Yet another perfect storm: High demand for two-year college education due to unemployed workers seeking to retool, coupled with broke states trying to cut down on higher education expenses.
Community colleges, long regarded as the most accessible realm of higher education, are becoming more difficult to access thanks to record enrollments combined with belt-tightening by state legislatures.
A jump in enrollment helps to explain why Miguel Morales failed to get a seat in intermediate algebra this spring at Johnson County Community College in suburban Kansas City, Kan.
“You used to be able to wait until the last moment,” said Mr. Morales, a 43-year-old part-time student at JCCC, where enrollment has reached new heights the past two years. “But it’s getting to where you have to go online at three in the morning to get a spot in some classes.” (A JCCC spokeswoman said few if any classes close out in a matter of hours.)
In a survey to be released Wednesday by the Pearson Foundation, a nonprofit educational think tank in Mill Valley, Calif., about 20% of 1,434 community college students interviewed in November reported difficulty enrolling in required courses for the fall semester. About one in three had trouble winning a spot in desired classes.
Those problems are mild next to enrollment caps that could be imposed in California and possibly other states. Budget cuts in California could force its community-college system—the biggest collegiate system in the U.S., serving about 2.76 million students—to turn away about 350,000 applicants next year.
“It’s disturbing,” said Thomas Bailey, director of Columbia University’s Community College Research Center in New York City. But given cost constraints, “community colleges need to figure out some way of limiting their enrollment.”
…
In my working-class public high school, intermediate algebra was an 11th-grade class, and that’s for average intelligence kids. The smart kids take it a year earlier. The less-academic kids take “business math,” but at the same time they start vocational school like food prep or auto mechanic.
For many it is the only alternative to unaffordable universities. The racket at universities is that you have to take those “liberal arts education requirements” like western civilization, music appreciation, literature, speech communication, etc. even if you major in rocket science. Not everybody has $5+K per semester to spend on tuition. So you go to a CC and pay maybe $500 per Semester to get all those pesky requirements out of the way.
Still, I could never figure out why you have to go from K - 12 and then still have to take all those bogus classes in university. 13 years in public school seems a sufficient amount of time to teach a person all the basics they need to know. If they want to know more, there’s a tool called the internet. Universities should be teaching a person the specifics that relate to their course of study.
As for budget cuts in education, the brain seems to be a good place to start trimming excess if you’re on a diet.
/sarcasm off
It depends on the school and the major. It’s certainly not true for engineering. They have one liberal arts elective per semester, at most. “Getting the electives out of the way” generally doesn’t work. Even engineers have trouble handling 5-6 highly technical classes at once, and it’s better to schedule one lighter class per semester to give the kids a break. Also, it’s probably not good to isolate students into ultra geekitude for days on end. The non-tech classes bring the engineers into contact with the rest of the world.
A couple weeks ago, somebody here on HBB posted something like: “H1-B Indians were very good at coding detailed specs, but Americans knew how to think better, in general.” I think that’s partly due to the more rounded college education, rather than just teaching to the test, so to speak.
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Comment by REhobbyist
2011-02-09 08:03:42
My husband was a grad school TA for engineering humanities at Michigan. His mission was to teach guys (back then there were few women in engineering) how to read critically and write. They covered varied literature, art and film. Worthwhile material for anybody. Most of them felt that it was one of their hardest classes. Doesn’t hurt to expand a young person’s horizons.
My favorite classes at Michigan were in art history. I can’t draw, but I love paintings and sculpture. I learned a lot and whenever I take a vacation I visit art museums. Those classes I took have enhanced my enjoyment of art for nearly 40 years.
When I was doing chemo and radation last fall I signed up for an online jazz piano class at CC. It was great. Only had to go in for a 5-minute performance quiz each week - my husband drove me when I was sickest. I’m taking the second semester now. A wonderful contrast to seeing patients and doing surgery. And expanding this older person’s horizons.
Comment by MightyMike
2011-02-09 08:07:13
+1, Oxide
Also, when I was in engineering school, they came up with a good idea, which was to use those humanities courses to ensure that the students had decent writing skills, which are necessary to many careers in science and engineering.
Comment by Arizona Slim
2011-02-09 08:29:38
My husband was a grad school TA for engineering humanities at Michigan. His mission was to teach guys (back then there were few women in engineering) how to read critically and write. They covered varied literature, art and film. Worthwhile material for anybody. Most of them felt that it was one of their hardest classes. Doesn’t hurt to expand a young person’s horizons.
I remember those engineering humanities classes. My U-M engineering classmates complained bitterly about them. After all, those guys (and, yes, most of them were guys back then) wanted to study all engineering! all the time!
What made me envious was that the EH classes were much better than what we were offered in LS&A (the liberal arts part of the U-M).
Comment by Mike in Miami
2011-02-09 08:34:15
“use those humanities courses to ensure that the students had decent writing skills”
13 years of public schools weren’t sufficient to teach decent writing skills? Sad indeed.
Look I am not saying to exclude scientists from those classes, it should be a personal choice. Personally I would prefer not to suffer through the agony of having to take another writing or scultpture class and be charged an exorbitant amount of $$ for it.
As for “isolating” students or geeking out, that’s a personal choice as well. I had plenty of personal interaction while delivering pizzas or at college parties.
Now if you have a rich daddy footing the bill it might be pleasant to spend some extra time in college. If you have to work odd jobs to pay your own way not so much.
Comment by RioAmericanInBrasil
2011-02-09 09:19:06
As for “isolating” students or geeking out, that’s a personal choice as well. I had plenty of personal interaction while delivering pizzas or at college parties.
Here’s what I think and I have both hard science and liberal arts degrees and have had extensive contact with both types of fine people. And I am speaking of course in gross generalities and I do respect both groups equally.
A liberal arts degree, although of not much valued these days, does give one a broader perspective of the big world than does a hard science or technical degree.
Many scientist types, bean counters and engineers seem to be missing something when it comes to understanding how the human condition plays roles in cause and effect. Many times they come to conclusions that pay no heed to history, context or human behavior which is a mistake because human behavior, society, politics and even economics cannot be boiled down to math and science alone.
On the other hand, many liberal arts people lack important math skills and the ability to analyze and think problems through in a scientific manner.
But hey, no one’s perfect.
Comment by cactus
2011-02-09 10:47:13
grad school TA for engineering humanities’
they should teach Chinese to engineering students so they can speak to their boss
Comment by In Montana
2011-02-09 10:48:50
“It depends on the school and the major”
Exactly. I don’t see how transferring from CC for the last two years works if you’re in CS, engineering, even premed, where you have to hit the ground running taking the right courses from freshman year (after taking the right courses in HS), or else you can’t take the next year’s required courses. eg chemistry to organic chem, CS fundamentals to machine language or whatever they’re doing nowadays.
Instead, what I see is people making up all the coursework they blew off in HS then starting as freshmen at the 4-yr college. Or, majoring in liberal arts where the ordering of classes doesn’t matter a much.
Comment by cactus
2011-02-09 10:50:48
Many scientist types, bean counters and engineers seem to be missing something when it comes to understanding how the human condition plays roles in cause and effect.”
True none of my co-workers could understand in 2005 that we were on the verge of a housing bubble bust
And they are very smart in math as most electrical Engineers are. The Chinese ones seemed most fooled by the housing run-up and speculated like crazy. Good thing they make alot of money.
Comment by REhobbyist
2011-02-09 11:29:52
To answer Montana, premed requires a year of calculus, a year of chemistry, a year of organic chemistry, a year of physics, and a host of biology classes. You can get all of this in two years of community college. Seriously.
Comment by X-GSfixr
2011-02-09 12:10:47
“…..engineers seem to be missing something when it comes to understanding how the human condition plays roles….”
Poster on the wall in the prototype/experimental hangar at (at least) one of the Wichita bizjet OEM.
“There comes a time when it is necessary to kill the engineers, and start production”
Comment by Arizona Slim
2011-02-09 12:18:02
“There comes a time when it is necessary to kill the engineers, and start production”
Or, as my mother would say to my father when he was thinking of all sorts of complications to any sort of project around the house: Would you stop engineering it to death and just do it?
Comment by rms
2011-02-09 12:25:09
A young defense engineering friend in Lancaster, CA saw the Germans on the television chipping away the concrete at the Brandenburg gates; it didn’t register. His older cohorts quickly accessed the market value of their homes, knocked off 15-20%, and put them on the market–sold! Within months defense funding was slashed, jobs were lost by the thousands, and my friend was stuck for twelve years while the fannie and freddie homes were sold to HUD for section 8 families, and the area’s crime exploded. Said friend is much wiser and less trusting these days.
Comment by Arizona Slim
2011-02-09 12:40:12
Within months defense funding was slashed, jobs were lost by the thousands, and my friend was stuck for twelve years while the fannie and freddie homes were sold to HUD for section 8 families, and the area’s crime exploded. Said friend is much wiser and less trusting these days.
Which is why studying history and economics is very important. And you don’t have to do this in school — all you need is a library card.
Comment by DennisN
2011-02-09 12:47:26
To answer Montana, premed requires a year of calculus
Ugg….brings back painful memories. I was a TA in the math department at UC San Diego back in the 1970’s. The biggest headache was teaching calculus sessions to a bunch of mostly pre-meds. They always came to me with the sob story of “I’ve got to get an A in calculus to get into medical school!!!!”
Some guys physically threatened me. Then there was the “girl with the unbuttoning blouse” who came by office hours. She was wearing one of those blouses with more than a dozen buttons down the front. After the other students had left, every time I turned around from the chalkboard she had yet another button unbuttoned. Oy Veh.
Comment by In Montana
2011-02-09 13:12:12
“You can get all of this in two years of community college. ”
yes I don’t know why I brought up those, since those are basic requirements for a lot of majors..but are you going to get engineering or pharmacy core classes in the typical city college? Of course where I am, the course offerings are pretty limited and change quickly if there is not enough demand or students just can’t cut it.
It just seemed to me that in any school, it is a lot easier to put together a lib arts schedule than a hard science major, and even harder when transferring.
Comment by alpha-sloth
2011-02-09 13:16:27
“every time I turned around from the chalkboard she had yet another button unbuttoned”
Note to self: Get job teaching calculus to pre-med students.
Comment by Rancher
2011-02-09 14:58:15
Toughest course for me was physical chemistry. All the others were a breeze.
“I could never figure out why you have to go from K - 12 and then still have to take all those bogus classes in university.”
Parents need to know the education system well to take short cuts. We learned that in CA you don’t need a college diploma to attend a JC. You can have your kids taking college classes while in HS but the HS principal needs to sign off and many won’t because their kids with high GPA’s will be leaving school a year earlier and that means trouble for the school when the state looks at overall school averages. Have your kids leave early, take the GED and then go off to JC. After a great Fresh year transfer to a 4 yr college if they wish.
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Comment by DennisN
2011-02-09 08:40:33
I think you meant to say “don’t need a HS diploma to attend a JC”.
My ghetto HS in San Jose didn’t offer AP calculus, so I had to take calculus at night at the local JC during my HS senior year. It might be good to consider doing away with AP classes and have the students just take them at the local JC.
Comment by The_Overdog
2011-02-09 08:41:15
What would be the benefit of that? In any case, most high school students can take AP classes for college credit (English 1, History 1, etc) or take classes accredited by the college while in high school.
Dropping out of high school and getting a GED seems like a good way to shoot yourself in the foot for any scholarships you might be eligible for. Not only that, you’d be younger than most of the people in JuCo, and have very little in common with them, which for most people is not a good recipe for success.
Comment by polly
2011-02-09 09:18:55
I believe that a number of states don’t allow you to take the GED before your regular high school class would graduate. In other words, if you want to have a high school diploma early, you have to graduate from your actual high school early by earning enough credits to qualify for one. Taking 6 major subjects a year and maybe a class or two in summer school should do it.
In my high school, the kids who wanted to graduate early had to double up in English and gym since MA required 4 years of both. They got the rest of their credits by doubling up in math (geometry and algebra II was the easiest combination, algebra II and trig/pre-calc was a little harder but doable) and science. If you were engineering inclined, some of the college bound kids took mechanical drawing as a 5 day a week class, though it was not considered a pre-college class and brought down your class rank.
Comment by DennisN
2011-02-09 09:25:32
The average instructor at a JC may be better qualified than a HS teacher for such subjects. And the HS students will benefit from the more mature attitude of the JC students.
Nowadays high schools are stressed to teach the dummies, so any high-achievers get short-shrift there.
Comment by In Montana
2011-02-09 10:31:59
I’m hearing that the AP courses in high school are getting a bit dumbed down, and graduates are arriving at college still unable to cope with college level math, for example. Apparently parent demand for AP due to competition and anxiety does not guarantee true college-level content.
Not everybody has $5+K per semester to spend on tuition. So you go to a CC and pay maybe $500 per Semester to get all those pesky requirements out of the way.
That’s very common here in Tucson. Pima Community College does quite a brisk business in intro courses that are too expensive at the University of Arizona.
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Comment by In Colorado
2011-02-09 09:02:48
CC’s aren’t much of a bargain in the Centennial state. Its about 4K per year. Cheaper than CU or CSU but its not $500 per semester.
Not taking those “bogus” classes is one of the reasons kids today don’t know squat about western civilization, literature, speech communication, etc. For instance, on another blog I got into an argument with someone who said that Obama’s natural-born citizenship wasn’t questioned when he was a senator. When I pointed out that a senator doesn’t have to be a natural-born citizen, and that he (the person I was arguing with) must have slept through his HS civics class, he self-righteously pointed out to me that his HS didn’t require that the students take such “useless stuff” like civics.
True. I used to teach a class at a California community college euphemistically entitled “Basic College Mathematics.” What it really was was K-8th mathematics for those who didn’t get it on the first try. Since there were no admission standards, the distribution of preparation was brutally wide, ranging from mid-30’s single moms going back to school after a long hiatus (they normally were at the top of the curve) to kids who were only there because they qualified for a Pell grant, despite having not a single academic bone in their bodies. Those with good preparations found the course relatively easy, while those who did poorly in grade school math spread out over a nine year period because they truly did not get it found it much more challenging to try to master the material over a one-semester period.
I know you guys really care about bristol’s new pad in az:
My prediction: She won’t be there very long. Why? Because the place will attract curiosity seekers like nobody’s business. That’s bound to go over like a rock with the neighbors.
Then there’s the security risk aspect. This place is a lot less secure than, say, the estate from which the Lindbergh baby was kidnapped. (That estate was in a remote area and a good distance from the street. It shouldn’t have been too difficult to spot an intruder.)
I found that the “college math” class at a four year school was difficult for many becuase it was ~3 years of H.S. math taught in one semester. So people did pretty well until they were no longer reviewing math that they’d done in H.S. and then dropped off because of the breakneck pace of the course.
Of course I had a close H.S. friend who was much more interested in sports than academics. Now he’s an aeronautical engineer. But to get there, he had to go to community college before being accepted into an engineering program. He complained about his time in community college, saying: “I’m paying cash money to take the same classes I could have taken FOR FREE in high school.”
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Comment by Carl Morris
2011-02-09 08:12:48
He complained about his time in community college, saying: “I’m paying cash money to take the same classes I could have taken FOR FREE in high school.”
Sounds like he’s one of those who really did get an education at the CC.
Comment by Rancher
2011-02-09 08:22:58
I took calculus and spherical trig in my senior
year because that’s all that was offered.
“Basic College Mathematics.” What it really was was K-8th mathematics for those who didn’t get it on the first try.
yep I am tutoring for that very class , what a funny math book. It uses for example in it’s word problems famous people like 2 cent and ( some other funny named guy ) you have to figure out how many millions more 2 cent has than another rapper dude. My immediate answer was 2 cents but people who struggle with math are not amused by old guy humor I guess ?
And FWIW I have a 2 year degree in Electrial Engineering an associates degree. Back in the day it was really cheap plus Areospace companies would usually reimburse some of the cost after showing a B or better.
I teach a junior level requisite quantative class at a local four year public university.
I have come to believe that about 60% of the kids who cycle through the college probably shouldn’t be there and probably don’t really want to be there. The problem is there really isn’t anywhere else for them to be, so the second tier colleges and universities become warehouses.
The non-traditional students, typically working adults, are a different matter entirely. They are generally highly motivated and eager to learn even when the subject matter is difficult.
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Comment by Arizona Slim
2011-02-09 13:52:04
I have come to believe that about 60% of the kids who cycle through the college probably shouldn’t be there and probably don’t really want to be there. The problem is there really isn’t anywhere else for them to be, so the second tier colleges and universities become warehouses.
The non-traditional students, typically working adults, are a different matter entirely. They are generally highly motivated and eager to learn even when the subject matter is difficult.
Agreed on both points, Spokaneman.
Here in Tucson, I’ve met a number of University of Arizona students who, truth be told, would rather be doing something else. But they were told that they should go to college, so here they are.
OTOH, the older, non-traditional students just absolutely blow the doors off the UA. Especially the military vets. They’re that good. And motivated.
Comment by Axlebone
2011-02-09 15:36:53
My daughter attends Gonzaga. You wouldn’t be instructing there, would you?
Comment by Spokaneman
2011-02-09 15:41:59
Nope.
Comment by MightyMike
2011-02-09 16:02:33
He said that he taught at public university. Isn’t Gonzaga a Catholic school?
It definitely has a high school feel, but it is a cheap alternative to the first two years of university in California. At the community college down the street from me you can take two years of calculus and Japanese, as well as vocational courses. If you maintain a 3.0 GPA you are guaranteed acceptance to a University of California campus as a junior. My husband is a high school teacher and he has had lots of top students go to community college for two years, in cases where their parents couldn’t afford dorm costs. They are deprived of two years of drunken partying.
“It definitely has a high school feel, but it is a cheap alternative to the first two years of university in California”
In many countries Colleges look like high schools. No, actually even less than that, as they have no athetic programs and hence there are no fields. Also: no dorms, no cafeteria, no student center, no gym, etc. You commute from home and are just there during class time.
This discussion reminds me of how the US is the land of second chances. My Japanese cousins’ path in life was determined by their performance on college entrance exams. In the US community college gives you a second chance to excel. I know a lot of people (mostly guys!) who were goofballs in high school and achieved academic success in community college, leading to professions that would have been denied to them elsewhere.
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Comment by Arizona Slim
2011-02-09 11:55:49
Preach it on the second chances, RE!
Case in point from mine own high school days: I had an art classmate who was a real goofball. To the point where we wondered what in the Sam Hill he was even doing in the art program.
Well, he went off to one of PA’s state colleges, Kutztown. That was known as the artsy school for artsy artists. More than a few of us wondered what he would be doing there.
Becoming a very serious painter was the answer. He’s been a professional artist for something like 25 years, and I could go on and on.
Methinks that getting out of high school and into the adult world, starting with college, forced him to buckle down and get serious. That and marrying another one of my classmates. Let’s just say that the goofball act wouldn’t get very far with her.
Comment by In Colorado
2011-02-09 12:37:02
“This discussion reminds me of how the US is the land of second chances. My Japanese cousins’ path in life was determined by their performance on college entrance exams.”
There is even a special word for those who fail to pass the exams and cram to try again next year: “ronin”.
There was a very popular manga/anime series about that: Love Hina.
Keep teaching the classes of choice in advance algebra, calculus, etc. and forget common sense “reality math” . Who needs this anyway? The banks, government do not care that you cannot understand basic math. No problem!
yep. I never went to HS, but I graduated with a 2.0. Surfed a lot. Then went to a CC and got a 3.85 and a scholarship to a real college. HS is a joke in most towns.
You obviously have not seen the Penny-stock trading site that brags about its founder turning a $10k student loan into millions by betting on risky penny stocks. I know a couple single moms who got pretty big grants and dropped their classes and kept the money. Its pretty rampant - the ripping off.
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Comment by RioAmericanInBrasil
2011-02-09 10:32:21
I know a couple single moms who got pretty big grants and dropped their classes and kept the money.
A long time ago I bought a 1966 Gibson ES-335 with part of my grant money. (My friend thought it was hilarious) But I did finish school.
Comment by bink
2011-02-09 16:32:09
I’m not sure I’d put faith in any claims from a website selling penny stock tips.
What does the English major say to the science major?
Do you want fries with that?
Many youngsters major in some completely useless field. 4 years later they’re stuck with some gigantic pile of debt and are working at the local burger joint for $8/hr. Only difference to the subprime borrower is that the students can’t discharge their debt in bankruptcy. Majoring in some non economically viable field is a sure way into life long debt slavery. Really sad that the government even helps luring young people into that trap. Many are not smart or experienced enough to avoid getting suckered. All the other kids are doing it, who wants to be left out?
This is why my idea is to give people 26 weeks of Unemployment to goof off but from the 27th week on… you have to be in school or training…or else nuttin.
99 weeks of UI and nothing to show for it, is a disgrace to our country.
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Comment by denquiry
2011-02-09 08:32:41
99 weeks (of UI) and nothing to show for it
—————————————————————-
One could also make that case against a lot of colleges.
Comment by michael
2011-02-09 11:30:34
do you not have to “prove” you are looking for a job anymore?
I know of 4 people who are late into their 99 weeks of unemployment and not one of them is making any effort whatsover to find any type of work.
one basically lives in a shack “down by the river” and smokes pot and drinks beer.
Comment by Arizona Slim
2011-02-09 11:57:20
I know of 4 people who are late into their 99 weeks of unemployment and not one of them is making any effort whatsover to find any type of work.
I’ve heard it said that a lot of the long-term unemployed used to work somewhere in the REIC. And, unless they were tradespeople, they have no salable skills.
Comment by polly
2011-02-09 12:59:32
You don’t have to prove you are actually looking for work. You have to affirm that you are by checking a box on the on-line for that you use to report that you are still unemployed.
If you want to require people to “prove” they are really looking for work, you will have to hire someone for the unemployed people to report to who will listen to and review the proof and then sometimes tell that person that they don’t qualify for unemployment for the last week or two because they didn’t try hard enough. How many folks are up for funding that little project?
Comment by michael
2011-02-09 14:58:52
isn’t that how it worked in Seinfeld?
Comment by Rancher
2011-02-09 15:02:20
And some Dem’s in Congress are already looking for ways to extend the 99 week limit.
You don’t have to prove you are actually looking for work. You have to affirm that you are by checking a box on the on-line for that you use to report that you are still unemployed.
Theoretically there are random audits - at least that’s what the State of Texas led me to believe, but I never actually got audited.
Which is good, as I accidentally deleted my electronic job-searching log. Oops
Comment by In Montana
2011-02-09 15:39:29
“do you not have to “prove” you are looking for a job anymore?”
Apparently not. Last time I collected, I had to put down three places I’d tried, with contact info, and I assumed someone could check on me. But that was in the 1970s.
Comment by redmondjp
2011-02-09 16:37:35
Here in WA state, both times I got laid off (2002, 2008) and was on unemployment, I did get audited once during each of my two 6-month-long periods on UI. I had to show contact information for at least three potential places of employment per week, and I believe that these requirements are still in place.
The STUPID thing is, WA state unemployment department only communicates with you via snail mail, and I have a private mailbox that I sometimes only check once per week. I missed my in-office audit appointment because of this and had to forfeit that week’s benefits. I even appealed this to a state administrative judge and was denied.
Why they couldn’t send an email, text message, or a plain-ol’ automated phone message to let you know that you need to come in is beyond me.
Say does anybody know where I can get a degree in community organizing? I am not a black muslim just a white cracker but I really think that I can use Diversity to my advantage in this field.
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Comment by REhobbyist
2011-02-09 08:05:51
Harvard Law.
Comment by oxide
2011-02-09 08:25:11
+5 REhobbyist!
Comment by denquiry
2011-02-09 08:35:39
Thanks a lot folks. I will apply and hopefully I can get in using affirmative action.
Comment by DennisN
2011-02-09 08:45:11
Or undergrad at Columbia.
Comment by RioAmericanInBrasil
2011-02-09 09:29:03
I will apply and hopefully I can get in using affirmative action.
What will help you stay in?
Comment by denquiry
2011-02-09 13:50:23
well, I dunno. I’m not really that smart but I am an excellent teleprompter reader. But if I did get in I would copy wall streets modus operandi of BS and greed and DC’s modus operandi of smoke and mirrors.
The unemployed ones are like those who major in other areas and can’t find work: they stink.
FWIW I knew a guy who graduated with a Computer Science degree. He couldn’t code his way out of a paper bag. He wound up working as a construction subcontractor in Park City.
I think you are being a bit too simplistic. You are assuming that the purpose of getting an “education” is solely for the purpose of getting a higher paying job. The two are mutually exclusive, and it is unfortunate that Universities have become tracks for job-seekers. That was not the original purpose of education in general and Universities in particular. The goal of the first was to allow you to function in general society by teaching reading, writing and math…..the basic stuff, along with Civics, Humanities, language courses, etc.
I think the goal of the University originally was to bring the best minds from various backgrounds to expand the pool of knowledge in general. That goal was pre-empted with advent of the State University systems wherein the goal was to produce workers for corporations.
I have a Bachelor of Arts in English, with a minor in Political Science, along with a B.S.C.E. The Engineering degree gave me more marketable skills for use in designing stuff, but it fails to make me a better overall person who can communicate effectively with the rest of the world around me. That’s why most Engineers are considered geeks. We don’t communicate well, because our heads are all involved in “solutions”. Our written and oral use of language is usually lacking. We tend to think in terms of formulas and diagrams because they communicate more effectively to other engineers. I don’t think that makes for well-rounded individuals.
The “arts and sciences” will probably not pay as well as technical fields, but most of us have a general idea of what areas of employment we might expect to find when finish school. For those who didn’t find that out, there is the real failure of “education”. If you didn’t have any idea what you were doing in school and hadn’t figured it out by the end of your Freshman year, you probably need to drop out and reassess your reason for being at the University.
And, yes, there are other jobs for people with English Lit. Majors. Many jobs can be learned with OJT, but if the applicant is a poor communicator, it may be some doofus English Major guy is better suited for the job.
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Comment by X-GSfixr
2011-02-09 12:16:21
Everybody’s missing the point.
-All the jobs that are left in the US require a college degree.
-All the votech jobs are being outsourced. The ones that haven’t don’t pay $hit.
That’s why you have people attending college, instead of going to votech.
Comment by In Colorado
2011-02-09 12:31:03
“-All the votech jobs are being outsourced. The ones that haven’t don’t pay $hit.”
Young girls pay up to $10,000 (or more) to learn how to cut and dye hair and end up working at chain hair salons for $10/hr (or even less).
Nice huh?
Comment by Arizona Slim
2011-02-09 12:43:20
Young girls pay up to $10,000 (or more) to learn how to cut and dye hair and end up working at chain hair salons for $10/hr (or even less).
There’s a meritocracy in this field, just like any other.
Ever noticed how, in every town, there is *the* salon? As in, you’d better be good if you even want to be considered for admission to their staff. (Yes, this comment sounds like I’m describing getting into an elite college. And that’s my intention, 100%.)
Any-hoo, the good people are never, ever hurting for work. But the trick is that you have to be good, and that means keeping up with trends in the field, practicing your skills, learning from the top pros, etc.
“Unlimited free money”
Why would there be student loans if that were true?
There’s a lot wrong with the current system of college aid, but wild inaccurate statements aren’t going to fix it.
My younger son just graduated from UC but he had to enroll in summer courses every year to get his requirements. That meant extra tuition every year, but worth it to graduate in four years.
Graphic Design. And he found a job! Thirty years ago he would have probably majored in fine arts. Now there are lots of opportunities for designers. Who knew?
Comment by Arizona Slim
2011-02-09 11:58:28
Now there are lots of opportunities for designers. Who knew?
Indeed there are. What kind of design does he do?
Reason for my question: I’m always looking for good subcontractors. And, if he’s related to REHobbyist, I *know* he has a work ethic.
Heck I remember in 1968 standing in line at good old NTSU trying to get a class card (they were the old Hollerit computer cards) trying to get the prereq class I had to get the next class I had to have etc. I think its always been that way.
My kid was able to get her four year degree in four years and one quarter even with changing her major in her junior year. Persistence was the key. She had no problem asking a prof for special dispensation to get into needed class.
If only this were true out here in the ever-effervescent SoCal coast! I see clear evidence of banks hoarding homes in a futile effort to prop up prices above pre-bubble levels.
Kudos to the WSJ writers, whose headline regarding a return to affordability at least leaves open the interpretation that lower home prices might actually be a blessing in disguise.
Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.
Data provided by Moody’s Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003.
During the boom, lax lending and speculation pushed house-price inflation far beyond the modest rise in household income. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003.
“Based on incomes, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”
…
P.S. Which is in your denominator: Wages or housing prices?
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Comment by Carl Morris
2011-02-09 12:19:26
I guess in my mind wages were the numerator and housing prices the denominator…not sure why. I guess I like it when a singularity is a good thing rather than a bad thing.
Comment by Professor Bear
2011-02-09 13:26:50
“I guess I like it when a singularity is a good thing rather than a bad thing.”
Not only that, but as any good RealtWhore will tell you, housing prices will never go to zero in Upper East Flyoverville, because everyone wants to live there. (Well, maybe not Detroit, but…)
‘After the late 80s bubble, prices fell for five years in California’
I’ve said this before; were those prices a part of a bubble, or the cycle? I’ve never seen much in the media or elsewhere about a CA bubble in the late 80’s.
Some say there was a true RE mania in Texas in the late 70’s/early 80’s. It took 15 years for house prices to stop falling.
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Comment by Professor Bear
2011-02-09 13:29:38
“It took 15 years for house prices to stop falling.”
Do others find it odd how the MSM continually gives the serial bottom callers brigade a pass on examples of long periods of housing price declines, such as the one in Texas you reference, or the current example from Japan (1990-2011 and counting)?
What is so frightening about empirical evidence that so many self-proclaimed ‘experts’ feel comfortable ignoring it?
Comment by Blue Skye
2011-02-09 13:45:20
Funding and media attention?
Comment by ecofeco
2011-02-09 14:12:26
Housing in Texas keep rising all through the 1980s and only collapsed from the S&L disaster, the first effect of which were felt here before the rest of the country.
It took approx 4 years for the market to bottom and another 2 before prices started rising again.
If you could afford to buy a house around 1993-5, you would have been able to double your money by 1999. By 2005, you could triple it. You could quadruple your money IN ONE YEAR by doing a teardown and then building townhouses on the same lot.
Buy for 100K, sell for almost half million one year later. Do four of those and never have to work a day job again.
I’ve said this before; were those prices a part of a bubble, or the cycle? Ben Jones
I was there in LA 86-94, IMO it was a bubble but it was mostly contained to Southern California. There was fraud and the same bubble thinking and terminology and then a massive hangover after the crash. Or course it was just a dress rehearsal for the big one.
We are now in our sixth year of falling house prices. REhobbyist
I would say in some areas we are only into our 4th or 5th year of falling prices. The Bay Area for example.
Also, after the crash of the SOCAL bubble of the late 80’s there were no TARPS or similar government house-price-propping programs to slow the crash. The Berlin Wall also fell hammering the defense industry. And although I call it a bubble back then, it was not nearly as big of a bubble as this last one.
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Comment by Carl Morris
2011-02-09 17:09:47
I would say in some areas we are only into our 4th or 5th year of falling prices. The Bay Area for example.
In Colorado out in the distant bubble burbs we’re 6 years into it, but in the middle of Boulder we’re only one year into it…if that. It was “different here” for a LONG time.
“By last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003″ during the “buy all the house you can afford era.” Fixed.
I don’t doubt that homes have become more affordable in many places, but not in the New York area.
When the overseas money goes to hong kong and shanghai prices in NYC will drop. The Chinese don’t need the dollar and they definitely don’t need wall street. Hell! With wall street’s help china may begun to look more like america. IMO, china doesn’t want to go that route.
Which means that unless prices go down a lot more, that affordability will be a disaster as intrest rates go up. Sigh. I’d like to see someone end an analysis like this with a warning that in addition to the payments they included, people who make low downpayments need to put substantial cash into a “get out from under in case I need to sell when interest rates are higher forcing prices down” fund every month. Lets see what that does to the affordability calculation.
In other words, house prices are dropping only in areas where they never should have risen in the first place. Where The Jobs Are, prices will never fall. We in DC are being forced to spend a higher % of our income on housing, and that’s what the market will bear.
I looked up a cost-of-living table on Bankrate. The cost of living in DC vs., say Pittsburgh, for things like doctor appointments, food, gasoline, utilities, were nearly identical, EXCEPT housing. Housing was twice as much.
Years ago, when we moved from New Jersey to Florida, I noticed a drop in a lot of goods and services. For things like daycare, a large portion of the cost is related to the cost of housing/real estate. Milk was cheaper. Cars were not, although you could find older cars in decent shape in Florida.
I think doctor’s fees are related more to the cost of getting the education and Medicare rates - what the market will bear - and staffing costs - more related to local wages - and less to the cost of real estate in individual markets. Local wages are related to the state’s minimum wage and somewhat to real estate. Housing is a significant portion of household budgets, so it does affect wages a bit.
Gasoline is more related to state taxes and the price of crude than to local real estate.
Utilities are more dependent on the cost of commodities and power generation than real estate. The Pacific Northwest has lower utility rates due to the significant use of hydro power. But there is probably not much difference between Pittsburgh and DC in the kind of power generation and its costs.
For food costs, you are probably also looking too close geographically. Try comparing food prices in the Midwest or New Mexico.
I’ve been looking at PHX, N. LV, Tucson real estate lately on Trulia. Lots of 3 2 2 decent looking houses in those markets going for 38 to 50 per Sq Ft. <$60K for 1400 Sq ft. I don’t know enough about either place to judge the quality of the hoods, but that is getting dang cheap. That is less than I paid for my first house in Spokane in 1980 on a per sq ft basis. Those prices are typically 40% or so of the peak (2006) prices.
North LV is full of stucco crap on 1/16th acre lots in HOA rabbit warrens.
If the older tract homes in the same area are any indication, they are going to be gangsta cess-pits in 20 years or so (maybe less).
Now, the custom home neighborhoods sprinkled in amongst them are much more desireable - 1/2 to 3 acre lots, but then you’re still surrounded by Stuccettos.
Home values in the United States posted their largest quarterly decline since the first quarter of 2009, falling 2.6 percent as the temporary stimulus of the home buyer tax credits wore off, according to Zillow’s fourth quarter Real Estate Market Reports. See region-specific data below. Click column headers to sort.
Look whose housing market is getting pounded the hardest now, according to Zillow: Old Midwestern Cities (plus Portland). I added the annualized quarter-over-quarter change to make the recent rate of decline comparable to a year-on-year rate of change (with no apologies offered for omitting prediction error estimates).
LOOK OUT BELOW!
Metropolitan Area
Q4 2010/Quarter-over-Quarter Change/Annualized Quarter-over-Quarter*
Detroit, MI $73,200 -7.5% -26.8%
Chicago, IL $175,100 -6.5% -23.6%
St. Louis, MO $130,400 -6.1% -22.3%
Minneapolis-St. Paul, MN $166,300 -21.3%
Portland, OR $209,900 -5.2% -19.2%
* ((1+r)^4-1)*100%, where r = Quarter-over-Quarter Change
From the WS Journal chart, 70% of all single family homes with a mortgage are now underwater in Phoenix. Not bad for a desert city.
Does this mean a “flood” of new home construction is likely? About as much chance as a snowball on a Phoenix sidewalk in July.
Take away construction jobs and Phoenix has about as many “employment opportunities” as the Sahara.
In the early 90’s I looked into relocating from SoCal to Phoenix. The deal killer was the lack of quality jobs. Those that I found paid A LOT LESS than similar jobs in San Diego (where we lived at the time). After a few months I stopped looking.
In the early 90’s I looked into relocating from SoCal to Phoenix. The deal killer was the lack of quality jobs. Those that I found paid A LOT LESS than similar jobs in San Diego (where we lived at the time). After a few months I stopped looking.
Same thing here in Tucson. And that’s why a lot of University of Arizona students leave town as soon as they pick up their sheepskin.
“70% of all single family homes with a mortgage are now underwater in Phoenix.”
Did you see this footnote to the table?
*Negative equity refers to the % of single-family homes with mortgages.
I found that statement most confusing; did they mean that they simply reported the area’s percentage of single-family homes with mortgages as the “negative equity” figure, or did they mean that the “negative equity” figure should be interpreted (as you apparently did) as the percentage of single-family homes in the area with a mortgage which are now underwater?
It means that free and clear homes are not included in the denominator.
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Comment by Professor Bear
2011-02-09 07:19:07
I’m leaning to your interpretation, though I find the statement poorly worded.
Comment by oxide
2011-02-09 07:42:40
Speaking of wording, what kind of shoots and leaves were you eating? I’m partial to Romaine myself.
Comment by Professor Bear
2011-02-09 07:50:32
I wasn’t referring to ‘eating shoots and leaves,’ but rather to what pandas normally do at a cafe: They eat the sandwich they ordered, fire a couple of shots into the air, then leave the building (”large animal that eats, shoots and leaves”).
Comment by oxide
2011-02-09 08:29:20
Poorly worded??
(sorry, just ribbin’ ya…you are correct. That comma saved your grammatic patootie. )
I thought that Atlanta was interesting in the table. They’ve only had a 28% decrease in house prices from the peak, yet they lead in negative equity at 54%. We can conclude that they also led the country in cash-out refinancing.
“We can conclude that they also led the country in cash-out refinancing.”
The other possible explanation is that more homes changed hands there at the peak with 100% LTV financing. Simple differences in volume near the peak could explain higher negative equity on a smaller decrease.
Portland, OR….. the new rust belt. I have family there and in Deschutes County/High Desert area. They were all convinced their wigwams were the path to riches. Even in spite of the substantial declines there, their denial was strong back in early 2009. It’s time to bring up the topic again…. lmao.
Hey it ain’t so bad. There were, after all, 7 job openings in the paper yesterday. And two full pages of NOD’s.
House next to us had well heeled owners, so they sold out of this nightmare and ate their own loss. Unless you have 160k extra cash laying around, you are stuck and may as well stay until the bank asks you to leave. What better options do we have. GTFO is only the most sensible for the other guy, for us who sank close to our last 160k into this place, we are waiting for the bank to scoot us along. I think they see the number of similar units for sale, the scale of the losses, the HOA’s and the taxes, and decide to put off foreclosure for a good bit.
Our well heeled neighbors, they bought for 360k in 06. Sold for 200k in 2010. Booked the loss themselves, good for them!The new purchaser thinks he got a deal, cuz its up for sale again for 230k.
“Portland, OR….. the new rust belt. I have family there”
My 25 YO daughter moved to Portland in November 2009. She’s renting and likely will for a long time. She’s in an apartment complex also about 25 years old. I went to visit in August last year; and although the Rose Garden, Japanese Gardens, and Columbia River Gorge and waterfalls are beautiful, the highways are straight out of 1965. You can be in a traffic jam at midnight because there are a hundred cars and one Hiway Dept truck on the road. The houses downtown looked old and decrepit with overgrown yards. But hey, the Saturday morning market shindig was pretty cool, if you like competing bands, plastic tub drummers, woodcarvings, and henna artists.
I’m thinking the big industries may be making meth and growing pot; but I was just visiting for a few days, so I didn’t get the full scoop.
I guess it’s just the JT Extension that honors it.
Yeah, I don’t do any filtering on the HTML tags…I didn’t realize that the blog software would ignore/filter certain tags. If you want to write a JavaScript routine that will identify these tags and replace the < and > tags with the appropriate marked up versions so that the preview is accurate, I’d be happy to integrate it
US Treasuries with 5 year maturity are now yielding about 2.40 %.
A check at Bankrate.com shows that there are only 5 bank 5 year CD’s yielding above that. The highest is 2.65 %. Most are well under 2.40 %. A lot are around 2%.
So,the vast majority of 5 year bank CD’s are being offered with less yield than a Treasury, which is presumably safer and has no pre-payment penalty.
Could someone explain how that can be ? The banks must be getting
their money from somewhere at a lower rate than the government can borrow, or the people buying CD’s don’t know that the government pays more, or don’t care ?
(Yes, I know that CD’s usually compound daily, and there are some
trading costs when buying treasuries, but all this seems minor compared to the CD prepayment penalty– usually 6 months interest–if one needs the money early.)
I’m still trying to get past a HBB post from several days ago that told of hundreds of thousands of credit card holders carrying over monthly balances that charged interest rates of fifty-nine percent.
I have no trouble with the 59%. That’s for sub-primes with a max limit of $300.
What burns me is that that the public can’t get a piece of that action. My BigBank credit card* charges 15% interest. Why wouldn’t my BigBank checking account offer 6%? (Oh that’s right, because those deposits would bolster the trash MBS, not the profitable CC sector of BigBank.)
Story: When I was a pup, my father took me to the bank to open an account for my Christmas money. The bank offered me 5% interest. I asked my dad how the bank could afford to give me more money back than I put in; for example, how did they pay the teller? How did they buy the stuff to put up the bank building? My father tried to explain that they loaned my money out for a 12% interest rate on a grown-up’s house. The grown-up in the house paid the bank 12% more than they had borrowed. The bank gave me 5% of it and kept the rest themselves. [heavily simplified.] Well that set me off. It was MY money they were taking…the bank didn’t put any of their Christmas money in the account…how come *they* got more than *I* did. My father pointed to a well-dressed middle-aged lady behind a desk, and told me to ask her; she knew the answer.
I caused quite a scene in the bank when I marched across the hush-hush bank right up to the loan officer screaming “WHERE’S MY SEVEN PERCENT? I WANT MY SEVEN PERCENT!” My father, I think, was secretly dying with laughter.
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Comment by Carl Morris
2011-02-09 08:08:17
I caused quite a scene in the bank when I marched across the hush-hush bank right up to the loan officer screaming “WHERE’S MY SEVEN PERCENT? I WANT MY SEVEN PERCENT!”
And here we are all these years later…a whole group of “screaming seven-percenters” :-).
Comment by exeter
2011-02-09 09:54:38
Great story Oxy!!!!
Comment by Awaiting
2011-02-09 13:11:18
I almost peed in my dress LOL, oxide.
Did you and your dad get told not to come back? LOL
Comment by ecofeco
2011-02-09 14:58:25
I remember being the same way when I found out that my insurance money wouldn’t be refunded if I never made a claim and canceled or were canceled because of a missed payment.
I’m still that way. I HATE paying for something and getting nothing in return. Most people would call that theft.
Comment by Awaiting
2011-02-09 15:46:05
ecofeco
OTOH if the premiums were so darn high, having insurance takes care of the oh chit moments. I understand your position, but I’ve had those moments, and glad I had insurance.
I’ve wondered what would happen if my ins. co. lost a boat of money in Derivatives. Would I see my claim paid?
Comment by ecofeco
2011-02-09 16:35:59
Only twice in my life have I had to make an insurance claim, but there were more times when I didn’t have insurance and needed it, but didn’t have the money.
I realize I’m the exception and not the rule and I’m glad I had insurance for those 2 times, but I would dearly love to have those THOUSANDS of dollars back in my pocket right now from the other times I didn’t make a claim.
Because I don’t have insurance again and it would be cheaper to pay out of pocket for what I need than to pay the insurance premiums.
The banks can borrow money from the Fed at 0.25% and buy the Treasuries that yield 2.4%. If not enough banks want to play this game, the Fed will buy the Treasuries directly with made up money, and the Taxpayer will pay off the note from his wages.
If you do not get this, you are missing the Great Robbery.
And that’s why I sent 20k to my mortgage company rather than leave it in my saving account. And after I complained, they DID properly credit it as an additional principal payment.
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Comment by RioAmericanInBrasil
2011-02-09 09:42:09
And after I complained, they DID properly credit it as an additional principal payment.
I like money but sometimes I don’t pay much attention to it like when I paid off my student loans.
My monthly payment was $150 but I sent in about $300 a month until one day it was paid off. But what was happening? Was the extra coming off the principal?
Maybe I should have done it differently but hey, it’s done.
Comment by measton
2011-02-09 11:25:20
Yesterday someone posted an article about how people were buying with cash as a sign that investors were scooping up real estate.
Nope
People can’t earn anything on safe investments and they figure I’ll just pay off my loan or buy this house for cash. If you’re a rich retired investor this may give you more confort than investing in the market or treasuries even if you are early. You’ve locked down living expenses.
Comment by Awaiting
2011-02-09 13:23:04
“You’ve locked down living expenses.”
measton, you’ve got that right.
In 2010 our house money earned $243- dollars in interest. (That makes me sick.) A mortgage is 5%. (FICO’s 825)
If we pay what my target is, the Property Taxes will be $370/mo (the first year) and will probably stay there or go down as home prices decline.
Comment by Awaiting
2011-02-09 13:58:31
We’re a no loan purchase. One thing I’ve learned from older family members, is to have a house paid off by your 65th B-Day.
Comment by ecofeco
2011-02-09 15:00:32
That’s a good way to do it, Awaiting, but not everyone has that choice.
Comment by Awaiting
2011-02-09 15:27:58
ecofeco
So true. We sold 2 homes already in our lifetime, and socked it away during this bubble, which has taken years of life enjoyment from us. We rent a dump, drive old cars, and live quite frugal, and have been hammered by this economy and some other issues. Life hasn’t been a cake walk, but hey, we’re tough.
Comment by Spokaneman
2011-02-09 16:07:26
I haven’t had a home mortgage in a long time, but I thought I read somewhere that banks were starting to put prepayment or yield maintenance penalties into home mortgages similar to what you would find in a commercial loan. Is this true? That would be a real bummer to pay the loan off early and get hit with a penalty.
Comment by ecofeco
2011-02-09 16:54:26
If they are, then you would have to be an idiot to sign and not shop around more.
“Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.
Data provided by Moody’s Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003.”
As always, some good comments. And those houses in that picture. I couldn’t tell if they were Army barracks or the opening shot of many movies that shows (I think) the rows of buildings at Universal Studios. Blech! Who would live there?
Alex Veiga, AP Real Estate Writer, On Tuesday February 8, 2011, 7:05 pm EST LOS ANGELES (AP) — The traditional spring selling season can’t come quickly enough for builders like Beazer Homes USA Inc., following the worst year for new home sales on record.
The company reported Tuesday that it slid to a loss in the fiscal first quarter as home closings and contracts for new homes fell sharply. Its results for the October to December period were worse than expected.
But President and CEO Ian McCarthy said sales trends last month perked up considerably, echoing other large homebuilders that have given guarded optimism in recent weeks about the prospect for improving fortunes this spring.
“I’m very encouraged with what we’ve seen in January so far and we’re looking for a strong February and March,” McCarthy said. “It will be very critical to us.”
McCarthy said new home orders in January climbed by more than 50 percent from December and posted a comparable increase versus January 2009.
The builder doesn’t anticipate it will match the level of home orders in the second quarter that it generated last year, when federal tax credits helped boost home sales before expiring in April.
But McCarthy does expect to put up bigger home sales numbers in the second half of this year than in the last six months of 2010, when sales tanked following the end of the government incentives.
“We fully expect to beat that performance this year,” he said.
Anything short of that might signal even deeper doldrums for new home sales, which sank last year to the lowest levels since at least 1963.
It sure is telling when the home construction and auto manufacturing industries get all excited about a slight increase over historically low sales levels.
I guess contrary to popular belief, people on welfare don’t buy houses or new cars.
In Colorado
People on welfare can buy a home (of some sort) or a car. Federal Law prohibits discrimination, and they might be able to get a Grant from a Non-Profit.
In Ca, the EBT Card (Free $ wired into your account) can be used as a Savings Account, since there is no cap. That’s how our neighbor saved to buy a home. But in general, you’re right.
My remark was tongue in cheek about those who claim that everyone on welfare has a late model Escalade, lives in a McMansion and dines on steak and lobster every night.
The few that I know drive 15-20 year old beaters, live in dumps and survive on diets of bologna, mac-n-cheese and soda pop.
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Comment by Awaiting
2011-02-09 14:22:11
Our niece is a welfare queen. She’s pretty, educated, and loves her surrogate husband, our govt’s monthly check. Children without marriage, is her modus operandi.
Comment by Arizona Slim
2011-02-09 14:47:48
Our niece is a welfare queen.
And it sounds like you try very hard to be polite when you’re around her. Not that such a thing is easy.
Sort of like how I have to bite my tongue when dealing with my REIC-ster relatives.
Falling prices still have a long way to go for the cities (including my own) on the first list. Given the number of foreclosures in the past few years, it’s kind of mind-blowing that half of mortgages in those counties are still under water.
Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
Now 27% of homeowners with mortgages owe more than their homes are worth. That’s up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That’s because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow’s chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
Local disaster. This place is black-out entirely when you drive by at night. Two completed monster towers and nobody lives there:
” Like a passenger who sold his ticket on the Titanic, Dill walked away from one of the area’s most ambitious residential projects just before the condo market plunged.”
“The original vision remains intact — but, at prices starting below $200,000, that might make the property affordable to more local buyers. With only 72 of the 486 units sold, Dill said he and his partners have a lot of dealing to do before moving on to their goal to build another two towers.”
486 units so far, and 972 planned, but only 32 slips planned for the marina? So a boater has a one in 30 chance of getting a slip? They need to rename it Marina non-Grande.
And as we’ve seen, they will be right to building more monstrosities just as soon as they can, and despite losing millions, will get bankrolled to do so again.
But god forbid an FB misses some payments on his crap shack.
P.S. It seems as though while the MSM is passing directly from the denial phase of the housing bubble stages of grief into the reconciliation phase, many of the sheeple remain mired in the denial phase. Do the sheeple have yet to endure the anger phase which the MSM has somehow circumvented?
A place to learn about the controlled collapse of a historic housing bubble, through the links, brain trust, and insight of an incredible pool of intelligent people.
Not to mention the wonderful camaraderie.
As a buyer on the hunt, the HBB is my oasis for real information.
Insanity is addictive. If individuals can’t get some for themselves, they will follow someone who has it.
Blue Skye
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Comment by combotechie
2011-02-09 07:43:35
IMHO crowd insanity is addictive for those people who have a weak identity. These are the people who subvert their personal egos to the collective ego of the herd.
Among my curiousities is how seemingly intelligent persons become such mindless herd creatures every election, voting for a Republicrat status quo that is actively and overtly imnicable to their interests. And then, without the slightest trace of irony, these same sheeple b!tch about the direction the country is headed in, as the Wall Street hirelings they install and maintain in power continue to loot the productive working and middle classes.
” in which staged footage was shown with lemmings jumping into certain death after faked scenes of mass migration… they did not jump off the cliff, but were in fact launched off the cliff using a turntable.”
A source of “education with experience” to toss in Hwy’s Omniumgatherum Kaleidoscope of wonderment!
define: affirmation:
A declaration that something is true; an oath; A form of self-forced meditation or repetition
affirm - confirm: establish or strengthen as with new evidence or facts; “the strawberry picker story confirmed Hwy’s doubts”; “The evidence supports the bitter-renter”
affirm - to declare or affirm solemnly and formally as true;
“Your house price is too d@mn HIGH!” …”The rent’s too d@mn HIGH!”
My first visits to the HBB in spring 2005, and following up on the links therein, motivated me to sell my Florida house in early 2006 for $450,000. Probably within $30K of the peak.
It’s currently Zillowed at $238K and falling.
The best financial advice I have ever received or ever expect to receive.
I’ve been here for almost five years. And, during that time, I’ve felt ever more vindicated about what I’d suspected was wrong with the real estate market here in Tucson.
And I felt a lot better that those pretty young things really *didn’t* have $50K in down payment money, that I wasn’t the slacker that I thought I was, and that it was okay to be a low-life renter.
I was on some random news hunt a few months ago for articles from the bubble era, for evidence that at least some MSM saw it coming. Somehow a link from a discussion forum led me here.
The reason I was news hunting: Back in ‘05, driving a guy to the airport (that’s what i do), we were talking about housing prices. I, having no background in RE and limited economic chops, said “they can’t just keep going up like this”. He said, straight-faced and confidently, “people will always need a place to live”. That stuck with we through the years, and I felt redeemed as it all unwound. I had no idea it would be as “bad” as it was, but it seems people here did. I now read and learn. And laugh, and get bummed out with all the doomsaying. Good mix.
Sac and SFO from the central valley. (Mainly Davis, Ca, but a bunch of other nearby areas too). The recession has had an interesting effect on us. We charge $23 to Sac airport from Davis, it’s a door-to-door shared ride deal. Now many more people take the 2-dollar county bus (long ride), but others who used to pay $60 for a cab have “downgraded” to us, so it kind of evened out. And I would say that tipping has only improved over the last couple of years. Davis is kind of a bubble of its’ own, though.
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Comment by Arizona Slim
2011-02-09 11:20:08
Ooooo, Davis! One of my favorite bicycling cities!
Comment by Pete
2011-02-09 11:41:45
That it is! But some take their bikes out on the county roads that connect Davis with Woodland. The “bike lane” on these CRs is about two inches wide. Speed limit 55, and alot of trucks. It’s do-able if the trucks are only going one direction. Of course, often they aren’t. Very dangerous I’d think, but no fatalities that I’m aware of.
Comment by REhobbyist
2011-02-09 12:01:25
Hey, neighbor Pete. I live in Sac.
Comment by Arizona Slim
2011-02-09 12:02:20
But some take their bikes out on the county roads that connect Davis with Woodland. The “bike lane” on these CRs is about two inches wide.
Yeah, I know.
When I left Davis (in 1981), I headed over to Vacaville. And darn if it didn’t start raining. As in, really coming down!
At one point, I was riding through a low spot of road, and it was completely covered with water. I must have hit the CA equivalent of a lunar crater. The ultimate pothole. Almost capsized my bicycle.
Comment by Pete
2011-02-09 14:47:06
“Hey, neighbor Pete. I live in Sac.”
Wow, small world. I actually just moved from Davis to Woodland. My wife works in Sac, so we pondered moving out there. Some really affordable homes, it was tempting. Interesting differences between Woodland and Davis. Only 8 miles from each other and the $400,000 home in Davis is under $200,000 in Woodland.
Comment by ocjohn
2011-02-09 14:55:35
I’m a Sac native and proud UC Davis alumni, but live in the other half of California now.
The town was anti-student back then, but I don’t know what it is like now. As students we used to joke that UC Davis could just have easily been UC Dixon.
Here in the OC, the market has definitely turned south since summer. New home developments are not sold out and they have started offering commissions to brokers again. Saw this movie in 2007. I think the ending will be similar but don’t think it will be as gory. Trying to hold out a little longer to see if the trend will continue before buying a house.
Comment by Pete
2011-02-09 15:09:01
“The town was anti-student back then, but I don’t know what it is like now. As students we used to joke that UC Davis could just have easily been UC Dixon.”
That’s funny. Actually, I would call it pro-student today, if you don’t include rent prices. There are 30,000 students here now (if you include grad students), and so much of the regular population is tied in some way to the university. No animosity in either direction. Much of the town is opposed to the University’s plans to build a massive housing complex off of hwy 113, that’s about it.
My shoeshine boy moment was when I rode an Enterprise rent-a-car shuttle from Boston Logan to the rental agency (which was actually kind of far from the airport).
The driver was bragging to me about his properties.
I paid attention when an accountant in 2004 told me that he was using his house as his retirement plan.
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Comment by MightyMike
2011-02-09 13:56:44
Wasn’t the plan for most CA homeowners on the coast? Wasn’t the plan to sell the house when they reached retirement and move to one of the neighboring states?
Comment by Arizona Slim
2011-02-09 13:59:22
Wasn’t the plan to sell the house when they reached retirement and move to one of the neighboring states?
Yeah, this one. And we were supposed to get all warm and fuzzy when they came here, started foo-foo businesses funded by their CA home equity, and proclaimed that the universe would take care of them.
Comment by In Montana
2011-02-09 15:58:01
They liked to move here and warn us that Cali was crazy, and it would be a shame to ruin this place like that.
I kind of like partisanship, it’s the personal attacks that frustrate me.
But on a positive note, it’s all of the above for me. I used to be really active on car boards, but found the economics lessons here to be far more useful.
“WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on pricesUS diplomat convinced by Saudi expert that reserves of world’s biggest oil exporter have been overstated by nearly 40%.”
We all know that conservation and thinking ahead is what effette wussies do! Real men don’t drive cars, especially not cars with 4 cyclinder engines!
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Comment by leosdad
2011-02-09 14:46:47
Elvis was a truck driver before he became famous.
Comment by In Colorado
2011-02-09 15:59:18
“Elvis was a truck driver before he became famous.”
I think that he drove the “uncool” kind of truck, a delivery van. Still, I could see him driving one of those 4 door, 400HP, 6000 lb “commutter” vehicles that get 12 mpg.
It’s just way easier to wear a flag lapel pin or affix an “I Support Our Troops” sticker to one’s car with no hint of irony.
Putting on a sweater when it’s cold is so lame! I don’t have time to cook or garden because my commute is so long! Yo quiero Taco Bell!
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Comment by Arizona Slim
2011-02-09 10:06:15
Putting on a sweater when it’s cold is so lame!
Well, I must be crippled, because I just donned my second sweater of the morning.
Comment by RioAmericanInBrasil
2011-02-09 10:17:31
Putting on a sweater when it’s cold is so lame!
I just turned the AC off, turned on the fan and took off my socks.
Comment by MrBubble
2011-02-09 11:18:08
I forgot about the AC. The one day last summer that I wanted to use it, the landlords happened to be around. I mentioned that I was thinking about turning it on and the woman looked at me like I had two heads and said, “There’s no AC.” She didn’t say “idiot”, but I heard it. No AC for us (by design)!
MrBubble
Comment by measton
2011-02-09 11:33:23
Jimmy Carter will look like a prophet after Saudi Oil production collapses. People will look back and remember Reagan removing solar panels on the tax payer dime just to make a statement that he didn’t believe in alternative energy or energy conservation.
Comment by oxide
2011-02-09 11:39:22
Sorry measton, I don’t think they will. They’ll just think of Carter asking us to sacrifice by putting on a gay sweater, and Reagan allowing us to bully people on the highway in an SUV while keeping the kiddies quiet with a DVD player.
Comment by Arizona Slim
2011-02-09 12:03:49
People will look back and remember Reagan removing solar panels on the tax payer dime just to make a statement that he didn’t believe in alternative energy or energy conservation.
Yes, there was that aspect of the story.
However, those panels were originally installed to provide hot water for the White House kitchen. And the kitchen staff complained because they didn’t work very well.
Comment by michael
2011-02-09 14:20:01
…and it would of cost the taxpayers alot more to put in ones that did work.
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.
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Comment by RioAmericanInBrasil
2011-02-09 09:57:42
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.
Me and mine too.
Comment by Arizona Slim
2011-02-09 10:02:17
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping.
Not only were we told to go shopping, we were also told to take a trip! On a plane!
“Not only were we told to go shopping, we were also told to take a trip! On a plane!”
Go to Disneyworld! IIRC dubya literally said that.
Comment by oxide
2011-02-09 11:40:34
After 911, a friend of mine did look into going to Disneyworld, thinking she could get a price break, but nope, Uncle Roy was as greedy as ever. She didn’t go.
Comment by In Colorado
2011-02-09 12:17:58
“After 911, a friend of mine did look into going to Disneyworld, thinking she could get a price break, but nope, Uncle Roy was as greedy as ever. She didn’t go.”
Wasn’t that when they introduced the “dine for free” plan? It has expanded quite a bit now and from what I have heard its offered for over half the calendar year.
Of course better deals are found “off property”.
Comment by CarrieAnn
2011-02-09 12:19:39
Me too, Polly. I knew then something was very, very wrong with our government.
**********************
“The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.”
I’ve never understood why fuel conservation (and eventually independence) has not been embraced as a patriotic imperative.
It totally was for 25 years.
….but in Brazil.
P.S. It worked.
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Comment by Prime_Is_Contained
2011-02-09 10:53:48
“….but in Brazil.”
That’s something I’ve long respected about Brazil. They managed to sustain some longer-term thinking on energy independence, in an era of increasingly short-term thinking.
Comment by REhobbyist
2011-02-09 12:04:53
Sugar cane ethanol! Efficient where corn isn’t. Can we grow sugar cane in mainland USA?
Comment by In Colorado
2011-02-09 14:30:12
Can ethanol be made cost effectively from sugar beets?
Comment by ecofeco
2011-02-09 15:41:11
We used to grow a lot sugar cane here. It’s just that it was cheaper to farm it (grow, harvest, process) somewhere else.
“Overseas” somewhere else.
Comment by alpha-sloth
2011-02-09 16:27:28
I think switchgrass is now being touted as the best source of biofuel. It’s native, grows on marginal land, and doesn’t need a lot of water and fertilizer. Many claim hemp is still superior, but of course that opens another can of worms.
It is not just Saudi Arabia. As soon as OPEC started to consider “reserves” when setting a countries quota, reserves for all the OPEC countries jumped. It is all subprime oil.
One thing we can do is get rid of so much of this plastic crap, which would certainly do wonders not only for the price of oil, but the planet as well. For example, go to any Lowe’s or Home Despot and check out the shower heads or faucets and you will find that many of them are made of plastic with a metallic coating. You’re lucky if you get a year out of them. Planned obsolescence on steroids.
So much stuff is made out of plastic that would be better made out of metal or wood. It would last longer, pollute less, free up space in trash heaps, etc. Get rid of a lot of plastic bags and plastic packaging, too. Bring back re-usable bottles and bags.
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Comment by In Colorado
2011-02-09 09:21:35
+1
I make a point of finding the non plastic crap. It can be hard though. If you want a non plastic vacuum cleaner you might have to buy a Kirby or an Electrolux.
Comment by MrBubble
2011-02-09 11:29:15
“non plastic vacuum cleaner you might have to buy a Kirby or an Electrolux”
Had my first Old School moment last weekend while purchasing a vacuum on the weekend (Olive Garden…if there’s time). I was promised that our new German vacuum will be the one used the clean the room in which we are waked when we both snuff it. The Miele Titan. What’s up, sucka?
MrBubble
PS: It was expensive, but we went the “buy quality once” route, and it got the best reviews for a cannister style. With the HEPA filter, it can also be used as an air purifier for the baby room, if desired. Don’t like have to throw away bags, but our cheaper bagless vacuum wouldn’t clean even though I washed and scrubbed the filter with a toothbrush regularly and the Dyson was out of our price range.
Comment by Awaiting
2011-02-09 11:36:25
Plastic has been indicated as a pseudo estrogen, and a cause of high estrogen levels in women, leading to a Breast Cancer Diagnosis. I tossed out my plastic kitchen stuff and replaced it with glass. Besides, glass is more eloquent.
Comment by Arizona Slim
2011-02-09 12:04:50
Besides, glass is more eloquent.
Uh-oh! Talking glass!
Comment by REhobbyist
2011-02-09 12:07:24
I wanted to buy some baby socks the other day. $5.99 for four pairs at Marshall’s. Problem was they were in a big plastic box display with little plastic feet to fill them out. It looked cute, but I couldn’t believe such a waste of plastic for four pairs of baby socks.
Comment by The_Overdog
2011-02-09 13:42:53
Here’s a tip: Don’t add any bright lighting inside your cabinets, or you’ll be sad at how poorly your dishwasher works when you look at your glass dishes.
Comment by ecofeco
2011-02-09 15:48:24
Paper packaging was one of the main causes of nearly destroying our national forests.
Most of our wood now comes from Canada, where they are also now seeing unsustainable levels of logging.
I’m no tree hugger, but the numbers don’t lie. The human race is depleting its resources.
Fresh water. Fish. Wood. Arable land. Oil. All are in critical trouble.
We now have good logging polices in place, but it put a lot of people out work in the NW.
I was amazed when I first moved up to the Seattle area and drove around the Olympic Peninsula. Seeing recently logged areas, and then others with signs saying they were last logged 30 years ago…It’s good they rotate and limit the scope of things, but still sad to be driving through national forest land and see a clean-cut parcel.
It is kind of cool seeing all the baby trees sticking up, though.
It will get interesting once gas at the pump hits $10 and rationing. Then the blame game starts, commies, liberals, Arabs, oil companies, tree huggers, Bush, Clinton, speculators, easter bunny, etc.
Got bike or electric train? No? Tough luck!
At $10 it will self ration. $300 to fill up the tank on a pickup truck will make those babies as popular as a non-alcoholic beer at a frat party. And if there is rationing they will be even less popular (here’s your 5 gallons for the week, let’s see, that should be good for about 60 miles)
While the corporate MSM is sticking desperately to its “crisis contained” meme for Egypt - we wouldn’t want the sheeple thinking a crisis might be brewing, which would spook the markets - al Jazeera with its on-the-ground reporting is painting a very different picture.
‘In the mid-1990s, Suleiman worked closely with the Clinton administration in devising and implementing its rendition program…Under the Bush administration, in the context of ‘the global war on terror’, US renditions became ‘extraordinary’…Egypt figured large as a torture destination of choice, as did Suleiman as Egypt’s torturer-in-chief. In Egypt, as Habib recounts in his memoir, My Story: The Tale of a Terrorist Who Wasn’t, he was repeatedly subjected to electric shocks, immersed in water up to his nostrils and beaten. His fingers were broken and he was hung from metal hooks. At one point, his interrogator slapped him so hard that his blindfold was dislodged, revealing the identity of his tormentor: Suleiman.’
‘Frustrated that Habib was not providing useful information or confessing to involvement in terrorism, Suleiman ordered a guard to murder a shackled prisoner in front of Habib, which he did with a vicious karate kick.’
‘On January 29, Omar Suleiman was anointed vice president by tottering dictator, Hosni Mubarak..Suleiman has long been favoured by the US government for his ardent anti-Islamism, his willingness to talk and act tough on Iran - and he has long been the CIA’s main man in Cairo.’
He mentioned his real estate troubles in the book he wrote shortly after the Hudson landing. Book’s title is Highest Duty. As insta-books written by ghostwriters go, it’s not bad.
Ask anyone in the aviation business…….airline pilots and their “investments” are a running joke.
There’s a stand up comic whose day job is flying for Fedex. One of his bits has to do with sitting in a cockpit for several hours, listening to investment “advice” from other pilots.
What’s different this time is that the accelerated declines are likely to bring the real estate market to a bottom later this year, according to real estate information service Zillow.com, which is releasing a report today on fourth-quarter values.
“This is the beginning of the end,” said Stan Humphries, Zillow chief economist. “We’re seeing more depreciation in most markets, which means the ultimate end (to the declines) will come sooner rather than later.”
All across America real estate investors are pondering the question: is there a housing bubble? To answer this question we interviewed 4 of the nation’s leading unbiased real estate experts: David Lereah, economist; Leslie Appleton-Young, economist; Gary Watts, a highly respected real estate observer; and a man who goes by the name “Buck” that runs a popular Internet blog called There Is No Housing Bubble!
And good satire at that. About halfway down, check out the tale of the city of Realatopia with Prince Realtor and the two brave knights, “Option Loan” and “Interest Only Loan”, setting out to find and slay the bubble monster. Hilarious!
People tend to forget what the atmosphere was back in the day (and the abuse regular posters here took from the trolls). Note this is 2006!
‘Debt is Wealth — look at all the great societies the world has produced and you see one thing in common: debt…Slavery is Freedom — I remember reading once someone saying that they did not want to become a slave to their home. They felt the seeming high prices of homes today means they are slaves to the house, spending weekends fixing up the house or working second jobs to make the mortgage payment.’
‘But what they don’t realize is the freedom the home gives you. You see, every hour spent putting in granite countertops or fixing the yard is money in your pocket. You are using your time to create wealth. And every nickel you put into that mortgage from that second or third job comes back to you dressed up as a twenty dollar bill.’
‘Fear is Happiness — one of the main reasons why people stay renters is fear of failure. They are afraid if they buy a house they might lose everything. They see isolated instances of this happening and assume that they will be one of these unlucky few. However, by embracing the fear and buying one or multiple homes you open the door the complete and joyous happiness.’
‘Let’s say you do something wise, you purchase a home in California for $500,000. This beautiful and desirable home will appreciate by about 20% per year. Therefore after 30 years that home that the renter unwisely turned his nose up to will be worth a little over $100 million. Now let’s say you are even wiser than this. Let’s say you use the rapidly rising equity in this dream home to purchase another undervalued home every year. So you’ll earn 30*$100 million or over 3 BILLION dollars. That’s right, you’ll become one of the richest people in the world and all you did was sit back and let debt work for you.’
‘Now, some of you embittered renters probably think this is some unrealistic fantasy…If you look at history there has never been any period of time where home prices declined. Never. Even if you go back to Ugh selling the first cave to Ooog for 3 rocks and a wooden club, I guarantee you Ooog made money…So what will the future be like? It will be a lot like the middle ages. You will have a landed aristocracy (home owners) and you will have the poor, embittered, masses (renters)…sadly, 30% of Americans will be left behind with no hope of a better life. And like the serf of the middle ages they will leave to their children nothing but ashes. Ashes of dreams. Ashes of hopes. Nothing but servitude to their landed betters. What a hopeless existence they will have.’
‘Unfortunately, a lot of reckless people are throwing about words like “bubble” to try to ruin people’s lives. They are trying to use fear and ignorance as a weapon to destroy the lives of this future aristocracy. I believe they have one of two motives. Either they are looking into the abyss and see that they will never own a home so like an angry two year old they want to destroy the hopes of everyone else. Or they are greedy and want to drive prices down temporarily so they can snatch up this wealth from those foolish enough to heed their advice…For the frightened renter/bubble advocate, it causes fear and resentment to want to ruin other people’s lives. Don’t become one of these pathetic wretches.’
‘That is why I’m writing this blog, to educate the few redeemable renters out there. To let them know that if they take a chance and let debt, slavery, and fear into their lives they’ll find wealth, freedom, and happiness.’
“So you’ll earn 30*$100 million or over 3 BILLION dollars. That’s right, you’ll become one of the richest people in the world and all you did was sit back and let debt work for you.”
Yeah, it had to be satire.
Then again, my carpool mate received advice from a “friend” (not a Realtor) the other day: that he was stupid being a renter and that if he bought now he would make a cool 50 grand in just 2 years.
IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then. I literally would be asked by reporters what I thought of this blogs ‘rebuttal’ to the HBB. I had never even looked at it, so I could answer.
But as far as the numbers; remember what people were saying when coastal CA prices went to their peak; that these houses would be worth 10 times that in X number of years? When Miami condos planned for empty lots sold and re-sold up over $1000/sq ft? And the talk about ‘landed aristocracy’ versus ‘bitter renters’, that was common-place and was repeated in the media over and over.
Yes, the reporting and dialog a few years back was THAT insane. It’s a mania, there is no other way to describe it. Some places it’s peaked, in others it goes on. And we still have a part of the population, govt and media who want to keep that madness alive.
Comment by In Colorado
2011-02-09 11:28:11
“IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then.”
Absolutely. Which is why at first I thought it was for real.
Comment by bobrune
2011-02-09 11:45:14
“IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then.”
True. These words on that blog summed up the times:
Financing is no problem. Habla espanol. Bad credit? No credit? Legally dead? No matter what you say he will say he can put you in a home. He has homes for all payment levels. No income needed.
Anonymous from California writes:
I be a realuhtor in san jose. I sell milliun dolor homes to janiters waitors and morgage brokers. I urn my 6% comision. I maid 1 milliun dolors last yeer selling homes. I urn my money. Tell people the trooth about homes allways going up in price. Its a fact. I no. I’m a realuhtor.
Wise words from someone who knows his industry. Who better to listen to than a highly trained real estate professional who knows the market and your home’s value? What sort of training do most of these “housing bubble” maniacs have? They are not trained real estate professionals. Rather they are bitter amateurs who are projecting their hopes and fears onto other people. They don’t understand why changing demographics, immigration, environmental, and other socio-economic factors have caused real estate to reach a permanently high plateau. People in the industry and educated home owners know the truth. They don’t need some outsider trying to confuse them with so-called facts. But I give you my pledge that as long as I have fingers to type I’ll proudly proclaim “there is no housing bubble!”
‘The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’
‘In addition, officials could also reduce the maximum loan limit for mortgages that Fannie and Freddie are allowed to buy, and encourage them to raise the fees they charge banks to guarantee mortgages. Other options that could be discussed in the white paper are gradual increases in the minimum down payments on government-backed loans, and an accelerated reduction in Fannie and Freddie’s loan portfolios.’
Yes, the portfolios. Why did the GSEs hold the paper behind the loans? It didn’t have anything to do with their ‘mission.’
‘May 19, 2005: Federal Reserve Chairman Alan Greenspan again pushed for limits on the multibillion-dollar mortgage holdings of Fannie Mae and Freddie Mac, saying such restrictions would not hurt the thriving housing market. ‘As Fannie and Freddie grow ever larger, their ability ‘to quickly correct a misjudgment in their complex hedging strategies becomes more difficult,’ Greenspan said. ‘We are thus highly dependent on the risk managers at Fannie and Freddie to do everything right…The assets required for Fannie and Freddie to achieve their mission are but a small fraction of the current level of their assets,’ Greenspan said.’
‘April 25, 2005: The DallasNews editorial by Danielle DiMartino has this headline, “High stakes won’t allow us to admit housing bubble.” ‘The powers that be insist there’s no housing bubble. They have to, mass delinquencies and foreclosures are simply not an option, not with the risks built into the mortgage-finance system. The general concern about these instruments is that they’ve yet to be ‘tested’ by an inevitable market downturn. Is there risk in today’s lax lending standards?”
“John Vogel (said that) when the government first noted the risks in the savings and loan industry, he remembered, a pencil-to-paper exercise put the risk at about $40 billion. ‘We knew we had a problem back when the S&Ls were on the skids in the early ’80s. Instead of taking care of it then, we waited until we had a $500 billion problem.’”
“Ten years ago, when the whole securitized mortgage market was $1.6 trillion, Fannie and Freddie held about $76 billion on their balance sheets, or less than 5 percent. Today, Fannie and Freddie either own or back about $3.5 trillion of a $5.5 trillion market.”
“Eating away at these protections are no-income verifications, piggyback loans made only to skirt the mortgage insurance requirement, builders paying closing costs so buyers cross the threshold owing more than the house is worth, and lenders doing everything they can to avoid foreclosing.”
‘Fannie’s Regulator Says Problems Not Yet Resolved, the worst may be yet to come.” The Wall Street Journal gave us an update on the Fannie Mae fiasco today. Some tidbits: “‘Fannie’s problems are worse than those of sibling Freddie Mac and that a hefty fine could be in the works’. said Armando Falcon, director of OFHEO.”
As it became known last week, Fannie employees have been “falsifying signatures and altering information in databases” and Mr. Falcon says such problems were “not isolated incidents. Moreover, he adds, ‘there are additional issues that we still haven’t looked at yet,’ and these issues could haunt Fannie for some time.’”
Yet the GSE’s continued to plunge into the disaster:
‘February 20, 2005. Freddie Mac unveils a new mortgage product intended for the “savvy borrowers”. “(T)he second-biggest provider of financing for U.S. housing, said that it will expand its interest-only payment option to more adjustable-rate home loans to meet demand from borrowers”.
“(Its) designed for borrowers who fully understand that the monthly payment will rise following the interest-only period,” Freddie Mac said in the statement. The story points out “they are popular with consumers who are stretching financial resources and might not be able to repay the loans when interest rates rise.”
‘March 30, 2005. Foreclosure filings have exploded in the Denver metro area and county officials are pretty clear as to who is to blame. “‘Lenders started giving money to people, and it’s gotten out of hand,’ said Jeannie Reeser, public trustee of Adams County. ‘I am talking to people who have jobs, but their income doesn’t come anywhere close to matching their financing.’”
“Soaring foreclosure filings in Arapahoe County for the first three months of this year helped drive metro Denver’s foreclosure rate 34 percent higher than the same period of last year and 30 percent higher than the fourth quarter of 2004. The rate represents 1.3 percent of 125,325 single-family, owner-occupied houses in the county.”
‘One mortgage lender says borrowers should be wiser. “Everybody has to have what they want right now, no waiting, no saving up,” he said. “Credit is so loose today that I can buy the groceries I need on a credit card, eat the food tonight, discard the food by tomorrow at noon and finance my debt on a 30-year, amortized loan. How stupid is that? But people do it all the time - and then they wonder why they’re in foreclosure.”
‘The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’
Okay, Obama, here’s Slim, puckering up in Tucson. Next time you come here, I’m gonna kiss you. I swear I will.
“The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.”
“The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’”
‘On a scale of 1-10
Degree of blame for Bubble:
Banksters 10
FB’s 2′
From above in early 2005:
‘Everybody has to have what they want right now, no waiting, no saving up,” he said. “Credit is so loose today that I can buy the groceries I need on a credit card, eat the food tonight, discard the food by tomorrow at noon and finance my debt on a 30-year, amortized loan. How stupid is that? But people do it all the time - and then they wonder why they’re in foreclosure.’
I think that, in a few months, Ms. Giffords is going to have some very pointed things to say about that topic.
Ditto for her husband and her parents, who will be her caregivers for quite some time to come. Recall that Gabby’s father had some pointed things to say about the Tea Party shortly after she was taken to the hospital on January 8.
Right now, things are still very nicey-nice. But just you wait. The fireworks are coming.
Yes, but not before a lot of the blogosphere did the “right-click and save image” thing.
Comment by nickpapageorgio
2011-02-09 16:45:44
Got to love Freedom of (Politically Correct) Speech.
Comment by RioAmericanInBrasil
2011-02-09 17:04:44
Got to love Freedom of (Politically Correct) Speech.
Come on nickpapageorgio, Put your politics aside for a bit. I’m sure you don’t condone that kind of “free-speech”.
“Don’t just retreat, RELOAD” Then putting gun sights over districts. And moron, fascist ilk calling for “second amendment solutions” “We need to take out Harry Reid.”
Who admires that kind of “free speech” nickpapageorgio?
Do you? I don’t. But I think it makes some wack-jobs feel like real tough guys. You know, kind of gun toting, 90 IQ, corn pone, red-neck edgy. Nice huh?
People who like that stuff are not the norm in America.
Comment by ecofeco
2011-02-09 17:34:43
Constitutional free speech does not and never did and never was meant to authorize treason or provoke violence.
You CANNOT make threats and claim “freedom of speech.” It was, is and always will be illegal. The only reason hate radio got a pass was because they were well connected.
Comment by nickpapageorgio
2011-02-10 08:27:53
Umm….Unless you are in elementary school, you do know that individuals are responsible for their own actions. Also, I get tired of pointing out the fact that the Tucson shooter was an anarchist leftist. You can cherry pick statements from left wing politicians containing far more venom and violent undertones…I guess they don’t count.
Gary might have more luck pursuing work in other states. That would mean selling the house at a big loss or doing what the couple say they won’t do: Give the house back to the bank and walk away.
“We made an agreement,” Loreina says. “We can’t go anywhere until we can break even on the house.”
I wonder ? people can say what sounds good but what will they do when they see others walking away ? Walking away and possibly buying back in at 1/3 the cost. Thats what they did in 1995 in CA.
“She eats TV dinners at her desk for lunch, rather than fresh sandwiches at a deli. She can recite, down to the penny, the cost of South Beach Diet bars at three retailers.”
Why not “fresh” sandwiches made at home (for less than the price of that TV dinner)? Only in America can you see people crying poor while constantly dining on prepared foods. Geesh.
When you buy the diet microwave “meals” for a couple of bucks on sale it’s cheaper than real bread and decent cold cuts and you don’t have to eat the same sandwich everyday for a week to use up the food.
Exactly. A cheap TV dinner can cost ~$1. The better ones cost ~$2.
Decent (not fancy. still white) bread costs $2+ a loaf. Even cheap lunch meat is around $3, but off brands taste so bad and the portions are no bargain that they aren’t worth buying. Oscar Mayer is as low as you want to go. Cheese? Another $3. Tomato? Lettuce? Mayo? Mustard?
You are now at around ~$16+ for the week. Vs $10 for TV dinners? And it’s hot? No brainer.
You don’t go to the grocery store much, do you Kim? Or perhaps you’ve never had to REALLY bargain shop.
Homemade sandwiches are only a bargain compared to store bought, but can’t compete with TV dinners.
THAT’S how screwed up our economy is. Call it “Sandwich Economics.”
You are now at around ~$16+ for the week. Vs $10 for TV dinners? And it’s hot?
If you’re doing that comparison and taking it being hot into consideration, don’t forget to add in the cost of the microwave as well as the electricity (the latter is likely negligible, but still a consideration). Fridge/freezer is required for either.
Comment by ecofeco
2011-02-09 18:59:28
Food storage and prep is moot and a wash.
Company microwave. Free. Refrigerator. Who doesn’t have one? Prep time? Longer for the sandwich.
Personally, there comes a point where it’s simply not cost effective to micro-account manage.
When on sale, Lean Cuisine can be had for 2 bucks each. It’s not easy to make any kind of lunch at home for that price. The better cold cuts cost $6-7 per pound, which makes the sandwich alone $2.
I’ve been calculating food prices for a while and made a strange observation:
1. Mid-quality food costs about 1.0 penny per calorie.
2. Low-quality process carbohydrates costs something like 0.75 pennies per calorie — likely because the original farm subsidies were structured to reward calories, not nutrition.
3. High-quality food costs 1.15 to 1.25 pennies per calorie.
And truly good stuff costs about a dollar per serving per food, like 1.5 oz cheese or a 1/4 pound fresh berries.
There are exceptions at both ends, but it’s a good starting point rule of thumb. It seems to work for restaurant food too, although it’s skewed a bit higher of course. For example, typical Applebees fare with french fries is about 1000 calories for 10 bucks. Applebee’s “healthy, under 560 calorie” entrees are about $8.50.
Still?? Wow, I haven’t eaten one of those in years. But when I did, it was always two. And I can make a filling lunch for way less than $4. I may have to do the lasagna calculation tonight.
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Comment by ecofeco
2011-02-09 16:19:29
2? I can only eat one.
And while I LOVE lasagna, it’s not as nutritious.
Comment by MrBubble
2011-02-09 18:19:51
Only one? They’re like 300 calories!
Our lasagna is a bit more nutritious since we add spinach and home-roasted red peppers.
“The better cold cuts cost $6-7 per pound, which makes the sandwich alone $2.”
Deli cuts are a value added luxury. A roast or ham or chicken on sale will make many sandwiches, and they will cost less than $1. You have to bring your own knife though.
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Comment by X-GSfixr
2011-02-09 15:10:26
Enough with the “I can eat cheap” bragging.
If my life depends on my cooking skills, I might as well put a bullet in my head right now, and bypass the slow death by food poisoning.
I hate cooking. The only reason I did it before was because it cost a lot less, when I had kids (and their teenage boyfriends) hanging around the house.
Now the girls are (mostly) out of the house, I work until 6-7pm most nights, and I don’t save much money by cooking at home.
Cooking (to me) is like hitting yourself in the head with a hammer. It feels so good when you stop.
Just make sure when you buy the inexpensive TV dinners that the list of ingredients isn’t a mile long, you can pronounce them all, and they’re not the same as your shampoo.
Well I just saw another Democrat drop out of Congress, Virginia Senator Jim Webb won’t be running in the next election. And he was a Blue Dog too, very conservative. At this rate there won’t be any incumbents left to run in 2012. The Senate should flip and the house should pick up 20+ more GOPers. This country is going hard right fast. I give Obama zero chance of being re-elected.
Recall that in 1984, less than half the eligible electorate voted in the presidential election. Yet the Reagan people called his re-election victory a mandate.
the world wide interweb told me 53.1 percent of the voting age population showed up.
56.8 percent of the voting age population showed up for obama/mccain.
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Comment by Arizona Slim
2011-02-09 15:06:00
the world wide interweb told me 53.1 percent of the voting age population showed up.
Oops! I stand corrected. I meant to say that less than half the eligible electorate voted for Reagan in 1984.
I can recall quite a bit of commentary over the (for the time) low voter turnout in the 1984 election. To the point that Gil- Scott Herron released a song called “B Movie.” It started with Gil saying, “The first thing I’d like to say is mandate, my @ss.”
Comment by ecofeco
2011-02-09 16:22:29
“The Revolution Will Not Be Televised”
I loved “B Movie” as well. Really sticks it to the neocons.
Comment by Arizona Slim
2011-02-09 16:30:12
“The Revolution Will Not Be Televised”
I loved “B Movie” as well. Really sticks it to the neocons.
I was working in a food co-op in Pittsburgh when that song came out. Everyone working in the store was expected to deejay a killer set of music during their shift. Competition to get on the turntable was fierce.
And let me tell you, “B Movie” was a real customer-pleaser.
Comment by Happy2bHeard
2011-02-10 01:02:36
That was 53.1% of eligible voters, not voting age population.
Yes but the growth rate coming out of the recession was more than twice as high as the present growth rate. 8 to 9% unemployment is not good for the incumbent party.
The number of borrowers who owe more on their mortgages than their homes are worth took a huge leap in the fourth quarter of 2010. A full 27 percent of borrowers are now “underwater” on their mortgages, up from 23 percent in the previous quarter, according to a new report from Zillow. Foreclosure moratoriums and falling home prices are to blame.
Adding to a slew of negative reports on home prices, Zillow found home values posted their largest quarter-over-quarter decline, 2.6 percent, since the beginning of 2009. The home buyer tax credit, which inflated home prices artificially in the first half of the year, resulted in a Fall hangover. Home prices plunged 5.9 percent compared to the fourth quarter of 2009.
With foreclosure moratoriums in place due to charges of faulty paperwork at some of the nation’s largest mortgage servicers, many homes with underwater mortgages that should have been repossessed by lenders were not, and instead boosted volume in the negative equity pool. Falling prices didn’t help.
“…since the beginning of 2009. The home buyer tax credit,…”
Wasn’t the home buyer tax credit put into effect just after the beginning of 2009? It’s beginning to look like that tax credit turned an entire cohort of first-time buyers into knife catchers.
Working class going down and upper class going up. I wonder how long this trend will last?
Bloomberg
“The amount of money being made in the rest of the world is astonishing — confidence is more than just coming back to the London market,” said property entrepreneur Nick Candy, who along with his brother Christian masterminded the One Hyde Park development that opened last month. Six apartments sold there in November and December for record prices of about 6,000 pounds a square foot, he said, without giving their size.
The shortage of homes for sale in London’s seven priciest boroughs last year encouraged more people to renovate and expand their homes, data obtained from the municipalities by Bloomberg News indicate. The number of homes sold in these areas in 2010 was 30 percent below the average of the past decade, Land Registry data show.
-”Growing problem of unemployment and under employment among university graduates……”
-….”less-skilled and less educated migrants from the countryside, who are consigned to second-class jobs in the cities…..”
-”Finally, China needs to get serious about it’s corruption problem. Personal connections, or quanxi, remain critical for getting ahead. Recent migrants from the countryside, and graduates with degress from second-tier universities sorely lack such connections…..”
A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.
Nearly one-third of respondents said that understanding the mortgage process was the most difficult step in buying a home in the survey, conducted by MortgageMatch.com, a unit of Move Inc.
Nearly one-third of respondents said that understanding the mortgage process was the most difficult step in buying a home, according to the survey conducted by MortgageMatch.com, a unit of Move Inc. That was higher than the share of borrowers who said getting approved for the mortgage (23%) or negotiating the home purchase price (25%) was the most difficult step in buying a home.
The majority of buyers said that finding the right home (54%) was the hardest part of the buying process, while 37% of borrowers said saving for the down payment was the most difficult step.
My last two mortgages have had a ridiculous amount of paperwork associated with them. The looks on their faces when they realized I expected to read each document was unforgettable.
“A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.”
So much for the era when anyone who could breath automatically qualified for a mortgage loan. I heard from a colleague today that buying a short-sale or a foreclosure home is a major pain in the rumpus, as well.
Nearly half of South Florida homes sold for a loss
by Kim Miller
Zillow released its fourth quarter home statistics this morning with sobering results for South Florida.
In Miami-Dade, Palm Beach and Broward counties, 47 percent of homes sold in December did so at a loss.
The Treasure Coast fared even worse with 54 percent of homes selling for less than what the previous owner paid.
Nationwide, home values in the United States posted their largest quarterly decline since the first quarter of 2009, falling 2.6 percent as the temporary stimulus of the home buyer tax credits wore off, according to Zillow.
“While the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place,” said Dr. Stan Humphries, Zillow chief economist. “Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom.”
“Retirement is supposed to be all about enjoying the time you’ve been saving up for, and the reality is that many people couldn’t save enough”
And yet, that didn’t stop them from retiring.
More than half of those surveyed had saved less thatn $50,000 - and many of that group said they’d saved absolutely nothing - yet they retired anyway. Just 4% said they had delayed their retirement due to debt.
“They get to a certain age and they feel privileged”, Ellington said. “They say ‘I’m going to go on that trip even though I have to put it on my credit card.’”
Freddie Mac said that its chief operating officer, Bruce Witherell, resigned from the company on Wednesday.
In a federal filing, the company said Mr. Witherell left for “personal reasons” and that his departure was effective immediately. Mr. Witherell won’t receive any termination benefits.
…
TULSA, Okla.—A second powerful blizzard in a week roared through parts of the nation’s midsection on Wednesday, bringing biting winds and dumping more than a foot of snow on areas still digging out from last week’s major storm.
As the system barreled through the Plains toward the Deep South, it blanketed parts of northeastern Oklahoma under a new layer of snow, dropping 16 inches on the town of Pawhuska, 14 inches on nearby Eucha and more than a foot on the town of Bartlesville, officials said.
By 9 a.m. Wednesday, Tulsa had received 4.5 inches of new snow, putting it just two-tenths of an inch from matching its seasonal record of 25.6 inches set in the 1923-1924 season. Last week’s record 14-inch snowfall kept students out of school for at least six days and made many roads in the state’s second-largest city impassable, and garbage pickup had only just resumed.
…
The Telegraph
Banks and Finance
Meredith Whitney is the talk of Congress
Meredith Whitney, the Wall Street analyst who shot to fame predicting Citigroup’s demise, was the talk of Congress on Thursday. Or at least a corner of it. And then only because she was no where to be seen.
Meredith Whitney is the talk of Congress
By Richard Blackden 8:13PM GMT 09 Feb 2011
Ms Whitney had been invited to testify before a committee of lawmakers examining the health of America’s $2.86 trillion (£1.8 trillion) municipal bond market. It’s one of the less glamorous parts of the debt universe, covering the borrowings of the country’s towns, cities and other local authorities that exist below state level.
The House of Representatives Oversight and Government reform sub-committee had asked Ms Whitney to attend because she has been the talk of the market this year. The 41-year old, who cited a clash of schedules in declining the invitation, caused waves in the market after using a high-profile television interview late last year to warn that a flood of defaults was on its way.
“You could see 50 sizeable defaults, 50 to 100 sizeable defaults,” Ms Whitney, who runs her own research firm, told CBS’s ‘60 Minutes’ programme a week before Christmas. “This will amount to hundreds of billions of dollars’ worth of defaults.”
Given there are legitimate concerns over the health of some borrowers in the municipal bond market, critics have lambasted Ms Whitney’s comments as reckless and designed only to grab headlines. The ‘60 Minutes’ programme she appeared on attracted about 18m viewers, according to Neilsen ratings.
While investors were pulling money out of municipal bond mutual funds already, it has continued since the interview aired. Investors have redeemed about $33.5bn from the funds in the past 12 weeks.
What do you think about this? A portion of an article:
“The question, of course, is this: Does her prediction have any merit?.
We ran across some impressive gathering of statistics put together by Michael Schroeder of Wasmer, Shroeder & company, that analyzes Whitney’s assertions. There’s a problem with Whitney’s math. It seems to be off, by at least an order of magnitude.
Whitney did not specify exactly how many “hundreds of billions.”
Schroeder explains the error of magnitude this way: Whitney acknowledges that states will likely make good on their bond debt, so starting with $2.8 Trillion in outstanding muni debt, less $200 billion in pre-refunded U.S. government obligations, leaves $2.6 Trillion owed by some form of municipal government. There are about exist 91,000 such entities — in the form of cities, towns, townships, counties, school districts, housing and other state or local agencies, water and sewer and redevelopment authorities, fire districts, special taxing districts, etc.
“The states and their agencies owe 40% of the total (1 Trillion), leaving $1.6 Trillion owed by various counties and parishes, cities and towns, taxing districts, local authorities, colleges, universities, tribal governments and electric coops,” Schroeder writes.
He continues explaining, in this way: If you assume 1/3 of these municipalities have outstanding bond debt, that’s $53 million for each of them. Whitney says that 50-100, maybe more, will default in the next 12 months. And that’s where the number don’t add up. Schroeder uses an even higher number – 200 – to show the math error that’s going on…”
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Wednesday warned against sharp cuts in spending at a time when the economic recovery is still fragile enough to require extraordinary support from the central bank.
Even as he warned about the need for a long-term plan to address “unsustainable” budget deficits, Bernanke said steep reductions in government outlays could compromise growth at a time when employment is just beginning to rebound.
“The cost to the recovery would outweigh the benefits in terms of fiscal discipline,” Bernanke told the House of Representatives’ Budget Committee. “I think we really need to take a long-term view.”
…
* By DAVID WESSEL
…
For all the noise, this spending, about $1 of every $6 the government spends, isn’t driving up deficits. “I’m waiting for the politician to get up and say: There’s only one way to do this. You dig into the big four: Medicare, Medicaid, Social Security and defense,” former Sen. Alan Simpson (R., Wyo.), co-chairman of a deficit commission Mr. Obama appointed, said Sunday on CNN. “Anybody giving you anything different…you want to walk out the door, stick your finger down your throat, and give them the green weenie.” (I looked it up: The “green weenie” was a plastic hot dog that Pittsburgh Pirates fans once waved to bestow good luck on their team and jinx opponents.)
…
House Republicans sketched their vision for a smaller federal government Wednesday, proposing sharp spending cuts that would wipe out family-planning programs, take 4,500 police officers off the street, and slice 10 percent from a food program that aids pregnant women and their babies.
Top White House priorities would also come under the knife: Key Republicans are proposing to defund President Obama’s high-speed rail initiative, slash clean-energy programs and cut the Office of Science by 20 percent - trims that would deal a direct blow to Obama’s innovation agenda. They would also cut the Environmental Protection Agency by 17 percent.
Programs traditionally favored by Republicans would not escape unscathed. The list includes significant reductions in agriculture programs, which benefit many GOP districts. All told, House leaders are aiming to cut programs unrelated to national security by more than $40 billion over the next several months, an unprecedented reduction.
“Never before has Congress undertaken a task of this magnitude,” House Appropriations Committee Chairman Harold Rogers (R-Ky.) told Republican lawmakers in a closed-door meeting in which he announced the proposal. “You will be voting on the largest set of spending cuts in the history of our nation.”
…
The political rhetoric on scrapping Fannie and Freddie continues to blithely ignore examples from other developed countries whose much healthier housing markets have no Fannie or Freddie.
Bipartisan support for scrapping Fannie, Freddie draws criticism
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, February 10, 2011
To many Republicans and the Obama administration, Fannie Mae and Freddie Mac, the government’s mortgage giants, are ill. But rather than healing them, both sides agree that the companies should be left to die and that their support for the housing market should wither away.
Some influential interest groups are taking issue with that surprising bipartisan consensus.
They include small banks, real estate agents and consumer groups, who all say that Fannie and Freddie, or something similar, are crucial for sustaining the struggling housing market.
And ahead of the administration’s scheduled release Friday of a white paper on overhauling the nation’s mortgage system, some economists are also saying that shrinking the government’s role too much will make housing far more costly for Americans.
“These groups have considerable political clout and will make it difficult to get Congress to act on housing finance reform,” said Jaret Seiberg, an analyst with MF Global. “Legislation to cut back the government’s role in housing finance will result in higher mortgage rates and downward pressure on home values. That is a tough vote for many lawmakers, regardless of their party affiliation.”
…
If it seems like prices in your area are too high compared to incomes and rents, look no farther than Fannie and Freddie, who originated more than 85 percent of new mortgages last year, for the reason. Remember, affordable housing is the GSE mission!
Audio for this story from Morning Edition will be available at approx. 9:00 a.m. ET
Freddie Mac headquarters in McLean, Va., and the Fannie Mae headquarters in Washington, D.C.
AP
February 10, 2011
The Obama administration will unveil Friday its plan for the future of the mortgage giants Fannie Mae and Freddie Mac, but don’t expect a singular vision for how to move ahead. Instead, the administration is expected to present a menu of options on what the government’s role in housing finance should be.
The government took Fannie and Freddie into conservatorship at the height of the financial crisis. Two years later, the bill to taxpayers is more than $130 billion and counting. Fannie and Freddie now play a larger role in the nation’s housing finance system than ever.
“The government now is financing upwards of 90 percent of all the mortgages being made in this country,” says Guy Cecala, publisher of Inside Mortgage Finance.
The bulk of that is being done by Fannie and Freddie.
… Government’s Share Of New Mortgage Originations (Fannie Mae, Freddie Mac, FHA and VA included)
Nightly news reports have chronicled the impact that “robo-signers” have had on the mortgage industry. Stressed-out clerks sign off on inaccurate mortgage documentation that gets pushed through a “rocket docket” court to force foreclosures, catching innocent bystanders in the wake of the recession.
With collection agencies getting aggressive over smaller debts, industry insiders expect robo-signers to take center stage in the credit card industry as well. The practice has actually been going on for years, but with far lower stakes than the evictions caused by inaccurate mortgage paperwork. Credit card companies typically “charge off” as much as 10 percent of their portfolios each year, selling the right to collect bad debts for pennies on the dollar.
…
…some say what happen locally in January may signal the turnaround we’re all hoping for.
Local real estate agents tell me home buyers are beginning to wake up.
“We have a better atmosphere out there,” said Tom Wilbanks of Windermere Real Estate.
Realtors say more buyers have been showing up at open houses, and they’re making more offers.
“Those that have been on the fence they have realized that interest rates are going up,” Wilbanks said.
That could mean good news if you’re selling, or thinking about selling, depending on where you live and when you bought your home because the latest Zillow data suggests we may finally be at the bottom.
Zillow’s fourth-quarter postings for 2010 show local home values down an estimated average of more than 12 percent over 2009. Pierce County values were down 9.4 percent. King County was down 10.3 percent, and home values in Snohomish County were down 13.7 percent year to year.
But in January 2011, something snapped.
“I think folks are more positive. There’s more buyers out there, as our charts and stats have indicated, ” said Wilbanks, a 15-year veteran in the Seattle-area real estate market.
Charts based on data from the Northwest Multiple Listing Service show a sharp spike in new listings in January, pending sales jumped considerably from December, and inventory is down. It’s still a buyer’s market, but the changing conditions signal a better climate for sellers as long as the price is right.
“Generally speaking I would say we’re back in the 2005 pricing structures,” Wilbanks said.
Experts say while sales are picking up, it could be several months before home values start coming up again.
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Yet another perfect storm: High demand for two-year college education due to unemployed workers seeking to retool, coupled with broke states trying to cut down on higher education expenses.
* EDUCATION
* FEBRUARY 9, 2011
High Enrollment Strains Two-Year Colleges
By KEVIN HELLIKER
Community colleges, long regarded as the most accessible realm of higher education, are becoming more difficult to access thanks to record enrollments combined with belt-tightening by state legislatures.
A jump in enrollment helps to explain why Miguel Morales failed to get a seat in intermediate algebra this spring at Johnson County Community College in suburban Kansas City, Kan.
“You used to be able to wait until the last moment,” said Mr. Morales, a 43-year-old part-time student at JCCC, where enrollment has reached new heights the past two years. “But it’s getting to where you have to go online at three in the morning to get a spot in some classes.” (A JCCC spokeswoman said few if any classes close out in a matter of hours.)
In a survey to be released Wednesday by the Pearson Foundation, a nonprofit educational think tank in Mill Valley, Calif., about 20% of 1,434 community college students interviewed in November reported difficulty enrolling in required courses for the fall semester. About one in three had trouble winning a spot in desired classes.
Those problems are mild next to enrollment caps that could be imposed in California and possibly other states. Budget cuts in California could force its community-college system—the biggest collegiate system in the U.S., serving about 2.76 million students—to turn away about 350,000 applicants next year.
“It’s disturbing,” said Thomas Bailey, director of Columbia University’s Community College Research Center in New York City. But given cost constraints, “community colleges need to figure out some way of limiting their enrollment.”
…
In my working-class public high school, intermediate algebra was an 11th-grade class, and that’s for average intelligence kids. The smart kids take it a year earlier. The less-academic kids take “business math,” but at the same time they start vocational school like food prep or auto mechanic.
CC is just glorified high school now.
For many it is the only alternative to unaffordable universities. The racket at universities is that you have to take those “liberal arts education requirements” like western civilization, music appreciation, literature, speech communication, etc. even if you major in rocket science. Not everybody has $5+K per semester to spend on tuition. So you go to a CC and pay maybe $500 per Semester to get all those pesky requirements out of the way.
Still, I could never figure out why you have to go from K - 12 and then still have to take all those bogus classes in university. 13 years in public school seems a sufficient amount of time to teach a person all the basics they need to know. If they want to know more, there’s a tool called the internet. Universities should be teaching a person the specifics that relate to their course of study.
As for budget cuts in education, the brain seems to be a good place to start trimming excess if you’re on a diet.
/sarcasm off
It depends on the school and the major. It’s certainly not true for engineering. They have one liberal arts elective per semester, at most. “Getting the electives out of the way” generally doesn’t work. Even engineers have trouble handling 5-6 highly technical classes at once, and it’s better to schedule one lighter class per semester to give the kids a break. Also, it’s probably not good to isolate students into ultra geekitude for days on end. The non-tech classes bring the engineers into contact with the rest of the world.
A couple weeks ago, somebody here on HBB posted something like: “H1-B Indians were very good at coding detailed specs, but Americans knew how to think better, in general.” I think that’s partly due to the more rounded college education, rather than just teaching to the test, so to speak.
My husband was a grad school TA for engineering humanities at Michigan. His mission was to teach guys (back then there were few women in engineering) how to read critically and write. They covered varied literature, art and film. Worthwhile material for anybody. Most of them felt that it was one of their hardest classes. Doesn’t hurt to expand a young person’s horizons.
My favorite classes at Michigan were in art history. I can’t draw, but I love paintings and sculpture. I learned a lot and whenever I take a vacation I visit art museums. Those classes I took have enhanced my enjoyment of art for nearly 40 years.
When I was doing chemo and radation last fall I signed up for an online jazz piano class at CC. It was great. Only had to go in for a 5-minute performance quiz each week - my husband drove me when I was sickest. I’m taking the second semester now. A wonderful contrast to seeing patients and doing surgery. And expanding this older person’s horizons.
+1, Oxide
Also, when I was in engineering school, they came up with a good idea, which was to use those humanities courses to ensure that the students had decent writing skills, which are necessary to many careers in science and engineering.
My husband was a grad school TA for engineering humanities at Michigan. His mission was to teach guys (back then there were few women in engineering) how to read critically and write. They covered varied literature, art and film. Worthwhile material for anybody. Most of them felt that it was one of their hardest classes. Doesn’t hurt to expand a young person’s horizons.
I remember those engineering humanities classes. My U-M engineering classmates complained bitterly about them. After all, those guys (and, yes, most of them were guys back then) wanted to study all engineering! all the time!
What made me envious was that the EH classes were much better than what we were offered in LS&A (the liberal arts part of the U-M).
“use those humanities courses to ensure that the students had decent writing skills”
13 years of public schools weren’t sufficient to teach decent writing skills? Sad indeed.
Look I am not saying to exclude scientists from those classes, it should be a personal choice. Personally I would prefer not to suffer through the agony of having to take another writing or scultpture class and be charged an exorbitant amount of $$ for it.
As for “isolating” students or geeking out, that’s a personal choice as well. I had plenty of personal interaction while delivering pizzas or at college parties.
Now if you have a rich daddy footing the bill it might be pleasant to spend some extra time in college. If you have to work odd jobs to pay your own way not so much.
As for “isolating” students or geeking out, that’s a personal choice as well. I had plenty of personal interaction while delivering pizzas or at college parties.
Here’s what I think and I have both hard science and liberal arts degrees and have had extensive contact with both types of fine people. And I am speaking of course in gross generalities and I do respect both groups equally.
A liberal arts degree, although of not much valued these days, does give one a broader perspective of the big world than does a hard science or technical degree.
Many scientist types, bean counters and engineers seem to be missing something when it comes to understanding how the human condition plays roles in cause and effect. Many times they come to conclusions that pay no heed to history, context or human behavior which is a mistake because human behavior, society, politics and even economics cannot be boiled down to math and science alone.
On the other hand, many liberal arts people lack important math skills and the ability to analyze and think problems through in a scientific manner.
But hey, no one’s perfect.
grad school TA for engineering humanities’
they should teach Chinese to engineering students so they can speak to their boss
“It depends on the school and the major”
Exactly. I don’t see how transferring from CC for the last two years works if you’re in CS, engineering, even premed, where you have to hit the ground running taking the right courses from freshman year (after taking the right courses in HS), or else you can’t take the next year’s required courses. eg chemistry to organic chem, CS fundamentals to machine language or whatever they’re doing nowadays.
Instead, what I see is people making up all the coursework they blew off in HS then starting as freshmen at the 4-yr college. Or, majoring in liberal arts where the ordering of classes doesn’t matter a much.
Many scientist types, bean counters and engineers seem to be missing something when it comes to understanding how the human condition plays roles in cause and effect.”
True none of my co-workers could understand in 2005 that we were on the verge of a housing bubble bust
And they are very smart in math as most electrical Engineers are. The Chinese ones seemed most fooled by the housing run-up and speculated like crazy. Good thing they make alot of money.
To answer Montana, premed requires a year of calculus, a year of chemistry, a year of organic chemistry, a year of physics, and a host of biology classes. You can get all of this in two years of community college. Seriously.
“…..engineers seem to be missing something when it comes to understanding how the human condition plays roles….”
Poster on the wall in the prototype/experimental hangar at (at least) one of the Wichita bizjet OEM.
“There comes a time when it is necessary to kill the engineers, and start production”
“There comes a time when it is necessary to kill the engineers, and start production”
Or, as my mother would say to my father when he was thinking of all sorts of complications to any sort of project around the house: Would you stop engineering it to death and just do it?
A young defense engineering friend in Lancaster, CA saw the Germans on the television chipping away the concrete at the Brandenburg gates; it didn’t register. His older cohorts quickly accessed the market value of their homes, knocked off 15-20%, and put them on the market–sold! Within months defense funding was slashed, jobs were lost by the thousands, and my friend was stuck for twelve years while the fannie and freddie homes were sold to HUD for section 8 families, and the area’s crime exploded. Said friend is much wiser and less trusting these days.
Within months defense funding was slashed, jobs were lost by the thousands, and my friend was stuck for twelve years while the fannie and freddie homes were sold to HUD for section 8 families, and the area’s crime exploded. Said friend is much wiser and less trusting these days.
Which is why studying history and economics is very important. And you don’t have to do this in school — all you need is a library card.
To answer Montana, premed requires a year of calculus
Ugg….brings back painful memories. I was a TA in the math department at UC San Diego back in the 1970’s. The biggest headache was teaching calculus sessions to a bunch of mostly pre-meds. They always came to me with the sob story of “I’ve got to get an A in calculus to get into medical school!!!!”
Some guys physically threatened me. Then there was the “girl with the unbuttoning blouse” who came by office hours. She was wearing one of those blouses with more than a dozen buttons down the front. After the other students had left, every time I turned around from the chalkboard she had yet another button unbuttoned. Oy Veh.
“You can get all of this in two years of community college. ”
yes I don’t know why I brought up those, since those are basic requirements for a lot of majors..but are you going to get engineering or pharmacy core classes in the typical city college? Of course where I am, the course offerings are pretty limited and change quickly if there is not enough demand or students just can’t cut it.
It just seemed to me that in any school, it is a lot easier to put together a lib arts schedule than a hard science major, and even harder when transferring.
“every time I turned around from the chalkboard she had yet another button unbuttoned”
Note to self: Get job teaching calculus to pre-med students.
Toughest course for me was physical chemistry. All the others were a breeze.
“I could never figure out why you have to go from K - 12 and then still have to take all those bogus classes in university.”
Parents need to know the education system well to take short cuts. We learned that in CA you don’t need a college diploma to attend a JC. You can have your kids taking college classes while in HS but the HS principal needs to sign off and many won’t because their kids with high GPA’s will be leaving school a year earlier and that means trouble for the school when the state looks at overall school averages. Have your kids leave early, take the GED and then go off to JC. After a great Fresh year transfer to a 4 yr college if they wish.
I think you meant to say “don’t need a HS diploma to attend a JC”.
My ghetto HS in San Jose didn’t offer AP calculus, so I had to take calculus at night at the local JC during my HS senior year. It might be good to consider doing away with AP classes and have the students just take them at the local JC.
What would be the benefit of that? In any case, most high school students can take AP classes for college credit (English 1, History 1, etc) or take classes accredited by the college while in high school.
Dropping out of high school and getting a GED seems like a good way to shoot yourself in the foot for any scholarships you might be eligible for. Not only that, you’d be younger than most of the people in JuCo, and have very little in common with them, which for most people is not a good recipe for success.
I believe that a number of states don’t allow you to take the GED before your regular high school class would graduate. In other words, if you want to have a high school diploma early, you have to graduate from your actual high school early by earning enough credits to qualify for one. Taking 6 major subjects a year and maybe a class or two in summer school should do it.
In my high school, the kids who wanted to graduate early had to double up in English and gym since MA required 4 years of both. They got the rest of their credits by doubling up in math (geometry and algebra II was the easiest combination, algebra II and trig/pre-calc was a little harder but doable) and science. If you were engineering inclined, some of the college bound kids took mechanical drawing as a 5 day a week class, though it was not considered a pre-college class and brought down your class rank.
The average instructor at a JC may be better qualified than a HS teacher for such subjects. And the HS students will benefit from the more mature attitude of the JC students.
Nowadays high schools are stressed to teach the dummies, so any high-achievers get short-shrift there.
I’m hearing that the AP courses in high school are getting a bit dumbed down, and graduates are arriving at college still unable to cope with college level math, for example. Apparently parent demand for AP due to competition and anxiety does not guarantee true college-level content.
Not everybody has $5+K per semester to spend on tuition. So you go to a CC and pay maybe $500 per Semester to get all those pesky requirements out of the way.
That’s very common here in Tucson. Pima Community College does quite a brisk business in intro courses that are too expensive at the University of Arizona.
CC’s aren’t much of a bargain in the Centennial state. Its about 4K per year. Cheaper than CU or CSU but its not $500 per semester.
Not taking those “bogus” classes is one of the reasons kids today don’t know squat about western civilization, literature, speech communication, etc. For instance, on another blog I got into an argument with someone who said that Obama’s natural-born citizenship wasn’t questioned when he was a senator. When I pointed out that a senator doesn’t have to be a natural-born citizen, and that he (the person I was arguing with) must have slept through his HS civics class, he self-righteously pointed out to me that his HS didn’t require that the students take such “useless stuff” like civics.
True. I used to teach a class at a California community college euphemistically entitled “Basic College Mathematics.” What it really was was K-8th mathematics for those who didn’t get it on the first try. Since there were no admission standards, the distribution of preparation was brutally wide, ranging from mid-30’s single moms going back to school after a long hiatus (they normally were at the top of the curve) to kids who were only there because they qualified for a Pell grant, despite having not a single academic bone in their bodies. Those with good preparations found the course relatively easy, while those who did poorly in grade school math spread out over a nine year period because they truly did not get it found it much more challenging to try to master the material over a one-semester period.
I know you guys really care about bristol’s new pad in az:
http://www.cnn.com/2011/POLITICS/02/08/political.circus/index.html?hpt=C2
I know you guys really care about bristol’s new pad in az:
My prediction: She won’t be there very long. Why? Because the place will attract curiosity seekers like nobody’s business. That’s bound to go over like a rock with the neighbors.
Then there’s the security risk aspect. This place is a lot less secure than, say, the estate from which the Lindbergh baby was kidnapped. (That estate was in a remote area and a good distance from the street. It shouldn’t have been too difficult to spot an intruder.)
the place will attract curiosity seekers ??
Curious to see what ??
“Curious to see what ??”
Her ugly, generic, stucco snout-house.
I found that the “college math” class at a four year school was difficult for many becuase it was ~3 years of H.S. math taught in one semester. So people did pretty well until they were no longer reviewing math that they’d done in H.S. and then dropped off because of the breakneck pace of the course.
Of course I had a close H.S. friend who was much more interested in sports than academics. Now he’s an aeronautical engineer. But to get there, he had to go to community college before being accepted into an engineering program. He complained about his time in community college, saying: “I’m paying cash money to take the same classes I could have taken FOR FREE in high school.”
He complained about his time in community college, saying: “I’m paying cash money to take the same classes I could have taken FOR FREE in high school.”
Sounds like he’s one of those who really did get an education at the CC.
I took calculus and spherical trig in my senior
year because that’s all that was offered.
“Basic College Mathematics.” What it really was was K-8th mathematics for those who didn’t get it on the first try.
yep I am tutoring for that very class , what a funny math book. It uses for example in it’s word problems famous people like 2 cent and ( some other funny named guy ) you have to figure out how many millions more 2 cent has than another rapper dude. My immediate answer was 2 cents but people who struggle with math are not amused by old guy humor I guess ?
And FWIW I have a 2 year degree in Electrial Engineering an associates degree. Back in the day it was really cheap plus Areospace companies would usually reimburse some of the cost after showing a B or better.
its so expensive now. No inflation uh huh sure
I teach a junior level requisite quantative class at a local four year public university.
I have come to believe that about 60% of the kids who cycle through the college probably shouldn’t be there and probably don’t really want to be there. The problem is there really isn’t anywhere else for them to be, so the second tier colleges and universities become warehouses.
The non-traditional students, typically working adults, are a different matter entirely. They are generally highly motivated and eager to learn even when the subject matter is difficult.
I have come to believe that about 60% of the kids who cycle through the college probably shouldn’t be there and probably don’t really want to be there. The problem is there really isn’t anywhere else for them to be, so the second tier colleges and universities become warehouses.
The non-traditional students, typically working adults, are a different matter entirely. They are generally highly motivated and eager to learn even when the subject matter is difficult.
Agreed on both points, Spokaneman.
Here in Tucson, I’ve met a number of University of Arizona students who, truth be told, would rather be doing something else. But they were told that they should go to college, so here they are.
OTOH, the older, non-traditional students just absolutely blow the doors off the UA. Especially the military vets. They’re that good. And motivated.
My daughter attends Gonzaga. You wouldn’t be instructing there, would you?
Nope.
He said that he taught at public university. Isn’t Gonzaga a Catholic school?
It definitely has a high school feel, but it is a cheap alternative to the first two years of university in California. At the community college down the street from me you can take two years of calculus and Japanese, as well as vocational courses. If you maintain a 3.0 GPA you are guaranteed acceptance to a University of California campus as a junior. My husband is a high school teacher and he has had lots of top students go to community college for two years, in cases where their parents couldn’t afford dorm costs. They are deprived of two years of drunken partying.
They are deprived of two years of drunken partying.
I didn’t see anybody miss out on that at the CC. The just got to do it with their high school friends instead of “branching out”.
“It definitely has a high school feel, but it is a cheap alternative to the first two years of university in California”
In many countries Colleges look like high schools. No, actually even less than that, as they have no athetic programs and hence there are no fields. Also: no dorms, no cafeteria, no student center, no gym, etc. You commute from home and are just there during class time.
re: glorified high school
that’s the fraud.
the percentage of first year students that take remedial math or english is astounding.
the graduation rates are ridiculously low, but the easy solution is worse (Don’t fail anybody)
This discussion reminds me of how the US is the land of second chances. My Japanese cousins’ path in life was determined by their performance on college entrance exams. In the US community college gives you a second chance to excel. I know a lot of people (mostly guys!) who were goofballs in high school and achieved academic success in community college, leading to professions that would have been denied to them elsewhere.
Preach it on the second chances, RE!
Case in point from mine own high school days: I had an art classmate who was a real goofball. To the point where we wondered what in the Sam Hill he was even doing in the art program.
Well, he went off to one of PA’s state colleges, Kutztown. That was known as the artsy school for artsy artists. More than a few of us wondered what he would be doing there.
Becoming a very serious painter was the answer. He’s been a professional artist for something like 25 years, and I could go on and on.
Methinks that getting out of high school and into the adult world, starting with college, forced him to buckle down and get serious. That and marrying another one of my classmates. Let’s just say that the goofball act wouldn’t get very far with her.
“This discussion reminds me of how the US is the land of second chances. My Japanese cousins’ path in life was determined by their performance on college entrance exams.”
There is even a special word for those who fail to pass the exams and cram to try again next year: “ronin”.
There was a very popular manga/anime series about that: Love Hina.
Keep teaching the classes of choice in advance algebra, calculus, etc. and forget common sense “reality math” . Who needs this anyway? The banks, government do not care that you cannot understand basic math. No problem!
yep. I never went to HS, but I graduated with a 2.0. Surfed a lot. Then went to a CC and got a 3.85 and a scholarship to a real college. HS is a joke in most towns.
Gee, do you think unlimited free money from the government for any “student” with a pulse has anything to do with it?
Is it really unlimited? My impression was they had to stay in school — use it or lose it.
You obviously have not seen the Penny-stock trading site that brags about its founder turning a $10k student loan into millions by betting on risky penny stocks. I know a couple single moms who got pretty big grants and dropped their classes and kept the money. Its pretty rampant - the ripping off.
I know a couple single moms who got pretty big grants and dropped their classes and kept the money.
A long time ago I bought a 1966 Gibson ES-335 with part of my grant money. (My friend thought it was hilarious) But I did finish school.
I’m not sure I’d put faith in any claims from a website selling penny stock tips.
What does the English major say to the science major?
Do you want fries with that?
Many youngsters major in some completely useless field. 4 years later they’re stuck with some gigantic pile of debt and are working at the local burger joint for $8/hr. Only difference to the subprime borrower is that the students can’t discharge their debt in bankruptcy. Majoring in some non economically viable field is a sure way into life long debt slavery. Really sad that the government even helps luring young people into that trap. Many are not smart or experienced enough to avoid getting suckered. All the other kids are doing it, who wants to be left out?
Mike:
This is why my idea is to give people 26 weeks of Unemployment to goof off but from the 27th week on… you have to be in school or training…or else nuttin.
99 weeks of UI and nothing to show for it, is a disgrace to our country.
99 weeks (of UI) and nothing to show for it
—————————————————————-
One could also make that case against a lot of colleges.
do you not have to “prove” you are looking for a job anymore?
I know of 4 people who are late into their 99 weeks of unemployment and not one of them is making any effort whatsover to find any type of work.
one basically lives in a shack “down by the river” and smokes pot and drinks beer.
I know of 4 people who are late into their 99 weeks of unemployment and not one of them is making any effort whatsover to find any type of work.
I’ve heard it said that a lot of the long-term unemployed used to work somewhere in the REIC. And, unless they were tradespeople, they have no salable skills.
You don’t have to prove you are actually looking for work. You have to affirm that you are by checking a box on the on-line for that you use to report that you are still unemployed.
If you want to require people to “prove” they are really looking for work, you will have to hire someone for the unemployed people to report to who will listen to and review the proof and then sometimes tell that person that they don’t qualify for unemployment for the last week or two because they didn’t try hard enough. How many folks are up for funding that little project?
isn’t that how it worked in Seinfeld?
And some Dem’s in Congress are already looking for ways to extend the 99 week limit.
You don’t have to prove you are actually looking for work. You have to affirm that you are by checking a box on the on-line for that you use to report that you are still unemployed.
Theoretically there are random audits - at least that’s what the State of Texas led me to believe, but I never actually got audited.
Which is good, as I accidentally deleted my electronic job-searching log. Oops
“do you not have to “prove” you are looking for a job anymore?”
Apparently not. Last time I collected, I had to put down three places I’d tried, with contact info, and I assumed someone could check on me. But that was in the 1970s.
Here in WA state, both times I got laid off (2002, 2008) and was on unemployment, I did get audited once during each of my two 6-month-long periods on UI. I had to show contact information for at least three potential places of employment per week, and I believe that these requirements are still in place.
The STUPID thing is, WA state unemployment department only communicates with you via snail mail, and I have a private mailbox that I sometimes only check once per week. I missed my in-office audit appointment because of this and had to forfeit that week’s benefits. I even appealed this to a state administrative judge and was denied.
Why they couldn’t send an email, text message, or a plain-ol’ automated phone message to let you know that you need to come in is beyond me.
Say does anybody know where I can get a degree in community organizing? I am not a black muslim just a white cracker but I really think that I can use Diversity to my advantage in this field.
Harvard Law.
+5 REhobbyist!
Thanks a lot folks. I will apply and hopefully I can get in using affirmative action.
Or undergrad at Columbia.
I will apply and hopefully I can get in using affirmative action.
What will help you stay in?
well, I dunno. I’m not really that smart but I am an excellent teleprompter reader. But if I did get in I would copy wall streets modus operandi of BS and greed and DC’s modus operandi of smoke and mirrors.
ROTF, LMAO
Most tech writers I know were English majors.
The unemployed ones are like those who major in other areas and can’t find work: they stink.
FWIW I knew a guy who graduated with a Computer Science degree. He couldn’t code his way out of a paper bag. He wound up working as a construction subcontractor in Park City.
Mike,
I think you are being a bit too simplistic. You are assuming that the purpose of getting an “education” is solely for the purpose of getting a higher paying job. The two are mutually exclusive, and it is unfortunate that Universities have become tracks for job-seekers. That was not the original purpose of education in general and Universities in particular. The goal of the first was to allow you to function in general society by teaching reading, writing and math…..the basic stuff, along with Civics, Humanities, language courses, etc.
I think the goal of the University originally was to bring the best minds from various backgrounds to expand the pool of knowledge in general. That goal was pre-empted with advent of the State University systems wherein the goal was to produce workers for corporations.
I have a Bachelor of Arts in English, with a minor in Political Science, along with a B.S.C.E. The Engineering degree gave me more marketable skills for use in designing stuff, but it fails to make me a better overall person who can communicate effectively with the rest of the world around me. That’s why most Engineers are considered geeks. We don’t communicate well, because our heads are all involved in “solutions”. Our written and oral use of language is usually lacking. We tend to think in terms of formulas and diagrams because they communicate more effectively to other engineers. I don’t think that makes for well-rounded individuals.
The “arts and sciences” will probably not pay as well as technical fields, but most of us have a general idea of what areas of employment we might expect to find when finish school. For those who didn’t find that out, there is the real failure of “education”. If you didn’t have any idea what you were doing in school and hadn’t figured it out by the end of your Freshman year, you probably need to drop out and reassess your reason for being at the University.
And, yes, there are other jobs for people with English Lit. Majors. Many jobs can be learned with OJT, but if the applicant is a poor communicator, it may be some doofus English Major guy is better suited for the job.
Everybody’s missing the point.
-All the jobs that are left in the US require a college degree.
-All the votech jobs are being outsourced. The ones that haven’t don’t pay $hit.
That’s why you have people attending college, instead of going to votech.
“-All the votech jobs are being outsourced. The ones that haven’t don’t pay $hit.”
Young girls pay up to $10,000 (or more) to learn how to cut and dye hair and end up working at chain hair salons for $10/hr (or even less).
Nice huh?
Young girls pay up to $10,000 (or more) to learn how to cut and dye hair and end up working at chain hair salons for $10/hr (or even less).
There’s a meritocracy in this field, just like any other.
Ever noticed how, in every town, there is *the* salon? As in, you’d better be good if you even want to be considered for admission to their staff. (Yes, this comment sounds like I’m describing getting into an elite college. And that’s my intention, 100%.)
Any-hoo, the good people are never, ever hurting for work. But the trick is that you have to be good, and that means keeping up with trends in the field, practicing your skills, learning from the top pros, etc.
“Unlimited free money”
Why would there be student loans if that were true?
There’s a lot wrong with the current system of college aid, but wild inaccurate statements aren’t going to fix it.
“about 20% of 1,434 community college students interviewed in November reported difficulty enrolling in required courses”
This suggests that 80% didn’t report difficulties. Hardly a perfect storm, more like a storm in a tea cup.
Maybe. The word “reported” might be critical.
My younger son just graduated from UC but he had to enroll in summer courses every year to get his requirements. That meant extra tuition every year, but worth it to graduate in four years.
What was his major?
Graphic Design. And he found a job! Thirty years ago he would have probably majored in fine arts. Now there are lots of opportunities for designers. Who knew?
Now there are lots of opportunities for designers. Who knew?
Indeed there are. What kind of design does he do?
Reason for my question: I’m always looking for good subcontractors. And, if he’s related to REHobbyist, I *know* he has a work ethic.
Heck I remember in 1968 standing in line at good old NTSU trying to get a class card (they were the old Hollerit computer cards) trying to get the prereq class I had to get the next class I had to have etc. I think its always been that way.
My kid was able to get her four year degree in four years and one quarter even with changing her major in her junior year. Persistence was the key. She had no problem asking a prof for special dispensation to get into needed class.
““community colleges need to figure out some way of limiting their enrollment.”
Sooo… then the education that people need to “get ahead” will now be inaccessible?
Genius.
No jobs. No training. No savings. No investments. No way to move up even if you have job without more training.
Starting to look like Egypt.
Starting to look like Egypt. (I wudda said Detroit).
If only this were true out here in the ever-effervescent SoCal coast! I see clear evidence of banks hoarding homes in a futile effort to prop up prices above pre-bubble levels.
Kudos to the WSJ writers, whose headline regarding a return to affordability at least leaves open the interpretation that lower home prices might actually be a blessing in disguise.
* REAL ESTATE
* FEBRUARY 9, 2011
Home Affordability Returns to Pre-Bubble Levels
By NICK TIMIRAOS
Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.
Data provided by Moody’s Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003.
During the boom, lax lending and speculation pushed house-price inflation far beyond the modest rise in household income. Nationally, the ratio of home prices to annual household income reached a peak of 2.3 in late 2005. But by last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003.
“Based on incomes, this is as affordable as it gets,” said Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”
…
“Based on incomes, this is as affordable as it gets.”
If you drop wages and house prices together, which one will hit the ground first?
Sounds like a real world use for L’Hôpital’s rule.
Sounds like a real world use for L’Hôpital’s rule.
L’Hôpital’s “Rule”? Really? That explains a lot.
I learned that in college from a very newly arrived Asian TA.
And all this time I thought it was “Le hoopital’s Lule“
Math humor — awesome!
P.S. Which is in your denominator: Wages or housing prices?
I guess in my mind wages were the numerator and housing prices the denominator…not sure why. I guess I like it when a singularity is a good thing rather than a bad thing.
“I guess I like it when a singularity is a good thing rather than a bad thing.”
Not only that, but as any good RealtWhore will tell you, housing prices will never go to zero in Upper East Flyoverville, because everyone wants to live there. (Well, maybe not Detroit, but…)
Wages………because housing prices have further to fall.
Wanna bet?
I remember a few years ago the HBB was wondering how many years it would take for prices to fall to inflation adjusted norms.
After the late 80s bubble, prices fell for five years in California.
We are now in our sixth year of falling house prices.
‘After the late 80s bubble, prices fell for five years in California’
I’ve said this before; were those prices a part of a bubble, or the cycle? I’ve never seen much in the media or elsewhere about a CA bubble in the late 80’s.
Some say there was a true RE mania in Texas in the late 70’s/early 80’s. It took 15 years for house prices to stop falling.
“It took 15 years for house prices to stop falling.”
Do others find it odd how the MSM continually gives the serial bottom callers brigade a pass on examples of long periods of housing price declines, such as the one in Texas you reference, or the current example from Japan (1990-2011 and counting)?
What is so frightening about empirical evidence that so many self-proclaimed ‘experts’ feel comfortable ignoring it?
Funding and media attention?
Housing in Texas keep rising all through the 1980s and only collapsed from the S&L disaster, the first effect of which were felt here before the rest of the country.
It took approx 4 years for the market to bottom and another 2 before prices started rising again.
If you could afford to buy a house around 1993-5, you would have been able to double your money by 1999. By 2005, you could triple it. You could quadruple your money IN ONE YEAR by doing a teardown and then building townhouses on the same lot.
Buy for 100K, sell for almost half million one year later. Do four of those and never have to work a day job again.
I’ve said this before; were those prices a part of a bubble, or the cycle? Ben Jones
I was there in LA 86-94, IMO it was a bubble but it was mostly contained to Southern California. There was fraud and the same bubble thinking and terminology and then a massive hangover after the crash. Or course it was just a dress rehearsal for the big one.
We are now in our sixth year of falling house prices. REhobbyist
I would say in some areas we are only into our 4th or 5th year of falling prices. The Bay Area for example.
http://ror.com/graphs/graph5.htm
Also, after the crash of the SOCAL bubble of the late 80’s there were no TARPS or similar government house-price-propping programs to slow the crash. The Berlin Wall also fell hammering the defense industry. And although I call it a bubble back then, it was not nearly as big of a bubble as this last one.
I would say in some areas we are only into our 4th or 5th year of falling prices. The Bay Area for example.
In Colorado out in the distant bubble burbs we’re 6 years into it, but in the middle of Boulder we’re only one year into it…if that. It was “different here” for a LONG time.
“By last September, it had fallen to 1.6, matching the lowest level in the 35 years the data have been collected and well below the historical average of 1.9 between 1989 and 2003″ during the “buy all the house you can afford era.” Fixed.
I don’t doubt that homes have become more affordable in many places, but not in the New York area.
When the overseas money goes to hong kong and shanghai prices in NYC will drop. The Chinese don’t need the dollar and they definitely don’t need wall street. Hell! With wall street’s help china may begun to look more like america. IMO, china doesn’t want to go that route.
China will do what it always does: copy something but put its own spin on it.
China also doesn’t want to be Wall St. They want to destroy it.
Which means that unless prices go down a lot more, that affordability will be a disaster as intrest rates go up. Sigh. I’d like to see someone end an analysis like this with a warning that in addition to the payments they included, people who make low downpayments need to put substantial cash into a “get out from under in case I need to sell when interest rates are higher forcing prices down” fund every month. Lets see what that does to the affordability calculation.
In other words, house prices are dropping only in areas where they never should have risen in the first place. Where The Jobs Are, prices will never fall. We in DC are being forced to spend a higher % of our income on housing, and that’s what the market will bear.
I looked up a cost-of-living table on Bankrate. The cost of living in DC vs., say Pittsburgh, for things like doctor appointments, food, gasoline, utilities, were nearly identical, EXCEPT housing. Housing was twice as much.
Not really so
I went home to visit the Fam in fly over Kansas last week & was shocked at how much cheaper food was there compared to Fairfax, CO VA
Housing appeared to be approx 1/3 cheaper there than metro DC
How about ammo? Is ammo cheaper in Kansas?
No
Years ago, when we moved from New Jersey to Florida, I noticed a drop in a lot of goods and services. For things like daycare, a large portion of the cost is related to the cost of housing/real estate. Milk was cheaper. Cars were not, although you could find older cars in decent shape in Florida.
I think doctor’s fees are related more to the cost of getting the education and Medicare rates - what the market will bear - and staffing costs - more related to local wages - and less to the cost of real estate in individual markets. Local wages are related to the state’s minimum wage and somewhat to real estate. Housing is a significant portion of household budgets, so it does affect wages a bit.
Gasoline is more related to state taxes and the price of crude than to local real estate.
Utilities are more dependent on the cost of commodities and power generation than real estate. The Pacific Northwest has lower utility rates due to the significant use of hydro power. But there is probably not much difference between Pittsburgh and DC in the kind of power generation and its costs.
For food costs, you are probably also looking too close geographically. Try comparing food prices in the Midwest or New Mexico.
I’ve been looking at PHX, N. LV, Tucson real estate lately on Trulia. Lots of 3 2 2 decent looking houses in those markets going for 38 to 50 per Sq Ft. <$60K for 1400 Sq ft. I don’t know enough about either place to judge the quality of the hoods, but that is getting dang cheap. That is less than I paid for my first house in Spokane in 1980 on a per sq ft basis. Those prices are typically 40% or so of the peak (2006) prices.
If you need any opinions on Tucson nabes, I’m full of ‘em. And you can always read the HBB for commentary on my own nabe.
North LV is full of stucco crap on 1/16th acre lots in HOA rabbit warrens.
If the older tract homes in the same area are any indication, they are going to be gangsta cess-pits in 20 years or so (maybe less).
Now, the custom home neighborhoods sprinkled in amongst them are much more desireable - 1/2 to 3 acre lots, but then you’re still surrounded by Stuccettos.
* February 9, 2011
Housing Declines Again
Home values in the United States posted their largest quarterly decline since the first quarter of 2009, falling 2.6 percent as the temporary stimulus of the home buyer tax credits wore off, according to Zillow’s fourth quarter Real Estate Market Reports. See region-specific data below. Click column headers to sort.
Look whose housing market is getting pounded the hardest now, according to Zillow: Old Midwestern Cities (plus Portland). I added the annualized quarter-over-quarter change to make the recent rate of decline comparable to a year-on-year rate of change (with no apologies offered for omitting prediction error estimates).
LOOK OUT BELOW!
Metropolitan Area
Q4 2010/Quarter-over-Quarter Change/Annualized Quarter-over-Quarter*
Detroit, MI $73,200 -7.5% -26.8%
Chicago, IL $175,100 -6.5% -23.6%
St. Louis, MO $130,400 -6.1% -22.3%
Minneapolis-St. Paul, MN $166,300 -21.3%
Portland, OR $209,900 -5.2% -19.2%
* ((1+r)^4-1)*100%, where r = Quarter-over-Quarter Change
From the WS Journal chart, 70% of all single family homes with a mortgage are now underwater in Phoenix. Not bad for a desert city.
Does this mean a “flood” of new home construction is likely? About as much chance as a snowball on a Phoenix sidewalk in July.
Take away construction jobs and Phoenix has about as many “employment opportunities” as the Sahara.
In the early 90’s I looked into relocating from SoCal to Phoenix. The deal killer was the lack of quality jobs. Those that I found paid A LOT LESS than similar jobs in San Diego (where we lived at the time). After a few months I stopped looking.
In the early 90’s I looked into relocating from SoCal to Phoenix. The deal killer was the lack of quality jobs. Those that I found paid A LOT LESS than similar jobs in San Diego (where we lived at the time). After a few months I stopped looking.
Same thing here in Tucson. And that’s why a lot of University of Arizona students leave town as soon as they pick up their sheepskin.
“70% of all single family homes with a mortgage are now underwater in Phoenix.”
Did you see this footnote to the table?
*Negative equity refers to the % of single-family homes with mortgages.
I found that statement most confusing; did they mean that they simply reported the area’s percentage of single-family homes with mortgages as the “negative equity” figure, or did they mean that the “negative equity” figure should be interpreted (as you apparently did) as the percentage of single-family homes in the area with a mortgage which are now underwater?
Eats, shoots & leaves…
It means that free and clear homes are not included in the denominator.
I’m leaning to your interpretation, though I find the statement poorly worded.
Speaking of wording, what kind of shoots and leaves were you eating? I’m partial to Romaine myself.
I wasn’t referring to ‘eating shoots and leaves,’ but rather to what pandas normally do at a cafe: They eat the sandwich they ordered, fire a couple of shots into the air, then leave the building (”large animal that eats, shoots and leaves”).
Poorly worded??
(sorry, just ribbin’ ya…you are correct. That comma saved your grammatic patootie. )
Eats Chutes & Ladders
Just for the record, the original joke involved a panda in a bordello….
I thought that Atlanta was interesting in the table. They’ve only had a 28% decrease in house prices from the peak, yet they lead in negative equity at 54%. We can conclude that they also led the country in cash-out refinancing.
“We can conclude that they also led the country in cash-out refinancing.”
The other possible explanation is that more homes changed hands there at the peak with 100% LTV financing. Simple differences in volume near the peak could explain higher negative equity on a smaller decrease.
Interesting, though–thanks for pointing that out.
Portland, OR….. the new rust belt. I have family there and in Deschutes County/High Desert area. They were all convinced their wigwams were the path to riches. Even in spite of the substantial declines there, their denial was strong back in early 2009. It’s time to bring up the topic again…. lmao.
Hey it ain’t so bad. There were, after all, 7 job openings in the paper yesterday. And two full pages of NOD’s.
House next to us had well heeled owners, so they sold out of this nightmare and ate their own loss. Unless you have 160k extra cash laying around, you are stuck and may as well stay until the bank asks you to leave. What better options do we have. GTFO is only the most sensible for the other guy, for us who sank close to our last 160k into this place, we are waiting for the bank to scoot us along. I think they see the number of similar units for sale, the scale of the losses, the HOA’s and the taxes, and decide to put off foreclosure for a good bit.
Our well heeled neighbors, they bought for 360k in 06. Sold for 200k in 2010. Booked the loss themselves, good for them!The new purchaser thinks he got a deal, cuz its up for sale again for 230k.
“Portland, OR….. the new rust belt. I have family there”
My 25 YO daughter moved to Portland in November 2009. She’s renting and likely will for a long time. She’s in an apartment complex also about 25 years old. I went to visit in August last year; and although the Rose Garden, Japanese Gardens, and Columbia River Gorge and waterfalls are beautiful, the highways are straight out of 1965. You can be in a traffic jam at midnight because there are a hundred cars and one Hiway Dept truck on the road. The houses downtown looked old and decrepit with overgrown yards. But hey, the Saturday morning market shindig was pretty cool, if you like competing bands, plastic tub drummers, woodcarvings, and henna artists.
I’m thinking the big industries may be making meth and growing pot; but I was just visiting for a few days, so I didn’t get the full scoop.
Have you been watching the new comedy sketch TV series on IFC, “Portlandia” ?? Crazy funny.
I sure miss the Bend blogger ihatetoburstyour bubble…lol.
where r = Quarter-over-Quarter Change/100
Hey, check it out!
The HBB honors the <pre> tag!
<pre>
Metropolitan Area
Q4 2010/Quarter-over-Quarter Change/Annualized Quarter-over-Quarter*
Detroit, MI $73,200 -7.5% -26.8%
Chicago, IL $175,100 -6.5% -23.6%
St. Louis, MO $130,400 -6.1% -22.3%
Minneapolis-St. Paul, MN $166,300 -21.3%
Portland, OR $209,900 -5.2% -19.2%
* ((1+r)^4-1)*100%, where r = Quarter-over-Quarter Change
</pre>
fail?
fail?
Speak of the devil…
The HBB honors the <pre> tag!
Oops.
I guess it’s just the JT Extension that honors it.
I guess it’s just the JT Extension that honors it.
Yeah, I don’t do any filtering on the HTML tags…I didn’t realize that the blog software would ignore/filter certain tags. If you want to write a JavaScript routine that will identify these tags and replace the < and > tags with the appropriate marked up versions so that the preview is accurate, I’d be happy to integrate it
US Treasuries with 5 year maturity are now yielding about 2.40 %.
A check at Bankrate.com shows that there are only 5 bank 5 year CD’s yielding above that. The highest is 2.65 %. Most are well under 2.40 %. A lot are around 2%.
So,the vast majority of 5 year bank CD’s are being offered with less yield than a Treasury, which is presumably safer and has no pre-payment penalty.
Could someone explain how that can be ? The banks must be getting
their money from somewhere at a lower rate than the government can borrow, or the people buying CD’s don’t know that the government pays more, or don’t care ?
(Yes, I know that CD’s usually compound daily, and there are some
trading costs when buying treasuries, but all this seems minor compared to the CD prepayment penalty– usually 6 months interest–if one needs the money early.)
“Could someone explain how that can be?”
People are smart?
I’m still trying to get past a HBB post from several days ago that told of hundreds of thousands of credit card holders carrying over monthly balances that charged interest rates of fifty-nine percent.
I have no trouble with the 59%. That’s for sub-primes with a max limit of $300.
What burns me is that that the public can’t get a piece of that action. My BigBank credit card* charges 15% interest. Why wouldn’t my BigBank checking account offer 6%? (Oh that’s right, because those deposits would bolster the trash MBS, not the profitable CC sector of BigBank.)
Story: When I was a pup, my father took me to the bank to open an account for my Christmas money. The bank offered me 5% interest. I asked my dad how the bank could afford to give me more money back than I put in; for example, how did they pay the teller? How did they buy the stuff to put up the bank building? My father tried to explain that they loaned my money out for a 12% interest rate on a grown-up’s house. The grown-up in the house paid the bank 12% more than they had borrowed. The bank gave me 5% of it and kept the rest themselves. [heavily simplified.] Well that set me off. It was MY money they were taking…the bank didn’t put any of their Christmas money in the account…how come *they* got more than *I* did. My father pointed to a well-dressed middle-aged lady behind a desk, and told me to ask her; she knew the answer.
I caused quite a scene in the bank when I marched across the hush-hush bank right up to the loan officer screaming “WHERE’S MY SEVEN PERCENT? I WANT MY SEVEN PERCENT!” My father, I think, was secretly dying with laughter.
I caused quite a scene in the bank when I marched across the hush-hush bank right up to the loan officer screaming “WHERE’S MY SEVEN PERCENT? I WANT MY SEVEN PERCENT!”
And here we are all these years later…a whole group of “screaming seven-percenters” :-).
Great story Oxy!!!!
I almost peed in my dress LOL, oxide.
Did you and your dad get told not to come back? LOL
I remember being the same way when I found out that my insurance money wouldn’t be refunded if I never made a claim and canceled or were canceled because of a missed payment.
I’m still that way. I HATE paying for something and getting nothing in return. Most people would call that theft.
ecofeco
OTOH if the premiums were so darn high, having insurance takes care of the oh chit moments. I understand your position, but I’ve had those moments, and glad I had insurance.
I’ve wondered what would happen if my ins. co. lost a boat of money in Derivatives. Would I see my claim paid?
Only twice in my life have I had to make an insurance claim, but there were more times when I didn’t have insurance and needed it, but didn’t have the money.
I realize I’m the exception and not the rule and I’m glad I had insurance for those 2 times, but I would dearly love to have those THOUSANDS of dollars back in my pocket right now from the other times I didn’t make a claim.
Because I don’t have insurance again and it would be cheaper to pay out of pocket for what I need than to pay the insurance premiums.
I would dearly love to have those THOUSANDS of dollars back in my pocket right now from the other times I didn’t make a claim.
You’re always welcome to self-insure. In that case you would have those thousands of dollars.
Just don’t go looking for anyone to cover you if you can’t cover your own medical/auto/whatever bills.
I’ve been “self insured” for over a decade.. as in, can’t afford ANY insurance, thank you very much.
The banks can borrow money from the Fed at 0.25% and buy the Treasuries that yield 2.4%. If not enough banks want to play this game, the Fed will buy the Treasuries directly with made up money, and the Taxpayer will pay off the note from his wages.
If you do not get this, you are missing the Great Robbery.
not just your run of the mill everday banks either…investment banks were giving access to the fed window a few years ago…or did they close it?
The banks can borrow money from the Fed at 0.25% and buy the Treasuries that yield 2.4%
—————————————————————————
that ain’t nuthin. my bank is currenly borrowing money from me at 0.1% interest.
And that’s why I sent 20k to my mortgage company rather than leave it in my saving account. And after I complained, they DID properly credit it as an additional principal payment.
And after I complained, they DID properly credit it as an additional principal payment.
I like money but sometimes I don’t pay much attention to it like when I paid off my student loans.
My monthly payment was $150 but I sent in about $300 a month until one day it was paid off. But what was happening? Was the extra coming off the principal?
Maybe I should have done it differently but hey, it’s done.
Yesterday someone posted an article about how people were buying with cash as a sign that investors were scooping up real estate.
Nope
People can’t earn anything on safe investments and they figure I’ll just pay off my loan or buy this house for cash. If you’re a rich retired investor this may give you more confort than investing in the market or treasuries even if you are early. You’ve locked down living expenses.
“You’ve locked down living expenses.”
measton, you’ve got that right.
In 2010 our house money earned $243- dollars in interest. (That makes me sick.) A mortgage is 5%. (FICO’s 825)
If we pay what my target is, the Property Taxes will be $370/mo (the first year) and will probably stay there or go down as home prices decline.
We’re a no loan purchase. One thing I’ve learned from older family members, is to have a house paid off by your 65th B-Day.
That’s a good way to do it, Awaiting, but not everyone has that choice.
ecofeco
So true. We sold 2 homes already in our lifetime, and socked it away during this bubble, which has taken years of life enjoyment from us. We rent a dump, drive old cars, and live quite frugal, and have been hammered by this economy and some other issues. Life hasn’t been a cake walk, but hey, we’re tough.
I haven’t had a home mortgage in a long time, but I thought I read somewhere that banks were starting to put prepayment or yield maintenance penalties into home mortgages similar to what you would find in a commercial loan. Is this true? That would be a real bummer to pay the loan off early and get hit with a penalty.
If they are, then you would have to be an idiot to sign and not shop around more.
You can buy those 5-year Treasurys for your own portfolio, with no commission, at Treasury Direct.
Home Affordability Returns to Pre-Bubble Levels
“Home affordability returned to pre-bubble levels in a growing number of U.S. markets over the past year as price declines laid the groundwork for a housing recovery.
Data provided by Moody’s Analytics track the ratio of median home prices to annual household incomes in 74 markets. By that measure, housing affordability at the end of September had returned to or surpassed the average reached between 1989-2003 in 47 of those markets. Most economists believe the housing boom took off in 2003.”
As always, some good comments. And those houses in that picture. I couldn’t tell if they were Army barracks or the opening shot of many movies that shows (I think) the rows of buildings at Universal Studios. Blech! Who would live there?
The housing boom took off in 1995 in my state.
Oh Ward, I’m Beginning to Worry About the Beazer:
Alex Veiga, AP Real Estate Writer, On Tuesday February 8, 2011, 7:05 pm EST LOS ANGELES (AP) — The traditional spring selling season can’t come quickly enough for builders like Beazer Homes USA Inc., following the worst year for new home sales on record.
The company reported Tuesday that it slid to a loss in the fiscal first quarter as home closings and contracts for new homes fell sharply. Its results for the October to December period were worse than expected.
But President and CEO Ian McCarthy said sales trends last month perked up considerably, echoing other large homebuilders that have given guarded optimism in recent weeks about the prospect for improving fortunes this spring.
“I’m very encouraged with what we’ve seen in January so far and we’re looking for a strong February and March,” McCarthy said. “It will be very critical to us.”
McCarthy said new home orders in January climbed by more than 50 percent from December and posted a comparable increase versus January 2009.
The builder doesn’t anticipate it will match the level of home orders in the second quarter that it generated last year, when federal tax credits helped boost home sales before expiring in April.
But McCarthy does expect to put up bigger home sales numbers in the second half of this year than in the last six months of 2010, when sales tanked following the end of the government incentives.
“We fully expect to beat that performance this year,” he said.
Anything short of that might signal even deeper doldrums for new home sales, which sank last year to the lowest levels since at least 1963.
It sure is telling when the home construction and auto manufacturing industries get all excited about a slight increase over historically low sales levels.
I guess contrary to popular belief, people on welfare don’t buy houses or new cars.
In Colorado
People on welfare can buy a home (of some sort) or a car. Federal Law prohibits discrimination, and they might be able to get a Grant from a Non-Profit.
In Ca, the EBT Card (Free $ wired into your account) can be used as a Savings Account, since there is no cap. That’s how our neighbor saved to buy a home. But in general, you’re right.
My remark was tongue in cheek about those who claim that everyone on welfare has a late model Escalade, lives in a McMansion and dines on steak and lobster every night.
The few that I know drive 15-20 year old beaters, live in dumps and survive on diets of bologna, mac-n-cheese and soda pop.
Our niece is a welfare queen. She’s pretty, educated, and loves her surrogate husband, our govt’s monthly check. Children without marriage, is her modus operandi.
Our niece is a welfare queen.
And it sounds like you try very hard to be polite when you’re around her. Not that such a thing is easy.
Sort of like how I have to bite my tongue when dealing with my REIC-ster relatives.
Oh Ward, I’m Beginning to Worry About the Beazer:
lol
Funny title, Cobalt!
I do not know if this was reported yesterday but I since I live in PWC in VA we are 26th on the list for mortgages under water.
http://www.usatoday.com/money/economy/housing/2011-02-04-under-water-chart_N.htm
Falling prices still have a long way to go for the cities (including my own) on the first list. Given the number of foreclosures in the past few years, it’s kind of mind-blowing that half of mortgages in those counties are still under water.
no end in sight…
Sometime, somehow, the foreclosure crisis will ease. But probably not anytime soon.
Home prices dropped 2.6% nationwide during the last three months of 2010, pushing more borrowers underwater, according to a quarterly real estate market survey from Zillow.com.
Now 27% of homeowners with mortgages owe more than their homes are worth. That’s up from 23.2% a quarter earlier.
That will surely lead to higher foreclosure rates soon. That’s because being underwater is second only to unaffordable payments in leading to foreclosure, according to Zillow’s chief economist, Stan Humphries.
Additionally, the report found that more than one-third of all homes were sold at a loss in December. That trend has been on a steady uptick for the past six months, as homeowners try to find ways around foreclosure or out from under their homes.
Local disaster. This place is black-out entirely when you drive by at night. Two completed monster towers and nobody lives there:
” Like a passenger who sold his ticket on the Titanic, Dill walked away from one of the area’s most ambitious residential projects just before the condo market plunged.”
“The original vision remains intact — but, at prices starting below $200,000, that might make the property affordable to more local buyers. With only 72 of the 486 units sold, Dill said he and his partners have a lot of dealing to do before moving on to their goal to build another two towers.”
http://www.news-journalonline.com/news/local/east-volusia/2011/02/09/marina-grande-sees-new-life-with-old-developer.html
486 units so far, and 972 planned, but only 32 slips planned for the marina? So a boater has a one in 30 chance of getting a slip? They need to rename it Marina non-Grande.
And as we’ve seen, they will be right to building more monstrosities just as soon as they can, and despite losing millions, will get bankrolled to do so again.
But god forbid an FB misses some payments on his crap shack.
Even robbing a bank now costs an arm and a leg:
http://www.orlandosentinel.com/news/local/breakingnews/os-one-armed-bandit-orlando-20110208,0,2673170.story
Hobby, obsession, major peeve, helpless rant venting outlet, sanity verification, other: What is your interest in the HBB? Survey:
Early On(late 2004-early 2005: Validation and return to sanity. I knew I wasn’t imagining that something was very very wrong.
Now: To commiserate, bitch and belabor that something is still very wrong but improving.
Endless fascination over a collapsing bubble embellished by increasingly credible MSM commentary…
P.S. It seems as though while the MSM is passing directly from the denial phase of the housing bubble stages of grief into the reconciliation phase, many of the sheeple remain mired in the denial phase. Do the sheeple have yet to endure the anger phase which the MSM has somehow circumvented?
Same here.
To vent my frustration with the crooked housing industry as well as educate myself on financial topics.
A place to learn about the controlled collapse of a historic housing bubble, through the links, brain trust, and insight of an incredible pool of intelligent people.
Not to mention the wonderful camaraderie.
As a buyer on the hunt, the HBB is my oasis for real information.
Hobby, obsession, and sanity verification here. Plus its really a great MSM BS filter.
I never once doubted my sanity.
Insanity is addictive. If individuals can’t get some for themselves, they will follow someone who has it.
Blue Skye
IMHO crowd insanity is addictive for those people who have a weak identity. These are the people who subvert their personal egos to the collective ego of the herd.
They are lemmings.
They are
lemmingsreligious.Oh, and here I thought they were NFL fans.
Among my curiousities is how seemingly intelligent persons become such mindless herd creatures every election, voting for a Republicrat status quo that is actively and overtly imnicable to their interests. And then, without the slightest trace of irony, these same sheeple b!tch about the direction the country is headed in, as the Wall Street hirelings they install and maintain in power continue to loot the productive working and middle classes.
Imnicable?
“unfriendly” the opposite of amicable.
“Among my curiousities is how seemingly intelligent persons become such mindless herd creatures every election…”
Same with their blind acceptance of TSA encroachments.
IT’s certainly a trait that developed due to evolution. Safety in heards is the rule lemmings excluded.
lemmings excluded
The idea that lemmings blindly run off cliffs is actually a myth, btw.
http://en.wikipedia.org/wiki/Lemming
Hey, nycdj, you should add this to your act:
” in which staged footage was shown with lemmings jumping into certain death after faked scenes of mass migration… they did not jump off the cliff, but were in fact launched off the cliff using a turntable.”
Economic impact.
What is your interest in the HBB?
A source of “education with experience” to toss in Hwy’s Omniumgatherum Kaleidoscope of wonderment!
define: affirmation:
A declaration that something is true; an oath; A form of self-forced meditation or repetition
affirm - confirm: establish or strengthen as with new evidence or facts; “the strawberry picker story confirmed Hwy’s doubts”; “The evidence supports the bitter-renter”
affirm - to declare or affirm solemnly and formally as true;
“Your house price is too d@mn HIGH!” …”The rent’s too d@mn HIGH!”
My first visits to the HBB in spring 2005, and following up on the links therein, motivated me to sell my Florida house in early 2006 for $450,000. Probably within $30K of the peak.
It’s currently Zillowed at $238K and falling.
The best financial advice I have ever received or ever expect to receive.
The first three in my case.
I’ve been here for almost five years. And, during that time, I’ve felt ever more vindicated about what I’d suspected was wrong with the real estate market here in Tucson.
“Vindication”
I forgot that one.
And I felt a lot better that those pretty young things really *didn’t* have $50K in down payment money, that I wasn’t the slacker that I thought I was, and that it was okay to be a low-life renter.
I was on some random news hunt a few months ago for articles from the bubble era, for evidence that at least some MSM saw it coming. Somehow a link from a discussion forum led me here.
The reason I was news hunting: Back in ‘05, driving a guy to the airport (that’s what i do), we were talking about housing prices. I, having no background in RE and limited economic chops, said “they can’t just keep going up like this”. He said, straight-faced and confidently, “people will always need a place to live”. That stuck with we through the years, and I felt redeemed as it all unwound. I had no idea it would be as “bad” as it was, but it seems people here did. I now read and learn. And laugh, and get bummed out with all the doomsaying. Good mix.
Hey, Pete, what airport do you take people to? (Memo to HBB-ers: Let’s request Pete’s car when we’re in his city.)
Sac and SFO from the central valley. (Mainly Davis, Ca, but a bunch of other nearby areas too). The recession has had an interesting effect on us. We charge $23 to Sac airport from Davis, it’s a door-to-door shared ride deal. Now many more people take the 2-dollar county bus (long ride), but others who used to pay $60 for a cab have “downgraded” to us, so it kind of evened out. And I would say that tipping has only improved over the last couple of years. Davis is kind of a bubble of its’ own, though.
Ooooo, Davis! One of my favorite bicycling cities!
That it is! But some take their bikes out on the county roads that connect Davis with Woodland. The “bike lane” on these CRs is about two inches wide. Speed limit 55, and alot of trucks. It’s do-able if the trucks are only going one direction. Of course, often they aren’t. Very dangerous I’d think, but no fatalities that I’m aware of.
Hey, neighbor Pete. I live in Sac.
But some take their bikes out on the county roads that connect Davis with Woodland. The “bike lane” on these CRs is about two inches wide.
Yeah, I know.
When I left Davis (in 1981), I headed over to Vacaville. And darn if it didn’t start raining. As in, really coming down!
At one point, I was riding through a low spot of road, and it was completely covered with water. I must have hit the CA equivalent of a lunar crater. The ultimate pothole. Almost capsized my bicycle.
“Hey, neighbor Pete. I live in Sac.”
Wow, small world. I actually just moved from Davis to Woodland. My wife works in Sac, so we pondered moving out there. Some really affordable homes, it was tempting. Interesting differences between Woodland and Davis. Only 8 miles from each other and the $400,000 home in Davis is under $200,000 in Woodland.
I’m a Sac native and proud UC Davis alumni, but live in the other half of California now.
The town was anti-student back then, but I don’t know what it is like now. As students we used to joke that UC Davis could just have easily been UC Dixon.
Here in the OC, the market has definitely turned south since summer. New home developments are not sold out and they have started offering commissions to brokers again. Saw this movie in 2007. I think the ending will be similar but don’t think it will be as gory. Trying to hold out a little longer to see if the trend will continue before buying a house.
“The town was anti-student back then, but I don’t know what it is like now. As students we used to joke that UC Davis could just have easily been UC Dixon.”
That’s funny. Actually, I would call it pro-student today, if you don’t include rent prices. There are 30,000 students here now (if you include grad students), and so much of the regular population is tied in some way to the university. No animosity in either direction. Much of the town is opposed to the University’s plans to build a massive housing complex off of hwy 113, that’s about it.
My shoeshine boy moment was when I rode an Enterprise rent-a-car shuttle from Boston Logan to the rental agency (which was actually kind of far from the airport).
The driver was bragging to me about his properties.
I paid attention when an accountant in 2004 told me that he was using his house as his retirement plan.
Wasn’t the plan for most CA homeowners on the coast? Wasn’t the plan to sell the house when they reached retirement and move to one of the neighboring states?
Wasn’t the plan to sell the house when they reached retirement and move to one of the neighboring states?
Yeah, this one. And we were supposed to get all warm and fuzzy when they came here, started foo-foo businesses funded by their CA home equity, and proclaimed that the universe would take care of them.
They liked to move here and warn us that Cali was crazy, and it would be a shame to ruin this place like that.
I like it as a quick news aggregator
the comments are really funny
it’s neat to have a “boots on the ground” look at Real estate from all the posters. also the insight they provide on other things in their area
I like it as a quick news aggregator
agreed. It’s great for getting an overview of the important things going on. If you can filter out the partisan crap, that is.
If you can filter out the partisan crap
I kind of like partisanship, it’s the personal attacks that frustrate me.
But on a positive note, it’s all of the above for me. I used to be really active on car boards, but found the economics lessons here to be far more useful.
” If you can filter out the partisan crap, that is.”
Then stop posting it. It’s really that simple.
Then stop posting it. It’s really that simple.
that was funny
The housing bubble run up and subsequent bursting is history in the making. The hbb is a front row seat.
Future generations will be studying this time in our history for years to come.
Future generations will be studying this time in our history for years to come.
When I watched Idiocracy it didn’t look like they were studying much of anything.
What is your interest in the HBB? Survey:
Equal parts verification, schadenfreude and relief.
Virtual water cooler.
A wonderful source of ear-to-the-ground information and a real-time record of an historic era in American (and global,) socio-economic history.
This forum is a national treasure–as is its moderator. (Yay, Ben.)
“WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on pricesUS diplomat convinced by Saudi expert that reserves of world’s biggest oil exporter have been overstated by nearly 40%.”
say it ain’t so joe!
we waste so much fuel in the US that it is mind boggleing.We are living like millionaires on a taco bell budget.
I’ve never understood why fuel conservation (and eventually independence) has not been embraced as a patriotic imperative.
Because we mere mortals are on THIS side of the oil, and the immortals* with the money are on the OTHER side of the oil.
———
*I refer to one immortal in particular, the one whose ribcage houses several spare cardiac parts.
“I’ve never understood why fuel conservation (and eventually independence) has not been embraced as a patriotic imperative.”
The same reason that the populace discarded the (short-lived) frugal living brought upon by the great recession: it’s easier this way.
Cuz we’re Merikans and Merikans drive trucks!
We all know that conservation and thinking ahead is what effette wussies do! Real men don’t drive cars, especially not cars with 4 cyclinder engines!
Elvis was a truck driver before he became famous.
“Elvis was a truck driver before he became famous.”
I think that he drove the “uncool” kind of truck, a delivery van. Still, I could see him driving one of those 4 door, 400HP, 6000 lb “commutter” vehicles that get 12 mpg.
It’s just way easier to wear a flag lapel pin or affix an “I Support Our Troops” sticker to one’s car with no hint of irony.
Putting on a sweater when it’s cold is so lame! I don’t have time to cook or garden because my commute is so long! Yo quiero Taco Bell!
Putting on a sweater when it’s cold is so lame!
Well, I must be crippled, because I just donned my second sweater of the morning.
Putting on a sweater when it’s cold is so lame!
I just turned the AC off, turned on the fan and took off my socks.
I forgot about the AC. The one day last summer that I wanted to use it, the landlords happened to be around. I mentioned that I was thinking about turning it on and the woman looked at me like I had two heads and said, “There’s no AC.” She didn’t say “idiot”, but I heard it. No AC for us (by design)!
MrBubble
Jimmy Carter will look like a prophet after Saudi Oil production collapses. People will look back and remember Reagan removing solar panels on the tax payer dime just to make a statement that he didn’t believe in alternative energy or energy conservation.
Sorry measton, I don’t think they will. They’ll just think of Carter asking us to sacrifice by putting on a gay sweater, and Reagan allowing us to bully people on the highway in an SUV while keeping the kiddies quiet with a DVD player.
People will look back and remember Reagan removing solar panels on the tax payer dime just to make a statement that he didn’t believe in alternative energy or energy conservation.
Yes, there was that aspect of the story.
However, those panels were originally installed to provide hot water for the White House kitchen. And the kitchen staff complained because they didn’t work very well.
…and it would of cost the taxpayers alot more to put in ones that did work.
ho hum…round and round we go.
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.
Me and mine too.
The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping.
Not only were we told to go shopping, we were also told to take a trip! On a plane!
Contrast that with FDR’s “Call to Sacrifice” speech.
“Not only were we told to go shopping, we were also told to take a trip! On a plane!”
Go to Disneyworld! IIRC dubya literally said that.
After 911, a friend of mine did look into going to Disneyworld, thinking she could get a price break, but nope, Uncle Roy was as greedy as ever. She didn’t go.
“After 911, a friend of mine did look into going to Disneyworld, thinking she could get a price break, but nope, Uncle Roy was as greedy as ever. She didn’t go.”
Wasn’t that when they introduced the “dine for free” plan? It has expanded quite a bit now and from what I have heard its offered for over half the calendar year.
Of course better deals are found “off property”.
Me too, Polly. I knew then something was very, very wrong with our government.
**********************
“The time for leadership on that issue was just after September 11th. I was aching for it to happen at the time. Then we were told to go shopping. My heart died a little that day.”
I’ve never understood why fuel conservation (and eventually independence) has not been embraced as a patriotic imperative.
It totally was for 25 years.
….but in Brazil.
P.S. It worked.
“….but in Brazil.”
That’s something I’ve long respected about Brazil. They managed to sustain some longer-term thinking on energy independence, in an era of increasingly short-term thinking.
Sugar cane ethanol! Efficient where corn isn’t. Can we grow sugar cane in mainland USA?
Can ethanol be made cost effectively from sugar beets?
We used to grow a lot sugar cane here. It’s just that it was cheaper to farm it (grow, harvest, process) somewhere else.
“Overseas” somewhere else.
I think switchgrass is now being touted as the best source of biofuel. It’s native, grows on marginal land, and doesn’t need a lot of water and fertilizer. Many claim hemp is still superior, but of course that opens another can of worms.
our ability to control the oil is unmatched through our military prowess.
pretty much.
It is not just Saudi Arabia. As soon as OPEC started to consider “reserves” when setting a countries quota, reserves for all the OPEC countries jumped. It is all subprime oil.
good link for reserves: http://www.enopetroleum.com/opecoilreservers.html
One thing we can do is get rid of so much of this plastic crap, which would certainly do wonders not only for the price of oil, but the planet as well. For example, go to any Lowe’s or Home Despot and check out the shower heads or faucets and you will find that many of them are made of plastic with a metallic coating. You’re lucky if you get a year out of them. Planned obsolescence on steroids.
So much stuff is made out of plastic that would be better made out of metal or wood. It would last longer, pollute less, free up space in trash heaps, etc. Get rid of a lot of plastic bags and plastic packaging, too. Bring back re-usable bottles and bags.
+1
I make a point of finding the non plastic crap. It can be hard though. If you want a non plastic vacuum cleaner you might have to buy a Kirby or an Electrolux.
“non plastic vacuum cleaner you might have to buy a Kirby or an Electrolux”
Had my first Old School moment last weekend while purchasing a vacuum on the weekend (Olive Garden…if there’s time). I was promised that our new German vacuum will be the one used the clean the room in which we are waked when we both snuff it. The Miele Titan. What’s up, sucka?
MrBubble
PS: It was expensive, but we went the “buy quality once” route, and it got the best reviews for a cannister style. With the HEPA filter, it can also be used as an air purifier for the baby room, if desired. Don’t like have to throw away bags, but our cheaper bagless vacuum wouldn’t clean even though I washed and scrubbed the filter with a toothbrush regularly and the Dyson was out of our price range.
Plastic has been indicated as a pseudo estrogen, and a cause of high estrogen levels in women, leading to a Breast Cancer Diagnosis. I tossed out my plastic kitchen stuff and replaced it with glass. Besides, glass is more eloquent.
Besides, glass is more eloquent.
Uh-oh! Talking glass!
I wanted to buy some baby socks the other day. $5.99 for four pairs at Marshall’s. Problem was they were in a big plastic box display with little plastic feet to fill them out. It looked cute, but I couldn’t believe such a waste of plastic for four pairs of baby socks.
Here’s a tip: Don’t add any bright lighting inside your cabinets, or you’ll be sad at how poorly your dishwasher works when you look at your glass dishes.
Paper packaging was one of the main causes of nearly destroying our national forests.
Most of our wood now comes from Canada, where they are also now seeing unsustainable levels of logging.
I’m no tree hugger, but the numbers don’t lie. The human race is depleting its resources.
Fresh water. Fish. Wood. Arable land. Oil. All are in critical trouble.
Paper packaging was one of the main causes of nearly destroying our national forests.
That’s only an issue if the fedgov sells logging rights to those lands.
That problem is easily solved - don’t log national forests, or have a good logging policy in place.
We now have good logging polices in place, but it put a lot of people out work in the NW.
But they were going to be out of work anyway AND the resources would have been gone for a century.
IIRC, we have approx 2 million acres in pine tree production farms in this country now, with the number increasing every year.
We now have good logging polices in place, but it put a lot of people out work in the NW.
I was amazed when I first moved up to the Seattle area and drove around the Olympic Peninsula. Seeing recently logged areas, and then others with signs saying they were last logged 30 years ago…It’s good they rotate and limit the scope of things, but still sad to be driving through national forest land and see a clean-cut parcel.
It is kind of cool seeing all the baby trees sticking up, though.
It will get interesting once gas at the pump hits $10 and rationing. Then the blame game starts, commies, liberals, Arabs, oil companies, tree huggers, Bush, Clinton, speculators, easter bunny, etc.
Got bike or electric train? No? Tough luck!
At $10 it will self ration. $300 to fill up the tank on a pickup truck will make those babies as popular as a non-alcoholic beer at a frat party. And if there is rationing they will be even less popular (here’s your 5 gallons for the week, let’s see, that should be good for about 60 miles)
http://english.aljazeera.net/
While the corporate MSM is sticking desperately to its “crisis contained” meme for Egypt - we wouldn’t want the sheeple thinking a crisis might be brewing, which would spook the markets - al Jazeera with its on-the-ground reporting is painting a very different picture.
Why doesn’t the US media report this about Egypt?
‘In the mid-1990s, Suleiman worked closely with the Clinton administration in devising and implementing its rendition program…Under the Bush administration, in the context of ‘the global war on terror’, US renditions became ‘extraordinary’…Egypt figured large as a torture destination of choice, as did Suleiman as Egypt’s torturer-in-chief. In Egypt, as Habib recounts in his memoir, My Story: The Tale of a Terrorist Who Wasn’t, he was repeatedly subjected to electric shocks, immersed in water up to his nostrils and beaten. His fingers were broken and he was hung from metal hooks. At one point, his interrogator slapped him so hard that his blindfold was dislodged, revealing the identity of his tormentor: Suleiman.’
‘Frustrated that Habib was not providing useful information or confessing to involvement in terrorism, Suleiman ordered a guard to murder a shackled prisoner in front of Habib, which he did with a vicious karate kick.’
http://english.aljazeera.net/indepth/opinion/2011/02/201127114827382865.html
‘On January 29, Omar Suleiman was anointed vice president by tottering dictator, Hosni Mubarak..Suleiman has long been favoured by the US government for his ardent anti-Islamism, his willingness to talk and act tough on Iran - and he has long been the CIA’s main man in Cairo.’
That’s our guy, Suleiman.
Nobody picks ‘em like we pick ‘em.
He’s a regular Egyptian treasure and we own him.
Notice how “rendition” became a euphemism for “put your gonads in a vice and start cranking”?
And now here’s Omar Suleiman with his #1 rendition of the ole classic: “You Always Hurt The One You Love…”
“Rendition” (because “illegal kidnapping on foreign soil” is too much to say) is the number one reason why the world really doesn’t like us any more.
Sully wants a do-over…
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/02/09/state/n070404S22.DTL&tsp=1
He mentioned his real estate troubles in the book he wrote shortly after the Hudson landing. Book’s title is Highest Duty. As insta-books written by ghostwriters go, it’s not bad.
At least he can afford it with his speaker fees. Sorry Sully, you’re a great pilot but a dumb investor.
Ask anyone in the aviation business…….airline pilots and their “investments” are a running joke.
There’s a stand up comic whose day job is flying for Fedex. One of his bits has to do with sitting in a cockpit for several hours, listening to investment “advice” from other pilots.
Like emu farms.
Or being stuck with a “Randy Weaver” type…..
Dear god! NO!
Would that comic be Mike Hatton?
And in other news…Zillow says the bottom will come in 2011 for SF bay area houses.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/09/BUC81HK33N.DTL&tsp=1
What’s different this time is that the accelerated declines are likely to bring the real estate market to a bottom later this year, according to real estate information service Zillow.com, which is releasing a report today on fourth-quarter values.
“This is the beginning of the end,” said Stan Humphries, Zillow chief economist. “We’re seeing more depreciation in most markets, which means the ultimate end (to the declines) will come sooner rather than later.”
Well, I agree with Humphries that an acceleration of the declines will get us through the downturn sooner rather than later.
But “a bottom later this year”? I think not.
Cleaning up old bookmarks.
http://thereisnohousingbubble.blogspot.com/
Hard to believe it was 5 years ago.
All across America real estate investors are pondering the question: is there a housing bubble? To answer this question we interviewed 4 of the nation’s leading unbiased real estate experts: David Lereah, economist; Leslie Appleton-Young, economist; Gary Watts, a highly respected real estate observer; and a man who goes by the name “Buck” that runs a popular Internet blog called There Is No Housing Bubble!
“To answer this question we interviewed 4 of the nation’s leading unbiased real estate experts…”
That has to be one of the most biased list of unbiased real estate experts that I’ve ever seen!
Talk about a Flat Earth Society!
I’m positive it was satire.
And good satire at that. About halfway down, check out the tale of the city of Realatopia with Prince Realtor and the two brave knights, “Option Loan” and “Interest Only Loan”, setting out to find and slay the bubble monster. Hilarious!
Am I getting the correct impression about this “no housing bubble” blog? That it went dormant back in ‘06?
People tend to forget what the atmosphere was back in the day (and the abuse regular posters here took from the trolls). Note this is 2006!
‘Debt is Wealth — look at all the great societies the world has produced and you see one thing in common: debt…Slavery is Freedom — I remember reading once someone saying that they did not want to become a slave to their home. They felt the seeming high prices of homes today means they are slaves to the house, spending weekends fixing up the house or working second jobs to make the mortgage payment.’
‘But what they don’t realize is the freedom the home gives you. You see, every hour spent putting in granite countertops or fixing the yard is money in your pocket. You are using your time to create wealth. And every nickel you put into that mortgage from that second or third job comes back to you dressed up as a twenty dollar bill.’
‘Fear is Happiness — one of the main reasons why people stay renters is fear of failure. They are afraid if they buy a house they might lose everything. They see isolated instances of this happening and assume that they will be one of these unlucky few. However, by embracing the fear and buying one or multiple homes you open the door the complete and joyous happiness.’
‘Let’s say you do something wise, you purchase a home in California for $500,000. This beautiful and desirable home will appreciate by about 20% per year. Therefore after 30 years that home that the renter unwisely turned his nose up to will be worth a little over $100 million. Now let’s say you are even wiser than this. Let’s say you use the rapidly rising equity in this dream home to purchase another undervalued home every year. So you’ll earn 30*$100 million or over 3 BILLION dollars. That’s right, you’ll become one of the richest people in the world and all you did was sit back and let debt work for you.’
‘Now, some of you embittered renters probably think this is some unrealistic fantasy…If you look at history there has never been any period of time where home prices declined. Never. Even if you go back to Ugh selling the first cave to Ooog for 3 rocks and a wooden club, I guarantee you Ooog made money…So what will the future be like? It will be a lot like the middle ages. You will have a landed aristocracy (home owners) and you will have the poor, embittered, masses (renters)…sadly, 30% of Americans will be left behind with no hope of a better life. And like the serf of the middle ages they will leave to their children nothing but ashes. Ashes of dreams. Ashes of hopes. Nothing but servitude to their landed betters. What a hopeless existence they will have.’
‘Unfortunately, a lot of reckless people are throwing about words like “bubble” to try to ruin people’s lives. They are trying to use fear and ignorance as a weapon to destroy the lives of this future aristocracy. I believe they have one of two motives. Either they are looking into the abyss and see that they will never own a home so like an angry two year old they want to destroy the hopes of everyone else. Or they are greedy and want to drive prices down temporarily so they can snatch up this wealth from those foolish enough to heed their advice…For the frightened renter/bubble advocate, it causes fear and resentment to want to ruin other people’s lives. Don’t become one of these pathetic wretches.’
‘That is why I’m writing this blog, to educate the few redeemable renters out there. To let them know that if they take a chance and let debt, slavery, and fear into their lives they’ll find wealth, freedom, and happiness.’
http://thereisnohousingbubble.blogspot.com/2006/02/debt-is-wealth-look-at-all-great.html
People tend to forget what the atmosphere was back in the day (and the abuse regular posters here took from the trolls). Note this is 2006!
Yeah, Ben, whatever happened to those 2006 trolls anyway? Our current trolls can’t light a candle to the oh-sixers.
I guess its starting to finally sink in for some people: It’s raining knives!
“So you’ll earn 30*$100 million or over 3 BILLION dollars. That’s right, you’ll become one of the richest people in the world and all you did was sit back and let debt work for you.”
Yeah, it had to be satire.
Then again, my carpool mate received advice from a “friend” (not a Realtor) the other day: that he was stupid being a renter and that if he bought now he would make a cool 50 grand in just 2 years.
The koolaid is still being served and consumed.
‘it had to be satire’
IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then. I literally would be asked by reporters what I thought of this blogs ‘rebuttal’ to the HBB. I had never even looked at it, so I could answer.
But as far as the numbers; remember what people were saying when coastal CA prices went to their peak; that these houses would be worth 10 times that in X number of years? When Miami condos planned for empty lots sold and re-sold up over $1000/sq ft? And the talk about ‘landed aristocracy’ versus ‘bitter renters’, that was common-place and was repeated in the media over and over.
Yes, the reporting and dialog a few years back was THAT insane. It’s a mania, there is no other way to describe it. Some places it’s peaked, in others it goes on. And we still have a part of the population, govt and media who want to keep that madness alive.
“IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then.”
Absolutely. Which is why at first I thought it was for real.
“IMO, it doesn’t matter if it was or not, but rather did it reflect the thinking back then.”
True. These words on that blog summed up the times:
Financing is no problem. Habla espanol. Bad credit? No credit? Legally dead? No matter what you say he will say he can put you in a home. He has homes for all payment levels. No income needed.
I never saw that blog. He’s hilarious!
Anonymous from California writes:
I be a realuhtor in san jose. I sell milliun dolor homes to janiters waitors and morgage brokers. I urn my 6% comision. I maid 1 milliun dolors last yeer selling homes. I urn my money. Tell people the trooth about homes allways going up in price. Its a fact. I no. I’m a realuhtor.
Wise words from someone who knows his industry. Who better to listen to than a highly trained real estate professional who knows the market and your home’s value? What sort of training do most of these “housing bubble” maniacs have? They are not trained real estate professionals. Rather they are bitter amateurs who are projecting their hopes and fears onto other people. They don’t understand why changing demographics, immigration, environmental, and other socio-economic factors have caused real estate to reach a permanently high plateau. People in the industry and educated home owners know the truth. They don’t need some outsider trying to confuse them with so-called facts. But I give you my pledge that as long as I have fingers to type I’ll proudly proclaim “there is no housing bubble!”
http://money.cnn.com/2011/02/09/news/economy/fannie_freddie_phase_out/index.htm?hpt=T2
‘The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’
‘In addition, officials could also reduce the maximum loan limit for mortgages that Fannie and Freddie are allowed to buy, and encourage them to raise the fees they charge banks to guarantee mortgages. Other options that could be discussed in the white paper are gradual increases in the minimum down payments on government-backed loans, and an accelerated reduction in Fannie and Freddie’s loan portfolios.’
Yes, the portfolios. Why did the GSEs hold the paper behind the loans? It didn’t have anything to do with their ‘mission.’
http://thehousingbubble.blogspot.com/2005/05/enough-already-get-rid-of-portfolios.html
‘May 19, 2005: Federal Reserve Chairman Alan Greenspan again pushed for limits on the multibillion-dollar mortgage holdings of Fannie Mae and Freddie Mac, saying such restrictions would not hurt the thriving housing market. ‘As Fannie and Freddie grow ever larger, their ability ‘to quickly correct a misjudgment in their complex hedging strategies becomes more difficult,’ Greenspan said. ‘We are thus highly dependent on the risk managers at Fannie and Freddie to do everything right…The assets required for Fannie and Freddie to achieve their mission are but a small fraction of the current level of their assets,’ Greenspan said.’
http://thehousingbubble.blogspot.com/2005/04/admitting-bubble-not-option.html
‘April 25, 2005: The DallasNews editorial by Danielle DiMartino has this headline, “High stakes won’t allow us to admit housing bubble.” ‘The powers that be insist there’s no housing bubble. They have to, mass delinquencies and foreclosures are simply not an option, not with the risks built into the mortgage-finance system. The general concern about these instruments is that they’ve yet to be ‘tested’ by an inevitable market downturn. Is there risk in today’s lax lending standards?”
“John Vogel (said that) when the government first noted the risks in the savings and loan industry, he remembered, a pencil-to-paper exercise put the risk at about $40 billion. ‘We knew we had a problem back when the S&Ls were on the skids in the early ’80s. Instead of taking care of it then, we waited until we had a $500 billion problem.’”
“Ten years ago, when the whole securitized mortgage market was $1.6 trillion, Fannie and Freddie held about $76 billion on their balance sheets, or less than 5 percent. Today, Fannie and Freddie either own or back about $3.5 trillion of a $5.5 trillion market.”
“Eating away at these protections are no-income verifications, piggyback loans made only to skirt the mortgage insurance requirement, builders paying closing costs so buyers cross the threshold owing more than the house is worth, and lenders doing everything they can to avoid foreclosing.”
It’s worth noting what was known at the time:
http://thehousingbubble.blogspot.com/2005/03/wsj-fannies-problem-persist.html
‘Fannie’s Regulator Says Problems Not Yet Resolved, the worst may be yet to come.” The Wall Street Journal gave us an update on the Fannie Mae fiasco today. Some tidbits: “‘Fannie’s problems are worse than those of sibling Freddie Mac and that a hefty fine could be in the works’. said Armando Falcon, director of OFHEO.”
As it became known last week, Fannie employees have been “falsifying signatures and altering information in databases” and Mr. Falcon says such problems were “not isolated incidents. Moreover, he adds, ‘there are additional issues that we still haven’t looked at yet,’ and these issues could haunt Fannie for some time.’”
Yet the GSE’s continued to plunge into the disaster:
http://thehousingbubble.blogspot.com/2005/02/lenders-bottom-fishing-for-borrowers.html
‘February 20, 2005. Freddie Mac unveils a new mortgage product intended for the “savvy borrowers”. “(T)he second-biggest provider of financing for U.S. housing, said that it will expand its interest-only payment option to more adjustable-rate home loans to meet demand from borrowers”.
“(Its) designed for borrowers who fully understand that the monthly payment will rise following the interest-only period,” Freddie Mac said in the statement. The story points out “they are popular with consumers who are stretching financial resources and might not be able to repay the loans when interest rates rise.”
And the fallout was already happening:
http://thehousingbubble.blogspot.com/2005/03/lending-standards-blamed-for-denver.html
‘March 30, 2005. Foreclosure filings have exploded in the Denver metro area and county officials are pretty clear as to who is to blame. “‘Lenders started giving money to people, and it’s gotten out of hand,’ said Jeannie Reeser, public trustee of Adams County. ‘I am talking to people who have jobs, but their income doesn’t come anywhere close to matching their financing.’”
“Soaring foreclosure filings in Arapahoe County for the first three months of this year helped drive metro Denver’s foreclosure rate 34 percent higher than the same period of last year and 30 percent higher than the fourth quarter of 2004. The rate represents 1.3 percent of 125,325 single-family, owner-occupied houses in the county.”
‘One mortgage lender says borrowers should be wiser. “Everybody has to have what they want right now, no waiting, no saving up,” he said. “Credit is so loose today that I can buy the groceries I need on a credit card, eat the food tonight, discard the food by tomorrow at noon and finance my debt on a 30-year, amortized loan. How stupid is that? But people do it all the time - and then they wonder why they’re in foreclosure.”
‘The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’
Okay, Obama, here’s Slim, puckering up in Tucson. Next time you come here, I’m gonna kiss you. I swear I will.
“The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.”
Gotta wonder how many generations this will take?
Do you mean I’m going to stay puckered up for 25 years before I can kiss Barack? Dang it, rms, you are *such* a killjoy!
“The Obama administration will issue a proposal later this week recommending the gradual elimination of government-sponsored mortgage backers Fannie Mae and Freddie Mac, a White House official said Wednesday.’”
is that before or after he closes Gitmo?
Wait until you see what they replace them with. FannieMacZilla.
‘The assets required for Fannie and Freddie to achieve their mission are but a small fraction of the current level of their assets,’
What mission was he talking about? Creating affordable housing?
It seems like having them wind down their REO inventory portfolios would go a long way towards achieving that mission…
As I’ve said: They. Knew.
From another post on this thread:
‘Bankster vs Deadbeat FB’
‘On a scale of 1-10
Degree of blame for Bubble:
Banksters 10
FB’s 2′
From above in early 2005:
‘Everybody has to have what they want right now, no waiting, no saving up,” he said. “Credit is so loose today that I can buy the groceries I need on a credit card, eat the food tonight, discard the food by tomorrow at noon and finance my debt on a 30-year, amortized loan. How stupid is that? But people do it all the time - and then they wonder why they’re in foreclosure.’
Here’s my degree of blame for the Housing Bubble:
On a scale of 1-10
Banksters 10
FB’s 10
Etc. 10
This just in from Tucson (by way of Houston): Rep. Giffords’ speechlessness is toast.
Wonderful news. Amazing progress. I wonder how long it will be before we get to see or hear her on camera?
I think that because she’s a woman, it may be a while. After all, a gal’s appearance is pretty important.
I can just hear Obama exclaiming “Gabby opened her mouth!”
And various Fox News commentators saying “Uh-oh…”
Do Palin supporters still have those gunsights targeted on AZ Congressional districts w/ Democratic representatives?
I think that, in a few months, Ms. Giffords is going to have some very pointed things to say about that topic.
Ditto for her husband and her parents, who will be her caregivers for quite some time to come. Recall that Gabby’s father had some pointed things to say about the Tea Party shortly after she was taken to the hospital on January 8.
Right now, things are still very nicey-nice. But just you wait. The fireworks are coming.
You DO NOT jack around with astronauts.
So Loughner was a Tea Partier?
Those were removed that very evening.
Yes, but not before a lot of the blogosphere did the “right-click and save image” thing.
Got to love Freedom of (Politically Correct) Speech.
Got to love Freedom of (Politically Correct) Speech.
Come on nickpapageorgio, Put your politics aside for a bit. I’m sure you don’t condone that kind of “free-speech”.
“Don’t just retreat, RELOAD” Then putting gun sights over districts. And moron, fascist ilk calling for “second amendment solutions” “We need to take out Harry Reid.”
Who admires that kind of “free speech” nickpapageorgio?
Do you? I don’t. But I think it makes some wack-jobs feel like real tough guys. You know, kind of gun toting, 90 IQ, corn pone, red-neck edgy. Nice huh?
People who like that stuff are not the norm in America.
Constitutional free speech does not and never did and never was meant to authorize treason or provoke violence.
You CANNOT make threats and claim “freedom of speech.” It was, is and always will be illegal. The only reason hate radio got a pass was because they were well connected.
Umm….Unless you are in elementary school, you do know that individuals are responsible for their own actions. Also, I get tired of pointing out the fact that the Tucson shooter was an anarchist leftist. You can cherry pick statements from left wing politicians containing far more venom and violent undertones…I guess they don’t count.
http://www.usatoday.com/money/economy/housing/2011-02-08-1Amercedcalif08_CV_N.htm
Gary might have more luck pursuing work in other states. That would mean selling the house at a big loss or doing what the couple say they won’t do: Give the house back to the bank and walk away.
“We made an agreement,” Loreina says. “We can’t go anywhere until we can break even on the house.”
I wonder ? people can say what sounds good but what will they do when they see others walking away ? Walking away and possibly buying back in at 1/3 the cost. Thats what they did in 1995 in CA.
“John Betham, 58, and his wife, Sandra, 55, are staying put. They owe $375,000 on their Los Banos home. They estimate it would sell now for $150,000.”
It would take some serious water boarding to get me to sign a mortgage agreement for $375k in Los Banos, CA. What were they thinking?
It would take some serious water boarding to get me to sign a mortgage agreement for $375k in Los Banos, CA. What were they thinking?
That someday they’d be flush with cash but then it all went down the toilet.
“She eats TV dinners at her desk for lunch, rather than fresh sandwiches at a deli. She can recite, down to the penny, the cost of South Beach Diet bars at three retailers.”
Why not “fresh” sandwiches made at home (for less than the price of that TV dinner)? Only in America can you see people crying poor while constantly dining on prepared foods. Geesh.
When you buy the diet microwave “meals” for a couple of bucks on sale it’s cheaper than real bread and decent cold cuts and you don’t have to eat the same sandwich everyday for a week to use up the food.
Exactly. A cheap TV dinner can cost ~$1. The better ones cost ~$2.
Decent (not fancy. still white) bread costs $2+ a loaf. Even cheap lunch meat is around $3, but off brands taste so bad and the portions are no bargain that they aren’t worth buying. Oscar Mayer is as low as you want to go. Cheese? Another $3. Tomato? Lettuce? Mayo? Mustard?
You are now at around ~$16+ for the week. Vs $10 for TV dinners? And it’s hot? No brainer.
You don’t go to the grocery store much, do you Kim? Or perhaps you’ve never had to REALLY bargain shop.
Homemade sandwiches are only a bargain compared to store bought, but can’t compete with TV dinners.
THAT’S how screwed up our economy is. Call it “Sandwich Economics.”
You are now at around ~$16+ for the week. Vs $10 for TV dinners? And it’s hot?
If you’re doing that comparison and taking it being hot into consideration, don’t forget to add in the cost of the microwave as well as the electricity (the latter is likely negligible, but still a consideration). Fridge/freezer is required for either.
Food storage and prep is moot and a wash.
Company microwave. Free. Refrigerator. Who doesn’t have one? Prep time? Longer for the sandwich.
When on sale, Lean Cuisine can be had for 2 bucks each. It’s not easy to make any kind of lunch at home for that price. The better cold cuts cost $6-7 per pound, which makes the sandwich alone $2.
I’ve been calculating food prices for a while and made a strange observation:
1. Mid-quality food costs about 1.0 penny per calorie.
2. Low-quality process carbohydrates costs something like 0.75 pennies per calorie — likely because the original farm subsidies were structured to reward calories, not nutrition.
3. High-quality food costs 1.15 to 1.25 pennies per calorie.
And truly good stuff costs about a dollar per serving per food, like 1.5 oz cheese or a 1/4 pound fresh berries.
There are exceptions at both ends, but it’s a good starting point rule of thumb. It seems to work for restaurant food too, although it’s skewed a bit higher of course. For example, typical Applebees fare with french fries is about 1000 calories for 10 bucks. Applebee’s “healthy, under 560 calorie” entrees are about $8.50.
“Lean Cuisine can be had for 2 bucks each”
Still?? Wow, I haven’t eaten one of those in years. But when I did, it was always two. And I can make a filling lunch for way less than $4. I may have to do the lasagna calculation tonight.
2? I can only eat one.
And while I LOVE lasagna, it’s not as nutritious.
Only one? They’re like 300 calories!
Our lasagna is a bit more nutritious since we add spinach and home-roasted red peppers.
“The better cold cuts cost $6-7 per pound, which makes the sandwich alone $2.”
Deli cuts are a value added luxury. A roast or ham or chicken on sale will make many sandwiches, and they will cost less than $1. You have to bring your own knife though.
Enough with the “I can eat cheap” bragging.
If my life depends on my cooking skills, I might as well put a bullet in my head right now, and bypass the slow death by food poisoning.
I hate cooking. The only reason I did it before was because it cost a lot less, when I had kids (and their teenage boyfriends) hanging around the house.
Now the girls are (mostly) out of the house, I work until 6-7pm most nights, and I don’t save much money by cooking at home.
Cooking (to me) is like hitting yourself in the head with a hammer. It feels so good when you stop.
Just make sure when you buy the inexpensive TV dinners that the list of ingredients isn’t a mile long, you can pronounce them all, and they’re not the same as your shampoo.
But I wash my hair with beer.
“Only in America can you see people crying poor while constantly dining on prepared foods”
+1
My homemade lasagna with home-butchered venison that I brought to work is super cheap per serving! Back to the grind… Heh
Well I just saw another Democrat drop out of Congress, Virginia Senator Jim Webb won’t be running in the next election. And he was a Blue Dog too, very conservative. At this rate there won’t be any incumbents left to run in 2012. The Senate should flip and the house should pick up 20+ more GOPers. This country is going hard right fast. I give Obama zero chance of being re-elected.
Sounds like what people said about Reagan in early 1983.
Recall that in 1984, less than half the eligible electorate voted in the presidential election. Yet the Reagan people called his re-election victory a mandate.
did susan research that?
the world wide interweb told me 53.1 percent of the voting age population showed up.
56.8 percent of the voting age population showed up for obama/mccain.
the world wide interweb told me 53.1 percent of the voting age population showed up.
Oops! I stand corrected. I meant to say that less than half the eligible electorate voted for Reagan in 1984.
I can recall quite a bit of commentary over the (for the time) low voter turnout in the 1984 election. To the point that Gil- Scott Herron released a song called “B Movie.” It started with Gil saying, “The first thing I’d like to say is mandate, my @ss.”
“The Revolution Will Not Be Televised”
I loved “B Movie” as well. Really sticks it to the neocons.
“The Revolution Will Not Be Televised”
I loved “B Movie” as well. Really sticks it to the neocons.
I was working in a food co-op in Pittsburgh when that song came out. Everyone working in the store was expected to deejay a killer set of music during their shift. Competition to get on the turntable was fierce.
And let me tell you, “B Movie” was a real customer-pleaser.
That was 53.1% of eligible voters, not voting age population.
link?
Yes but the growth rate coming out of the recession was more than twice as high as the present growth rate. 8 to 9% unemployment is not good for the incumbent party.
Bankster vs Deadbeat FB
http://www.xtranormal.com/watch/8320643/
That’s amazing.
Bankster vs Deadbeat FB
About what I though. On a scale of 1-10
Degree of blame for Bubble:
Banksters 10
FB’s 2
Degree of damage inflicted on America
Banksters 10
FB’s 1
Degree of being bailed out:
Banksters 8
FB’s 1
Degree of being held responsible for their actions: (so far)
Banksters 2
FB’s 7
As I’ve said, sociopaths always blame their victims.
CNBC
The number of borrowers who owe more on their mortgages than their homes are worth took a huge leap in the fourth quarter of 2010. A full 27 percent of borrowers are now “underwater” on their mortgages, up from 23 percent in the previous quarter, according to a new report from Zillow. Foreclosure moratoriums and falling home prices are to blame.
Adding to a slew of negative reports on home prices, Zillow found home values posted their largest quarter-over-quarter decline, 2.6 percent, since the beginning of 2009. The home buyer tax credit, which inflated home prices artificially in the first half of the year, resulted in a Fall hangover. Home prices plunged 5.9 percent compared to the fourth quarter of 2009.
With foreclosure moratoriums in place due to charges of faulty paperwork at some of the nation’s largest mortgage servicers, many homes with underwater mortgages that should have been repossessed by lenders were not, and instead boosted volume in the negative equity pool. Falling prices didn’t help.
“…since the beginning of 2009. The home buyer tax credit,…”
Wasn’t the home buyer tax credit put into effect just after the beginning of 2009? It’s beginning to look like that tax credit turned an entire cohort of first-time buyers into knife catchers.
Working class going down and upper class going up. I wonder how long this trend will last?
Bloomberg
“The amount of money being made in the rest of the world is astonishing — confidence is more than just coming back to the London market,” said property entrepreneur Nick Candy, who along with his brother Christian masterminded the One Hyde Park development that opened last month. Six apartments sold there in November and December for record prices of about 6,000 pounds a square foot, he said, without giving their size.
The shortage of homes for sale in London’s seven priciest boroughs last year encouraged more people to renovate and expand their homes, data obtained from the municipalities by Bloomberg News indicate. The number of homes sold in these areas in 2010 was 30 percent below the average of the past decade, Land Registry data show.
Working class going down and upper class going up. I wonder how long this trend will last?
Look to Cairo for your answer. If you think what’s happening there will not spread to Europe and the United States, think again.
“Why Egypt should worry China” (online today)
-”Growing problem of unemployment and under employment among university graduates……”
-….”less-skilled and less educated migrants from the countryside, who are consigned to second-class jobs in the cities…..”
-”Finally, China needs to get serious about it’s corruption problem. Personal connections, or quanxi, remain critical for getting ahead. Recent migrants from the countryside, and graduates with degress from second-tier universities sorely lack such connections…..”
And how is this different from the good old USA?
Well obviously it isn’t, is it?
Oh wait, their middle class is still growing DESPITE those problems.
“Working class going down and upper class going up. I wonder how long this trend will last?”</I.
About 30 years so far.
WSJ
Survey: Mortgage Process Has Become Too Confusing
A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.
Nearly one-third of respondents said that understanding the mortgage process was the most difficult step in buying a home in the survey, conducted by MortgageMatch.com, a unit of Move Inc.
Nearly one-third of respondents said that understanding the mortgage process was the most difficult step in buying a home, according to the survey conducted by MortgageMatch.com, a unit of Move Inc. That was higher than the share of borrowers who said getting approved for the mortgage (23%) or negotiating the home purchase price (25%) was the most difficult step in buying a home.
The majority of buyers said that finding the right home (54%) was the hardest part of the buying process, while 37% of borrowers said saving for the down payment was the most difficult step.
http://blogs.wsj.com/developments/2011/02/08/survey-mortgage-process-has-become-too-confusing/?KEYWORDS=mortgage+survey
http://www.mortgagematch.com/news/home-buying-and-selling/homebuyers-want-a-simpler-borrowing-process-575/
while 37% of borrowers said saving for the down payment was the most difficult step
That’s because 1% have a lot of money and 62% just assumed they wouldn’t need a down payment because they didn’t last time.
When you have 50 people each taking their cut of the deal, it can’t be anything BUT byzantine.
My last two mortgages have had a ridiculous amount of paperwork associated with them. The looks on their faces when they realized I expected to read each document was unforgettable.
“A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.”
So much for the era when anyone who could breath automatically qualified for a mortgage loan. I heard from a colleague today that buying a short-sale or a foreclosure home is a major pain in the rumpus, as well.
Nearly half of South Florida homes sold for a loss
by Kim Miller
Zillow released its fourth quarter home statistics this morning with sobering results for South Florida.
In Miami-Dade, Palm Beach and Broward counties, 47 percent of homes sold in December did so at a loss.
The Treasure Coast fared even worse with 54 percent of homes selling for less than what the previous owner paid.
Nationwide, home values in the United States posted their largest quarterly decline since the first quarter of 2009, falling 2.6 percent as the temporary stimulus of the home buyer tax credits wore off, according to Zillow.
“While the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place,” said Dr. Stan Humphries, Zillow chief economist. “Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we’re getting closer to the bottom.”
http://features.rr.com/article/0gyafaucsX4fk?q=Florida - -
More insider trading indictments.
http://news.google.com/news/story?pz=1&cf=all&ned=us&hl=en&ncl=dLZs66noAkfP8AMxfD9xy_eJF4zNM
As I’ve said, they’re getting to them as fast as they can, but the scope ans breadth of all the crimes is of historical proportions.
And in a follow-up to yesterday’s news on Chipolte Mexican Restaurants:
Fired Chipotle Workers Suing the Chain for Backpay
http://news.google.com/news/more?pz=1&cf=all&cf=all&ncl=dZd5z-16LkV_ZcMyZXM4qUx7zdP8M
Exploitation? What exploitation? Americans are just to lazy to do the work!
Here’s something EXTREMELY rare. An article critical of the oil industry actually published in the oil industry capital newspaper.
Drilling oversight criticized
Spill panel’s report faults regulation past and present
http://www.chron.com/disp/story.mpl/business/7419075.html
Damned oppressive commie regulations!
No way!!! It’s the Egyptians! They cause all the problems!
REVENGE!
http://www.usatoday.com/money/perfi/credit/2010-11-21-senior-debt_N.htm?csp=obinsite
Amazing …
“Retirement is supposed to be all about enjoying the time you’ve been saving up for, and the reality is that many people couldn’t save enough”
And yet, that didn’t stop them from retiring.
More than half of those surveyed had saved less thatn $50,000 - and many of that group said they’d saved absolutely nothing - yet they retired anyway. Just 4% said they had delayed their retirement due to debt.
“They get to a certain age and they feel privileged”, Ellington said. “They say ‘I’m going to go on that trip even though I have to put it on my credit card.’”
‘many of that group said they’d saved absolutely nothing - yet they retired anyway. Just 4% said they had delayed their retirement due to debt.’
These people are obviously victims of evil banksters…
http://www.charlieglickman.com/wp-content/uploads/2011/01/tiny-violin.jpg
http://market-ticker.org/akcs-www?post=179623
Banksters get SERVED! In small-town America the banks aren’t above the law like they are in NYC.
* REAL ESTATE
* FEBRUARY 9, 2011, 9:01 P.M. ET
Freddie Mac’s Chief Operating Officer Resigns
By NICK TIMIRAOS
Freddie Mac said that its chief operating officer, Bruce Witherell, resigned from the company on Wednesday.
In a federal filing, the company said Mr. Witherell left for “personal reasons” and that his departure was effective immediately. Mr. Witherell won’t receive any termination benefits.
…
This climate change is really getting out of hand!
* U.S. NEWS
* FEBRUARY 9, 2011, 12:13 P.M. ET
Blizzard Hits Oklahoma, Neighboring States
TULSA, Okla.—A second powerful blizzard in a week roared through parts of the nation’s midsection on Wednesday, bringing biting winds and dumping more than a foot of snow on areas still digging out from last week’s major storm.
As the system barreled through the Plains toward the Deep South, it blanketed parts of northeastern Oklahoma under a new layer of snow, dropping 16 inches on the town of Pawhuska, 14 inches on nearby Eucha and more than a foot on the town of Bartlesville, officials said.
By 9 a.m. Wednesday, Tulsa had received 4.5 inches of new snow, putting it just two-tenths of an inch from matching its seasonal record of 25.6 inches set in the 1923-1924 season. Last week’s record 14-inch snowfall kept students out of school for at least six days and made many roads in the state’s second-largest city impassable, and garbage pickup had only just resumed.
…
The Telegraph
Banks and Finance
Meredith Whitney is the talk of Congress
Meredith Whitney, the Wall Street analyst who shot to fame predicting Citigroup’s demise, was the talk of Congress on Thursday. Or at least a corner of it. And then only because she was no where to be seen.
Meredith Whitney is the talk of Congress
By Richard Blackden 8:13PM GMT 09 Feb 2011
Ms Whitney had been invited to testify before a committee of lawmakers examining the health of America’s $2.86 trillion (£1.8 trillion) municipal bond market. It’s one of the less glamorous parts of the debt universe, covering the borrowings of the country’s towns, cities and other local authorities that exist below state level.
The House of Representatives Oversight and Government reform sub-committee had asked Ms Whitney to attend because she has been the talk of the market this year. The 41-year old, who cited a clash of schedules in declining the invitation, caused waves in the market after using a high-profile television interview late last year to warn that a flood of defaults was on its way.
“You could see 50 sizeable defaults, 50 to 100 sizeable defaults,” Ms Whitney, who runs her own research firm, told CBS’s ‘60 Minutes’ programme a week before Christmas. “This will amount to hundreds of billions of dollars’ worth of defaults.”
Given there are legitimate concerns over the health of some borrowers in the municipal bond market, critics have lambasted Ms Whitney’s comments as reckless and designed only to grab headlines. The ‘60 Minutes’ programme she appeared on attracted about 18m viewers, according to Neilsen ratings.
While investors were pulling money out of municipal bond mutual funds already, it has continued since the interview aired. Investors have redeemed about $33.5bn from the funds in the past 12 weeks.
What do you think about this? A portion of an article:
“The question, of course, is this: Does her prediction have any merit?.
We ran across some impressive gathering of statistics put together by Michael Schroeder of Wasmer, Shroeder & company, that analyzes Whitney’s assertions. There’s a problem with Whitney’s math. It seems to be off, by at least an order of magnitude.
Whitney did not specify exactly how many “hundreds of billions.”
Schroeder explains the error of magnitude this way: Whitney acknowledges that states will likely make good on their bond debt, so starting with $2.8 Trillion in outstanding muni debt, less $200 billion in pre-refunded U.S. government obligations, leaves $2.6 Trillion owed by some form of municipal government. There are about exist 91,000 such entities — in the form of cities, towns, townships, counties, school districts, housing and other state or local agencies, water and sewer and redevelopment authorities, fire districts, special taxing districts, etc.
“The states and their agencies owe 40% of the total (1 Trillion), leaving $1.6 Trillion owed by various counties and parishes, cities and towns, taxing districts, local authorities, colleges, universities, tribal governments and electric coops,” Schroeder writes.
He continues explaining, in this way: If you assume 1/3 of these municipalities have outstanding bond debt, that’s $53 million for each of them. Whitney says that 50-100, maybe more, will default in the next 12 months. And that’s where the number don’t add up. Schroeder uses an even higher number – 200 – to show the math error that’s going on…”
http://financialsense.com/contributors/daniel-barnes/what-is-eating-municipal-bonds
Bernanke warns against steep budget cuts
Wed Feb 9, 2011 10:36pm EST
By Pedro da Costa and Mark Felsenthal
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Wednesday warned against sharp cuts in spending at a time when the economic recovery is still fragile enough to require extraordinary support from the central bank.
Even as he warned about the need for a long-term plan to address “unsustainable” budget deficits, Bernanke said steep reductions in government outlays could compromise growth at a time when employment is just beginning to rebound.
“The cost to the recovery would outweigh the benefits in terms of fiscal discipline,” Bernanke told the House of Representatives’ Budget Committee. “I think we really need to take a long-term view.”
…
* CAPITAL
* FEBRUARY 10, 2011
Big Issues the Budget May Miss
* By DAVID WESSEL
…
For all the noise, this spending, about $1 of every $6 the government spends, isn’t driving up deficits. “I’m waiting for the politician to get up and say: There’s only one way to do this. You dig into the big four: Medicare, Medicaid, Social Security and defense,” former Sen. Alan Simpson (R., Wyo.), co-chairman of a deficit commission Mr. Obama appointed, said Sunday on CNN. “Anybody giving you anything different…you want to walk out the door, stick your finger down your throat, and give them the green weenie.” (I looked it up: The “green weenie” was a plastic hot dog that Pittsburgh Pirates fans once waved to bestow good luck on their team and jinx opponents.)
…
GOP proposes dramatic spending cuts, targeting energy, environmental and other programs
By Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Thursday, February 10, 2011
House Republicans sketched their vision for a smaller federal government Wednesday, proposing sharp spending cuts that would wipe out family-planning programs, take 4,500 police officers off the street, and slice 10 percent from a food program that aids pregnant women and their babies.
Top White House priorities would also come under the knife: Key Republicans are proposing to defund President Obama’s high-speed rail initiative, slash clean-energy programs and cut the Office of Science by 20 percent - trims that would deal a direct blow to Obama’s innovation agenda. They would also cut the Environmental Protection Agency by 17 percent.
Programs traditionally favored by Republicans would not escape unscathed. The list includes significant reductions in agriculture programs, which benefit many GOP districts. All told, House leaders are aiming to cut programs unrelated to national security by more than $40 billion over the next several months, an unprecedented reduction.
“Never before has Congress undertaken a task of this magnitude,” House Appropriations Committee Chairman Harold Rogers (R-Ky.) told Republican lawmakers in a closed-door meeting in which he announced the proposal. “You will be voting on the largest set of spending cuts in the history of our nation.”
…
The political rhetoric on scrapping Fannie and Freddie continues to blithely ignore examples from other developed countries whose much healthier housing markets have no Fannie or Freddie.
Bipartisan support for scrapping Fannie, Freddie draws criticism
By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, February 10, 2011
To many Republicans and the Obama administration, Fannie Mae and Freddie Mac, the government’s mortgage giants, are ill. But rather than healing them, both sides agree that the companies should be left to die and that their support for the housing market should wither away.
Some influential interest groups are taking issue with that surprising bipartisan consensus.
They include small banks, real estate agents and consumer groups, who all say that Fannie and Freddie, or something similar, are crucial for sustaining the struggling housing market.
And ahead of the administration’s scheduled release Friday of a white paper on overhauling the nation’s mortgage system, some economists are also saying that shrinking the government’s role too much will make housing far more costly for Americans.
“These groups have considerable political clout and will make it difficult to get Congress to act on housing finance reform,” said Jaret Seiberg, an analyst with MF Global. “Legislation to cut back the government’s role in housing finance will result in higher mortgage rates and downward pressure on home values. That is a tough vote for many lawmakers, regardless of their party affiliation.”
…
If it seems like prices in your area are too high compared to incomes and rents, look no farther than Fannie and Freddie, who originated more than 85 percent of new mortgages last year, for the reason. Remember, affordable housing is the GSE mission!
What’s Next For Fannie, Freddie? Hard To Say
by Tamara Keith
February 10, 2011
Audio for this story from Morning Edition will be available at approx. 9:00 a.m. ET
Freddie Mac headquarters in McLean, Va., and the Fannie Mae headquarters in Washington, D.C.
AP
February 10, 2011
The Obama administration will unveil Friday its plan for the future of the mortgage giants Fannie Mae and Freddie Mac, but don’t expect a singular vision for how to move ahead. Instead, the administration is expected to present a menu of options on what the government’s role in housing finance should be.
The government took Fannie and Freddie into conservatorship at the height of the financial crisis. Two years later, the bill to taxpayers is more than $130 billion and counting. Fannie and Freddie now play a larger role in the nation’s housing finance system than ever.
“The government now is financing upwards of 90 percent of all the mortgages being made in this country,” says Guy Cecala, publisher of Inside Mortgage Finance.
The bulk of that is being done by Fannie and Freddie.
…
Government’s Share Of New Mortgage Originations (Fannie Mae, Freddie Mac, FHA and VA included)
2010: 86.8%
2005 – 30.8%
2000 – 46.9%
1995 – 41.5%
Source: Inside Mortgage Finance
Whistleblower warns of robo-signer crisis looming in credit card industry
Written by Curtis Arnold
Posted On: February 7, 2011
Nightly news reports have chronicled the impact that “robo-signers” have had on the mortgage industry. Stressed-out clerks sign off on inaccurate mortgage documentation that gets pushed through a “rocket docket” court to force foreclosures, catching innocent bystanders in the wake of the recession.
With collection agencies getting aggressive over smaller debts, industry insiders expect robo-signers to take center stage in the credit card industry as well. The practice has actually been going on for years, but with far lower stakes than the evictions caused by inaccurate mortgage paperwork. Credit card companies typically “charge off” as much as 10 percent of their portfolios each year, selling the right to collect bad debts for pennies on the dollar.
…
Seattle’s Back Baby! In January something “snapped” because something “happen”. (the comments are classic HBB)
Report shows Seattle-area housing market bouncing back
http://www.komonews.com/news/consumer/115687804.html
…some say what happen locally in January may signal the turnaround we’re all hoping for.
Local real estate agents tell me home buyers are beginning to wake up.
“We have a better atmosphere out there,” said Tom Wilbanks of Windermere Real Estate.
Realtors say more buyers have been showing up at open houses, and they’re making more offers.
“Those that have been on the fence they have realized that interest rates are going up,” Wilbanks said.
That could mean good news if you’re selling, or thinking about selling, depending on where you live and when you bought your home because the latest Zillow data suggests we may finally be at the bottom.
Zillow’s fourth-quarter postings for 2010 show local home values down an estimated average of more than 12 percent over 2009. Pierce County values were down 9.4 percent. King County was down 10.3 percent, and home values in Snohomish County were down 13.7 percent year to year.
But in January 2011, something snapped.
“I think folks are more positive. There’s more buyers out there, as our charts and stats have indicated, ” said Wilbanks, a 15-year veteran in the Seattle-area real estate market.
Charts based on data from the Northwest Multiple Listing Service show a sharp spike in new listings in January, pending sales jumped considerably from December, and inventory is down. It’s still a buyer’s market, but the changing conditions signal a better climate for sellers as long as the price is right.
“Generally speaking I would say we’re back in the 2005 pricing structures,” Wilbanks said.
Experts say while sales are picking up, it could be several months before home values start coming up again.
Good—we need increased volume to aid in price-discovery on the way down.
