Bits Bucket for January 22, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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I was offered a transfer to DC as a result of someone retiring. I need to figure out next week how much of an “offer” it really is (e.g., whether they will hold it against me if I do not take it) and whether to accept. I was considering moving to DC in 2005 but decided not to based mainly on the outrageous home prices. I will start doing my own research, but was wondering if anyone knows if prices have come down much. I would probably be looking in the areas of Bethesda, Chevy Chase and Arlington.
Is there any room for “negotiation”? Are they offering more $ and a better job? And relocation assistance, etc?
And if you turn it down they probably will hold it against you, you’ve inconvenienced them by not being a good life-sacrificing employee. The question in my mind is what the “price” is of them holding it against you and which price you prefer to pay: moving or being the inconvenient one.
In the old days, if you turned down a relocation offer from IBM you would be fired.
They used to say IBM stood for I’ve Been Moved.
“In the old days, if you turned down a relocation offer from IBM you would be fired.”
In the old days, if you turned down a relocation offer from USS/USX you would disap____
Hint: Most helicopter drops of liquidity land near Wall Street or K Street.
Hands Natalie the keys to his (Secret) “bunker” under the sw edge of Washington Circle by GWUH.
I haven’t been there in years but please don’t let the cat out.
Well, “down county” in the Peoples Republic of Montgomery county hasn’t come down terrifically, I’d say we are “down” to ‘05/’06 pricing from Bethesda to Friendship Heights. My metro stop is Farragut North (K-Street for the red line) for a Friendship Heights commute it is probably 15 or 20 mins. If you are willing to push the commute up a little further on the red line pricing has dropped to ‘04 levels in much of Rockville (35-45 min commute from Rockville Town Center).
I can’t speak to Virginia. Good luck, let us know how you decide.
Natalie, where are you moving from? The DC area’s overall cost of living (not just housing) is as much as 50% higher than many low-cost areas. Some might argue the difference can be even greater.
For example, electricity costs in Maryland are outrageously high.
Your D.C. job could get you a 20% higher salary and yet you could be worse off.
As with many areas, there is big difference depending on the market segment that you’re looking at. At lower end, working class neighborhoods like mine (College Park), the prices are probably 50% of peak. But if you’re looking at nicer neighborhoods, like Bethesda or the Chevy Chases the prices haven’t fallen nearly as much.
Prices have not come down much on the close in areas except perhaps for poorly built condos with too much common space and too little private living space. As a matter of fact, I believe, Arlington was up by 6% last year (not sure if that is a median a mean or if it was done by comparing same house sales). You get better value for your money by going right across the edge into DC itself because the schools are still fairly awful. The last time the local rag showed a house that looked to be walking distance to Friendship Heights in Chevy Chase, it had a horrible layout (kitchen and informal eating area in the basement, a living room and formal dining room on the ground floor and two bedrooms up top) for over $800K listing price. I’m not even sure that it had parking.
None are cheap.
Washington is hell for drivers. I would plan on living somewhere that the car could be eliminated. And you need Metro not a bus, given the traffic on the roads.
Fairfax County is unbelievable. They had a great pro-business, low tax idea — allow massive development, but don’t waste money on transit or roads. You’ve got little country roads with massive office and apartment development on them.
Rents have come down some. People aren’t commuting from Baltimore anymore. Prices are still too high.
Unless you are married with kids and certain of staying there long term, don’t buy anything — anywhere, but especially in the DC area. If I had to live there, I would try Alexandria, but it ain’t cheap either.
1) Try researching prices on Realtor.com (aka.. “realwhore.com”)… that’s the 1st place I’d start.
2) I’ve heard prices there have remained high.. mostly due to the ever-increasing, bloated growth of our pathetic federal gov’t.
3) Always consider submitting a “counter-offer”. Many years ago, I accepted a Controller position at a company.. only later to find out that I could’ve countered the offer.. w/ higher pay, more vaca & a large signing bonus. After I got the job, I had to review other employee contracts that were based on the counteroffer terms. Never again will I accept an offer as written. Just like in real estate.. it DOESN’T HURT TO ASK!!
“…it DOESN’T HURT TO ASK!!”
It depends. If you try to drive too hard a bargain, it can hurt. But you are probably correct that a tactful inquiry is acceptable to let your employer know that you are on the fence, rather than eager to make the move.
“Real estate industry sees signs of life after slowdown”
http://www.democratandchronicle.com/article/20110122/BUSINESS/101220322/Real-estate-industry-sees-signs-of-life-after-slowdown
Here’s an interesting bit:
“Ryan Tucholski, chief executive of the Realtors association, said that despite the decline in sales in recent years, the Rochester market has fared better than many other markets… Tucholski, who had been CEO of the Lakeland Association of Realtors in Polk County, Fla., said that Rochester doesn’t have the type of speculative building that occurred in Florida.”
Hmmm, looks like he’s riding the last wave of the bubble. I wonder what he’ll be saying about Rochester in 2 years?
Good God, is it 2005 in Rochester?
(The magic 8-ball said, “hell yes, it is!”)
http://www.democratandchronicle.com/article/20110122/GROUP01/301220010/Capron-Street-Lofts-seeks-buyers–not-renters
“The Capron Street Lofts managed to make exposed brick and steel beams sexy, with a trendy launch party showcasing the new housing development Thursday night. Capron, lauded by Rochester officials for furthering the agenda to revitalize downtown, offers luxury living for buyers, not renters.
Several DJs, along with free food and beverages, were interspersed throughout the five-story building.
…but not yet complete…average price is around $250,000…received $1.1 million in Restore New York funds from Empire State Development Corp…”
“Hmmm, looks like he’s riding the last wave of the bubble. ”
He’s riding it in to the beach! You gotta admire his survival skills.
He’ll probably become a funeral director next, and cash in on the boomers’ last boom.
“You gotta admire his survival skills.”
He’s probably applying to nursing school as we speak.
Another screw job barely avoided:
Capital Bank’s game-changing plan to sell a majority stake in the business is moving forward without controversial provisions that would have cost taxpayers millions of dollars at the same time that it enriched top bank executives.
Following a round of negotiations with the U.S. Treasury, the Raleigh bank now intends to repay all of the $41.3 million in stimulus money it owes the federal government. North American Financial Holdings, an investment firm led by former Bank of America executives that has agreed to purchase an 85 percent stake in Capital for $181 million, initially conditioned its deal on the bank paying back its debt to the government at a steep discount.
Simple clerical oversight…
Tony Plath, a finance professor at UNC Charlotte who called the initial proposal “a lousy deal for taxpayers,” said the changes make the deal a good one for everyone - North American, Capital’s shareholders and taxpayers alike.
“I didn’t like the [former] terms and, apparently, neither did Treasury,” Plath said. “Sometimes justice gets done.”
Rarely….
The North American deal also was poised to trigger a “change of control” clause in the retirement plans of four top executives. That would have accelerated their vesting in the plans, generating lucrative lump-sum payments totaling $5.7 million, including $3.4 million to Yarber.
Yarber and the other executives agreed to alter their employment contracts. Now they will receive only what they already are entitled to under their retirement plans, Yarber said. He estimated that will amount to “far less than $1 million” for himself and less than $1.4 million overall.
“I just get what already was set aside, what I have already earned,” he said.
Contrary to the initial agreement when he’d have received money he didn’t earn. Correct me if I am wrong, but isn’t taking money you didn’t earn stealing???
Although Yarber ends up losing millions of dollars on paper, he said he made the decision to alter his contract in less than 30 seconds.
Going forward with the North American deal, he said, “was the right [thing] to do, notwithstanding what we may or may not receive on a personal basis.”
Hwy50, a little help here, please insert your BAHAHA’s and HOHOHO;s. Nobody does it better…..:)
Take your pick!:
BWAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHH!!! (fpss™)
&
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
&
Ho ho, hah hah, hehehehehehe, BwaHaHaAhHAHAHAHAHAHA!!! (Cantankerous Intellectual Bomb-thrower™)
(Note to self: Need celery for Bloody Mary’s)
cramer has called the bottom once again.how many times is this now?
http://www.cnbc.com/id/41182255
The comments in that link are a hoot. I got about four pages in and couldn’t find a single one agreeing with Cramer.
“…but isn’t taking money you didn’t earn stealing???”
Apparently it’s OK and it’s yours to keep so long as the source is a pension fund and those in charge of it agree to the plan.
10/25/2004
San Diego now ‘Enron by the Sea’
By John Ritter, USA TODAY
…
When annual contributions to the pension fund began to squeeze the budget, the city in 1996 and again in 2002 went to the pension board seeking to make smaller payments. In return, the city granted even more generous retirement benefits. Both deals apparently violated state law barring cities from funding pensions below rates that outside financial experts recommend. Neither deal was disclosed to Wall Street.
When the stock market plunged, investment income plunged, too. The city’s liability grew as a pension plan that for years had been 100% funded shrank to less than 70% funded. Wall Street gets nervous when the level slips below 90%.
This coastal city of 1.3 million has closed swimming pools, cut library hours and raised fees to control spending. Potholes go unfilled and police and firefighters complain that aging equipment isn’t replaced. Critics warn of bigger cuts in services and layoffs.
Meanwhile, the average police officer, firefighter or clerk retiring after 30 years takes home a one-time $300,000 check from a much-criticized deferred retirement program established in 1997, plus a $50,000 annual pension for life, inflation adjusted. A few top officials have left with $1 million deferred-retirement checks and $144,000 a year for life.
San Diego’s benefits are “certainly on the high end of the spectrum,” says April Boling, head of a pension-reform committee created by City Council.
The depth of the city’s financial hole is unclear. Murphy says the current budget is balanced, but the city hasn’t released financial audits the last two years and a new auditing firm’s report won’t be out until after the election.
“The mayor doesn’t know if the budget’s balanced,” says Ron Roberts, a San Diego County supervisor trying to unseat Murphy. “To balance the budget, they didn’t make full payments to the pension plan. They just pushed a lot of debt off.”
…
“Meanwhile, the average police officer, firefighter or clerk retiring after 30 years takes home a one-time $300,000 check from a much-criticized deferred retirement program established in 1997, plus a $50,000 annual pension for life, inflation adjusted. A few top officials have left with $1 million deferred-retirement checks and $144,000 a year for life.”
This is absolutely outrageous.
Wow , that does seem high .
“Contrary to the initial agreement when he’d have received money he didn’t earn. Correct me if I am wrong, but isn’t taking money you didn’t earn stealing???”
Not when you’re a Bushwood member, it isn’t.
Consider yourself corrected.
“isn’t taking money you didn’t earn stealing”
Not if it’s a gift.
O.K fess up, which HBBer has been commenting in the UK?
“Historically taxes have not travelled well across the Atlantic.
The ill-fated Stamp Act of 1765, which required Colonists to pay a tax for using printed paper, did much to stir resentment against Britain.
Over 250 years later, another tax, again drawn up in London, fared no better.
Last February, with Wall Street banks fresh from handing out just over $20bn (£12.6bn) in cash bonuses, two Democratic Senators, Barbara Boxer and James Webb, proposed a one-off 50pc tax on all bonuses over $400,000 for those employees at banks that received help from the government.
It didn’t muster enough support in Washington and, unlike the Stamp Act, will fail to make it as a footnote in history books.
The majority of Americans opposed TARP, as a matter of fact over 70% of Americans disagreed with TARP.
Those wanting to deliver a blow to Wall Street pay had already seen their best chance pass a year earlier. Insurer AIG’s decided to take a $173bn bailout with one hand and award bonuses with the other prompted the House of Representatives to pass a bill that would have taxed bonuses at 90pc, however the Senate balked.
That Congress didn’t convert public anger into something more tangible in the politically explosive atmosphere of early 2009, suggests that bank chiefs will not be losing too much sleep as they reveal pay and bonuses over the next fortnight.
Don’t expect the furore in Britain to find an echo in the US.
That’s not because Americans aren’t angry or love bankers. Though they seem less quick to attack success. ”
Comment:
I’m in the US and there is a bit of bank bashing.
It IS heavily censored and those who do it are publicly marginalized.
People on Facebook set up groups and they are banned.
Vincent McCrudden was marginalized by the press. The death threats are unnecessary, but there’s no other way to draw public attention to the CFTC that did fail to take complaints from hedge fund investors that would have prevented the subprime collapse.
The censorship is not new, it’s not directly linked to Obama (although he does absolutely nothing to help us).
There WAS propoganda in the last decade talking up real estate prices (during a jobless recovery).
There were a lot of heated internet debates about that and those who called the bubble out then were censored. Posts were deleted, floods of sock puppets ran to hide their original post.
The only way to get past that is to provide REAL information with supporting facts that you’re knowledgeable about through fundamental education. I tell everyone I know to learn finance and economics through coursework at a credible, reputable learning institution (school/university)-DO NOT LEARN FINANCE OR ECONOMICS THROUGH POLITICS.
Everything you see from the US on the internet is not real.
There are sock puppets and shills, paid out by Public Relations firms on behalf of special interest that pull many stunts, like posing as real people and responding to news articles to “shape public opinion”. The media here spins the news and hides articles about the banks.
I can’t confirm this yet, but there are quite a few “libertarian” shills that patronize the finance boards with conspiracy theories, Alex Jones videos and the like.
Soros (democrat) worked with Jim Rogers who supports Ron Paul, who calls himself a “republican”. I personally think they set the political landscape up so they could marginalize opposition to the banks.
None of these shills or sock puppets can tell you the first thing about how to calculate a yield on a bond, but they will post irrelevant, obnoxious things….probably with the attempt to make anyone look “crazy” if they call the CFTC out on it’s corruption.
The last reason why this is swept under the rug, the “non-materialistic flowerchildren” aka. the Baby Boomers seriously think that a small 2 bedroom house is worth $500,000 in a jobless “recovery”. Truth be told, a stampede of realtors took out ARMs to speculate in Real Estate, pushing the prices to obnoxious levels (bubble). Compliance Technology cites that 70% of people who took out too scary for words Adjustable Rate Mortgages are Caucasian (many ARE upper middle class).
The banks who sold ARMs sold subprime derivatives to investors to get the money to make the ARMs with. The subprime dealers were supposed to collateralize them with a bond. Since the economy in the last decade in the U.S. was a “jobless” one, anyone could have figured out that people were going to foreclose in numbers at some point in time.
The fees and interest that the borrowers paid on ARMs were given by the banks to the investors. When the borrowers could not pay on the ARMs, they foreclosed and the banks had nothing to give to the investors to honor the contract because they did not collateralize their subprimes with bonds like they were supposed to.
So former Secretary Treasurer HankPaulson robbed the tax payers to bail them out.
It is also true that the government backed agency Commodities Futures Trading Commission did not do it’s job. Wendy Gramm, Judge Levine, Robert Rubin and Larry Summers all blocked any good suit against the banks for misrepresenting the character of the subprimes that they were sold.
http://www.washingtonpost.com/...
This is in violation of Title 18, U.S.C. 1501-1525.
So none of these corrupt bankers went to jail. Had the victims of the subprime scandal been of African American descent, MAYBE Eric Holder and the federal prosecutors would have pursued the CFTC and authorities in charge of it.
I am part of the Gen Y demographic and I resent John Lennon and the Beatles because of the actions of their fanbase, the baby boomers sycophants who steal from their children.
Real estate/stock market INFLATION + jobless “recovery” (UNEMPLOYMENT)= STAGFLATION
There was no way this was going to pan out. The taxpayers were robbed.
The hype was for a black president and drug legalization here. The sock puppets or anyone else I’m aware of either knows what they’re talking about in the markets, or they’re preoccupied with the legalization of marijuana.
This is so corrupt, so huge and there is no way for me to protect myself that i actually want to be an expat from the US.
(Edited by author 6 days ago)
“There are sock puppets and shills, paid out by Public Relations firms on behalf of special interest that pull many stunts, like posing as real people and responding to news articles to “shape public opinion”.
I can’t confirm this yet, but there are quite a few “libertarian” shills that patronize the finance boards with conspiracy theories, Alex Jones videos and the like.”
alpha-sloth
You’re right! Edward Bernays is the Father of Public Relations and he termed it “The Engineering of Consent”. IIRC, there is a free Documentary online about who Bernays was and his body of nefarious work. Bernays was Sigmund Freud’s Nephew.
An Edward Bernays quote:
“In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons (…) who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind, who harness old social forces and contrive new ways to bind and guide the world.”
IMO those who truly and throughly UNDERSTAND this - and I do mean UNDERSTAND - know just about all they need to know to get along well in this world.
combotechie
Thank you for that quote. You’ve got that right!
It’s sad, such intelligence wasn’t used to make the world a better place. Bernays Daughter wrote a book about her Father. I haven’t read it, but I’ve seen her interviewed. Bernays had a low opinion of most people.
For an interesting video related to Bernays and manipulation, google-up “A Century of Self”.
Correction: It should be: “The Century of self”.
Tankxs for the reminder!
Exactly. It’s no conspiracy theory. High dollar monolithic thugs (NAR, mortgage bankers, Wall St banks) buy access to Marketwatch boards and post propaganda around the clock.
I have read that they even have computers that can post stuff from fake people to divert talk contrary to the propaganda
groups talking points . These shills are masters of diversion and faulty arguments . You can’t stop debate ,but shills for Wall Street or Banks for instance are apparent verses a regular person just repeating the propaganda they heard .
“Parroting” is what propagandist want. Have no clue, but participate in the telephone game. The NAR has mastered this into their Ministry Of Fear.
Good thought there awaiting wipeout ,,they want “parroting .”
They want people to repeat sound bites that they haven’t even
thought about .
Really ,whenever anyone talked about giving up so another group
farther up on the ladder gets more ,you might think about it being a con job .
The only way to get past that is to provide REAL information with supporting facts that you’re knowledgeable about through fundamental education. I tell everyone I know to learn finance and economics through coursework at a credible, reputable learning institution
(school/university)a.k.a., Ben’s HBB blog -DO NOT LEARN FINANCE OR ECONOMICS THROUGH POLITICS.PD Eastman: Go Dog, Go!
2001 / 2002 / 2003 / 2004 / 2005 / 2006 / 2007 / 2008 / 2009 / 2010 / 2011 / 2012 / 20013…
Dog with fancy hat: “Do you like the price of my house?”
Dog with mournful face: “No, No I most certainly do not!”
Dog with fancy hat: “Why, Why, won’t you buy my house?”
Dog with mournful face: “‘Cause the price is too d@mn high!”
Dog with fancy hat: “Well now! Good-bye then!”
Dog with mournful face: “Good-bye! Good-bye, …again.”
(Disclosure: Dog with tired face only got 5 out of 10 questions right on Professor Bear’s HBB eCONomic quizz of 2010)
“People on Facebook set up groups and they are banned.”
Uh, did anyone else notice that Gollum already has one of its sharp-clawed tentacles and its blood-sucking beak in Facebook? Could content control be an even bigger objective than turning Facebook into a tech stock bubble 2.0 Wall Street favorite?
they are saying facebook is valued at 50 billion dollars.How in the world can this be?We arent talking rocket science here.
There are a billion people on it desperate to share all their personal and professional info, product preferences, etc, with anyone who’ll be their ‘friend’. It’s a marketer’s/political operative’s wet dream.
Goldman also told clients its Abacus MBS toxic waste was a stellar investment, while secretly shorting them.
Maybe the value of controlling their content is worth $50 bn to Gollum Sucks?
Facebook is going to do a faceplant. More and more I hear about people kicking it to the curb. I’ve never even once considered joining.
“Could content control be an even bigger objective than turning Facebook into a tech stock bubble 2.0 Wall Street favorite?”
I suppose those who own the servers with the stored data also get to groom it for seditious comments. In the old days during a revolution it was better known as book burning.
‘There are sock puppets and shills, paid out by Public Relations firms on behalf of special interest that pull many stunts, like posing as real people and responding to news articles to “shape public opinion”.’
That reminds me, Joey and Eddie sure have been scarce in 2011.
That reminds me, Joey and Eddie sure have been scarce in 2011.
Which is an odd coincidence since they are absolutely positively two different people.
Hah! I honestly was never sure about that one…
Me neither. Just a bit of morning sarcasm.
I always thought they were one and the same .
“So former Secretary Treasurer Hank Paulson robbed the tax payers to bail them out.”
Was it really bank robbery, or did it merely look like the largest bank robbery in American history, carried out in broad daylight in the halls of Congress?
The last reason why this is swept under the rug, the “non-materialistic flowerchildren” aka. the Baby Boomers seriously think that a small 2 bedroom house is worth $500,000 in a jobless “recovery”.
(Hwy50’s best John Wayne voice/hip-stance/anger-face):
“Whoa Pilgrim, them there’s “fightin’ words!”
Enough with this boomer crap. EVERYONE participated in this.
And BTW, if you look at most of Wall St’s and iBankers hot shot “playas”… they’re GEN Y.
“And BTW, if you look at most of Wall St’s and iBankers hot shot “playas”… they’re GEN Y.”
Bullsh!t. Look who’s running the show.
Just buy a motorhome and live in that, because if you move to that area you’ll spend half your life in traffic. All day long, every day, weekends included.
I think the price of gas has forced a lot of retiree’s in motorhomes to be stuck in the middle of BFE enjoying their golden years.
I think the price of gas has forced a lot of retiree’s in motorhomes to be stuck in the middle of BFE enjoying their golden years ??
More like the price of life…….
A lot of those Class A motorhomes turn into white elephants real quick. And, it’s not just the price of fuel, it’s repairs and maintenance.
Atlas Van Lines released their 2010 report; 1942 hauls from AZ, 1798 to AZ. First time in 10 years there’s a net outflow. U-Haul current rate to Houston is more than 15% higher Phoenix to Houston than from Houston to Phoenix. Folks are fleeing. I can’t blame them.
U-Haul does a similar report, but the 2010 report isn’t out yet.
U-Haul International, Inc. has released the results of the annual 2009 U-Haul National Migration Trend Report, titled “The 2009 Top 50 U.S. Destination Cities.” According to moving data reflective of nationwide statistics for calendar year 2009, Houston took the No. 1 spot, moving up from second place, while Las Vegas took second place, moving up from the No. 4 rank last year. Chicago climbed to No. 3 from No. 7 last year, while San Antonio ranked No. 4, moving up from No. 8. Austin, Texas moved up to fifth place from the No. 9 rank last year, and Atlanta, Orlando, Fla., Sacramento, Calif., Kansas City, Mo. and Denver rounded out the top 10.
The ranking reflects destinations for movers traveling more than 50 miles, and considers every city in the country, regardless of size. However, the data is not stated as a percentage of population and is not reflective of overall growth.
The 2009 Top 50 U.S. Destination Cities Report was compiled from more than 1 million U-Haul truck transactions occurring during a recent 12 month period.
Link to top 50 list:
http://www.getlisty.com/preview/2009-top-50-u-s-destination-cities/
alpha; am I mistaken in thinking U-Haul only reports rankings by net hauls to the cities, not hauls away from the cities?
http://www.uhaul.com/Articles/About/42/U-Haul-Top-50-US-Destination-Cities-2009
U-Haul says it counts any move that’s longer than 50 miles.
Vegas is the no. 2 destination. Their unemployment rate is over 14%. What’s up with that?
Chicago is no. 3, but it’s huge and the list is not controlled for population, so that’s understandable.
Orlando and Sacramento are in the top 10.
Are U-Haulers stupider than average? Many seem to be moving where the jobs *aren’t*. Maybe they’re low-budget retirees?
That list looks bogus. Las Vegas is the #2 destination city in the US in 2009?
Riddle:
“When is a straight line really a spiral disguised as a circle?”
Hwy50 Answers: “When I use to drive my lil’ sister’s rented U-haul straight down the road to her storage unit rental” :-/
Now that’s interesting.
The contrarian in me says this means it’s a good time to move to Arizona!
From yesterday’s HBB:
measton said:
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.
whyoung said:
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.
Tell me again why golden parachutes are allowable?
U.S. Chiefs Set for Big Payoffs Sell More Cheaply, Study Says
Investors in U.S. companies taken over between 1999 and 2007 “typically” lost $249 million on each transaction where chief executives had “overly generous” severance pay in place, according to a study published today.
Larger so-called golden parachutes encouraged some executives to compromise the interests of shareholders in mergers and acquisitions, the study found. Professor Eliezer Rich and Professor Ralph Walking, from the LeBow College of Business at Drexel University in Philadelphia, and Dr Anh Tranh, a lecturer Cass Business School in London, looked at 850 deals announced during the period.
“Our results show that as CEOs become more insulated from personal losses due to relatively larger parachutes, shareholders obtain less favorable acquisition terms,” Tranh said in an e-mailed statement. “This suggests that overly important parachutes encourage some self-serving CEOs to sacrifice premium for personal gain.”.
A 10 percent increase in the importance of the severance payoff relative to the merger pay package was linked to a 5 percent fall in the price paid by the acquirer, the research showed. That amounted to a shortfall of $249 million in deal value for the typical takeover, according to the statement.
The researchers didn’t identify any individual transactions where investors lost out.
To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.
“Tell me again why golden parachutes are allowable.”
They are allowable because these golden parachutes are doled out by public corporations which are owned by stockholders. The stockholders can either go along with the golden parachutes or, if they don’t like them, sell their stocks.
Not defending golden parachutes here, just saying doled out corporate golden parachutes are really not the the concern of those who are not stockholders.
Three words: Board of Directors.
Two words: crony capitalism.
One word: Indemnified!
The stockholders can either go along with the golden parachutes or, if they don’t like them, sell their stocks.
Almost all this stock is held by large investment houses (hedge funds, Fidelity and the like), do you really think they give a rat’s azz how J6P’s 401k performs? besides they’re running the same game…..
We have a winner.
Sorry Combo, but you are forced to own stocks in companies whose executives are fleecing them. Via public employee pension funds whose losses you have to make up as a taxpayer.
…or your 401 and even your local government!
Golden Parachutes are just another amplifier of moral hazard.
CEO is encouraged to gamble recklessly as if they win they win big if they loose they win big. The worse thing for the ceo is to run a stable growing company.
They might fire the engineering and advertising dept, do away with training employees. Earnings go through the roof for a few years. He sells his options. Then there is a collapse and he is fired with a massive Golden parachute.
Exactly. Heads I win, tails I win.
You don’t NEED intelligence under those conditions.
If you’re getting an opportunity to write the rules, you should definitely include a “heads I win, tails I win” result.
(Hwy’s headed to the beach today to STUDY the relationship between Last night’s huge full moon and it’s effect on reveling strange critters that live near the tide-shore interface. After reading this article perhaps, maybe, possibly Hwy can find time away from these “scientific observations” to help Mr. Cole show the true real life “mechanical difficulty” Bugs & Daffy have when they say their going to dig ALL the way to China! Post Note: The Balboa Saloon with the billiards/air hockey table and large screen TV showing the Celtics game may be risking over-indulgence. Perhaps, maybe, possibly… but as the saying goes: Nothing ventured, nothing lost!)
“Hey! cut with the negative waves Kelly, it’s gonna be a mother beautiful experiment, this roaming about in 8 minutes of tossed sunlight!”
(Hwy puts on his “Happy Camper” “Hey! Snap out of it!” t-shirt…)
The Key to Happiness: A Taboo for Adults?:
Joe Robinson / author: ‘Don’t Miss Your Life’ / Huffington Post
It’s a vision problem that no laser surgery can cure, a hyperopia that keeps us from seeing the central source of happiness right next to us. That problem is called adulthood. Those who are afflicted with this condition have trouble focusing on nearby objects of amusement and the realm that delivers the most enjoyment per square inch: play. Adults are oblivious to what they knew as kids — that play is where you live.
When you’re stressed, the brain’s activated emotional hub, the amygdala, suppresses positive mood, fueling a self-perpetuating cycle of negativity. Play can break you out of that straitjacket. It also cut through stagnation at the office. Studies show that playfulness can increase performance on the job and stoke creativity by breaking up the mental set that keeps us stuck. It resets the brain.
Play isn’t a character defect; it’s the builder of character, developing persistence, competence, mastery and social skills that take us beyond perceived limitations. It was there in the faces and confidence of stunt-kite fliers, salsa dancers and badminton enthusiasts I met along the road to my new book on the power of participant experience, “Don’t Miss Your Life.” Everyone I met had dramatically upgraded self-esteem and a sense of self anchored by something that’s supposed to be worthless.
Anthropologist Gregory Bateson believed that the fixation on making everything productive and rational cuts us off from the world of the spontaneous that is home to real knowledge. Wisdom, Bateson believed, is to be found in the realms outside intentionality, in the inner reaches of art, expression and religion. “The whole culture is suffering from overconscious intentionality, overseriousness, overemphasis on productivity and work,” psychologist and cultural explorer Bradford Keeney told me. “We’ve forgotten that the whole picture requires a dance between leisure and work.”
“That problem is called adulthood.”
“Assuredly, I say to you, unless you are converted and become as little children, you will by no means enter the kingdom of heaven.” - Matthew 18:3.
Nice post Hwy………
The lords of the castle don’t like the serfs to have fun. They might start realize what a raw deal they’re getting.
Met a chap on a Tampa to Phoenix flight yesterday. He and his wife have a Paradise Valley house which sounds great from the description. Also a house in Sarasota. I reckon they are retired.
I should have asked him why own two houses? Why not just rent a luxury place for a couple of months at high season? I did not run the math, but I still think he would have less worries about his property if he rents one of those places, furnished!
I want an all year ocean view home on the left coast or a Scottsdale house north of Frank loyd Wright Blvd with a city view, and then rent a furnished Flagstaff cabin from June to October. If I had an all year ocean view home in Big Sur, I would not really feel a need to get away from the climate.
My point is that material things burden you. You have more worries, maintenance, if you have more things. It is far better to rent luxury than own it. I tend to rent low end cars when driving to work to avoid arousing suspicion among the wage slaves that Iam making a lot of money. So I am upgrading my flying experience these days. And lodging.
Side note: since NY has a ten year inventory, should’t it’s lofts be cheap to rent?
“My point is that material things burden you.”
IMHO material things can exist to serve you or you can exist to serve them. And the choice is yours to make.
I tend to rent low end cars when driving to work to avoid arousing suspicion among the wage slaves that I am making a lot of money.
Psst: Bill, …they know.
“I tend to rent low end cars when driving to work to avoid arousing suspicion among the wage slaves that Iam making a lot of money.”
Bill…. you’ve outdone yourself once again. You’ve deluded yourself to such depths that you deny your own wage slavery. You’re on the clock Bill. You don’t “make alot of money”.
The importance of Bill’s comment is making a lot of money *compared to everyone else*. It’s a safety/perception thing.
Of course, you’re right, too, Exeter, that probably nobody on this board “makes a lot of money.”
He makes more than enough with the skill he brings to the table.
Pay attention. I didn’t say he didn’t make “more than enough”. I said he’s on the clock and anyone on the clock doesn’t “make alot of money”. Besides, unless you’re another one of his usernames, you don’t know.
Maybe I don’t make a lot of money relative to you. But you don’t really know how much I make. I reckon you were born with a gold spoon in your mouth, judging from your elitist slant to your posts.
Relative to a Manhattan resident, I don’t make “a lot of” money.
It’s all relative. I do know I make double what I would be making if I was working at that same job as a direct hire that I left in 2000. And I figure I’d be at 50% higher income now from pay raises if I stayed at that Fortune 500 company.
But Exreter you are so elitist that you claim you know how much I make. You are so deluded because you are blinded from your blind elitisim.
Exe doesn’t even count you if you are not amongst the top 2%.
There’s a reason for that. Because it’s those 2% that run your life.
No one runs my life. Sorry that you have that mentality that someone else enslaves you. Better pay a visit to the library and pick up that copy of “How I Found Freedom in an Unfree World.”
Oh they run you’re life Billy. Every last minute of it. You’ll figure it out some day. All wage slaves have their epiphany and you will too.
You’re a wage slave Billy. Just like everyone else.
I think that exeter’s point is that anyone who HAS to get up and go to work in the morning, regardless of how fat hir/her pacheck is, is not “rich”, and is merely a wage slave, perhaps one with some money salted away or a fancy car, but still a wage slave.
That you are doing better than most middle class folks is good and dandy, FWIW I suspect that most folks on this blog are doing better than average. But that doesn’t make us “wealthy”, not by any stretch of the imagination.
A better definition of a wage slave is someone who’s major component of income is wages and not dividends adn stock options.
A wage slave doesn’t get teh 10-15% tax rate
doesn’t get a golden parachute
takes a greater hit from inflation
has benefited little from bailouts
faces AMT as their wages rise
faces higher unemployment
Doctors lawyers scientists engineers programers middle management sales are all wage slaves they are no different than the assembly line workers who have had their jobs outsourced. Many are just too dumb to know it.
And some of us choose to live the best we can in spite of the knowledge that the game is rigged against us.
I don’t have to be anywhere at any particular time, and I’m working on my own product, not working for someone else.
So am I rich? Maybe I am, and don’t know it.
Bill, when they see what good shape you’re in, they’ll know you’re rich. You need to start eating doughnuts and fried chicken, develop a paunch, and ‘blend in’. For your own safety.
I should have stayed at that Extended Stay and drank a case of beer along with my 20-something year old neighbors. Then I could develop a paunch fast - become like Val Kilmer.
As to the ideal of Bill being a wage slave, the old idea was those who weren’t wage slaves are people with enough socked away to live off the interest.
Given current interest rates, isn’t everyone a wage slave?
Absolutely not
Take a look at Wall Street / Hedge Fund/ CEO pay it’s through the roof and taxed at a lower effective rate than a wage slave. They can reprice options, and get bailouts. If you know or control the FED you get to invest prior to the FED fixing prices thus you make a mint.
As to the ideal of Bill being a wage slave, the old idea was those who weren’t wage slaves are people with enough socked away to live off the interest.
Given current interest rates, isn’t everyone a wage slave?
Your definition is too restrictive. It suffices to be able to live off the interest and/or principal as long as there’s essentially zero risk of depleting it during your lifetime. This is easily possible even in a negative real interest rate environment (i.e. now) as long as you have a big enough balance.
“My point is that material things burden you.”
Within the last six weeks I’ve purchased orthodontic braces and a buffet r13 clarinet for my daughter. That easily could have been a long skydiving vacation in a warm place with scantily clad ladies. When the weather permits I commute to work on a touring bicycle, yet I must provide a safe family vehicle that costs north of $30k and rests idle in the garage most of the time. There’s no monk lifestyle when you must provide for a family, and the need for material things increases exponentially.
as the kids get older the toys get more expensive.
For us, trying to make do on 20k/yr family income, being underemployed as we are….is not as fun as raising the kids on equity funny money. We actually got to be for the most part stay home mom AND dad for a whole decade; which was good in a way that $$ cant buy; but $$ did allow us the opportunity to home school or travel or whatever we wanted with our precious cargo. One bubble year we cashed in on 300k in housing gains. Why teach for 30k/yr when a decade worth of dough was there for the taking nearly tax free? Well I guess cuz the easy money is now gone and a gaping resume hole makes getting a job harder.
Now all we got is a bunch of stuff (including one last paid off home that I rent out while waiting for and living with my family in my wife’s soon to be foreclosure) and low income. Why the bank has postponed the sale 5 times so far is beyond us; just take it already! Her condo appraised at 440k in 2007, now the units are selling if at all for 200k. So in 2005 they were 200k, in 2007 they were 400k, in 2011 they are again at 200k and still falling. Why we bought at the top is probably psychologically same as investing in the stock market after a run up.
We are going to have to adapt to the new paradigm somehow. I need to get a masters degree to continue teaching in OR, as it is their state law(got my license in 2003; it expires without a masters degree in 2013). Thinking of specializing in Special Ed or ESOL so I have a good chance of landing a job with bennies.
My wife wants to go to community college to get some kind of valuable degree in either ultrasound tech or dental hygenist. Or she could luck out and get the few 6 hour positions as an Ed Assistant (she is a 3.5 hr “nutritions services site manager”; euphemism for lunch lady). With bennies it would be an alright gig for someone with no college.
“So I am upgrading my flying experience these days. And lodging.”
Good for you, Bill! It’s good that you treat yourself once in a while. You can’t live your whole life in the future. Some of your comments have made it seem as if you are so busy planning for the future that you are not living at all for today, which is no healthier than partying all the time.
The year of hope 2.0
United States
Nov 22nd 2010 | from The World In 2011 PRINT EDITION
Change Americans can believe in?
In America, 2008 was all about “hope”: crossing our fingers and electing leaders who we thought would enact the change we desperately needed. Gazing into my crystal ball, I predict 2011 is going to be all about hope 2.0, the realisation that our system is too broken to be fixed by politicians operating from within it—and that real change will come only when enough people outside Washington demand it and make it politically risky to stick to the status quo.
America is facing conditions that are highly volatile. On the right, rage is all the rage. Progressives, meanwhile, are awash in disappointment, finding it hard to come to terms with the fact that this president is just not that into them. And America’s middle class is facing a very uncertain future. Wall Street may have its casino up and running again, but Main Street shows no signs of bouncing back anytime soon. Awful statistics—on bankruptcy, unemployment, home foreclosures—flash warnings that the middle class is under assault, and that America risks turning into a third-world nation.
I know that’s a jarring phrase, but the evidence is everywhere you look, dotting the American landscape. The state of Hawaii has gone beyond laying off teachers and has begun laying off students, closing its public schools on 17 Fridays during the past school year. In the Atlanta suburb of Clayton County, the entire bus system was shut down. Colorado Springs turned off a third of its 24,000 streetlights. Camden, New Jersey, is on the verge of permanently shuttering all of its libraries. Some cash‑strapped places are giving up on the idea of maintaining paved roads altogether, allowing them instead to return to gravel or to nature. But America’s leaders seem unable, or just unwilling, to do anything about it. Job creation has been put on the back burner, as all of Washington is afflicted with deficit fever.
That’s why 2011 will be the year of hope 2.0. Those who voted for transformation will finally grasp that, with the Washington game more rigged than ever and the ability of special interests to thwart meaningful change stronger than ever, Americans can’t simply sit back and wait for the people they elected to make things better. That is a recipe for overwhelming frustration. And this realisation will also come to those who may not have voted for transformation but, looking all around them, understand that something needs to be done to stop America’s slide into third-world status. Hope 2.0 is not a partisan platform. Indeed, it transcends the right v left divide to which the American media want to reduce every story.
…
Like they say, hope in one hand and sh@t in the other.There is no hope besides the printing press right now.
I believe the saying goes, “You can wish in this hand and sh!t in the other, then see which one fills up the fastest.”
What a load of cr@p? Tell us Arianna what you propose?
Weren’t you the same person who sponsored “Government Works” rally few months ago?
Arianna Huffington has the distinction of having been full of crap on both ends of the political spectrum over the past 20 years or so. At least she is consistent in that regard.
We have not put a man on the moon in 35 years.
We do not a high speed rail network.
We have the weakest high speed Internet of all the industrialized nations.
The worst public health care system.
The worst public school system.
The weakest corporate and consumer protection laws.
This not something that happened overnight. It’s been ongoing for 30 years.
That’s a long time.
It really hurts my eyes to watch the fleecing of this Country by the
Raiders and Traitors and the USA taken over by Wall Street Traders .
The country was the most productive when it didn’t turn around Wall Streets idea of production and money generation .
Everything possible has been done to keep Wall Street Casinos operative as well as the corrupted Corporation structure. The breakdown of Government workers and services is the last attack
on structures build for the service to the Majority .
For sale today
18640 Lochpoint Ct Jupiter, FL 33458
$254,900Price Reduced
4 Bed 4 Bath 3,147 Sq Ft
———————————————————————–
Oct-2010 24115/1863 $260,100 CERT OF TITLE
HSBC MORTGAGE SERVICES INC
Previous Owner KVARNBERG LEE Purchase Price And Date
Sep-1997 10018/1385 $166,500 WARRANTY DEED
———————————————————————–Game on!
Type: MTG
Date/Time: 6/23/2003 14:53:58
CFN: 20030369295
Book Type: O
Book/Page: 15419/293
Pages: 22
Consideration: $307,500.00
Party 1: KVARNBERG LEE
KVARNBERG MARIA ELENA
Party 2: WASHINGTON MUTUAL BANK FA
Legal: SHORES 3 L249 L
Type: MTG
Date/Time: 8/19/2003 10:11:45
CFN: 20030488392
Book Type: O
Book/Page: 15707/1874
Pages: 6
Consideration: $61,500.00
Party 1: KVARNBERG LEE
KVARNBERG MARIA ELENA
Party 2: UNION PLANTERS BANK NA
Legal: SHORES 3 L249 L
Type: MTG
Date/Time: 5/23/2005 10:52:51
CFN: 20050313750
Book Type: O
Book/Page: 18624/709
Pages: 25
Consideration: $432,000.00
Party 1: KVARNBERG LEE
KVARNBERG MARIA ELENA
Party 2: REGENT MORTGAGE FUNDING
Legal: SHORES 3 L249 L
Type: MTG
Date/Time: 7/22/2002 08:37:58
CFN: 20020374430
Book Type: O
Book/Page: 13941/1379
Pages: 23
Consideration: $240,000.00
Party 1: KVARNBERG LEE
KVARNBERG MARIA ELENA
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
GREENPOINT MORTGAGE FUNDING INC
Legal: SHORES 3 L249 L
Type: MTG
Date/Time: 7/27/2006 10:02:54
CFN: 20060436463
Book Type: O
Book/Page: 20650/1228
Pages: 7
Consideration: $80,000.00
Party 1: KVARNBERG LEE
KVARNBERG MARIA ELENA
Party 2: CITIBANK FEDERAL SAVINGS BANK
———————————————————————–
Game over.
Type: JUD
Date/Time: 6/2/2010 11:20:24
CFN: 20100201880
Book Type: O
Book/Page: 23875/1997
Pages: 7
Consideration: $0.00
Party 1: HSBC MORTGAGE SERVICES INC
Party 2: SHORES OF JUPITER HOME OWNERS ASSOCIATION INC
KVARNBERG MARIE ELENA
KVARNBERG LEE
Short sales spike across S. Florida in 2010
By Paul Owers
Sun Sentinel
Posted: 2:42 p.m. Saturday, Jan. 15, 2011
The number of homeowners completing short sales rose sharply across South Florida in 2010, following the release of government guidelines designed to simplify the process.
But real estate agents and housing analysts say other factors besides the new rules have largely driven these transactions over the past year.
Even without the effect of moratoriums, lenders have warmed up to short sales, realizing they can dispose of properties more quickly and make $30,000 to $50,000 more per sale than they could by foreclosing on a home, said Peter Zalewski, principal at CondoVultures.com, a Bal Harbour-based consulting firm.
http://www.news-press.com/article/20110119/RE/101190387/1076/Banks-drop-foreclosures-in-Southwest-Florida
This could be a significant development. Banks are opting not to pursue hundreds of foreclosure actions because they may not be able to prove in court that they actually hold the mortgage. I wonder how widespread this is, and if it could cause another significant logjam in foreclosures nationally.
One hates to be hyperbolic, but…HOLY COW!!! These banks look like they’re admitting they don’t actually hold these mortgages! From the article:
“Green said he hasn’t calculated exactly how many foreclosures are being dismissed.
But eight voluntary dismissals were filed Tuesday alone by seven different banks including Bank of America, one of the largest filers of foreclosures in this area. Bank of America did not reply to a request for comment Tuesday.
At one court hearing alone, attorney Kevin Jursinski said, one of his associates watched as “50 in a row” were withdrawn.
“Can they re-litigate?” Fort Myers-based attorney Carmen Dellutri asked. “I don’t think so.”
Most of the mortgages in dispute were sold to Wall Street and sold in bundles to investors as mortgage-backed securities, he said. But so many mistakes were made in the process it’s unlikely the banks can win those cases.
1:10 A.M. — Banks in recent weeks have been
dropping hundreds of their Southwest Florida
foreclosure lawsuits instead of facing defendants at
trial, according to local attorneys and court records.
Opinions varied sharply on whether that means
banks are just taking a breather before refiling with
stronger evidence - or giving up for good on
hopelessly flawed cases.
Some foreclosures at large law firms were never
actually read by the attorneys who filed them here
and elsewhere, and some of the mortgages that
ended up in mortgage-backed securities sold to
investors were never legally transferred by the
banks, defense attorneys have alleged.
“We think they’re going to come back and refile,” Lee
County Clerk of Court Charlie Green said.
That’s an expensive proposition, he said, noting
foreclosure suits carry a hefty filing fee: about
$1,900 for a $250,000 house, for example.
What happens is lawyers for the banks are asking
judges to dismiss their cases, which is “very much
out of the ordinary,” Green said. “You don’t see
cases dismissed without prejudice that often.”
Foreclosures were rare in Southwest Florida until
the housing market crashed at the end of 2005,
bringing on waves of mortgage defaults by
investors and homeowners.
Green said he hasn’t calculated exactly how many
foreclosures are being dismissed.
This is worse than the S&L disaster. At least then they knew who held the mortgage.
I always thought there was a major fraud cover up and a attempt
to avoid judicial process with these bail outs .BB making loans against junk paper . A avoidance of this rating of securities
fraud and all the attempts to avoid due process . Biggest obstruction of
Justice attempts I have every seen . I always wondered why they
were avoiding resolving this debacle by Standing Law . We resolve things in America by standing law and the rule of law .
Would AIG even have to pay on securities that were flawed and mis-rated to say the least .
I want all the money back from these Obstruction of Justice con artist from Wall Street that guided Congress/Presidents/Feds down a slippery slope .The fact that Hank Paulson wanted immunity
for anything he did is like saying protect me from being the guy
that does the dirty work . Congress approved all this giving money without proof of claims ,no meaningful investigations ,just the words of a x-wall street guy from Goldman’s ,Hank Paulson,one of the most conflict of interest guys who should of
step down for conflict of interest . Nothing ever made sense .
Bail outs to banks when they weren’t holding the securities ,but
were just the servicer . Nothing ever made sense to me so the
only conclusion you can draw is bail outs to transfer liability to the taxpayers .
Still more! Free houses for everybody! I told you guys this robo-signing crap was the tip of the iceberg! (But you laughed….and laughed….*sniff*… fortunately I held up nobly, I like to think.
)
“April Charney, a Jacksonville-area legal aid attorney who’s an expert on foreclosure issues, said for the most part banks have no way to prosecute their cases because the mortgages in mortgage-backed securities were never actually legally transferred to the trusts.
She said much of the recent wave of voluntary dismissals may be a result of a Massachusetts Supreme Court ruling Jan. 7 upholding a judge’s decision two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were improperly transferred into two mortgage-backed trusts.
Now, she said, many mortgages simply aren’t fixable. “You can’t go back and securitize. You run a red light, you can’t go back and unrun it.”
O what glory deregulation hath wrought….
Is it a surprise to you that the 30 year experiment with a failed economic ideology called supply side economics ended in failure?
I told you guys this robo-signing crap was the tip of the iceberg! (But you laughed…)
Alpha, I wasn’t among the scoffers. Despite the pervasion corruption of our justice system and the eagerness of the Fed, Treasury, and Fannie Mac/Freddie Mae to shift liabilities from TBTF banks and mortgage servicers onto taxpayers, the sheer magnitude of the fraud is too big to paper over. When you threw the rare honest judge and DA into the equation, not to mention juries disgusted by banker rapaciousness, there is a clear potential that banks will finally be held accountable for MERS, crap mortgages, and the systemic fraud they’ve engaged in for years. Plus, some of the “investors” who were left holding the bag on the toxic-waste MBS bundles are starting to sue the rating agencies and other villains of the piece, which should force costly put-backs.
Right now I wouldn’t touch a foreclosure with a ten-foot pole, and I’m guessing I’m not the only one.
The Keynesian frauds need to be ridden out of every town in America on a rail.
Exeter, no surprise at all. Thanks for keeping it front and center.
I have started to wonder at what point do a lot of people who are struggling to pay their mortgage see all of this and say screw it. My neighbor hasn`t payed in years and he is still there, and he tells me he doesn`t have to pay because they don`t know who he owes the money to. It seems like that could start a big azz snowball going down a hill that would be awfully tough to stop.
“I have started to wonder at what point do a lot of people who are struggling to pay their mortgage see all of this and say screw it.”
And what about the responsible folks who are about to pay off their mortgage? How do they prove it’s fully paid and the house is theirs if no one can trace who in securitzation-land holds the note?
“And what about the responsible folks who are about to pay off their mortgage?”
I’d say they are bagholders, relative to deadbeats who stopped paying their mortgages but who will get to keep their house because the lender doesn’t have proper paperwork to claim ownership. Renters who make their monthly payments are also bagholders, relative to myriad FBs who stopped making payment long ago but still live rent free due to lenders’ inability or unwillingness to evict. Generally speaking, responsible owners and renters are on the ’shafted’ side of bailout transfer payments.
All said, being responsible these days is a fool’s errand.
“All said, being responsible these days is a fool’s errand.”
Sheila Bair Wants to Protect Foreclosure Victims
By Alec Foege | Posted Jan 20th 2011 4:35PM
Sheila Bair wants to help rescue the nation’s homeowners from the foreclosure disaster. On Wednesday, the chairman of the Federal Deposit Insurance Corp. (FDIC) recommended the formation of a foreclosure claims commission not unlike the one created to aid victims of the oil spill in the Gulf of Mexico in 2010. Bair was speaking at the Mortgage Bankers Association conference in Washington on the future of mortgage servicing when she made the proposal. “The mortgage servicing industry is fundamentally flawed and in desperate need of reform,” she said, explaining that homeowners needed protection from improper foreclosures
alpha-sloth
“I told you guys this robo-signing crap was the tip of the iceberg!”
Sheila Bair Wants to Protect Foreclosure Victims
By Alec Foege(RSS)
Jan 20th 2011 4:35PM
Sheila Bair wants to help rescue the nation’s homeowners from the foreclosure disaster. On Wednesday, the chairman of the Federal Deposit Insurance Corp. (FDIC) recommended the formation of a foreclosure claims commission not unlike the one created to aid victims of the oil spill in the Gulf of Mexico in 2010. Bair was speaking at the Mortgage Bankers Association conference in Washington on the future of mortgage servicing when she made the proposal. “The mortgage servicing industry is fundamentally flawed and in desperate need of reform,” she said, explaining that homeowners needed protection from improper foreclosures.
http://realestate.aol.com/blog/tag/sheila+bair/ - 45k -
alpha-sloth …I also took you serious when you found this to be a big deal ,but I keep thinking they will come up with something to
bail out the Banks /Investment houses .
But this legal snag goes back to why I think all the cover up’s and
bail-outs to begin with . 5years ago they had lawyers making these assertions about chain of title ,so how could they not of known that this would be a big deal legally . It was really absurd from day one really the way Hank Paulson was talking about buying toxic mortgages . He should of said buying loans not secured by anything
Your favorite products - now 20% smaller
http://tinyurl.com/2awvbds
It’s funny how they try and make the packaging look the same or bigger when the product goes down.Dreyers pissed me off when they shrunk the amount of ice cream in the carton.
I have mixed feelings about smaller packages of ice cream. On the one hand, you are getting less product for the money. On the other hand, you’re getting fewer calories
.
A carton of ice cream doesn’t last very long once it enters my house.
“It’s funny how they try and make the packaging look the same or bigger when the product goes down.”
It’s called the blowfish phenomenon.
I thought you were going to say “Speedo Phenomenon”.
But not 20% cheaper.
B…b…but Zimbabwe Ben assured us his creation of trillions of dollars out of thin air to cover the bad bets of his Wall Street masters wouldn’t be inflationary.
remember back in the housing bubble they were also saying there was no inflation.these people have no clue.
I watched home prices more than double in 4 years in my area (S. FL) all the while hearing from the Fed that inflation was 2-3% (tame, nothing to worry about).
I’m sorry, but any measure of inflation that doesn’t “catch” house prices DOUBLING is worthless. Housing is the largest expense in almost everyone’s monthly budget, doubling it (for some people) would take housing to more than 100% of their income. How on earth can any reasonable inflation measurement somehow decide that housing is going to be represented by “owner’s equiv rent” and then, at the same time, tell us with a straight face that inflation was tame?
Also, in case anyone doesn’t remember, when housing was going up like crazy (or nearing the top) oil was also going through the roof.
Somehow, both of those things aren’t inflationary in the Fed’s magic “everything is fine” formula.
We had a few people around here who insisted that inflation above the official numbers is nothing but a fantasy.
” It is far better to rent luxury than own it.”
Luxury is in the eye of the beholder!
Any of you remember crisp and cole?
http://www.kget.com/news/local/story/Former-realtors-Carl-Cole-David-Crisp-arrested/XTdE_-nziEKuyERIUXccjA.cspx
That is AWESOME. In the Big House they’ll be known as Kneeler & Squealer.
Many here have complained that there isn’t enough perp walks.
As I’ve said, there are so many guilty, it’s going to take a long time to work through the backlog.
What I want to see isn’t small fry like Cole & Crispy, but the real guilty parties: Greenspan, Dodd, Frank, Bernanke, Dimon, Blankfein, etc.
Not going to ever happen. They are the modern aristocracy and the aristocracy ARE the law.
Most people don’t seem to realize we’re back to the 19th century. 100 years of social progress are gone and there are plenty of dangerous idiots who want all the social safeguards dismantled.
OK, the Master Plan of how to solve the Crimes of the Century
, and transfer the liability ,without the true culprits being arrested ,was a plan that created the most stupid bail out plans and waste of money .It’s like a big black hole sucking up the air of America .
I think the culprits need to be closed down , I mean closed down
before they take every last penny from every state ,every person
in America ,and leave America to rot . Get all the money back and more and start from the beginning . Really it comes down to the culprits life means death to everyone else .
State bankruptcy bill to be introduced on the hill next month. Watch them cap or renege on pensions next using it. All those people counting on crazy benefits and good pension for life will be in for a rude awakening. Hell…next it will be the Feds capping pensions come 2020.
http://www.reuters.com/article/idUSTRE70K6PI20110121
“Watch them cap or renege on pensions next using it.”
My suspicious side suspects this will turn into another way for Megabank, Inc to steal from other peoples’ money. It would be interesting to see how many of the muni bonds, whose value would go up if a bankruptcy proceeding put bond holders in the front of the line of creditors, are currently in the hands of Wall Street Megabanks armed with Uncle Ben’s bailout bucks, financed at zero percent interest, that enables them to snap up devalued assets at fire sale prices…
http://finance.yahoo.com/q/cq?d=v1&s=agg,%20bab,%20babs,%20babz,%20bbk,%20cmf,dia,%20ief,%20mln,%20mub,%20nyf,%20shy,%20tfi,%20vrd
I have the same suspicion. How much of Helicopter Ben’s $600 billion QE II money, pumped directly to the TBTF banks in the form of near-daily POMO free money liquidit injections, is being allocated for just this scenario? And if that bet goes wrong, well, that’s why we have taxpayers.
Hell hath no fury like a public sector union member once the Wal Street-owned Democratic Party joins their Wall Street owned GOP counterparts in throwing these lifelong loyalists under the bus.
No RA, if they mess with the pensions, it won’t be those who get the gravy benefits, but the rank and file who get the plain-jane pensions.
Some guy in Sacramento has come up with a novel approach to prevent the next-door FBs from renting out their house: fly the Nazi flag!
http://www.sacbee.com/2011/01/22/3342765/swastika.html
“A Nazi flag hangs in the window of a midtown Sacramento home whose owner, Joe Ongaro, says he hopes to discourage anyone from renting the house next door”
Hey Joe, that probably will discourage anyone from renting the house next door. EXCEPT FOR A NAZI!
He could rent his house to a nutcase and give the nutcase a break on the rent in return for a promise to make the Nazi flag guy’s life “interesting”.
The advantage in this situation goes to the one who has the house to rent. He has options that the Nazi flag guy doesn’t have.
What has a more adverse effect on neighboring property values: Renting out a home or flying a Nazi flag?
Good point. Of course, the inevitable foreclosure will render the point moot.
Major reforms needed, says banking inquiry head
BBC
In a speech in London, Sir John Vickers said plans to separate bank trading and retail operations were being looked at.
These may require banks to put their investment arms into separate entities that could be allowed to collapse.
Sir John stressed that no final decisions had yet been made by his Independent Commission on Banking.
In his speech at the London Business School, Sir John said the failure of banks to efficiently manage risks had been “spectacular”.
He said the shock from the fall in property prices “should not have caused havoc on anything like the scale experienced”.
Have any of you got a notice of a 10/month charge on your chase bank account? I am tired of grabbing my ankles for jamie dimon.Like they dont make enough money on all the interest they charge for home loans.
Could you elaborate a little more? I haven’t seen or heard anything about that.
got a letter saying there will be a 10 dollar / month service charge for my “free checking account”. I think it starts in february.
leave
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8275060/Spain-to-rescue-its-banks.html
Spain, on the model of the U.S., plans to “rescue” its banks by shifting their massive liabilities created during that country’s housing bubble, onto Spanish taxpayers, the EU, and the IMF (which gets most of its funding from U.S. taxpayers, so congratulations, we get yet another opportunity to pay for the sins of the banksters).
As always, the comments on these Telegraph articles are priceless, and say far more, anecdotally, about the true state of the Spanish economy (with one million vacant houses, due to massive overbuilding and developer excess, and mounting numbers of walkaways) than does the article itself. For example:
“Having spent years in ‘the real Spain, often popping into our local caja (Bancaja) I saw how they turned from cautious outfits into willing agents of a grotesque lending boom. Even ten years ago I computed my wife’s colleagues were getting mortgages 10 times their salaries to buy in Madrid. We’re always told Spain had good central bank management - but I saw little evidence of it. The particular Spanish delusion was to lend young people money for homes secured on their parents’ own houses and say it was all safe lending. yet these same people were runnig to their parents by the third week of each month because they had run out of cash to live on. My own experience convinces me Spanish banking is totally beyond repair. Only its strong family structure will prevent social breakdown when the country finally faces the music.”
When it’s “heads I win, tails I win.” what need is there for caution or reason?
Are Illinois, NY, California and other states with huge budget holes too-big-to-fail or aren’t they? I guess we will soon learn the answer.
State bankruptcy bill imminent, Gingrich says
* Big states spurn bankruptcy bill
Fri, Jan 21 2011
By Lisa Lambert
WASHINGTON | Fri Jan 21, 2011 5:57pm EST
WASHINGTON (Reuters) - Legislation that would allow U.S. states to file for bankruptcy will likely be introduced in Congress within the next month, Newt Gingrich, the former speaker of the House of Representatives and a powerful Republican party figure, told Reuters on Friday.
Although Gingrich, considered responsible for the “Republican Revolution” of the 1990’s, is no longer in office, he has deep ties to Congress and is frequently named as a potential presidential contender in 2012.
For months he has championed letting states file for bankruptcy in order to handle their long-term budget problems despite resistance from states and investors in the $2.8 trillion municipal bond market.
“We’re faced with the danger that the states are going to try to show up and say to Washington: You have to give us money,” Gingrich said. “And I think we have to have an alternative that allows us to say no.”
…
“letting states file for bankruptcy”
Not “forcing” them. If a state chooses not to discharge its debts through bankruptcy, so be it.
If a state declared bankruptcy, who would get left holding the bag?
For instance, would current pensioners have their benefits reduced, or only current workers? And would current workers only see reductions to the future rate of pension accrual, or would their accrued benefits be reduced as well? How would the distribution of pain be spread over pensioners, bondholders, current government employees, state programs and other stake holders?
One thing is for certain: The bagholder identification process will continue until it ends.
A Path Is Sought for States to Escape Their Debt Burdens
By MARY WILLIAMS WALSH
Published: January 20, 2011
Policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
Senator John Cornyn asked this month whether Congress should consider establishing a bankruptcy procedure for states.
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.
But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.
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.
“All of a sudden, there’s a whole new risk factor,” said Paul S. Maco, a partner at the firm Vinson & Elkins who was head of the Securities and Exchange Commission’s Office of Municipal Securities during the Clinton administration.
…
IN reality this is just another step concentrating power in the US. If states go bankrupt there goes states financing for state AG sueing big corporations or the FED gov, state regulation will be gutted. States will be forced to sell buildings parks highways to corporate America for pennies on the dollar. Pulbic unions will be destroyed. Unions may demand higher wages but they also prevent state functions from being sold to GS, Hedgefunds etc which in my book is far worse particularly for the state. Even if the total costs is less the money is removed from the state and concentrated thus making everyone poorer.
But the bankers will get their bonuses. That’s what’s important here.
“States will be forced to sell buildings parks highways to corporate America for pennies on the dollar.”
Now that the word is out on how the Fed’s printing press money was used to make the banksters whole while screwing over the rest of America, I am more on board with Ron Paul’s proposal to End the Fed than I was previously. I had no idea that the playing field between Wall Street and Main Street would be drastically and illegally tilted by the unholy alliance between Wall Street and the Fed before I saw it play out in the Fall of 2008, as confirmed by recent news that the magnitude of the Fed’s unannounced bailouts far exceeded the amounts Congress authorized by the TARP.
We could sure use a man like Andrew Jackson again at this point in U.S. history!
“If a state declared bankruptcy, who would get left holding the bag?”
Those on welfare will always rank higher than a worker.
That’s true. American politics these days is all about slaughtering geese who lay golden eggs in order to feed the hungry.
I thought it was about slaughtering geese that lay golden eggs to enrich the overlords?? Welfare is just to keep the masses from rioting before all the wealth is stolen.
“Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors.”
Eeny, meeny, miny, moe. . .retirees or investors. “Bring out the Gimp. Gimp’s sleeping. Well, I guess you’re gonna have to go wake him up now, won’t you?”
I smell the potential for Republican-engineered pension theft in these state bankruptcy proposals being floated. Could they be construed as a means to transfer monies owed to state pensioners into the hands of wealthy municipal bondholders (e.g. members of the Megabank, Inc cartel that makes easy money loans they know will never be repaid), who would be in front of the line of creditors during the resolution phase of bankruptcy proceedings?
Needless to say, a share of the stolen pension funds would ultimately be recycled as Republican candidate campaign contributions. Pretty good pension theft scheme, neh?
Weighing In on State Bankruptcies
Why in the world would the bond holders be protected. I suspect many of them would take a hit too.
Did I impart too much significance to the Texas governor’s assurances?
…… and the conservative republican war on wager earners continues.
Whom, I’m sorry to say, deserve it.
Any group of people who give the very people more power who have been screwing them over for
yearsdecades, deserves what they get.It’s just damn shame it affects the rest of us.
Regarding autodebit (from the other day)… I am sure most you know what I am about to write, but if you have any form of autodebit, I would reconsider. When I was younger I worked for a few months in customer service for a wireless provider when data plans were new. Many customers misunderstood pricing and I regularly saw $10,000+ bills that CLEARED autodebit because dudes were surfing the web without data plans.
Needless to say that was unpleasant for all involved. Most tier 1 customer service reps have a $50/call cap on credits, so you can imagine how many escalations it took for these people to get their cash back, if at all.
“Regarding autodebit (from the other day)… I am sure most you know what I am about to write, but if you have any form of autodebit, I would reconsider.”
When WaMu went bust a co-worker’s automatic home loan payment got a bug; it took six months to correct everything with everyone since all his creditors triggered their Universal Default clauses too.
I will say it again because it can’t be said often enough: why in the hell would anyone give up control of their money?
Autodebit is stupid.
A friend of mine went through months of (additional) grief trying to close her deceased mother’s autodebit accounts. Since she didn’t have her mother’s passwords, she had no authority to access these accounts to close or change them. She was on the phone for hours explaining the situation to the utilities, phone and credit card companies, and sending out death certificates and proof of being executor of the estate. Yet another reason to avoid autodebit.
One thing seems certain as an outcome of this discussion of state bankruptcies: Muni bond yields will continue to rise until the issue is resolved.
Should States Be Allowed To Go Bankrupt?
As General Motors goes, so go the states? That is the question looming as policymakers try to figure out if it might be possible to let states go bankrupt in order to free themselves from crippling debts, reports the New York Times. States aren’t allowed to go bankrupt under federal law, but some advocates say a GM-style bailout might be the only way to save states like Illinois from slashing basic services. Pension funds for public workers place a particular strain on struggling states. State bankruptcy might allow a state to change its pension obligations, which has public worker unions very worried. “They are readying a massive assault on us,” said Charles Loveless, legislative director of the American federation of State, County, and Municipal Employees. “We’re taking this very seriously.”
…
One thing is for sure, if other states go bankrupt your state will have to — or face armageddon. Public services are about to be gutted to pay for debts and unfunded pension benefits run up by Generation Greed.
A state that walks away from some of those benefits might have public services in the future, and reasonable taxes. The non-bankrupt states would not have services but would have taxes. It’s a domino effect, with people and businesses fleeing to post bankrupt states.
I could see a bankruptcy judge wiping out all the retroactive pension enhancements of the past 15 years, cutting benefits back to what people were promised when hired, putting a max level on the benefits, and eliminating the higher benefits from pension spiking. And hosing bondholders.
“Public services are about to be gutted to pay for debts and unfunded pension benefits run up by Generation Greed.”
As someone who lost significant income due to a state which could not figure out how to properly manage its finances under a Republican governor who promised to fix the financial situation once and for all, and who pays close attention to the numerous potholes in the local roads which pose an ever present threat to seriously damage our cars, I can assure you that public services are already being gutted to pay for Generation Greed’s excesses and abysmal financial mismanagement.
Really, if I was one of those people I would be really worried to . Some of these people have set up long term obligations on what they thought they would be receiving . Just slashing at people ,especially the rank and file
who didn’t have some of the spikes of the higher level employees could be
a disaster to some of these people . Its easier said than done just to say
that they aren’t going to pay . You mostly hear about the highly spiked
pensions ,I’m more curious about the average employee pension . I know the medical benefits were usually really good with a lot of the Government workers . Again I say ,Health Care costs is a big factor in the pension problem .
Do you remember when the retired airline pilots got the tube steak?
If states are allowed to go bankrupt this would be extremely deflationary as a lot of money would go poof. You could count on another massive leg down in real estate and teh market.
Another possibility is that there is a plan to talk state muni’s into the toilet where banks and elite can purchase them adn then when teh FED bails out the states the munis will skyrocket. What is the likelyhood that democrats would allow a bill like this through congress or that the president would sign it. It seems very unlikely.
So what are the alternatives?
1. Greatly increase state income, sales, and other taxes.
2. Beg for a bailout from Uncle Sap.
3. ?
Given the Democrats’ track record on TARP and other mega-bailouts, plus their continuation of Bush-Cheny appointe Ben Bernanke, what delusion are you operating under when you say it’s “very unlikely” the Dems would “allow” a bill like this to fly through Congress? Hell, they’d be co-sponsors and accomplices all the way. You need to get over the obsolete notion that Dems stand up for the working man or Repubs stand for fiscal responsibility and small business. Both are Wall Street stooges and have been for years.
http://www.dailypaul.com/
For those who want REAL hope & change, here’s an alternative to the corrupt, Wall Street-owned Republicrats.
You need to remember that it was the Dems who tried to end tax breaks for offshoring jobs just last Sept and it was the Repubs who voted to keep it.
CAFRs
Learn it. Know it.
Low prices spur sales at Riviera high-rise
By Alexandra Clough Palm Beach Post Staff Writer
Posted: 7:42 p.m. Friday, Jan. 21, 2011
Four years ago, the Marina Grande condominium in Riviera Beach was among the first Palm Beach County condos to experience the buyers’ remorse crowd. As the market for flipping real estate died during early 2007, dozens of investors at Marina Grande scrambled to try to undo their pre-construction contracts.
Now Marina Grande is finding popularity with buyers who can’t resist snapping up the properties at discounted prices.
The sudden interest shows that people will buy condos - at the right price.
During the past three months, about 30 residences have been sold by the property’s owner, bringing the number of unsold units down from 349 when the property opened in early 2007 to only 56, said Rick Cortez, a Marina Grande sales agent.
Some units are selling in the $200,000 to $300,000 range, or around $140 to $170 per square foot. During the boom, some units sold for more than twice that amount.
Buyers can get units for even less money by scooping up short-sale properties. Kevin Dickenson, of Prudential Florida Realty in Palm Beach Gardens, said he has buyers who are picking up deals for $90 to $100 per square foot for units with ocean views. One investor owns five, “and has 11 more under contract,” Dickenson said.
Prices tell the story: One of the units originally sold for $674,500. Dickenson’s investor bought it for $215,000, or about $100 per square foot.
Once purchased, units are rented out immediately. Dickenson said one rents for a whopping $6,000 a month during the winter season.
White Hot in Canada
http://www.cbc.ca/video/#/News/Money/1239849460/ID=1758092890
No mention of the local wages?
Unreal . A piece of junk for that price . A lady makes 350k flipping a house after owning it for 2 week . A house gets 30 offers and goes over 500k over list price . Canada your nuts .
Ok ,I lost the article ,but they say Canada doesn’t have a foreclosure
problem because of the following :
(1) They don’t have a secondary market ,so banks carry the loans
themselves so the underwriting is good .
(2) They make loans for 25 years and change the interest rate every
5 years according to market so people pay off their loans faster also because they don’t give the mortgage tax break .
(3) This article claimed they had under a 1% foreclosure rate .
All I can say is they must be making some pretty good income in
Canada .
And Ill bet 99% chance she takes her winnings and buys another house….
Even at $2000mo rent thats 15 or more years of free rent
Yup, pride with an extra helping of greed.
http://www.dailypaul.com/node/154969
Ron Paul finishes 2nd in New Hampshire straw poll behind RINO Mitt Romney, but well ahead of celebrated imposter “Tea Party leader” Sarah Palin.
I’d like to see Ron Paul break out this time and actually win some primaries. I hope he gets equal time in the debates.
I just did a quick check on a San Diego County zip code (92064) for the city of Poway, which lies just to the east of Rancho Bernardo, where we live. There is $219 million worth of single family home inventory on the market, at least according to seller list prices, spread out over 225 single family homes currently on the market, for an average list price of $974K. Call me skeptical, but I suspect many of these folks are going to have great difficulty moving their homes at anywhere near their wishing prices, given so many other nice areas around San Diego County with myriad desirable homes for sale.
By contrast, La Jolla, which is far cooler and closer to the ocean than Poway, currently has 211 single family homes on the market at an average median list price of $1,950,000 — in fact there are four homes on the market right now at exactly this price point. But there are nice four bedroom homes currently on the market in La Jolla for well under Poway’s median of $974K.
My guess is that Darwinian competition between sellers of nice San Diego single family homes will drive prices towards affordable levels over the next decade or so.
Sheila Bair Wants to Protect Foreclosure Victims
By Alec Foege (RSS)
Jan 20th 2011 4:35PM
Sheila Bair wants to help rescue the nation’s homeowners from the foreclosure disaster. On Wednesday, the chairman of the Federal Deposit Insurance Corp. (FDIC) recommended the formation of a foreclosure claims commission not unlike the one created to aid victims of the oil spill in the Gulf of Mexico in 2010. Bair was speaking at the Mortgage Bankers Association conference in Washington on the future of mortgage servicing when she made the proposal. “The mortgage servicing industry is fundamentally flawed and in desperate need of reform,” she said, explaining that homeowners needed protection from improper foreclosures.
http://realestate.aol.com/blog/tag/sheila+bair/ - 45k -
give me a break.
“give me a break.”
You are a responsible person so no can do.
they are all victims now?
Yeah, sure. Perhaps we can call them something like Jealous Bitter Owners, or, JBO’s. Ha!
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