Bits Bucket for January 21, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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There’s never been a better time to buy.
(Just kiddin!
)
There’s never been a better time to buy …..
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Gold
Not kiddin!
So when is it a good time to sell gold?
It’s always a good time to buy or sell gold!
When Joe six-pack realizes that the $ is doomed, and a cup of coffee costs $1,000.
When all the states except North Dakota declare bankrupt you better have gold/silver. Look for Ill. and the “golden state of California” to go first!
I agree that the currency of North Dakota will be hard to spend in NY when that day comes.
Boycott Megabanks/ Save America -bumper sticker
How the Government Caused the Housing Bubble
January 20, 2011 07:45 AM
(The Atlantic) — Conservatives blame poor government policy for causing the housing bubble, while progressives blame the financial industry. While most arguments on the right focus on the government-sponsored enterprises Fannie Mae and Freddie Mac, its stance actually might not need to rely on them. Data indicates that the government’s broader efforts to make housing an attractive investment has funneled money away from business and into the housing sector.
…
The title of the actual article is ‘How the Government Caused Overinvestment In Housing’. It’s the editors at the Atlanta Post who chose the much more misleading- but provocative, you betcha!- title that we see here.
Overinvestment In Housing = Bubble
From the article:
“There are a few things to note about this finding. First, it’s important to bear in mind that this was all before the housing bubble; Mulligan’s analysis ends in the year 2000.”
—
You can have over-investment and still not be in a bubble. The bubble didn’t get going big time until the big boyz on Wall street found a way to profit enormously from it. Prior to that we had what the original title said: “Overinvestment in housing.”
Tax Policy = Some overinvestment, but no bubble
CRA = Some overinvestment, but no bubble
Banksters Securitization = Bubble.
Tax policy favoring homeownership and the CRA have been around for a while. None of the banksters were making crazy loans, until they figured out a way to pocket cash up front, and offload the risk.
A study at MIT offers a good counter-argument. From Slate:
“Finally, Acemoglu examines the role of federal government support for housing. To be sure, the U.S. has long provided subsidies to owner-occupied housing—mostly through the tax deduction for mortgage interest. But nothing about this subsidy explains the timing of the boom in housing and outlandish mortgage lending.
The FCIC Republicans point the finger firmly at Fannie Mae, Freddie Mac, and other government-sponsored enterprises that supported housing loans by providing guarantees of various kinds. They are right that Fannie and Freddie were “too big to fail,” which enabled them to borrow more cheaply and take on more risk—with too little equity funding to back up their exposure.
But, while Fannie and Freddie jumped into dubious mortgages (particularly those known as Alt-A) and did some work with subprime lenders, this was relatively small stuff and late in the cycle (e.g., 2004-2005). The main impetus for the boom came from the entire machinery of “private label” securitization, which was just that: private. In fact, as Acemoglu points out, the powerful private-sector players consistently tried to marginalize Fannie and Freddie and exclude them from rapidly expanding market segments.
The FCIC Republicans are right to place the government at the center of what went wrong. But this was not a case of overregulating and overreaching. On the contrary, 30 years of financial deregulation, made possible by capturing the hearts and minds of regulators, and of politicians on both sides of the aisle, gave a narrow private-sector elite—mostly on Wall Street—almost all the upside of the housing boom.”
link to article:
http://www.slate.com/id/2281718/
‘Conservatives blame poor government policy for causing the housing bubble, while progressives blame the financial industry’
And I blame both, along with millions of others, from REIC groups, greedy individuals to the media, etc. None of this does anything to address what steps we are taking now! To have a financial mania is one thing, but to ignore history is another:
‘The world has recent experience with attempts at resuscitating a bubble economy. The Bank of Japan cut interest rates six times between 1986 and early 1987 and all that new money caused the Japanese economy to bubble over…For a brief moment in 1990, the Japanese stock market was bigger than the US market…At the bubble’s height, the capitalized value of the Tokyo Stock Exchange stood at 42 percent of the entire world’s stock-market value and Japanese real estate accounted for half the value of all land on earth.’
‘Between 1992 and 1995, the Japanese government tried six stimulus plans totaling 65.5 trillion yen and they even cut tax rates in 1994. They tried cutting taxes again in 1998, but government spending was never cut. Also in 1998, another stimulus package of 16.7 trillion yen was rolled out nearly half of which was for public-works projects. Later in the same year, another stimulus package was announced, totaling 23.9 trillion yen. The very next year an ¥18 trillion stimulus was tried, and, in October of 2000, another stimulus for 11 trillion was announced. ‘
‘the Bank of Japan switched, during the spring of 2001, to a policy of quantitative easing…in order to engineer a rebound in demand growth. The move by the Bank of Japan to quantitative easing and the large increase in liquidity that followed stopped the fall in land prices by 2003. The Bank of Japan held interest rates at zero until early 2007, when it boosted its discount rate back to 0.5 percent in two steps by midyear. But the BoJ quickly reverted back to its zero interest rate policy.’
‘In August of 2008, the Japanese government unveiled an ¥11.5 trillion stimulus…this past April, the Japanese government announced another ¥10 trillion stimulus program…Japan’s GDP at the end of this year (2010) will be no higher than it was in 1992 – 17 lost years.’
‘Producing things that nobody wants and propping up malinvestments cannot possibly help any economy,’ writes economist Ben Powell’
http://mises.org/daily/4059
I guess if the Japanese Example teaches us anything, it’s that quantitative easing doesn’t necessarily result in inflation.
And while I’m not saying that stimulus is always a bad idea, the problem with much of the stimulus is that it has been mis-applied. Things like the homebuyer tax credit from last year, or the cash for clunkers deal. By trying to preserve demand at the debt-fueled levels prevelant at the height of the bubble, they are the equivalant of piling sandbags at the low tide line. A waste of resources that might well have been useful if used elswehere. Economic triage, not trying to save all the bankers and prevent a sizeable number of FBs from foreclosure and bankruptcy.
I guess if the Japanese Example teaches us anything, it’s that quantitative easing doesn’t necessarily result in inflation.
Also note that Japan did it at a time when other world economies were strong.
I still blame the banks
GSE’s were just one of a number of vehicles used by the banks to off load worthless MBS onto the backs of the tax payer and conservative investors. They paid off the politicians, they took over regulatory bodies, and they silenced or countered the small amount of reporting that exposed it.
You don’t blame the gun you blame the criminal.
“I guess if the Japanese Example teaches us anything, it’s that quantitative easing doesn’t necessarily result in inflation.”
That might be the wrong lesson. I think QE does cause inflation, just not necessarily at home.
The BOJ QE did not cause inflation at home, because that money was fleeing Japan for places where it could earn a return—e.g. the yen carry-trade.
Our QE is likely the cause of the inflation that is occuring in other developing nations.
Japanese real estate accounted for half the value of all land on earth.’
And the silly Chinese Gov’t just there wishing they had a valuable Island that could increase in value…
(‘Conservatives blame poor government policy for causing the housing bubble, while progressives blame the financial industry’
And I blame both, along with millions of others, from REIC groups, greedy individuals to the media, etc.)
Thank you! I am so sick of the either/or mentality that dominates so much of the rhetoric coming from the media and the two major parties. This was a group effort, people!
“At the bubble’s height, the capitalized value of the Tokyo Stock Exchange stood at 42 percent of the entire world’s stock-market value and Japanese real estate accounted for half the value of all land on earth.’”
Ya gotta admit- the Japanese bubble blows ours out of the water. It’s like Pearl Harbor all over again.
“Our QE is likely the cause of the inflation that is occuring in other developing nations.”
Why should we care?
I guess if the Japanese Example teaches us anything, it’s that quantitative easing doesn’t necessarily result in inflation.”
Prime is contained is right QE does cause inflation just not in the country thats trying to inflate. Look at what US QE is doing to inflation in emerging economies
I’ve read japan easy money is linked to the US housing bubble, easy money looking for “safe ” high yeild returns.
In other words, it’s the usual logical fallacy that B causes C, when in reality A causes B AND C.
Cause vs. Enabler. A bubble is a mania. You cannot explain an illogical situation with logic. Finding blame is an essential part of the Denial process. Blame allows us to avoid concluding that we were simply very stupid.
“Blame allows us to avoid concluding that we were simply very stupid.”
So you blame us.
Yes, it helps me avoid concluding that I alone was very stoopid.
The claim of stupidity is just a cover for criminals. We just didn’t see it coming BS. If the head of Goldman Sachs or JP Morgan or the FED officials want to claim ignorance let me examine how they invested their money before the collapse and read a few emails.
I’ll bet you Paulson’s Hedge Fund is full of investors from this class of people.
But a mania ususally requires something in order for it to get going. If the mania was for standing on one’s head for hours a day, it would require time (and perhaps a lot of wall space for those who needed help balancing). To buy houses, the requirement was credit. It doesn’t matter how much people *wanted* to buy houses; if they couldn’t borrow the money to do it, the bubble would have been cut off at its knees. With just a mania, prices would have gone up a bit as people were willing to devote more of their excess cash to a housing payment, but eventually prudent lenders would have cut it off. It was the disconnect from underwriting standards that allowed things to take off, which allowed prices to go steadily up (along with contantly shrinking interest rates) which inspired lenders to decide that since property values could never go down, it didn’t matter if the borrower could pay it back, and around and around in an ever increasing spiral. But in the beginning, it was the ability of innumerate borrowers to get more money than they could pay back that allowed things to get stupid.
‘a mania usually requires something in order for it to get going’
There are different theories:
‘Early Speculative Bubbles & Increases in the Money Supply’ by Doug French
‘The Housing Bubble was hardly the first in human history. What’s eluded historians is the same issue that eludes commentators today: the underlying cause of bubbles. This book is the first (and only) book to solve the mystery of the most famous bubble in world history: Tulipmania in 17th century Netherlands. French follows the money to prove that the bubble resulted from a government intervention that dramatically exploded the money supply and fueled the tulip-price bubble – not altogether different from modern bubbles.’
It’s important, because we need to understand how we got in this mess in order to get out of it.
Yes, arguably the mania was LENDING people more than they were likely to be able or willing to pay back.
Arguably, the mania was the people buying the packaged mortgage securities.
It’s important to note that all the supposed ‘government causes’ of the RE bubble were in place for decades prior to the bubble. You can say that they caused an over-investment in RE, but it’s hard to argue that they caused the bubble, unless you can explain why it took so long to happen, and what effect such changes as the repeal of Glass Steagall had.
One thing that that at least contributed to a rapid acceleration of the bubble was the Fed reaction to the 9/11/01 attacks and subsequent economic slowdown. It’s almost as if bin Laden was prescient about what our reaction would be, and the consequences that would follow. If he is still alive in a cave somewhere in the Pakistani mountains, he is laughing at us.
“It’s almost as if bin Laden was prescient about what our reaction would be, and the consequences that would follow.”
Bingo! A small, ragtag band of terrorists armed with box cutters was all it took to lure the almighty Bush regime into two very costly and protracted wars which seem destined to end the U.S. rein as sole superpower. The gnat has defeated the lion whose nose it tickled.
The answer to the question of what causes bubbles, is the same as the answer to the question on what is the limit on the amount of loans that can be made within the economy? Change that limit and there are immediate economic and price consequences as either more or fewer loans are made.
The introduction of Securitization removed an invisible limit within the banking system that limited bank lending to a proportion of the money on deposit.
That’s why it all happened.
Although somewhat self-serving (It’s not our fault, we didn’t receive enough funding) it’s worth reviewing the testimony last year by the head of OFHEO (the little regulator who couldn’t).
fcic.gov/hearings/pdfs/2010-0409-Falcon.pdf
Number of factors that created this housing bubble ,all mentioned
above .One of my favorite factors is a huge investment money
supply from all over the World looking for a place to park with yields, thus it was funneled to fraudulent RE lending ,mostly from the private sector .
The fact that funds from Pensions should only go to AAA investment grade ended up going to fake AAA grade securities marketed by Wall Street . Credit cards to fund consumer spending went into no mans lands
also and this funded the consumer economy ,not wage increase.
It took other factors to fuel it like a list of the following that has been mentioned above and I added more …..
(1) Huge money supply ,faulty credit limits extended in housing and credit cards for purchases .
(2) Favorable tax laws enacted for capital gains treatment of
real estate appreciation gains that set up the short term flipping
of RE as a tax free income short term .
(3) Government hands off policy and de-regulation of financial industry , The creation of 40x leverage instruments in the unregulated world of finance and credit default swaps . At the same time the co-mingling of the unregulated financials with the unregulated financials creating risk beyond normal historic bounds .
To sum it up ,casinos were created out of our financial markets in
which leverage with no reserves were created ,thus increasing the money supply in spite of it being fake .
(4) Borrowers willing to commit fraud and over extend themselves coupled with a wide scale PR campaign by the industry to use leverage for untold riches in real estate .
(5) REIC sold real estate on the speculation aspect cashing in on the fact that lending underwriting was not present ,causing them to conspire with the Market Creator at the top .Developers would
created tracks for speculation and flippers and they were in bed with Lenders thus increasing the mis-allocation of funds to unneeded real estate rather than end user demand based on qualified income . Appraisers pushed into Hit the Mark appraisals
and extreme violation of long standing Appraisal principals that
a Market can only be created will willing and able qualified buyers
in arms length transactions .
(6) As the mania progressed the creation of even more faulty lending such as toxic liar loans and qualifying based on teaser rates
along with no underwriting and prevention of fraud .
(7) The faulty easy money lending overtook the market to the point that prudent lenders would be left in the dust if they didn’t
join in .
(8) Passing off the junk to the securities market that mis-rated the securities risk in large part created the Origination lenders breach of duty to under-write or prevent fraud .
(9) The Main Street Media actually becoming cheerleaders for real estate with little counter data from Experts on the bubble . Advertisers being real estate related . Experts becoming payed shield for the Industry . Property taxes and spending becoming
a money cow for government and state coffers .
(10) Borrowers searching for ways to off set the lack of wages keeping up with inflation and things like health care costs ,etc .
Baby Boomers seeking ways to fund retirement .
(11) Off-shoring and off manufacturing and faulty trade balances and trade taxes creating less jobs and more pressure for the creation of investment to off-set this loss of cash flow and cash flow for taxes .
(12) Greenspan keeping the interest rate to low for to long that
encouraged the inflation of real estate .
(13) A entire breakdown of regulation in part due to de-regulation
but in part due to resources of law enforcement put toward homeland security .
(14) A incentive pay structure for CEO ’s that encouraged quick easy money gains ,and a incentive structure for commission money
men to breach fiduciary duty .
(15) The slow gradual development of a Wall Street ego-centric
market development in investments ,rather than production ,and
a slow take-over by Monopolistic Corporations seeking short term gains and low wage foreign work forces .
(16) Underfunding of Pension Plans by Private business as well as
Government ,thus part of the reason for Government going along with the contrived market .
(17) A disconnect with the co-mingling of one regulatory body
(the SEC ) with another regulatory body ( The FDIC and bank regulators of regulated banks ,rendering them both ineffective .
(18) Refinancing encouraged to bail out a unqualified borrower
as well as a means to obtain purchasing power with real estate always goes up to finance it .
(18) The repeal of Glass-Steagal that reduced the separation
of investment from lending and it created a co-mingling of
financial markets ,the unregulated with the regulated ,lending
with investment , Insurance companies moving from their
normal role . This conflict of interest in part created the housing boom . Also there was not proper insurance on risk ,nor was there reserves to cover the risk because they were insuring based on leverage (no reserves like in the case of AIG ) . So, financial market became a casino backed by fake money .
(19) Governments long standing support of housing market .
(20) The lobbying power of special interest groups to get Congress to do their bidding and special taxes favoring a stacked deck and supplements to private self -interest . In other words -a takeover
of Government by the Industrial and Financial Complex .
I could go on and on ,but many factors had to create the most absurd Housing Bubble of such a epic size .
Good summary.
MSM commentators are catching on to the great, big, government-sponsored dead cat bounce in housing that followed the first leg down of bubble collapse.
Get Ready For Another Housing Crash
Published: Tuesday, 18 Jan 2011 | 11:49 AM ET
By: John Carney
Senior Editor, CNBC.com
The best evidence that we’re headed for a double-dip in housing is the quality of the mortgages during the recent period in which the housing market seemed to improve in many areas.
In the Freddie Mac review of Citigroup’s performing loans that I mentioned earlier today, the portion rated as “Not Acceptable Quality” was as high as 32 percent in the fourth quarter of 2009. While this has obvious implications for the repurchase or “put-back” liability of Citigroup [C 4.80 0.04 (+0.84%) ], it also has broader implications for the housing market and the economy.
Keep in mind that the quarter in which Citi was churning out the highest amount of flawed mortgages was supposedly a good time for housing. The median price of previously owned single-family homes in the fourth quarter of 2009 rose in 67, or 44 percent, of the 151 metropolitan areas, according to a survey by the National Association of Realtors. Sixteen of the areas posted double-digit increases. The Case-Schiller numbers for that quarter showed U.S. home prices were trending up in 155 out of 384 metro areas.
Now there have been indications in the past that a mini-housing bubble was being built during that period. The Federal Housing Authority, for instance, was backing some very questionable loans. The home-buyer tax credit was allowing individuals to buy loans with no money down. All the bad practices of the 2005-2007 bubble seemed to be back again.
…
I saw this article and it’s a good one. More proof that we’re a very long way from the bottom.
The only thing that has changed with lending is now you have to prove you have a job.there are zero down loans available from the usda and 3.5% down loans through FHA.All backed by the taxpayer.Dont you feel happy?
I’d rather see a 0% down backed by a job than a 20% down backed by nothing. Aren’t those FHA still only available to first-time primary residence buyers? Not sure about the USDA, but those sound like flyover country, which is pretty low volume.
‘I’d rather see a 0% down backed by a job than a 20% down backed by nothing’
How about 20% down backed by a job?
Jobs are ephemeral.
Well Ben, I agree with you. I’d take “both” over “either.” Of course, “both” would crash housing prices through the floor.
FHA loans with 3.5% down are available to anyone - not just first time homebuyers. And each county in the U.S. has a limit for how much the loan can be, determined by the average price of housing in the county. Funny thing is, the FHA limits were run up during the bust, *but they haven’t adjusted them downward*. For instance, in Miami (where I am), the current FHA loan limit is 423,000. The average price of a home has dropped to the 2-300,000. But the FHA loan limit was raised from 417,000 to 423,000 this last year. Go figure.
So FHA loans are still allowing people to get into homes with only 3.5% down that are likely overpriced. Insured by the American taxpayer.
“Not sure about the USDA, but those sound like flyover country, which is pretty low volume.”
And that is how they are fooling you, because it sounds like flyover country but it is not.
The USDA loan program is NOT limited to rural areas, from what I understand. People were/are using them even in major metropolitan areas.
It’s just another way to get government on the hook for the losses.
If you remember ,when the meltdown started Congress raised the FHA limits from $417.000 to somewhere in the neighborhood of over 700k . This was something that Mozillo wanted because a lot of his junk loans where over F&F limits and how can you dump junk on F&F if the loan limits limit you . The private market to buy MBS’s was drying up ,especially in those higher loan amounts , Mozillos default rate was over 80% on those bundles he was left holding the bag on that he
couldn’t offload at the time .
That single act by Congress ,that was done at a time of a
contracting market ,told me that more insanity was to follow .
“How about 20% down backed by a job?”
…
“Jobs are ephemeral.”
And enough savings to tide you over during a spell of unemployment that lasts ‘longer than expected’?
‘…“both” would crash housing prices through the floor.’
Why are you so pessimistic?
I agree with Professor Bear. Many moons ago, when we bought our one and only house with 20% down, we thought we were doing a great thing. But between that and furnishing the thing, we used all of our savings. So obviously, the a/c died not long after we moved in costing several thousand we no longer had. What did we know, we were 21 years old and eager to become slaves to the Almighty Bankers?
Lesson to be learned, 20% down, money for furnishings that will be needed, good job and 3-6 months savings before you buy a house. That is what I will teach my kids. If you are tapped out when you move in something bad is bound to happen to the house, or a car, etc.
Until we require folks to have real skin in the game (15% or more down, 30% if you’re a credit risk), we won’t see any real recovery in housing. When someone buys that home on FHA or other government program at $200,000 with $7,000 down, what are they going to do when the market value is $130,000?
If government didn’t prop the housing market, we’d probably be at bottom now.
Maybe it’s time to revisit that Credit Suisse Graph again. $16 billion of Subprime peaked in 2007. I think those houses are still in the system, either from TARP or Fannie Freddie backing. Or perhaps robosigned and FB squatted shadow inventory.
Last fall we had another small peak in subprime (more foreclosures), and we had the most resets in Prime mortgages. I suspect the Primes still had enough FICO and equity to re-fi.
In a couple months we’ll start to climb the Big Peak: This summer, $12 billion in Option ARM mortgages are due to reset, almost as bad as the subprime. Aren’t these the folks that mostly cashed out into 5-year Op-ARMs in 2005? (Watch out, California and Florida!) These homes are seriously underwater, can’t refi, jobs lost, no more greater fools, and there is no money left to save them.
I don’t think we’ll be near a national bottom until this graph plays out mid-2012. Even then, that will be just in time for interest rates to rise, at which point housing will dive again. Maybe there will be an actual bottom in mid 2013?
A number of those oprion ARMs reset early because the borrower never paid more than the minimum and therefore hit a loan-to-value (value at time of sale, I believe) ratio reset before the date when it had to reset. I have not seen any analysis of how many of these accellerated or even if the servicers enforced the early reset clauses.
Oxide, as the saying goes, from your mouth to God’s ears!
I know three people waiting until the 3 year period on the tax credit expires to sell the house they just bought.
I’ve seen several houses coming on that we considered in the recent past. They sold higher than we were interested in paying and now they’re back on the market. Of course, I know several are legitimate transfers (yes the company only left them here less than 2 years) and as I mentioned in one case the company would reimburse the owners up to $50k in property value losses. So any fear in overpaying is much diminished and in reality since the employer’s product is a commodity we all end up paying for the luxury of that option through higher prices.
(This is an industry that moves its employees often. As it was explained to me, if they want the best in the labor market to agree to be moved all over the world on a regular basis, there are payments & perks that attempt to help compensate.)
On an aside, I talked to a realtor friend this morning. She shared she’s making sales and also has several serious buyers ready to move soon….all in the lower price ranges. Thought that was interesting.
I know three people waiting until the 3 year period on the tax credit expires to sell the house they just bought.
And they’re expecting that those houses will *magically* sell for a lot more than they paid, right? Sort of like a three-year flip?
If course they will. Suzanne said they would.
Does anyone know where those great C-21 commercials of the stressed out buyers being reassured by “Suzanne”, the professional (not sure what profession) that REAL ESTATE was their best investment, it was sure to go up, price was no matter, and don’t worry about, i got you covered……………………..>>?
I found the clip that explains the thinking. go to Youtube and type in “Suzanne researched this”. Play clip.
Fond memories of days gone by.
I was hoping they were gone forever, but I got outbid again last week. Oh my.
Treasury Prices Fall on Jobs Data, Housing Figures
Treasury prices slip after reports show jobless claims fall and home sales surge in December
The Associated Press
Post a Comment
By JANNA HERRON AP Business Writer
NEW YORK January 20, 2011 (AP)
Investors pulled out of the Treasury market Thursday after two reports signaled the economy is strengthening. An auction of inflation-indexed securities was weaker than expected.
The price on the 10-year Treasury note fell 71.9 cents per $100 invested. Its yield, which moves in the opposite direction, rose to 3.43 percent from 3.34 percent late Wednesday.
The Labor Department reported that fewer people filed first-time claims for unemployment benefits last week. That raised expectations that hiring might pick up this year.
In another hopeful sign, sales of previously owned homes spiked in December after slumping in the last half of 2010.
Investors also sold off bonds after the Treasury Department’s $13 billion TIPS auction drew fewer buyers than expected.
Traders tend to invest in low-risk Treasurys when the economy seems weak. Investors have been shifting money out of Treasurys and into stocks since late November, anticipating the recovery will accelerate.
Treasury yields rose sharply in the last two months of 2010 after falling to 2.38 percent in October. Yields have stayed within a relatively narrow range since the new year began.
“We are still two steps forward, one step back. We don’t see the economy taking off, but we aren’t going back to the double-dip scenario either,” said Howard Simons, strategist with Bianco Research in Chicago. “We’ll be trapped below 4 percent for a while.”
…
“We are still two steps forward, one step back.”
On that second step forward, they stepped in dog s@@t. Which means that they stepped in the same dog s@@t when they took that step back!
Fannie pie sounds pretty gross to me. I’m not surprised to learn banksters have an appetite for that sort of thing, though.
January 21, 2011, 2:00 am
Investment Banking
Banks Want Pieces of Fannie-Freddie Pie
By DEALBOOK
As the Obama administration prepares a report on the future of Fannie Mae and Freddie Mac, some of the nation’s largest banks are offering a few suggestions, Louise Story reports in The New York Times.
Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee.
The banks have presented their ideas publicly through trade groups. Housing industry consultants and people familiar with recent meetings at the Treasury Department say these banks view the government’s overhaul of the mortgage market as a potential profit opportunity. Treasury officials have met with executives from several institutions, including Wells Fargo, Morgan Stanley, Goldman Sachs and Credit Suisse, according to a public listing of the meetings.
The administration’s report, to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners.
…
Ol’ Brer Fox said he’d be most happy to look after the chickens…
Well, well, well…
Key House Republican plans Fannie, Freddie wind-down
By Corbett B. Daly
WASHINGTON | Thu Jan 20, 2011 2:30pm EST
WASHINGTON (Reuters) - A key Republican in the U.S. House of Representatives plans to reintroduce legislation soon that would wind down mortgage finance giants Fannie Mae and Freddie Mac within five years.
Representative Jeb Hensarling told reporters “five years is the right time” to wind down the two firms, which are now under the conservatorship of the U.S. government.
Hensarling, the fourth-highest ranking House Republican and a vocal critic of Fannie Mae and Freddie Mac, said he is open to arguments for changing the timetable, though he has not heard anything yet that would cause him to take a slower approach.
“What is absolutely nonnegotiable is getting the taxpayer off the dime and ensuring that these are no longer government sponsored enterprises, implicitly or explicitly, or in any single way,” Hensarling told reporters on Capitol Hill.
The two firms have taken more than $150 billion in direct taxpayer aid since then-Treasury Secretary Henry Paulson seized them in September 2008 as loan losses mounted.
Hensarling still aims to end the conservatorship of Fannie Mae and Freddie Mac within two years of passage, as his original bill, which did not pass when Democrats controlled the House, proposed.
Under his proposal, Fannie Mae and Freddie Mac would then enter receivership or be placed back into the market for a maximum of three more years.
Hensarling’s proposal continues to rely exclusively on the private market for the role now played by Fannie Mae and Freddie Mac.
…
The taxpayer no longer guaranteing banskter profits? Dream on.
As for their (FANNIE, FREDDIE) mandate to make housing affordable, how do you make something affordable by raising its price?
And why didn’t they deep six Phonie and Fraudie when they owned the entire govt?
More BS from this crowd.
“What is absolutely nonnegotiable is getting the taxpayer off the dime and ensuring that these are no longer government sponsored enterprises, implicitly or explicitly, or in any single way,”
NO more Gov’t GSE’s = Bye, Bye, Pentegon!
Well, looks like they are going to take on “TrueKeepFearAlive™” Inc.
(You think Cheney’s Shadow Gov’t Office paddles will wind up on eBay?)
ensuring that these are no longer government sponsored enterprises, implicitly or explicitly, or in any single way,”
Which this sorta-liberal is fully in favor of. AFAIAC, private companies can privatize their profits as much as they want, as long as they have no mechanism to socialize their losses.* In any partnership, private sector ALWAYS finds a way to socialize their losses, even if that involves buying a few congresscritters.
———-
*with exceptions that there is no monopoly and that they can’t play games with strategic necessary goods like health/food/energy.
First ,F&F had become a private corporation on the Stock market
and it only had a mandate by Government to encourage home
ownership . Often times F&F set underwriting standards and they
had insurance on lower down loans . F&F actually had standards for conformity standards for houses and health ad safety requirements
also . Also there was problems with CEO scandals with F&F and
some commission incentives investigations around the time of
the 2004 I believe .
The fact that Congress decided to back F&F at the time of the meltdown was in large part due to the fact that they needed a
place to offload junk from all the other lenders . 700 billion for
Tarp was simply not enough money .
There was big disclaimers at the F&F stock buying cite on the computer that it was not financially backed by the Government and it was a private Corporation working on a mandate from
Government . There was only a implied backing by the Government
because the original creation of that entity was in response to emergency many years ago ,but than it was turned over to Private
Industry on the New York stock exchange .
In the meltdown it was taken over and backed by the taxpayers
again . In my view they could of created a whole new entity to
deal with credit needed for the housing market ,if credit needed for the housing market was the true objective of why you would need credit during a dried up private market in lending .
IMHO F&F was to be the dumping ground for toxic assets from the private sector . I have seen F&F buy a bunch of Mozillos junk at par value and has taken the loss on their books . This is part of some of the secret bail-outs that I refer to that have exceeded
Tarp by billions .
When BB lent all that money to those entities who were using their junk for the security for the short term loans from the Feds ,leading up to TARP , BB put this County in the position of becoming the bag-holder ,rather than the entities that created
the losses . Talk about a Fed Chairman that needs to be fired .
‘getting the taxpayer off the dime’
strange usage…out from behind the 8 ball maybe.
This is exactly the plan
Off load overvalued MBS onto GSE’s at the peak to “save the system” Then after the collapse put those same MBS back on the market for pennies on the dollar with a fat gov guarantee that they will buy them back if things take another leg down.
Here’s what *I* want: Save the “system,” then break all those vertical-monopoly megabanks up into smaller banks. Then allow those small banks a “head start” in their reserves by offering 50¢ on the dollar MBS for 20¢ on the dollar, and knock off the government guarantees already.
Good call measton. That’s the way I would bet.
What system were you saving ,what they did was just transferred the loss to the taxpayer . A orderly BK of all these institutions that
became insolvent was the way to do it and than the smaller ‘institutions could of taken up the slack .The government would of been needed for short term liquidity in the market until the orderly
demise of the culprits could be done . For the Government to end up buying a 92% stake in AIG is just absurd to the tune of over 200 billion . This was a Company that was insolvent because of their
real estate credit default bets based on leverage or no reserves .
Since when is a insurance Company allowed to have that kind of exposure ,unless its the unregulated world of casino bets . This is what was to big to fail ,just like the leverage that was going on
with leveraging up those MBS ’s ,that didn’t even have proper
transfers of loan title .
Jan. 20, 2011, 2:23 p.m. EST
White House stalls on Fannie, Freddie reform
Pressure on Treasury to ‘keep options open’: former top aide
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — The White House is unsure about how to go about reforming troubled housing giants Fannie Mae and Freddie Mac and a soon-to-be-released Obama administration report will reflect that uncertainty, regulatory observers were saying Thursday.
At issue is a report the Treasury Department is scheduled to release later this month or in February with recommendations about how legislators can go about reforming the housing giants. The two groups were nationalized at the peak of the crisis in 2008 to avoid losses and stem the credit contagion.
National Association of Realtors chief economist Lawrence Yun said Thursday he is not expecting specifics in a Fannie and Freddie report that he is expecting to be released in February.
“The [Obama] administration is buying time,” he said.
…
The subsidized American free market?
I must say I find news of a 12% Nov-Dec jump in the rate of home sales beyond bizarre. Has this ever happened before, given that December is usually when the U.S. real estate market virtually comes to a standstill for the holiday season?
Economic Report
Jan. 20, 2011, 10:53 a.m. EST
Existing-home sales jump 12%
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Sales of existing U.S. homes jumped 12.3% in December, providing an encouraging end to the worst year since 1997, as the collapse in house prices and a wave of foreclosures depressed activity over the 12-month period.
The National Association of Realtors on Thursday said existing-home sales rose from November to a seasonally-adjusted annualized rate of 5.28 million.
Economists polled by MarketWatch had forecast a rate of 4.88 million, and the rate of sales was 2.9% below the rate of December 2009.
November’s sales were revised higher to 4.7 million from the initial 4.68 million reading. The raw, unadjusted figures showed sales rising to 404,000 in December from 355,000 in November.
The jump in the mortgage rate to 4.8%, a rise of roughly a half percentage point from depths, has helped induce on-the-fence buyers back into the market, said Lawrence Yun, chief economist of the NAR. The improving economy also helped confidence, Yun said.
The annual tally of sales was 4.91 million, a drop of 4.8%, based on preliminary data.The trade group said a fuller review of 2010 data would come next month, when it also will announce revisions to activity over three years.
He said the improving economy, as well as rising rental prices, may help lift sales to a 5.2 million rate in 2011.
…
December sales are the closings of October contracts?
The gold bugs here have been rather quiet lately. I wonder why?
It ain’t as Precious™ any more as it used to be.
But isn’t a good thing? If the price of gold goes down then the same amount of worthless fiats will buy even more.
Buyers should welcome falling prices.
“Buyers should welcome falling prices.”
Typical bubble mentality when things start to head down…and I’m not saying gold is headed down…I’m just saying this is typical bubble mentality and you should consider your thoughts.
combo is funnin ya..
But reality says gold is heading down.
Short term trend targets have been reached. It’s a Dirty Harry moment.
Why should it be a “Dirty Harry moment”.
Does gold have an intrinstic value or does it not? If it does then one should buy below this intristic value and sell above this intristic value, isn’t that correct?
All one needs to do is discover just what this intristic value is. This works for stocks, for real estate, for tomatos, for gasoline - why not for gold?
But what is gold does not have an intristic value? What if the only way to value gold is by its price? If that were the case then what ever gold is priced at would be its correct price.
But if gold is valued only by its price then a buyer or a seller of gold depends solely on the viewpoint of thousands of strangers who, collectively, determine its value by determining its price.
Why hurt yourself with this line of thinking? Everything is worth just what the next fool will give up to get it.
“Everthing is worth just what the next fool will give up to get it.”
This is not true; Many things have a value of their own, an intristic value, a value that is seperated from price.
Are apples a buy when they are twenty-five cents a pound? Would you buy lot of apples at this price and think of ways to use them?
Are apples a buy if they are five-dollars a pound? Would you cut back on your apple consumption if they were priced at five-dollars a pound?
Do people rush out and buy as many apples as they can when they learn the price has gone way up?
No?
Well, that’s what they seem to do with gold.
Not everybody.
Apples go bad. The precious won’t even rust.
“This is not true; Many things have a value of their own, an intristic value, a value that is seperated from price.”
Gold seems to many an intrinsic value, one is fear (related to the unknown).
This is not true; Many things have a value of their own, an intristic value, a value that is seperated from price.
Austrian economic theory begs to differ. The value of a good varies by time, place, circumstance, and individual preference and whim. There is no “intrinsic” value. Transactions happen because a good is valued more highly by one person than by another at a particular time and place.
“But what is gold does not have an intristic value? What if the only way to value gold is by its price?”
Great—then what is the intrinsic value of steel? Or of copper?
This argument would make more sense if any of the industrial metals had an intrinsic value. They clearly have utility, but that does not mean it is easy to determine their value.
If they do have intrinsic value, then why does their price vary so much over time?
But what is gold does not have an intristic value?
intristic value = cost of extraction
thats the way I look at it. the rest is expectations of demand going forward. pure speculation.
I dunno combo.
I think we’re in a new paradigm. Better buy before you’re priced out. You know they’re not making anymore gold. There’s never been a better time to buy gold.
Sorry…no one ever points out the obvious comparisons. It was time.
The gold bugs here have been rather quiet lately. I wonder why?”
Maybe they are buying Agriculture ? all the bad harvests , etc.
Let’s say you have a precious gem that is rare and priceless yet you have no buyers who could afford such a purchase . The rare gem has
a “intrinsic” value but just doesn’t having any willing able buyers . So you might say the gem has future value once a market is created of
able buyers .
Its always tricky establishing value . If you have willing and able buyers but they are simply nuts and willing to overpay ,than was the value that was established correct …..no . The speculation aspect of price ,in other words giving something more value in the now because of
it’s possible value in the future is what can contort pricing .
What would a person pay for using something now ,verses what would they pay for using something in the future .Speculation is simply betting that the value will go up from it’s present value .
Supply and demand can be tricky also . If many people buy something it’s value goes up ,in spite of the fact that the people buying it might be nuts . So ,just demand in itself doesn’t necessary confirm value .The same item can go up in value just because of a smaller supply of the item ,than a year later the supply could go up making the price fall .
I think it was a lot easier when a caveman traded a deer for a
basket of berries and 4 rabbits .
Volcker we hardly knew ye
Volcker to step down
Washington Post
President Obama is launching a new economic advisory council focused on job creation and competitiveness and has named General Electric chief executive Jeffrey Immelt as its head, the administration announced early Friday morning.
Immelt will lead the President’s Council on Jobs and Competitiveness. The council is replacing the Economic Recovery Advisory Board, which Obama created two years ago to help guide the administration’s response to the recession.
The recovery board has been chaired by former Federal Reserve Chairman Paul Volcker. In a statement, Obama announced that Volcker will step down next month from his role advising the administration.
“…new economic advisory council focused on job creation… ”
Yeah, get a guy who is an expert on balance-sheet creation to help with the numbers.
An announcement of what happened long ago.
“Obama created two years ago to help guide the administration’s response to the recession”
Is that how he parsed it during his campaign?
Obama. Biggest. Con-job. Ever.
Didn’t even take him that long either.
Some of the most conservative people I know voted for Obama… How’s that working out for ya?
Just Swell!
G frakin’ E? The world pioneer in outsourcing? One would think that Obama wants to lose in 2012.
No kidding.
“…and Competitiveness.”
Loophole alert!
I think he wants to win. He is shell-shocked from the midterms. He figured he will make the deal with devils until the re-election. After that he will go medieval in their as***.
Please. What’s the saying? “when you dance with a 800 lb. gorilla, it’s the gorilla who decides when you stop”
Obama conned us in believing that he was an outsider. Even a Bob Barr voting person like me thought Obama would be infinitely better than McCain. Palin had nothing to do with it. McCain was bad in his own.
Then again, if you think for a moment, why would Obama fight the status-quo when as a matter of fact he happens to be one of the biggest beneficiaries of it?
A true “outsider” would never get on the ballot.
There are “filters” throughout the system to ensure this. Sure, once and a while one gets through but they are quickly marginalized or coopted.
McCain was bad in his own.
As one of my neighbors says about McCain: “I worked for American Continental. I knew what kind of a crook he is.”
Butters, I have to agree. I think he really wants to go medieval, but he may not be able to.
You know, young prince takes up the evil but powerful sword and says “I’ll use this just long enough to kill the bad guy, and then I’ll throw the sword away and be a nice king.” Of course at the end he kills the bad guy but he’s so corrupted by the evil that he can’t throw it away and he becomes the new evil guy himself. Happens ALL THE TIME in fantasy books. Obama will fall too.
That’s what came to my mind when Obama appointed Larry Summers. No wonder Paul Volcker ran for the hills.
As long as you have all these special interest groups controlling
Congress it would be hard for any President to be able to deliver
on campaign promises .
Obama really inherited a bad time to be a President IMHO .
I don’t think that Obama was really satisfied with that Health Care Bill . And Obama’s financial Advisors have been horrible .
Presidents have advisors that they have to rely on to some degree . To bad Obama is going through trial and error to find out just how bad these so called financial advisors are ,like Summers for instance .
Obama’s bffs:
Immelt, Dimom, Flankenstein, Buffet……….
File this under no wonder they can’t manage a foreclosure action.
I looked at my finances and decided that I had more than enough money for emergencies in my savings account and that it wasn’t really earning ANYTHING. So I decided to pay down some of the principal on my mortgage. I sent a check to Wells Fargo with an extra 20k and a payment slip indicating that that this was to be applied to my principal balance. Imagine my surprise when I got my statement from Wells Fargo yesterday an they had: pre-paid my February payment, put $10,377.38 into escrow, and applied $8,853.48 to my principal. Keep in mind that not only is 10k more than I put into escrow in a year, they even refunded me $411.80 from escrow because I was over witheld (I guess they anticipated payments going up, but taxes aren’t going to to up for a while) So instead of a simple, round number going where I told them on the payment slip, they put some here, some there ins a seemingly random manner.
Now the customer service person I talked to this morning made it sound like they would fix this, but judging from what we’ve heard, I’m not as confident as I would like to be. I mean usually when people screw up, they do it in a manner which simplifies work for them, rather than makes it more complicated.
i have a ten year old wells fargo mortgage on my business property.
after 9 1/2 years they have begun applying 100% of my mortgage payments to principal each month and then following up with collection efforts because they see it as my failure to make the payment.
they even argue that i owe late payments when they agree my payments were timely.
They do that for college loans. You’re not allowed to pay extra principle. If you pay extra, they simply don’t send a bill for x months until the extra is worked off. I would still pay their interest, and on top of it they could invest my lump sum. Well I didn’t like that sound of THAT. So I laid low. Meanwhile, I scrimped for a couple years, and suddenly sent a $10K check to pay off the entire loan at once. They couldn’t play their games then! Suck it, Sallie Mae!
I did that ages ago when I was dealing with Sallie and Citi for student loans. I would save up until I was sure I had enough to spare to pay off the loan I was targeting, call for the pay off amount and send that in to a special address with all sorts of instructions about paying off the entire balanceof one specific loan with its own id number. Then I’m pretty sure I followed it up with a fax (which had a cover sheet that identified it as personal but still had a time stamp that showed it came from my law firm). I paid off 7 or 8 of them that way. The one time I remember trying to reduce the principle of one by $3000 was such a cluster f***, I did not try it again. I did not consolidate them, didn’t even really consider it. It was possible, but unusual and the schools didn’t push it at all.
The really odd thing I remember was that you could request that the servicer on some of your loans buy the loans from one of your other servicers and they would do it. I did that once or twice too because I wanted to deal with fewer servicers and some of them had significantly dumber reps than the others. In the end, the only way to get rid of the hassel was to pay it all off. Nearly $70K in just under 3 years. And I went on vacations. And I went to shows (this was NYC, after all). And I had dry cleaning bills. And I had my own apartment. And for a while I had a car in a garage. How the heck did that work?
I did the same thing. Forgot about the special address for the payoff…but at the end of it all I did get a nice letter listing all the loans and that they were paid in full.
How the heck did that work?
You must have had a very well-paid position at a big Manhattan law firm. Is that how it worked?
If Polly’s loans were like mine, each year of college is a separate loan. They lumped them into one big amount owed, but I guess you could split them off one by one if you were careful. I just paid them all off at once.
The position was well paid at the time, but I was still paying off loans that totaled almost my entire yearly salary and the lowest interest rate I had was 8%. Most were quite a bit higher than that (I’m remembering 12.75% for some reason). Stuff in genral was just way, way, way cheaper. Also, I rented a co-op from the owner for less than half of what most people were paying for rent. Alan loved me because my checks generally arrived before the first of the month. At that point, I didn’t know that having them arrive after the first of the month was an option.
Years ago when I was using the old GI Bill to go to trade school, I got a form letter from the Veterans Administration stating that they had overpaid me by $0.00, and ordering me send this amount to them immediately or face severe consequences. They had a number to call if I could not afford the payment, so that I could arrange a payment schedule. I called and talked to the customer service guy and he agreed that this situation was ludicrous, and promised to clear it up. But over the next several weeks I got a series of ever more threatening letters demanding immediate payment or else. In the end I caved and sent a check for $0.00 and the problem went away.
I got a form letter from the Veterans Administration stating that they had overpaid me by $0.00, and ordering me send this amount to them immediately or face severe consequences.
That’s hilarious…I’d have that framed on the wall.
I had something similar with the first loan I paid off that was from a revolving fund at the school. It was the lowest interest rate, but as soon as I paid it they could lend it to someone else so I did it first. I paid off the whole thing before it even was scheduled to start accruing interest. Then I started getting bills for tiny amounts - $0.09 sticks in my head. It was certainly well under a dollar. I called the department and the guy just zeroed it out. Same thing the next month. And the next. And the next. I told them it was almost certainly a corrupt sector on their disc, and they agreed. Not sure how they fixed it, but it eventually just stopped.
Jim, after they “fix it”, make sure its journal entried retroactive to the date they received the initial payment so you don’t have extra days of interest in the time it took for you to discover the problem and when they finally made the adjustment. Don’t know if they’ll do it or not or if the amount is worth fighting over, however, there is an opportunity for them to do some skimming there.
Well the representative made it sound like they’d back date it. But frankly, a weeks worth of interest just isn’t worth fighting about seeing as how that would give the the opportunity to screw up again.
That was no accident. No way.
In the old days you had to get a table of amortization for your loan and then when you wanted to prepay the loan and prevent them from screwing you make out a separate check for each principle payment that you are making in advance. I learned this from an attorney at the time.
Of course in the old days, somebody had to sit down with a mechanical calculator and figure out a new ammortization table instead of just pressing a button. Since my monthly statement includes how much principle and interest were paid for the previous month, my back of the envelope figuring is that if you pre-pay an ammount of principal equal to the current ammount of ammortizing principal, you have shortened the term by one month. So it’s pretty easy to knock a month off of the term in the early years of a 30 year mortgage, but more difficult when you are already down to 8 years.
That’s a common rule of thumb: every month, pay your full loan payment and the principle on next month. You’ll cut your mortgage time in half. And yes, it’s easier in the beginning because mortgages are front loaded with interest. But the finance guys count on us getting pay raises and promotions over 20 years
, so by the later years it’s easy to afford the higher principle payments.
In the old days there were no 30 year loans.
And people wonder why the avg person seems irresponsible?
Not to say that many aren’t, but this is a perfect example of “making it as hard as possible for the average person and then blaming them.”
ecofeco ..agree . Industries prosper by people making bad decisions
actually . The person that has freed themselves from being a slave
is no good to Industry and they can’t be compromised . Financial
position will compromise any person to the point where they go into a form of madness called sublimation while the anger is always under the surface ready to be misdirected .
“… I sent a check to Wells Fargo with an extra 20k and a payment slip indicating that that this was to be applied to my principal balance.”
News from the OC! (wait until the outraged public set their eyes upon the OCFD Cult!)
RSM: “Quickly now, out with the OLD (workers) in with the NEW!”
(unlike GM, it’s tough to out-source most “city/town/county” jobs.)
Big pension reform comes to little RSM
January 21st, 2011, by Teri Sforza, OC Registerstaff writer
Rancho Santa Margarita has become one of the first cities in Orange County to embrace a two-tiered pension plan intended to head off financial Armageddon.
As one of the county’s newest cities, RSM doesn’t have nearly as much to worry about as, say, the grand ol’ ladies like Anaheim. But as the gap widens between what governments have promised to pay their employees in retirement — and what cash they’ll actually have to pay those employees in retirement — every little bit helps.
Folks who work for the city now will get 2.5 percent of salary for each year they work, once they reach age 55. Which is to say, if 55-year-old City Employee A makes $100,000 a year, and retires after 30 years of service, he’ll get 75 percent of his salary for the rest of his life — or $75,000 a year.
Folks hired in the future will get a less-generous formula: 2 percent at 60. So the now-60-year-old City Employee A, with that same 30 years, making that same $100,000, will get 60 percent of his salary for the rest of his life — or $60,000 a year. (Salary is averaged over the last three years of work.)
Lots of governments statewide are exploring this sort of system. Critics say that 60 still seems like a rather young age to retire. And that the money problem governments face is happening NOW, while the savings from a two-tiered system won’t come until far in the future, in 20 or 30 years, when the folks hired today retire.
“I favored researching a defined contribution plan such as a 401k, or a Social Security option rather than a pension plan, as I do not believe 2% at 60 goes far enough,” new Councilman Jesse Petrilla wrote in his email blast. “(H)owever at this time a two tier option was chosen, and we voted 5-0. I believe this is a good first step, and I commend all those who supported putting our city on the forefront of the pension reform issue.” (Read the RSM pension staff report here.)
The County of Orange has approved a voluntary tiered system for new employees, but that plan is tied up in IRS red tape right now, and it’s not clear how many new employees will actually avail themselves of it (it is different than RSM’s, promising more money in employees’ paychecks now, and less in their retirement accounts later).
How much will it save?
Right now, the city pays both the employer’s required share of pension contributions — 13.34 percent of the worker’s salary — as well as that worker’s share of pension contributions — 8 percent. Which means there is no “worker’s share” of pension contributions, and the city pays the entire 21.34 percent of the worker’s salary into a retirement account, every year. This is a very common scenario in local government.
In the new world, the city will kick in just 8.14 percent of the worker’s salary. And there will, indeed, be a “worker’s share” again — new hires will pay 7 percent of their salaries toward their retirements.
To recap: That reduces the city’s burden from the current 21.34 percent, all the way down to 8.14 percent.
Of course, how much it will save depends on how many people the city hires going forward. In the last three years, there have been four hires at City Hall: director, principal engineer, senior management analyst and administrative secretary. The combined “PERS-able” annual salary for these folks is $402,568.
* Now, the city pays $85,924 a year into retirement accounts.
* Under the new plan, it would pay … drum roll please … $32,749.
Even those who hate guaranteed-payment retirement plans can find some solace in that.
I wonder whether the employees are also paying (and anticipating collecting) Social Security. That makes a huge difference in trying to figure out how gold plated their potential retirement package is.
Your forgetting the free medical care.
I’m just trying to point out that some government workers are covered by social security and some aren’t. To make any kind of apples to apples comparison you have to know which one we’re talking about.
(Salary is averaged over the last three years of work.)
One of the biggest changes would be to base retirement on a averaged last five years of work especially for safety retirement where they circumvented basic retirement with the 9th Circuit court’s ruling (Ventura Decision)
Limited gubernmint
“Today, the United States spends roughly 76 cents of every federal tax dollar on just four things: Medicare, Medicaid, Social Security and interest …”
See CNN money section. Too bad links don’t post well.
Except that Social Security and Medicare are funded through their own dedicated taxes, and not through the federal income tax as this article implies.
If anything, it goes to show why there are huge deficits. The rest of spending, unlike Medicare and SS, is largely unfunded and is covered by borrowing.
Medicare and social security both need to be reworked and eventually phased out. Sooner or later we’ll all have to realize this simple fact. If it’s later, Americans will take to the streets with pitchforks.
What kind of weed are you smoking.
If it’s phased out sooner Americans will take to the streets. Medicare and SS are extremely popular.
I suspect that if you polled Americans they would favor pulling are troops from Iraq and Afghanastan and taxing the Wall Street hitmen and CEO class a little more over doing away with SS and Medicare. This class gets bailed out w US tax dollars and pays a lower effective tax rate than many middle class Americans.
If it’s later, it will already be too late.
LOL - I picture a bunch of old folks on scooters circling the White House with torches.
But face it, Americans won’t be hitting the streets any time soon. They won’t put forth the effort.
The old may not march in the streets, but some will die in them. Because that’s what they did before SS.
“bunch of old folks on scooters circling the White House with torches. ”
‘Aux scooters, citoyens!’
“I picture a bunch of old folks on scooters circling the White House with torches. ”
And I picture the uniformed secret service that hang out on either end of Pennsylvania Avenue and the walking path that skirts south of the White House shooting them.
And I picture the uniformed secret service that hang out on either end of Pennsylvania Avenue and the walking path that skirts south of the White House shooting them.
True, that. Don’t mess with the Secret Service.
Matter of fact, during President Obama’s recent trip to Tucson, I think someone tried to do just that.
It was during his speech, I was listening to it in Arizona Stadium with 13,000 of my best friends, and suddenly there was an eruption of police dog barking.
The barking was coming from outside of McKale Center, which is where the President was speaking. Oh, did those dogs sound *nasty*.
Medicare and Social Security taxes aren’t federal taxes?
It doesn’t say 76% of federal income tax. It says 76% of federal tax.
Besides, SS and MC taxes are also running large deficits.
SS was just barely covering the costs until the recession hit. $40 billion defict last year was expected to grow to $80 billion this year, but the 2% reduction will make thatr deficit jump to closer to $200 billion.
Medicare was running a deficit of $180 billion a year back in 2007 prior to the great recession. I am sure it has widened since then, but can’t find a definitive answer.
Social security rate was regularly increased, on avereage doubling every 10-15 years or so. counting both halves: 2% in the 40s, 3% and then 4% in the 50s, increased from 6% to 8% during the 60s, 10%-12% during the 80s and beyond.
But it hasn’t increased since the mid 80s. Oh really? Instead of constantly increasing the SS tax, as had been done for the prior 40 years, they just started increasing the max cap at 2x inflation. The cap started at $3K in 1937, and CPI would have increased that to $17K. Actual was $26K. So, the max had been increasing at 1.5x inflation.
From 1980 to current, inflation should have increased the cap to $68K, an increase of $42K. Actual is $106.8K. So, cap has increased at 2x inflation.
Add this all up, and in terms of years of earning, (assuming no further increases) I will pay in 7x as much as my grandfather and 3x my father.
In reward for paying in many, many times more than them, I will esither get to pay in even more, or I will get back significantly less than they are getting.
Social Security = intergenerational theft.
Medicare is even worse.
Why is spending money on its own citizens a bad thing for government? Government’s ONLY purpose is the defense and welfare of its citizens. (surely no one here is going to refute the founding fathers?)
Did you know that tax breaks for corporations amount to somewhere in the neighborhood of a trillion dollars? (sorry, hard to find concrete numbers, but this is in the ballpark)
As for health care, even a 5th grader knows that diseases mutate and that public health is all that stand between a deadly plague… and you.
Why is spending money on its own citizens a bad thing for government?
when the money is forcefully taken from one person and given to another, do the actors (citizens or government) really matter?
If you consider any tax to involve the government taking money you forcefully (in other words, theft), then it doesn’t matter how much they take or what they do with it. It’s plain theft and therefore wrong. If everybody in your town had to pay $1 per year to fund a police department that completely eliminated all crime in that town, it still wouldn’t matter.
But ,people don’t seem to care that money is filtered to the rich ,
but any benefits to the Majority is taken as being unfair .
What about the fact that Corporations underfunded their pension
plan so they could play with the money more and Government underfunded pension plan for about the same reasons . Than when you have costs go up ,such as the case with the price-fixing monopoly called Health care ,you have the money people wanting to throw everyone under the bus .
Now you have the talk starting up regarding most the States going BK ….which we knew was going to be on the table on this blog .
The Power elite is thriving and gets to keep this ill-gotten gain at the expense of leaving the Nation in ruins ,and they don’t BK
like they should have if standing law had handled the housing
bust .Every penny that went to these mad-hatters was at the
expense of the entire beehive .
You don’t like paying taxes? Move to a country that doesn’t have taxes.
Oh wait… there’s no such thing, Peter Pan.
http://www.irishtimes.com/newspaper/finance/2011/0121/1224288008726.html
Mega-FBs sued by Bank of Ireland.
“TrueBamboosuckstraw™” continues…unabated!
FYI: Did ya know that only 1 in 10 Chinese actually pay $$$ for MS Software?
(even that estimate is probably…”Highly” inaccurate)
Hu visits U.S. heartland to tout business ties:
By Andrew Stern and Nick Carey Andrew Stern And Nick Carey – Fri Jan 21 / Reuters News
Edit intrusion by Hwy50…
“…”China wishes to work with the United States to fully
tap our cooperation potentialsuck out all US advances in fiscal, financial, energy, environmental, infrastructure development and other fields,” Hu told Thursday’s dinner, attended by a number of corporate executives.”“He also urged a “level playing field” for Chinese firms that want to invest in the United States and pressed for greater Chinese access to U.S. technology .”
Hu Flung Poo.
More and more, China looks like a huge Ponzi scheme.
Don’t fear the paper tiger.
May be. Following the US lead I suppose.
This country’s relationship with China is headache inducing.
On one hand the Pentagon boyz say they’re a growing threat in the east Pacific, but on the other hand we’re told we need to share even more technology with them. They violate human rights and get scolded, but never enough to even slow the pace of imports. We bemoan outsourcing but bid up the stock of companies moving more business there.
In the context of these contradictions it’s difficult not to think our politicians, corporatists, and technocrats are secretly envious of theirs - that they want us to become more like them. So if anything is to be “feared” then it’s probably that.
In the context of these contradictions it’s difficult not to think our politicians, corporatists, and technocrats are secretly envious of theirs - that they want us to become more like them. So if anything is to be “feared” then it’s probably that.
BINGO
I’d also add that due to the Supreme Courts decision China can donate unlimited cash to influence elections.
Local Example:
1/21/11 - NBC local affliate
Hailing him as a “man of vision,” Mayor Richard Daley on Thursday held a formal dinner and gala for visiting Chinese president Hu Jintao and vowed to make Chicago “the most China-friendly city in the United States.”
“BINGO
I’d also add that due to the Supreme Courts decision China can donate unlimited cash to influence elections.”
From Washington Post, January 21, 2011
Stranger still were the unwarranted attacks against the Supreme Court that followed. Most visibly, the president used his State of the Union address to accuse the court of having “reversed a century of law” and “open[ed] the floodgates for special interests - including foreign corporations - to spend without limit in our elections.” That statement was astonishing because none of it was true: The oldest decision reversed by Citizens United was 20 years old, not 100, and foreign corporations are prohibited from participating in elections, just as they were before. As for “special interests,” many had been spending at an equally furious rate, apparently unnoticed by the president, well before this ruling.
I think the world should be allowed to influence our elections via cash or whatever for 2 reasons.
1. Dollars.
2. Wars.
Foreign countries can now buy a shell company and make campaign contributions via that shell company.
Thursday’s opinion in Citizens United v. Federal Election Commission allows corporations to spend unlimited amounts on political commercialson the grounds that corporations should be treated just like individuals when it comes to First Amendment rights.
The problem, former Federal Election Commission Chairman Scott Thomas told ABC News, is that it’s much tougher to determine whether foreign money is behind a political ad when the check is cut by a multi-national corporation.
“There are unfortunately lots of examples where foreign businesses or governments have tried to route money through U.S. subsidiaries and into party coffers,” Thomas said. “Now we’re permitting businesses to get involved directly in advocacy messaging. There will have to be a lot more scrutiny on the question of whether the money is coming from a foreign source, and whether it can be constrained.”
I thought Citizens United was a free speech case, not a campaign finance case.
A foreign corp may not be able to contribute directly to a campaign. But they are now allowed to contribute to corporate groups to BUY TV ADVERTISING because now it’s “free speech.”
If the corp pays for the TV advertising — which is usually covered by the campaign — then the candidate can do pure campaigning on a lot less money. So the foreign and corp money is not a technical contribution, but effectively it is.
You have problem with Corporate Communist Capitalism©®™, comrade?
There’s nothing more patriotic than unlimited foreign money in our elections.
Has the Tea Party ever sent its minutemen into action over this ruling? I don’t think I’ve heard a peep from them on the issue, perhaps some of their defenders here know otherwise?
There still too busy telling the gov to keep it’s hands off their medicare
From the LA Times:
Justices Antonin Scalia and Clarence Thomas are the subject of an unusual letter delivered Wednesday by Common Cause asking the U.S. Justice Department to look into whether the jurists should have disqualified themselves from hearing the campaign finance case if they had attended a private meeting sponsored by Charles and David Koch, billionaire philanthropists who fund conservatives causes. A Supreme Court spokesperson said late Thursday that the two justices did not participate in the Koch brothers’ private meetings, though Thomas “dropped by.”
I guess the Kochtopus won’t attack itself…
Like I said below.
Wall Street and corporations have won.
The death of unions is just one more knife in the middle class.
The own the media and distract the right with religion flag burning abortion issues.
They destroy the funding for the left by crushing the middle class and union jobs.
They purchase our politicians and supreme court.
Foreign countries can now buy a shell company and make campaign contributions via that shell company.
Well, what’s wrong with that? I thought we needed to be influenced to become more like the rest of the world, because everyone’s laughing at us for not having free health care.
“I thought we needed to be influenced to become more like the rest of the world, because everyone’s laughing at us for not having free health care.”
I doubt they’ll encourage us to do smart things that would enhance our competitiveness.
So they’re going to buy ads telling us not to have government health care, while laughing at us for not having it. This I gotta see.
That is one serious free-association-stretch there, LehighValleyGuy.
If you reached any farther, you’d tip over.
“So they’re going to buy ads telling us not to have government health care, while laughing at us for not having it. This I gotta see.”
You just witnessed it in the last election.
Don’t you think spending way more on health care as a country, and having our work force tied to their jobs because that’s how they get their health care, and having start-up businesses discouraged because of the expense of providing health care, and having companies stuck with the expense of providing their employees with health coverage, doesn’t hurt us competitively?
Why would our international competitors want to lose that advantage? It’s definitely worth a few advertising dollars. They’ve seen how easily misled our sheeple are. We’ll fight for our right to be denied health coverage.
America, the way it is…
(Hey Mikey, ain’t there’s a lot of Swedes in your neck of the woods?)
America’s Core Values
Beyond A House Divided
By Chuck Colson|Christian Post Guest Columnist
“Anderson writes that Americans, by a margin of nearly two to one, share a common moral compass and are, as a result, at odds not with each other, but rather with governmental, media, and financial institutions. We care much more about right and wrong than we do about right and left.”
“It reminds me of what Sociologist Peter Berger used to say: If India is the most religious nation in the world, and Sweden the most irreligious, America is a nation of Indians governed by Swedes. We, in fact, are in the mainstream. It’s the elite who are out of step. So if we focus our energies on working together, we can bring about the great civic and national renewal so many of us seek.”
Beyond a House Divided: The Moral Consensus Ignored by Washington, Wall Street, and the Media, Carl Anderson examines a mountain of polling statistics and has some surprising news.
America, the way it
is… will not be, until it’s the way we want it to be, which is the only way it should ever be, and only truly ever ought to be for ALL Americans!” … signed:Sarah ‘The Barracuda” / Glenbeckinstan / Rash Limpbaughs
Make your donation check payable to: “Free & Restore the Real America Evangelical Society”
Problem is, people confuse religion with morals. It is a crock oh shite.
Atheists commit less crime than religious. They have a lower divorce rate. They drink less, gamble less, have fewer abortions, go bankrupt less…
Of course, atheists are more educated, more likely to be middle class, and generally have a higher IQ than average.
Religion is not primary determinant in morality. Financial situation is.
Atheists commit less crime than religious.
I know some people from China, the ex-USSR, Cambodia, North Korea and Cuba that would disagree with you…
People are … unfortunately … people.
The US has the highest prison population in the world.
America, the way it is…
(Hey Mikey, ain’t there’s a lot of Swedes in your neck of the woods?)
There used to be but we ate them all when the temperatures dropped and the food ran out.
Note to self: Do not visit Mikey after Sept.
California Declares Fiscal Emergency.
Not again…….
Democrats who control the legislature declined to act on Schwarzenegger’s declaration, saying they would instead wait to work on budget matters with Brown, who
The thing that amazes me is that American Presidency felt that it needed to lie to make the Chinese dictator look good.
—-SeattleTimes
The claim: A White House fact sheet released Wednesday to coincide with the state visit of Chinese President Hu Jintao said: “In preparation for this visit, several large purchases have been approved including for 200 Boeing airplanes. … The approval, the final step in a $19 billion package of aircraft, will help Boeing maintain and expand its market share in the world’s fastest growing commercial aircraft market.”
What we found: The deal President Hu signed does not include any new jet orders.
Delivering the formal approval during Hu’s visit is designed to make the Chinese government appear responsive to U.S. concerns about the balance of trade.
However, all of the airplanes in the sale were announced and booked by Boeing as firm orders over the past four years. Chinese airlines had already paid nonrefundable deposits and signed contracts for the jets, most of them as far back as 2007
That is the way diplomacy works. They never announce anything new during a visit like this. Anything that is announced has to be firm at least months or even years ahead of time because they have to know it is in the bag before the visit even starts to be arranged. At least that is the way it works with a nation that is not an ally.
To pretend that this is a big deal is to expose your own ignorance.
Oh, please. From the same article.
The White House announcement said the total value of the orders was $19 billion. But that’s the list price, which airline customers never pay. Based on market data from aircraft-valuation consultancy Avitas, the actual price for those 200 planes is about $11 billion.
And the amount of the total value was almost certainly reported that way at the insistance of Boeing. Are you really this naive, or do you just like to pretend to be this naive because it is fun to pout and stamp your foot?
I see no inconsistencies in the statement.
“In preparation for the visit…” defines no specific time frame except “before.”
Florida home prices could lose another 10% this year, TD Bank forecast says
by Jeff Ostrowski
Florida home prices still haven’t hit bottom, according to a dreary forecast released today by TD Bank Financial Group. Prices here “could fall by as much as 10 percent as excess inventory comes into the market,” the company predicted.
“Florida’s housing market still has a long way to go before it recovers,” said Alistair Bentley, a TD economist.
In 2012, Florida’s housing market should bounce back, thanks to affordable prices, Bentley said.
This entry was posted on Wednesday, January 19th, 2011 at 12:05 pm
12 Responses to “Florida home prices could lose another 10% this year, TD Bank forecast says”
1. WE THE PEOPLE Says:
January 19th, 2011 at 12:47 pm
The head of the Fedral reserve and Mrs Elizabeth warren have Publically stated.
There are 71/2 Million Foreclosures coming.
A Tsnami compared to what we have had.
Prices are going to drop massively.
Do not believ Housing reports by Palm Beach Post.
Look online for the TRUTH
2. RDC Says:
January 19th, 2011 at 12:57 pm
We the people Mrs Warren is right(on many, MANY things not just this). Until jobs that pay enough to buy a home (not service industry positions) return to the U.S. and Palm Beach County in particular, the housing market will continue to decline.
3. JUDI W TREMAIN, RN,CEN,OCN Says:
January 19th, 2011 at 2:58 pm
TD Bank has not been forthcoming in their handling of
mortgage accounts previously held by Riverside Bank. As
retirees, our income is fixed; we cannot afford to delete
our only revenue yet still hold mortgages not fully paid
on property that continually depreciating even while we
continue to pay on those accounts. I certainly would not
take their word on any financial matter!
4. Waiting Says:
January 19th, 2011 at 2:59 pm
“WE THE PEOPLE”… we’ve been waiting for this “wave of millions of foreclosures” for oh… three? years now. I have friends who are trying to buy in the coastal west palm beach neighborhoods and can’t find ANY good bargains in decent shape!
I don’t know if the banks are holding back or if the number of condos are skewing the stats, but those same friends have had a hell of a time trying to buy!
5. dick Says:
January 19th, 2011 at 3:09 pm
!0%. Bull. 10 will get you 20, maybe 25% lower. Who caused it. Your government. That’s why we need a small government. Vote then out. Anybody that’s been in long. Get them out. All they did was spend and hurt you and me financially. Big time.
6. Dave Sistern Says:
January 19th, 2011 at 3:38 pm
I am a sheriff deputy, and I see firsthand hundreds of houses in the local area which are in some state of foreclosure, but when I look up the owner of the house on the property appraiser web site, it still lists the individual as the owner. The banks have stopped the foreclosure process because they know if the market knew the true amount of houses which are going to be foreclosed, then the prices would fall. Just like the diamond business. Diamonds are so expensive because of a false market created by DeBeers. There are actually more diamonds in the world then other gems, but they are the most expensive because DeBeers keep them stockpiled in their warehouse and only releases a few each year. The EXACT same thing is happening with houses. Once all the foreclosures are actually known, houses are not going to be worth half of what there are now. Did you know there are 94 units in foreclosure inside Terracina (Jog and Belvedere)? No you didn’t because that info is kept secret so the prices won’t fall to $150k
7. Randell Stryker Says:
January 19th, 2011 at 4:22 pm
What a great website this is. Found it thanks i will be come back.
8. Get in the Game Says:
January 19th, 2011 at 5:27 pm
Again, who cares?
If you ‘owe’ a house - then you should not be worried about selling (because you acquired it only as a Monthly Paying Customer).
If you want to acquire a house - then you should WAIT until the price discovery is truly known.
For the people that have been waiting for years to acquire a house and cannot - so what?
You have had the opportunity to save money for an additional three (3) years.
Meanwhile prices for the traded object (used or new houses) have dropped 15%+ percent.
Reads like a great deal to me…
9. Mike Pagliccia Says:
January 20th, 2011 at 7:33 am
To throw out a blanket statetment on Florida losing another 10% on pricing is wrong. Real Estate has to be viewed as a local market. There are areas in Florida that have already rebouned. I’m a realtor in Naples and our inventory is now at a three year low and it’s dropping lower. Granted, there are areas that will continue to see a drop in Florida, but when you throw Naples into the mix, you’re not providing accurate information. As a matter of fact Forbes magazine listed Naples, FL as the #1 place in America where the wealthy are putting their money. We’ve seen a strong influx of foreign nations buying up property in Naples and we expect that to continue throughout the year. In my opinion, we have already turned the corner in Naples, FL.
10. Get in the Game Says:
January 20th, 2011 at 9:16 am
Mr. Pagliccia and other RE traders. As long as YOU are providing accurate information to the Sellers and Purchasers…
Money magazine and NAR/FAR/NAHB just does not cut it.
Naples, Palm Beach, Jupiter Island, Ponte Vedra, Winter Park, Coral Gables, Vero Beach…are not insulated.
They are involved/implicated in this nonsense just like just about every other section/portion/town/city/county of FL.
When this nonsense started (or at least came to light) ~2003/2004 all of those above areas stated…
We are insulated
THAT does not happen here
We have Russians, Latin American and other foreign buyers to buoy us
We are wealty = we are immune
On and on…
For the 2nd half of 2003, all of 2004, 2005, 2006, 2007, 2008, 2009, and 2010…the same ‘ole song and dance
As the RE market continues to reach historical norms. Govt intervention = failed. Media and RE cheerleading = failed. Zero money down (still) = failed.
When people SAVE MONEY and can AFFORD the traded objects (used or new houses), then and ONLY then will the RE market make sense.
So, Venetian Bay, The Moorings, Gulf Shore Blvd, and Port Royal are no that different from the “rest of us.”
Good Luck.
11. tim Says:
January 20th, 2011 at 10:14 am
Get in the Game is RIGHT!!!!!! amazing that in Jan 2011 most still have NO CLUE! Most of these homes are still overvalued…most have no money for down payment! Garbage credit scores..and if it wasnt for “FREE” money from 2000-2005…most would NEVER have bought a home…or took out Home Equity loans to buy CRAP they could normally not afford!
Unemployment is close to 20%…all time high in Food stamps..Mortgages in delinquency are huge…If it wasnt for ZERO % finacing..most could not even afford a car! Wake up! Keep listening to the same realtors who have been wrong..who need to SELL a home to make a living..just like a car salesman..
12. Here and There Says:
January 20th, 2011 at 7:56 pm
To the Naples RE guy,as you know all of Naples is not the same its very nice the closer you our to the Gulf beaches and downtown and of course thats were the towns money people are but when you go inland its nothing special alot of lower income retired and service workers and hotter then FL east coast in summer and too boring to live for my tastes better as weekend getaway.With that said its easy to see how Naples prices in general can go lower…but there chamber of commerce Thanks you.
I’m watching the Florida thing and wondering when, if ever, those pending foreclosures will come on the market. Between the judicial moratoriums stuff, the banks milking the servicing fees on delinquent loans, courtesy of the taxpayers, plus zero rate cost of funds for the banks, I really don’t see any urgency. Am I wrong?
“Am I wrong?”
Evidently not.
Banks are putting some on the market but clearly not all. It does take quite a bit of time to get through the entire process. That’s what they need to work on. Then give a 90 day window to get them listed. Force the banks to get rid of the shadow inventory.
That was a hoot. Commenters rule!
Everything is fine just move along
Wells Fargo & Co. (NYSE: WFC - News) and American Express Co. (NYSE: AXP - News) said Wednesday that they would take action to reduce expenses and lay off employees to become leaner. PNC Financial Services Group Inc. (NYSE: PNC - News) and Fifth Third Bancorp (NYSE: FITB - News) said Thursday they too want to become more efficient.
For Synovus Financial Corp. (NYSE: SNV - News), that means cutting jobs. The bank said last week it would eliminate 850 jobs, 13% of its staff, and close 39 branches to save $100 million in expenses a year.
State Street Corp. (NYSE: STT - News) reiterated Wednesday that it is on track to save as much as $625 million in expenses through 1,400 job cuts to be completed this year. Barclays Capital laid off 600 employees world-wide earlier this year.
Many banks are struggling to put their bad loans behind them, adjust to a raft of costly regulations and increase revenue in challenging economic conditions.
It all amounts to cost cutting. Analysts expect banks will reduce operating costs by as much as 20% over the next three years. Compared with the third quarter of 2007, profits of all U.S. banks in the third quarter of 2010 were still down nearly 48%; employment is down 9% to 2.04 million jobs from 2.22 million in the fall of 2007, according to the Federal Deposit Insurance Corp.
“It all amounts to cost cutting.”
It’s the ONLY thing Corporate America understands these days. Not innovation, not long term planning, just cost cutting.
I live in a 12 unit building, at least 3 of my neighbors are currently unemployed…
Yup
I think at somepoint in the not too distant future there will be an Oh sht moment for a lot of the management class that thought their jobs were secure. Even many at the top of their companies will be in trouble if those companies depend on a thriving middle class.
The difference is the guys at the top have golden parachutes and are unlikely to worry about sleeping indoors and eating regularly anytime soon even if the “worst” happens.
The mortgaged and leveraged mid-level worker bees are unlikely to be in so good a position.
A lot of the management class has already found out their jobs are not secure, but they have yet to make the connection to the cause of corporate betrayal and “globalization.”
My apartment management pushed heavily for us to pay the rent online, even removing the rent check drop-box. I admit it was convenient. Recently I pulled my recent credit report. I haven’t had debt in over a year, but now the report shows a balance for thousands of dollars, levied by the national apartment management company. I guess once I renewed a one-year lease, and they have my bank information, they can play funny accounting and book a year’s worth of upcoming rent payments as an asset on their balance sheet NOW. No wonder they pushed for online rent pay!
Meanwhile, this same amount shows up as debt(?) on MY credit report, essentially accusing me of not yet paying (never mind that it was for services not yet rendered.) I’m sure it’s legal, but it’s low. Is this going to decrease my FICO, and should I raise holy hell about it? I’m already on their sh**t list for daring to negotiate my rent.
Ya gotta love how “creative” Corporate America can be.
Love it, love it, love it,… Corpooration Inc. DNA!
They.will.NEVER.stop-it.Really!
Where’s the punishment? :-/
Makes you wonder how those Reits are really doing??
Oxide
Our self storage LL wanted us to give them our CC number for automatic payment and we declined. They have proven their incompetence already, and we told them to shove it.
That will effect your credit score as it shows as a liability, but your clear it monthly, so it shows a payment history. Call or email Fair Issacs Co or Advantage (their new competitor -the 3 credit bureaus own it) and ask.
“you” clear it monthly.
Can you discontinue the payment method?
My building set up on-line rent payment. Very nice for people who don’t have on-line bill payment with their banks, but I completely ignored it and will continue to do so. I don’t give ANYONE permission to directly debit from my bank account. Seriously, why would you? It is dangerous.
Same here. NOBODY gets autopayment from me.
Nobody.
I guess your credit will look good when you pay off this “debt”
tricky
In theory they had your financial information before: they could have pulled your bank account number and the name of your bank off every paper check. I agree this fooling around with your credit report really stinks, though. Make them put an end to it or tell them you’ve changed banks and will no longer be going the auto debit route.
Thanks for the advice, all. Now they did have a change in management (whence the rent increase and negotiation), so maybe this is standard practice on ALL leases, not just online bill pay. My FICO is still very high, so I don’t know if this balance is some sort of phantom number that doesn’t affect my score at all, or if it just hasn’t registered with the credit bureaus yet.
It will suck if it turns out that signing a rental lease is tantamount to buying $15K or so on a credit card. But cactus is right: At the end of the year it will raise my score because I “paid” it off. (As long as i don’t need credit during the year.)
There is NO law that says you HAVE to pay in a certain way other than cash.
If they wouldn’t take your the payment that you know is good and is convenient for you, tell them to take a hike.
Better yet, tell them to take you to court.
Wow!!
Austin condos are selling!!!!!!!!1
——————————
One of the tough things about buying units in new projects is that it’s hard to know the fair market value. While the developer will set a price — it’s the open market that determines whether that price is fair. As the famous Los Angeles agent Ari Emmanuel recently said, “Fair is where you end up.” For new projects, where others end up tends to be a secret.
So, it’s always interesting when the first new units in a prominent new building begin transacting on MLS. While it is not clear if it is a new or resale unit, the first Austonian transaction crossed the MLS in late December.
In this case, a 1,464 square foot 2/2 with 2 parking spaces sold for $680,000 after little more than a month on the market. The unit sold for 94% of it’s asking price. The final sales price was $464 per square foot. Currently on MLS, a similar mid-size unit is listed for $640 per square foot which would suggest that the quick sale may have been under-market. As more sales cross the MLS, the true value of Austonian units will become clearer. Until then, this will be the one data point that realtors will use as they negotiate with the sale office and owners listing units for resale.
In a crazy tall project like the Austonian, projects on upper floors are likely to carry a pricing premium. The unit that sold in December was located in the bottom half of the building.
Currently, there are just three Austonian listings on the MLS ranging in price from $1.03 million to $5.30 million. The $5.3 million unit is a beautiful 4,700 square foot 3/3.5 on the 45th floor. In addition, a single 1,609 square foot 2/2 unit on the 17th floor is available to rent for $6,400 / month — an amazingly high $3.98 / square foot per month.
Something tells me that the state’s 31 billion dollar budget deficit might have a future impact in those prices.
Brett, you sound like I did last May/June. Like Combo would say: go lie down for a while.
Local observations
ON my drive to work seeing more and more blank billboards. I’d say 10% at this point. In 10 years I’ve never seen this.
I’ve been seeing the same thing for a few months now.
Here in Tucson, the graffiti artistes would see such blank canvases as an opportunity. And, what the heck, it could be an opportunity to, ahem, lose a few gangbangers as they tumble from their billboard perches.
The worst thing about blank billboards is that they are NOT blank. Rather they have torn-up old ads on them in ragged tatters. Your eye is distracted trying to figure out what they say, and only later do you realize the answer is “nothing”.
From the Columbian
SALEM, Ore. (AP) — The number of Oregonians receiving food stamps has reached a record level of nearly 750,000 people.
The Statesman Journal reports the Supplemental Nutrition Assistance Program, or SNAP, increased by about 7,500 people in December alone — up about 13 percent compared to December 2009.
Gene Evans, a spokesman for the Oregon Department of Human Services, says the 750,000 people now in the SNAP program means that about one of every five people in Oregon is now receiving food stamp benefits.
Hope they can still laugh,…with themselves / at themselves…
“I love Portlandia. It really represents so much of what I love culturally, musically and in so many other ways,” said Fred Armisen. “This started as just a fun summer activity for Carrie and me. We’d be hanging out in Portland and shooting whatever made us laugh, and that evolved into Portlandia.”
PORTLANDIA’s inhabitants include but are not limited to: the owners of a feminist book store; a militant bike messenger; an artsy couple who attach cut-outs of birds to everything (”put a bird on it!”); an organic farmer who turns out to be a cult leader; an adult hide and seek league; and a punk rock couple negotiating a “safe word” to help govern their love life.
http://www.ifc.com/portlandia/
Portlandia? Why, that sounds a lot like Tucson!
Since the late 90s, it’s been hip to be hip and/or outdoorsy. I’d say it’s hipper to be hip these days…the outdoorsy has seen better days as an image, IMO.
And even if you’re not either of those, the fact that you live in places like these (Austin might be another), projects the image that you ARE one of those things. So, it’s all good.
Lenders See Little Choice: Layoffs
The banking industry, racked by the financial crisis and facing slower revenue growth, is starting to cut costs increasingly at the expense of jobs.
From what I hear, closings are already taking two months if a lender is involved. What now? Three months? Four?
Robosigning didn’t work out too well as a cost cutting measure.
Gee… this could be interesting from a variety of standpoints.
Not counting on a robust housing rebound; no way, no how…
REAL ESTATE | Topics: Housing
Don’t count on robust housing rebound
Even if housing picks up steam, a full recovery isn’t likely this year, says veteran real-estate-industry observer Lew Sichelman.
Lew Sichelman was very pro-bubble and now he’s playing the downside. He use to write for a REIC newspaper. This guy didn’t find “God”, he needs a paycheck and a new audience, imho.
This guy didn’t find “God”, he needs a paycheck and a new audience, imho.
Hmmm, is this place hiring? Perhaps we HBB-ers should apply there, using our extensive backgrounds as Bits Bucketeers.
“Even if housing picks up steam, a full recovery isn’t likely this year, says veteran real-estate-industry observer Lew Sichelman.”
Yeah genius…even if the little PaddleSteamer, the USS Real Estate piles on the logs and puts the pedal to the metal, this barge is still going in one direction…over the freakin’ waterfall.
As to what caused the housing bubble, my wife is an financial MBA who follows these sorts of things closely.
In the late 1990s and early 2000s housing prices started getting out of line with incomes. I told her this would have to reach its limit and correct. But it kept going.
What she said was there must be something financial behind it — an excess liquidity bubble.
Her exact words (as I recall) were that “this is just like the excess liquidity that fell upon third world economies leading to credit crashes in the past. Only this time it has fallen on the American homeowner. And when it busts they are not going to be happy, and there are going to political consequences.”
Good call. Too bad her bosses where she worked at the time thought otherwise.
They may not have thought otherwise, they may have thought look how big my paycheck is.
To clean out the S&Ls, governemnt created RTC which bought up bad debt, packaged it into securites, and sold it off as the first asset backed securities. Of course, the government bought the debt for $400 billion to ensure depoitors didn’t lose money, and then sold it off for $250 billion… costing tax payers some $145 billion.
Getting the debt at 62 cents on the dollar, the people that bought the debt did very well…. Not only did the S&L collapse create the ABS and later MBS markets, but it also gave a false impression of it being safe and highly profitable.
For a decade, money flowed into tech. Then the tech wreck hit and people began looking for safer yet still profitable places to put huge sums of money. They found MBS.
Orders went to banks… generate more MBS, and higher interest rate is better! Orders went out to mortgage originators… generate more mortgages for us to package up… And the riskier, higher interest rate, then better!!! When the existing infrastructure couldn’t keep up, hundreds of new mortgage origination companies sprung up, all fighting each other to have the loosest lending terms, riskiest loans, highest interest rates, and no problem selling them to banks that were having no problem packaging them into MBS ans selling them to investors that were looking for untra-safe investmetns that still paid fairly well.
All was good until the housing Ponzi began to run out of buyers, prices stopped going up, people with high risk loans couldn’t sell off their overpriced houses to a greater fools for huge profit, or even for enough to pay off the laon… defaults, losses….
Slowly at first, then pretty quickly, MBS buyers woke up and stopped buying. Banks stopped buying and started trying to push back the loans in the pipeline back to the originators. Originators folded. Sub-prime locked up… with the krill dead… it takes time, but eventually the whales die.
As the whales started to die, governemnt jumped in with tax credits, temporarily stopping the free fall. Then another credit that actually created a VERY slight upward trend… then totally evaporated as the credit ended… full collapse mode again.
Because the krill are still dead
Remember the Cranston name, like Senator Alan Cranston?
Your sh!t didn’t stink if your were a Cranston, and then the bottom fell out from under the S&L deals. I haven’t heard the Cranston name in years. Greed destroyed a political dynasty!
I applaud your wifes’ insight. I hope you were able to use that insight to position yourself well as this unfolds.
Another story: Definitely 1999/2000, right after we bought our first house, I very distinctly remember a conversation w/my husband in our kitchen. The sentiment amounted to how will the whales eat after they’ve killed off all the krill? Why don’t they understand it is unfolding slowly but in they end they still need the krill?
I understand now they feel Asian krill is as tasty as American. Maybe that source will be there for them and maybe the Chinese whales will defend their territory from outsiders. Can’t help but notice that when you watch video from Chinese schools the children look all the same. No western whale calves in sight.
Darrell, measton and CarrieAnn - that krill metaphor is powerful. I never heard it before, and it is useful in many contexts. I think its aptness will cause it to gather momentum until it is the “it” term of 2011.
Remember when ‘no brainer’ sprang forth from nowhere into common usage? It seems like it has been around forever. But, it was only from the early 90s. I don’t know when or where it started, but I heard it first in January 1992, in New York. There was scarcely a month of ramp up in usage frequency. Then I must have heard it every day of the week for years.
In reverse fashion, the “quality” meme has gone out of style. Remember when quality was job one? Total quality management? Statistical quality control? It went out of style in the mid 90s, just as rightsizing, offshoring jobs and offshored manufacturing became the next thing.
It’s interesting to observe the ebb and flow of concepts? sniglets? terms? in mass media and common parlance. Wonder who is pulling the strings, and if there is a cultural value of “shame”, that prevented the co-existence of the “TOTAL QUALITY MANAGEMENT” message with the “OFFSHORE MANUFACTURING TO CHINA” message.
The krill metaphor has hereby been launched into public discourse.
HBBers, mark this day - we heard it here first!
If ya can’t buy ‘em, might as well try to out compete ‘em…heheheeheee
Google is preparing to launch Google Offers, the search giant’s Groupon competitor.
Update: Google has responded to our inquiry and sent us the following statement:
“Google is communicating with small businesses to enlist their support and participation in a test of a pre-paid offers/vouchers program. This initiative is part of an ongoing effort at Google to make new products, such as the recent Offer Ads beta, that connect businesses with customers in new ways. We do not have more details to share at this time, but will keep you posted.”
Google essentially confirms Google Offers is real. It looks like Google Offers is in the testing phases, though.
Update 2: We’ve also learned that Google will pay out 80% of a business’ revenue share three days after its deal runs. Google will hold the remaining 20% for 60 days to cover refunds before sending the rest.
http://mashable.com/2011/01/20/google-offers/
Verizon moves $20.2B in pension losses to the past
By PETER SVENSSON The Associated Press
Posted: 8:49 a.m. Friday, Jan. 21, 2011
NEW YORK — Following in the footsteps of rival AT&T Inc., Verizon Communications Inc. on Friday said it is changing its accounting in a way that effectively moves $20.2 billion worth of future losses into the past.
The New York phone company said it will recognize losses and gains in its plans that fund pensions and other retirement benefits, like the health care, in the same year they occur rather than amortizing them over time, as is standard practice.
That allows Verizon to reduce previous years’ results by $20.2 billion, an amount that will then not weigh on future results.
So
1. CEO pay in the past was based on moving losses forward.
2. CEO pay in the present and future based on moving those same losses into the past???
Am I understanding this right?
Yes.
Yes, plus the pay of many other high level executives.
That is a nifty accounting trick. I hadn’t heard of that one before.
” I hadn’t heard of that one before.”
I think it`s called a “Loss be gone” that moves $20.2 billion worth of future losses into the past. It`s a time travel quantum physics bookkeeping kinda thing.
For some reason I’m picturing Dogbert, cooking the books, shouting “Loss be gone!”
And I’m picturing that Salem Witch (the one who wards off evil foreclosure spirits or whatever) from a week ago saying the same thing!
I think it was a car commercial in the 80`s. This 20 something year old guy was at his birthday party and dreaming about being out driving his Pathfinder or whatever it was while he was opening his presents. There was an overweight 50 year old man pictured on the screen with his wife’s voice saying ” It`s a gut be gone, Russ just loves his.”
Thursday was caravan day on Hawaii, the Big Island, so I went to a few open houses and spoke to Realtors before diving. I know it sounds like a bizarre way to spend a vacation, but I always try to take a few hours to go look at real estate if I can find the time. I think someone dropped me as a kid or something. Well prices are high but less expensive than I thought they would be. One of the things I liked about the housing was that most homes I looked at were around 2000 sq feet. They havent built many homes that size in the mainland for a long time. I really dont need more than one living area, one dining area, two bathrooms and two bedrooms with a den. Basic no view home in a middle class neighborhood in a resort area appears to be around 350-400k. A nice house with decent ocean views runs around 500-700k. I went into one with marble floors, a great kitchen, and a pool over looking the ocean for $550,000 (the flier had $629,000 crossed out). The Realtor says the seller recieved and offer for 825k three years ago but turned it down. I then saw a crazy luxurious house on a cliff, looking over a golf course and the ocean with no obstructions for 800k. The Realtor said similar houses were going for 1.2 million three years ago. All in all it looks like about a 30% drop or more and you can get a good view for around $500k and total luxury with killer views for less than a million. Expensive, but I have seen worse on the mainland. All houses I looked at were around the 2000 sq ft range and no basement since they are built on lava rock.
What are the property taxes in HI? It looks like I can afford the low ends houses there. What are the job opportunities like?
I had friends who spent a couple of years stationed at the Air Force Base there.
From what they observed, most of the economy seems to be based around tourism that there doesn’t seem to be a lot beyond that job wise. Apparently a number of young “surfer wannabees” move there and end up subsisting on waiting tables, hotel work, etc.
And the public schools were so bad they spent a ton of money on private schools.
And since so many things have to be imported (groceries, etc.) the off-base prices were relatively high.
Property taxes are low, around 1% or less. Income tax is where they get you in Hawaii.
The Big Island is one of the most beautiful places I’ve ever been. I hope prices keep on droping and I’ll be there. lol
Property taxes seemed normal. Around 8k for a 700k house. There is no real business here that I can tell other than tourism. I think most of the homes in the resort areas are vacation or retirement homes.
I should add Mike is probably right about the 1%. I saw a little higher listed on the fliers, but prices have dropped significantly, so they are probably selling for less than assessed value right now causing some distortion.
“What are the job opportunities like?”
I’ve always heard that (like in many tourist places) the locals in Hawaii will tolerate you if you just move there and spend money, but they’re not too friendly if you start competing with them for the few available jobs. If you’re a heart surgeon or the like, you’ll be alright, but if you’re looking to work with the locals in a locally-owned business, good luck.
I used to travel in the same circles as a bike shop owner from Hawaii. His application for employment was many pages long. I think he’d stolen it from the CIA — it was that detailed.
Any-hoo, the instructions were an absolute hoot. He advised against applying if you were going to use the shop as yet another venue in your ongoing quest to figure out how to interact with the world. Other, similar bits of advice were offered.
The real killer was the part where the instructions said that every question on the app had to be answered. Nothing less would be considered.
I vacationed there 8 years ago or so.
We stayed on the water.
There was a giant tree that had fallen into the ocean and was dead.
The guy above us said 3 years earlier there was 20-30 ft of shore infront of the tree.
The 2 unit was for sale for 1.5 million
At the rate of shore loss I figured it would be gone in about 10 years.
If I bought I would get hillside with an ocean view. Ocean front scares me with erosion and tsunamis. It you buy a hillside house built on lava rock, I can’t see it eroding too much, but I guess it could sink or get covered in a volcanic eruption. There are live volcanoes on the Big Island.
Natalie,
Just wanted to let you know that your post from the other day inspired me to look into plane tix to HI. Well, the deals are back. $298 to fly to Maui, Oahu, or Big Isle from Portland. Okay, I did pay $280 a year ago.
I’m booked into Kona for end of April to the Big Isle. Can’t wait for snorkeling, diving, kayaking…
Cheers!
You have to try the Manta Ray/Black Water night dive with Big Island Tours. For snorkeling, the best is Sea Quest (6 person raft and thrilling bumpy ride) or Fair Winds II (large boat but awesome food and people) and go to Kealakekua Bay (storm surge is high right now so lots of surfers but poor visability, but in Kealakua Bay they still had 150 ft visability and I saw octopus and moray eels, among many other critters). I also recommend a trip around the Island in a rental car, not a tour bus (or get a jeep as many interesting beaches are accessable only by 4WD and you can have the whole beach to yourself). Make sure you get a copy of Hawaii The Big Island Revealed. It tells you all the best spots. I would plan on being at Volcanoes National Park around 2 or 3 so you can hike through the crater and get to see the lava at night. I arrived too early (around 11 am) and saw lots of smoke, but didnt feel like waiting 5 hours for dark especially since I over did it at first and was sunburned and exhuasted. You will have a blast. I plan most of my hikes very early morning or later in the evening as the sunrises and sunsets are fantastic, so you want to plan not to miss them and get the best photos.
“Big Island Tours” should be “Big Island Divers”
Outstanding!
We haven’t booked rooms yet. Is there anything in the Kona area in regard to nightlife, or is Hilo the only place to get that? Mind you, nightlife (restaurants, bars) are just about the lowest priority for us for this trip, but we’re at least hoping for an area that we can get a few drinks, etc.
We’re looking at a place near Honaunau, and other than being very close to good snorkeling and kayaking, we’re not sure what else is there…
The biggest towns are Kona and Hilo. Hilo is on the rainy side and doesnt have the best water visability. The best diving is off of Kona. I am at the Waikoloa Marriott which is about 25 miles north of Kona. I think it has the most pituresque beach with awesome sunsets, and you can walk in either direction for a mile or more and see lots of turtles. There is a shopping district here that is nice, but clearly all tourists and expensive. There is a cool town about 20 minutes north which has a more local and artsy flair, but still about 70% tourists. I am not sure you would want to go to a place purely local as they are not always the friendliest to tourists. The best shore snorkeling is from the area you are talking about Pu’uhonua O Honaunau/Place of Refuge, Kahalu Beach and Kealakekua Bay and it would be a good choice if most of your time will be on the water. That area and Kona is also where most of the dive and charter boats are located. I have seen a lot of small restaurants/bars down there that may be cool to try out. I assume you are talking about having some umbrella’ed drinks on the deck as opposed to NYC or San Fran style night clubs, as I do not believe that any exist on this Island. Kona has lots of restaurant choices.
I should add that although Kona is where most the boats go out and has the most restaurants. It also has some traffic and chain shopping centers including a Walmart, Borders, Sports Authority, etc. Go a little south (where you are talking about) or north and it quickly gets quiet again.
Great, thanks. The little research I’ve done seems to agree with that. And yes, i am talking about a low maintenance (non-main-drag-tourist-area) bar to get a few beers and/or $3 margaritas at happy hour. As a comparison, when I go to Maui I stay in Paia or Haiku, which is near the main windsurfing spots and I largely avoid Kihei and Lahaina except for some snorkeling.
Which is the town 20 miles north? Might want to check that out…
Hawi and Kapa’au. They are a bit out of the way, but have some interesting gallaries/restaurants and are on the way to Pololu Beach, which I recommend. It is a very picturesque hike.
I thought it might be Hawi. I have been considering a place to stay there. Thanks again and enjoy the remainder of your trip!
These guys were often highlighted in the various housing bubble blogs during the run up. They had commercials where they posed in front of a private jet.
They have been under investigation for several years and last night they were arrested.
In the news this morning:
After years of investigation, federal agents on Thursday arrested David Crisp and Carl Cole and at least nine others alleged to have been part of the Crisp & Cole real estate empire that, prosecutors say, systematically cheated banks and mortgage companies out of tens of millions of dollars.
Crisp and his wife, Jennifer, were arrested at their home in San Diego. Cole also was arrested Thursday evening somewhere near his Ventura County home.
A major announcement, including details on the allegations, was expected Friday.
In Bakersfield, booked by U.S. Marshals into the Kern County Jail were:
Jeriel Salinas, a loan officer at Crisp & Cole’s Tower Mortgage Co.
Robinson Nguyen, a salesman for Crisp & Cole Realty
Caleb Cole, Cole’s son and a real estate agent
Jayson Costa, a loan officer at Tower Mortgage
Julie Farmer, an office manager and notary at Crisp & Cole
Sneha Mohammadi, a Crisp & Cole employee
Mike Munoz, a Realtor at Crisp & Cole
Several of those arrested were set to enter pleas in a federal courtroom in downtown Bakersfield Friday.
Five years ago, David Crisp and Carl Cole were featured on magazine covers as the faces of Kern County’s explosive housing boom. They were instant millionaires, real estate tycoons protected by bodyguards, driving luxury cars and flying in their own private jet. Now they and others face decades in prison.
Federal court documents filed in related cases say Crisp and Cole, their company, Crisp & Cole Co., and co-conspirators bought luxury homes in some of Bakersfield’s most prestigious neighborhoods. They sold the houses at fraudulently inflated prices to other members of the scheme, prosecutors said.
The second buyers – often friends, relatives or employees of Crisp and Cole — used falsified applications to qualify for mortgages they didn’t deserve, according to court documents. Many times, the mortgages called for little or no money down.
The conspiracy made millions when the houses were sold for much more than was paid for them, according to documents. That profit came at the expense of mortgage companies, which were stuck for the loss when the bogus buyers defaulted on home loans, and the houses turned out to be worth much less than the mortgages, documents say.
More:
http://www.kget.com/news/local/story/Crisp-and-Cole-arrested-in-huge-federal-mortgage/83JN9CRS_kWp8HZZbQhhUA.cspx
The conspiracy made millions when the houses were sold for much more than was paid for them, according to documents. That profit came at the expense of mortgage companies, which were stuck for the loss when the bogus buyers defaulted on home loans, and the houses turned out to be worth much less than the mortgages, documents say
And this is different from what Wall Street and Megabanks and Countrywide did????? Just replace millions with 100’s of trillions, replace mortgage company with tax payer.
Stealing from taxpayers is perfectly acceptable, even encouraged as long as part of that money is returned in form of campaign donations. Stealing from mortgage companies that neglected to perform their own due diligence is a crime punishable by imprisonment. Any questions?
I always thought that Bernie Madoff would have avoided prison had he fleeced the tax payers or the government. Too bad, he pi$$ed of many many richer people than himself.
should read 100’s of billions
After years of investigation, federal agents on Thursday arrested David Crisp and Carl Cole and at least nine others alleged to have been part of the Crisp & Cole real estate empire that, prosecutors say, systematically cheated banks and mortgage companies out of tens of millions of dollars.
There is a God!
Oh ye of little faith!
A forthcoming episode of American Greed! Did anyone else see the one last week about former NSync, Backstreet Boys manager, Lou Pearlman? What a douchebag. Why do people always fall for such pretension and hype?
Crispy & Cole, a former HBB poster, would be ecstatic. He documented their dasatardly deeds in an entertaining fashion for eons -
Yes ,weren’t they big real estate operators in Bakersfield ? One of them even had his own private jet . Their racket was getting straw buyers to purchase real estate and than they raised the price and they got the excess money . The straw buyer /cash back fraud game .
Anyway ,I don’t know why it took so long to get these guys because it was so clear that when all these loans started defaulting that they
were behind it all ,even getting employees to be straw buyers .
I remember reading a article about one of them that when he was a
young boy he turned his father into the cops for doing something .
It’s kinda ironic that such a do-gooder as a boy turns into a criminal .
Oh sorry ,now I see a more complete article farther up . Sometimes when I am reading the blog I go from down to up .
From my little broke azz state, S.C….Oh man I am loving this, the whiners are lining up to hammer away at our new Gov.
SHE SAID:
“The reality is the role of South Carolina’s government in the year 2011 can no longer be to fund an Arts Commission that costs us $2.5 million. It cannot be one that funds ETV, costing taxpayers $9.5 million.” ~Governor Nikki Haley
HE SAID:
“The reason to have a state arts agency is so there’s someone working to make sure every citizen has the arts in their lives … not just the people who are wealthy, not just the people living in the cities. You can’t have that without state involvement.” ~Ken Mays, S.C. Arts Commission
Among the reactions posted on the Internet following Haley’s remarks was this from “Saxoholic”: “I don’t believe this is a liberal vs. conservative argument.. The issue is financial at its core. I am a public school arts teacher, and I certainly believe that everyone deserves to have the arts in their lives. What I don’t believe is that you have to rely on the government to ensure that such happens. There are many in the private sector (myself included) who will work hard to make the arts relevant and active without state help. And, private citizens will do it more efficiently and with better results than the state government. The ‘You can’t have that without state involvement.’ attitude is what got us into this fiscal mess in the first place.”
However, South Carolinians are racing en masse to the defense of the Arts Commission and SC ETV. “How dare she?” is the battle cry and we look for a hot, yet entertaining, debate for the next several months.
The chief point will be ignored by most of the combatants - separating NEEDS and WANTS. We have grown used to taxpayer subsidized entertainment and don’t want to give it up. We personally sympathize with the plea of the small-town drama club which counts on its grant from taxpayers, but South Carolina - like most states - has worked its way into a large budget deficit and some of the wants must be shelved while the state deals with urgent needs. Are Carolinians prepared to give up needs in order to support entertainment? We’ll find out before July 1st.
I have to side with Haley on this.
Now gov often spends to put up sculptures or other works of art to improve a city and attract workers. IN this economy I don’t think a pretty city is needed to attract workers. I think most would just like a safe and clean city at this point. That also will be done away with due to budget cuts see Camden report from yesterday.
Maybe SC can get some help $$$$$$$$$$ from their “Sister City” in Argentina?
I thought the cars in the front yards on blocks was art.
Well there you go! Apparently you have an eye for fine art.
Never fear! Underdog is here!
Grab your popcorn, pull up a seat for the “TrueMascot™” wrassilin’ match!:
“TrueAnger™” mascot: “States Rights! States Rights! States Rights!” …vs…GOP mascot: “Reduce the US Deficit NOW! Reduce the US Deficit NOW! Reduce the US Deficit NOW!”
A Path Is Sought for States to Escape Debt Burdens:
MARY WILLIAMS WALSH, On Thursday January 20, 2011 / NYT
“…Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.
Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.
Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout. Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.
For now, the fear of destabilizing the municipal bond market with the words “state bankruptcy” has proponents in Congress going about their work on tiptoe. No draft bill is in circulation yet, and no member of Congress has come forward as a sponsor, although Senator John Cornyn, a Texas Republican, asked the Federal Reserve chairman, Ben S. Bernanke, about the possiblity in a hearing this month.
House Republicans, and Senators from both parties, have taken an interest in the issue, with nudging from bankruptcy lawyers and a former House speaker, Newt Gingrich, who could be a Republican presidential candidate. It would be difficult to get a bill through Congress, not only because of the constitutional questions and the complexities of bankruptcy law, but also because of fears that even talk of such a law could make the states’ problems worse.
“…fears that even talk of such a law could make the states’ problems worse.”
I guess they’ll have to debate it using only body language and significant eye contact.
LOL, alpha-sloth your responses makes me chuckle .
But anyway ,after a good laugh , I would like to comment on States getting out of their pension obligations by declaring BK when it isn’t allowed .
Between rock and hard spot .
Remember the home in Hamilton, NY I posted a few weeks back. The one I suggested if it wasn’t for Colgate would never exist because most of the surrounding towns were very low median income?
Well looks like another “investor” is getting out of Dodge:
http://cnyhomes.com/Listing/Search/info.cgi?mlnum=S246795
$695,000
20 acres
5210 sq feet
professionally decorated
Like I said, nearby Earlville sold 2 homes last quarter according to Trulia. Median price of $44k. That is not a typo, mid 5 digit home prices just down yonder from this baby.
No scam here. LOL Just popped up Contingency
729 Duchess Ct Palm Beach Gardens, FL 33410
$190,000
3 Bed 2.5 Bath 2,511 Sq Ft
Status: Contingency
Days on site 0 days
———————————————————————–
Property Appraiser
Location Address: 729 DUCHESS CT
Owner Information
Name: HENRIQUEZ JUAN &
Mailing Address: PO BOX 30422
WEST PALM BEACH FL 33420 0422
Sales Information
Jun-2005 18917/0935 $465,160
WARRANTY DEED
HENRIQUEZ JUAN &
I checked the Clerk & Comptroller for HENRIQUEZ JUAN, but first….
WARNING! This material may not be suitable for children under the age of 13 or people who live in Colorado where no one stays in their house after foreclosure or takes advantage of government programs.
Detail Name Cross Name Date Type Book Page CFN Legal
* View HENRIQUEZ JUAN AMERICAN GEN FIN INC 05/30/2000 FIN 11807 901 20000201446
View HENRIQUEZ JUAN CENDANT MORTGAGE CORPORATION 07/01/2003 SAT 15461 648 20030387893 MODEL LD CO 14-44-42 T2
View HENRIQUEZ JUAN CENTEX HOMES 05/21/2004 D 17002 1652 20040294412 HARBORS L26
* View HENRIQUEZ JUAN BAC FLORIDA BANK 05/21/2004 MTG 17002 1654 20040294413 HARBORS L26
* View HENRIQUEZ JUAN MILLENIUM REAL ESTATE INVESTMENTS INC 08/11/2004 D 17383 1238 20040465610 HARBORS L26
View HENRIQUEZ JUAN BAC FLORIDA BANK 10/25/2004 SAT 17678 1498 20040605345 HARBORS L26
View HENRIQUEZ JUAN TOUSA HOMES INC 11/05/2004 D 17732 1073 20040631778 EQUUS AGR 1 L79
* View HENRIQUEZ JUAN BAC FLORIDA BANK 11/05/2004 MTG 17732 1074 20040631779 EQUUS AGR 1 L79
View HENRIQUEZ JUAN COMMUNITIES FINANCE COMPANY LLC 07/18/2005 D 18917 935 20050441929 EVERGRN # 09 L48
View HENRIQUEZ JUAN EQUUS CENTER LLC 01/25/2006 D 19845 1858 20060049885 18 45 42 POR
* View HENRIQUEZ JUAN WORLD SAVINGS BANK FSB 04/24/2007 MTG 21656 38 20070196755 EQUUS AGR 1 L79
View HENRIQUEZ JUAN BAC FLORIDA BANK 05/31/2007 SAT 21790 69 20070265882 EQUUS AGR 1 L79
View HENRIQUEZ JUAN EQUUS PROPERTY OWNERS ASSOCIATION INC 07/24/2009 LN 23354 1992 20090250604 EQUUS AGR 1 L79
View HENRIQUEZ JUAN WACHOVIA MORTGAGE FSB 08/20/2009 LP 23402 1624 20090287640 EVERGRN # 09 L48
View HENRIQUEZ JUAN WACHOVIA MORTGAGE FSB 11/10/2009 LP 23540 174 20090394160 EQUUS AGR 1 L79
View HENRIQUEZ JUAN EQUUS PROPERTY OWNERS ASSOCIATION INC 11/30/2009 LP 23566 1190 20090414990 EQUUS AGR 1 L79
View HENRIQUEZ JUAN PALM BEACH COUNTY 02/19/2010 LN 23702 1490 20100065104 EQUUS AGR 1 L79
View HENRIQUEZ JUAN FLORIDA 06/04/2010 JUD 23883 419 20100206540
View HENRIQUEZ JUAN J MALLORY SQUARE PALM BEACH LIMITED PARTNERSHIP 07/21/2004 D 17284 100 20040421247 RENAISSNC 7 L45
* View HENRIQUEZ JUAN J WORLD SAVINGS BANK FSB 07/21/2004 MTG 17284 102 20040421248 RENAISSNC 7 L45
Welcome to my world.
Page 2
Detail Name Cross Name Date Type Book Page CFN Legal
* View HENRIQUEZ JUAN J MILLENIUM REAL ESTATE INVESTMENTS INC 09/01/2004 D 17476 705 20040510270 RENAISSNC 7 L45
View HENRIQUEZ JUAN J WORLD SAVINGS BANK FSB 10/14/2004 REL 17635 739 20040583975 RENAISSNC 7 L45
* View HENRIQUEZ JUAN J WORLD SAVINGS BANK FSB 07/18/2005 MTG 18917 936 20050441930 EVERGRN # 09 L48
View HENRIQUEZ JUAN JR FLORIDA 06/04/2010 JUD C 23883 36 20100206402
View HENRIQUEZ JUAN JR FLORIDA 06/04/2010 JUD C 23883 420 20100206541
View HENRIQUEZ JUAN JR FLORIDA 06/04/2010 JUD 23883 25 20100206396
* View HENRIQUEZ JUAN P DECISION 1 MTG CO 02/06/2001 MTG 12298 137 20010046137 MODEL LD CO 14-44-42 T2
* View HENRIQUEZ JUAN P SOUTHSTART FD 02/06/2001 MTG 12298 94 20010046131 MODEL LD CO 14-44-42 T2
View HENRIQUEZ JUAN P COTTON KEITH & TENA 02/06/2001 D 12298 92 20010046130 MODEL LD CO 14-44-42 T2
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Wow. Now there’s a “serial refinancer”!
Barry sez…
Obama Seeks to Highlight Nation’s Economic Potential- AP
President Barack Obama says “putting the economy into overdrive” is a top priority, even as a new poll showed the public giving him poor marks in this area.
“Barry sez…” I`ve heard of that game.
Barry sez… take this 8K and buy a house
Barry sez… collect 99 weeks of unemployment
Barry sez… get your family on SNAP
Go to work!
Ahhh, youre out Barry didn`t say.
There is a very interesting dynamic at hand. Barry prioritized health care at a time when his opponents (and those without jobs) wanted JOBS to be the priority.
Now that the House is what the House is, the HOUSE is prioritizing (the removal of) health care instead of focusing on jobs/economy while Team Barry tries to use that against them and is NOW focusing on jobs and “can’t understand” why the House is prioritizing health care.
My head, it spins…
sleepless …….isn’t it kinda funny to watch . Actually working on health care was a situation that did need immediate attention in that
this was a back-breaker for Industry and people . The only problem is the problems were’t solved with Health Care Bill because the Politicians continue to draft bills that satisfy their lobbyist
self-interest groups which would not really solve the problems .
Good news!
Unions see sharp membership declines again
Union membership falls sharply; private sector union ranks at pre-WWII levels.
WASHINGTON (AP) — The nation’s labor unions saw another steep decline in membership last year, even as the economy showed signs of recovery and job losses slowed.
The Bureau of Labor Statistics reported Friday that unions lost 612,000 members in 2010, dropping the unionized share of the work force to 11.9 percent from 12.3 percent in 2009. That follows a loss of 771,000 workers in 2008, continuing a steady decline from the 1950s when more than a third of workers belonged to unions.
The news comes as union officials are pressing President Barack Obama and other leaders to invest more money in infrastructure projects like repairing highways and bridges to help stimulate the economy and create new jobs. That plea is meeting stiff resistance from Republicans intent on cutting spending sharply to pare back the rising national debt.
There is always whining about how unions are destroying everything, but the reality is that unions have been on the decline, well for about as long as the middle class has been on the decline in this country. Outsourcing technology and a great concentration of wealth have crushed the power of labor. When they are gone will we go back to child labor, no vacations, no weekends, no safety at work? My guess is yes. Corporations and Wall Street have all the power at this point. Political financial media and judicial. Now it’s time to see how much of a decline in living standards Americans are willing to put up with before they start setting things on fire.
We should be kicking butt! Unions in the private sector have been all but vanquised!
Meanwhile, Corporate America continues to offshore low paying jobs to the third world.
If unionize workers are such a small percentage ,why all this blame to
Unions ? I just shutter to think how unprotected the worker is going to be . Corporations don’t want the people to have any protection at all . Its getting so one-sided and Corporations are having record profits in a recession .
Wauseon manufacturing company closing its doors
A company out of Wauseon, Ohio known as HP2g — a facility that manufactures a 110-mile-per-hour V8 engine that runs on E85 fuel — is closing its doors.
The company says the big problem here is the banks. The company says its EPA emissions stand better than the 2016 requirements. It had hopes of changing transportation worldwide and putting Americans back to work. But that mission came to an end because of a lack of funding.
President Douglas Palmear says the company applied for loans from local banks. He says the state of Ohio was willing to help fund the HP2g project with a bank that was willing to finance. Things fell through for the plant when the bank didn’t meet the required deadline.
In a release, Palmear says: “The banks forgot that their money comes from our depositors. Our government would not have to finance banks and businesses if the banks were doing their job!”
Palmear also said he’s been receiving offers from other foreign companies. However, he plans to shelve the product for now.
For sure it was supposed to read 100 mpg, not mph.
Poor Palmear, he can’t get the free money gravy train based on unproven claims of finding the fountain of youth. Anyway, you don’t get 100 mpg on an engine, you get it on a complete vehicle.
I remember a lot of hooplah about a 100 mpg carburetor in the 70’s.
This motor sounds unrealistic. It looks like he’s getting high MPGs with special tires and a highly aerodynamic shell. Such a configuration is easy to get high MPGs from, since most of the energy consumed at cruising speeds is due to aerodynamic drag and rolling resistance.
No way to shuffle off dead buffalo?
55 buffalo die mysteriously on southern Cayuga County (NY) farm:
Sempronius buffalo farmer Peter Head has lost 55 animals to a mysterious illness since October, but autopsies have shown no clear cause of death.
“We’re going nuts down here trying to figure out what’s going on,” he said. “This is going to put me out of business. That’s half my frickin’ herd.”
Head and his wife Deborah have run PDH Buffalo Farm on Route 41A for nine years. This year, 17 of his 23 calves died and he has stopped selling meat as a precaution.
“I don’t want to be selling buffalo meat when I don’t know what’s going on here,” he said.
Cornell University’s College of Veterinary Medicine conducted necropsies on several of the carcasses but found only dehydration, Head said.
Ron Podolak of the Cayuga County Soil and Water Conservation District said there is no indication that disease is spreading to neighboring farms.
“In my career, I don’t remember anything quite like this,” Podolak said. “There’s die-offs, but usually they can determine what it is right away and treat them. … I just wish there was something more we could do to help Pete. This is a catastrophic loss for him.”
The SWCD is conducting water samples from springs on the farm, but the results have not yet come back, Head said.
Experts are buffaloed.
My dad told me 50 years ago that Buffalo was dying because of the Welland Canal.
“Those who don’t bear the burden of government spending will always vote for more government.” ~Dr. Walter Williams
and then they turn around and say the ones who do pay are selfish and “un-christian” or not charitable enough when they resist having to pay for even more.
don’t you just love human nature?
Those who steal from those who work will always create a system that is in essence serfdom for the masses. MEaston
Bonus Payments to City Retirees Are Drawing Ire
As San Francisco struggles under ballooning pension and health care costs, the city’s retirees will receive unexpected cost-of-living bonuses totaling $170 million. The city’s anticipated budget deficit for the coming year is $360 million.
A nonprofit, nonpartisan news organization providing local coverage of the San Francisco Bay Area for The New York Times. To join the conversation about this article, go to baycitizen.org.
A political battle has raged over the city’s growing retirement obligations. In November, Proposition B, which would have required city workers to contribute more toward their pensions and benefits, was soundly defeated. The measure’s opponents — every major elected official and energetic public-employee unions — said fears about the pension fund were overblown.
Meanwhile, the fund’s fundamentals deteriorated as it gradually accounted for its huge losses in the stock market crash. It took in $414 million in contributions in 2010 but paid out $819 million.
Ok ,so when a Pension fund has losses from a stock market crash ,how is that possible when they can only invest in non-risky stuff .
In other words ,all I ever see is either underfunding of Pension Plans or mismanagement of Pension Plans .Is this the fault of the people who had the Pension . Its a scary thought to me now that Wall Street or any of these managers have their hands on funds .
South Carolina’s Governor Sued for Opposing Union
Subtext: If she doesn’t like unions she should keep her opinion to herself.
Boeing Aircraft operations in South Carolina promise to be a pain in the neck for people who believe in the right-to-work principle. Governor Haley annoyed union organizers by flat-out speaking her mind on the subject. “There’s no secret I don’t like the unions, We are a right-to-work state. I will do everything I can to defend the fact we are a right-to-work state. We are pro-business by nature. I want us to continue to be pro-business. If they don’t like what I said, I’m sorry, that’s how I feel.”
Good for her! Only a few days in office and she’s already in a major scrap. And it will attract a lot of attention because the people suing her are the International Association of Machinists and the AFL-CIO. They want her to “butt out and remain neutral in matter concerning union activities.”
The story is in news and her staff will be kept busy fielding requests for comments, interviews, and no doubt television news crews have bought their airline tickets to Columbia already.
South Carolina’s Governor Sued for Opposing Union
Subtext: I pander to peons and peasants who have nothing and are too lazy to get a job.
UC Regents Discuss Budget Cuts At San Diego Meeting
By Hank Crook, Gloria Penner
Editors Roundtable transcript | Friday, January 21, 2011
University of California regents met in San Diego this week to discuss how to close a $1 billion budget gap. UC President Mark Yudof said thousands of qualified applicants will be turned away because of a proposed $500 million budget cut for 2011-2012, and other “unavoidable” expenses. The California State University system is also facing massive budget cuts that could lead to layoffs, and higher tuition. We discuss how the budget cuts could impact California colleges.
Guests
JW August, managing editor for 10 News.
Bob Kittle, director of News Planning and Content for KUSI.
Andrew Donohue, editor of voiceofsandiego.org.
…
“More for less in Vista … from the low $400Ks”
Holy Crap — $400K for bargain basement housing in Vista? What are these builders smoking these days?
I spent the day at a Biotech manufacturing facility that produces bone parts from donated cadavers. Great way to end the week!
http://www.tampabay.com/news/courts/judge-tampa-federal-courthouses-window-frames-in-backwards/1146912
TAMPA — Federal judges figured the workers who built their gleaming, downtown courthouse 13 years ago knew how to install a window.But now one of the most costly repairs in that building’s history is under way to fix one big, befuddling problem.
Window frames were installed backward.
The World is sinking: Dubai islands ‘falling into the sea’
What was that children’s song they taught us in religion again?
Oh yes, here it is…..
The wise man built his house upon the rock
The wise man built his house upon the rock
The wise man built his house upon the rock
And the rain came tumbling down
Oh, the rain came down
And the floods came up
The rain came down
And the floods came up
The rain came down
And the floods came up
And the wise man’s house stood firm.
The foolish man built his house upon the sand
The foolish man built his house upon the sand
The foolish man built his house upon the sand
And the rain came tumbling down
Oh, the rain came down
And the floods came up
The rain came down
And the floods came up
The rain came down
And the floods came up
And the foolish man’s house went “splat!” [clap hands once]
I wonder if this wonderful display of architectual beauty and excellence will soon come to be known as a 23rd century Atlantis.