Bits Bucket for January 4, 2011
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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Phew! I thought maybe Ben had forgotten us today.
Requisit housing-related link:
Note that house prices are only back to 2004-2005 levels in much of the PNW. Still a long ways to go, IMHO
http://www.bellinghamherald.com/2011/01/04/1798705/whatcom-county-home-prices-sales.html
Whatcom County home prices, sales post drops in 2010
DAVE GALLAGHER - THE BELLINGHAM HERALD
While the final three months of 2010 were stronger than expected, it was still an ugly year for Whatcom County home sales.
Last year 1,842 homes were sold by real estate agents in Whatcom County, down 7.9 percent compared to 2009 and the lowest annual total since the mid-1990s, according to a report compiled by Lylene Johnson of The Muljat Group.
The median price of those homes sold was $250,000, a level not seen since 2004-05. Johnson compiles and analyzes data from the Northwest Multiple Listing Service.
I wonder if this is the low for that area. Or maybe it’ll grind down a little, which is not worth one’s time and money. Who knows? Maybe things will collapse. Maybe we’ll get hyperinflation and nominal prices will go through the roof. Who can tell?
We already have hyperinflation, just not in wages or RE.
where? i have yet to see hyperinflation.
Lucky you.
where? i have yet to see hyperinflation.
Uggg Health care, Food, Gas? I could go on but why?
OK, wages are down - So I have coined a new term
Hyper-Stagflation.
Welcome to the real world Neo.
Some good news?
——————
CALIFORNIA: Harris promises to be activist attorney general
Sacramento Bee | 1/4/11 | Jim Sanders
New Attorney General Kamala Harris took office Monday with a rapid-fire barrage of promises to target everything from violent gangs to online scams to truancy and prison recidivism rates.
Minutes after her swearing-in, Harris sent a message that she plans to be an activist as California’s top cop, an innovator with a motto identical to the title of her book: “Smart On Crime.”
“Ultimately, being smart on crime is about doing more preventing and less reacting, it’s about being tough and being tough-minded, doing more of what works and less of what doesn’t,” she said.
Harris, former San Francisco district attorney, vowed not only to vigorously fight violence but crack down on environmental, white-collar, mortgage, online and other crimes.
Will Attorney General Kamala Harris Take on Foreclosure Crisis?
…
“Attorneys general are the tip of the spear in terms of what’s happening in terms of investigation and negotiation,” says Mike Calhoun, president of the Center for Responsible Lending in Washington, D.C. “California plays a critical role given the size of its housing market and the extent of the foreclosure crisis there.”
California is already a part of a 50-state investigation targeting so-called “robo-signers,” mortgage servicers that approved hundreds of thousands of foreclosures without scrutinizing the underlying documents to see whether the seizures were legal or fair.
But Sacramento has played a secondary role in the robo-signing probe and other cases, despite the fact that California has the largest number of foreclosures and delinquencies in the country and the second-highest per-capita rate of foreclosures.
…
Why don’t they check the loan documents of all those people in default and see if they had the financial means to pay the loan??
If she finds they had a ’stated income’ of $15,000 per month working as a migrant, then perhaps she should pursue fraud charges against the borrowers.
I, for one, am really, really tired of the government agents pursuing supposed fraud on the lender side, and completely ignoring what I consider to be the heart of the Housing Bubble: fraudulent loan APPLICATIONS.
So, let’s get with it. Go after FRAUD in all its forms. Lenders and BORROWERS.
I, for one, am really, really tired of the government agents pursuing supposed fraud on the lender side,
“Feds are “Pursuing” fraud on the lender’s side? Where?
Wrist-slaps and lip-service are really “pursuing” fraud nowadays?
The banker’s fraud was of course the heart of the housing bubble and it is not being effectually “pursued” by anyone except private lawyers of influential parties that were burned.
I agree. Almost all of these “liar loans” have gone bad. I think going after a few liars is not a bad idea.
Some of these Borrowers were just as bad as the culprit Lenders and it’s well documented how much fraud by borrowers took place ,including cash back fraud .How about all those people that went around looking for straw buyers so they could hoodwink the Banks and those acts drove up prices in a number of areas . I can’t say that the acts of the developers and builders were above reproach and
the real estate community was just going along with this faulty lending when they should of know better and stop showing people property they really couldn’t afford . In fact real estate agents were
major cheerleaders for the real estate boom and my god their income rose dramatically and they became order-takers for the fake bubble . The RE agents witnessed a lot of fraud and didn’t object and if anything they pressured the appraisers to hit the mark on the appraisals ,and the regulators and Government were just incompetent and sleeping on the job .I know better that the real estate agents weren’t aware of the fraud and weren’t contributory in helping borrowers connect with corrupt loan agents and helping borrowers with fraudulent loan applications .
You can’t tell me otherwise and you can’t tell me that the RE agents were innocent because they weren’t the parties that
applied for the loan .Of course there was some honest agents ,but you can’t tell me they didn’t see a lot of this dishonest stuff going on . It was just surprising how few the whistle blowers were .
We have even had posts on this blog about people who were objecting being threaten by sales people ,and you can’t say that Escrow agents objected to a lot of the third party checks that were written that weren’t a part of disclosure to the lender .Just one big loan fraud market on so many levels .
At one point during the run up a lot of appraisers were objecting and they even went to Congress and made their complaints and
they were ignored and some were actually blackballed from the
Industry because they didn’t go along with this hit the mark appraisal BS .
But no It wasn’t just the Lenders ,but lenders are suppose to prevent fraud not contribute to it and pass it on to unsuspecting
investors . They were giving loans to 20 year old flippers that didn’t even have jobs for god sakes and I could go on and on .
How quickly we forget what was really taking place . And who can forget that professor couple who was selling tapes on how they had concluded that real estate prices were justified and were only
going to soar more and they were given major MSM time .And what happened to the so-called objective MSM . Just look at who their advertisers were and you can understand that they were at the mercy of their advertisers rather than any objective journalism going on ,in fact they were cheerleaders for real estate .And the so-called Experts were incompetent and the ones that were calling it for what it was were considered doom and gloom. And Ben Jones
Blog was considered nothing but a bunch of fringe doom and
gloom people ,in spite of the merits of those posts years ago . And really we can’t forget the Feds contributory role to the absurd
real estate run up .
When I think back and remember how people where running around like zombies mouthing the talking points of “‘Real Estate
always goes up”, and” buy now or be priced out forever “,I truly
feel like a whole lot of brainwashing was going on without much counter data . All this jazz was the workings of that Market Making machine ,that still has a way of spinning it’s BS .What can you say about all check and balances breaking down and some kind of
fraudulent frenzy taking over .
Dr. Sowell poses a fair question:
“Why should politicians be riding to the rescue of the housing market with the taxpayers’ money?”
~ Thomas Sowell gets right to the heart of the matter. “We hear all sorts of sad stories about people whose homes are ‘under water’ or who are facing foreclosure. But why should our attention be arbitrarily focused on these particular people, rather than on the many other people who would benefit from being able to buy those same houses, if the prices came down? The government is artificially keeping the prices up with subsidies and with pressures on lenders to accommodate the current occupants.”
~ ‘Saving’ the Housing Market ~
Because Dr Sowell, you are a slow learner…and you cannot think outside the box and still maintain your status.
It is only years down the road when it becomes acceptable to ask this question.
He is one of the few people on the planet lucky enough to have a rare combination of (1) a PhD in economics from Chicago; (2) common sense; and (3) a bully pulpit from which to share his knowledge.
Thanks for sharing!
Sorry PB was Ben quoting him years ago for being so smart?
Been reading Thomas Sowell’s columns for years. He’s quite bright.
Because FBers vote.
And because the housing industry and the banks have very rich and very influential lobbyists in Washington.
Same reason they rode to the rescue of the big banks. Same reason they pump up the stock market. Same reason they spend trillions on “stimulus”.
The economy is a lie, built on ever increasing debt, and maintained by the delusion that the debt can be repaid.
If we can’t maintain the lie, there is no modern economy and we’re all back to the barter system.
We need to keep house prices from falling, or more and more of the debt won’t be maintained, it becomes that much harder for banks to hide thier losses, and it becomes more likely that we have to face the truth that the debt based economy has reached the obvious end game.
It’s not so much “the same reason they rode to the rescue of the big banks” as it is “to rescue the big banks.” For the most part they’re not there to save all those poor pitiful FBs, but to save the rich and powerful who LENT them the money.
Saving the banks by trying to prop up the value of their residential mortgage holdings accidentally helps out the FBers. So it’s a “twofer”, as viewed by the DC crowd.
If it was only the FBers taking the hit, “deadbeat” stories would be the order of the day.
“…but to save the rich and powerful who LENT them the money.”
PERIOD. The end.
Is it really about the houses anymore? I’ve started to see the actual assets more as chess pieces what w/all the manipulation, MBS tranches which may or may not include transfer of mortgage ownership, layering of derivative hedges against risk, etc. etc.
The house represents something so completely different to the occupant than to the traders that are ultimately behind the existence of the mortgage that sometimes I wonder if we lose perspective. To them our home is nothing more than a bushel of wheat or a barrel of oil.
It hasn’t been about houses since 2003.
“…more as chess pieces what w/all the manipulation…”
Yep. Cases in point:
1) Dot com stocks, which were worth a fortune until many of them left the true believers broke.
2) Facebook, which is valued at $50 bn not based on its earnings stream, but because Gollum bought a stake, which everyone interprets as a sign that Facebook will be among the next generation of high tech bubble stocks backed up by Wall Street funny money which the Fed loans them at below-market interest rates.
Exactly.
Pump-n-dump, baby! Pump-n-dump!
bu…but…Facebook is a bubble too big to pop!!
A Haiku:
“Virginity like Bubble
One prick
gone”
But if they can create another bubble and pay down debt, it might all just work out like in the late 1990’s.
One can dream, can’t one? It might work.
Because they were told the whole system would collapse if they didn’t.
Too bad they never understood what was part of “the whole system” and what wasn’t.
I think the Market Makers crossed the line when they started making these unsustainable loans and leverage beyond any reasonable persons tolerance for risk taking and they had no right to do this with other peoples money in the final analysis,especially since the securities were rated as AAA grade ,and the investors didn’t even get the proper yield for that junk .
. When the Bubble was first crashing it became a mad dash for these Middle -men to transfer the liability
from what would of been a huge liability for them because of what
“Discovery ” of the facts would of shown .
Why is it that the Wall Street risk-takers (with other peoples money ) think that they can just hire some ‘Hired Gun ”
Math Guy and pressure those people to come up with models that
defy any reasonable testing for timespan and come up with new
risk ratings that defied any traditional long term information on risk ratings ? Some of those model makers have testified that they
would give some formulas that showed the risk but they were told to go back to the drawing board .
Every bit of evidence that I have seen so far points to a deliberate
Ponzi-scheme that these Fat Cats and their under staff sought to
pass off the potential loss to the conned investors .
While it might be true that these Market Makers /Money Changers /Traders etc. didn’t think it would crash to the
degree it did ,they were blinded by short term objectives that were criminal if you consider the misrepresentation .. Madoff kept on going also for as long as he could until it crashed and he could hide his Ponzi-scheme no more .Madoff could say he didn’t see his demise coming either and I’m sure he thought he could keep it going until his deathbed.
I have never gone along with this idea that Bail Outs were the proper solution to this mess ,and you would have to determine
after a long investigation where any Bail Outs would be proper .
Hank Paulson just screamed ‘FIRE” with his BS about putting out a fire or other houses might burn .
It’s all smoke and mirrors now . We rewarded people who failed and were criminal actually and we are punishing segments of Society
that we actually should be rewarding . And people wonder why
everything is so lopsided now and crazy with calls to punish the innocent .
Well, that was the story from Hank Paulson, who had 700 million in investments with Goldman Suchs, so if Goldman went BK, he would loose big time. So he came up with a 3 page contract that said, for 700 BILLION dollars, i can pass it around to the people who are losing money, and all will be well. It didn’t work out exactly that way, but that was essentially what happened.
The SEC, Treasury and FED are all working to support PRIVATE COMPANIES, who could easily have been put into receivership and we could then pick their bones, the way they would pick ours if the shoe was on the other foot.
LIQUIDATION should have been the answer and still is. This applies to people who bought overpriced houses, too. Paid too much? Not my problem. Underwater and don’t want to pay off? Too bad. Move out and let the liquidations begin in earnest.
The world will not come to an end, and the financial ’system’ can begin to stabilize with new owners. Hank Paulson, Jamie Dimon, Lloyd Blankfein, and a whole bunch of other scammers would simply be forced to pay for their shenanigans.
Too bad there is no justice in the US of A. Perhaps the NEW congress will go after these crooks. I dream.
They seem to be making deals with these Culprits in terms of small
fines if you consider the true damage .You can’t justify something that was wrong on so many levels by simply saying that it made money and everybody else was doing it and oh we were wrong on the models .
When I saw them let Mozillo off the hook it became apparent that
this is the way they are going to go with these Culprits . Many of these Culprits are still in power ,it’ just isn’t Justice or even proper correction . And is it any wonder that these Industries continued
to be fraudulent in things like a foreclosure process . Moral Hazard is alive and kicking .
I would of liked to see a stripping of these culprits personal wealth
and jail time rather than them keeping their ill-gotten gain and remaining in power positions if anything and being rewarded and bailed out .At least a lot of the Fat Cats of the Great Depression
lost their wealth along with everybody else .
There was a lot of contributory factors that created this false real estate market ,but I think the factor that pisses me off the most
was the Fat Cats who you could say were the creators and masterminds and their greed and arrogance and lack of Social responsibility is just mind-blowing ,and they are just fraudulent con artists as far as I’m concerned .
They have even tried to go so far as to explain the acts of these
culprits as a disease of greed that was uncontrollable and should be treated like a disease and not really a criminal act .Why don’t we just call all criminal acts of social harm a disease instead of a crime and let everybody out of prison because their disease rendered them incapable of making choices ,like the fat cats .
Sorry for the rant ,but these people who should of been held to a higher standard if anything are getting away with it .
2011: Year of the bank run?
CNN | 1/3/2010 | Colin Barr
Is a bank run about to bring Europe to its knees?
Some market watchers say yes, pointing ominously to the torrents of money pouring out of Ireland
Irish bank deposits declined in November for the fourth straight month, the central bank said last week. Overseas deposits fled the country at their fastest pace in more than a year.
The deposit flight compounds the stress on a financial system whose massive property-lending losses already have driven the government to accept an unpopular bailout from the European Union and the International Monetary Fund.
Worse yet, it shows that the solutions policymakers slapped together in the fall of 2008 helped in some cases to create even bigger problems — ones that are now coming due.
Gee, it turns out that Ireland deciding TO bail out the banks has the same result as Iceland deciding NOT to bail out the banks. People decide they want their money SOMEWHERE else either way.
I think the Irish are just converting their bankholdings to non-euro denominations.
I think the dollar will benefit.
Yes, but only against a different deflating currency. It could be a “race to zero” for “fiat” currencies, as it were. But what do I know? I only regurgitate the average total of the chatter that I’m exposed to. Don’t you?
How safe is your pension?
Not very, if government needs it.
The Christian Science Monitor reports on pension grabs in Bulgaria, Poland, France and Ireland. “It’s a cautionary tale for America. If fiscal austerity becomes a real issue in the U.S. the way that it’s been reaching critical mass in Europe — don’t think that U.S. lawmakers regard either your personal wealth or money they might owe you as sacrosanct. Government has a habit of looking out for itself.”
~ Pension Funds ~ TCSM
> “It can’t happen here!” (?)
On the other hand, Congress got its mitts on the Social Security Trust Fund years ago and everybody got used to the idea that government spent the money and replaced it with IOUs in the form of government issued securities. Will it do the same thing with pension funds…even private ones?
The “got used to it” because the only people who will be affected, Republicans say, are those who aren’t “at or over 55.”
If some sacrifices are imposed on Generation Greed, the response would be somewhat different.
If I could opt out of social security, I’d do it in a heartbeat. You’ll notice even when Bush was talking about ‘privatizing’ SS and ‘giving people a choice’ because ‘people are smart’ he never mentioned the idea of making it optional.
Nope, that whole deal was all about giving some investment bank what little is left of SS to play with, and getting some fat bribes in return.
It would be like 401k plans
Mine is managed by Wells Fargo and as far as I can tell it selects funds based on what kind of kick back they give to Wells Fargo.
It would be like mandatory 401(k) where you can’t go to your HR/Account rep and complain about the outrageous fees until they agree to throw in some low-fee indexes. Instead, all you can select are 3% management fee funds where they get a share of all gains as a bonus.
It’s too late to allow anyone to opt out of Social Security.
Now, Medicare is a different story.
But wait, I thought that those evil civil servants didn’t deserve those high pensions? And if the CSM thought government looked out for itself, they haven’t met Corporate America.
Maybe the exchange should go:
How safe is your 401K?
Not very, if the bank execs want a bonus.
How safe is your job?
您要不要与那的油炸物？
The corporatist ideology is rife with hypocrisy so don’t expect it to make any sense.
Do you honestly think it makes sense to the dummies that parrot it? If they had even the slightest clue they’d run from it. Instead they go on repeating it…. even though doing so is diametrically opposed to their own economic interests.
pɹıǝʍ s,ʇɐɥʇ
I like your style!
Oops- now I see it’s not weird, it’s Chinese. Or something.
It’s the babelfish tranlation of “would you like fries with that.”
Considering how many “lines in the sand” have been crossed recently, why not take this possibility seriously? At this point it only seems prudent.
With that much money there’s just too much temptation for the bankstas and their state agents to resist. Wrap it up in the flag (war, crisis) and the idea might even sell itself.
What do you think they’ve been trying to do for the last 20 years?
People need not travel far to get a great underwater experience. Get one in the comfort of your own home.
Irish prices are apparently back to 2002 levels:
The Irish market seems to be tracking with the more speedy US ones (FL, Vegas, etc), rather than the slower ones.
http://www.irishtimes.com/newspaper/breaking/2011/0104/breaking35.html?via=mr
Prices fell 3.2 per cent in the fourth quarter of 2010, bringing the fall for the year to 13.1 per cent according to the latest Property Barometer issued by property website MryHome.ie
Based on average mix-adjusted asking prices, the average price for a home nationally is now €271,000 compared to €280,000 three months ago and €312,000 12 months ago.
In Dublin, asking prices overall fell by 3.4 per cent bringing the total fall over the last 12 months to just under 15.2 per cent. Prices in the capital have now fallen by 41.2 per cent since their peak. The average asking price for a house in Dublin now stands at €314,000 down from €325,000 in the third quarter and €370,000 twelve months ago.
The latest fall brings the total decline from the peak of the market in late 2006 to 34.6 per cent.
It only took 7 months to hit over 14T! Congress has never NOT passed an increase, so of course they”ll do it again. The hand wringers will whine the system will self destruct other wise, which is not true. So we’ll just blast on up to 15 trillion this year. Problem solved!
~ Public debt topped $14 trillion December 31st ~
Not to worry say politicians. We’ll just increase the debt ceiling.
(Only $269 billion left on the “credit card! “)
“Debts are like children; begot with pleasure and brought forth in pain.”
~Moliere
And sustained only with much toil.
For 26 years now too, maybe more if you bought them a “can’t lose” condo!
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
- Jr. Senator from Illinois, speech on Senate floor, 20 March 2006
And I’ll bet that more than a few people are going to put this quote into a video, post it on YouTube, and the current President and his administration will be very upset.
Why? Because, once again, things he said before are being hurled back at him.
Darn that Internet!
You know, the Congressional Record has been published for over 200 years. But I guess only us bookworms ever read the darned thing.
The UK Parliament has the equivalant of the Congressional Record called “Hansard”. It goes back something stupid like 500 years IIRC.
Let’s also remember that most of this recently accumulated debt is from tax cuts to the elite, war costs, and medicare prescription coverage combined with falling revenue.
A stop to ALL foreign aid would put a dent in this. I say, stop all foreign aid. And I mean all. After all, we can’t discriminate, eh? ALL of it.
Not really. Foreign aid is a favorite bogeyman, but it’s minuscule compared to military and social spending, and both of those combined are small compared to corporate tax breaks.
a journey of 100 miles begins with a single step
“Home Prices Will Decline for Years: Zuckerman”
http://www.cnbc.com/id/40887670
This is my kind of forecast: A straight shot from the hip.
Didn’t his magazine quit publication?
He is quite the oracle all of a sudden.
They quit sending out the paper version. My parents were the only people I knew who still got it. I asked my mom if they were sad about it going away. She said no, they weren’t planning to renew anyway :-). I was surprised since I think they’d been getting it since I was a kid.
This would never happen here, we are superior in our stimulating ability!
Japan’s industry outlook reportedly gloomy.
SAN FRANCISCO (MarketWatch) — Japan’s major industries are faced with a gloomy current quarter, due to the expiry of government stimulus measures, weak demand and other factors, according to a report published Tuesday. The Nikkei business daily reported that the outlook for 10 of the country’s 30 major sectors is for a “drizzle,” while “cloudy” conditions are expected for a further 13 industries. No industries are seen enjoying “clear” weather, according to the Nikkei survey’s terminology. The auto industry, for example, is seen suffering from sagging domestic demand and scaled back production, according to the report.
Not to mention that the Japanese are just as hot and heavy into offshoring to China as we are. I recall reading somewhere that 30-40% of the Japanese workforce is contingent (temps)
One of the bigger reasons for Japan offshoring its industries is that their native population is falling and they have passed tough anti-immigration and guest worker laws.
And the biggest reason for their population falling is… lack of secure jobs.
Once again, another ruling class learns that there are real consequences to screwing over your population and that getting bailed out is only a short term solution to their own well being.
I posted this late yesterday but it deserves another look.
United Van Lines publishes an annual migration survey, which shows relative in-migration vs. out-migration for the 50 states. The one for 2010 was released late yesterday.
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2011/2010-united-van-lines-migration-study_000.htm
It’s interesting to compare this survey with the one for 2005 - at the peak of the boom.
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2006/2005-united-migration-study-01-06.htm
Back in 2005 it looks like a lot of people in CA were selling at bubble prices and moving to NV and AZ. Not so much anymore.
Colorado prices fell a while ago in the less desirable areas but until very recently were still going up in Boulder. Boulderites are noticing that things may actually be falling a bit. I wonder if that’s got anything to do with what your link mentions, which is that Colorado was still getting inflows of people until 2010?
I wish that data was available broken down by age group. I’d really be interested in knowing how much of that migration was work related and how much was boomer downsizing to cheaper cost of living areas.
And how much is people moving back to mom and dad’s
And how many are moving back to Mexico and other places.
Of course UVL can only report their own statistics, which may have certain biases.
For example, I’d guess that people who “hire” movers are more affluent, and probably homeowners, than those who are less affluent and renters. The latter probably use U-Haul and their own sweat, and have fewer possessions. The former have a lot more stuff, and have enough money to pay the freight to a company like UVL.
ISTR that there are HBB-ers who have been quite diligent about posting U-Haul rental stats. So, be patient. Those stats will be here soon enough.
United Van Lines is very high end. My guess is that people who use them are being moved by their employers. I have always been a renter and used movers several times, but I always went with local guys. The national places take a while to schedule the visit for the estimate.
We moved partially U-Haul last time because of the huge price my previous company paid to move my 800 pounds of books 2000 miles. So we moved the heavy stuff ourselves in two U-Haul trips. Turns out it would have ended up about the same price (including gas) to have the movers do it… and a lot less stressful and dangerous. (Either the prices changed or a 300 mile move is different than a 2000 mile move
- I should have checked first and not assumed. )
Hmm. North Dakota is ‘outbound’. So much for people moving where the jobs are. Looks like a lot are still moving where it’s warm- the sand states are all ‘balanced’.
I couldn’t find Florida anywhere in there…
Scroll down, there’s a map of the whole US with every state shown. (at least the lower 48)
There’s also a link at the bottom to a table of all the raw data.
I found some data earlier on migration for CA, and charted it against home price affordability. Unsurprisingly, the strongest inmigration to the state was when home prices were most affordable.
The only outmigration years since 2001, counting foreign and domestic movements were 2005-2007, the peak bubble years.
You can look at it one of two ways:
These are all net numbers, so the effect is two-fold (people arriving and leaving):
1. When home prices are high in CA, some people “cash out” and leave, but additionally, the high home prices are a deterrent for people to move into the state.
2. When home prices are relatively low in CA, fewer people “cash out” and leave, and more people can afford to move into the state.
Frankly, I think that the second effect is the one that matters the most (high home prices being a deterrent to moving in), not the “cashing out effect”. Because of prop 13, few people are pushed out of their home because prices rise too high and their property taxes are increased. If someone is of retirement age and has been in their home for a while, why move? This is especially the case if your kids and friends are still around.
looks like a lot of people in CA were selling at bubble prices and moving to NV and AZ ??
Yep…. Unfortunately for them they were paying “Double-Bubble” prices in the destinations that they choose to go to…Look at Bend Or….Look at Reno & LV….Look at Southern Or….
…looks like a lot of people in CA were selling at bubble prices and moving to NV and AZ ??
Indeed they were. And, during the mid-1990s, more than a few people came here because they didn’t want to deal with another Rodney King-type riot in SoCal.
“Cloudy with a Chance of Depression”, the new feel-good family movie from Japan will have your family rolling in the aisles… in fear.
Speaking of depression in Japan, I caught a documentary on TV about the stigma being clinically depressed carries in Japan and how Japanese society likes to pretend its not a real problem.
One thing that was an eye opener in that documentary for me was how unused office space was turned into living quarters for low income singles, who basically live in rooms built from tall (8 ft+) cubicle partitions and are only big enough for a bed, a desk, and a small closet.
One thing that all the depressed had in common was a lot of eductation and a menial job, usually just a part time one.
Elites in the US used to worry about the social dislocations (i.e., revolution) that might be sparked by having a highly educated class unable to find work. Fortunately for the elites, they realized they could destroy education so that even if someone obtained a JD, MD, or PhD they’d still be totally clueless. And, as we all know, the clueless do not lead a revolution, and the highly educated do not follow those lose educated if they can help it. Problem solved! Apparently, the Japanese still have good schools. So, they’ve got a problem brewing.
IAT
lose=less
WOW, what a typo.
IAT
Yeah, I thought you meant “loser” :-).
You’ve nailed it, Itsabouttime.
One thing that all the depressed had in common was a lot of education and a menial job, usually just a part time one.
A few weeks ago, I posted a few comments about my own bout with depression while I was living in Pittsburgh during the 1980s. The above italicized sentence summed up why I so dang down.
And, as succinct and on-target as the above sentence is, the mental health people I dealt with kept insisting that the root of my problems was (cue up the drumroll)…
…low self esteem.
I mean, jeez Louise, we were in Pittsburgh where the unemployment rate was up around 20%, and the under-employment rate had to have been just as bad, and yes, my problem was low self esteem.
Well, duh! I would have liked to have seen what those mental health folks’ self esteem would have been like if they were traveling in my shoes.
Needless to say, I don’t hold the mental health folks in very high regard.
As for curing my depression, I did three things:
1. I found a better job than the one that was getting me so down.
2. I used the better job as a savings generator. Those savings made it possible for me to…
3. …get the heck out of Pittsburgh.
I got out of Pittsburgh in 1971, tough as it was to leave my union $2.55 / hour job at the Thoroughfare.
I grew up just south of Pittsburgh and got out of dodge when I went away to college.
I realized recently that March is very depressing in Pittsburgh. No snow, no leaves on the trees, gray days, cold enough to keep one inside. It has almost as many cloudy days as Seattle. Anyone even marginally prone to SAD would find it depressing. Your improved mood may be as much due to ending up in sunny Tucson as to finding better employment.
The current crop of 20 somethings have even more reason to be depressed if they have also acquired substantial debt and end up in that low wage job. A friend of my son recently graduated and accepted the same job at the same pay as before he went to college.
I always say that: “Yes, I’m from ______. It’s a good town to be from.”
All the friends I left behind are taxi drivers or dispatchers. Or dead.
In Sarasota for our winter get-away. Here’s what we’ve noticed so far.
Very few For Sale signs (maybe even slightly less than “normal”) in our old ‘hood and the others close by. Even somewhat fewer signs on Siesta Key.
Lots of people still think it’s 2006, based on the wishing prices we saw in the real estate freebie magazines and Sunday’s newspaper. And mixed in with those listings are houses with very attractive prices. Not all of those are foreclosures or short sales. Good luck to the dreamers. Capitulation is still not here.
A double decimation (meaning perhaps 20%, not 10%) of empty store fronts along U.S. 41. Several places we’ve patronized in the past (shops, restaurants) are now gone.
Numerous For Sale signs on the big yachts in the downtown harbor (by Marina Jack’s). Not having taken that walk in recent years, I don’t know if it’s just the usual number, way more than normal, or somewhere in between. I did notice the outdoor storage racks at the marina by Stickney Point bridge had considerably more empty slots than in the past, but these are for smaller boats, not the big yachts.
Thankfully the weather so far is a lot better than it was when we were here last January.
“A double decimation (meaning perhaps 20%, not 10%)”
I love a man who knows what decimate really means.
I’m picturing a Roman centurion executing every fifth CRE owner…
Centurion: What’s this, then? “Romanes eunt domus”? People called Romanes, they go, the house?
Brian: It says, “Romans go home. ”
Centurion: No it doesn’t ! What’s the latin for “Roman”? Come on, come on !
Brian: Er, “Romanus” !
Centurion: Vocative plural of “Romanus” is?
Brian: Er, er, “Romani” !
Centurion: [Writes "Romani" over Brian's graffiti] “Eunt”? What is “eunt”? Conjugate the verb, “to go” !
Brian: Er, “Ire”. Er, “eo”, “is”, “it”, “imus”, “itis”, “eunt”.
Centurion: So, “eunt” is…?
Brian: Third person plural present indicative, “they go”.
Centurion: But, “Romans, go home” is an order. So you must use…?
[He twists Brian's ear]
Brian: Aaagh ! The imperative !
Centurion: Which is…?
Brian: Aaaagh ! Er, er, “i” !
Centurion: How many Romans?
Brian: Aaaaagh ! Plural, plural, er, “ite” !
Centurion: [Writes "ite"] “Domus”? Nominative? “Go home” is motion towards, isn’t it?
Brian: Dative !
[the Centurion holds a sword to his throat]
Brian: Aaagh ! Not the dative, not the dative ! Er, er, accusative, “Domum” !
Centurion: But “Domus” takes the locative, which is…?
Brian: Er, “Domum” !
Centurion: [Writes "Domum"] Understand? Now, write it out a hundred times.
Brian: Yes sir. Thank you, sir. Hail Caesar, sir.
Centurion: Hail Caesar ! And if it’s not done by sunrise, I’ll cut your balls off.
Did you hear about the Latin student who, when asked to conjugate a verb, declined?
*rimshot*
Me too.
Although, a double decimation would be 19%, right?
Correct. The empty U.S. 41 storefronts are probably only 19% of the total, not 20%.
The big question is, what is a triple dog decimation?
IAT
When States Default: 2011, Meet 1841. ~ The Wall Street Journal ~
January 4, 2011
Land values soared. States splurged on new programs. Then it all went bust, bringing down banks and state governments with them. This wasn’t America in 2011, it was America in 1841, when a now-forgotten depression pushed eight states and a desolate territory called Florida into the unthinkable: They defaulted on debts.
This was an incredible step, even then. Fledgling U.S. states like Indiana and Illinois were still building credibility on global debt markets. They rightly feared “a prejudice so deep and wide” that they could never sell bonds in Europe again, said one banker.
Their paranoia would be familiar to the shell-shocked California and Illinois of 2011. Each is beset by budget problems so great that some have begun debating default or bankruptcy. These worriers may draw comfort from the state crises that raged and retreated long ago. Most of the states eventually paid off their debts, and changed their laws to safeguard their finances, helping make U.S. states some of the world’s best credits.
How long did it take to restore faith?
What other markets competed for capital back in 1841, allowing creditors to avoid lending to the defaulted states?
What state obligations were “meetable” without borrowing in 1841–my sense is they had no meat inspections, air traffic control, or developed research capability for drugs (and the attendant oversight to reduce the likelihood of snake oil salesperson success)?
These are authentic questions, i.e., I really am seeking answers. If we are going to look back to 1841 for guidance, we should do so fully, and answer these questions. Sometimes the past is a good guide. Sometimes, not so much. I remain on the fence on this one.
IAT
“Most of the states eventually paid off their debts, and changed their laws to safeguard their finances, helping make U.S. states some of the world’s best credits.”
And then along came Greenspan…
How long is “eventually?” What was life like in those states during the period between “bankruptcy” and “eventually?”
IAT
With no air conditioning it was probably brutal.
We can try what I’ve heard through the grapevine they did did then: a 20 year whisper campaign directed at the south and how they would be sooo much better off if they weren’t shackled by those nosy feds. Then a few years of war and everyone forgets about the debts!
http://www dot cbpp dot org/cms/?fa=view&id=711
Deficit problems are not unique to CA and IL. I wish the media would stop pretending as such, so people will stop pretending that “since I don’t live in CA or IL, we’re totally fine”.
NEARLY every state has fiscal problems.
17 states have a deficit to make up of more than 20% of their budget.
The US AVERAGE deficit to make up is 18.7% of states budgets.
IL is at 40% (AND their pension is dramatically underfunded)
CA is at about 28%
CT is 29%
AZ is at 36%
MN is 25%
NJ is at 38%
etc., etc., etc.
We all need our governments to STOP SPENDING AND REFORM THE STATE PENSION SYSTEMS.
Can the US economy recover what was lost or was it just an illusion? The mess that the US is in was based off false promises, and for that all parts of government went on a spending spree think it will last forever. With the false promises came many jobs base of the promises and now the jobs are disappearing. Would we have had those jobs if the economy grew at a normal rate? With no hope in sight, I see more layoffs and a false bottom recovery.
The problem is what we spent money on. It’s the same as life. It’s OK to borrow for an education that has the earning power to pay off the debt, or a truck for a business, or a faster computer etc.
Borrowing to get a make over, a new car, and a big screen not so much.
Yet right now its easier to finance a new TV than a work truck.
Never happen here, back then those old-timers weren’t as smart and sophisticated as we are today. When they went broke they defaulted, went bankrupt, debts were bought for pennies on the dollar and most people picked up the pieces and started over again.
Today no one should feel any pain, in particular the bankers and politicians. So no worries, we will just keep right on printing and passing out the dough. Debt and greed are good, we have proven that beyond a shadow of a doubt.
Kick the can down the road, until it hits a wall.
More like kick the taxpayers down the road until they hit the wall. Then kick them a few more times while they’re laying against it.
We have a winner.
1841 - a nation of farmers probably worried more about the weather and their crops. In a sense “starting over” is something they did every single year.
2011 - 30 year mortgages, 401k accounts, retirement expectations, education expectations, career expectations, debt lovin’ lifestyles - all make “starting over” a little trickier.
The concept of debt-as-wealth was sold by building expectations, expectations that for most, are worlds away from those of 1841.
I’d have to say “lack of decent paying jobs” is what makes it hard to start over in 2011.
Or the near future for that matter.
+1 wmbz
+1 +1 edgewaterjohn…………….
Article on Gen Yers/Millenials in yahoo finance. Apparently, there are as many of them as there are of boomers, they just don’t make up as large a percentage of the population because the population has grown so much. Maybe there will be a market for all the boomers’ houses, if not their stocks:
Millennials are more risk averse than previous generations were at the same age. About half of their nest eggs are in bonds, money market accounts or cash. Even though they have decades to go before retirement, only 22% of investors under age 35 — many fewer than in 2001 — say they’re willing to take on substantial risk.
One reason: They’ve seen little or nothing of the upside of long-term investing in stocks. In the decade since the oldest Gen Yers entered the workforce, the stock market has languished. Worse, many saw their parents’ savings evaporate in recent years. If that reluctance to invest in the stock market lasts, many will come up short in their golden years.
Why media is useless:
“If that reluctance to invest in the stock market lasts, many will come up short in their golden years.”
True. It is also true that:
“If that reluctance to invest in the stock market EVAPORATES, many will come up short in their golden years.”
IAT
“If that reluctance to invest in the stock market EVAPORATES, many will come up short in their golden years.”
Hey, let me give this a try. How about:
If their reluctance to invest in the stock market disappears, but their stock market investments evaporate, many will come up short in their golden years.
I dumped a lot of money into stocks when I was in my late 20s, early 30s. Got it out of dot com and into a nice safe utility with a solid PE… Maybe you heard of this company where I was significantly overweighted….. Worldcom?
Stocks are in full bubble mode already. First sign of trouble, I’ll be back out of stocks and back into bonds as I did in 2007.
First sign of trouble, I’ll be back out of stocks and back into bonds as I did in 2007.
What keeps me out is that I think lots of people are thinking the same thing and I don’t have faith that when the big one hits that I’ll be able to get out. 2008 was easy to get out because nobody really wanted out very bad. So I keep sitting on my thumbs watching Eddie look like a genius…
Right — I’m not that nimble. It’s bad value, so I won’t buy it.
But I did give some of my savings to my brother, who is an investment adivsor. The believes that in a flat market you have to move in and out, ride the ups and get out before the downs.
Over the past couple of years, while most of my savings has been in three month T-Bills earning a few pennies while waiting for fairly-priced assets, he managed the same return non-return for me after trading up a storm (by my standards).
Not that I have a better idea.
“…he believes that in a flat market you have to move in and out, ride the ups and get out before the downs.”
Picking up nickels in front of steam rollers can be great sport!
I haven’t seen any steamrollers…I just keep my eyes on the nickels!
I haven’t seen any nickels . . . I just keep my eyes on the steamrollers!
IAT
I don’t like to watch something daily like a stock trader . After watching the Stock Market crash before the Bail Outs it happened
so fast that it’s scary . If I had been smart I would of re-invested
but now the fear of it being to high and to pumped up . I don’t like dealing with this corrupted entity called Wall Street either ,so I’m rebelling ,and I’m to old to take any risks anyway . But my nephew
picked a stock that went up 300% .
After watching the Stock Market crash before the Bail Outs it happened
so fast that it’s scary .
My recollection was that it was only about 500 points a day. I expect the “real” one to be an unmanageable flash crash that from the outside may simply look like markets have closed. When they reopen everyone will get to look at their new haircut in the mirror and only those on the inside will have had any chance to do any maneuvering in between.
With everyone thinking they’re going to get out fast once the steamroller catches their sleeve, how can it be any other way? The new road will be paved with Soylent Green…or maybe we’ll get lucky and they’ll stop the steam roller in return for everyone donating an arm…on the spot.
There are as many milenials as baby boomers, but what percentage of them immigrants (legal and illegal) or are children of illegals. The answer is, something like 30%.
AND, we’ve already started another baby bust with this great recession… or, Depression Delayed as I like to call it.
Long term? What long term?
Who hasn’t seen the reality of getting nothing, long term? Work, investment, education? The percentage of people who have seen any of those pay off is getting smaller every decade.
Might as well play the lotto.
http://www.nationalreview.com/articles/256226/saving-housing-market-thomas-sowell
January 4, 2011 12:00 A.M.
‘Saving’ the Housing Market
Why should everyone else pay for the reckless?
Don’t you wish we could invite Sowell to one of our HBB gatherings? (One thought: Maybe those who are willing could convene in Palo Alto at some future point and offer to take him out for lunch or coffee…)
I’m sure he understands that it’s all about the banks and has absolutely nothing about keeping people in their homes??
“…it’s all about the banks…”
Those who view the situation through that lens are cheerleaders for ever-higher home prices.
PB, are you on the mid-peninsula?
In SD, but occasionally come to SF on business…
Nice Post Portland Mainer……..
National Association of Realtors is a Crime Syndicate.
Bad news exeter. They aren’t the only ones.
« Wall Street Executive Air: “In the unlikely event of a loss in profits, bailout funds will drop from the panel above your head” »
http://dailybail.com/home/wall-street-executive-air-in-the-unlikely-event-of-a-loss-in.html
Thanks heavens we have The Bernake over here, he won’t let it happen…
Inflation Jumps in Europe ~ nytimes
PARIS — Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services.
Annual inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency.
The release was significant because it means that inflation has breached the European Central Bank’s target of just below 2 percent for the first time since November 2008.
The data “will probably raise some eyebrows at the E.C.B.,” said Martin van Vliet, economist at the Dutch bank ING.
But are they using the Euro system or the American-let’s-leave-out-everything-everyone-uses-everyday system?
This Bowles dude must be nutz, our finances are A-OK. We have this thing called a printing press, debt doesn’t matter.
~ NC business leaders get dire forecast for 2011 economy.
RALEIGH, N.C. — North Carolina business leaders heard Monday from lawmakers, an economist and others about the grim picture for the state and national economies in the coming year.
Former University of North Carolina President Erskine Bowles, who recently chaired a commission appointed by President Barack Obama to find ways to cut the federal deficit, said the country is in “abysmal” financial shape.
National debt is now almost $14 trillion, and Bowles said all tax revenue covers only mandatory spending like Social Security, Medicare and Medicaid. The money to pay for defense, homeland security, education, research and infrastructure is borrowed, he said, calling it a “formula for failure.”
“That debt is like a cancer, and it is truly going to destroy our country from within,” Bowles told the estimated 1,000 people who attended the ninth annual Economic Forecast Forum sponsored by the North Carolina Chamber and the North Carolina Bankers Association.
Struggling Borders to Meet With Publishers
By JULIE BOSMAN
Published: January 3, 2011
http://www.nytimes.com/2011/01/04/business/media/04borders.html?src=me&ref=business
Last line of article:
Borders, based in Ann Arbor, Mich., has 19,500 employees.
When I was a pup, I used to love to go to the original Borders store in Ann Arbor. Like most University of Michigan students, I didn’t have a lot of time to do reading for pleasure. Had too much reading to do for classes.
But Borders did provide a nice place for a study break. Nice benches to sit and read their books. I even wondered how, with all of us student study-breakers hanging out there, the Borders store stayed in business.
Well, obviously they stayed in business. Then, IMHO, they over-expanded and that doomed them.
Maybe the two aren’t unrelated. I’ve noticed that food chains don’t need to make a profit as long as they’re expanding. The problem is when they reach the edge of the petrie dish. Then suddenly everybody wants to talk about profit.
I remember when Borders was a store. A single store. Now it’s a classic example of overexpansion.
Okay, Elanor, ‘fess up. Did we frequent the same Borders store on State Street in Ann Arbor? And wasn’t it just the bestest place ever for taking a study break while not buying anything?
I visited that store, too, when I went over from Chicago or Madison to visit friends who studied/taught at Michigan. Ah, the good old days.
IAT
Overexpansion into a new business climate. People buy books on line now, just when Borders put a B&M store on every corner. At least Barnes & Noble and Hastings put a coffee shop into each B&M location so it’s a cool place to hang for the hipsters.
Just like Blockbuster Video and Hollywood Video. People rent/stream from Netflix now, just when those two rental places put a B&M store on every corner.
At least Barnes & Noble and Hastings put a coffee shop into each B&M location so it’s a cool place to hang for the hipsters.
And that’s a part of the problem.
How do I know? Because I know a family that owns a coffeehouse here in Tucson. Here’s what they told me:
One of the big problems in the coffeehouse business is what the trade calls “table-suckers.” Those are the people who buy one cuppa coffee, then sit there for hours on end, doing whatever it is that they do.
Any-hoo, if you’re in the food/drink service business, you need turnover and lots of it. “Table suckers” do a real number on this business model.
Yeah. All those extremely successful small one-room independent bookstores. WHAT was Borders thinking?
IAT
12 months from now Borders may be back to only one store.
Doubtful. More likely zero.
IAT
Powell’s in Portland seems to have created a better business model. One giant B&M store that’s a “destination” for a hundred miles in any direction, plus internet sales.
Last week, I was in eastern PA.
Outside of West Chester, PA, is a strip shopping center that houses the Chester County Book Company. Trust me, this place is huge. And busy. Haven’t seen that busy a bookstore since, well, the last time I went there.
Any-hoo, this place was founded by a lady who was married to a fellow who was a neighborhood favorite. A real gentleman. And she was, if there is such a word, a real gentlewoman.
My folks bought the lot that they built their house on, and the folks still live there.
Their lovely neighbor sold the store a few years back, and another guy who had been one of our neighbors was thinking of buying it. He passed on the deal. Decided to focus on his law practice instead.
Boy, did he blow that one, because Chesco Book Co. is huge now.
Fed Minutes: Economy Needs Bond-Buying Program- AP
Federal Reserve officials stuck with the pace of their $600 billion Treasury bond-buying program last month because the economy wasn’t improving fast enough to make a noticeable dent in unemployment.
I guess the rich need more returns on stocks?Isnt like the top 10% control 80% of the stock market?
They control 80% of EVERYTHING.
Jan. 4, 2011, 4:49 a.m. EST
Major floods swamp Australia’s northeast
Floodwaters expected to peak Wednesday
Insurance companies will spread this major loss globally.
Isn’t that the idea behind insurance: spreading risk?
Here’s another story about the floods…
http://www.accuweather.com/blogs/news/story/43871/australia-flood-waters-cut-off-1.asp
Residents were urged not to wade into floodwaters because of snakes and crocodiles that have been displaced by the flooding.
Wheat prices in Australia are also on the rise, as flooding has damaged crops and brought transportation to a standstill. Australia is the world’s fourth-largest exporter of wheat.
This has brought a ripple-effect to other parts of the world, as U.S. wheat futures have spiked.
I can’t wait for stories about FB’s getting their homes back free and clear due to foreclosure paperwork determined to be fraudulent.
Hot potato time for title insurers
By Jay MacDonald · Bankrate dot com
Monday, January 3
Posted: 10 am ET
It hardly requires a crystal ball to foretell that this sparkling New Year will soon be sullied by the ongoing mortgage mess. Joining last year’s headline-grabbing robosigners and rocket dockets will be this year’s new players: the title insurance companies.
As New York Times columnist Ron Lieber recently wrote, title insurance companies will likely be the next institution to have their mettle tested by the mortgage fiasco, which is feeling more like a chronic condition than a crisis by now.
When we think of title insurance, if we bother to think of it at all, it’s as the largest fee on our home settlement statement at closing. Unless we’re buying the home outright, our mortgage lender requires us to purchase title insurance in case someone should turn up claiming to be the rightful owner of the property. Warning: spoiler alert.
The previously placid title insurance industry received a major wakeup call last fall when the mortgage giants put foreclosures on pause in light of some seriously sloppy paperwork being jammed through the courts by the foreclosure mills. They’ve all started up again, of course, but for title insurers, the nail-biting has just begun.
“What would happen if scores of people who had lost their homes to foreclosure somehow persuaded a judge to overturn the proceedings?” Lieber wonders. “Could they somehow win back their rights to their homes, free and clear of any mortgage?”
From kicked to the curb to full ownership? The thought fairly boggles the mind.
…
I wonder if the bank will put concrete in the drains before they give it back?
And rip out the copper wiring…
Don’t open the refrigerator.
And don’t forget to put trash bags over your shoes and wear the paper breathing mask.
Don’t you think a Higher Court of Law needs to rule on this clear title on a
loan mess because it’s a issue that will affect so many transactions . I’m sure any High Court would give the Banks rights to re-do the paper-work
with the idea that the intent of the law is that the party that put up funds should be paid . If you went by real law it might be true that the mortgages could be turned into instruments that are not secured by real estate by not conforming to the actual due process of law .
Gold prices Sink: Is This a Correction or time to buy?- TheStreet
Gold prices Tuesday were dragged down by profit-taking and an ardent return of risk appetite. A new year is bringing further positive economic data and has triggered a rush into riskier equities leaving gold somewhat abandoned.
Good time now for dips to buy?
Does the stock market go down anymore? I heard that the powers that be want to flush all the mom and pops from gold into stocks cause there cheap now.
Wall Street business model:
Flush ‘em in, clean ‘em out, lather, rinse, repeat.
Pump-n-Dump©®™
Tax day extended to April 18 ~ CNN
You get three extra days to file your taxes this year. They’ll be due on Mon., April 18.
But it’s not because of a previously announced processing delay that will prevent people who itemize their taxes from filing before mid- to late February, the IRS said Tuesday. Instead, the bonus days come thanks to Emancipation Day, a little-known Washington, D.C., holiday that celebrates the freeing of slaves in the district.
Emancipation Day falls on Sat., April 16, but it is observed in D.C. on Fri., April 15. That prompted the IRS to extend the tax filing deadline to April 18 this year. Under the tax code, filing deadlines can’t fall on Saturdays, Sundays or holidays.
The last time an extension was granted for this reason was in 2007.
“Hurry! It won`t last” Listing of the day.
486 Dover Rd Tequesta, FL 33469
$184,000 Price Reduced
5 Bed 2 Bath 3,584 Sq Ft
Rambling Rustic
Drum Roll…………..
Days on site 586 days
lowball them.
As some of you may recall, two years ago I bought a 1000 sq ft 2 bed/2bath house in a neighborhood called Natomas for $105K in Sacramento. My son and his girlfriend live there. Last week their neighbor, an older woman, suddenly moved out. I decided to look up the neighborhood stats for the 7 houses on their court. The woman bought her house in 1982 for $73K, but unfortunately she took out $180K of mortgages on it in 2005. Her man-friend moved out a few months ago, so it looks like she can’t afford those mortgages. On the other side of the court, there are three houses owned by different members of the same extended family. The first was bought in 1982 for $72K and refinanced in 2002 for $155K. Recently the owners rented out the house and moved in with other family members in the other two houses. They bought one of these houses in 1991 for $123K and refinanced in 2006 for $145K. The other house, the largest at 1500 sq ft, was bought in 2006 for $352K with a $282K mortgage. Ouch. This extended family has compressed from three houses to two and a rental and has close to $600K in mortgage obligations. I guess that they’ll be ok as long as everybody continues to work. The remaining two houses on the court are short sales: one recently sold for $120K and the other has been on the market for the past six months, current price $126K.
Do banjos play at night on this street?
I’m sure bullets fly once in awhile.
LOL…………..
No Criminal Charges: All 50 States Ready To Settle Foreclosure Fraud Probe Of Largest Banks.
Jan. 4 (Bloomberg) - The five largest loan servicers, including Bank of America and JPMorgan Chase, may be the first to settle with all 50 state attorneys general probing foreclosure fraud, Iowa Attorney General Tom Miller said.
LMAO, you cant make this stuff up.So I imagine part of the settlement will be to help all those victims who overpaid for a house?
Don’t be crazy! They’ll get stiff penalties that will go directly into the state coffers and from there, to the pensioners.
Thats a interesting settlement .They have contracts that are voidable but settle it with a little fine . The next time a street criminal commits a crime I wonder is they can settle it with a fine paid instead of time in Jail .
Did they say for HOW MUCH?
Who says crime doesn’t pay?
Unemployment rates rise in two-thirds of large US metro areas; some job seekers giving up
WASHINGTON (AP) — Unemployment rates rose in more than two-thirds of the nation’s largest metro areas in November, a sharp reversal from the previous month and the most since June.
The Labor Department said Tuesday that unemployment rates rose in 258 of the 372 largest cities, fell in 88 and remained the same in 26. That’s worse than the previous month, when rates fell in 200 areas and rose in 108.
The economy is strengthening, but employers have been reluctant to create jobs. Hiring will pick up in 2011, but not enough to significantly lower the unemployment rate, economists forecast.
Metro areas in states with the weakest housing markets, such as California, Nevada, Florida and Georgia, are seeing ongoing increases in unemployment. Las Vegas, Atlanta, San Francisco and Miami all saw their rates rise. Construction jobs haven’t returned. Real estate agents and mortgage broker positions have also disappeared.
“The areas really affected by the housing bust have yet to come back,” said Jim Diffley, a regional economist at IHS Global Insight.
“…employers have been reluctant to create jobs.”
The job tree must grow in the same orchard as the money tree.
Most Fortune 500 companies made substantial profits last year.
The money tree is in the orchard with barbed wire and machine guns.
Can you believe the nerve of those bast***s!
Why don’t they just hire some more people they don’t need?
The Wall Street Journal
* ASIA BUSINESS
* JANUARY 4, 2011, 4:56 P.M. ET
Floods Hit Key Coal Area
Torrential rains in Australia halt production of steel-making coal, pushing up world prices
By KRIS MAHER And ROBERT GUY MATTHEWS
Severe flooding in Australia has interrupted coal production, pushing up prices and threatening to constrain world-wide steel output and lead to higher steel prices in some parts of the world.
Torrential rains in the northeastern state of Queensland, the world’s biggest exporter of seaborne coal, have idled dozens of mines and shut rail lines and roads needed to transport coal. The floods have already cost coal companies an estimated $1 billion from lost production, according to the Queensland Resources Council.
In recent weeks, Queensland-based Macarthur Coal Ltd., St. Louis-based Peabody Energy Corp., and the world’s biggest miners, Rio Tinto, BHP Billiton and Brazil’s Vale have declared force majeure, which frees them from contract liability for not shipping coal due to extraordinary circumstances.
Roughly 98 million tons of annual steelmaking-coal capacity, equal to 73% of such coal exported from Queensland, is under force majeure, according to Curt Woodworth, an analyst with Macquarie Capital in New York. That is about 37% of the annual, global seaborne supply of coal used by steelmakers.
Prices for steelmaking coal have already shot up 10% on the spot market to about $250 a metric ton, say analysts. “If the infrastructure issues continue, clearly prices are going to continue to head upward,” said Jeremy Sussman, an analyst with Brean Murray, Carret & Co.
The impact of the production halts is greatest in China and the rest of Asia, which depends heavily on coal from Australia to make steel and feed electric utilities. Also affected will be buyers around the world who rely on Asian steel.
…
And none of these Companies had any insurance at all that would offset
the loss of the floods …..right ……sure .
How can you not have sympathy for those poor, poor, beleaguered companies?
The Fed
Jan. 4, 2011, 4:44 p.m. EST
Professor Bernanke wants the class to quiet down
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — There are growing signs that Federal Reserve Chairman Ben Bernanke is cracking the whip and wants to pull other Fed officials into line when it comes to how they communicate with investors and the financial markets.
…
Good luck with reigning in Thomas Hoenig. Or Richard Fisher, for that matter.
Hoenig is off the FOMC as a voting member this year. They need to get more guys like Mishkin on the FOMC (see Inside Job and you will get the picture!).
Inside Job
Sony Pictures Releasing | 108 mins
18 Comments
Join the discussion
Inside Job is the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, Inside Job traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia.
Narrated by Matt Damon.
Director * Charles Ferguson
Cast * Matt Damon
1. Read Review
1 2 3 4 5 6 7 8 9 10
Astonishing account of financial meltdown yields great returns.
08 June 2010- By Lisa Nesselson
If you used to have money, currently have money or hope to have money some day, drop what you’re doing – including working to make money – and see Charles Ferguson’s astonishingly pertinent documentary Inside Job.
At the doc’s Cannes premiere Ferguson (speaking exquisite French) thanked the Festival for the invitation: “I’m very moved to be here – this is only my second film.” The first one was No End in Sight: The American Occupation of Iraq, his award-winning indictment of the quagmire in a country whose capital city is Baghdad.
Ferguson comes right out and says that the global financial meltdown of 2008 “was not an accident” and describes it as “a completely avoidable crisis.” This is a refreshing change from “Uh, gee, how did that happen? Oh well, it’s probably beyond the understanding of mere mortals, particularly the hard-working variety.”
Twenty trillion – the amount of dollars believed lost in the tentacular debacle – is a really big number. No matter how many friends you have on Facebook, you will never get anywhere near 20 trillion.
That’s a really big number, and yet the number of people who have gone to prison for facilitating this crisis is a really small number: Zero. You will leave the theatre in the mood to make a few citizen’s arrests.
In this you may be joined, at least in spirit, by the good people of Iceland – all 300,000 of them. Unless, of course, by the time you read this, thousands more have been forced to leave in order to find work elsewhere. In the film’s opening stretch, we are shown how a thriving, ecologically and humanly sound island nation was reduced to insolvency by ill-advised incompetence on a terrifying scale. “All” it takes is a few banks “run” by people who don’t know what they’re doing but who are convinced that what they’re doing is probably fine because, well, so many other people are doing it.
Garden variety Hollywood movies usually have only one villain. This true story, alas, boasts dozens. Hiss at unrepentant talking heads! Boo at deregulation mavens who pocketed massive bonuses for having gutted banks, communities, cities, states and nations! Gasp at the sheer clueless chutzpah of decision makers and “regulators” who saw nothing amiss! Grind your teeth at the sight of beastly vermin in suits who wouldn’t change a thing if they had it all to do over again.
Cheer as Charles Morris, intrepid author of The Trillion Dollar Meltdown: Easy Money, High Rollers and the Great Credit Crash takes the proper tone of outraged incredulity that sub-prime mortgages were allowed to proliferate.
Marvel at the forthright tone and tanned cleavage of Kristin Davis, who provided highly paid female company to high-flying investment bankers.
And rejoice at the fact that, thanks to the way Ferguson lays out the facts in pithy narration voiced by Matt Damon, you – yes you! – will be able to grasp what went wrong. In a memorable scene in his crusading doc Capitalism: A Love Story, Michael Moore asked a whole bunch of people to explain financial hocus pocus like derivatives and credit default swaps. For some reason, interviewees stammered, backtracked, started over and essentially gave up.
Ferguson is really smart and is gracious enough to share his smarts with the average viewer. You’ll be able to impress your friends with your newfound command of daunting abbreviations and acronyms used on Wall Street and beyond: ABS (Asset Backed Security), CDO (Collateralised Debt Obligation, CDS (Credit Default Swap). And you’ll see why the so-called ‘financial services industry’ should be re-named the financial disservices industry in the wake of rabid deregulation.
The culprits are not only running free but are, for the most part, filthy rich.
If you have the price of a movie ticket, Inside Job is a terrific investment.
So much for glasnost at the Fed.
Investing Dying as Computer Trading, ETFs, Dark Pools Proliferate- CNBC
There’s an old Wall Street adage meant to inspire investors that goes “it’s not a stock market, but a market of stocks.” Consider that dead.
Funny, here I thought online gambling was going gangbusters.
South Florida bankruptcies up 40% in 2010
By Marcia Heroux Pounds
Sun-Sentinel
Posted: 2:04 p.m. Monday, Jan. 3, 2011
— South Florida’s personal bankruptcy filings were up 40 percent in 2010 compared with a year ago, according to data provided by the U.S. Bankruptcy Court in Miami.
In Palm Beach, Broward and Miami-Dade counties, bankruptcy filings totaled 34,627 in 2010 compared with 24,681 in 2009.
Monthly bankruptcy filings for the region peaked in August 2010 at 3,387 and have been falling since September 2010.
In December, 2,577 residents filed for bankruptcy compared with 2,645 in November 2010, a decrease of 2.6 percent. December 2010 filings were up 14 percent compared with December 2009.
Bankruptcy lawyers point to South Florida’s high unemployment, in November ranging from 10.8 percent to 13 percent in the three counties, as today’s primary driver for filing bankruptcy.
COMMENTS Comments feed .
The party is just starting.Thousands of floridians every week will not get unemployment checks.Desperate people will do desparate things ANNEY get your gun.
money bags
3:14 PM, 1/3/2011
Governor Scott take note… I am one of the statistics… my unemployment ran out, I’ve spent every penny I have trying to stay afloat, been through the indignity of bankruptcy, waiting to lose my house via foreclosure… I’ve applied everywhere, for jobs paying significantly less than what I made before, all over the country, with no luck… don’t take away unemployment for the thousands who need it still, until you have created the jobs you promised…
Mike
4:00 PM, 1/3/2011
The true sign of how bad things really are is the incredible rise in bankruptcies over the last 2 years even though the bankruptcy laws had been made significantly tougher in the 2004.
Can you imagine what the real numbers would be if the laws hadn’t been changed?
Isn’t it just as easy as ever if you’re below median income? Lots of people are getting a turn at “below median income” these days.
Until zero becomes the new median.
“It will take nearly 10 years to clear the shadow inventory in the New York metropolitan area at the current liquidation rate, S&P estimated on Monday.”
Jan. 3, 2011, 6:06 p.m. EST
S&P warns on ‘shadow inventory’
It’s taking longer for market to absorb foreclosed properties
By Alistair Barr, MarketWatch
SAN FRANCISCO (MarketWatch) — Standard & Poor’s Ratings Services said Monday that it’s taking longer for the U.S. housing market to absorb foreclosed homes, which means there may be a major drag on prices for a few more years.
The New York metropolitan area may suffer the most from this, the ratings agency also said.
At the end of the third quarter of 2010, the principal balance of foreclosed homes topped $450 billion, which represents about a third of the nonagency residential mortgage-backed securities market, according to S&P managing director Diane Westerback.
“While this amount is down about $10 billion from the second quarter, we estimate that it will take 44 months to clear the supply of distressed homes on the market in the U.S. as a whole, which is up from our second-quarter estimate of 40 months, Westerback added in a statement.
A decade in New York
It will take nearly 10 years to clear the shadow inventory in the New York metropolitan area at the current liquidation rate, S&P estimated on Monday. That’s at least twice as long as it will take in any of the other top 20 metropolitan statistical areas monitored by S&P, and nearly three times the average time to clear for the entire U.S.
New York hasn’t been hit as hard by foreclosures as other places like Florida, Nevada, Arizona and California. However, states in the northeast of the U.S. often have a judicial foreclosure process, which takes more time, Westerback noted in an interview with MarketWatch.
“New York and New Jersey have historically had the longest foreclosure times,” she said. “It used to be around two plus years. But it’s extended by nearly a full year at this point.”
http://www.marketwatch.com/story/sp-warns-on-shadow-inventory-of-foreclosures-2011-01-03 -
“It will take nearly 10 years to clear the shadow inventory in the New York metropolitan area at the current liquidation rate, S&P estimated on Monday.”
Yawn…
How the fed could become insolvent:
http://www.caseyresearch.com/editorial/3959?ppref=ZHB144ED0111A
This article reads like nonsense to me. The Fed can create money out of thin air, and buy assets that yield more than the short-term rates that they have to pay on reserves.
How can that possibly drive them to insolvency?? The very notion is lunacy.
Not to mention, even if the Fed were to operate at a loss, they have at least a couple of options that are not mentioned by the article:
- do nothing, and pass the loss on to the Treasury. The Fed’s books are rolled up into the Federal Gov’t books, so the profit/loss is not really theirs, but rather the taxpayers.
- implement QE3-QE6 to drive down short-term rates, thus reducing the amount of interest that they have to pay on reserves. They have demonstrated a willingness to go this route, and I would argue it is the most likely course as long as we are not in a “real” recovery.
“It used to be around two plus years. But it’s extended by nearly a full year at this point.”
So foreclosure turnarounds in NY are 3 plus years now? That means most of the foreclosure inventory in this state is still yet to come. Oh, this is going to be an interesting next couple of years.
“metropolitan area”
Tri State NY,NJ, Ct. That`s BIG MONEY where I always thought judging from my parents house in Old Greenwich Ct. was a much bigger bubble than anyone ever mentioned. Well maybe except for exeter.
The world loves an optimist!
Paul B. Farrell
Jan. 4, 2011, 7:19 a.m. EST
America’s 10 worst years start right now
Commentary: 2011-2020: Rich get richer, market crashes, empire ends
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Dateline December 2020. Let’s look back on the 2011-2020 decade, at what historians call the “Worst Decade in American History.” Totally predictable, totally denied.
Back in January 2011 we made 10 predictions of a chain of events that would reach a critical mass and consume America in a torrent of creative destruction, crippling capitalism and other outmoded institutions, forcing new power players to step out of shadows and assume leadership in a time of extreme crisis. Now we see how they came true.
…
Somebody’s been lurking on this board.
I especially enjoyed this part:
2020. Patriarchy ends: male dominance declines, women leaders rise
Back in 2011 it seemed clear that patriarchy, male dominance world culture, politics and economics throughout history, would collapse all by itself, without women engaging in any direct war, any “battle of the sexes” to defeat men at their own game. But in 2020, women may be our only salvation.
But, speaking as a member of the fairer sex, I think this change will happen a lot sooner than 2020. Why? Because we gals are pretty good at organizing and making things happen.
2020. Patriarchy ends: male dominance declines, women leaders rise…But in 2020, women may be our only salvation.
Good, more hope and change…
“Because we gals are pretty good at organizing and making things happen.”
But who invented the
- automobile
- light bulb
- phonograph
- motion pictures
- trains
- airplanes
- bicycle
- steam engine
- model of the atom
- telephone
- cell phone
- internet
- Google
- Facebook
- Theory of whatever (evolution, planetary motion, plate tectonics, etc etc etc)
- model of DNA atom
- H-bomb (oops!)
Don’t you gals like inventions? We can’t live without them…
Well, we lived without all of them at one time, right?
Besides almost all inventions start out as attempts to impress some girl anyway…
Oh you guys are gonna love this one:
Rent vs. own ratio to flip in 2011?
Cnnmoney.com/Fortune
Posted by Nin-Hai Tseng, writer-reporter
“By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country,” (Mark) Zandi says
, the comparative costs between renting and buying will largely depend on individual market conditions. For instance, cities in Florida and Arizona, which continue to experience high foreclosure rates, falling home prices and widespread unemployment, will be areas where homeownership will likely be more affordable than renting, says Daisy Kong at Trulia, a San Francisco-based real estate data provider. Meanwhile, renting will probably continue to make more financial sense in national and regional job centers such as New York, Omaha and Seattle, she says.
And while it could become more attractive to buy than rent this year, it’s anyone’s guess how long it could take before a flurry of home sales transpires. Household finances have improved only modestly and are still quite a mess. Also, lending standards for new mortgages have tightened considerably and many economists have said a housing rebound will likely fall mercy to the unemployment rate, which is expected to improve some but still hover over 9%.
Will the American Dream return to your town?
Location Price-Rent Ratio
Atlanta, GA 12.82
Austin, TX 21.08
Boston, MA 17.71
Baltimore, MD 17.42
Charlotte, NC 25.98
Chicago, IL 15.09
Cincinatti, OH 13.74
Cleveland, OH 11.43
Columbus, OH 15.61
Dallas - Fort Worth, TX 16.98
Denver, CO 22.08
Detroit, MI 12.32
East Bay, CA 35.06
Fort Lauderdale, FL 15.19
Hartford, CT 18.52
Honolulu, HI 34.72
Houston, TX 16.01
Indianapolis, IN 14.68
Inland Empire, CA 14.75
Jacksonville, CA 15.12
Kansas City, KS 14.4
Las Vegas, NV 13.89
Long Island, NY 21.09
Los Angeles, CA 14.99
Memphis, TN 17.92
Miami, FL 14.57
Milwaukee, WI 22.36
Minneapolis, MN 14.04
Nashville, TN 23.88
New Orleans, LA 15.66
New York, NY 15.43
Norfolk, VA 19.88
North - Central New Jersey 24.69
Oklahoma City, OK 16.11
Orange County, CA 27.14
Orlando, FL 13.1
Palm Beach County, FL 16.64
Philadelphia, PA 15.94
Phoenix, AZ 12.35
Pittsburg, PA 11.71
Portland, OR 25.74
Raleigh, NC 24.39
Richmond, VA 22.18
Sacramento, CA 15.85
Salt Lake City, UT 18.05
San Antonio, TX 17.77
San Diego, CA 21.75
San Francisco, CA 27.17
San Jose, CA 32.27
Seattle, CA 26.96
Bridgeport, CT 18.49
St. Louis, MO 14.04
Tampa, FL 13.08
Washington - Northern Virginia - Maryland 18.48
Manhattan, NY 28.34
Metropolitan Area Average 14.85
U.S. 10.42
Source: Moody’s Analytics, price-rent ratio for third quarter of 2010. As a general rule of thumb, you should often buy when the ratio is below 15 and rent when it’s above 20. If it’s between 15 and 20, lean toward renting.
So Pittsburgh, #7 in the top 10 cities declining in population, has a ratio of 11.71. This is a good place to buy?
See also, Detroit and Cleveland.
Hmmmmm…..
Short summary….
It’s above 30 in “East Bay CA”, Honolulu, and San Jose.
I always said a dog was the best burglar alarm.
Suspected burglar dies after pit bull chases him through window of home
By Arelis R. Hernández
Orlando Sentinel
Posted: 8:07 a.m. Tuesday, Jan. 4, 2011
The Marion County Sheriff’s Office is investigating the death of man after he jumped through the window of a home he is suspected of burglarizing Sunday afternoon, authorities said.
A pit bull chased Laird Butler, 41, after he broke into a Summerfield mobile home at about 2:30 p.m., officials said.
The man suffered cuts all over his body and lost a lot of blood. He managed to ask a neighbor for help.
Butler died as he was being transported to a local hospital, officials said.
Marion County Sheriff’s Office spokeswoman Jenifer Lowe said they think Butler was on drugs. Officials do not know what drugs he used or how much he took.
A toxicology report should reveal those details, Lowe said.
The homeowner identified Butler as someone who lived in the neighborhood. She said she locked her dog in the bedroom before she left the house. No information about the dog’s condition was released.
Laird has a series of previous arrests in Marion County dating back to 2001 on numerous charges including disorderly conduct, resisting or obstructing an officer without violence, and carrying a concealed weapon.
“he broke into a Summerfield mobile home ”
This would not be on my list of prime places to burglarize.
http://www.guardian.co.uk/environment/2011/jan/04/apocalypse-mystery-bird-deaths-louisiana
Mysterious mass deaths of blackbirds on the wing in Arkansas and Louisiana. No cause of death determined. Very strange. Personally, I think they died of fright at the prospect of all those new Republicans joining their Democrat colleagues in aiding the banksters’ frenzied looting of America’s disappearing middle class.
http://www.businessweek.com/news/2011-01-04/big-lenders-may-be-first-to-settle-foreclosure-probe-iowa-says.html
As I predicted, the corrupt state attorneys general will settle their robo-signing “investigation” of the TBTF bankster loan servicers, for a pittance of the banksters’ ill-gotten gains, no doubt in exchange for drug-deal promises of generous campaign contributions. Oh, an notice how Bank of America settled $126 billion in potential buybacks of sh!t mortgages to Freddie Mac and Fannie Mae for $2.6 billion, putting future liabilities on the US taxpayer.
America’s descent into a banana republic is officially confirmed. To those who voted for this corrupt administration and its equally corrupt predecessor, a heart-felt F**k You.
Never thought I’d find myself agreeing 100% with Maxine Waters on anything, but the senior Democrat from Compton hit the nail on the head with this comment about the lastest, multi-billion dollar back-door bailout of the banksters by taxpayers, courtesy of our Republicrat overlords:
Congresswoman Maxine Waters, a senior Democrat on the House Financial Services Committee, issued the following statement today after Bank of America settled with Fannie Mae and Freddie Mac for $2.8 billion over the misrepresentation of loans that the bank originally sold to the GSEs:
“I’m concerned that the settlement between Fannie Mae, Freddie Mac and Bank of America over misrepresentations in the mortgages BofA originated may amount to a backdoor bailout that props up the bank at the expense of taxpayers. Given the strong repurchase rights built into Fannie Mae and Freddie Mac’s contracts with banks, and the recent court setback for Bank of America in similar litigation with a private insurer, I’m fearful that this settlement may have been both premature and a giveaway. The fact that Bank of America’s stock surged after this deal was announced only serves to fuel my suspicion that this settlement was merely a slap on the wrist that sets a bad example for other negotiations in the future.
I understand that the questions raised by fraudulent servicing practices were not addressed in these settlements, and I hope that Fannie Mae and Freddie Mac, along with their conservator, are more aggressive in pursuing banks for the fraud I documented in my Subcommittee during the last Congress.”
“I’m concerned that the settlement between Fannie Mae, Freddie Mac and Bank of America over misrepresentations in the mortgages BofA originated may amount to a backdoor bailout that props up the bank at the expense of taxpayers.
Gosh. The feds are really “pursuing” that bank fraud now.
http://www.telegraph.co.uk/finance/china-business/8233589/World-on-red-alert-over-Chinas-inflation.html
US in a race with China to trigger the next global financial crisis. Thank you, Ben Bernanke.
Financial Times of London
In the grip of a great convergence
By Martin Wolf
Published: January 4 2011 20:55 | Last updated: January 4 2011 20:55
Convergent incomes and divergent growth – that is the economic story of our times. We are witnessing the reversal of the 19th and early 20th century era of divergent incomes. In that epoch, the peoples of western Europe and their most successful former colonies achieved a huge economic advantage over the rest of humanity. Now it is being reversed more quickly than it emerged. This is inevitable and desirable. But it also creates huge global challenges.
In an influential book, Kenneth Pomeranz of the University of California, Irvine, wrote of the “great divergence” between China and the west.* He located that divergence in the late 18th and 19th centuries. This is controversial: the late Angus Maddison, doyen of statistical researchers, argued that by 1820 UK output per head was already three times and US output per head twice Chinese levels (see chart below). Yet of the subsequent far greater divergence there is no doubt whatsoever. By the middle of the 20th century, real incomes per head (measured at purchasing power parity) in China and India had fallen to 5 and 7 per cent of US levels, respectively. Moreover, little had changed by 1980.
What had once been the centres of global technology had fallen vastly behind. This divergence is now reversing. That is far and away the biggest single fact about our world.
On Maddison’s data, between 1980 and 2008 the ratio of Chinese output per head to that of the US rose from 6 to 22 per cent, while India’s rose from 5 to 10 per cent. Data from the Conference Board’s “total economy database”, computed on a slightly different basis, indicate that the ratio rose from 3 to 19 per cent in China and from 3 to 7 per cent in India between the late 1970s and 2009. The comparisons are uncertain, but the direction of relative change is not.
Rapid convergence on the productivity of advanced western economies is not unprecedented in the era following the second world war. Japan was the forerunner, followed by South Korea and a few small east Asian dragon economies – Hong Kong, Singapore and Taiwan. Japan had already begun to industrialise in the 19th century, with remarkable success. After its defeat in the second world war, it restarted at about a fifth of US output per head, roughly where China is today, to reach 70 per cent in the early 1970s. It attained a peak of close to 90 per cent of US levels in 1990, when its bubble economy burst, before declining again. South Korea started at 10 per cent of US levels in the mid-1960s to reach close to 50 per cent in 1997, just before the Asian crisis, and 64 per cent in 2009.
…
I read somewhere that the biggest problem facing the housing market is the massive inventory sitting out there. That is not the real problem.
The real problem is unemployment and a jobs crisis that has killed housing.
Hence housing is a dead patient that cannot be revived. Welcome to the Banana Republic of America.
The Second Bank of the United States
The Second Bank of the United States was chartered in 1816 to cure the problems caused by the end of the First Bank of the United States in 1811. These problems included state banks issuing too many loans and too much money, causing an increase in spending and rising prices. Those who favored the bank believed a federal bank would help keep prices from rising too high. Those against it were concerned about excessive concentration of wealth and power in the hands of a private bank with close ties to the federal government. In 1832, Nicholas Biddle, the head of the Second Bank of the United States during Andrew Jackson’s presidency, attempted to recharter the Bank. Jackson objected because he believed the bank was guilty of fraud and corruption, and was actively involved in attempting to buy elections.
SOME THINGS NEVER CHANGE!!!
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
Paging Andrew Jackson’s ghost!
The Second Bank of the United States
The Second Bank of the United States was putatively chartered in 1816 to cure the problems caused by the end of the First Bank of the United States in 1811. The problems included state banks issuing too many loans and too much money, causing an increase in spending and rising prices.
Business people generally favored the Second Bank because it loaned them money. The Bank was also a safe place for the federal government to keep its money, and the paper money issued by the bank formed a stable currency. As a result, confidence increased in local banks all over the country. Many Americans disliked the Bank because they opposed its restrictions on loans made by state banks. Fearing that state banks were making too many loans, Second Bank directors often restricted the amounts that state banks could lend. Farmers and merchants who wanted to borrow money to buy land were angered by the Bank’s policies. Many blamed the Bank for the economic crisis which broke out in 1819, in which many people lost their farms.
In 1832, Nicholas Biddle, the head of the Second Bank of the United States during Andrew Jackson’s presidency, attempted to recharter the Bank. Jackson objected because he believed the bank was guilty of fraud and corruption, and was actively involved in attempting to buy elections. Jackson called the bank The Monster, and claimed that it protected the interests of the wealthy. Biddle got Congress to renew the Bank’s charter in 1832, over Jackson’s objections. Jackson immediately vetoed the bill, and turned the fight over the Bank into a campaign issue which helped him win reelection by a huge margin.