Bits Bucket For December 15, 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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and the beat goes on….
What’s wrong with MERS — Mortgage Electronic Registration System?
>>”It didn’t add up,” he said of the electronic database that, unbeknownst to most homeowners, holds 60 percent of the nation’s residential mortgages. “At first I thought I didn’t understand, but after studying it for a few years, it became clear there are basic and quite fundamental problems with MERS.”
Those problems have been exacerbated as millions of foreclosures work their way through the legal system and MERS’ role as the mortgage holder, invisible in good times, gets scrutinized when homeowners default.
Peterson, who taught at University of Florida’s law school until 2008, believes MERS is a shell company that usurped the traditional role of county clerks to the benefit of lenders and the detriment of borrowers.<<
http://www.tampabay.com/news/business/realestate/whats-wrong-with-mers-8212-mortgage-electronic-registration-system/1139971
Watch live now: http://www.c-span.org/Watch/C-SPAN3.aspx
“…unbeknownst to most homeowners, holds 60 percent of the nation’s residential mortgages.”
Why does this not constitute a violation of the Sherman Antitrust Act?
Violations of acts, laws, rules, promises, contracts, etc. are rampant.
What’s lacking is enforcement. The systems are owned.. but not by the citizens.
At the risk of over-simplifying antitrust law….
Having a large share of a market - a “monopoly” if you will - is not per se illegal under antitrust law. What’s a violation is “acting like a monopoly” - throwing your weight around as it were.
GM once had something like 50% of the car market in the US. That wasn’t a violation. But if they had pressured their suppliers not to deal with Ford, that would have been a violation.
Suppose GM had also owned gas stations, who refused to sell gas to non-GM cars. That probably would have been an illegal “tying agreement” and also a violation.
‘What’s a violation is “acting like a monopoly” - throwing your weight around as it were.’
Where does hastily, fraudulently robo-signed paperwork with no recourse for FBs facing discriminatory or wrongful eviction land in your dichotomy?
Also, not monopolistic. That would be fraud. Saying you reviewed something that you really didn’t.
I would guess they are violations of laws other than antitrust laws.
Social security disability for teens
HOLYOKE — Bianca Martinez is 15 and has a dream, to work someday as an animation artist, preferably in Japan, a country she has been fixated on for years.
But for now the idea of getting any kind of paid job, even at the Holyoke Mall, where many of her teenage friends work, worries her because of what she might lose: Her $600-a-month federal disability check, which represents more than half her family’s income.
“That’s why I’m not working this summer,’’ said Martinez, a freshman at Holyoke High School who is being treated for ADHD and depression. “If I work and I get a certain amount, then they’ll take money away from my mom. She needs it. I don’t want my mom’s money to go down.’’
Tens of thousands of teenagers who receive disability checks through the $10 billion federal Supplemental Security Income face this same painful dilemma: In many cases, their indigent families have depended on the income for years.
Milly Cruz, Bianca’s mother, was laid off earlier this year from her job as a special education aide. She acknowledged that Bianca’s benefit, in addition to her oldest daughter’s $500-a-month SSI check for ADHD and speech delays, has sustained the family for more than a decade. She is not happy about it, but she also does not see an easy way out.
‘A reason not to work’
It is a prospect that fills Kris Long with dread. Since he was 16, Long has qualified for the children’s SSI program for his depression and bipolar illness. When he was a student at New Bedford High School, he recalled, he felt envious of peers who earned extra money by working at restaurants and stores. He says he did not work because he did not dare jeopardize his $700-a-month SSI check, which was critical to his family.
A destructive dependence
Top Social Security officials, in an interview at the agency’s headquarters just outside Baltimore, said they also worry that the SSI program for children may have the unintended effect of sapping teenagers’ motivation to enter the workforce.
“The question becomes whether it increases the chances the child will see himself forever dependent on government programs of some sort,’’ said David Rust, deputy commissioner in the agency’s Office of Retirement and Disability Policy. “It’s very destructive to the child and child’s well-being.’’
Disability is the new welfare. We need massive reform.
new?
Disability is the new welfare ??
I know of a mid 50’s guy who is out on full disability who is worth double digit millions….All inherited…
Cousin and her baby dady are both on disability. They hobble from the car to the house with a cane. Once inside, they pull tight the curtains, lean the cane in a corner, and walk about the house as if they are perfectly fine….
Call me heartless, but I would love to stop all these leeches!!
“depression and bipolar illness” qualifies you for free $$$$ ?… can’t work? TOO BAD!!!
Bi-polar disorder can be rough. Still, our society ought to be able to strike a much better balance between encouraging him to “try” to work and helping him along. Giving these otherwise willing and able-to-try teens a completely free ride - and making them choose between having money and having a life - is hardly an effective use of resources.
For those interested, here’s a fantastic video of a kid who made lemonade when life handed him lemons:
www youtube com/watch_popup?v=9xwCG0Ey2Mg
I just can’t believe the kids they label as “bipolar” now. If a young guy has any anger or problems getting along… he’s bipolar. They just did it to a kid I know, who seemed perfectly normal and healthy for the 15 years I’ve known him, and now it’s screwing up his military service because he can’t deploy.
I can tell you that the term “bipolar” was used rather casually when I had my brush with the mental health care system. That was back in my twenties and I’ve mentioned it elsewhere on today’s HBB.
Any-hoo, I think there’s much to be desired about our mental health care system. For one thing, I think it’s way too quick to diagnose people without considering the consequences of what this could mean. Note the case of In Montana’s friend, for example.
I also think that there are too many instances of people being drugged silly. It’s so much easier to put them on something than it is to help them learn coping skills that could get them over the rough spots of life.
In my own case, I went to a free, community-based support group that taught me those skills. And I literally owe my life to the people I met in that group.
How can the big pharmaceutical companies make money if people are sent to free, community-based support groups?
How can the big pharmaceutical companies make money if people are sent to free, community-based support groups?
Good point, Doug. While I was being a resistant patient* who refused to take the recommended drug, one of my friends sought help at the same place I was going to.
They recommended that she go on the same drug that I was refusing. She was horrified.
So much so that she called her old therapist and he made some phone calls of his own. Turned out that this place was doing a study on (you guessed it!) that drug.
*A friend of a friend was a psychiatrist at the Pittsburgh VA. One fine afternoon, when all of us friends got together for a party in the country east of Pittsburgh, I spoke to him about the drug that was so ardently being recommended to me.
Dr. Friend-of-Friend told me to stay the heck away from it. Reason: I was too young for it. And it was too strong. So, having gotten such a strong second opinion, I continued to say no to this drug.
I’ll admit to having suffered the first of these two things during my twenties. And, at the same time, I came very close to being diagnosed as bipolar.
However, I did hold jobs all through this period, even though I wasn’t the most stellar of employees. At one point, a therapist complimented me on my willingness to go out to work. Seemed that a lot of the people he dealt with weren’t doing that.
Slim,
Thank you for your candor, that’s not the easiest thing to share publicly. My post will turn up I’m sure but I have no qualms w/ supporting ppl in the effort to rehabilitate themselves and be the best ‘you’ you can be?
You evidently have not met anyone suffering from a bipolar disease. Its horrendous and awful for anyone living with them too!
However, not working due to ADHD is BS. But the government enabled that, didn’t it?
Speaking of depression and bi-polar disorder- did anyone catch the John Boehner 60 minutes interview? I did not watch it, but instead saw a video snippet of his emotional breakdowns. I’m not against a guy tearing up every once in a blue moon, but this screamed “unstable” to me. There’s something off about this guy.
The new Weeper of the House sheds tears for himself and admitted to it. The self-centeredness of that coward is stunning.
Tens of thousands of teenagers who receive disability checks through the $10 billion federal Supplemental Security Income
Stay focused,… America’s involved by it’s own consent in x2 foreign wars, don’t get distracted by indigent families grabbing pennies from your pockets. Stay focused, America is just days away from auditing the Federal Reserve any pennies lost to children in indigent families can surely be made whole by the 100’s of Billions $$$$$$$$$we’ll recover from that Corpooration.
Stay focused, As Mr. Bear suggested yesterday, “any-moment-now” we’re just x1 fiscal tax season away from taxing the “unseen” profits generated by Wall Street from freely utilizing Trillions of digital taxpayer monies $$$$$$$$$$$$$ to keep themselves in Business.
Stay focused,…oh never mind,… it’s really best you prioritize your personal worries for yourself and the good of our enduring Nation. ;-/
Did you hear that the Persian Gulf is now the Arabian Gulf?
Reprinting all those maps and documents is probably a couple hundred million alone - maybe even a cool billion?
That’s one way to deal with the whole Wikileaks fiasco.
Rename it “BP Gulf” “Royal Dutch Gulf” or “Aramco Gulf”
Closer to the truth.
Who are the doctors who are labeling these children as disabled? I’m outraged by this. I’ve had a couple of parents ask me to write disability letters for their children for things like deafness and I’ve always turned them down. Why would you label a child as disabled when they’re not? Disabled status should be preserved for kids who are truly permanently disabled - think severe mental retardation or severe autism. Conditions like depression, ADHD, mild retardation, mild autism, deafness, even quadriplegia don’t necessarily mean that they will be permanently disabled for work. Government aid should be aimed at getting them the education and habilitation they need, not just a paycheck for their parents.
Why? Did you miss the part about the monthly check. No system is more manipulated than this system. Not even Medicare.
How long do these payments go on?
Do they stop at age 18?
No, not unless the child is drawing based on the parent’s retirement or disability. That’s a different entitlement.
Once they get on SSI or SSD for their own “impairment,” they’re on forever unless disqualified. I know someone who got it at about age 14 for dyslexia..and with that status he got Medicare, and was later able to get survivor’s benefits on a govt pension as well. Still drawing today at 55.
What’s really bad is once they’ve been on disability a few years, from a young age, the prospect of having to work is terrifying.
Well after reading the story, once I found it, it looks like SSI does stop at 18 and they have to re-apply as an adult. That’s for low income…the people I know are getting full SSD which is not income-restricted. Maybe they had to re-apply too and I just didn’t know about it.
Maybe it is the prospect of having to work and not being able to find a good paying job with benefits that is terrifying.
I have a friend who is disabled. He’s been in a wheelchair for, oh, about a decade now. (He was nearly killed in a car accident.)
Guy has a job, a family, and is active in the community. Hardly what any of us would call a slacker.
He does get some government assistance, but the notion of not going out to work is unthinkable to him.
I have a cousin who, as far as I know, is the only person in the state of Massachusetts with a full disability rating who works. She has had epilepsy since early childhood - sometimes more controlled, sometimes less controlled - and the grand mal seizures eventually did a number on her back and her balance. She works as a contractor doing industrial kitchen design. She has to be careful of her workload and sometimes has to do all the work lying down as sitting just doesn’t always work for her, but computers are a lot more flexible about work position than drafting tables so she makes it work.
She has never gotten a check for living expenses as that requires both the designation and not having earned a paycheck for some huge amount of time (like 2 years). I don’t understand why she has the designation even though she clearly can and does work, but I’ve never researced the rules for the system. She doesn’t earn enough these days to have an apartment so she lives with her mother. The designation does mean she has access to subsidized insurance in MA, though she didn’t even use that for years and years.
Did you see that chart in the story?
67% of children in Pennsylvania qualify for SSI?? what?? The numbers are incredible..
How is this creating jobs? The new number one priority of our leaders.
While I despise those leeches the motherlode of waste is in military & wars, medicare and presents to Wall Street. Welfare fraud is peanuts compared the wealth mining operations by Wall Street.
In California the “men” who are not inclined to work usually go for a penal code 5150 status, which brings home the federal SSDI bacon. Their free time is used to get high and reproduce.
Oh god…I’ve got one in the family (in-law). She used to get a check for night blindness but lost it, maybe for working I don’t know. She’s trying to get back on, of course, at the ripe old age of 20. Worthless POS…
“night blindness” lol
Yeah I get that every Friday night.
What I think has gotten lost in Pink-Slip Mania is that a lot of the ppl that were laid off were miscategorized? When you have a lot of 50+ former employees put on Unemployment we should have looked at their circumstances on a case-by-case basis.
My sense is that a good many of them ’should’ have been put on some form of disability. A guy (gal?) worked in Production in their 20’s, QC in their 30’s and 40’s, mgmt. in their 50’s and beyond in a good many cases simply b/c they could no longer perform “the work”.
But… employers want them ushered & whisked out the front gate post-haste so we just put ‘em on Un and let the taxpayers figure it out?
It wasn’t so long ago that ADHD went by another name: childhood.
What a wonderful diagnosis which hinders kids from gaining that invaluable early work experience. I’m not sure the value of it on a resume, but invaluable from a work ethic standpoint. Mowing 6-8 lawns a week during my early teen years didn’t hurt me a bit.
Tax breaks for corporations FAR outweigh all combined welfare.
GE did not pay any tax, neither did Exxon. How is that possible?
Wall Street is getting trillion from US tax payers, with a bazooka
pointed at us by Paulson. Watch for the hundred billion bonuses
this year for Wall Street, for doing nothing, producing nothing.
Permit me to weigh in with a ray of sunshine from cloudy Tucson. Where it’s supposed to rain tomorrow.
Despite the above bad news, I have a great deal of hope for our country’s future.
Why? Because every major social change — the Founding, the abolition of slavery, women’s suffrage, civil rights, etc., has come up from the grassroots.
And here it is, happening again. Call it the anti-plutocracy movement. Or the anti-big corporate movement. But here again, it’s percolating up from the bottom, not the top.
Slim,
Very most excellent point. It’s been something of an inspiration of late for me as well. I see a resurgence of smaller businesses cropping up.
Not just to fill the void/need ( largely b/c they’re fed up ) It’s a good thing.
wake me up when corp are stripped of their rights as supercitizen of this this nation. maybe then we will have a shot.
derka derka mohammed jihad……A pocka sherpa sherpa a bock allah ……….aahhh derka derka derka
Democrats’ budget bill: $1.1 trillion; 1,900 pages
By DAVID ROGERS - 12/14/10 - Politico
Defying the political odds, Senate Democrats rolled out a year-end, governmentwide spending bill Tuesday that cuts more than $26 billion from President Barack Obama’s 2011 requests even as it holds firm to thousands of the appropriations earmarks so adamantly opposed by critics of Congress.
Filling more than 1,900 pages, the $1.1 trillion measure represents an increase of less than 2 percent in annual spending but makes for an easy target of ridicule — a last stand by the Senate’s old bulls before the tea party takeover. In a scene reminiscent of the movie “Casablanca,” top Republicans expressed shock, shock that there was gambling still in Rick’s Cafe even after their own members have been quietly working to write the bill and gather GOP votes for passage.
“It’s completely inappropriate; I’m vigorously in opposition to it,” said Senate Minority Leader Mitch McConnell, who then had to admit the bill included earmarks for projects in his home state of Kentucky. Indeed, the spending levels are specifically designed to meet appropriations targets that McConnell and much of the Republican leadership espoused only months ago, and the leader’s old friend, Sen. Bob Bennett (R-Utah), has been active on the bill’s behalf.
Political theater at its finest.
I’m vigorously in opposition to it,” said Senate Minority Leader Mitch McConnell, who then had to admit the bill included earmarks for projects in his home state of Kentucky.
No worries, “TrueAnger™” is gonna whack, whack, whack, all those old established/entrenched “TruePurity™” “bluebloods” upside their head with a CSA 20# steelhead and get ‘em to reduce the US deficit “any-day-NOW!”
For the fiscal year that is already more than 1/4 over.
6500 earmarks in the bill.2100 pages more or less. No time to debate. I hope the GOP fillibusters it. Let’s see if they have the balls. Kick them all out in 2012. We need more Tea Party people.
You do realize that the Republicans voted into office (the 65 new ones in the house and the 6 new ones in the senate) have not yet been seated yet? That happens 3 JAN 2011.
And you do realize that until 3 JAN 2011 the house is controlled by democrats by a huge margin, the senate is controlled by democrats by a huge margin and the white house is controlled by a democrat.
Yes, but even though this is true, the Media Propagandists like to portray the Republicans as the “party of NO” and say they are holding up everything the Democrats are trying to do.
It’s sad to comprehend. I expect one last push from the OBAMA team to screw us over with more fascist legislation and “mandates” before they get booted out. There’s nothing lame about a “lame-duck”.
You may recall it was during Christmas Recess that the FEDERAL RESERVE ACT was instituted. It passed and has put us under the rule of the Bank-Lords since that time.
http://www.tampabay.com/news/education/college/after-real-estate-bust-agency-owner-gets-nursing-degree-at-phcc/1140033
“NEW PORT RICHEY — Pasco’s real estate boom had Kevin Horan and his family living the good life… But the housing market bust in recent years sent the business into a free fall… After years of hitting the books, he had finally obtained his associate of science degree in nursing and was ready to tackle a new career.”
I did exactly the same, but what went south for me was teaching, where it was not the stable career I hoped (for experienced teachers, that is,) even before the recession. Just graduated and so far, so good.
I have met multiple Gen Jones members who have gone or are going back to school for healthcare. All of course are exemplary students: we never hit the parties, and hit the books nonstop. When my generation is jonesing after something, we try harder. And we know how to study.
“but what went south for me was teaching, where it was not the stable career I hoped (for experienced teachers, that is)”
I’m confused, can you elaborate on this?
riots in Athens, austarity debate in Ireland, Spain debt downgrade…
USA looking to add another $1 trillion to our national debt over the next 2 years. The big hangup now is how much pork will be added to the billionaires’ tax cuts. Obviously, we’re (USA) not going to do anything on debt reduction until forced to by the bond holders.
Bond vigilantes have started the process, 10 year rates up 70 basis points since 11/30.
If they can run the 10 year up to 8%, I will chortle with glee.
unfortunately, they don’t have the speed and depth of bbs pocket.
The crisis is over, silly! Now get out there and consume, consume, consume to help Santa Claus drive a Christmas rally on Wall Street.
Yeah, the pork aspect of this tax bill are sickening - but not at all surprising. All it means when a chamber of congress pouts and doesn’t pass a bill - is that they were in a hurry crafting the bill and forgot to make sure and write in enough pork - that’s all.
The pork, while distasteful, is a drop in the bucket compared to SS, Medicare, Medicaid, and the prescription drug program.
You mean the Poor People, Old People, and Crazy People pork?
That poor people, old people, and crazy people pork that ate up 41% of the budget last fiscal year.
Add on DoD, VA, benefits to retireed federal workers (including civilian and military), and interest on the debt and we’re talking 73% of the budget.
Add up all the stuff that people like to call Welfare like AFDC, food stamps, housing subsidies, foster care, etc. and you get about 12% of the budget.
Unemployment (including extensaions): 2%
Transportation: 3%
Education: 3%
CDC, FDA, NASA, other health and science research: 2%
Everythign else: 5%
Any serious attempt to attack spending HAS to be focused at DOD, SS and Medicare/caid. AND, it better be immeidate cuts, not phased in over 20 years type shell game.
SS = intergeneration theft where those that paid in the least got back the most and those that will pay in the most, (like 3-7x as much) will get back far less.
Medicare = feeding into the rampant runaway cost of providing medicare that has been increasing at 2.5x the rate of inflation for 50 years, and now has us spending about twice as much per person as any other country in the world… but it generates nice profits for the drug companies, the lawyers, the insurance companies…
And tax breaks for corporations FAR outweighed those numbers combined.
Corporations never pay taxes. It’s just passed on the the consumer. Why bother with corporate taxes at all? The consumer pays it anyway.
Since employers have to pay people more so that people can live on their wages after income tax, and busnesses just pass those higher employemnt costs along to consumers, then really, consumers are really paying income taxes too. Let’s get rid of those.
And, of course, the sales tax also requires employeers pay their workers more to compensate for lost purchasing power, so really consumers are really paying that tax too… Let’s get rid of those too.
Heck, why bother with ANY tax. Oh, except estate tax. That is the one tax that can’t just be passed along to consumers. 75% on anything over $1 should generate some income. AND, it has the added benefit of keeping the money moving (as long as we get rid of loopholes like trusts and such).
Sales taxes are at least voluntary. I can choose not to spend.
You can? How? Besides discretionary or luxury items?
Yep.
“The big hangup now is how much pork will be added to the billionaires’ tax cuts”
What planet are you talking about?
Tax rates, if the bill passes, will stay WHERE THEY ARE NOW. That is not a cut, except to lefty jerk-offs.
The death tax will come back, though, which mostly affects THE RICH.
Idiot. And I mean that in the clasical Greek sense, you are incapable of seeing beyond your own tub ring.
Temporary - [tem-puh-rer-ee] –adjective
1.lasting, existing, serving, or effective for a time only; not permanent
The current debate is whether to EXTEND the TEMPORARY tax cuts that were set to AUTOMATICALLY expire.
And I DON’T mean that is the classical Greek sense, but in the “do try and keep up with current events” sense.
I thought I’d be a renter for a while, but excessive increments in rent are making me look into home ownership.
Over 40k people moved to Austin, TX this year, which is causing a lot of demand for rental units; therefore, prices are skyrocketing… my rent went up 24%.
Honestly, I feel uncomfortable paying 1650 a month in rent; however, I feel even more uncomfortable moving out of downtown Austin. I really like the downtown lifestyle.
What made you become a home owner?
this is what is keeping me from becoming a home owner.
http://finance.yahoo.com/q/bc?s=%5ETNX+Basic+Chart&t=3m
That’s the best reason of all Michael. Lets hope it keeps going in the same direction…… Then maybe the lying realtor community will have a legitimate reason to suggest someone buy a house to benefit from the mortgage interest tax deduction.
Brett, maybe I missed it, but I asked you before for advice about moving to Austin with my 21-year-old son (sorry, hope I don’t drive up rental price further.) I am looking at the south and north areas where I’d like to work. Any neighborhoods I should seek out or avoid? Any nice condo-style properties you’d recommend north or south of the city? Also, how easy is it to get a minimum wage job in the Austin area (for my son.)
Thanks,
Go East
I did respond; you mentioned your budget was like 1200 bucks and you wanted a 2-bedroom apartment with top-notch amenities.
If I was looking for safety, I’d probably look in SW or NW Austin like the Arboretum or Brodie Lane/71, maybe?… avoid anything east of I35. Central will be too expensive! I would chose SW or NW depending on where your workplace is… traffic is bad in Austin.
I don’t think he should have any issues finding minimum wage jobs in Austin… I’ve seen signs everywhere!
‘how easy is it to get a minimum wage job in the Austin area’
If he has a masters degree, it shouldn’t be a problem.
I guess we should explain why:
First, there’s the University of Texas. For those of you who don’t know, it’s a BIG school.
Second, Austin is the state capital. Guess what that means? Yep, a lot of privileged money and bright young things who want a piece of the action.
Third, they tried to make Austin a Silicon Valley South. AMD has their headquarters and a huge plant there. Intel built a a large downtown office building, but didn’t finish it and it had to be demolished.
Result? A lot of very educated folks chasing a limited number of opportunities.
And now it’s overpriced.
Lockheed tried to form a “Lockheed Austin Division” back in 1982, presumably to expand from the overpriced “Silicon Valley” campus in Sunnyvale. But for many reasons it never panned out and they abandoned LAD sometime in the mid 1990’s.
Anyone know what happened to the old LAD campus?
According to Google, the property is currently for sale in whole or as parcels and that adjoining property ventures have been attempted.
What made me become a homeowner? The desire to stop being in the midst of my landlady’s never-ending family dramas.
What made you become a home owner ??
Constant rent increases ??
This one demands that one must be nuts to buy a home:
http://stockcharts.com/h-sc/ui?s=USB&p=D&yr=3&mn=0&dy=0&id=p25672058587
Fair prices, and an assumption that I would stay where I bought indefinately.
How permanent is your job/family situation? As for the job, one advatage of NYC is that with 2.5 million of them a subway ride away in Manhattan, you don’t have to move to get the next one when you have to. Austin is smaller, but growing.
I don’t think the average rent in Austin went up 25%. Maybe downtown.
I would bet that this rate of increase is a one-time event. The typical scenario is that a company builds a building as condos, then realizes they won’t sell in the new post-bust market for what they think they are worth, apartmentizes the building, and rents them out at below-market to fill the building quickly. Once it is full, they can crank rates up until they hit the vacancy rate that they are willing to tolerate.
Does that sound like your building, Brett? I bet if you looked only at established buildings in the area, you would find that rent increases were dramatically lower.
Using this one-off data-point as a reason to buy strikes me as very short-sighted. Your milage (sic) may vary, of course.
Actually, my complex is not in that scenario. This is an established compex; there are other new units in the area who are offering 2 months off and $1000 gift cards if you sign with a 12-month lease.
All buildings have gone up… when I first moved downtown, there were multiple 1 br units for rent between 1300 to 1400 a month… I have gone to every single downtown complex, and there are no units cheaper than mine.
I would have to move outside the heart of downtown to get rents in the 1400-1500/month range; however, they are a lot smaller and the area isn’t as exciting…
Wow, I can pay that here in San Jose, heart of Silicon Valley. Austin? Again Wow!
I pay $ 1650 for a really nice 2/1 in santa monica.tell them to stick their rental increase where the sun don’t shine.
What made you become a home owner?
The wife.
ba-dump-ba
Take my wife. Please! And the mortgage with her!
LOL…
For me, it was when I realized the the rent on my apartment in an OK area was more than twice the mortgage that my parents were paying on their house in a very nice area. In a normal market, it takes years before purchasing is cheaper than renting. And then it gets better and better every year. The bubble distorted this.
Hey, there’s a question I can answer. Four years ago, my girlfriend-now-wife decided that she wanted to own a home. There was an interesting “low-cost housing” program available at the time. You could get a piece of crap $300,000 house for ~$120,000 if your number was drawn, and if you agreed to certain stipulations such as not moving for 20 years.
I agreed to this plan, as I’m in love. Though I never thought it would happen. To make this short– Last year, we watched interest rates and home prices tumble together. And got pregnant. We somehow found a house we loved for a price we liked and jumped.
We were paying $900/mo in rent for a 1-br apt in Davis (kind of similar to Austin–overpriced etc), and that rent went up yearly. We locked in at 4.3, and we’re paying $1040 a month, including taxes and insurance, for a wonderful $189,000 4br/2b home 8 miles away in another Sacramento suburb. And that monthly payment isn’t going up, ever. I know, we’re “slaves to our lender”. So be it. This house is a home, and we’ll be here a long time.
Next up the renters will be shaken down. Why? That’s where the money is.
Oh Austin, TX… You used to be so cool and affordable
Look up the MLS listing 4242951
641 sq ft condo at The W, across the street from my place
Price? 391,000k!!!!! or $601/sq ft
Plus 2.153% in property taxes and ~385 monthly HOA fees
That should answer your question Brett. Sounds like Austin is unaffordable for you, so you’re forced to continue renting. Better to overpay for rent than overpay to buy.
‘forced to continue renting’
IMO he’s not ‘forced’ to rent. He could get a loan, so no one is putting a gun to his head.
I can afford it; I just chose not to spend that much money in mortgage, taxes and HOAs..
I have multiple friends who own downtown in similar units (even smaller), and their monthly payments are almost 1k higher than my rent… but the OWN!!
There’s also squatting, or just plain hoboing too.
You know, that whole “hip urban downtown lifestyle” comes at a huge cost. People buy in the ‘burbs because it normally is much cheaper.
…and less frantic with less taxes and less fees.
When I was young I left the burbs because it was “dead.” I did the whole downtown hipster thing for years. Then it got old and I moved back to the burbs.
But a funny thing happened in the meantime, the burbs got hip. More art, music and theater and “events” than when I had left decades ago. A lot more.
I now avoid the inner city as much as possible.
Just out of curiosity, what would that $391k cubicle rent for?
http://www.marketwatch.com/story/offbeat-strategies-to-sell-your-home-2010-12-15
“Offbeat strategies to sell your home”
Lower the price.
Get what you can get for it today because it’s going to be less tomorrow for alot of years to come.
They said “Offbeat” not “Sensible.” And they surely didn’t say “Effective.”
it´s called a bubble. we have had the same bs in CA for years.
Not sure I get Mitt’s point, as clearly the option is available to extend the tax cuts again after the current extension ends. On the one hand, he says delay now is better than extending tax cuts; on the other hand he says the tax cuts should be extended indefinitely, once they are (eventually?) reinstated. Hmmmm…
Is the main point to elevate his standing in the eyes of the electorate by bashing Obama? In that case, I get it.
* December 14, 2010, 12:22 PM EST
Romney bashes tax-cut deal
Once and future Republican presidential contender Mitt Romney bashed the tax-cut deal between President Barack Obama and Republicans in an op-ed on Tuesday, saying a two-year extension of Bush-era tax breaks isn’t enough and will add to the deficit.
“Delay now is better than an immediate tax hike,” Romney wrote in USA Today. “But because the extension is only temporary, a large portion of the investment and job growth that characteristically accompanies low taxes will be lost,” he wrote.
…
He wants them made perminant, instead of just a 2-year extension….
I think we should get rid of all Federal taxes. If $1.5T a year deficits isn’t a problem, then I can’t imagine that $3.7T is an issue.
He wants them made permanent, but if not now, when? After Mitt is elected, I suppose?
Makes no sense…
He wants them made permanent, is against the deficit, and created the forerunner of Obama care.
Mr. Something for Nothing should just shut up, as people like him have already bankrupted the USA.
Prof Bear,I am probably missing some obvious point, but I feel we are being scammed by the talk about setting the estate tax rates. Whether you prefer the Dems 3.5M exemption and 55% rate or the Repubs 5M exemption and 35% rate,everyone I know who has assets greater than these exemptions has created a tax free or deferred trust to shelter the assets and pass them on to the family. Tell me where I am missing the point. Thx
I thought that putting the assets in a trust shelters them from probate taxes but not estate taxes. How could a trust protect a multi-million or billion dollar estate from estate taxes? Inquiring minds want to know?
How could a trust protect a multi-million or billion dollar estate from estate taxes ??
Not sure about Billions but millions can be protected via gifting and discounting through LLC’s prior to death but still maintaining control…I am sure we have some on the board with tax accounting or estate planning backgrounds that can expand on this…
My limited understanding of trusts is that you pay the taxes on the monies as you withdraw them from the trust.
Probate is the process of transferring legal title of assets from the dead person to the beneficiaries. This process creates estate taxes. Placing assets in a trust before death eliminates the need for probate as the trust owns the assets. Hence, no estate taxes upon death.
Placing assets in a trust before death eliminates the need for probate as the trust owns the assets. Hence, no estate taxes upon death ??
Huh ?? Yes, the trust does eliminate the probate process but no estate tax ??….Not true…
Assets in a trust are generally not considered assets of the dead person’s estate. Hence, no estate tax. The trust owns the assets, not the deceased. I am not a lawyer, but that is my understanding of how this works.
Steamed Bean is incorrect.
I have not studied this area of law in a long, long time, but my understanding is the primary benefit of the trust in estate planning is that you could specify that the beneficiary of the trust only “owned” the stuff actually distributed to them as the rest went to heirs further down the line. This would mean that the estate taxes only got paid as the funds were distributed. There was a limit on this because of “the rule of perpetuities” which is a common law doctrine (state) that means that you can’t create a valid trust that will exists for longer than specified life in existance plus a number of years (21?) plus gestational time. The effect of this is that the trusts had clauses that caused them to distribute all their assets to the heirs who were alive before the rule against perpetuities kicked in.
I believe that a number of states have eliminated their rule against perpetuities doctrines by statute. Total giveaway to the extremely wealthy and terrible for the economy. The original reason for the rule was so people of great wealth could not control the distribution to their heirs forever, which, of course is beneficial because it is hard to figure out the best way to handle funds/inheritances over a hundred years down the line. But the gradual demise of the rule is to make inheritance taxes much, much, much less of an issue for anyone with megabucks and some tax advice.
You are both right and wrong Polly. You are correct that beneficiaries get taxed upon distribution of assets from the trust, but mistaken on the type of tax paid. Beneficiaries will not pay “estate” tax on assets in an irrevocable trust upon death of the grantor. As income from the assets is distributed the beneficiaries will pay “income” tax. As underlying assets get distributed a taxable event only occurs upon the sale of those assets and then the beneficiaries will pay “capital gains” taxes. I was not inferring that trusts create a tax free environment for beneficiaries, only that the beneficiaries don’t pay “estate” taxes on the value of the trust. The beneficiaries pay the taxes the grantor would have paid on the assets. Again, I am not a lawyer, but this is my understanding of how this process works.
“Tell me where I am missing the point.”
Should I have the right to pass my wealth on to my heirs, or should the state have the right to summarily confiscate my wealth upon my death?
Some jackass interviewee on a news channel insisted that once you die it’s not your money any more and you’ll be beyond caring.
But what about people who want to make sure their childrens’ futures are secure? Should they be denied their rights by communist confiscators?
PB if you think money will insure that, you might be disappointed.
Money has been the ruin of many a young person.
Money has been the ruin of many a young person.
If you’re referring to inherited money, I can think of several cases right in my own family. And, interestingly enough, my parents’ refusal to accept this money made them into pariahs for many years.
However, in the long run, we’ve been better for it. We have much sharper “figuring things out” skills than those who accepted the money. And, when we’ve run into trouble in life, we’ve found ways to get help picking ourselves back up again, and then we move on.
Inherited wealth is a much larger source of wealth than earned wealth. You meet very few ‘rags to riches’ people, many ‘riches to riches’ and thousands of ‘rags to rags’ people.
The estate tax is to prevent Rockefeller and a few buddies of his to establish dynasties that will eventually control 99% of the wealth in our country.
Kids from wealthy families already have massive advantages over kids from poor families. You could tax estates at 100% and that would still be true.
My family will be hit by the estate tax regardless of what level it gets set to, and rightfully so. My Grandpa was a ‘rags to riches’ type, and my Dad got a great education in a good series of schools before he and grandpa stopped talking to each other when he went to college on a different career path than Grandpa wanted. (Could have followed in Grandpa’s footsteps and all, but didn’t.) So my Dad worked his way through college, and my mom worked to support his way through grad school. They worked hard to make sure we could have good primary schools and high schools, and to see that we didn’t have to work as hard as them to make it through college. (Summer jobs only.)
Had my dad grown up poor, he likely wouldn’t have had the education to get where he did, and instead of working through college to get a better job, he would still be a milkman in Atlanta.
Since my dad and grandpa reconciled and Grandpa passed, their net worth went up immensely. When they pass on, my net worth will go up significantly, but what has made my future secure is not the money I will inherit, but the opportunities and education that I had.
Another way to look at it is that the taxes help secure your children from the mobs with torches and pitchforks. If the rich get TOO rich, eventually they’ll have to start living Mexico style in armored villas they never leave without bodyguards.
<i.But what about people who want to make sure their childrens’ futures are secure? Should they be denied their rights by communist confiscators?
There will be plenty left over after Uncle Sam takes his share.
So I guess the people in the thread at the top that get thier kids labeled “disabled” are doing the right thing by helping set up a guaranteed income stream for life?
LOL
“PB if you think money will insure that, you might be disappointed.”
I said nothing about insurance; merely the right to pass on an inheritance, which dates back to Biblical times and before (check out the Old Testament story of the Prodigal Son for an example that touches on both your and my points).
If you have enough money to be affected by inheritance taxes, then you don’t have even HALF the problems most people do.
And taxing an inhertiance goes back a long way too. Googling “Heriot” is an exercise left to the reader.
Philosophically, or pragmatically?
Philosophically, I should have to give 35% of my income to the various levels of government. Philosophically, I shouldn’t get taxed on the money 3 times… payroll, income and sales. Philosophically, I shouldn’t have to pay property taxes.
Philosophically, I should not have the Federal Reserve subtracting 2% of the purchasing power of my savings every year in the name of stable inflation.
Pragmatically, we need taxes to provide the services that government provides…..
Pragmatically, a healthy economy is one in which the money keeps moving. Preventing too much money from pooling into too few hands is better for everyone (except the few that are having them money taken to keep it moving.
Pragmatically, it is only the rich that can afford to pay taxes as the middle class wage has not been keeping up with inflation since we became a net impirt nation 40 years ago.
Mormons are good Businessmen
In fact , the whole Church is run by Businessmen - not by trained Theologians
You’d think they’d get along with the Scientologists better.
Of course, every religion is a business. Except they sell an invisible, insubstantial imaginary product that never requires restocking or even purchasing. And they set the price very dear.
Monopolistic competitors generally tend to not get along all that well; after all, they are, by definition, in competition.
Buggers need to be taxed………
“Help! The Sky is Falling! The Sky is Falling!!!”
Dec. 15, 2010, 12:02 a.m. EST
Housing is the forgotten crisis
Commentary: Falling prices once again threaten economy
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The U.S. economy has made a lot of progress since the dark days of September 2008 — investors are happy, bankers are secure, markets are functioning and businesses are flush. No depression here.
But what about the rest of us? When does the recovery kick in?
…
I think commercial real estate is the forgotten crisis, as extend and pretend drags on.
I think commercial real estate is the forgotten crisis ??
You are soooooo right WT….It does not get the violin play in the MSN like residential does but I gotta tell you, it is a basket case….The only thing holding up well is multi-family apartments….
Really? REITs have been holding up rather well. What am I missing here? (For the record, I have said that commercial real estate was relatively insulated from the mania so would do better in the hangover period)
Really? REITs have been holding up rather well?
I don’t think you can use a REIT as a example of what has happened in the commercial real estate market…What percentage of commercial real estate is owned by REIT’s ?? My guess would be less than 10%…
REIT’s also have the deep pockets…They can react to the market place unlike most owners…Such as, reducing their rents significantly to hold tenants…Might be less cash flow but it does not turn them up side down…They also have access to capital that most don’t…
It’s much harder to extend and pretend with commercial RE though….
The mortgages for CRE are generally between 3 to 5 years, not 15 or 30 years as is true with residential RE. And CRE mortgages generally aren’t amortizing, but rather have a big balloon payment at the end.
Building prices have plunged, and lots of money has been raised for distress sales, and yet there are no distress sales. So what is going on?
There will be no recovery for Main Street. Just a long and slow decline in the standard of living needed to close the wage gap with Chindia.
When I tell people this I get glares and I’m told that I’m negative.
Ask them about our high speed rail or stem cell treatments.
High speed rail is another boondogle. You can give every prospective passenger a $100 bill so they can fly Southwest to San Francisco from LA and the tax payers are ahead!HSR, It’s a loosing deal. Pelosi is even flying Southwest because bags fly free.
2 words: strategic diversity.
Yep, high speed rail is such a bad idea that most of the industrialized countries of the world are building them. Good thing we didn’t fall for that, huh?
Goging on 30 years and still sliding.
The last ten years of that thirty year slide being the worst - repeat worst - possible time to have the largest asset bubble in human history.
The logic employed by FBs in 2005 never made sense, but if you’re going to pay too much for housing then it would have been better to have done so in 1955 than in 2005.
Yes. Exactly. But your avg FB, like most people in this country, believe that realistic assessments are bad jou-jou and negative thinking.
Big price increase? Check.
Large drop in volume? Check.
Yep — it’s a dead cat bounce.
Jobs, not housing dominate real estate conference
2011 looks like a slight improvement over 2010
By Roger Showley
Tuesday, December 14, 2010 at 4:51 p.m.
The University of San Diego’s 11th annual residential real estate conference was supposed to be about housing, but jobs dominated the panelists’ view of how to end the five-year gloom.
Leslie Appleton-Young, chief economist at the California Association of Realtors, acknowledged that her original 2010 statewide projection did not pan out: Sales dropped 10 percent, not 2.3 percent, and prices rose 11.5 percent, not 3 percent. For next year she expects double 2’s: 2 percent jump in both sales and prices.
…
Bit Citibank bank told us that we are in a Plutonomy and that jobs and middle class
consumerscitizens don’t matter!Are you saying cake isn’t good enough?!
The price increase is a change in the mix of housing. As the low end locks up and the only thing moving is the middle or upper end of the market, median price is pulled up while the price of individual houses continue to decline.
Same thing happened here in Phoenix as the foreclosures moved from exurbs to prime areas. It looked like house prices were increasing, but really it was just a change in the mix of houses.
Darrell, you just demonstrated a greater understanding of statistics than the average news reporter has.
“As the low end locks up and the only thing moving is the middle or upper end of the market, median price is pulled up while the price of individual houses continue to decline.”
The Case-Shiller/S&P index is supposed to fix that problem, by using repeat sales. Of course, the convenience sample they employ might introduce bias towards price changes in what’s selling (ignoring what’s not). The bias is upward, as a falling knife is much harder to sell than a home whose value is appreciating.
“…by using repeat sales…”
Better description is ‘by averaging over the price changes of homes that sold at least twice over the sample period.’
What never sells never makes it into their sample…
Housing is the Forgotten Crisis
WASHINGTON (MarketWatch) — The U.S. economy has made a lot of progress since the dark days of September 2008 — investors are happy, bankers are secure, markets are functioning and businesses are flush. No depression here.
The stock market has finally climbed back where it was on that fateful weekend when Lehman Bros. filed for bankruptcy, but there has been little relief for the average family.
Policy makers may have rescued the banks, but they haven’t figured out a way to bring back the jobs that were lost, nor have they found any answer to the problem that was the nucleus of the crisis: housing.
Housing is the forgotten crisis.
It wasn’t always so neglected. Early on in the downturn, the government dug deep into its policy tool kit to find answers for the collapse of housing.
They lowered interest rates in an effort to boost affordability. They took over Fannie Mae and Freddie Mac, and they told the Federal Housing Administration to lend freely. The Federal Reserve purchased more than $1 trillion in mortgage-backed securities and bonds to support housing. They approved tax credits for buyers, and extended those credits several times. They tried to get lenders to modify loans.
Nothing has worked. At least, not well enough. The housing market is still dead, and worst of all, prices are falling again.
For a while, it seemed as if housing was at least bottoming out, if not improving. The low mortgage rates and tax credits boosted sales, but only temporarily. And when sales fell back, so did prices.
Nationally, home prices are down about 30% from their peak. In some cities, such as Phoenix and Las Vegas, prices are down more than 50% from the high point, according to the Case-Shiller home price index.
According to the CoreLogic home price index, home prices fell 1.8% in September, the fastest decline since early 2009. Other price measurements tell the same story of falling prices since mid-summer. Recently, Fitch Ratings projected that prices would fall another 10% in 2011.
According to the Fed, the decline in home prices in the third quarter subtracted about $584 billion from the equity Americans have in their homes.
Nothing has worked. At least, not well enough. The housing market is still dead, and worst of all, prices are falling again.
You’re sayin’ falling prices like that’s a bad thing.
“Best of all, affordability will continue to improve for the foreseeable future.”
If you have a job that pays more than $20hr.
Prices may fall far enough that $10 an hour will do, thus increasing affordability!
I hope you mean with tongue firmly in cheek, because $10hr is the REAL min wage.
One thing this article gets across loud and clear: Housing market bailout cargo cultists have not yet thrown in the towel in their hopes to pass on their gambling losses to some poor sap who tried to steer clear of the housing bubble collapse.
Even as GDP continues to recovery, the home building industry remains in the toilet. So much for the REIC’s false theory that macroeconomic recovery could only be led by a housing sector recovery.
market pulse
Dec. 15, 2010, 10:00 a.m. EST
NAHB builders index remains at 16 in December
By Steve Goldstein
WASHINGTON (MarketWatch) — Builder confidence in the market for newly built, single-family homes remained unchanged in December, with the National Association of Home Builders/Wells Fargo housing market index remaining unchanged at 16. “The steady but low level of the HMI reflects the fact that builders and consumers have yet to see consistent signs that the economy is improving,” said NAHB Chief Economist David Crowe. The seasonally adjusted index is based on a score where any number over 50 indicates that more builders view conditions as good than poor — which hasn’t been the case since April 2006.
…
Renter’s problems…..
A friend had an incident at his rented house near DC yesterday. When he was at work, some guys came by and rang the doorbell. His wife never answers the door when he’s gone. So these guys tried the doorknob, and then proceeded to get out a ladder and move up near the upstairs bedroom window. The wife, fearing a home-invasion robbery, appeared at the window holding their 12 gauge pump. The guys then left in a hurry.
She called the cops. Only much later did they discover that their landlord/prop management had sent over two stooges to “clean out the rain gutters”. She might have shot one of them.
If I recall my property law class, renters have the right to “quiet enjoyment” of their leasehold. The landlord really should have at least given them a call a day or so earlier. Cleaning the rain gutters hardly qualifies as an emergency.
They are lucky they didn`t get a refrigerator dropped on them.
That’s one husky wife!
Lack of communication, indeed! Sounds like your friend is renting from an “accidental landlord”.
As flaky as my previous landlady and her relatives were, they always communicated with me about the need to let repair/maintenance people in. Or, if they were doing the work themselves, they’d make an appointment with me.
And, being the curious type that I was/am, I’d get my nose into the thick of things so that I could learn how to do the job myself. They were more than happy to let me watch and help.
Now that I’m owned by the Arizona Slim Ranch, I’m glad that I had that, ahem, training.
When I was renting, I did minor repairs on the place and the landlady subtracted materials from the rent. She got upkeep on the cheap, and I got to practice handymanning on a loaner.
The economic and moral cost to America of the Afghan occupation will help to secure the third world status of the USA. As an American I am truly sorry for what the US soldiers have done to the Afghans. Sad beyond comprehension.
Red Cross says Afghan conditions worst in 30 years
Violence in Afghanistan is at its worst since the Taliban were overthrown more than nine years ago, with record casualties on all sides of the conflict. Almost 700 foreign troops have died in 2010 alone, by far the bloodiest year of the war.
The ICRC has also reported a spike this year in the number of patients with war wounds admitted at the main hospital it supports in southern Kandahar.
More than 2,650 patients with weapons-related injuries were admitted to Mirwais Hospital in 2010 compared to 2,110 in 2009, the ICRC says. A further 1,000 war wounded were treated but not admitted at the hospital over the past two years.
Webmaster’s Commentary:
It looks as though the US and NATO have declared “war without end” on the Afghan people; these numbers cited by the ICRC bear witness to what this war has done to the lives of ordinary Afghan citizens.
It looks as though the US and NATO have declared “war without end” on the Afghan people
Non-sense!, just-as-soon-as-a-majority-of-Afghani-women-implement-all-those-hard-earned-tools-of-democracy-and-toss-out-those-old-school-our-Islamic-Nation-is-nearly-built-ideas, the Western powers will leave lickety-split! Just-you-wait-and-see!
Wait, Shrub & Rummy would like to clarify what I’m trying to say:
“U.S. senator favors permanent Afghan bases”
U.S. Senator Lindsey Graham tells a “startled” Eliot Spitzer that he wants U.S. bases in Afghanistan “in perpetuity.”
Google the title for a CNN news video clip.
I think the British and the Soviets established permanent bases in Afghanastan.
We have already been there as long as the Soviets, so the bases must already be “permanent”.
Anything more permanent is going to require them to design license plates and name a state bird, flower, etc.
I’m still of the opinion that we’d have been better served by going in with guns blazing, busting a few caps in OSB, and bringing his head back to Ground Zero on the end of a long stick. And invite the Taliban to get out of the way, and if not……
Remember at the time what the story was, that we didn’t send in the 82nd Airborne because they were supposedly worried about casualties. So we subcontracted it to the Afghans, and somehow he escaped.
I’m beginning to wonder if OSB’s “escape” wasn’t part of the plan to begin with.
We never learn. Since WWII, we’ve always ended up backing the corrupt losers.
Anything more permanent is going to require them to design license plates and name a state bird, flower, etc.
We must look at what is important here: we control the heroin and not some godless commies or haji’s.
/snark off
Well when the Taliban ran the country, they were in the habit of killing those trafficing in drugs. Of course since we’ve taken over the country they’ve decided that drugs and drug money are critical ways to fight us.
Yesterday someone mentioned that we were more “socialist” than Germany because of all the bailouts and corporate welfare.
My response to that is that isn’t socialism, its crony capitalism. To impy that the USA, with its lack of:
Socialized health
Pitiful social security system
Super expensive higher ed, even when public
Minimal worker protection and rights
Is socialist would make any European laugh. We are plutocracy, when a tine percentage of the population owns and controls the lion’s share of the wealth and uses the government to rape every one else.
May have been me.
“Socialism for the rich and no-holds-barred capitalism for the rest of us.”
But yes, a plutocracy.
Marie Antoinette would have been proud.
New spending bill totals $1.1 TRILLION…
$575 million PER PAGE…
6,488 earmarks…
“There you go again,…” ronnie Raygun
The label on the “TrueAnger™” PeeParty tea toadlers new congressional dance party dress
givenloaned to them by the ““TruePurity™” repubican establishment” reads:“Used & Abused Inc.”
(Designed by: “kick’em-to-the-curb” Inc.)
(Imported from Glenbeckinstan)
Another American murdered by police and cops not going to be charged with murder:
Man Shot Dead By Police While Watering Neighbor’s Lawn (VIDEO)
http://www.activistpost.com/2010/12/latest-outrage-in-tyranny-usa-man-shot.html
Boy, they must take their water use restrictions in California seriously.
Upscale neighborhood?
Lawsuit city. BEEG lawsuit.
But you know it’s those dang unions what’s cost the taxpayers and not multi-million dollar mistakes like these.
Nope. No siree!
Was this guy actually watering the lawn? Kinda looks like he was sitting on back stairs in an alley. And that thing by itself looks like a pistol. And if he really pointed it at them, well…
Mortgage program failed most homeowners:
http://www.signonsandiego.com/news/2010/dec/14/govt-loan-mod-program-criticized/
In his blog ForeclosureTruth, O’Toole said he is not confident that most troubled borrowers will ever get real help. “What they need most is a principal balance reduction sufficient enough to return their underwater homes back into a sensible investment….,” he said. “Instead expect to continue to see more of the same – major programs that ultimately fail, as they are primarily designed as political theater rather than real help.”
Political theater is a good description of what is being done in lot of areas. Lots of talk, but little action that makes any difference.
In his blog ForeclosureTruth, O’Toole said he is not confident that most troubled borrowers will ever get real help. “What they need most is a principal balance reduction sufficient enough to return their underwater homes back into a sensible investment….,” he said.
If these homes were allowed to move into foreclosure this is exactly what would happen albeit with someone else getting the sensible investment.
If these homes were allowed to move into foreclosure this is exactly what would happen albeit with someone else getting the sensible investment.
Not necessarily, how many foreclosed houses have been kept off the market, i.e. the huge shadow inventory?
I’m not arguing to keep people in houses they could never have afforded under any reasonable circumstances, but just foreclosing on such houses alone isn’t enough to get them back in sustainable hands.
‘balance reduction sufficient enough to return their underwater homes back into a sensible investment’…
I have an idea; why don’t you pony up the money to make this happen OToole? We’re only talking a few hundred billion, give or take, in SD county.
This brings up something. This guy has a tracking service. But he gets quoted by the CA media as if he’s some expert. Same with realty trac and dataquick. I guess they are easy to get an interview out of, and they tow the REIC line pretty faithfully. But I don’t see where this guy has any better insight on the issue of principle reduction than the man on the moon. Like I said Otoole, take up a collection with the realtors and give away your own money.
He is an employee of the REIC. He doesn’t give a diaper load for silly thngs like moral hazard or national debt. He’s focused on getting the housing market fixed so he can start being rich again. This housing bust is seriously cramping his lifestyle, and therefor, it is the job of government to fix it for him.
“He’s focused on getting the housing market fixed so he can start being rich again.”
He’s focused on funneling tax dollars out of the hands of folks who want nothing to do with the real estate industrial complex into the hands of those who make their livings in it.
“We’re only talking a few hundred billion, give or take, in SD county.”
BwaHahAhAHAHAHAHAHHAHAHAHAHAAAAA!!!!!!!!!!!!
“Mortgage program failed most homeowners:”
It screwed most renters too. Take an overpriced house in a decent neighborhood that should be on the market not in some government program, give me a “principal balance reduction” which would have already happened if government had stayed out of it and I will pay for the GD house!
“About 57,700 Florida homeowners have been given permanent loan modifications, including 22,175 in Palm Beach, Broward and Miami-Dade counties.”
Among the 22,175 is my LL who has not lived in this house since 2004. He bought it in 1996 for $150k and refied it up to $290k and got his “work out” in November.
I wouldn’t mind if it was all talk and no action. What I mind is lots of talk and wasteful actions to APPEAR to be doing something. We should have seized, broken up, recapitalized, and sold the banks that were going to fail with the bailout money instead of fueling a banker bonus orgy with it.
Just when it looked as though the Santa Claus rally might make Eddie’s DJIA = 12K by year-end 2010 prediction come to pass, it appears that one of Santa’s reindeer may have broken a leg.
Damn! I didn’t think it would get even THAT close! That’s some serious manipulation gaming there!
We still have two weeks left for Santa Claus to drive the DJIA over the 12K finish line…
Carrying on from yesterday’s post on the Fair Tax:
ecofeco wrote:
neuromance wrote:
ecofeco and neuromance,
did you two even read what I wrote? Due to the fixed rebate/prebate, the poor will pay ZERO percent sales tax, assuming they only spend on the essentials. Geez!!
I’d add that there are 2 important advantages of the Fair Tax, as mentioned on their website, that are not present in the current system:
1. The underground economy will generate additional tax revenue. Currently if you pay an illegal under the table, there is no take for the govt. Under the Fair Tax, unless that illegal plans on starving, they will fork up 35% of each purchase in taxes. And, being illegal, they will not get any rebate or prebate
2. Tourists will pay into the tax pool every time they buy something, instead of US workers. Since the US dollar is going to be devalued they won’t feel it anyway
In Europe, tourist can get thier VAT refunded when they leave the country (actually the EU) and return to the US. Reciprocal agreements would no doubt have to be reached.
Wait… there will be a rebate so the poor don’t pay tax.
But, the poor will pay tax when they spend the moeny.
And there will no longer be a black market to avoid paying the sales tax? WHAT?????
The extra tax the poor pay on items will be refunded to them in the form of a rebate/prebate. What’s so difficult to grasp about that?
I’m not saying there won’t be a black market where goods are sold at lower prices without the govt knowing about it (and thus not getting their cut). However,
(a) this must be happening already, and
(b) it takes fewer resources to police retailers (sales tax) than it does to police retailers, corporations (corporate income tax) and individuals (individual income tax)
What I meant in my example was that somebody who is not paying tax now (income tax) will be forced into paying some taxes (sales tax) under the new system, unless they buy everything on the black market. Hence it is new revenue for the govt.
“did you two even read what I wrote? Due to the fixed rebate/prebate, the poor will pay ZERO percent sales tax, assuming they only spend on the essentials. Geez!!”
Don’t bet on it. In my little burb we pay city sales (not county though) tax on groceries. The city has a rebate program for low income households.
At face value- the fair tax seems like a decent idea. However, there’s one big question, I’ve never heard a good answer to:
What about existing savings, that has already been taxed? Does this money get taxed again?
Example: consider a recent retiree who has spent the last 40 years working to build a $500,000 nest-egg. Assuming a %25 average federal tax rate, those savings represent $667K earnings, of which he sent $167K to the government. He is now entitled to spend the remaining $500K without further federal tax burden.
Under the Fair Tax proposal, I think he gets to pay taxes on it all again, as he spends it. Doesn’t sound very fair to me…
This is a great point, which never occurred to me. I believe it could be solved by declaring one’s after-tax assets, with proof, resulting in some dollar value “D” for each individual that is considered already taxed. Each year the individual could file a simple return summing up the value of their purchases for the year, which could qualify for a full tax rebate if deducted from “D”. Over time, “D” would go away for most people. Only the super-high net-worthers would be left. I bet that for the majority of people this won’t even be an issue since the savings rate is so low in the US.
I realize this is going to be extra paperwork and processing, and there are probably more elegant solutions, but it’s not an unsolvable problem and certainly doesn’t debunk the Fair Tax idea.
While a good idea in theory, rebates are essentially worthless to poor people. You see, they don’t the money in the first place.
As for a prebate, that would be an outright acknowledge of the imbalance of the system. Hence, just going all the way around the block to get to the corner, adding yet another layer of administration.
But that’s how we like to do things in country. The hard way. And with as many words that actually describe nothing, as possible.
“they don’t the money in the first place.”
Huh? they don’t what?
Sorry. My dyslexia again.
“…they don’t HAVE the money in the first place.”
If they don’t HAVE the money in the first place then they won’t HAVE to pay high prices for anything, correct?
How does a “fair tax” keep money flowing?
One of the principals of capitalism is that having money makes it easier to make more money. This causes a natuarl tendancy for money to pool into a few hands.
An economy works best when money is not pooled into few hands, but rather when it is constantly moving through the economy.
Wages was an effective means of moving money back down the economic ladder, however with low wages in developing nation, that has been broken for decades.
Taxes paired with government services used to keep money moving back down, but for 30 years we’ve been focused on tax cuts for the rich… pooling money into hands of fewer and fewer people and triggering massive national debt and speculative bubbles as too much money chases too few real investment oppertunities.
For 40 years we’ve been using access to debt to move the money back down, but the poor and middle classes are totally tapped out and not going to pay back a lot of that debt. The rich have stopped loaning money to people that won’t and can’t pay it back.
So, how does the fair tax, that will further shift the tax burden from the rich to the middle class, keep the money moving?
In fact, in my opinion, it is likely to encourage the pooling of money into the hands of fewer and fewer people, which is really bad for the economy.
You know the paradox of thrift? Spending less than you make is good for you but bad for the economy? Well, it applies to the wealthy far more than to the poor. If the rich keep getting richer, and don’t spend that money, it leaves less and less money in the hands of everyone else… unless we constantly generate more money through the magic of debt, which just causes infaltion for everyone.
Income tax, estate tax, etc., while philosophically unfair, are pragmatically a necessity to keep money moving through the economy.
For some on Wall Stree, the amassing of money has become like a game, giving them the power to control the markets and toy with peoples’ lives as if it was a board game.
I’m sorry, but money exists to allow a smooth functioning economy, and that requires that money keep moving. Money does not exist for the purpose of making the few the masters and the many their slaves.
Not to worry — this can never happen here in ‘Murika.
Anti-Austerity Protest in Greece Turns Violent
Associated Press
The former Greek development minister Costis Hatzidakis, center, was attacked by protesters in Athens.
By NIKI KITSANTONIS
Published: December 15, 2010
ATHENS — Thousands of Greeks took to the streets of the capital on Wednesday for a protest against a fresh wave of austerity measures which was marred by violence as a general strike brought international travel and public services to a standstill.
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Gee whiz, don’t they have holiday shopping to do!?
Dang godless socialeest/commies!
In Europe, a Mood of Austerity and Anxiety
Jigar Mehta for The New York Times
“We are part of a generation who knows that things can vanish,” said Mathilde Donovan, 29, a French public relations executive.
By LIZ ALDERMAN
Published: September 23, 2010
“The politicians are to blame, not the people,” said Mr. Haros, 65, whose family in Athens has cut back to “absolute basics” amid a government austerity plan that he said should be paid for by the banks and speculators who fueled the crisis, not by ordinary citizens who were largely bystanders to the financial market’s follies.
In a series of interviews conducted across Europe with business owners, union chiefs, young entrepreneurs, workers and retirees, Mr. Haros’s concerns were widely echoed. Many are outraged to be footing the bill for what they see as the reckless gambles of wealthy bankers that have threatened jobs and the economy, and made it harder for an entire generation of young people to achieve the standards of living that their parents once enjoyed.
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What they fail to understand is that it was the bankers and the speculators that kept debt flowing and allowed people to live above their means for many decades.
The debt bubble isn’t the source of the trouble. The trade deficits caused by low wages in developing countries are the problem. The debt bubble was a way to avoid dealing with that reality awhile longer.
Agreed. Jobs and real productivity do matter.
No they don’t!
LALALALALALALALALALALLALA (I can’t hear you!)
Gee, didn’t the people ELECT the politicians that made unsupportable promises? Because “I’m going to raise your taxes and cut popular programs” is a sure fire election slogan.
Global Demand for U.S. Assets Slowed in October, Treasury Says
Global demand for U.S. stocks, bonds and other financial assets slowed in October from a month earlier, the Treasury Department reported, as the pace of economic recovery weighed on demand.
Wall Street Falters as Strong Dollar Offsets Data- Reuters
Stocks were little changed on Wednesday, trimming earlier gains as the dollar advanced, while investors tried to gauge how much further markets could run to year-end.
“General notions are generally wrong.” ~Lady Mary Wortley Montagu
Common Sense is neither common nor sensical. It is simply the logcal fallacy of appeal to unqualified authority.
There are more illnesses when it is cold, therefore, it is commong sense that being cold will make it more likely you will become ill. “Get inside before you catch your death of phemonia… ain’t you got no common sense?”
In reality, it isn’t being cold that causes more illness in winter. It is being inside more in winter that makes it easier for illness to spread. More close contact with infected people, less exposure to untraviolet light that destroys bacteria, kids in school spreading illness to each other…
I think you are confusing common sense with conventional wisdom. The example of common sense would be “you can’t run a marathon if you haven’t even completed 10K yet.”
This “Obama Tax Compromise” is becoming impossible to deal with in a sober state. The key players are starting to morph into animals. Mitch McConnell looks more and more porcine with every passing minute… and Obama, he’s starting to look like some skinny little hurtdog, the kind that rolls over and pisses himself at every loud noise. God I need a drink!
http://www.cnbc.com/id/40682173
“Now here’s the issue: The move-up buyer (which is the market we’re counting on now to get us out of this mess, given that the home buyer tax credit pulled a lot of first-time buyer demand forward to the beginning of 2010). A significant number of move-up buyers, even if not underwater on their mortgages now, may be in a negative equity position when it comes to buying a new home.”
And… who… without a first-time buyer, is the move-up buyer selling to? A move down buyer?
“‘In order to sell and re-buy, a homeowner must receive enough proceeds from the sale to 1) pay off the mortgage(s), 2) pay a Realtor 5-6 percent and 3) put a 3.5-20 percent down payment on a new vintage loan,’ begins Hanson”
Oh, I see the problem now… it is that pesky 6% realtor fee that is making so many people “effectively upside down” if not literally. Yeah. The government needs to get back to working on breaking the monopoly that is NAR.
“A significant number of move-up buyers, even if not underwater on their mortgages now, may be in a negative equity position when it comes to buying a new home.””</i<
Same difference, isn’t it.
If you read the article, they are saying you need atleast 9.5% equity to “move up”. 6% for the realtor and 3.5% for the down on the new house.
I guess they assume the new house will be the exact same price as the one you are selling. Is that really moving up?
Given the down economy and everybody is having to take a pay cut hows about the realtors taking a 3% vs. 6% cut until “it’s never been a better time to buy” times return. They won’t have long to wait. I promise.
Wednesday, December 15, 2010
Do we really know how many foreclosures are out there?
Marketplace’s Alisa Roth looks into why foreclosure figures vary so widely from source to source.
A foreclosure sign in front of a home in Miami Beach, Fla. (Joe Raedle/Getty Images)
Kai Ryssdal: There was an interesting development in the foreclosure paperwork story. Tom Miller, the Iowa Attorney General who’s been leading the charge against big banks and their robo-signers, said he’s set to launch a criminal investigation. “We will put people in jail” was the direct quote.
In the meantime, the latest foreclosure numbers are going to come out tomorrow from a company called RealtyTrac. There’ll be headlines about how many more homes might wind up being bank-owned. Lots of discussion about what that might mean for the economy. But foreclosures aren’t all that easy to get a handle on.
Marketplace’s Alisa Roth has more.
Alisa Roth: When the numbers come out tomorrow, we’ll find out how many hundreds of thousands of homes got foreclosure notices in November and how that compares to other months and years.
The question is how accurate those figures are. Depending on the source, anywhere from five to eight million properties are in some stage of foreclosure. Even if everybody agreed on the number, it’s hard to interpret exactly how dire the situation really is. For starters, foreclosure isn’t an event. It’s a process.
Alan White is a law professor at Valparaiso University.
The robo-signing mess means banks have frozen some foreclosures. And White says even before that, some banks were holding off on foreclosures. All of which means that many distressed properties haven’t been counted yet.
But there’s another more basic problem. Unlike, say, unemployment or Gross Domestic Product, there is no official foreclosure figure. The Mortgage Bankers Association keeps some stats. So do government housing agencies Fannie Mae and Freddie Mac, but probably the one we hear the most from is an outfit called RealtyTrac. RealtyTrac is mainly a website that lists foreclosed properties for sale. But it also releases data that includes everything from the first warning a home owner is behind on payments to the notice the bank has repossessed the property, which is sometimes called an REO.
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OSB’s survival has to be, statistically, a tacit approval of his past cooperation with the US government and an ongoing protective contract. He is not 5 foot 9 inches and 145 pounds. Is our military truly that incompetent??
Having lived through the Great Depression and seen what real unemployment is, I think the public does not understand what might be coming.
Cirticism of the rich, does not solve the problem of the poor, as without the rich there can be no investment in job production.
Of course, if you think that the Government can create wealth, you might be correct, but, probably wrong!
Big inheritance taxes can close businesses and not do a darn thing for the poor.
We need steel companies, manufacturing companies, and we do not need government programs.
So, support the wealthy , if possible, you might actually get a job, if you don’t have one!
And, I , personnally , do not have much wealth , and fear not the estate taxes as I my wealth would be such as to not require payment of such excises, but, then again, the government might even descend to taking 90% regardless of what the estate is.
Bank of America settles allegations of kickbacks, collusion
In a deal with 20 states and three federal agencies, the bank will pay $137 million for its part in a scheme to pay states, cities and school districts artificially low interest rates on investments.
By Nathaniel Popper and E. Scott Reckard, Los Angeles Times
December 8, 2010
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A fateful step for a banking giant
By Steven Mufson
Washington Post Staff Writer
Sunday, December 5, 2010
When Bank of America agreed to buy Countrywide Financial for $4 billion in January 2008, the bank’s chief executive, Kenneth D. Lewis, called it a “one-time opportunity.”
When this opportunity knocked, however, it blew the door down. More than two years after the acquisition, Bank of America has taken write-offs of $5.5 billion because of troubles at Countrywide. And the losses are still mounting.
Now, instead of celebrating its improved profits and stronger capital base, the bank is trapped in a “Groundhog Day”-style routine of fending off crisis.
Bank of America has set aside billions of dollars more to clean up Countrywide’s mortgage mess, including an avalanche of new disputes about faulty paperwork and foreclosures - and some analysts say it won’t be enough. It has thrown 20,000 employees - the equivalent of two Army divisions - at the job of dealing with the delinquent mortgages. Most of those are the legacy of Countrywide, which originated 10 million of the 14 million loans Bank of America is managing.
That legacy is a burden not only for Bank of America but also for the entire country. Countrywide’s bad mortgages are clogging the U.S. housing market, dragging down home values and slowing the recovery.
Moreover, the Countrywide mess has tarnished Bank of America’s reputation and put it back at the feet of the government not a year after it repaid its $45 billion federal bailout with interest. No bailout is needed this time, but federal agencies - as regulators and holders of vast amounts of mortgage securities - can either ease or ratchet up pressure on the bank to find a solution.
For the foreseeable future, the morass at Countrywide has also put an end to the freewheeling acquisition strategy that made the Charlotte-based bank the biggest in the United States.
“Countrywide was a garbage bin,” said Richard X. Bove, a banking analyst with Rochdale Securities. “All they did was make loans they could to whomever they could at whatever rate they could. If Bank of America hadn’t made this acquisition, they would have problems, but nothing remotely close to what they have now.”
“I think they’re just going to rue the day they bought Countrywide,” said the chief strategist of a major asset management firm who spoke on the condition of anonymity. “That was just a train wreck.”
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WSJ Blogs
Deal Journal
An up-to-the-minute take on deals and deal makers.
* December 8, 2010, 3:41 PM ET
Why Bank of America Should Split Apart
By Deal Journal
Michael White, of Dow Jones Investment Banker, reports:
A radical way for Bank of America to revive its flagging stock price and more than double its value would be to spin itself off into five pure-play operating entities.
This exercise makes more sense than ever. In doing so, each operating entity becomes an easier story for investors to understand and a more manageable operating unit better situated for growth and less prone to systemic risks.
U.S. banking deregulation that started in the 1990s paved the way for Bank of America to cobble together its financial services empire. Since then, the bank has acquired dozens of companies for more than $260 billion. With its stock now worth less than half of that, Bank of America needs to admit its failures and break itself up.
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