Bits Bucket for March 24, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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CNN: Sales of Luxury Doomsday Bunkers Up 1000%
NEW YORK (CNNMoney) — A devastating earthquake strikes Japan. A massive tsunami kills thousands. Fears of a nuclear meltdown run rampant. Bloodshed and violence escalate in Libya.
And U.S. companies selling doomsday bunkers are seeing sales skyrocket anywhere from 20% to 1,000%.
Northwest Shelter Systems, which offers shelters ranging in price from $200,000 to $20 million, has seen sales surge 70% since the uprisings in the Middle East, with the Japanese earthquake only spurring further interest. In hard numbers, that’s 12 shelters already booked when the company normally sells four shelters per year.
“Sales have gone through the roof, to the point where we are having trouble keeping up,” said Northwest Shelter Systems owner Kevin Thompson.
UndergroundBombShelter.com, which sells portable shelters, bomb shelters and underground bunkers, has seen inquiries soar 400% since the Japanese earthquake. So far sales of its $9,500 nuclear biological chemical shelter tents are at an all-time high — with four sold in California last week, compared to about one a month normally.
Hardened Structures said inquiries have shot up about 20% since the earthquake — particularly for its apocalyptic 2012 shelters, radiation-protection tents, and nuclear, biological and chemical (NBC) air filters.
0:00 /2:33Living large in an apocalypse bunker
Vivos, a company that sells rooms in 200-person doomsday bunkers, has received thousands of applications since the massive earthquake in Japan, with reservations spiking nearly 1,000% last week. And people are backing their fear with cash: A reservation requires a minimum deposit of $5,000.
“People are afraid of the earth-changing events and ripple effects of the earthquake, which led to tsunamis, the nuclear meltdown, and which will lead to radiation and health concerns,” said Vivos CEO Robert Vicino. “Where it ends, I don’t know. Does it lead to economic collapse? A true economic collapse would lead to anarchy, which could lead to 90% of the population being killed off.”
“Where it ends, I don’t know. Does it lead to economic collapse? A true economic collapse would lead to anarchy, which could lead to 90% of the population being killed off.”
Lol. This from a person who collects a minimum $5,000 deposit (in cash) from each person who makes a reservation for one of his doomsday bunkers.
The MSM and their non-stop hysteria is definitely his friend.
Free advertising, relentless non-stop gloom-and-doom. What could be better for business?
Would there be any limits to how many people he could collect $5,000 from in return for a doomsday bunker reservation?
If his doomsday bunkers were grossly overbooked how would anyone know? What could people do about it if they found out on doomsday that there was no more room in the bunkers?
He probably expects a lot of no-shows.
We cannot allow a mine shaft gap!
We cannot allow a mine shaft gap!
“…the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature.”
Start a facebook group and see if you can confirm more than 200 people who think they have reservations at a particular bunker. Also handy for arranging marriages among the kids who will survive to restart the human race.
Club-Dread
How long do these doomsday bunkers last before the canned peas and medications run out? A year? Five years? And then life is gonna suck anyway. I may as well spend my money on living good now, and use my last few post-disaster bucks on a Magnum 45.
‘a Magnum 45′
Contrary to what Hollywood portrays, unless you practice a lot, it’s difficult to be accurate with a handgun. A large gun like a 45 is especially so. If MD has a conceal/carry deal, a smaller purse size gun might be better. And if it’s home defense, I’d rather have a smaller gauge shotgun, like a 410. Plus you can then use it to pick off some doves out around the mcmansions when the food runs out…
Ben is right about the handgun. However, I would go with a 20 gauge shotgun. .410 ammo is more expensive than 20 gauge, although 20 gauge has more power and a bigger shot load.
‘410 ammo is more expensive’
Yeah, it’s a lot more expensive and the guns are pricey too. But I’ve always liked them; you can shoot all day and not wear out your shoulder.
I like my 12 gauge just fine.
Something that uses NATO ammo - so you can reload from all of the bodies.
Try hitting something at 25 yards with a .45.
That bullet is so slow, you can practically see it coming, and duck out of the way.
A 10mm, OTOH……..
I think Oxide is only planning on having to be accurate from a very short distance, but wants to make sure the job gets done.
‘accurate from a very short distance…make sure the job gets done’
Like I said; shotgun. Another thing about them is you are less likely to have lead go further than you’d want it to.
I haven’t used my guns for years and my eyesight sucks now ,so I wouldn’t be good at raw survival at my age I suspect ,unless I practiced all the time.
I remember when I was young everybody thought the Russians were going to nuke us ,so many people were buying bomb shelters . Some people I knew were debating and trying to decide on getting a bomb shelter or a swimming pool at the time . They opted for the swimming pool ….good choice looking back .
I have been hearing this my whole life about how the World
is coming to a end (by one means or another ),and it has never happened . Sure ,this could be the time that everything breaks down and anarchy prevails ,but I’m not
actually buying that events will unfold like that .
There might be revolutions brewing in places we would never expect them . Natural disasters you can’t say when and Countries nuking other Countries ,again it’s hard to predict .
I think the areas where there will be problems is in the financial areas, maybe some shortages ,competition becoming more of a factor . Also ,corruption tends to
destroy itself eventually ,because it not productive and it’s insane .
Japan has been very orderly about their disasters ,don’t know how the USA would fare with big disasters .
Changes going on in the Mideast ,hard to predict how that will all turn out and it’s complicated .
I have a general faith in humans being more productive than destructive in the long run ,so I hope that prevails .
Yeah, I remember too. Silver was a buck twenty nine an ounce. Today it hit 38 bucks. Somethin’s up as they say.
Nice post, Wiz. I sure hope you’re right.
BTW, in one listing I’ve seen, it advertised the “bomb shelter” in the backyard.
Older house from another time…
you can be accurate enough…just don’t miss the first shot.
If I were down to one weapon, I’d take the .22. I can still hit a silver dollar at 100 yards, so any type of game is fair. As for in my “home”, I couldn’t swing around with it but the space is simply a hallway with accessories.
Last summer, I learned to take down ground hogs in the marina with an air rifle (inside the city limits no “guns” allowed). Took me a while to figure out that there is a vulnerable soft spot behind the ear.
we call them marmots around here, we don’t shoot them cause the tourists like to feed them
We introduced peregrine falcons to our city to control the pigeon population, and they did that and pretty much took care of the ground hog population as well.
‘If I were down to one weapon, I’d take the .22′
If we’re talking anything we’d want, and just one, I’d pick an over/under - 225 rifle barrel over a 410. I’m not sure they even make those anymore.
I’ve got an old .22/.410. I’m curious to know whether the .410 barrel could also shoot .45LC, but so far haven’t been curious enough to actually investigate.
“I’d rather have a smaller gauge shotgun, like a 410. Plus you can then use it to pick off some doves out around the mcmansions when the food runs out…”
I have a year round covy of doves, squirrels and oppossums at my backyard birdfeeder and in the woods that I could use a throw net for chow. They are almost tame he he.
Was running around the other evening and forgot to leave the daily ration of peanuts out on my deck. Got home about dark, put the groceries away and stepped out on the deck in the dark to enjoy the crisp night air and to have a good cup off coffee while I made a phone call.
Suddenly felt something on my foot and that damned squirrel scared the crap out of me. Damned fool, he was supposed to be in bed somewhere instead of creeping up and scaring the hell out of old paratroopers. He owes me a good cup of coffee.
Come on Rocky, here’s a nice fat peanut for you my cubby lil friend.
My old farm neighbor Earl had a favorite animated story about a rat running up inside his pants leg while he was working in the hay mow. I developed a stomp on them reflex after that.
OMG
I’ve turned into ONE of them.
Now I’m feeding the freakin’ squirrels !!!
Damned fool, he was supposed to be in bed somewhere instead of creeping up and scaring the hell out of old paratroopers. He owes me a good cup of coffee.
LOL I used to live in Hollywood Hills and I had several “pet” squirrels, I had to make sure I closed the screen doors good or they would come right in the house, which my cats would have loved, but I am thinking it might have been messy. I loved those little guys. They would climb right up my leg if I had a walnut in my hand.
I didn’t force anyone to keep feeding them when I moved, but I did worry about them for a while.
My old farm neighbor Earl had a favorite animated story about a rat running up inside his pants leg while he was working in the hay mow.
———————————
It’s illegal to put squirrels in your pants for the purposes of gambling.
Is that a rat running up your leg, or are you just glad to see me?
The .45 Gold Cup Match is the most accurate gun I have ever fired. I am no marksman, but I could hit any little thing out to 50 yards with it. Uncanny. Much easier to carry and deploy than a shotgun or scoped rifle. A necessity for any survivalist.
RE: The .45 Gold Cup Match is the most accurate gun I have ever fired.
Ah, now somebody’s talkin’ guns here.
You see the stories in American Rifeman about Medal of Honor winners who won their medals with a 1911 45ACP?
The best was about a Marine sargent on Pelelui who got badly wounded and told the guys who were trying to drag him back to the American lines to leave him and save themselves.
He just asked to be left with a loaded .45ACP So they propped him up against a tree and give him a 1911 with 8 rounds.
After the battle, a scout party when out to see if he was still alive, which he wasn’t. What they did find was an empty .45 auto and 8 dead Japs at his feet.
8 shots-8 kills.
Colt/Browning 1911A .45ACP
King of the handguns then-King of the handguns now.
Never leave home without one.
“Never leave home without one.”
You just gotta carry it in a wheelbarrow.
smaller gauge shotgun, like a 410. ??
I got one Ben….Browning Citori…In fact, I have the whole line of Citori’s…12,20,28 & 410…
Mr. Cole just received his 22 Henry rifle yesterday…Made in America!
Chit….. sawed offs are more accurate that sidearms.
Well said, personally , i like my colt desert eagle 44 automag, but it is true that for home defense, nothing passes the muster like a shotgun….. Long long time lurker here, was a framing contractor for years and years, now a material estimator for lumber yards. seven years or so now. Work load cut in half since end of o8 . But by god, i survived, mostly cause i saw this coming. Started reading your great blog right after new century dumped. Read it every night. Thanks so much for your hard work. It fits right into what i see on the ground here in washington state , which is one of the better places to be. Still bad though, God Bless and best to you and yours…..
Do those doomsday bunkers qualify for tax-deductible home equity loan financing?
they did qualify for the tax credit.
My guess is that they see the riots around the globe and know what’s coming to America. Good time to be in the security for the elite business.
… or not.
No, it’s great because you get the first shot at the uber-rich, and when they’re least expecting it!
“Sure sir, go right in. I’ll stand out here and guard the stall. *snicker*”
LOL!
Love, it, SFBB!
Who would even want to survive? Earth would be uninhabitable in a true nuclear war anyway. Life would be so difficult, death would be preferable. (We wouldn’t deserve to ’start again’ after that anyway).
Note: In our neck of the woods (midlands of S.C.) I am seeing an up-tick in the sprucing up of foreclosed homes that have been sitting empty for one to two years. I guess they will be on the market soon, just added pressure on an already weak and weakening market.
~ New home sales slowest in at least a half-century
Weakest sales pace on record slows construction, threatens to put small builders out of work.
WASHINGTON (AP) — Home construction in the United States is all but coming to a halt.
Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago. Sales are now just half the pace of 1963 — even though there are 120 million more people in the United States now.
The sliding sales show just how far the housing market has fallen since the bubble burst four years ago. And they’re a blow to the economic recovery as it draws strength from other places.
Diminished sales have driven the median price of a new home down to about $202,000, the lowest since 2003. If the sluggish sales continue, analysts say, small home builders will fold, meaning less competition as the market improves and higher prices later.
“The longer it goes on, the more builders will drift away from the industry altogether,” said Paul Ashworth, chief U.S. economist of Capital Economics.
Who owns the shacks?
Spruce up? Skimcoat the walls with gold dust but unless they’re priced correctly they’ll sit another two years.
The sliding sales show just how far the housing market has fallen since the bubble burst four years ago. And they’re a blow to the economic recovery as it draws strength from other places.
———————
It’s statements like these that make me want to beat my head against a wall.
1. The sliding sales show how much the housing market has NOT fallen since the bubble burst four years ago. If prices had been allowed fall, rather than have the govt/Fed artificially prop them up, then sales would be UP, not down.
2. Slowing sales aren’t a blow to the economy as much as housing that is still priced WAY TOO HIGH…leaving people very little money, after paying for housing costs, to spend in the more “productive” areas of the economy.
……………..
“If the sluggish sales continue, analysts say, small home builders will fold, meaning less competition as the market improves and higher prices later.”
And then the writer has the audacity to threaten us with higher prices if we don’t rush out to overpay for their McCrapshacks. Good luck with that.
What part of “people can’t afford to buy homes at these prices,” do they not understand?
‘What part of “people can’t afford to buy homes at these prices,” do they not understand?’
I chalk this up to the way the media has glossed over the “so-called bubble” and turned the focus on the “financial crisis” of 2007 or 2008, or what ever time line they are using any given day. From the Yahoo story below:
‘Our condo features three bedrooms with two bathrooms and is 1,500 square feet with a garage…Our home has been on the market for 153 days as of today…we bought for $369,000 and we are asking $520,000.’
‘We took out a home equity loan for $100,000 and now we owe $456,000. We have lowered our asking price after 90 days on the market $50,000 down from $570,000.’
500k is a lot of money. What does a condo in OC rent for?
“500k is a lot of money. What does a condo in OC rent for?”
Depending on area, 3bd/2ba ~ $2,000-$2,500. At the high end, 150* monthly rent = $375K, which is about what these fools paid in 2004, and eventually the lender will sell the condo for down the road when these fools eventually walk. I’m seeing divorce in this couple’s future. I’m laughing hysterically thinking about what they’re probably paying in HOA fees on top of the bank pmts.
From the story:
“We are still able to make our mortgage but this is as a result of going without many of the luxuries we had in the past.”
“It seems like the only homes that are selling are single family nonattached homes for way below market value.”
Way below market value? Wake up fool, the “market value” won’t be back nominally for years if not a decade or more.
Memo to these fools and millions more in the same boat: You lived beyond your means for years and spent $100K you didn’t earn. Get used to your new debt serf reality cuz it’s going to be at least 30 years before foolish lending returns. HA!
What in the hell did they do with the 100k they took out in a equity loan . 100 thousand is a lot of money . Have you noticed the MSM never talks to much about what these people did with the money from these big ATM -like equity loans and how much
the industry was pushing this constant equity extraction based
on faulty lending and appraisals .
Since when was a 100k not a lot of money ? To think that people where extracting that amount of money from equity
loans ,when they only had short term ownership of the home,
that they didn’t put very much down on the property to begin
with ,is just insane . Of course many industries benefited from all this buying from equity extractions ,from cars to vacations ,to remodels ,to buying more investment properties ,to you name it .This bogus wealth creation was just wrong ….so wrong .
Depending on area, 3bd/2ba ~ $2,000-$2,500.
So that’s 24 to 30 thousand per year in rent. What would be the typical income of a person or a couple who would pay that kind of rent?
What in the hell did they do with the 100k they took out in a equity loan. 100 thousand is a lot of money.
Right behind me is a house which was an all-cash purchase back in 2006. I can’t help thinking that the owner (a flip whose flip attempts have flopped twice) used mommy and daddy’s HELOC to buy the place. Its 2006 sale price was $135k.
“Depending on area, 3bd/2ba ~ $2,000-$2,500.”
Around here they’re renting for 1000-1500. You just can’t charge much more than that, no matter the amenities, when incomes are so low.
“What part of “people can’t afford to buy homes at these prices,” do they not understand?”
The do not wish to understand. They refuse to accept that offshoring has decimated the pool of buyers. They want to believe that its just a case of uncertainty and that once buyers feel “confident” they’ll hop off the fence. They don’t want to face the fact that half of the workforce earns poverty wages and that there is a glut of inventory.
They just want it to be the early 2000’s again. And just as many of us wish were couod be young again, it ain’t gonna happen.
Between peoples own self-assessed Fantasy Home Values, their politics and their religious beliefs, I am really suprised than more people in this country aren’t stabbed, shot or pushed off nearby cliffs while at their local watering hole’s on Friday night “Happy Hour”.
“Let’s be careful out there!”
-Sgt. Phil Esterhaus,the turnout Sgt.
Hill Street Blues
” sprucing up of foreclosed homes that have been sitting empty for one to two years.”
Thank you for the heads up. So flipping is back, just at a couple rungs down the quality ladder. Instead of a hiring a real-estate agent to accompany me to house showings, I should hire a home appraiser/inspector who can immedidately point out fatal flaws under the Lowe’s paint and newer roof.
Much cheaper to borrow a library book or two on home building and home inspection. Do that and you’ll know more than most real estate agents do about construction. Not that this is a substitute for an actual home inspection once under contract (its not), but knowing what is quality and what isn’t when you are looking has its advantages.
Note: In our neck of the woods (midlands of S.C.) I am seeing an up-tick in the sprucing up of foreclosed homes that have been sitting empty for one to two years. I guess they will be on the market soon, just added pressure on an already weak and weakening market.
I’m noticing the same thing here in Tucson.
The reason for the uptick is strictly seasonal. Spring and fall are the strong selling times for houses.
The bailout beat goes on…and on, and on!
Item:Socrates Defeat Pushes Portugal Closer to EU Bailout (AP)
Portuguese Prime Minister Jose Socrates tendered his resignation after plans to cut the budget were rejected by parliament, pushing the country closer to an international bailout.
They could always start a war right?
Isn’t that what we do?
So what’s the big deal? They get a bailout, so what. There have been dozens of EU bailouts so far. They make up a big number - lets say a $billion-zillion euros, and life goes on. As long as the bills can keep getting paid with made-up money, who cares?
And the more people/countries that take this route, the more acceptable it is all becoming…Are we now the minority, the ones who have to play along since it’s what is best for everyone?
In this case the EU gets to drink the hemlock?
First Person: Selling My Home During the Housing Slump
‘Orange County, Calif…Buying a home six years ago seemed like a great decision and was the beginning of our family together. Most Realtors and financial planners that we spoke to were sure that the market would continue to rise. Well 2008 came and the so-called bubble busted.’
‘Our condo features three bedrooms with two bathrooms and is 1,500 square feet with a garage…Our home has been on the market for 153 days as of today. We are feeling quite discouraged and a little, (OK, a lot) uneasy about our decision to sell. We really have no other choice but to sell at this point. We are in a much better position considering we bought for $369,000 and we are asking $520,000.’
‘We took out a home equity loan for $100,000 and now we owe $456,000. We have lowered our asking price after 90 days on the market $50,000 down from $570,000. We have had a couple of offers that are lower than what we would accept… It seems like the only homes that are selling are single family nonattached homes for way below market value. My worry is that these home sales will further reduce the market making it impossible to sell our home and receive a decent price.’
It’s still treated as a non-event, sort of:
‘the so-called bubble’
They mention it as if it was a storm that blew over, instead of a financial fact. This enables them to say stuff like this:
‘Orange County, Calif., has been known to have some of the highest market prices on home sales. Buying a home six years ago seemed like a great decision’
We took out a home equity loan for $100,000…’
‘It seems like the only homes that are selling are single family nonattached homes for way below market value. My worry is that these home sales will further reduce the market making it impossible to sell our home and receive a decent price.’
‘It seems like the only homes that are selling are single family nonattached homes for way below market value”.
I gave up long ago thinking that perhaps one day more people could grasp the ‘fact’ that something is only worth what someone is willing to pay.
‘Single-family home sales edged up slightly in Marin in February but the median price was off sharply compared with the same month last year, according to new figures from the county assessor’s office. “I thought the market was going to pick up this year — that was the prediction — but I am not seeing that this year,” said Connie Irwin, a real estate agent with Pacific Union International in Kentfield.”
But not all buyers are eager to jump into the market, said Elizabeth Pedrick, manager of the Novato office for Coldwell Banker. “There is a perception out there that if they wait for a longer period of time prices will come down, and it has been a self-fulfilling prophecy over the last couple of years,” she said.’
“There is a perception out there that if they wait for a longer period of time prices will come down, and it has been a self-fulfilling prophecy over the last couple of years,” she said.’”
Wow….. I never imagined the buy side of the transaction was so damn powerful. All they have to do is *perceive* something and they WILL IT into existence. Oh how prophetic they are!!!
I’ll bet buyers would be a whole lot apprehensive if they knew FBs were being promptly foreclosed on and prices were allowed to fall with out any govt/Fed intervention.
The fact that there is so much intervention is what’s making buyers think prices still have to further to fall. After all, if the housing market had bottomed, there would be no need for govt-backed mortgages, shadow inventory, artificially suppressed interest rates, etc., right?
“The fact that there is so much intervention is what’s making buyers think prices still have to further to fall.”
I’m sure that works for you and me, at least.
The fact that there is so much intervention…
Facts is facts,…here are x2:
1. Manipulation on the way…UP!
2. Manipulation on the way…Down!
Bonus essay (extra credit for brevity):
“How eager are you?”
“After all, if the housing market had bottomed, there would be no need for govt-backed mortgages, shadow inventory, artificially suppressed interest rates, etc., right?”
+1 zillion.
I’m no fan of all the current interventions, but…
I lived through the Savings & Loan disaster. I remember how bad it was and how it affected everything. Wages, unemployment, prices, small business bankruptcies, long vacancies of properties, you name it.
Just like now. In fact, a lot like now, but with a significant difference.
There was not as much government intervention then as there is now. Although created almost at the start of the S&L mess, the RTC (Resolution Trust Company 1989-1995) wasn’t really effective until about halfway through that recession. And the RTC was the MAIN tool for dealing with problem.
So if it’s this bad today WITH government intervention, I’m scared to think what it would really be like without it.
Very. Scared.
“But not all buyers are eager to jump into the market,…”
Broke buyers don’t jump.
“But not all buyers are eager to jump into the market,…”
I think it’s hard to get loans now days. Sadly I think that’s the only thing holding prices down.
The cash buyers are flippers who pool their money and try and re-sell to real buyers who either can’t get loans or have saved their own money and don’t want to lose it.
Bernake has to flush this saved money out. With a uneasy feeling about the economy, older population which has to save for when they can’t work, and government job cuts looming I’d say he has his work cut out for him.
cactus
FHA’s 3% downs are a big part of the under $450K group in our area. Talked to one yesterday, that had to fix the HVAC system to qualify the house. (Seller “gave their house away”, so the buyer got stung.)
She also tells me her roof is leaking in almost every room, and the seller must have sprayed the ceilings with bleach to hide the stains. She decided as of yesterday, her USH wasn’t so great after all. LOL
Young and naive at $240/sf for a dump.
(I referred her to the CAR/Consumer for legal remedy -mediation (A Lobbyist win).
“Bernake has to flush this saved money out.”
And he could do that if he’d think a little longer term. Slowly raise rates so this older population can get capital above that which they are currently using just to live on. That would also lower housing prices, allowing banks to feel more comfortable lending and for housing costs to be lower for the younger population, again freeing up money to be spent elsewhere.
With higher rates, people would more likely invest their cash as well…To me, they are holding cash for safety right now in spite of the low rates while keeping it in savings accounts…
Talked to one yesterday, that had to fix the HVAC system to qualify the house. (Seller “gave their house away”, so the buyer got stung.)
She also tells me her roof is leaking in almost every room, and the seller must have sprayed the ceilings with bleach to hide the stains. ”
Waved the inspection when she bought ? Fixed the HVAC system to qualify for selling the house again ?
I would hate to buy a house off a flipper because I know all the junk the flipper fixes will fail in 6 months and I will have to fix it again the right way.
Home inspectors are not that good anyway. They find all kinds of stupid things like dryer vent flaps not installed, inadequate bracing on water heaters, not enough smoke dectectors and miss foundation cracks, termite damage , leaky roofs, plumbing problems, bad outlets, broken main power fuse boxes, etc.
cactus
As you know, FHA is pretty strict on property condition, and this gal’s seller (she was the buyer) said no to fixing the HVAC, and she wanted to close, so her and her husband paid to get the HVAC fixed. The seller gave them the house after all “we have that house away”. IIRC, FHA’s fees are going up soon, so this young thing was in a hurry “to buy something”.
The Inspector needs to be buyer picked and a General Contactor, not some weekend seminar grad. I hear you on the inspection finding the $10 item, meanwhile…So true!
“I gave up long ago thinking that perhaps one day more people could grasp the ‘fact’ that something is only worth what someone is willing to pay.”
Not only willing to pay but able to pay. The heart may be willing but the wallet may not be able.
What if the world threw a mania party but nobody had the money to attend?
Which is why many of us ultimately blame the Fed and the financial sector, rather than the idiot buyers, for the bubble. Lots of people might **want** to overpay, but without the loose credit, few will be able to do it.
“Lots of people might *want* to overpay, but without the loose credit, few will be able to do it.”
Well, now you getting down to it, aren’t you? If people do not have the money (from loose credit or from any other means) to finance high priced items then those items that are priced high are not going to be sold.
Lots of money circulating about means lots of buying and selling, lots of expansion, lots of sales at high prices.
Reduced amounts of money circulating about means reduced amounts of buying and selling, reduced expansion - so reduced that the expansion becomes a contraction - and reduced sales at high prices.
The amount of earned money is being reduced because:
1. Unemployment is high which means earned income is down.
2. Under-employment is high, which also means earned income is down.
3. Average wages are being reduced which also means earned income is down.
So the money to support high prices needs to come from … from where? From borrowing?
Borrowing money was yesterday’s answer to the money needs of the economy.
There has been a sea change. During the bubble, everybody thought that the house would pay for itself. With that as a premise, credit worthiness of the buyer was not an issue. Most people today would laugh at you if you suggested such a thing as logical.
A very long time ago, people thought that the buyer would pay for the house, with a mix of savings and future earnings. That is where I thought we would go directly. We haven’t yet; we’re caught in a purgatory where the FedGov will pay for the house with F&F guarantees. So lenders still do not have to consider the buyer’s ability to pay.
We’re still in a mania. It’s not the organic mania of the last decades, it’s morphed into an Anti-Depressant fueled mania. The delusion is still widespread.
something is only worth what someone is willing to pay.
I dunno, I learned here that rental income has something to do with it. Were the crapshacks and mcmansions rea lly worth all that in 2005, because someone would pay?
“…we’re caught in a purgatory where the FedGov will pay for the house with F&F guarantees. So lenders still do not have to consider the buyer’s ability to pay.
We’re still in a mania.”
Spot on! The only differences, so far as I can tell, are:
1) There is far more effort now than before by lenders to verify income and other means to repay the debt.
2) With unemployment so high and so many people who lost permanent income (accumulated wealth + future earnings prospects) during the Great Recession, the amounts of debt would-be buyers can potentially repay are much smaller now than previously.
3) With so many underwater borrowers unable to sell their homes for enough to pay of the principle balances on their loans, there are far fewer would-be move-up buyers who are able to raise downpayments by selling their current residences.
4) By all reports on the subject, there is a shadow inventory of used homes numbering in the millions due to hit the market over the next several years, to be added to the extant glut, putting further downward pressure on prices. Many of these represent homes whose owners have defaulted on their mortgages, but which have yet to be taken back by the lender.
So things are pretty much the same way they were before the bubble popped, right?
Right.
Doesn’t “what someone is willing to pay” = market value?
I like Wikipedia’s main definition, to a point:
“Market value is the price at which an asset would trade in a competitive auction setting.”
But this gets confusing when time and expectations are thrown into the mix. For instance, what if the most a buyer is “willing to pay” currently is, say, $400,000, and would-be sellers expect to be able to sell for, say, $440,000 by one year from now, after the housing market “comes back”? Thus there are no auctions or other current attempts to sell, because would-be sellers expect they will be able to sell for more later on.
How would you place a market value on an asset for which there is currently no agreed price between would-be buyer and would-be seller? You could argue the auction price is still (hypothetically) willingness-to-pay, but the auction would only occur if the seller was forced to go through with it.
Sellers and lenders want future potential value based on a perception that a future recovery on prices is in the cards . So, sellers want future value now ,in spite of the fact it could take decades to actually reach that value in terms of willing /able borrowers . The whole Ponzi-scheme was based on a future bogus value and they are still holding on to that bogus falsely created value ,that under normal conditions would of taken years to get to .
Real estate is based on current value ,not future value ,that is where they went haywire . The concept that real estate always goes up so therefore we will transport real estate into the future and base values on 20 years down the road ,
so we can get the money ,or value ,or wealth creation now ,was the scheme . Wealth creation by faulty premises that
Wall Street is so skilled at creating ,however falsely . Leverage without it being backed by true market value in the now .
Same as saying this stock will be worth 200% more in 15 years ,if everything goes right ,so why don’t we just give you a loan based on it’s future value ,because we can’t wait until it actually reaches that value ,we need money now . It’s insane ,what they did was insane ,not acceptable at all .
“Market value is the price at which an asset would trade in a competitive auction setting.”
uh, no mention of Buyers bid “psychology”?:
“Hurry, hurry, hurry, it’s a “steal” in this…eCONomy!, Besides, you can ALWAYS rent it out”
“How would you place a market value on an asset for which there is currently no agreed price between would-be buyer and would-be seller? You could argue the auction price is still (hypothetically) willingness-to-pay, but the auction would only occur if the seller was forced to go through with it.”
I struggled mightedly with this very notion some years ago following a conversation with a co-worker. Here is what I concluded…
… you have to consider the current owner as both a seller and a buyer in the market for the house. As a buyer, the owner is willing to pay what the house is selling for. The minimum amount the owner is willing to sell for represents an “accepted offer” (by themselves) to purchase the house.
You have to view the seller as a theoretical buyer in the market place to establish “market value”, and the minimum the owner will accept as the offer of this theoretical buyer.
‘The minimum amount the owner is willing to sell for represents an “accepted offer” (by themselves) to purchase the house.’
Not clear on this, as they already own the place, and hence don’t have to accept any purchase offer. But I think you are on the right track. A rational buyer will not currently sell for a price below the minimum of what the house is currently worth to them (including the value of a possible rental income stream) or the value of future potential offers, which gets back to my point about sellers who believe they might be able to get ten percent more ‘after the market comes back next year.’
Who would have thunk no-doc jumbo loans to anyone with a pulse would have an effect on market value? There is no Fed chairman in history who could have seen that coming.
Value use to be based on a number of factors that would establish market value (this is when the market was more
sane ).
(1) Supply and demand
( 2) local incomes
( 3) rental value
(4) market interest rates /availability of credit /costs
(5) willing and able buyers in a arms length transactions
(6) to a degree ,building costs .
(7) adverse or good effects in the general area .
(6) population increases or decreases
(7) plus factors such as weather ,local colleges ,restaurants ,
hospitals ,etc.
(8) property tax rates ,sales taxes and income taxes in the various places that factor into costs . Insurance costs factor in regarding what the market will bear . Capital gains tax would have a bearing on real estate value .
(9) stability of employment centers .
(10) Position of seller ,or buyer ,if they are distressed .All those factors and more factor into value of property.
But when you have a mania that pushed prices way ahead into the future that created false demand ,especially since a high percentage wasn’t even end user demand ,along with fraud and faulty lending that put people in into loans they
couldn’t afford afford long term ,followed by massive layoffs and a massive amount of foreclosures increasing supply ,you can’t really determine value in the normal sense .
The correction of a fraudulent mania market with massive supply will be a over correction market ,or a dump market ,
where it’s possible to get property way below what it would normally sell for . I have a friend that likes to look at 2002 prices and I have another friend that likes to look at 1998 prices to gage prices . I have seen foreclosures that have gone at below original price 20 years ago ,even if you consider fix up costs . And who can be certain what areas will go downhill and what areas will keep their demand position .
“The correction of a fraudulent mania market with massive supply will be a over correction market ,or a dump market ,
where it’s possible to get property way below what it would normally sell for .”
Excellent post, Wizard, which reminds me:
TRY NOT TO CATCH YERSELF A FALLING KNIFE.
When I bought my first house, my father asked if I could get monthly rent of 1% of the price. I’d never heard that before and it’s as good a measure of market value as any I’ve ever seen.
The answer was yes. I did well on that first place, buying at the absolute bottom of the market in 1990.
We are in a much better position considering we bought for $369,000 and we are asking $520,000…We took out a home equi
I would have “gonged” these arrogant beyotches off the show right about there.
LOL! I’da gonged them much earlier. Until I saw your comment, I was going to post that I wanted to stop reading after this part:
“Most Realtors and financial planners that we spoke to were sure that the market would continue to rise…”
If you are buying a house for the “beginning of your family together” why do you care if the market continues to rise? Actually, I would argue that if you have to take that into consideration AT ALL, it isn’t the right time to buy…
Strange world. I’m looking to buy a home. It seems like every time a reasonably priced home comes on the market it’s snatched up in a second. There are still many listings priced way above what I’m willing to pay. Some delusional people price their places 200K above assessment when it’s obvious by looking at the comps that the going rate is at or slightly below assessed value. These people then slowly start to lower the price…20K here and 10K there. Finally, over the course of a year or so they get to a reasonable price and sell. Hopefully, the comps will start to show these people the going rate.
“These people then slowly start to lower the price…20K here and 10K there. Finally, over the course of a year or so they get to a reasonable price and sell.”
That’s called sale by Dutch auction: Start with an asking price above what the home will sell for, and chase the market down until a buyer finally materializes.
A bad location and condition REO we looked at, started 5 months ago at $486K and leaked $10K a month, then a huge haircut,until it got down to $400K and it sold in a week. The property backed up to an apt, and easily needed $60K sunk in. $400K was still insane.
I’m counting on duration duration duration…
Agreed.
It’s the duration of the downturn that will cause the most harm, IMHO.
Hobo
So Ca is still dealing with price hope-ium too, and the DOM are adding up. I went to FSBO dot com and looked up my target area, and they were asking circa 2006 prices. Amazing, isn’t it!
You’d figure high 3 digits DOM, they’d get a clue. Thank you for your post. Most interesting.
Here is a great example of huge DOM and slow price cuts.
http://www.ziprealty.com/property/46-ALEXANDER-RD-NEWTON-MA-02461/35615586/detail
It’s assessed for 600K
“You’d figure high 3 digits DOM, they’d get a clue.”
A handful of houses in this area are up to four digit DOMs. You’d think they’d have figured out they’re overpriced - or at least hired a new agent by now. Got to wonder what those folks are thinking (though a lot of them with those high DOMs around here are builders trying to sell spec houses).
Kim
I’ve seen UHS buy a listing (offer to sell the house for top dollar) and if they don’t continue to hand out “hope-ium” they don’t get the renewal. (some sellers are idiots-DOM grows but somewhere over the rainbow…)
I also just witnessed an overpriced flip go out FHA, so that resets the dream pricing again. When someone said “housing purgatory” here, it is multi-dimensional, imo.
Boy, oh boy, are we feeling your pain, Kim and Awaiting.
“Purgatory” is a great way to describe it. Let’s get this downturn over with already!
In setback, Fed rejects Bank of America’s dividend hike plan; bank will resubmit request.
NEW YORK (AP) — It was one more blow for Bank of America: the Federal Reserve didn’t allow nation’s largest bank to increase its dividends.
The decision by the Fed makes Bank of America Corp. the only one of the four largest U.S. banks that wasn’t able to raise its dividend, something shareholders have been clamoring for.
The Fed’s decision, which BofA disclosed in a regulatory filing Wednesday, also raised questions over whether the bank is strong enough to withstand another economic downturn.
For CEO Brian Moynihan, the Fed’s rejection was another setback in his 14-month tenure, which has been marked by a sharp increase in lawsuits, mounting losses from credit cards and decreased income from checking accounts. As recently as March 8, Moynihan promised shareholders they would likely see a dividend increase in the second half of the year.
“We have the capital. We have the brand, and now we’ve been building the balance sheet,” Moynihan said at a conference for investors.
What’s wrong with a corrupt company trying to pump its share price by bribing investors with taxpayer TARP money? Seems legit to me?
Remind me again to always skip giving BoA a fee by using their ATM network. My bank pays me back, but I don’t want to help them in any way.
Also, decreased income off checking accounts? Does that mean more people are qualifying for free checking by having more money in linked accounts? Or that people are bouncing fewer checks so those charges are down? In my book, that is a good thing, not a bad thing. What is good for the bank and its shareholders is bad for anyone that does business with them? Ick.
Polly, you bring up a good point about using BofA ATMs. My bank also reimburses me for any fees, but is BofA really making any money or do they just have an agreement to waive the fees in this typ of arrangement?
I can’t imagine another bank would willingly send another bank $1.50 to $3.00 per transaction.
How can BofA even THINK about giving an increased dividend? With what?!
“US Cranks Up Pressure on Allies”
“Allies” to Obama: Get Bent.
Obama to Congress: Get Bent
Basically, Obama bypassed the Politburo, er, uh, Congress and initiated the “military action” over a weekend while Congress was out of session. He pretty much rendered Congress impotent and irrelevant. Now, you’d think members of Congress would be all indignant about this. And I guess a couple of them are, like Kucinich and Rand Paul. However, I just heard a report on the radio that Carl Levin (D- Lickspittle) has proclaimed there will be “strong bipartisan support” for the “military action” in Libya when the Politburo, er, uh, Congress re-convenes.
And then it dawns on me, OF COURSE there will be “bi-partisan” support. Having been bypassed, and rendered completely impotent and irrelevant, Congress now HAS to support the “military action”, rather than admit they were ambushed.
Brilliant.
If I was Obama’s dog, I’d bite him.
“Basically, Obama bypassed the Politburo, er, uh, Congress and initiated the “military action” over a weekend while Congress was out of session. He pretty much rendered Congress impotent and irrelevant.”
Hmmmm… now I wonder where the hell he got an idea like that from?
Rev. Wright?
Farahhkan?
Hmmmm… now I wonder where the hell he got an idea like that from?
The “Halliburton Inc.” decorated military man with the snickering angry-smile stompin’ down the hallway, white-knuckling x2 “paddles”.
Those life-long War-mongers keeps at ed-icatein’ ‘em, cause them democrapts ain’t gots the “Total-Fear” virus runnin’ through their veins as thick as you all have! Moreover, Pentagon spending $700 BILLION…per year…doesn’t seem like a hurtful thing for the American domestic eCONomy, in fact, to the “TrueAnger™” + “TruePurity™” advocates, it’s quite BENEFICIAL!
Don’t forget his shameful “Shazam-Islam-Is-Democracy.”
Oh, wait. That just happened in Egypt. And that’s what the rebels are trying to accomplish in Libya. And Syria. And Bahrain. And Tunisia. Actually this all started in Tunisia.
“OF COURSE Hillary’s gonna run”
She can`t even walk fast.
How can you bite a marketing construct?
There’s a lot more than Obama behind this. He’s probably the least of it. Guy doesn’t even know which end is up.
I dunno… he got a Nobel peace prize.
I suspect he knows exactly which end is up, just like GW and almost all politicians. Which end is up is the end that is giving them campaign contributions and keeping them in power.
“Which end is up is the end that is giving them campaign contributions and keeping them in power.”
It’s all gonna end in tears for the marketing construct. He’s being set up to be one of the biggest. fall guys. ever. I can smell it coming.
You heard it here first.
still think hillary will run against him:
“yes i am a democrat…but i am an american first!”
(crowd cheers)
OF COURSE Hillary’s gonna run, but I doubt she’ll even have to contend with him. Her sticky paw prints are all over this.
I remember saying, when Obama appointed her to State, bad move. REALLY bad move. Let there be NO doubt she hasn’t forgiven Obama and other members of the Dem party and probably even the citizens of the US for cheating her out of the title of Madame Prez. And she’ll get even. IS getting even.
Keep your friends close and your enemies even closer. I’m sure Obama didn’t want her at court stirring up trouble and figured State would keep her busy abroad.
I want to see Feingold run.
+100
He was really my favorite senator!!
WGAF
Over the last few years the “Lower My Bills dot com” ads (on about every website including this one) have gone from “Borrow $750k for $600/mo - everybody qualifies!” to “Obama home rescue plan”. How does anyone in this country take themselves seriously anymore?
“How does anyone in this country take themselves seriously anymore?”
The OC housewives post a couple of days ago led me to Google several celebrity sites regarding the OC housewives and their foreclosure/strategic default woes. They also go for a “new hunk” too; it’s spring ‘ya know. FWIW, lots of peeps are influenced by these celebrities and their shameless behavior.
when the money runs out the hubby gets kicked to the curb. vicki has some hooters.
The morally of Wall Street financial sector has trickled down to the sheep .
Since the dawn of time con artist have been trying to figure out
how to create wealth by avoiding the good old fashion way . There is a side to every human that wouldn’t mind making money fast and easy ,the lottery mentality ,or get rich quick and leave the greater fool holding the bag . Our financial system went to the dark side and they are still there .
You’d that these guys would know. It’s not like these bimbos have private lives.
I’ll admit to being attracted to “these bimbos” in my 20s. The easiest sign for me now is fake finger nails. Judgmental as it may be, if I see someone with fake fingernails, the likelihood they’ll be spending much time hiking, cycling, windsurfing, or snowboarding is slim to less than none. Listing “shopping” as a hobby is another red flag.
The only private lives they have is the time spent to make themselves look good.
My GF watches those shows nonstop. I’ll sit in on a few to yuck it up but last weekend I hit max saturation on Bravo. My animal/survival instinct suddenly clicked in and in a moment of clarity I realized just how much those programs are an affront to everything my parents taught me.
This weekend I plan on retreating to the computer room to watch my very peaceful, calming, and benign railway DVDs.
As for Mr. Obama - I don’t think it’s fair that the hucksters smear his name on their ads. While not his #1 fan, to me it really cheapens his name to have it attached to that stuff. Can’t the secret service do something about it?
My GF watches those shows nonstop. I’ll sit in on a few to yuck it up but last weekend I hit max saturation on Bravo. My animal/survival instinct suddenly clicked in and in a moment of clarity I realized just how much those programs are an affront to everything my parents taught me.
This weekend I plan on retreating to the computer room to watch my very peaceful, calming, and benign railway DVDs.
Ee-gads, edgewater! Sounds like you need a train-lovin’ GF.
Nah, there are just some things - try as I might - I’ll never like or understand. That’s where “alone time” is worth its weight in gold.
Nah, there are just some things - try as I might - I’ll never like or understand. That’s where “alone time” is worth its weight in gold.
Gotcha!
My dad (a research engineer) used to leave home and go to the lab on weekends for the same reason. Which was just fine and dandy with Mom and I.
Reason: We could put Beatles records on the hi-fi and dance around the living room. My rock -n- roll-hating father would have had a fit if we’d done such a thing while he was home.
Argggh. Fingernails on a chalkboard.
“…fine and dandy with I?”
edgewater
Nat’l Train Day is May 7th. Check out their website to see if there are any (free) activities in your area. We’re big train fans, too.
On PBS American Experience online, they have an excellent Documentary on NY’s Grand Central and the history of Steam Locomotives. Great stuff.
http://www.pbs.org/wgbh/amex/grandcentral/
Thanks Awaiting, they usually have something down at our Union Station, it will be a nice departure from those reality shows. Plus, it’s springtime! That means day trips out to our Illinois Railway Museum - they have large grounds on which one can wander for hours and hours looking at their large collection, soaking in the sun, and enjoying the quiet countryside!
You sure can tell when railroading began its heyday in this country- right after the Civil War. Many cities have a “Union” Station.
I wonder if any southern city has a “Union” Station?
edgewater
It’s nice to connect to another “adult kid”, and you too, Bill. That Illinois Railway Museum expedition sounds like fun.
Here I thought, just L A had a “Union” Station. LOL. We use the subway (below & above ground)in Los Angeles all the time, but Amtrack is too expensive for our blood. We’d love to do a cross country to DC trip.
Trains are so cool!
“I wonder if any southern city has a “Union” Station?”
Bristol, TN/VA has one.
“Since the early days of the financial crisis in 2008, the European Central Bank, the U.S. Federal Reserve and the Bank of England have all been forced to adopt policies that just a few years ago they would have dismissed as preposterous…Don Kohn, a former vice-chairman of the Federal Reserve, realized central banking was changing forever at a routine meeting of his peers in Basel, Switzerland, in March 2008…”It was terrible,” Kohn said. “One of the people at the meeting used the phrase, ‘It’s time to think about the unthinkable’.”
“Kohn left the meeting early to return to Washington, but the line stuck in his head. He would use it a few days later to justify his support for a Federal Reserve decision to spend $29 billion to help J.P. Morgan buy investment bank Bear Stearns”
“the Great Moderation, a two-decade period of relatively stable growth in developed economies..still has many proponents, but the credit crisis has made a mockery of that overriding simplicity, exposing serious flaws in how central banks defined their mission and operated. One flaw: they did little to prevent the build-up of the asset bubbles that triggered the financial crisis..Another: the obsession with inflation blinded them to dangerous trends in banking. After all, what is the point of keeping inflation low if lax lending and feckless financial supervision threaten to tip the economy into the abyss?’
“The problem was not that the Fed lacked instructions to avoid a crisis,” says James Hamilton, a professor of economics at the University of California, San Diego. “The problem was that the Fed lacked the foresight to see the crisis developing. ‘Prior to the crisis a lot more people were of the view that if it’s not broke don’t fix it,” said Dean Croushore, professor of economics at the University of Richmond in Virginia and a former economist at the Philadelphia Federal Reserve. “Policymakers didn’t react, particularly with respect to housing.’”
“Fed Chairman Bernanke doubts central banks can know for sure that an asset bubble has formed until after the event, and feels monetary policy is too blunt a tool to arrest any worrisome developments.”
See, the problem according to these guys was “the financial crisis in 2008.” Never mind that you still can’t afford a house, or that you’ve lost your job, these central bankers did the “unthinkable” and saved the economy!! Hurrah!!!
Then we get back to what these types of articles are all about:
“it will become tougher for central banks to preserve their most precious asset, credibility…”Look at the ’90s and the early years of this century — central banks were at the peak of their reputation worldwide, and I was already saying at that time that we know from experience that the risk is highest when you are on top,” Issing says. “Central banks have to take care to restore their reputation, if it has been lost…”
“Reputation is an idle and most false imposition; oft got without merit and lost without deserving.”
Othello
Good quote. No, great quote.
Kind of fun to go back and read those great quotes from “The Maestro” on this:
…But now, with the world’s most advanced economies in the midst of the worst financial crisis since the Great Depression and hundreds of billions of taxpayers’ dollars spent trying to prevent a full-scale global meltdown, Mr Greenspan said the free market ideology that had guided his life and dominated world capitalism for a generation did not work the way he thought it would.
Appearing before the House Committee on Oversight and Government Reform, the man once dubbed “The Maestro” said he had found a flaw in the “critical functioning structure that defines how the world works”. “I don’t know how significant or permanent it is but I have been very distressed by that fact,” Mr Greenspan said.
“I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.”
Asked by committee chairman Henry Waxman if he was saying his world view was “not working”, Mr Greenspan said: “Absolutely, precisely. You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
The extraordinary testimony was not a total act of contrition and during the four hours of testimony there were sharp exchanges with some committee members. Mr Waxman accused Mr Greenspan of failing to use his authority as Fed chairman to prevent the reckless sub-prime lending that started the housing market collapse and of doing nothing to regulate the derivatives products now causing stress in the credit markets. Mr Greenspan responded by saying that many parts of the derivatives market were performing well.
He also insisted Fed officials were not well placed to assess national mortgage markets, of which sub-prime loans now comprise 10 per cent.
But in a 2004 speech, Mr Greenspan had no problem urging lenders to think outside the square of the traditional US 30-year fixed-rate mortgage and offer a greater variety of products to homebuyers.
“Innovation has brought about a multitude of new products, such as sub-prime loans and niche credit programs for immigrants,” he said at the time.
“Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.
“With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately.” In his prepared remarks to the committee, Mr Greenspan said he was in “a state of shocked disbelief” about the breakdown in the ability of banks to regulate themselves and, without putting a number on it, predicted a significant rise in unemployment in the coming recession.
Now you never really expected to get a Happy Meal and toy with McGreenspan…did ya America, did ya ?
“Kohn left the meeting early to return to Washington, but the line stuck in his head. He would use it a few days later to justify his support for a Federal Reserve decision to spend $29 billion to help J.P. Morgan buy investment bank Bear Stearns”
That would have been a great point in time to nip the bailout moral hazard in the bud.
The problem was not that the Fed lacked instructions to avoid a crisis,” says James Hamilton, a professor of economics at the University of California, San Diego. “The problem was that the Fed lacked the foresight to see the crisis developing. ‘
BS the idiot defense just does not work. They knew what was going to happen. I suspect those at the top knew when it was going to happen. The only way I’d buy the idiot defense is if I’m allowed to examine these power players investment history. Seriously Ben Bernanke was brought in with the soothing phrase that he was an “EXPERT” on the great depression, right before the collapse. The collapse which was inevitable was triggered in my opinion at the end of GW’s presidency. From what we know GS,Hank Paulson, Mozillo and many other power players were selling hand over fist. GW pushed through a huge tax cut for capital gains right before this.
It’s interesting to note what Fed governors were saying in their 2005 speeches. It’s not as though they were clueless about the existing imbalances in housing and other areas of the economy, but more like they failed to anticipate the suddenness and severity of the incipient correction. Perhaps they believed it could all be ‘contained’?
P.S. Minsky was an economics professor at Bard.
Remarks by Governor Donald L. Kohn
At the 15th Annual Hyman P. Minsky Conference, The Levy Economics Institute of Bard College, Annandale-on-Hudson, New York
April 22, 2005
Imbalances in the U.S. Economy
…
“A second observation concerns the housing market, which you have already discussed. A couple of years ago I was fairly confident that the rise in real estate prices primarily reflected low interest rates, good growth in disposable income, and favorable demographics. Prices have gone up far enough since then relative to interest rates, rents, and incomes to raise questions; recent reports from professionals in the housing market suggest an increasing volume of transactions by investors, who (along with homeowners more generally) may be expecting the recent trend of price increases to continue. Even so, such a distortion would most likely unwind through a slow erosion of real house prices, rather than a sudden crash. Moreover, experience suggests that consumer spending would respond only gradually to any loss in wealth–an important consideration because a gradual adjustment in spending would give offsetting policy actions time to work. In any event, I take some comfort from the continuing disagreement among close students of the market about whether houses are overvalued, and, given the widespread press coverage of this issue, from my expectation that people should now be aware of the risks in the real estate market.”
…
I want to know what they were saying behind closed doors.
Seriously what they say in public is designed for consumption to influence markets and individual investors.
“The only way I’d buy the idiot defense is if I’m allowed to examine these power players investment history.”
Ask ye shall receive. (I posted this before)
http://www.chron.com/disp/story.mpl/business/steffy/7469090.html
The “idiot defense” is big fat LIE.
From the article
As a group, bank CEOs reaped about $2.6 billion from stock sales during the eight years.
Even if you account for their paper losses from the collapse in 2008, they still came out ahead by about $650 million.
I suspect it’s a good bit more than this. Just like GS these CEO’s likely hedged their bets. How many invested in Paulson’s Hedge Fund that made a mint shorting real estate. How many when massively long treasuries like Hank Paulson. How many shorted other banks.
We need all the details not just how they handled their own stock.
IMHO ,Wall Street Investment Banks and regular banks and unregulated hedge funds wanted that false wealth creation by the real estate Ponzi scheme with all the crazy leverage they resorted to . Wall Street can’t make money when wealth is stagnate or declining . It’s a bunch of BS when they act like the crash was the problem rather than the premise of their bogus wealth creation was the problem . When the King Pins saw that
the scheme was going into crash mode they proceeded to bet against it
as a means to cash in on the disaster coming . Further, they suckered
some Insurance Companies with no reserves to back credit default
swaps on mis-rated securities .We shelled out 200 billion so AIG could pay on those bogus bets . It’s all a scam ,the housing bubble was ,and the bail outs where .
I don’t like it when Mob like thugs are running the Country ,it’s a appalling state of affairs .
Wall Street can’t make money when wealth is stagnate or declining
Sure they can
1. Create inflation for food, fuel
2. Buy up gov buildings and roads and start charging tax payer guranteed rent and tolls.
3. Borrow money from the fed at 0% and lend it to suckers and the desperate at 20%.
4. War
As long as there is any wealth in the country Wall Street will have some scheme to strip it. Given their takeover of the gov and courts they should have no problem doing it.
measton …True ,they have ability to inflate ,but to me all that is just a scheme like your suggesting .
They may want to inflate housing, and in fact perhaps they have, through the GSE-subsidy channel, but the effort appears to have come at the expense of a drop in used and new home transactions volumes at or near record lows.
Finally saw Inside Job last night, made the parents watch it with me. Like others said, not much new info if you’ve been here a while, but it was a nice summary. The emphasis of the connection between the economics departments in our elite universities and the big banks was good. And somehow in all this I’d never heard of Glenn Hubbard. What a jerk…
I guess you have to have a PHD to get any credibility in economics?
And you have to be rich. After all, a poor economist can’t be much of an economist, can they?
You have to have grants from big financial institutions to have a job as a PHD.
A smart man once said to me before I went to grad school: You don’t go to an elite business school to learn how to get business done, you go so that you can make contacts. You wouldn’t believe the crap some the UofC professors were doing on the side just to make a buck.
The emphasis of the connection between the economics departments in our elite universities and the big banks was good.
Tell me about it!
As mentioned here before, I have an undergrad degree in economics from the University of Michigan. And, as I’ve gone on about at great length, I work in two fields that are as far from economics as you can get.
So, do you think that, when I go back to Ann Arbor, I make a point to visit the economics department?
The answer is no, and here’s why: They don’t know what to make of me. As near as I can figure out, my career choice (graphic designer and photographer) does not fit into their paradigm of what Michigan economics grads should do with their degree.
You’re supposed to troop off to grad school in order to become an academic or governmental economist. Or you’re supposed to go into the FIRE (finance, insurance, and real estate) sector of the private economy.
Those options didn’t appeal to me.
As for me, you know where I like to hang out at the U-M? With the College of Engineering people. Yup, that’s right. The engineers.
I enjoy their mathematical and scientific turn of mind. Better yet, despite their narrow-minded reputation, I find them to be some of the most eclectic people I’ve ever met.
The problem is when I was at the the University of Chicago, half of the class were engineers, tons of Indians and underpaid domestic engineers. Which is a shame. They should all be doing more important work. However, places like Pimco and Blackrock loved those guys. They made the best bean counters.
Was Lyle Gramley there when you were?
Former Fed governor discusses rate cut
AM - Wednesday, 23 January , 2008 08:04:19
Reporter: Tony Eastley
TONY EASTLEY: Joining us from Washington now is the former US Federal Reserve governor, Lyle Gramley. He’s now a senior economic adviser at the Stanford Washington Research Group.
Good morning Mr Gramley.
LYLE GRAMLEY: Good morning Tony.
TONY EASTLEY: Is this cut of three-quarters of a per cent large enough to halt the slide and stimulate the American economy at the same time?
LYLE GRAMLEY: I’d like to try to put that in a larger context if I can. The Fed has been sending rather mixed messages to markets since last August as to their priorities, whether they’re principally focused on inflation or keeping the economy away from the edge of recession.
And what the Fed has done in its statements in the past week or two and its actions this morning is send a very clear, unambiguous message that it recognises the potential severity of this credit crisis, and that it’s setting aside its priority on inflation for the moment to deal forthrightly with what could push us over the edge into recession.
That can help to restore confidence. Confidence is a very fragile thing, no magic bullet can do it, but the Fed is exercising leadership and that at least creates conditions in which confidence maybe begin to improve.
TONY EASTLEY: It is a sign of desperation, as the analyst from Standard and Poor’s said?
LYLE GRAMLEY: I don’t think so at all. I think the Fed Reserve was looking at a situation in which the numbers are indicating we’re coming ever closer to the edge of recession, and the financial markets are telling us that something needs to be done. And this move this morning is very well-timed and very necessary.
TONY EASTLEY: The sub-prime mortgage crisis, many people thought it had peaked months ago, but still we’re seeing its effects on markets everywhere. Do you think we have finally seen the worst of it this week?
LYLE GRAMLEY: We may see some additional announcements of institutions that are writing down their value of their assets because of their involvement in the sub-prime.
But I think we’re getting close to the end. Estimates that I have seen, reasonable estimates suggest that the losses in sub-prime might be on the order of $150-billion. And we’ve had … heard announcements of close to $100-billion of write downs just here in the United States. So, we are getting close to the end I think.
TONY EASTLEY: But that does indicate we’ve still got a way to go with that sort of figure.
LYLE GRAMLEY: Well, but there have been announcements abroad as well. We may have some more, but we’re more than halfway to the end.
TONY EASTLEY: What is your take, Mr Gramley, on a US recession? Is the US in a recession? If so, how long will it last?
LYLE GRAMLEY: I don’t think we’re in a recession now, but we’re very close to the edge of it. It could be a very nasty recession but for the fact that Washington is now working actively on a fiscal stimulus package.
The President has recommended $145-billion. The chances are it will end up bigger than that. And if that kind of fiscal stimulus comes along, the chances are very good this recession will be relatively short and relatively mild, if we get into one at all.
TONY EASTLEY: Yes, is there a threat here that sort of giant 800-pound gorilla thing called the US consumer sentiment is going to suffer somehow and that will drag the US economy down even further?
LYLE GRAMLEY: We’ve seen a big decline in consumer confidence already, and consumers are facing adversity in the form of high energy prices, home prices that are weakening, jobs that are not as prevalent as they were, and clearly that, the risk that consumer spending will slow is something we need to worry about.
All the more reason for the Fed to act aggressively to try to provide as much stimulus as possible, and for a fiscal package to be enacted that puts the money in the consumer’s pocket as soon as possible.
TONY EASTLEY: As the former US Federal Reserve governor, Lyle Gramley, what would be your message to these rattled investors that we’re seeing all around the world, particularly here in Australia at the moment?
LYLE GRAMLEY: Well, I would recall the resiliency that our economy has demonstrated in the past in response to major shocks. Look for example, at 9/11. There were many people who worried that the economy would really plummet in response to that.
In fact, October of 2001 was a month of strong consumer spending. The stockmarket recovered all of its losses in six weeks, and the month of November was the first month of a new economic expansion.
So, I think we’ll get through this, and with some fiscal stimulus, this will turn out, even if we get into recession, to be something we get over relatively soon.
TONY EASTLEY: Lyle Gramley, thanks very much for joining us this morning on AM.
LYLE GRAMLEY: You’re most welcome. Nice to chat with you.
TONY EASTLEY: Lyle Gramley, the senior economic adviser at the Stanford Washington Research Group, a former US Federal Reserve governor.
I love how it is always mentioned that these political hacks rotate in and out these so-called highly touted “Think Tanks”.
Lets call a spade a spade.
Think tanks my freakin’ A$$, the term Cesspool Spin Bins is a more more apt description of most of these these evil PsyOp dens and lairs.
“Think tanks” = lobbyists and the “other” shadow government.
I did the same, also last night (no parents). More ammo when I go up against the “Acorn and the CRA caused the crisis” people. I often say “Gramm-Leach-Bliley” into confused eyes, so I’m glad Inside Job covered that angle and hope to refer people to the movie going forward…
I just loaned the DVD out to a hard-core Fox News - Glenn Beck watching relative. It’ll be interesting to see if he’s bothered by the negative portrayal of some of his favorite politicians. I told him it wasn’t flattering to either party.
And I think that’s one of the best messages of the movie:
There’s plenty of blame to go around, and every gov’t since at least Reagan is paid for by the thugs of Wall Street.
WRAPUP 2-U.S. new home sales hit record low, outlook gloomy
Wed Mar 23, 2011 1:11pm EDT
Despite the surprise plunge in sales, economists did not
believe a new downturn in the housing market was underway.
HOUSE PRICES PLUNGE Analysts are optimistic home sales will pick-up from their
current depressed levels in the spring, but caution persistent
declines in house prices could hold back recovery.
http://www.reuters.com/article/2011/03/23/usa-economy-idUSN2314144720110323 - -
“Despite the surprise plunge in sales, economists did not
believe a new downturn in the housing market was underway.”
Nope. It’s the same one that has been underway since spring 2006!
The Financial Times
US housing barometer points to danger
By Suzanne Kapner in New York
Published: March 24 2011 18:10
| Last updated: March 24 2011 18:10
A large overhang of foreclosed homes along with a credit squeeze is pushing the US housing market to new lows, just as government assistance is waning, in a worrying reminder of the fragility in the broader economic recovery.
Sales of new homes fell to a seasonally adjusted annual rate of 250,000 in February, the lowest on record, the Census Bureau said this this week.
Home prices have already dropped more since their peak in 2006 than during the Great Depression of the 1930s. Almost four out of 10 homes today are sold by someone who either can’t pay their mortgage or won’t because he or she owes more than the home is worth.
…
EDITOR’S CHOICE
US jobless claims decline as lay-offs slow - Mar-24
Lex: State and local workers - Mar-24
US new home sales drop to record low - Mar-23
In depth: US foreclosure crisis - Jan-18
Lex: US home sales - Mar-23
US home sales fall more than expected - Mar-22
These Anal-ists give me da chew rouge.
‘Worst report’ on housing renews fears of recession
New home sales dive to lowest on record
By Patrice Hill
The Washington Times
8:53 p.m., Wednesday, March 23, 2011
Within the space of a week, the nation has witnessed worst performances on record of new home sales, home prices and building — evidence that the housing market has sunk into a double-dip recession that poses a significant drag on the overall economy.
Never before has the U.S. economy staged a recovery while the housing market was in such a deep slump, although analysts are expecting it to defy the historical odds and maintain growth this year. But the news on housing in recent days is giving even the biggest optimists some pause.
…
Not to worry. We can fight and print our way out of this small bump in the road. My realtor says its a great time to buy.
“It’s the buying opportunity of a lifetime!”
“Never before has the U.S. economy staged a recovery while the housing market was in such a deep slump …”
Oh, but this time is different.
Now if we could only something about the unemployment rate and that pesky average wage decline thingy …
“…staged a recovery…”
Such an apt metaphor!
If you can stage a house you can stage a recovery.
if you can catch a wrench….you can catch a ball.
Excellent reference. Well played michael, well played…
“what if you staged a recovery and nobody came” -John Lennon
Now if we could only something about the unemployment rate and that pesky average wage decline thingy
That’s not in the plan
The elite have taken a look at China and decided that the US is going to move in this direction.
We will destroy the middle class.
Suppress wages.
Destroy unions.
Cut benefits.
Take away freedoms and destroy the press.
We will crush protests.
Take over the courts.
Just my opinion, but the “middle class” has been a myth and an illusion for some decades. I myself am a case in point. In the early 70s, I earned $300 per week as a laborer. Gas was <40c if IRC. Now gas is $4. In the meantime, I got a high powered engineering degree and decades of professional experience, some of it gold plated resume stuff. I have a pretty decent job as an engineer still and trust me I do not make $3000 per week.
I’ve had the cute house in the burbs with the swiming pool, toys in the drive, and the SUV and sportscar for the spouse. The trick is I never paid for them! I made “payments”, I could only afford the interest and let the principle roll forward. When I cashed out in the 2000s, there was really no net worth, yet I could have easily borrowed over a million more bucks.
The middle class was not there in any substantial amount, it was a facade based on ever increasing credit expansion. What is disappearing now is not the middle class, it is the mountains of easy credit, for individuals, for companies that run their business on borrowed money and especially for governments that run their business on borrowed money.
So multiple generations of comfortable middle-class lifestyles was an illusion of credit? And its loss has nothing to do with the sudden bulge of wealth in the rich?
It seems like quite a coincidence that after electing people who greatly lowered taxes on the wealthy, and shifted the burden to the middle class, suddenly the debt explodes and we lose our middle class, while the rich get immensely richer.
Not generations, decades. My parents fit the middle class stereotype without debt. My generation did not for the most part. Yet we carried on like we had more than we did, through credit.
Yes, the Predator Class has done just fine. Not to say that all wealthy are crooks and liars, but those who are have had a hayday, agreed.
It is also my contention that my son’s generation is getting less compensation for working the same kind of jobs we did when we were their age, by far. Perhaps it is lucky for them that nobody wants to give them the expansive credit that we got.
The pain comes soonest at the bottom, but I believe it will shred most of those at the top of this pyramid in time as well.
“……son’s generation is getting less……”
My entry level job in October 1973 paid $2.10 an hour. And gas in our area at the height of the first oil shock maxed out at 45 cents a gallon.
My daughters entry level job in 2010 paid $6.50/hour. And gas is $3.50.
Anyone who wonders why kids don’t want to work minimum wage jobs need to do the math. After expenses, your take home pay can be as little as $1-2/hour. Basically, a transfer payment from the Bank of Mom and Dad, to Mr Small Businessman.
Nothing is wrong with teaching kids to work hard. But it is stupid to teach kids to work hard for someone else, and get no return.
Maybe the reason there are so many “unfilled” positions, is that it is a money losing proposition for most people, after you pay for expenses.
I ran my old 70s wages through an inflation calculator..whew not a pretty sight.
Toms’ Inflation Calculator is all you need to see just how much trouble we’re in.
http://www.halfhill.com/inflation.html
Basically, we’re effed.
Min wage, using the MOST conservative of inflation data, says it should be $8hr.
“Never before has the U.S. economy staged a recovery while the housing market was in such a deep slump,”…”</i.
This writer is unclear on the concept. And she’s paid?
More evidence against any meritocracy in this country.
Poor, beleaguered corporations have such a high tax burden in the US. What exactly IS the corporate tax rate? Check this out, “we the people” owe GE on their taxes! Well, at least they create lucrative jobs for lobbyists and lawyers:
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1&hp
Not just in Detroit? Where are all the rich boomers? I thought 1000 people/day were moving to Florida - that is what realtors were telling everybody:
http://www.news-journalonline.com/news/local/east-volusia/2011/03/24/daytona-beach-struggles-with-population-loss.html
“that is what realtors were telling everybody:”
Do I really need to say it? Would anyone else like to do it for me?
Anyone? Anyone at all?
Banks are predatory?
Debt is slavery?
You can’t cheat an honest man?
Keep going…..
Realtors’ pants are often on fire?
Realtors are seldom forthcoming with the truth?
Realtors sometimes fib a little to make the sale?
Realtors are often misinformed?
-any of those work?
I think you’re onto something!
Where are the rich boomers?
As I explain to all the younger crowds who have no problem with age discrimination against older people (little realizing they will eventually be victims of it as well) most of the boomers got hammered along with everybody else.
Not to mention the millions of jobs lost to offshoring that were never replaced over the last 30 years.
Where are the rich boomers?
My father has a $90k/year pension. Does that count? I’m not sure what his net worth is these days, but with that kind of pension, I doubt he’s hurting at all. I’m sure that covers his living expenses, and his investments are likely continuing to grow.
By the way, he grew up in a two room house in Mississippi. Not two-bedroom, two room. And no, he didn’t belong to a union.
Good for your dad. Wish people of our generation could do as well as he did.
ecofeco …I agree with you. All age groups are getting screwed in my view ,in one form or another . I can’t stand that people try to compare very low standards of living in third world countries as
the bench mark for what we are suppose to be grateful for . What a trick to take away all the advances that had been made for decades
and decades for the worker in the USA .
What a strange form of logic that your suppose to feel gratitude for being screwed and compare yourself to a starving person in China
working on the rice patties , What does that have to do with the royal
heist that has been going on and the standard of living that is being stolen from the Majority to enhance a small percentage of the populations standard of living ?
Thank you, Wiz.
This is what we hear every day on the blogs. We shouldn’t make what we make because someone in China or India, or Thailand is willing to do the job for half. As if that should determine what our lifestyle should be.
It’s the new midlife crisis: No job, little hope
By Jeff Ostrowski Palm Beach Post Staff Writer
Posted: 9:49 p.m. Wednesday, March 23, 2011
In normal economic times, Tom Gaskin would be in his peak earning years, socking away money for retirement and paying down his mortgage.
But amid Florida’s weakest labor market in decades, the 52-year-old West Palm Beach man has been out of work for more than two years.
After losing his job as a truck driver in late 2008, Gaskin earned a security license and has applied unsuccessfully for countless positions. He exhausted his unemployment benefits and has relied on the generosity of his five adult children.
“All of them kind of kick in to help me out,” Gaskin said. “At this age, you want to be in a position where you can help your children.”
“Going back home to crash when you’re 25 isn’t quite the same as when you’re 45 and you’ve got kids and a dog,” said Sean Snaith, an economist at the University of Central Florida.
http://www.palmbeachpost.com/money/its-the-new-midlife-crisis-no-job-little-1344014.html -
from the article
After John Schneider, 46, lost his television advertising sales job, he enrolled in Palm Beach State College’s biotech program. He’s still looking for a job that will use his new skills.
“It’s been a pretty tough environment,” Schneider said. “Biotech can be dicey even in the best of times.”
So why the heck did you go get a degree (?) in it after being laid off in a recession?
The Greenacres man is surviving on his wife’s paycheck, and the couple are expecting twins.
Well, at least that looks like it will work out well.
I’ve never heard of Palm Beach State College, but in general I would think that a degree from any college that isn’t ranked in the top 100 or so for that discipline probably isn’t worth the paper it is printed on.
Most likely the guy squandered his time and money (or worse, taxpayer money) paying a diploma mill for a certification that he will never use for anything.
I feel sorry for the guy with the Master’s in Bible Eschatology…
Damn spoiled and selfish boomers!
Oh wait…
Spring has arrived for Blue Skye. I have moved out of the efficiency appartment in town that I rented for the winter, off season B&B, $150 per week. I’ll be living rent free for the next nine months.
In my RV dockside, the boat will go in the water in a month. It’s a little chilly yet and yesterday’s March snow whitewashed the ground, but the ice is out and ducks, redwings and robins are all back. Thank God for Merino wool!
I’m a year out now from my last land holding (save the storage bin) and I am not missing the four decades of lawn mowers, utility bills and mortgage/lease payments in my backpack.
I’m enjoying my seat in the bleachers so much I don’t often think of being owned by a home again.
Cool! Enjoy your freedom from money pit ownership society!!
I thought a boat was a money pit on water?
LOL Alpha, sure if you rely heavily on services provided by others. If you have a plumber, electrician, seamstress, carpenter, HVAC tech, painter, Boy Scout, mad scientist, and engine mechanic living aboard, not so much.
Yeah, I guess you can always do it yourself, if you have the know-how and the will.
I believe the great boat dweller Travis McGee said a live-aboard boat on the water required one hour of maintenance a day. You could do it yourself, or you could pay someone else to do it.
But it got expensive if you always paid someone else to do it.
(Of course, the Busted Flush had teak decks, etc.)
So you’re a seamstress too.
Isn’t that what you on the hard call someone who can stitch a canvas repair?
McGee liked to hoard his cash in a secret “hidey-hole” in the hull of the Flush. He would not like our FED chairman’s behavior.
Don’t you mean seamster, Blue Skye? Or perhaps seamstor.
Labels are so confining.
needle captain?
needle dee and needle dumb. many hats.
Sail maker was the term in the British navy.
I envy your position, Skye. Sounds tempting to me.
heh…. In the next month or so I’ll haul my 5th wheel over to an isolated corner of CT for my next project. It’s hasn’t been since Delaware in 2006 that I’ve worked out of town.
the boat will go in the water in a month
What kind is she?
You givin’ her a name yet?
She’s a 32 ft Marinette, an all aluminum cabin cruiser vintage 1972, twin 318s. The name of the boat is “Blue Skye”, oddly.
Classic.
We went to the National Cathedral yesterday, very nice, but the highlight of the day was our tour of the Treasury building by one of my SILs coworkers. We got to see TTTs office, a very neat experience overall. I think my college bound daughter is now considering a major in finance.
We went to the National Cathedral yesterday, very nice, but the highlight of the day was our tour of the Treasury building by one of my SILs coworkers. We got to see TTTs office, a very neat experience overall. I think my college bound daughter is now considering a major in finance.
Finance? Yipes! We must save your daughter before it’s too late.
I guess it’s better to be inside the tent pissing out, than outside the tent being pissed on.
I believe she likes the thought of doing something not yet co opted by globalization. At some point NYC/DC will no longer be the financial capital of the world, but that day is TBD.
Tokyo fears run on bottled water:
Can’t they print water?
http://www.msnbc.msn.com/id/42242762/ns/world_news-asiapacific
That sucks.
“Get what you can get for your house today because it’s going to be much much less tomorrow for many many years to come.”
that’s hysterical, i was not pleased the lady bought our house at 75k below list, but NOW i guess i’m pleased!
Especially since you can give it to Wall St. and …double…your money!
Did I mention, quickly?…”double…your money quickly”
75K? Child’s play-dough.
Risks?: Yes!
Concerns?: “Are you in the top 1% wealth class?”
Housing poilcy-makers’ big white whale:
http://finance.yahoo.com/banking-budgeting/article/112414/housing-policy-makers-great-white-whale?mod=bb-budgeting&sec=topStories&pos=8&asset=&ccode=
Glas to see the commenters “got it.” Too bad the journalists never grasp why housing sales have stalled (the prices are **still** too damn high!).
Buy a new house so you don’t have any maintenance for many years - oops - this didn’t work out so well. Looks can be deceiving.
http://www.ksl.com/?nid=148&sid=14851848
Fruit Heights couple locked in battle with homebuilder, city
March 23rd, 2011 @ 10:00pm
By Lori Prichard
produced by Kelly Just
FRUIT HEIGHTS — Kathy and Dennis Gerber are caught in a housing nightmare. But it has nothing to do with the current foreclosure mess.
“Nobody will help, so it goes around and around,” Kathy Gerber said.
In 2007, the Fruit Heights couple purchased their house from Richmond American Homes of Utah, one of the largest homebuilders in the state. In 2008, the Gerbers received a letter from the city of Fruit Heights ordering them to repair the code violations found in their home. The couple was told they had 90 days to fix the problems or vacate the premises.
But according to the inspection reports written by the engineers the couple hired, everything was not all right. Structural problems were found from the ground up.
“Some of the joists didn’t look like they were properly secured to the floor where the joists are pulling out from the wall,” said Greg McCombs, a licensed structural engineer with BHB Consulting. The Gerbers hired McCombs’ company to evaluate their home.
“Some of the joists weren’t actually bearing on the wall. They missed the wall,” McCombs continued. “They used the improper stud grade, which compromises the strength of the exterior walls and it reduces the lateral force resistance capacity of the building to resist an earthquake or even wind forces.”
Other problems found by third-party inspectors include: misplaced footings, inadequate roof trusses, missing rebar, inadequate truss connections, footings not below frost line, improper drain flow, walk-out door not poured plumb, no ties between footings, door opening over-cut, cracks over window lintel, window opening over-cut, floor joist over-spanned, no footings on bearing wall, floor joist does not bear on wall, roof truss spacing, floor joist hangers not fully nailed, damaged joist hangers, rafters do not have framing anchors, girder trusses not nailed together, truss repair is failing, bowed wall, damaged floor joists, missing bolts, straps, supports, improper roof venting, protruding nails, questionable soil quality and too little insulation.
“The builder (in the past) has refused to repair even the items the city has documented,” Dennis said. “They’ve refused to honor our warranty, which is a complete separate issue from our code violations.”
“Everywhere this builder could cut costs, it seems like they did,” he said.
The structural engineer also believes some of the fault lies with the city for not inspecting the home properly.
“I don’t think that the building inspector had the proper plan check,” McCombs said. “And I don’t think (the home) had a proper building inspection.”
The Gerbers filed a complaint with the Department of Commerce, hoping the state would act since they believe they were not getting any help from the city of Fruit Heights. However, a Division of Occupational and Professional Licensing supervisor wrote a letter to the couple saying, “The city and county building inspectors have authority over building codes and permit violations. If there are code violations, you may contact the building inspector. The building inspector can issue a correction notice and if Richmond American Homes of Utah Inc. fails to comply with the notice, the inspector will file a complaint with our office.”
“They all refer to each other and say, ‘Well, you go to the city.’ Or the city says, ‘Well, no, we can’t do anything,’” Kathy said. “Nobody will help.”
In the meantime, the Gerbers’ home has lost hundreds of thousands of dollars in assessed value. According to the Davis County assessor, the original market value for the home was $439,500. Now, the current assessed value is $106,500 — a $333,000 drop.
“If you look at this home, it’s beautiful. It looks (as if) there’s no problems,” Dennis said. “But what’s underneath the skin is the problem. It’s as if the builder knew exactly what they were doing. They could cut whatever corners that wouldn’t be visible when the finished product was done.”
If I was thinking of buying a new home, I’d be using the FOIA to ask the town for copies of the inspection reports. In fact, I’ve done just that on some new and newer local houses that were of interest to us. That might not have prevented them from being in this situation, but it might have given them clues if inspections were repeatedly failed, incomplete or never done.
There is much to be said for watching your new home being built. My BIL documented every step of the process when my parents’ home was under construction. Even a novice could tell that house was solidly built.
One of my stepsons showed up on site and saw the cement contractor screwing up the basement pour or whatever you called it. Step later moved in but saw cracks developing in the drywall, sued and got the contractor to buy it back from him.
We were able to watch our Florida house being built in 2005. I was quite pleased overall. I was especially impressed with the quality of the studs they used for the interior walls. There were none with perceptible bends or twists. Only problem we ever had in the three years we lived there was the water heater developed a leak. Fortunately it was in the garage. Got a partial credit towards the replacement.
“If you look at this home, it’s beautiful. It looks (as if) there’s no problems,” Dennis said. “But what’s underneath the skin is the problem
So, the HBB class discussion today is:
“How are Politician’s like houses built in Utarrrr, circa 2001-2011?” Anyone?
Senator Larry Craig, who was busted in the airport bathroom sex sting, may suffer from improper drain flow like the Gerber’s house.
Flawed foundations,
Disconnected from the ground,
Failure to bear loads,
Questionable connections,
Unaccountable for their failures,
Serious flaws hidden by a polished exterior,
and work is never inspected so therefore beyond the law.
Sleazeball contractors……who da thunk??
In my experience, it is better to assume that any house builder or home improvement contractor is a sleazeball, until proven otherwise.
Is that where the derogatory term “tool” came from? Sure seems to fit…
Some days, you just can’t make these stories up even here on the HBB. I have no idea where Fruit Heights is on the map and I don’t care to look. But, we considered a Richmond American home in Mesa back in 2002.
Thankfully, we went with a real quality builder instead - Beazer homes.(Sarcasm off).
I was fortunate to unload both of them (Mesa and then Chandler) -not that the house I have now in Oregon is any better. I will give a recap of the whole experience soon. I miss being a renter(no sarcasm intended).
My GF doesn’t understand it when I tell her I want a home built from 1900 to about 1960-ish. I live in Portland. So, all the recent issues with construction quality, added to the wet environment make for bad things. A house as old as those I like will have spilled the beans of any problems long ago.
I REALLY don’t get when they build in the winter here. I can’t tell you how many times I’ve been past a construction site where the wood is exposed and getting soaked. You can’t convince me that giving it a day or two to “dry” before Tyvek-ing the place airtight is a good idea…
If you ever move to Texas, beware of Perry Homes. They are notorious.
We don’t need no education…
Education Chief Says Low Academic Achievement Affects National Security
U.S. Secretary of Education Arne Duncan speaks to military officials at Miramar Marine Corps Air Station during a San Diego visit on Wednesday.
Credit: Ana Tintocalis
An audio recording of this interview will be posted here within a few hours of the live broadcast. A transcript will also be added within 24 hours. Thank you for your patience.
By Megan Burke, Maureen Cavanaugh
March 24, 2011
Getting into the U.S. military is not like qualifying for an Ivy League college. But the armed services certainly have their standards. A young person has to have a high school diploma or GED, pass a basic academic test, and satisfy weight and fitness requirements.
What is beginning to worry some U.S. education and military officials is the fact that more than half the 18 year olds in this country don’t meet the basic qualifications for enlistment. And that number may continue to rise unless some changes are made.
…
Nothing like the DOE trying to latch on to the DOD gravy train.
I got an idea. It’s spelled D-R-A-F-T. With NO deferments.
In exchange, draftees get their college paid for, as long as they keep a decent GPA. Worked out pretty good for the whole country, when the WWII vets got home and took advantage of it.
This would have the added benefit of putting some of the PTB kids in the crosshairs every once in a while, instead of having the military load up with poor kids, or the kids of Red-Staters who have watched Top Gun too many times.
It also might make some of the decision makers people think whether the objective of the intervention is worth it.
Or, like WWII, tell everyone in the military that they are “in”, until ALL the fighting is over. And none of this candy-azz “rotation” stuff. You are stuck “in country”.
Want to know the REAL reason we won the 1990-91 Gulf War? Because most of the pilots over there were Air Guard guys. Who got called up from their high paying airline gigs to go camp in the desert for 6 months. And who were pissed at Saddam, and wanted the green light ASAP, so they could get their job done, and GTFOOD
“I got an idea. It’s spelled D-R-A-F-T. With NO deferments.”
Bad idea. The smart kids will leave in droves never to return. I did. If they want to go to war with somebody send the warmongers over there. Being forced, I would shot my commanding officer before I shot people I don’t even know. End of story.
Mike, if you’re in Miami you must have returned at some point. Where did you hide? Canada?
“Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you.”
Friedrich Nietzsche
That’s why I wear my mirrored sunglasses when I gaze into the abyss.
No, it’s because they put the tankers and infantry out in the desert for 6 months, didn’t let them near any women or alcohol, trained them relentlessly while wearing NBC suits and then said “Here are lots of big things that go boom - have some fun taking out your frustrations”.
Presto, war is over in 4 days and the targets took a biblical beating.
This time in Iraq was similar. Problem is…then we STAYED there. Would have been just as bad in 1991. Which is why George Sr. declared victory and got out as quickly as possible.
They just need to offshore more jobs. That should free up some better educated kids to recruit.
Nah, those better educated kids will move to the countries creating jobs. Not only will they earn income, but they also shed the future unfunded obligation liability. A huge win-win for kids smart enough to know better.
And where is this new frontier that will welcome them?
Canada, China, India, Brazil, Switzerland, New Zealand, Thailand, Viet Nam. Need I continue?
LOL! Unlike the US, most countries make it near impossible to immigrate permanently to their lands. You often have to prove that there are no locals to do the job. Its one thing to go overseas on a temporary English teaching stint, but try to get a real job there. You will get whiplash from all the doors slammed in your face.
This is why my kids are claiming their German citizenship, along with the associated EU passports.
Exactly, Colorado. We have the weakest immigration laws in the world.
..and then we send out jobs overseas.
We deserve the government we have.
“Nah, those better educated kids will move to the countries creating jobs.”
They’ll need to have dual citizenship.
U.S. Postal Service to detail major cuts affecting thousands
By WKTV News
WASHINGTON - The Washington Post is reporting that the U.S. Postal Service is expected to detail how it plans to cut about 7,500 administrative positions.
Postal officials previously announced plans to cut the 7,500 positions in January, and Thursday’s announcement clarifies which positions are impacted.
The job cuts are expected to impact about 2,000 postmasters.
Cutting postmasters is especially noteworthy, because it will likely prompt USPS to close the post offices they operate.
Though 7,500 seems like an impressive figure, remember the Postal Service still has about 520,000 full-time workers; another 234,000 employees left in the last decade on their own volition or through early-retirement incentive programs.
Obama was quoted as saying: “If we are going to do this jobless recovery, we are going to do it right”.
Its what the corporate taskmasters want.
Sounds like a teleprompter error… But yeah, I get it anything not worth doing is worth doing well
“If you are in debt for anything on a floating-rate basis, you are in trouble.” ~Dr. Gary North
Was Dr North aware of “strategic default” at the time he was quoted?
NARscum aka Realtor make Bernie Madoff look like a saint.
Cities You Don’t Want to Live In … Yet
March 23, 2011 ~ CNBC
Piling on is an age-old tradition. People get a whiff of negative air and, like a pack of wolves, turn against it.
That has happened to a lot of cities, many of which were struggling to reinvent themselves from industrial towns. The recession didn’t help and now that the recovery has gained momentum in the broader economy, many towns are having to work twice as hard to jumpstart growth.
City-data.com came up with a list of cities that, by the numbers, are some of the most beaten-up, undesirable cities in America. But instead of focusing on the numbers, we asked Bert Sperling, whose specialty is “Best Places” to tell us what’s good about each of these cities — what’s improving and what each has to offer.
http://finance.yahoo.com/real-estate/article/112409/cities-you-dont-want-to-live-in-yet?mod=realestate-buy
What dregs they are although I might consider Memphis or New Orleans.
One thing most of them have in common: access to fresh water.
You have obviously never been to New Orleans.
Nice place to visit. Sort of. At least once. Great food. Can’t say much else nice about it.
Think of it as the Detroit of the South.
Mortgage rates creep higher in latest week. ~ Associated Press
NEW YORK — Mortgage rates edged up this week, but even 30-year fixed rates below 5% have done little to boost home sales.
Freddie Mac said Thursday that the average rate on 30-year fixed mortgages rose to 4.81% from 4.76% the previous week. It hit a 40-year low 4.17% in November.
The average rate on 15-year fixed mortgages increased to 4.04% from 3.97%. It reached 3.57% in November, lowest level on records dating back to 1991.
Mortgage rates tend to track the yield on 10-year Treasury notes, which rose this week.
Still, low rates haven’t helped the weak housing market. In February, sales of previously occupied homes fell 9.6% and new-home sales tumbled to the slowest pace in nearly a half-century.
High unemployment, a record number of foreclosures and tight lending standards have kept people from making purchases. Other would-be buyers are waiting for home prices to bottom out, which most economists predict won’t happen until midyear.
The belief that “housing is key to economic recovery” lingers on, despite the abundant evidence that an excess of stimulus has burned the legs out from under the chair which supported the home building industry.
March 24, 2011, 12:01 a.m. EDT
Housing: policy makers’ great white whale
Commentary: Expect more drag from the housing sector
By Kathleen Madigan of Dow Jones Newswires
NEW YORK (MarketWatch) — Just when housing experts thought the industry couldn’t get any worse, it did.
February turned out to be one of the weakest months ever for the U.S. housing sector. Starts, permits and sales of existing homes all plunged in the month. The latest downbeat news was Wednesday’s report of a 16.9% freefall in new-home sales. Those sales are at their lowest since records began in 1963 — despite the fact that the U.S. population is 122 million residents larger than 48 years ago. Read more about declining sales of U.S. homes.
Housing has been a large beneficiary of government-stimulus efforts. Yet, the sector remains an intractable foe for policy makers. While the U.S. economy can grow without housing, a recovering housing sector would shift growth to a higher pace that would boost labor markets and lift confidence.
…
~ There is talk in our state, S.C. of pushing back the expansions of a couple nuke plants here. I guess this comes on the heels of the Japan occurrence.
South Texas nuke plant delays lead to layoffs
Houston Business Journal - 3-24-11
At least 60 positions at Bay City’s South Texas Project nuclear plant will be eliminated because of a plan to slow down the facility’s expansion.
Nuclear Innovation North America LLC said on March 22 it is scaling back plans to add an additional two nuclear reactors to the facility, which already operates two reactors.
Nuclear Innovation a joint partnership between New Jersey-based NRG Energy Inc. (NYSE: NRG) and Toshiba Corp.
One hundred employees, some staff members of the South Texas Project Plant, some contract workers, were working on expansion plans.
Some of the South Texas Project employees will be transferred to other parts of the plant, said David Knox, spokesman for NRG Energy.
There is talk in our state, S.C. of pushing back the expansions of a couple nuke plants
Drill off Hilton Head, Drill there! Drill Now!
If you knew what I know about the STNP, you would be very afraid.
~ Good thing it’s not war! Probably won’t cost nearly as much as the real thing.
White House: Libya fight is not war, it’s ‘kinetic military action’
Washington Examiner - 3-24-11
In the last few days, Obama administration officials have frequently faced the question: Is the fighting in Libya a war? From military officers to White House spokesmen up to the president himself, the answer is no. But that leaves the question: What is it?
In a briefing on board Air Force One Wednesday, deputy national security adviser Ben Rhodes took a crack at an answer. “I think what we are doing is enforcing a resolution that has a very clear set of goals, which is protecting the Libyan people, averting a humanitarian crisis, and setting up a no-fly zone,” Rhodes said. “Obviously that involves kinetic military action, particularly on the front end.”
From military officers to White House spokesmen up to the president himself, the answer is no. But that leaves the question: What is it?
Grenada Lite, …”more flavor / less filling”
Beat me to it.
OK, here’s the betting pool for the day.
On what date will we first have “boots on the ground” in Libya, for other than an air crew rescue operation?
Winner gets 100 points.
Mike Scheuer, former head of the CIA’s Bin Laden unit, says we already do. Mainly CIA and special forces teams.
Yeah, I’m sure there are special forces already on the ground, making contact with the rebels, and doing recon, targeting, scouting, etc.
Do the Libyans know its not a war?
House affordability plummets when you factor in transportation costs. This seems like a no-brainer, but tell that to the Denali drivers who commute to San Diego from Trekula just so they could “buy” a 5 bedroom crap collector.
http://dc.streetsblog.org/2010/03/24/feds-begin-redefining-affordable-housing-to-include-transport-costs/
An interesting transformation I have noticed in Cali over the years. When I used to live there it seemed that everyone drove a compact to midsize car (typically Japanese) or maybe a minivan. Yeah, there were a few Subrubans rolling around.
But everytime I go back to visit the Behemoths are more and more ubiquitous.
You’d have to be nuts to commute from Temecula to a job in San Diego driving a gas guzzler, even when gas was cheaper.
Bloomberg
$56,980 Consultation
The most detailed complaint is against Benyamin Hannallah, a cardiologist at Jersey City Medical Center. Hannallah charged $59,490 for a heart ultrasound in April 2010 and was paid $47,592, the suit says. Aetna reimburses in-network doctors $74 for the procedure at Jersey City hospitals, Michener said.
Hannallah billed Aetna $56,980 last July for a consultation with a patient who wasn’t critically ill, a hospital visit that typically takes 25 minutes, according to the suit. The insurer refused coverage, and said Hannallah had asked for $220 for this type of consultation in 2007.
In April 2010, Aetna said, Hannallah asked for $54,600 for a heart catheterization, up from $5,500 for the same procedure in 2007. When the insurer gave him $2,000 — a sum it deemed “usual and customary” for the procedure — Hannallah complained, and Aetna paid in full to prevent him from billing the patient for the remainder, Michener said.
The amount Hannallah requested for heart ultrasounds quadrupled between 2009 and 2010, and his price for cardiac- stress tests rose more than tenfold to $15,850 between 2008 and 2010, Aetna’s suit claims.
Healthy Profits
For an electrocardiogram, Aetna said it paid him $5,500 in 2010, up from $800 in 2008. The in-network fee listed on Aetna’s website for EKGs in Jersey City is $23.
Aetna said it paid Hannallah a total of $3.2 million in 2008 and 2009, up from $529,503 in the prior two-year period.
Robert Conroy, Hannallah’s lawyer in Bridgewater, New Jersey, said the fees in Aetna’s complaint are “false and/or misleading.” Some charges cited were pre-approved by the insurer, and some were negotiated between Hannallah and a third party representing Aetna, Conroy said.
Conroy said comparisons with some earlier rates are unfair because they represent fees when his client was an in-network doctor. Some of Hannallah’s patients or their employers paid higher insurance premiums for the right to use out-of-network doctors, Conroy said.
Aetna, which collects more than enough premium and administrative revenue to earn healthy profits, is suing because it wants to make even more money, Conroy said. “How much did Aetna pay its CEO last year?” he asked. “How many lives did he save while feathering his nests?”
There is a saying in Spanish:
“Ladrón que roba a ladrón tiene cien años de perdón”
Loosely translated
A thief who robs a thief is forgiven for 100 years.
Is this “The man”? Is this his “Ethical” & “Professional” profile info?:
Gender - Male
School - Univ Of Asyut, Fac Of Med, Asyut, Egypt
Training - Jersey City Med Ctr, Cardiovascular Diseases; Seton Hall U Sch Grad Med Ed, Cardiovascular Diseases
Major - Office Based Practice
Accepts new patients - No
First name Benjamin
Middle name Azmy
Last name Hannallah
last october my health care premiums were 539.00 for three months and now they are 939.00 for three months. I think im going to enjoy this joshua tree!
Mine did that too! I wish they would let Obama reform health insurance as he intended to.
I wish they would let Obama reform health insurance as he intended to.
Yes…we should just let the president decree those laws he wants!
Wait, you mean our government isn’t set up that way? Hrm….
Nope. No hyper inflation here. No siree!
As former President Bill Clinton leaves Harlem, no tears from residents.
~ DAILY NEWS
HARLEM residents aren’t crying over former President Bill Clinton’s offices moving out of their neighborhood.
The William J. Clinton Foundation, which moved onto W. 125th St. nearly 10 years ago, plans to move most of its offices to Water St. in the financial district.
Clinton will keep an office in the building, but many residents don’t care what his plans are - either because they never saw him or don’t think his presence helped the neighborhood.
“It don’t faze me; I never saw him,” said lifelong Harlem resident and Clinton supporter Susan Chaplain.
“When he was here what did he do for us? Nothing,” she said as she stood on Lenox Ave., not far from Clinton’s offices. “He never did nothing while he was here. What difference does it make?”
Sharon Johnson, 59, also wasn’t concerned with Clinton’s plans.
“He don’t come out here so it don’t matter one way or another,” she said. “He never even comes out to say ‘hi.’”
James Carrington, 62, is one of many sidewalk vendors selling artwork on W. 125th St. near Clinton’s building.
“It doesn’t matter to me,” said Carrington, who added he’s spotted Clinton only once and that his presence hasn’t made any impact on Carrington’s business.
“It doesn’t hurt me. It doesn’t affect me,” Carrington said of the move.
One woman, who declined to give her name, said she wasn’t surprised to hear Clinton was moving.
“I knew he wasn’t going to stay up here too long,” she said. “I was surprised when he moved up here…It was a lot of attention when he came up here, but when was the last time he was here?”
Another resident, who refused to give his name, hoped the rent for businesses would go down now that Clinton is packing up and leaving Harlem.
“Maybe now that he’s leaving, the rent will go down,” he said. “Him being in the community doesn’t affect us. All it did was raise the rent.
“Drugs were still being sold. People were still being killed,” he said. “It won’t be no tears. No, thank you. Goodbye.”
Read more: http://www.nydailynews.com
Clinton was a rolling stone,
Wherever he laid his staff was his home.
And when he moved in,
A-all it did was raise the re-ent.
(Which was too damn high already!)
http://blogs.forbes.com/jerrybowyer/2011/03/23/let-me-help-with-the-onrush-of-financial-porn/
update on financial porn!
Illinois teacher pension system nearly $40 billion in the hole
School districts worry local taxpayers might have to foot larger bill
~ Chicago Tribune
The Teachers’ Retirement System, the largest and costliest of Illinois’ pension programs, is now almost $40 billion short of what’s needed to cover future benefits — the deepest financial hole in 20 years of state records.
And with lawmakers looking to rein in the massive costs of public retirement programs, teachers worry that the nest egg they’ve always considered a sure thing might shrink, while school district officials are concerned that local taxpayers might have to start picking up more of the tab.
At 28, social studies teacher Patrick Sheridan is only in his fourth year of teaching, but he’s already on edge about retirement, wondering if he’ll ever get the pension checks he was promised.
“It’s very scary and very frustrating being a younger teacher, and not having any certainty,” said Sheridan, who teaches and coaches at Cook County’s Elmwood Park High School.
The National Center for Policy Analysis issued a report in 2010 that placed the unfunded pension liability in Illinois north of $100 billion if one used more realistic assumptions to calculate the present value of the plan.
“Illinois teacher pension system nearly $40 billion in the hole School districts worry local taxpayers might have to foot larger bill”
Should read
School districts worry local taxpayers may not foot larger bill.
…for politicians who underfunded and gambled away the pension fund on Wall St.
Local airport says traffic down 12% since last year.
Yep full recovery mode.
“…staged a recovery…”
Curiously, traffic at Denver International is on the rise. Of course, it is a hub.
A business article in my newspaper yesterday said the airlines are losing their shirts because of lack flights to Japan.
We flew to Denver last summer on Air Tran. The aircraft was a 737-400. I’m pretty sure there were six daily flights. Just booked another Air Tran trip to Denver. Will be flying a MD-8X (5 seats per row). And now only four flights each day.
I like the MD-8X series. With the engines at the back most of the cabin is quieter. Ahead of the wing you hear NO engine noise at cruise, just the hiss of the air passing by outside. And once the gear comes up after takeoff, that sucker can climb like an elevator.
Ralph Nader Calls for Ending Athletic Scholarships
March 24, 2011 | Associated Press
Consumer advocate Ralph Nader is calling for the elimination of college athletic scholarships, saying the move is necessary to “de-professionalize” college athletes.
Nader’s League of Fans, a group aimed at reforming sports, proposes that the scholarships be replaced with need-based financial aid. He says that would help restore academic integrity to college sports.
The Associated Press obtained a copy of the proposal Thursday, ahead of its official release.
Nader, a former presidential candidate, argues that his plan would also help reduce the “win-at-all-costs” mentality in high schools, by reducing the incentive of college scholarships.
Jesus, let’s just ban everything and go back to farming. WTF. I guess we’re at the beginning of a new era.
I have a new proposal: a permanent ban on Boomers trying to ban shit they got.
How’s that?
College sports like football and basketball are just a publicly funded minor league system for the pro teams.
NBA guy was on the radio the other day, saying that he was in favor of applying the same rules as the NFL did for football (no signing kids out of high school, not before junior year of college). Why?
Because it would give them more time to evaluate the kid before they drafted him, and forked over a bunch of money…..IOW, like everything else, let the individual and public bear the cost of training the person.
Too bad giving out gazillion dollar contracts to high schoolers doesn’t pan out a lot……..rich guys giving the serfs too much money, because they don’t want someone else to get him. Boo-Fooking-Hoo.
Okay…….then maybe we should require the same thing from the US armed forces. Seems to me that the stakes are a lot higher when you hand a kid a gun/tank/helicopter, than a basketball or football game. But the PTB don’t seem to think it is a problem.
Good News! Now the local whiners and bed wetters will come out of the wood work…What are we going to do, we need mo money!
Richland Co.S.C. assessor notes property taxes flat
Lexington County also expects ‘close to flat’ revenues
The State News - Local / Metro Mar. 24, 2011
A listless year for construction in Richland County, along with slow sales in the commercial and high-end home markets, means property-tax revenues won’t grow as much as usual this year, Assessor John Cloyd said.
Add in tax appeals on some of the county’s most expensive properties and county budget writers won’t have much new revenue to work with, Cloyd said.
“I don’t see much growth,” said Cloyd, a trend that appears less pronounced in neighboring Lexington County.
New construction and sales were lower than they have been since the mid-1980s, he said.
Additionally, tax values were too high on commercial properties, such as hotels and strip malls hit hard by the recession, so the assessor’s office lowered them after reassessment appeals. The same went for high-end homes scattered across the county.
Cloyd’s comments are a departure from his usually upbeat forecasts. In recent years, he has said Richland County’s home values have weathered the recession well.
Instead, he said values for 2010 didn’t increase as much as they normally do. He won’t have figures until mid-May, when his office verifies values and hands them over to the auditor’s office.
Cloyd’s office sets the values for land and buildings that help determine how much money the county gets each year from property taxes. And those taxes bring in the majority of the money that pays for basic services such as law enforcement, garbage pickup, libraries and land-use planning.
Most years, new construction and sold properties add between $700 million to $1 billion in assessed values, which translate into higher tax collections.
This year, Cloyd said: “We will add something, but I don’t know how much it’s going to be.”
This would be the second year of declines, he said.
Read more: http://www.thestate.com
Stocks rise after earnings continue to impress- AP
Stocks are closing higher on stronger corporate earnings and signs the job market is improving. Software company Red Hat Inc. and chip maker Micron Technology Inc. reported profits on Thursday that beat expectations.
even the rich are in foreclosure:
http://money.msn.com/home-loans/rich-famous-and-in-foreclosure-bankrate.aspx
“Prime” mortgages have been leading all foreclosures since early last year, putting lie to the problem being one of subprime loans.
Weirdest Craigs List post ever:
http://washingtondc.craigslist.org/nva/fuo/2284152241.html
I am single mother and deaf. I am on low budget. I need to find nice furniture for my new apt to get my daughter back from DFS.
The items I need is:
Black dresser
White or Black Wardrobe
.
.
.
shelf for bathroom
big TV like 50-70inches
sofa table
blue chair or red or orange chair
Family services requires large flat panel TVs to return children to their parent?
Nice color palette! Between the TV and those bright colors that kid just needs some candy and soda.
Holy smokes! Love the colors! And yes I believe one of the few ways a mother can get her child back is by having at minimum a 50″ flat panel TV.
Wish I could help, but all I have is a….
orange dresser
Purple or Green Wardrobe
shelf for den
little TV like 9-10 inches
coffee table
zebra striped chair or leopard spot or fuzzy pink chair
Sorry.
I SAID SORRY!
Oh, sorry.
Rockstar Fed:
WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke will begin holding news conferences four times a year to explain the Federal Reserve’s interest rate decisions and its views on the economy.
Weak demand for pricey flat-screen TVs and notebook computers helped push Best Buy Co.’s fourth-quarter net income down 16 percent.
Yep recovery on track??
As discussed demand for manufactured goods is collapsing.
“Weak demand for pricey flat-screen TVs”
I often wonder just what the difference is between a $600 TV and a $2000 TV. I’m sure that the $2000 set has better image quality, but is the difference really that dramatic?
Well not for me I still have an old box set with a digital converter.
Think Cadillac Escalade ($62K to $88K) vs. Chevy Tahoe ($37K to $54K). Same vehicle but for a nicer interior on the Caddy. Oh, and a nameplate with more “panache.”
(BTW, those are list prices from latest Consumer Reports annual car issue).
Yeah, big difference. I was looking at a very nice 65″ flat screen at Costco today for $3100 and thought what a nice replacement for my old projector it would make, but there is no way I would actually do that right now, particularly when I consider the one I have cost 4 gold coins back in 2004 and I sure wish I had 4 more gold coins today. Looked at that way I spent $6,000 on the TV, so IF I ever get to go back in time and kick myself…
The single deaf mother on a low budget from polly`s post, who is trying to get her kid back from DFS is looking for a pricey flat-screen TV. Like 50-70inches.
In the fund industry , there may be no bigger insult than to call a portfolio manager a “closet indexer.” It implies they’re too cowardly to pick stocks, choosing instead to hug the index they’re supposed to beat. But offensive or not, their ranks are growing – at the expense of investors who pay for their guidance.
While it’s difficult to know just how many index funds are posing as actively managed funds, the number is clearly rising, according to research by Antti Petajisto, a visiting professor of finance at New York University. Closet index funds claimed about 31% of all stock mutual fund assets at the end of 2009, the latest data available – up from 19% in 2006, according to Petajisto’s research. It’s also far more than the assets invested in pure index funds, which are significantly cheaper than actively-managed funds, and therefore tend to outperform funds run by closet indexer
BINGO - This describes my retirement plan options to a T. They recently switched to a managed REIT FUND. Top 10 holdings = index fund in percentage. Performance so far worse, fees so far higher, not that I put any monty into this garbage.
Full of memories? Memories of what, living in a house you never made payments on? The bank owns it now, is it with sadness that they sell it or is it with sadness that the people who lived there for free since Aug 2008 have to move out and pay rent?
New Listing
18660 LOCHPOINT Ct Jupiter, FL 33458
$259,000
Beds:4 Bed
Baths:2 Bath
House Size:2,805 Sq Ft
Exclusive undervalued price for this 4 bedroom, 2 baths home full of memories. With sadness the owners must sell and move. Make a banks loss your gain. Raise your family in this exceptional cul-de-sac, corner lot home in Jupiter Shores.
County records
Final Judgement
Unpaid principal $379,364.53
Interest on said principal through June 1, 2010 $30,230.55
Sales
Name: PITKIN JULIE &
Mailing Address: 18660 LOCHPOINT CT
Aug-2008 22855/0725 $387,500 WARRANTY DEED
PITKIN JULIE &
“Full of memories? Memories of what, living in a house you never made payments on?”
Zing!
In fairness, they probably will never forget that.
AHEAD OF THE TAPE
MARCH 25, 2011
Will Home Builders Trip in a Double-Dip?
By KELLY EVANS
The double-dip in housing may partly stem from the disappearance of first-time buyers.
Housing markets have been looking pretty grim lately. This week alone, data showed the pace of new-home sales fell to a near 50-year low in February while sales of previously owned homes also slumped. The median sales price of a new home is back to 2003 levels. The uptick in activity last year spurred by the first-time home-buyer tax credit, in other words, was a head-fake. That doesn’t bode well for home builders, including Lennar Corp., which is due out with fiscal first-quarter results early next week. KB Home, which typically reports before Lennar, hasn’t said when it will report. Both companies are expected to report a year-on-year drop in earnings and revenue for the quarter ended in February.
…