Bits Bucket For December 11, 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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Is it just me, or does the Christmas (or holiday, depending upon your persuasion) season seem particularly spiritless this year?
It`s not just you.
Very few lights in our neighborhood this year.
On my street it’s been the opposite for some reason.
I wonder if the middle class is staying home rather than traveling, so they’re making a little more effort in the decorations area? We’re doing even less than normal because we were gone for Thanksgiving AND Christmas and didn’t feel like making the effort.
I drove by a place that usually has a massive Christmas display in their yard. Nothing this year. Not as many over-the-top displays for sure.
On the other hand, the malls seems packed. Went to a big local mall at 2:30 on a Friday afternoon, expecting not too many people to be there, and the parking lot was very full.
I dunno, but I was openly recognized at a holiday party as a smart guy for renting all these years. There were about 5 people there that I’ve known since I arrived, and not all of them agreed with my “rationale” way back when.
As does at any party, housing came up, and finally vindication… only 4 years too late, but I’ll take it. The peanut brittle was fantastic, too.
As does at any party, housing came up, and finally vindication… only 4 years too late, but I’ll take it.
Better late than never, eh?
Congratulations! I have enjoyed similar moments of vindication in recent years. The best one was when my MIL openly acknowledged that I was entirely right about the housing debacle — I actually did see it coming and tried my best to warn others. To my recollection, that may have been the only time she ever admitted to my being right about ANYTHING!
Can you please stop being right before my house is worth less than copper in the walls.
You remind me of a recent Simpson’s episode. The family is getting foreclosed, but Homer is not worried, as he has removed all the copper from the walls as a going-away present to the future owner.
LOL. That would be remarkable from a MIL!
Kudos to you Muggy.
I’ve been getting some recognition too. I think the people who just couldn’t accept our gov/bank system could do this to us are finally moving beyond the denial stage. The info they are now getting barraged with is finally overwhelming their former belief system.
Still, do you see anger? I see no anger. I think the feeling that’s starting to surface is abject fear.
I too, think it’s fear. They are aware a bunch of people, Ben and his bloggers, others who never heard of the HBB, knew the RE crash was coming. So they are maybe aware they foolishly chose to gamble when the odds were way against them. So I think it is more fear and less anger.
A colleague on the west coast in his thirties did what he was socially supposed to do: in the five years I knew him, he 1) got married, 2) bought a house in Long Beach, 3) fathered a child, 4) fathered another child (meanwhile LB RE prices start a slide), 5) fathered a third child, even though he knew RE is in the dumps. Now the bad news for him is the little subcontracting company he works for has been booted out from work at the client site, starting January 1. If you asked any long time engineer, the subcontract company was considered permanently favored. The CEO is great buddies with the VP of the client company. But people forgot the HQ on the east coast does not care who are buddies at it’s western branch offices…so my colleague will be Mr. Mom for awhile while his wife works in her health field. He is taking the news in stride at least, professional to the end.
I wondered about people who do things that make them tied down, just because it’s expected of them. I was like that when I had mortgage payments. It taught me a lesson about missing opportunities. As soon as I sold that house I felt free.
“Still, do you see anger? I see no anger.”
I suppose it may depend on where you look.
The U.S. is just getting over the denial phase as I type. I predict anger will set in over the next two years or so…
+1
The jury is out here. A lady has asked me to come over on Sunday to “help decorate the tree”. Ask me on Monday if the holiday is spirited.
A few days ago, I had to get some old firewood off the property at an REO house in rural N AZ. I put out the free firewood word and got several people interested. On of them showed up early one morning; a gray haired guy. As I helped him load the wood we talked about foreclosures and the poor economy. He asked if I had lived in Phoenix in the 80’s, because things were terrible back then. I told him, no I was in Texas and we had it bad there after the oil/RE bubbles burst, and we traded anecdotes about joblessness, etc.
Two things came to mind; first that even though most of the hard-hit states back then were oil based, Arizona wasn’t. It was RE that dragged this state down in the 80’s, in part due to the S&L craziness. Second, I thought, ‘how could this guy not know about the mini-depression we experienced in Texas?’ And I recalled watching the network news back then and being amazed that parts of the country were doing so well when we were going down the drain; the bust was very regional.
While I brought back up those anecdotes and listened to his, we discussed how long it lasted here and there. We both remembered the many years. I think two things are what darkened spirits; the stretch of time and how different it was from the boom. Earlier holidays, for example, everyone was excited about the new baby, the new cars, the higher paying jobs. Then as we saw each other year after year, it was a downer that so-and-so still hadn’t found a good job, or some relative moved away to find work. And so it went, for me anyway, that there was a point when this seemed like the way it would always be.
But it wasn’t. Things did start to get a little better in the 90’s. (It may be a bit dismaying that this was in the early shadow of the tech/stock bubble and housing was just ramping up.) But it all serves to show that these booms and busts aren’t academic events. They upset lives and cause a lot of grief. We are right to insist that those who run the financial machinery see this damage and take it into account. Learn from history, dammit! And we can also take some comfort that history shows it will blow over, and that holidays in the future will seem brighter.
Thanks for that, Ben.
I’ve been watching my unemployed friends remain unemployed, or underemployed and stuck in suck jobs that they are wary of leaving, and trying to find some optimism. It ain’t easy!
it was like that in Montana too..everyone leaving for the coast…
“We are right to insist that those who run the financial machinery see this damage and take it into account.”
It’s a bit hard to get to that level of discussion when we aren’t even past ‘nobody could have seen it coming’ just yet. Audits of the Fed’s and major investment banks’ records might yield important information about who saw it coming and who was a high-finance moron who nonetheless some how managed to live the good life on Wall Street.
Was at a dinner Friday and someone asked how Hitler could finance a huge military expansion when Germany was in a depression and not recovered from the devastation of WW I.
Found some interesting names.
August Thyssen
Roland Harriman
Union Banking Corporation
Presott Bush
General Electric’s Gerard Swope
Bank voor Handel en Scheepvaart N.V. (BHS)
Has anything actually changed except the names of people on Wall Street and National capitols trying to control the people?
30 years ago John Lennon was murdered in cold blood.
“John Lennon must die!”….from JD Salinger’s popular book ”The Catcher in the Rye.”
ht tp://afpakwar dot com/blog/archives/6541
Isn’t wealthy white history interesting?
I assume you are not white.
Assuming? Again?
I’d have to guess that nobody could have seen Hitler’s rise into megalomanic dictatorship coming. Let’s be sure to bring these old articles about Prescott “Daddy Warbucks” Bush to the surface in case Jeb’s name gets further float as a prospective Republican presidential candidate.
How Bush’s grandfather helped Hitler’s rise to power
Rumours of a link between the US first family and the Nazi war machine have circulated for decades. Now the Guardian can reveal how repercussions of events that culminated in action under the Trading with the Enemy Act are still being felt by today’s president
* Ben Aris in Berlin and Duncan Campbell in Washington
* The Guardian, Saturday 25 September 2004 23.59 BST
George Bush’s grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.
The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.
His business dealings, which continued until his company’s assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.
The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator’s action should have been grounds for prosecution for giving aid and comfort to the enemy.
The debate over Prescott Bush’s behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the “Bush/Nazi” connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis’ plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler’s rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty.
Remarkably, little of Bush’s dealings with Germany has received public scrutiny, partly because of the secret status of the documentation involving him. But now the multibillion dollar legal action for damages by two Holocaust survivors against the Bush family, and the imminent publication of three books on the subject are threatening to make Prescott Bush’s business history an uncomfortable issue for his grandson, George W, as he seeks re-election.
While there is no suggestion that Prescott Bush was sympathetic to the Nazi cause, the documents reveal that the firm he worked for, Brown Brothers Harriman (BBH), acted as a US base for the German industrialist, Fritz Thyssen, who helped finance Hitler in the 1930s before falling out with him at the end of the decade. The Guardian has seen evidence that shows Bush was the director of the New York-based Union Banking Corporation (UBC) that represented Thyssen’s US interests and he continued to work for the bank after America entered the war.
…
Its going to be crappy for quite some time longer than the other recessions simply beacause it is. But you are right, things will eventually improve and one day yet another boom will come and which will be followed by heartache. My aluminum hat says so.
I already lived through a depression, one which was localized in the extreme, when I lost my wife and my tiny little world collapsed. I refuse to spend the rest of my years in regret. So, as we watch this economic event, I am still ever hopeful personally for the good stuff, which has little to do with financial profit. I wish for you all what I wish for myself; the peaceful companionship of friends and loved ones and plenty of laughter.
I echo your sentiments. Most people go through life saying “If only…”. I like to say
“Next time….” Moving forward is the only
way not to stagnate.
Skye said it best. Do you really need granite and a hummer to be happy? (an occasional hummer never hurt anyone, I know.)
You are a wise one, Blue Skye. We wish the same for you.
You really just have to keep moving forward. There is no such thing as going back. Moving forward is less painful if you can get past the fear and grab the good moments as they appear.
Ok, for me, some days are better than others. Have fun at your tree trimming party. : )
Do you really need granite and a hummer to be happy?
Do you even need a house? Things aren’t too bad here in the doublewide while we wait. Leaves lots of money for anything else we want to do.
“…a hummer to be happy?”
FPSS missed his cue…
I’d be curious to know how fast and far land prices fell in the TX bust. What’s remarkable to me is how land has been so stubborn to fall while completed houses take a beating. In WA, it’s not unusual to see a few acres of land priced the same as a completed house on an equal sized lot. I understand these are both asking prices, but there’s plenty to be gleaned from them.
In my area the sale of land seems to have frozen almost completely. No sales volume, no price discovery.
“I’d be curious to know how fast and far land prices fell in the TX bust.”
I know two families who lived in Casper, WY. Both took huge losses on their homes when they had to move for employment reasons. The area is a natural gas center, and it crashed along with Texas in the mid 80’s due to over speculation.
And Casper had the Husky Oil Company refinery, which as part of a corporation that was mostly Canadian, got nationalized and then liquidated as part of that mess. Kinda tough times for some Wyoming towns. We started out middle class and ended up blue collar by the end of that one.
“In my area the sale of land seems to have frozen almost completely. No sales volume, no price discovery.”
Was talking to a relative of a builder the other day. He said the name but now I forget. He said people still want what they want and don’t want someone else’s home and so they are still keeping relatively busy. I know another builder in the opposite direction of town, is experiencing the same. That means some lots are still being purchased in our general area but lots and lots of it is way overpriced especially the stuff w/the great views.
I know the families of some of this stuff. They own an incredible amount of land between here and Ithaca and its been in their family for generations. One of this generations’ land holders is incredibly risk averse (always has been) and holds very little debt. I’d imagine they’re in no hurry to dump the property. Probably sell a few lots here and there to pay for fund the kid’s college fund.
It doesn’t matter who owns the land- prices will fall to a level which represents what a builder can pay for it and still make a profit while competing with resales. Period.
I was an oilfield worker in the early-to-mid ’80s when the oil bust occurred. The onset was extremely rapid (mid ‘85 if I remember correctly), from boom to total bust in just a few months. A year after the onset of the bust. it seemed like square miles of dumpy apartment and condo buildings in Houston were completely deserted. Flying into the airport at night I would see huge swatches of formerly bustling suburbia completely dark, with even the street lights off. Fortunately for me I was an industrial controls technician and I was able to simply move out of oil and gas exploration and into another field. Specialists such as geologists and rig crews suffered the same fate as realtors face now - start completely from scratch in a new career or be unemployed for life.
“He said people still want what they want and don’t want someone else’s home and so they are still keeping relatively busy.”
A friend’s sister recently met a new love; both are recently divorced. Anyway, the new guy has an almost paid for home, but the friend’s sister wants him to sell it because they should start their love in a new home.
Dang if that’s not a strong signal for the guy to run!
We are right to insist that those who run the financial machinery see this damage and take it into account.
I like these longer Ben Jones ruminations. However, I take a much harder line on those who “run the financial machinery.” They should be held accountable for their actions and punished accordingly.
Here’s hoping she hangs a hummer on your tree.
xmas has been ruined by consumerism.I just want it over so the media will stop their verbal diareah.
Buy a couple iPads and you’ll feel better.
I bought an iPad for a sister, so I got a little into the spirit. Well, maybe I got into a little too much spirit, a couple glasses of vino, that caused me to be impulsive. I love my iPad. It is great for mobile people who wish to travel very light. Much better than a suitcase.
I am sitting outside a coffee shop after a four mile run, a haircut, a trip to the bank, and trying to find a US post office. My VZ Navigator does not always work in newer areas.
Stopped at “the Shops” in 33647 to look around. Small world! My new supervisor with a cell phone glued to his ear walking past recognized me and greeted me. This is about 15 miles from the office.
High tech world is good if you learn how to use it.
Stayin’ mobile (watch the police and the tax man miss me)…
“much better than a suitcase” should have been “much better than a laptop.”
For the most part, I have everything I need. I’m only buying a few incidental items during this crazy period. My timex of some 20 years finally gave out. Bought me a new Citizen eco-drive watch for $160. I really, really like my new watch, a very good value. Also purchased a dozen pairs of socks; very luxurious, very comfortable with thick heal pads. And now the only items left on my shopping list are some luxuriously soft towels. Donating the thin card-board like towels purchased from Walmart to the local Goodwill.
A good friend of mine recently purchased a new Hyundai. I drove it and I really like the shifting capability (without a clutch) on these new auto trannies. But, my nine year old Honda is the best vehicle I have ever owned, so I guess I can keep “clutching” until I am through with school.
My antique CRT TV in my living room is a conversational piece when folks come over. The label on the back reads MADE IN TN, USA, 1984. I have repaired it once and I guess I’ll replace it when the repairs are not worth the effort, like when the CRT finally gives up its ghost.
I never understood how buying stuff and house clutter contributes to people’s happiness. I am deficient in this understanding, I simply don’t get it. Really, I don’t get it.
My timex of some 20 years finally gave out. Bought me a new Citizen eco-drive watch for $160. I really, really like my new watch, a very good value.
Ha, TCM,…good one!:
By Jeffrey Van Camp, DigitalTrends.com
A retired Navy doctor put his 52 year-old diving watch up for sale on eBay at a price of $9.95. After a week, it sold for $66,100.
So imagine this: you decide to sell your 52 year-old watch on eBay for $9.95 and when the auction is over you end up with $66,100. Not bad, right? That’s what happened to Bob. The retired Navy doctor decided to sell a few of his old things and put his Rolex Submariner Ref 5510 dive watch up for auction on eBay. He bought the watch from a Navy Exchange 52 years ago and wore it almost every day for more than 35 years
To his shock, a few days into the auction, his watch started climbing to more than $30,000. After speaking with his son, the two figured out that the watch was an extremely rare model that Sean Connery wore as James Bond in Dr. No, Goldfinger, and Thunderball.
Wow. By starting the auction at 10 bucks and letting it run he probably got a much higher price than if he had priced it at a premium.
I totally understand. To me, “things” may as well be redefined as “burdens.”
I first caught on 15 Yeats ago vomiting my SO in her two bedroom apartment in Silicon Valley. A highly educated gal with two masters degrees, one of which is an MBA from USC. She had all sorts of curios in her living room and complained it takes too long to clean it all. From that point on I called ‘em “dust collectors.”
“vomiting my SO”?
Is that some bizarre Freudian slip?
LOL! My beloved iPad does some editing for me…”years ago visiting my SO”..
Too funny!
Auto correct strikes again!
“I never understood how buying stuff and house clutter contributes to people’s happiness. I am deficient in this understanding, I simply don’t get it. Really, I don’t get it.”
Me neither, but then again I’d rather be outside doing something then sitting around looking at my stuff or shopping, aka looking for new stuff. I’d started to wonder if I was deficient in some female chromosone part. Now I just roll w/it.
This morning I arrived at the park pre-dusk, as the lights of Syracuse twinkled on the lake surface and went for a nice long run. Due to extended family I’ve got some nice stuff. It sits there and has no impact (and no real joy) to my life….no, nothing like this morning . That beauty made my heart sing and cost me nothing.
Then there is some of us who’s clutter is related to work, as a dj and the gf as an artist…if we had 2 cubicle jobs we would be back in Manhattan happily living in 1/2 the space we have now.
—————–
“I never understood how buying stuff and house clutter contributes to people’s happiness
TCM_guy
“Hyundai. I drove it and I really like….”
When my car was getting a new tyranny (290K on the old one) I rented a Hyundai and I really liked it too. It was peppy, the dash was very techie, decent turning radius, and it handled well.
You may enjoy the artistic sculpture I saw recently in Santa Monica. It’s that same commentary on Christmas.
Who 17: Up the side of Mt. Crumpit
Who 18: He rode with his load to the tiptop to dump it!
Grinch: They’re finding out now that no Christmas is coming!
They’re just waking up! I know just what they’ll do!
Their mouths will hang open a minute or two then the Whos down in Who-ville will all cry Boo-Hoo!
That’s a noise
Grinch: That I simply MUST hear!
Who 19: So he paused. And the Grinch put his hand to his ear. And he did hear a sound rising over the snow.
Who 20: It started in low.
Who 21: Then it started to grow…
Who 22: But the sound wasn’t sad!
Who 23: Why, this sound sounded merry!
Who 24: It couldn’t be so!
Who 25: But it WAS merry!
ALL: VERY!
Who 26: He stared down at Who-ville!
Who 27: The Grinch popped his eyes!
Who 28: Then he shook!
Who 1: What he saw was a shocking surprise!
Who 2: Every Who down in Who-ville, the tall and the small, was singing!
Who 3: Without any presents at all!
Who 4: He HADN’T stopped Christmas from coming! It came!
Who 5: Somehow or other, it came just the same!
Who 6: And the Grinch, with his grinch-feet ice-cold in the snow,
Grinch: How could it be so? It came with out ribbons! It came without tags! It came without packages, boxes or bags!
Who 7: And he puzzled three hours, till his puzzler was sore.
Who 8: Then the Grinch thought of something he hadn’t before!
Grinch: Maybe Christmas
Quotations Who: he thought
Grinch: doesn’t come from a store. Maybe Christmas…perhaps…means a little bit more!
Who 9: And what happened then…?
Who 10: Well…in Who-ville they say that the Grinch’s small heart Grew three sizes that day!
Well…in Who-ville they say that the Grinch’s small heart Grew three sizes that day!
And his enlarged heart caused his health insurer to drop him.
Meerrry X-mas!
lmao.
Too funny sloth!
Just another day on Fereginar
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
I’m having too much fun to notice…
The stress my wife puts her self under during the holidays is unfathomable…I hate the holiday season.
Is your wife a perfectionist? My Mom was. Christmas was painful….always painful. We laugh way more in my house even if the ornaments aren’t all in a perfect little spot.
**************
The stress my wife puts her self under during the holidays is unfathomable…I hate the holiday season.
Let’s form a support group. Holiday stress is highly contagious, especially within families.
“The stress my wife puts her self under during the holidays is unfathomable…”
The stress my wife put’s on my wallet at Christmas is equally unfathomable.
The Wall St. boys and top exec’s of the banks are “All smiles” with their Christmas bonus. Another great year again. Life couldn’t be better!
Foreclosed homes hit auctions with no legal representation
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:58 p.m. Friday, Dec. 10, 2010
WEST PALM BEACH — The transfer of thousands of files from the deposed David J. Stern law firm caused not just a foul-up in recent Palm Beach County foreclosure auctions, but is shutting down cases to the point that one defense attorney called the lack of action “malpractice.”
Between Nov. 29 and Friday, there were 110 foreclosure sales in Palm Beach County in which the bank made no bid for the home, according to the Palm Beach County Clerk’s office.
Unwitting investors put in winning offers as low as $200 for homes they’ll probably never get because the auctions were not properly advertised, likely lost in the shuffle from Stern’s office to other firms.
Foreclosure defense attorneys said hearings are being canceled, they don’t know who is representing the banks in their cases, and that motions for Stern to withdraw from cases aren’t being filed, leaving the firm as attorney of record.
The problems led Broward County Chief Judge Victor Tobin to issue a temporary administrative order outlining how Stern cases should be handled and requiring legal evidence be shown that the firm was terminated and new counsel hired.
“It appears that Stern has not made arrangements for the orderly transfer of cases from him or his firm to new counsel for pending cases,” Tobin wrote.
And Palm Beach County Clerk of Court Sharon Bock said the transfers are “just adding to the misery that is already happening” in the foreclosure courts.
“As you try to solve one problem, you get another problem,” Bock said.
“Unwitting investors put in winning offers as low as $200 for homes they’ll probably never get because the auctions were not properly advertised, likely lost in the shuffle from Stern’s office to other firms.”
Oh goody — sounds like more legal business in the making!
bait and switch? business as usual in real estate.
Cool! Sounds like another bubble in the making. A fool and his money part ways. Oh well. The state needs it worse anyways.
Wonder which blew up first: The copier or the shredder?
Treasury 10-Year Notes Decline; Weekly Yield Advance Is Biggest This Year
By Cordell Eddings and Susanne Walker - Dec 10, 2010 2:26 PM PT
…
The yield on the 10-year note rose 12 basis points, or 0.12 percentage point, to 3.32 percent at 5:11 p.m. in New York, according to BGCantor Market Data.
The 30-year bond yield increased three basis point to 4.43 percent after dropping six basis points yesterday, when the $13 billion U.S. sale of the debt drew the highest demand since August. The yield increased to a seven-month high of 4.5 percent on Dec. 8, buoying the government bond auction.
Bonds tumbled this week after Obama agreed on Dec. 6 to a two-year extension of current tax rates in exchange for another 13 months of federal unemployment insurance for the long-term jobless and cutting the payroll tax by $120 billion for a year.
Pimco’s Outlook
Pacific Investment Management Co., which manages the world’s biggest bond fund, is raising its forecast for U.S. growth next year as policy makers pump a “massive amount” of stimulus into the economy, Chief Executive Officer Mohamed El- Erian said in a telephone interview yesterday from his office in Newport Beach, California.
“The market will be under pressure as people raise their growth estimates,” said Thomas Tucci, head of U.S. government bond trading in New York at Royal Bank of Canada’s RBC Capital Markets, one of the 18 primary dealers that trade directly with the Federal Reserve. “People were hoping the market would hold in here today, but we are not through the tax-policy shift.”
…
Call me when the 10 year yield hits 5 percent.
the fed cant let thet happen.
Do you folks here think the U.S. will ever default on it’s sovereign debt, like Argentina has done in the past?
If yes, what’s your best guess as to when?
If they do what is anyone going to do about it?
Default = when a country can not pay back the debt in the currency promised
A country can never default if it controls it own currency.
Even Zimbabwe never defaulted.
A country can make its money be worth almost nothing through hyper-inflation - but they do not default. They will pay back the debt (maybe in worthless currency).
A country defaults when it does not control its own currency. So it must pay back debts in currency that it can not de-value.
For example – when a country joins the EU, it replaces its own currency with the Euro. If the Euro remains stable or even increases in value, those debts must be paid back with the same value of currency that was lent to it. That is when countries default (just like a US consumer) when mathematically there is no way to service the debt or devalue the debt.
Not formally, but a period of high inflation seems like it could happen. The problem is that while the change from the world seeking safety in dollars to not wanting to be repaid in dollars will be a long time comming, the actual switch can happen VERY QUICKLY INDEED. And once it does, you just can’t go back.
Another note, just as TIPS have been offered to enable the Treasury to sell debt DESPITE inflation fears, if the treasury starts issueing bonds denominated in foreign currecy (or more likely against a basket of foreign currencies), call ‘em say ERPS watch out.
Another note, just as TIPS have been offered to enable the Treasury to sell debt DESPITE inflation fears, if the treasury starts issueing bonds denominated in foreign currecy (or more likely against a basket of foreign currencies), call ‘em say ERPS watch out.
If this ever happens (and it might - the Chinese keep floating this idea from time to time) it will mean:
The end is near. American WILL default on this kind of debt.
Plan according including up to and moving out of America and getting rid of any investment is dollars.
As I’ve previously stated here, inflation is the only politically acceptable way out of this mess.
When the hammer falls I believe it will be swift. I hope I’m wrong but fear I’m not.
My belief is that there is real value out there. Real value. What it’s measured against (currency) makes no matter to me. It’s my way of trying to stay sane in an insane world, however temporary.
“When the hammer falls I believe it will be swift.”
Like it was in Japan, back in the early 1990s?
Ireland looks to have a default in its future.
Irish Taxpayers Paying the Bill
Spiegel
The bailout loan of €85 billion that the EU, the European Central Bank and the International Monetary Fund agreed to extend to Ireland just over a week ago had failed to calm market jitters. And why would it? After all, it actually exacerbates the country’s financial problems.
The EU has failed to make the foreign bondholders take a hit on the losses from toxic real estate loans. In particular, the ECB insisted that the interests of the German, British and French banks would continue to be protected. Instead, Irish taxpayers are being asked to pay the bill: at a hefty interest rate of 5.8 percent, to ensure the foreign creditors will get their money back rather than face any losses.
That may be something German banks welcome, but it is a disaster for Ireland. And many economists now predicts that it is just a question of time before the country defaults. “This ‘bailout’ will sink the Republic,” warns economist David McWilliams in the Belfast Telegraph. “It is the EU giving us enough rope to hang ourselves in the hope that we don’t hang all of them.”
I wonder if the seeds of WWIII on the yurupian continent are now being planted? Wars on this continent have been ubiquitous, I wouldn’t rule out another major engagement sometime in the first half of this century.
Do you folks here think the U.S. will ever default on it’s sovereign debt, like Argentina has done in the past?
If yes, what’s your best guess as to when?
The US government has already defaulted several times, including 1971, when it refused to pay gold to foreigners as it had promised.
Currently, it is in the process of gradual default in the form of currency debasement. Will there be a sudden default? Probably not; they can continue with currency debasement until no one wants their paper, and that’s what I expect to happen.
“if the treasury starts issueing bonds denominated in foreign currecy (or more likely against a basket of foreign currencies), call ‘em say ERPS watch out.”
Jim has it spot on above; we will never default on dollar-denominated debt, but if we ever start down the road of borrowing in some other currency, then default becomes a real possibility.
I have only $10,000 cash, US currency, of my seven figure net worth. Also paper bonds of about $90,000. All the rest of my US government securities are electronic. At maturity, the ” face” value is deposited to my US bank electronically. The income on my bonds, bills, and TIPS, are also electronically deposited to my bank.
At any time a branch of my bank is open, I can get money out in US currency and exchange it for another currency or gold.
It takes a few days to exchange my paper savings bonds for an alternative currency.
Now what about my stock mutual funds? These are not investments in dollars, but are investments in companies. It sows not matter that Vanguard tells me how much my stock funds are worth ib US dollars. Maybe Vanguard could drive the point home and provide it’s customers the option of viewing the NAVs in the currency of their choice, such as the yuan!
My point is that many people such as myself have very little US currency, so the demise of the dollar is no biggie. This is why one needs to have a hedge in gold bullion, the ultimate hard currency.
“….WW III….”
More likely in Asia, IMO.
The Chinese could come up with their own version of “Manifest Destiny”, and start stepping on the toes of the Russians, Indians, Vietnamese. Japanese, Central Asian Muslims, Koreans, etc.. And, like dumb$hits, we’ll get dragged into it.
Digressing…..X-GSfixr’s Idea Du Jour…….Mandate that the kids/grandkids of the Top 2%ers be required to serve in a combat arm of the US Armed Forces.
After all, if it’s worth sending J6Ps kid, they should be willing to go, because they have more to lose, if the US loses.
Or make a premature move on Taiwan, like the Argentinians did on the Falklands. Especially if oil is found in the East China Sea.
Lead is the ultimate hard currency my friend. Just ask our Iraq and Aghan friends.
“Do you folks here think the U.S. will ever default on it’s sovereign debt, like Argentina has done in the past?”
I think a key reason for QE is to avoid that from happening. If the Fed gets hammered hard enough by politicians for QE-ing away the debt burden, I would think the risk of a sovereign default would increase considerably, as austerity measures ain’t US.
Bill, how much gold do you hold?
I had about 130 ounces of gold and platinum about eightbweeks ago but now I have around 100 ounces. Rebalanced.
YUP…cant happen or the millions and millions of now adjustable rate credit cards issued in the last 3 years will blow up and default…..
that rock and a hard place is getting like a tomb.
US stimulus sparks government bond sell-off
By Dave Shellock
Published: December 10 2010 22:24 | Last updated: December 10 2010 22:24
Wonder how easy and fast it could go the other way.
The tax cut/stimulus goes down in flames as democrats defeat it outeight (they DO still control congress and the senate afterall) or load it up with so much pork that even republicans can’t vote for it (and the clock is ticking - it turn into a pumpkin on 2 JAN 2011).
Then the Irish vote down the IMF and do an Iceland on 15 DEC 2010.
Stock market tumbles — all cash looks for safety in T-Bills. Rates then tumble once more.
I have always looked at crashing the stock market as the last chance the Fed has to keep rates low.
“Then the Irish vote down the IMF and do an Iceland on 15 DEC 2010.”
You are an optimist, 2banana. We can only hope they would be so smart. I’m guessing that they will instead spend several years building up sufficient resentment to take action. In the meantime, the scenario that plays out will be a continuing of the theme of making banksters whole on the backs of austerial for the little guy.
“austerial”
Uuuhhh… I meant “austerity”, of course.
“I have always looked at crashing the stock market as the last chance the Fed has to keep rates low.”
That’s also a great ace in the hole for the Fed to play in case politicians get too aggressive about reining in their independence. A truly horrible financial crisis is one of the best justification for the Fed to abandon all rules and play pure, seat-of-the-pants discretion. Who would dare to criticize them at the height of a financial crisis?
Is this just another excuse for more QE? I feel this is being created by the big boys on wall street.Give us more QE or we raise rates to the moon and kill any housing recovery.Silly me.
Is there still an army of “fence sitters” out there trying to time their entry into the housing market, who will suddenly be spurred into action by the prospect of rising mortgage rates?
Call me skeptical, but I would guess that like myself, anyone who has sat out the market this long, as the pundits have offered repeated assurances that a housing recovery was just around the corner or even already underway, must be feeling a bit smug at the moment, as we learn that continued high unemployment, a shadow inventory of homes numbering in the millions, and a dearth of demand, which will only get worse with rising mortgage rates, are likely to continue hammering housing for several more years.
It seems highly improbable that anyone who has managed to sit on their hands for this long is going to suddenly rush into the ever-Doddering housing market out of fear they will soon be priced out forever. A more likely scenario is that rising interest rates will disqualify buyers who might have been willing to make purchases at or near current prices, forcing would-be sellers to lower their asking prices to complete a sale.
Meanwhile, we recently renewed our lease with no rent increase for the third straight year. We are probably overpaying, but it certainly beats owning a home at a point when prices are sleighted to drop another ten percent in value over the next year. Based on the Zestimate, the home equity loss for a ten percent drop in the value of the home we rent would fully cover two year’s worth of rent at our current rate, and then there are the other components of PITI plus an HOA to add to the costs of owning. No thank you.
Will rising mortgage rates spur home sales?
Posted by Nin-Hai Tseng, writer-reporter
December 10, 2010 11:13 am
Historically low mortgage rates didn’t encourage new home sales, but rising rates could finally push home-buying fence-sitters into the market.
President Barack Obama and congressional Republicans agreed to extend tax cuts for two years, including cuts for the wealthy. Though the deal is still being debated in Washington, financial markets interpreted the development as likely to accelerate the economic recovery but also swell the budget deficit. Though the yield on the benchmark 10-year bond has retreated some, it has still increased 21 basis points this week.
…
HIgher interest rates = lower home prices
The actual best time to buy a house is when interest have peaked.
Housing prices are then super low (becuase that is all I can afford in the monthly payment) and you can re-finance as interest rates come down to make your house more and more affordable.
The worst time to buy a house is when interest rates are on the lowest valley.
Housing prices are high (hey, but the monthly payment is the same) and when interest rated go up:
Housing prices come down and the is no where to get relief in re-financing. You are stuck. Can’t sell (without bringing money to the table). Can’t refinance.
Thank you Master of the Obvious.
It truly is important to state the obvious when porcine beauticians are steadily spreading disinformation about financial reality.
Walmart wage scale determines future home prices.
the Schiller index will be replace buy the Walmart Wally index.
cash 4 gold is setting up shop at walmart to cash in on the golden teeth.
CfG stores are popping up all over the place where I live.
The peak must be soon.
CfG stores are popping up all over the place where I live.
The peak must be soon.
Yes, the peak in trying to get gold away from people cheaply must be happening soon.
The McJob Index.
I still see pollyannas posting on Yahoo that RE is near a bottom! Utterly amazing in light of what you write about interest rates.
OTOH, American wages are still falling. That means no inflation, not while US wages fall. But while wages fall, more people fall out of the RE market.
I still think boomers will dump their real estate to pay for their catastrophic health care. That will happen while wages go up. I think in 15 years US wages will start to go up significantly. We have to first achieve wage parity with Chindia.
The challenge for we who are willing to buy at a certain price is twofold; Capital preservation and maintaining employment.
We’re interested in three REO’s right now. All are empty, and in foreclosure purgatory, not on MLS, etc. One has been empty for over two years.
PS-Raw land is still inflated many times over and although labor is cheap, material prices are still nuts even though they’ve fallen some.
PS-Raw land is still inflated many times over
Yep, this is quite true,…I’m looking to add to my Audubon / Nature Conservancy Hwy50 wilderness donation program. I reckon it’s a good thing I can contain my eagerness whilst I contemplate the accumulated cellar damage from playing outside in all that 8 minute tossed sunlight…
The Joisy housing market has foreclosure malfeasance issues. Ho ho ho!
In the Region | New Jersey
A ‘Shadow Inventory’ Dampens Winter Market
Jessica Kourkounis for The New York Times
Gloucester County has an overall inventory of unsold homes of almost two years. This house, on Prairie View Lane in Mickleton, is on the market for $432,000.
By ANTOINETTE MARTIN
Published: December 10, 2010
NEW statistics provide a glum holiday-time snapshot of the real estate market: shrunken sales pace, bloated inventory and a “shadow inventory” of foreclosed homes looming menacingly in the background.
Right now, according to one report, New Jersey has the largest shadow inventory in the country: 41 months’ worth of homes to sell — and they aren’t even on the market yet.
The foreclosure process is complete on these nearly 98,000 homes; a National Association of Realtors committee made the state-by-state count. But the banks or other lenders have not yet released them for sale.
“Some are occupied, and in the eviction process,” said Bill Flagg of ERA Queen City Realty, a foreclosure sale specialist whose clients include Fannie Mae and Freddie Mac, the government-backed federal lenders. During the foreclosure process, he said, “the former owners were not pushed toward eviction while they were attempting a loan modification through a government program.” (One result is that some former homeowners have lived free of monthly payments for two years or more.)
Even among houses that have been vacated, Mr. Flagg said, very few sales have gone ahead for the last two months. Fannie Mae, Freddie Mac and lenders put a hold on them during the flurry of legal challenges nationwide to alleged “robo-signing” of foreclosure documents, and other malfeasance imputed to foreclosure officials.
…
Wow - and on all those houses…
Not one dime of property taxes is being paid.
NJ is heavily dependent on extremely high property taxes to fund local, country and school services.
Big issues and choices coming…
Either raises high taxes even higher on those still paying (pushing more of them into foreclosure)
Dramatically cut the cost of government = cutting public union pay/benefits/pensions – good luck with that
Bankruptcy
“Not one dime of property taxes is being paid.”
You would think the idiots in government who believe that unaffordably priced housing is some how good for the economy would realize the devastation on local governments due to the unpaid taxes on all those empty homes, wouldn’t you?
those back property taxes will have to be paid in order for the banks to provide clear title to new buyer.they will get their money sooner or later.
What if the banks end up owing more in back taxes than they can get for selling the house? Wouldn’t that be a powerful disincentive for the bank to ever sell?
What about the prospect for local authorities to foreclose on houses from debt-beat banks that don’t stay up to date on their property tax filings? Let’s hope this idea gains traction. It could be a great source of revenue for cash-strapped local governments, as they could first sue Megabank, Inc for taxes owed, then sell the properties at auction to the highest bidder.
they will get their money sooner or later.
Not necessarily. The country takes eventually possession, but ends up having to auction the property and waives the taxes owed in order to sell it.
Courthouse auctions. Happens all the time.
“…waives the taxes owed…”
But if Megabank, Inc owns the home, wouldn’t it make sense to collect, given that Megabank, Inc could borrow from the Fed at zero percent interest or so to raise the monies needed to make good on what they owe in back taxes?
This is what I have been waiting for - when a news organization reports on the months of sales represented by the shadow inventory. Progress is being made!
One thing I have noticed about the NYT though. They like to make their points on this RE collapse relative to other states. When will they report the months of sales of the shadow inventory on their own back yard?
It’s different here — in every neighborhoody!
“Shadow Inventory” and Future Home Prices
posted Dec. 9, 2010, 10:26:00 am
Michael Edlen
MICHAEL EDLEN, REAL ESTATE CONSULTANT
A prospective homebuyer asked whether I would agree that it made sense for him to wait longer before purchasing a Santa Monica home. His question was based on a recent report from Core Logic, a mortgage research firm. They had stated that “a supply of 2.1 million homes poised for foreclosure or delinquency potentially looms over the nation’s housing market… this ‘shadow inventory’ is at an 8-month supply as of September, and consists of residential real estate that is in foreclosure, has a loan 90 days past due or has been taken back by a lender and not yet listed for sale.” They noted that the total supply of homes in the country was up to a 23-month level, including the unlisted “shadow inventory.”
The question is how this information relates to Santa Monica homes in particular. Of course each Santa Monica market segment is different, and home value changes are very “neighborhoody.”
…
I posted a comment, but I doubt it makes it up. Just said that I had a crystal ball named the “Ivy Zelman ARM reset chart” and it tells me that Santa Monica shadow inventory has just barely begun to accumulate.
Time to head for the sticks?
Real Estate
Rural Foreclosures: The Hidden Heartland Inventory
Published: Dec. 6, 2010
By Steve Cook Real Estate Economy Watch
Ever heard of the Shadow Inventory? There’s also an inventory of Heartland foreclosures that is completely hidden.
Nobody knows how many rural homeowners are facing foreclosure or have lost their homes during the housing crisis because we don’t collect data from small lenders or lenders that operate exclusively in rural areas. Nor do we know trends in defaults and delinquencies.
The Federal Reserve expects 2.25 million foreclosure filings this year, same number again next year and about 2 million more in 2012, according to Fed Governor Elizabeth Duke. Those estimates, however, are based on data that does not don’t include a large chunk of rural America, according to a recent report from the Housing Assistance Council.
As a result, the scope of the national foreclosure crisis may be significantly larger than estimated and we don’t know what’s going on with homeowners in the heartland as they struggle with many of the same factors that plague urban and suburban owners: unemployment, falling values, underwater mortgages, difficulties obtaining credit and shrinking numbers of buyers. The heartand’s foreclosure inventory is invisible.
…
I’ll stand by my assertion that prices in rural areas are far more volatile.
And you would be correct.
Re: The housing market around Manhattan/Ft Riley, Kansas after they announced that the Big Red 1 was moving back in. Zero job base otherwise, except for KSU, and the ag industry, which is a very mature industry.
“Nobody knows how many rural homeowners are facing foreclosure or have lost their homes during the housing crisis because we don’t collect data from small lenders or lenders that operate exclusively in rural areas.”
Hmmm, I guess that information available down to zip code level that I’ve been pulling up from the NY Fed Reserve themselves for the last 3 years must be a figment of my imagination. Let’s see we had 90 days late, lis pendens, in foreclosure. You could look at subprime or prime…..
Well ok it was by percentage. No publication of hard numbers. But I did once pull up a giant gov file by zip which did provide numbers. It was another hbber that first provided the link. I’ve had trouble finding it again of late.
Note: in the past that page has allowed you to look down to zip level. But some months they only offer data down to county level.
The large Excel gov provided file I looked at 2 years ago whose link was provided by an hbber was down to zip level.
So wood butchers Lennar is buying pools of mortgages from the FDIC…. This removes all doubt that the official US policy is to keep housing prices grossly inflated.
http://www.bizjournals.com/southflorida/news/2010/11/29/lennar-closes-300m-distress-fund.html
I know men hate shopping but…
——————
Woman Kidnapped at Lehigh Valley Mall Forced to Shop for Abductor in Allentown
Morning Call | December 10, 2010 | Tracy Jordan and Adam Clark
A 32-year-old Allentown man has been charged with kidnapping and robbery after admitting to abducting a woman returning to her car at the Lehigh Valley Mall on Thursday night, then forcing her to buy him clothing at a downtown Allentown store.
Tyquann S. McCord, of 533 Cedar St., held a BB gun pistol to a woman’s ribs around 7 p.m. outside the Whitehall Township shopping mall and forced her into the passenger seat of her car, according to the arrest affidavit.
Wasn’t me, I swear!
Good thinking! Don’t shoplift the clothes and risk a misdemeanor, kidnap somebody and force them to buy you the clothes. And then get 20 years in prison to think about how dumb you are.
Yeah, but he won’t need to worry about buying clothes for a while. Hope he like orange.
“Madoff’s son found dead in apparent suicide”
Sure hope Bernard is proud of himself now. He destroyed the lives of many investors, but karma has paid a visit.
Since the main street hosts have been consumed it seems like the wall street parasites are starting to eat their own.
For all we know he doesn’t even care.
A message to all the other bankster crooks and you know who you are: Greed Does Not Pay.
Sorry, but yes, it does.
Paraphrasing…….
“Hang, you F##kers”.
Bernie Madoff’s eldest son Mark hanged himself today.
http://www.nytimes.com/2010/12/12/business/12madoff.html
Big Investor: “So Bernie, are you going to pay us back?”
Madoff: “I can’t! I’m broke!”
Big Investor: “Is that a picture of your family? Nice family!”
The Good: Ron Paul
The Bad: Ben Bernanke
The Ugly: Barney Frank
Now I’m going to hear that music in my head all day.
“Your son, here. Does he like to hang around the house? Yeah, I bet he does. Maybe we can help him out with that.”
Big Investor: “Is that a picture of your family? Nice family!” ??
Interesting Rancher…I was kind of thinking the same thing this morning after seeing the news flash…The common thought would likely be that the Fed’s were closing in on him…I kind of thought like you did…The guy was probably a prisoner in his own place…Afraid to even go outside given how many lives his father ruined and people seeking revenge…
Dave, he hangs himself with his two year old
son in the next room? It smells.
I agree Rancher…
could be a disgruntled investor getting revenge?
It’s really hard to hang someone against their will. There would be signs of a struggle if a 3rd party hanged him.
It’s really hard to hang someone against their will ??
Agreed but, it may have been of his free will with someone watching or waiting…Its either you or the kid in the next room…Giving the scam the old man ran, I am sure there was a lot of laundered money that ran through his hands… Laundered money that did not get paid back…
Like Rancher said; “Nice Family”…
BBC News
A friend and associate of Bernard Madoff, Jeffry Picower, who was also being sued, was found dead in a swimming pool at his Florida home in October, although the case remains unresolved.
AP News:
“…A year ago, the court-appointed trustee trying to unravel Madoff’s financial affairs sued several relatives, including Peter, Mark and Andrew, accusing them of failing to detect the fraud while living lavish lifestyles financed with the family’s ill-gotten fortune.
The lawsuit accused Mark Madoff of using $66 million he received improperly to buy luxury homes in New York City, Nantucket and Connecticut.”
This debacle reminds ol’ Hwy of a lawsuit from years ago:
(A Lawyer dies in his Office from a fire. Sometime later another lawyer convenes a meeting, a door opens and many people file into a large room. They represented nearly everything that was in the office that burned and was turned into smoke…(smoke inhalation being the determined cause of death) carpet Mfg, padding, curtains, desk, lamps, phone, computer mfg’ers etc.etc.etc,. The idea being that monetary compensation could be found in many, many small creative ways. From what I recall, the general notion was better to settle incrementally, then be sued individually.)
(It caught my attention at the time because my retired elderly pa was making custom computer desks for…lawyers & doctors) ;-/
Madoff trustee sues accountants for $900 million:
By Catherine Tymkiw, producerDecember 11, 2010: 11:23 AM ET
NEW YORK (CNNMoney.com)
I agree….
I sort of felt the same way when Sadams sons got it, but I do feel badly for these very dysfunctional families. The sons were under investigation and I assume the end was in sight.
Saddam’s kids were brutal people themselves. Was Madoff’s son a con artist like his dad?
Yes, if you ever watched Caligula, the same type of violence, torture, and killings occurred in the S. Hussein household, and instigated by Saddam and his sons.
I sucked in my breath when I read that. This must be one of the first Wall Street casualties of high finance remorse, no?
I guess I always assumed that the scheming, scamming great vampire squids who perpetrated the Fall 2008 financial calamity didn’t give a sh!t about the rest of humanity. Perhaps Madoff’s son was not one of these guys?
Perhaps he was suffering from Richard Cory Syndrome?
“Richard Cory” is a narrative poem written by Edwin Arlington Robinson. It was first published in 1897
And later adapted for song by S&G.
I’m sure that many people like Dick Fuld and Lloyd Blankfein (the devil incarnate) look into the mirror every day and absolutely despise what they see. Deep down, they know how despicable they really are. All the money in the world cannot cover up that filthy rotten stench emanating from their empty souls.
It would be nice if it were true, but I am sure that these people have completely rationalized their behavior. They have convinced themselves that they were providing a vital service to the economy.
Some of them even claim to be doing God’s work!
Exactly.
Never try to ascribe any kind of rationality to a sociopath.
People like Fuld and Blankfein are focused on one thing - personal gain. I don’t think folks like that are wired to deeply consider issues unrelated to that goal. Humans come in all different flavors. We assume that they must believe they are doing good on some level. I don’t think that requirement is part of their decision-making circuitry.
Some people are just true believers in certain things. Religion, a policy, themselves. I think it’s wiring.
I’m really sorry, Grizz, but no, they don’t. They don’t see it at all. I have worked for the junior versions of these people and self-awareness just doesn’t come into it.
The laws to punish them for their horrible actions are limited, but the wheels are slowly turning. Very, very slowly. Most will never face a penalty that even approaches justice for the harm they have done, but to some extent they can be embarrassed. Think about enough exposure so that a few of their pet charities stop fawning all over them which brings a realization that their money does not, in fact, buy everything. The lobbyists can make sure the laws aren’t all that harsh, but they can’t eliminate social pressure.
Tell me lies, tell me sweet little lies..
Bernie Madoff’s eldest son Mark hanged himself today. (too tacky)
——————————————————————————-
Madoff’s eldest son Mark celebrates early Russian Christmas.
All trussed up and nowhere to go.
Maybe just buying an overpriced house is the thing to do.
Fannie, Freddie in talks with government on mortgages: report
Tue Dec 7, 10:23 pm ET
NEW YORK (Reuters) – Fannie Mae and Freddie Mac are in discussions with U.S. government officials to join government programs aimed at reducing mortgage balances where borrowers owe more than the values of their homes, the Wall Street Journal reported on Tuesday citing people familiar with the situation.
The paper reported that Fannie Mae and Freddie Mac have been highly reluctant to reduce mortgage balances, especially for borrowers who are still making payments.
The report also said the government is pressuring both mortgage companies to join a program run by the Federal Housing Administration that allows banks and other creditors, which agree to write down mortgages, to hand off the reduced loans to the FHA.
http://news.yahoo.com/s/nm/20101208/bs_nm/us_fannie_freddie - 138k
Here is a dark thought: What if the Fed doesn’t like the tax cut proposal, and is expressing its voice of disapproval by allowing long-term interest rates to rocket up? After all, wasn’t the point of QE2 to keep the lid on long-term rates? They wouldn’t have ever bothered with QE2 if they did not have the power to keep the lid on; ergo we should infer the recent increase in interest rates as due to deliberate action by the Fed to crash the bond market.
Just a thought…
A second charcoal grey idea to ponder on a dreary day here in FL: It is painfully obvious that the federal government is doing everything in its power to help General Motors out of the hole they dug themselves. A huge stake has been placed in the success of the Chevy Volt (an absoulte abortion). Could it be possible that the price of oil is being manipulated higher to assure the successs of the government’s new baby? (Inflation being part of the grand scheme certainly does not hurt).
You have demand destruction here and in Europe, rising demand for oil in India and China, and a finite resource that has gone past peak in 2006.
Mexico’s Cantrell field is declining at over 17% a
year, Venezuela’s production of heavy crude is
plummeting, and we have the suits closure of
major drilling areas and the closed door on new
permits.
Google “Mexico Cantrell” for more.
Also, the biggest elephant ever found, the Ghawar field in the KSA, is now in decline.
I have five contracts each for $64 and $83
December 2012 at the Merc.
We’ll get treated to news stories of 12 mpg pickup and SUV owners fretting as they fill up their behemoths.
“and a finite resource that has gone past peak in 2006.”
??? Reference please?
I’ve heard much forecasting of global peak oil production, but have not seen data that supports this. Does it exist? And how would we differentiate between a decline in production due to reduced demand caused by the global economic downturn, versus a decline in production due to it becoming increasing difficult to produce more?
The data does exist - a little work with Google will help you find it. The anti-spam here doesn’t seem to want to let me post urls however. Google theoildrum.
I went looking for this data, and what I found contradicts the assertion.
World production data from the EIA shows 2008 production as being above 2006 production.
http://www.eia.doe.gov/ipm/supply.html
ever heard of GE buying half of volt to be produced for their fleet services. that is one hell of a boost.
“The OC” …or,… “How to CONvince “TrueBeliever’s™” conservative’s with your Educational Professionalism that you the “right” person to teach their “offspring”!”
(Talk about his ability in “Following the money!” From Beverly Hills…to…Newport Beach that’s using your smarts!)
Published: Dec. 10, 2010
Newport-Mesa district to discuss school chief’s felony charges:
By FERMIN LEAL
THE ORANGE COUNTY REGISTER / Published: Dec. 10, 2010
“…According to the felony complaints, while at Beverly Hills Unified, Hubbard allegedly gave Karen Christiansen, then the district’s facilities director, $20,000 in stipends that were not approved the Beverly Hills school board.
Christiansen, who now lives in Las Vegas, was hired as a facilities director for the district in 2004 at an annual salary of $113,000. But in 2006, she allegedly secretly negotiated a contract to be an independent contractor that paid her about $5.2 million while performing her same duties as director, a violation of state conflict of interest codes, Schmidt said.
In addition, Christiansen was charged with two counts of misappropriation of funds and five counts of conflict of interest, said L.A. County Deputy District Attorney Juliet Schmidt.”
You Go Misses Robinson!:
“Vicki Robinson, a parent and PTA member at Newport Harbor High School, said she was in disbelief and shock when she heard about the allegations against the superintendent.
“Dr. Hubbard has served as a good leader since he came to the district,” she said. “Under his control, test scores have improved and the district has managed to thrive despite budget cuts. I would hate to lose him over something like this.”
“…facilities director…”
Is that what they call it now?
Wonder what “facilities” she was directing?
Or is this an “under the table” settlement of a sexual harassment suit?
Signed, Mr Cynical
$5 MILLION to be a director?!
Seriously, there was absolutely something else going on.
Oh, and I have mentioned lately those sweetheart deals that are what is really costing the taxpayer?
Good find Hwy. Damn unions.
An excerpt from an email that got forwarded to me regarding the socialistic tax-rate trends in Europe and how the US has aspirations to emulate this model. Points out how poverty is still rampant throughout Europe and socialism is no solution to poor/debt issues.
United Kingdom
Income Tax: 50%
VAT: 17.5% TOTAL: 67.5%
France
Income Tax: 40%
VAT: 19.6% TOTAL: 59.6%
Greece
Income Tax: 40%
VAT: 25% TOTAL: 65%
Spain
Income Tax: 45%
VAT: 16% TOTAL: 61%
Portugal
Income Tax: 42%
VAT: 20% TOTAL: 62%
Sweden
Income Tax: 55%
VAT: 25% TOTAL: 80%
Norway
Income Tax: 54.3%
VAT: 25% TOTAL: 79.3%
Netherlands
Income Tax: 52%
VAT: 19% TOTAL: 71%
Denmark
Income Tax: 58%
VAT: 25% TOTAL: 83%
Finland
Income Tax: 53%
VAT: 22% TOTAL: 75%
“….socialism is no solution……”
Neither is capitalism, as currently configured in the USA.
The USA is capitalist? LOL.
I don’t know what you call what we have now.
What do you call a system that devalues honesty, restraint, and intelligent use of capital, and rewards crooks, swindlers, market manipultors, tax cheats, the list goes on and on……
The reason none of these problems are being addressed, is because too many people’s income and net worth is dependent on keeping the scam going.
Try mixed economy. It is discussed in economics 1 in college. Some elements of a command economy and some elements of capitalism. There has never been a pure socialist economy, never a pure communist economy, and never a pure capitalist economy.
To be pure capitalist, taxes have to be truly voluntary. There would be absolutely no regulations. Government would be funded out of charity, not out of force. Money for government would be so limited that there would be absolutely no entitlements, no forced preferential hiring, no Medicare, and no social security. Banking would be decentralized and private mints would compete to provide the most stable currency. We are far from a market economy, bub.
What we have is socialism for the rich and no-holds-barred capitalism for the rest of us.
I agree with eco.
“What do you call a system that devalues honesty, restraint, and intelligent use of capital, and rewards crooks, swindlers, market manipultors, tax cheats, the list goes on and on……”
1. Kleptocracy
2. Crony capitalism
3. Disaster capitalism
4. Plutocracy
5. Aristocracy
6. Feudalism
7. Dictatorship of the proletariat
8. Fascism
Those income tax rates are probably the highest tax brackets. It doesn’t really make sense.
Also, none of the European listed above is socialist. Prviate businesses exist in all of them.
Also, it makes absolutely no sense at all to add the VAT rate to the income tax rate. If you ever actually pay the highest marginal rate as your abolute tax rate (possibly reached within some small margin of error for people who make many millions of whatevers per year), you cannnot then spend all your income buying stuff unless you spend out of your savings or finance the purchase by borrowing.
Example, I make 100K whatevers. I am taxed at 50%. I have 50K whatevers left over. I buy stuff subject to the VAT with everything that is left over (already an unreasonable assumption as I don’t thing rent is subject to VAT and if you are paying for housing with a mortgage you are not paying VAT as the purchase was made ages ago). The VAT rate is 17.5%. So I am paying 8.75% of total pay on VAT because, well, you don’t pay VAT on your income taxes.
The proper way to add the two taxes is to apply VAT only to the amount not paid in income taxes. And you should use the real effective rate for that, not just the highest marginal rate. And that assumes you spend every penny and don’t save a thing. Please, what is the savings rate in those countries? It isn’t negative even in the US.
The “analysis” is garbage. Start to finish.
If it absolutely makes no sense then the congress will do it.
“Points out how poverty is still rampant throughout Europe”
Making stuff up again I see.
Why bother?
My Friendly Neighborhood Realtor says don’t be a bottom-caller, and now is a great time to buy:
“Homebuyers trying to time the real estate market today may think they have it down to a science. They watch the news, read the papers, hear that prices are dropping, and assume the bottom hasn’t arrived. So they wait.
There’s just one problem. The bottom - at least the bottom for interest rates - appears to be gone. And it just so happens that interest rates are a very powerful determinant of how much home you can afford and what you’ll pay each month - even more powerful, in some instances, than price.
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It may be hard to believe, but in the long run it makes more financial sense to buy a home at a higher price with a lower interest rate than vice versa. So instead of trying to time the bottom for prices, get the best interest rate you can on a mortgage and home that’s right for you.”
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“It may be hard to believe, but in the long run it makes more financial sense to buy a home at a higher price with a lower interest rate than vice versa.”
It is funny - I see it the opposite way. When interest rates rise, prices drop further - ultimately it is affordability under whatever the current rules are that determine the prices. But if I start out with a higher interest rate and then it drops, I can refinance and save money. If you start out by paying more and getting a low interest rate, you can’t do that, and you may find yourself underwater.
Her commission depends on you buying now. That’s why buying now is always a great time for her.
This write-up is a fine example of someone who is unable to generalize from a single individual purchase decision to the market at-large.
The premise is that if a potential buyer waits too long, their purchasing power may be reduced, because interest rate increases may reduce affordability more than purchase price declines improve it. That is true, as far as it goes, when viewed in isolation.
Completely ignored is that simple fact that if this scenario were to be borne out in reality, the reduced purchasing power of EVERY buyer in the market shifts the entire demand curve for housing. Some of those who could afford to buy at the margin will no longer be able to buy at all. Most will still be able to buy, but only at a reduced purchase price.
This shift in the demand curve will directly lead to reduced priced in the market at-large.
And after having made the decision to purchase based on this fear of reduced future affordability, the reader will instead get to enjoy watching the value of their new purchase decline.
There are all sorts of tax increases coming and an expected spike in energy that I’m thinking might be worth waiting out for their impact on people’s ability to pay for home purchases.
These issues might also increase the numbers of those deciding to sell.
I’m waiting this baby out.
Then again I might just join the numbers leaving the state.
Are y’all tipping your landlord this holiday season? LOL
www rentedspaces com/2010/12/09/the-renters-guide-to-tipping/?icid=main%7Chtmlws-main-n%7Cdl9%7Csec4_lnk2%7C189347
Tip. The. Landlord?!
Like hell!
We gave our landlord a nice Christmas gift this year, out of appreciation for shouldering the home equity losses that we get to forgo as renters.
Bernie Madoff’s eldest son dead of apparent suicide:
(Reuters) - Mark Madoff, the elder son of convicted swindler Bernard Madoff, was found hanged in his New York City apartment in an apparent suicide on the second anniversary of his father’s arrest, police and his lawyer said on Saturday.
The 46-year-old Mark Madoff, who had worked at his father’s firm, “succumbed to two years of unrelenting pressure from false accusations and innuendo,” his lawyer said. He was found dead in his apartment in the city’s SoHo neighborhood, New York City police spokesman Paul Browne said
Question for the HBB:
I’ve been watching several different foreclosure properties in my area, and one recently sold for far more than I would have expected per the sale info on redfin.com.
I noticed that the MLS sale price (12/8/2010) was $465K and the Property Tax info (12/9/2010) had a value of $446K. Why the difference?
Maybe this is the same question, but can the MLS price be gamed significantly?
Driving about 33647 this morning, here are my observations. Very clean area. Lots of thirty-somethings and kids. Drove near one condo development with a sign saying prices starting in the $100′000s. Not sure what is in that price. Everything here in Tampa from USF northward to Wesley Chapel part of New Tampa exceeded my expectations.
I have easily seen more griminess in Phoenix and LA, even the South Bay, with the $600,000+ crapshacks built in the 1940s and 1950s.
Haven’t seen trashy people - well there is a Wal-Mart sign next to Bruce B Downs Blvd at some point, but the big box is well concealed from motorists by trees and shrubs that blend in to the environment. I think that is the intent.
The next stage for me is when I detect the client hopes I will be around long term. I need that sign by mid-January to decide if I should get a two year old civic or not, which would be cheaper than renting a car for a year.
Lived, worked in Tampa 1976-80, 1989-2000. Visit from time to time.
1) Rent, gated if you can, crime is higher than perceived.
2) Traffic on 275, Dale Mabry is lousy at commute times.
I think I am pretty safe in my motel I take my iPad and cell phone with me when I leave my room. I park behind a guarded gate at work. I don’t venture out at night. And don’t have much baggage.
I’m rooting for the GSEs in the Battle Galactica edition of Fannie and Freddie vrs. Megabank, Inc!
The American mortgage mess
Invest then protest
Banks are under assault from buyers of mortgage securities
Dec 9th 2010 | NEW YORK | from PRINT EDITION
AMERICA’S foreclosure scandal is still reverberating. Congress recently held hearings on mortgage lenders’ use of “robo-signers” to stamp eviction documents without bothering to read them first. An investigation by the 50 states’ attorneys-general may result in a settlement with banks—perhaps early next year—that could include pledges to reform industry practices. And the right of mortgage servicers (which administer payments to investors) to foreclose on loans that were sliced and diced in securitisations is being challenged by, among others, the United States Trustee Programme, the arm of the Justice Department with the job of protecting the integrity of the bankruptcy system.
Worse, investors in mortgage-backed securities (MBSs) are trying to make the banks that underwrote the deals buy them back at par. They have to do this if they breached assurances about the quality of the mortgages in the pool. So shoddily were these securities cobbled together in 2005-07 that analysts at Compass Point Research & Trading, a broker, reckon loan “putbacks” could cause more than $130 billion in losses, almost half of them to be borne by JPMorgan Chase and Bank of America (BofA), whose purchase of Countrywide greatly increased its exposure. Most other estimates lie between $50 billion and $100 billion.
In the vanguard of this battle are Fannie Mae and Freddie Mac, America’s nationalised housing agencies, which have so far forced banks to take back $13 billion-worth of dodgy debt. Five of the 12 Federal Home Loan Banks, industry-owned co-operatives that lend to mortgage banks, are also pressing claims against the big securitisers. Bond insurers such as MBIA and Assured Guaranty, which took hits on mortgage securities they had “wrapped” with credit enhancement, are becoming more active too. In a lawsuit this week MBIA claimed Morgan Stanley had “fraudulently induced” it to insure $223m in bonds.
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Rot-roh.
“Rot-roh.” Astro!
I ruv you reorge.
Brokers slow to apply for licenses
By Nirvi Shah Miami Herald Staff Writer
Posted: 5:04 p.m. Thursday, Dec. 9, 2010
Only about a quarter of Florida’s 43,000 mortgage industry professionals have applied for licenses under the Nationwide Mortgage Licensing System, meaning the rest could be barred from working in the industry on Jan. 1.
Applications have been accepted since Oct. 1, and each will take up to three months to process. The new, tougher licensing rules require a state and federal background check, required education, proof that an applicant has tried to take state and national tests and a credit report.
Old rules required a state criminal background check once, and licenses could be renewed every two years without additional criminal screenings. Licenses could be revoked if mortgage sellers were charged for a crime after that, but the state relied on the brokers to report criminal charges filed against them.
Those who turn in applications by Jan. 1 can keep working while their paperwork is processed.
It’s unclear why more brokers haven’t applied. Since the peak of the housing market about five years ago, the number of registered mortgage brokers in Florida has dropped by about half, said Flora Beal, a spokeswoman for the Florida Office of Financial Regulation.
The fees may be a deterrent she said, or people may simply be procrastinating.
Venezuela halted flight crew in 2008 over remark
By IAN JAMES The Associated Press
CARACAS, Venezuela — The captain and crew of an American Airlines flight were briefly detained in 2008 after a crew member advised passengers to set their watches to “local Chavez time” upon arrival in Caracas, according to a confidential U.S. report released by WikiLeaks.
President Hugo Chavez in 2007 created a new time zone for Venezuela, moving the clock back a half hour on a permanent basis.
The U.S. Embassy report, dated Oct. 1, 2008, and released Friday, said there appeared to be a misunderstanding over one crucial word in the crew member’s announcement: “local” vs. “loco” — which means crazy in Spanish.
The embassy said one passenger, who was a friend of pro-Chavez lawmaker Carlos Echezuria Rodriguez, thought the crew member said “loco Chavez time.”
American Airlines local manager Omar Nottaro reported to the embassy that the crew member announced to passengers: “Welcome to Venezuela. Local Chavez time is …”
Does lying one’s ass off cause kidney stones?
http://finance.yahoo.com/news/Treasury-Geithner-home-from-apf-460890239.html?x=0&sec=topStories&pos=3&asset=&ccode=
Nothing that a barney frank enema couldn’t solve.
I was just reading CNN, and their latest housing article states that people might be tempted to pull the trigger on a house right now on account of the fear that mortgage rates will rise soon and quickly. Finally, this is an indicator that the final chapter of suckering innocents into the market at still inflated rates is now being read. Hence, we might actually see a true buyers market in about a year. This crash is running right on schedule, but who could have envisioned the details?
Karma aside, this story breaks my heart. The loss of Madoff’s son to suicide adds an element of Shakespearean tragedy to what would otherwise have gone down in history as just another run-of-the-mill busted Wall Street fraud operation. As a father with sons, I can feel Madoff’s pain vicariously.
* U.S. NEWS
* DECEMBER 12, 2010, 1:17 A.M. ET
Madoff’s Son Is Found Dead in Apparent Suicide
By SEAN GARDINER, MICHAEL ROTHFELD, STEVE EDER and CHAD BRAY
NEW YORK—Bernard Madoff’s elder son was found dead Saturday of an apparent suicide on the second anniversary of his father’s arrest, according to law-enforcement officials.
Mark Madoff, 46 years old, was found hanged with a dog leash attached to a living-room-ceiling pipe in his apartment by his father-in-law, Martin London, law-enforcement officials said. A relative notified police around 7:30 a.m. No suicide note was found, the officials said.
Mark Madoff’s 2-year-old son, Nick, was found unharmed in a bedroom in the apartment, along with a dog. Police said that because the toddler was left alone, they are notifying the city’s Administration for Children’s Services. The child was released to Mr. London. Detectives took at least one computer, an Apple, and BlackBerries as per a search warrant for analysis.
The body of Mark Madoff, son of convicted Ponzi scheme architect Bernie Madoff, was removed from his Soho apartment as media and onlookers watched. WSJ’s Steve Eder reports.
Law-enforcement officials said Mr. London went to the apartment in Manhattan’s SoHo section at the request of Mark Madoff’s wife, Stephanie Morgan, who was in Florida, where she received an email Saturday morning from her husband indicating that she should have someone check on their son. According to police, one email to her read “Please send someone to take care of Nick” and another “I love you.” He also sent an email to his attorney, Martin Flumenbaum. According to police it read “Nobody wants to believe the truth. Please take care of my family.”
Mark Madoff’s death comes as federal prosecutors in recent months have been scrutinizing Bernard’s brother and sons, who haven’t been charged with wrongdoing. Seven people besides Bernard Madoff, including his top lieutenant, Frank DiPascali, have been criminally charged.
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* SIGHTINGS
* DECEMBER 10, 2010
The Man Who Said No to Hitler
His life was not in danger under the Nazis, but his soul was. He chose exile over a devil’s bargain
* By TERRY TEACHOUT
Adolf Busch, the greatest German violinist of the 20th century, is now known only to classical-record collectors who treasure the searchingly eloquent 78s that he cut with Rudolf Serkin, his son-in-law and recital partner, and the Busch Quartet, the ensemble that he led for three decades. But there is another reason to remember him, one that in the long run may well count for as much as the music that he made: Mr. Busch’s name is at the very top of the short list of German musicians who refused to kowtow to Adolf Hitler. This latter aspect of his life is described in detail in Tully Potter’s “Adolf Busch: The Life of a Honest Musician” (Toccata Press), the first full-length biography of the violinist ever to be published. It is at once a stirring tale and a disturbing one.
Most of us, I suspect, like to think of artists as a breed apart, a cadre of idealists whose souls have been ennobled by long exposure to beauty. The truth, however, is that they are every bit as human as the rest of us, and that a certain number of them are self-centered opportunists who are perfectly willing to ignore evil so long as the evildoers leave them in peace to do their work. That was pretty much what many German musicians did when the Nazis came to power in 1933. Within a matter of days, Hitler and his henchmen started putting into place a policy of systematic persecution of German Jews. Numerous well-known Jewish musicians, including Bruno Walter, Otto Klemperer and Emanuel Feuermann, either were forced out of their posts or quit in protest.
In April, mere weeks after Hitler seized the levers of power, the Busch Quartet decided to stop playing in Germany. Mr. Busch also canceled his remaining recitals with Mr. Serkin, issuing this statement: “Because of the impression made on me by the actions of my Christian compatriots against German Jews…I find it necessary to break off my concert tour in Germany.” What makes this act so significant is that Mr. Busch was the only well-known non-Jewish German classical musician to emigrate from Germany solely as a matter of principle—and one of a bare handful of non-Jewish European musicians, including Arturo Toscanini and Pablo Casals, who resolved to stop performing there for the same reason.
Virtually all of the other big names in Austro-German music, including Wilhelm Furtwängler, Walter Gieseking, Herbert von Karajan, Carl Orff and Richard Strauss, stayed behind, some because they were active supporters of Hitler and others because they thought that the Nazis would dry up and blow away. Mr. Busch knew better. In a prophetic letter, he wrote, “Some of them believe that if they only ‘play along,’ the atrocities and injustice that are part and parcel of the movement will be tempered, can be turned around…they do not notice that they can only have a retarding effect, that the atrocities will still take place, only perhaps a bit later.”
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The Financial Times
Treasuries drop back to earth with a bump
By Richard Milne, Michael Mackenzie and David Oakley
Published: December 10 2010 19:11 | Last updated: December 10 2010 20:58
This week’s sell-off in US Treasury bonds has been acute. Over the course of two frenetic days prices suffered their biggest falls since Lehman’s collapse. Government debt markets around the world tumbled, sending yields on bonds back to their highest levels since June.
The sharp falls, triggered by US President Barack Obama’s deal with Republicans to extend Bush-era tax cuts for millions of Americans, have divided investors, strategists and dealers.
Does the slide mark the beginning of the end of the 30-year bull market in bonds amid fears that budget deficits will spiral out of control – or is it a more modest retracement, reflecting growing hopes for economic recovery?
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Does the slide mark the beginning of the end of the 30-year bull market in bonds amid fears that budget deficits will spiral out of control…?
Is the Pope Catholic?
QE2 and inflation containment don’t mix.
Crude oil tipped to bubble over $100 a barrel
By Javier Blas
Published: December 7 2010 19:26 | Last updated: December 7 2010 23:11
For the first time in two years, oil bulls are starting to outnumber bears.
The bulls’ push comes as the oil market is experiencing a “demand shock”, with consumption growth this year accelerating to almost its highest rate in 30 years.
This unexpected boom in demand has lifted benchmark oil prices sharply higher, to a 26-month high of more than $90 a barrel on Tuesday. Some traders believe the market could jump to $100 within weeks.
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Don’t just ignore that nagging cough, as what you ignore could kill you.
Executive Health December 09, 2010, 12:00 EST
U.S. Life Expectancy Drops Slightly
Deaths from stroke, infant mortality decline, federal report finds
By Steven Reinberg
HealthDay Reporter
THURSDAY, Dec. 9 (HealthDay News) — Life expectancy dipped slightly in the United States from 2007 to 2008, according to a new federal report.
Life expectancy for Americans in general declined by a little more than one month, from 77.9 to 77.8 years. For women, the average life expectancy dropped by a tenth of one year, to 80.3 years; for men it also dropped by the same amount, to 75.3 years.
For the first time in 50 years, stroke was not the third-leading cause of death; it was overtaken by chronic lower respiratory diseases such as asthma, emphysema and chronic bronchitis. The age-adjusted death rates for stroke dropped 3.8 percent from 2007 to 2008, while rates for chronic lower respiratory diseases rose 7.8 percent, according to the report, released by the U.S. Centers for Disease Control and Prevention.
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Cover Story December 9, 2010, 5:00PM EST
The Colossus of Wall Street
Bestride the bond and equity markets, counseling the Treasury and the Fed, BlackRock CEO Larry Fink is the most influential man you’ve never heard of
The brain trust: Kapito, Wagner, and Fink Christopher Anderson
By Sheelah Kolhatkar and Sree Vidya Bhaktavatsalam
December 13, 2010
Larry Fink: BlackRock’s Brain
As chairman and chief executive officer of BlackRock (BLK), Larry Fink controls more money than Germany has GDP. BlackRock is the world’s biggest asset management firm, a $3.45 trillion powerhouse that’s the largest counterparty on Wall Street, on track to pay investment banks $1 billion in fees this year. It manages $1.4 trillion for state pension funds in New York, New Jersey, and California, among others, invests $240 billion for central banks and sovereign wealth funds such as the Abu Dhabi Investment Authority, and in the U.S. stock and bond markets, it’s responsible for a massive amount of trading volume each day. BlackRock serves as the U.S. Treasury Dept.’s go-to source for private sector financial expertise and managed at least $150 billion in toxic assets on behalf of U.S. taxpayers after the 2008 bailouts of American International Group (AIG) and Bear Stearns. While running the company is a team effort, Fink, 58, is BlackRock’s brain, and BlackRock, increasingly, is Wall Street’s.
“There’s no bank, no sovereign wealth fund, no insurance company that’s as large as BlackRock,” says Ralph Schlosstein, a co-founder who left in 2007 and is now CEO of investment bank Evercore Partners. “BlackRock today is one of, if not the, most influential financial institutions in the world.”
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BlackRock was part of the group that put together the Stuyvesant Town deal that defaulted on $6 billion in debt earlier this year.
Purchased in 2006, “At that time, the $5.6 billion total price tag made the sale the most expensive in residential real-estate history. But Tishman and BlackRock didn’t put in much of their own money — according to The Wall Street Journal, Tishman, for example, only put up $112 million. Now the complex is estimated to be worth only $1.8 billion, and earlier this month, the owners began defaulting on debt payments . . . ” http://nymag.com/daily/intel/2010/01/tishman_speyer_and_blackrock_g.html
What got my attention about that deal, as a life long resident of the NY metropolitan area, was that it made no sense. It was dependent on the courts overturning rent control in Manhattan apartments that had gotten special financing when they were built after WWII. The idea was that these apartments could be sold. But no one who has been reading the New York papers for the past 40 years would think the courts would allow middle class rental housing to be decontrolled and converted to coops and condos.
How did that deal get put together for billions in loans? I think there is something very stinky there and another example of how the people at the top are protected from accountability. One of the investors in that deal was the California Public Employees Retirement System (CALPERS) and CALPERS lost $500 million on the deal. Are California taxpayers going to have to make up the difference in pension funding or will the workers pensions be cut for that money? Who at CALPERS made the decision to put that money into such a stupid investment? An investment that any New York area newspaper reader would know was going to fail. Who got the money and still has it?
How many other deals just as stinky as this one are there out there? Some of the Tishman partners are former Federal Reserve Board people.
And not a word about any interest in investigating this deal by the Justice Department or New York or Californey attorneys general.
With over 1.2 million bank repossessions expected in 2011, it certainly doesn’t look like we will run out of foreclosure homes any time soon.
* MARKETWATCH
* DECEMBER 12, 2010
More Foreclosures Expected in 2011
By AMY HOAK
Brace yourself for another rough year in housing: The number of foreclosures is expected by many to increase in 2011 as more troubled mortgages work their way through the pipeline.
Next year could very well be a peak year for foreclosures, says Rick Sharga, a senior vice president at RealtyTrac, an online marketplace for foreclosure properties. The market is expected to tally about 1.2 million bank repossessions in 2010, up from 900,000 in 2009, he says. “We expect we will top both of those numbers in 2011.”
That’s partially due to issues the industry has faced with foreclosure processing that began in the fall and delayed a portion of foreclosures from being completed this year, he says. In the so-called robosigning controversy, some lenders halted foreclosures after learning procedures for signing off on foreclosure documents might not be in accordance with the law.
Continued high unemployment also is expected to exacerbate the foreclosure problem in the year ahead, as will upcoming interest-rate resets on adjustable-rate mortgages that will increase monthly payments for some homeowners, Mr. Sharga says.
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Can anyone explain “interest rate signalling” and why the Australian government feels obligated to crack down on it?
Australia unveils reforms to boost bank competition
* Factbox - Key changes to Australian bank regulations
2:03am GMT
By James Grubel
CANBERRA | Sun Dec 12, 2010 3:53am GMT
CANBERRA (Reuters) - Australia’s government unveiled reforms to boost bank competition on Sunday, allowing lenders to issue covered bonds for the first time and cracking down on interest rate signalling under a package designed to calm voter anger at rising mortgage interest rates.
Treasurer Wayne Swan said the reforms aimed to help mutual credit unions and building societies become a fifth pillar of Australia’s finance sector, by making it easier for customers to leave the big four banks which currently dominate the home loan market.
The reforms aim to help unlisted credit unions and building societies access funding and customers, but analysts say they are unlikely to seriously hurt the profitability and share values of the major banks.
“Most of what has been announced has been flagged or leaked. I don’t think there is anything really new or earth-shattering here, so I don’t see a huge reaction,” said RBS bank analyst John Buonaccorsi.
“But certainly over time, it will lead to slightly cheaper housing loans, because covered bonds are cheaper funding. But it is not going to cause a dramatic difference.”
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