Bits Bucket for March 28, 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
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Freddie Mac Rules Out MERS Foreclosures
Effective April 1, servicers managing Freddie Mac loans will no longer be allowed to foreclose on properties in the name of Mortgage Electronic Registration Systems (MERS). This was one of a several changes announced yesterday by Freddie Mac through Single-Family Seller/Servicer Guide Bulletin 2011-5.
According to the directive, Freddie has “eliminated the option for the foreclosure counsel or trustee to conduct a foreclosure in the name of MERS. Effective for Mortgages registered with MERS that are referred to foreclosure on or after April 1, 2011, Servicers must prepare an assignment of the Security Instrument from MERS to the Servicer and instruct the foreclosure counsel or trustee to foreclose in the Servicer’s name and take title in Freddie Mac’s name.” In states where required the servicer must also record the prepared assignment; Freddie Mac will not pay the recording fees.
http://www.mortgagenewsdaily.com/03242011_freddie_mac_servicers_mers.asp
How’s that deregulated mortgage recording system working for ya?
Looks like it’s turning into a real Charlie Foxtrot.
Maybe government isn’t always the problem?
“So ferry ‘cross the Mers-y…”
‘Maybe government isn’t always the problem’
I’m not sure what you are advocating here. For instance, I recently posted thoughts on the ‘Rise and Fall of Eliot Spitzer’ documentary. Here was a guy that was going after Wall Street, and the feds dug into a prostitution ring, seemingly to bring him down. (Not that Spitzer was an angel; he moved up to Governor, and wasn’t very concerned with WS abuses anymore. And where is the current NY AG on fraud etc, these days?)
Blanket statements that govt is a problem or solution are overly simplistic, IMO. It would seem that what we need is effective govt that roots out bad behavior.
Well, the AG did send to jail that former Goldman programmer who stole their trading software.
Government has always had problems with priorities.
+1
Alpha is probably countering the mantra that free-market can “always” solve “everything.”
The best scenario for people in government is that government controls everything.
The best scenario for people in private sector is that government controls nothing.
The best scenario for the population as a whole (and the environment) is some combination of the two. It could be that private sector and government share an industry, for example: private sector with government regulation or government work done by private sector contractors. It could be that private and gov choose whole industries to run with no sharing: for example, Gov generally handles military while car manufacturing is almost all private.* The trick is to find which balance in which industry is best for everybody. And on top of that, what is good for the rich population is not-so-good for the population as a whole (or the environment). The solution is one giant gray area that nobody wants to venture into.
The worst of all worlds is where the government enters into a “partnership” or “encourages” or “incentivizes” or “works with” otherwise tries to be nice to private sector. Private sector folks proceed to take advantage of the government inch in socialized risk to take a mile in privatized profits.
————–
*and for the both examples there are aberrations — ie the Military-industrial complex and the government takeover of GM. Both were seen as non-ideal.
Best for certain members of the private sector is for them to control gov and use it to mine wealth from citizens and foreign goverments.
That’s what we have now. The too big or small arguement is a waste of time. The problem is that the elite have taken over government.
“The problem is that the elite have taken over government.”
And while they get trillions in “Free Sh#t” they demonize school teachers, lunch ladies and janitors for their “lavish incomes”.
‘…demonize school teachers, lunch ladies and janitors for their “lavish incomes”.’
Don’t forget their ridiculously rich pensions!
Nearby district: HS teachers Avg Yearly salary $76000.+; 3 elementary schools, avg at each is over $80K. Dont tell me theyre not lavish; pensions worth1.3 million+……no, lunch ladies make slightly more than minimum wage, janitors, I dont know…probably somewhere in between but getting laid off because of raises given to teachers in the last 3 years. New money levy on the May ballot…its for the children.
Carlos4 — Have you considered a teaching career? I hear the work is easy and it pays well.
“Blanket statements that govt is a problem or solution are overly simplistic, IMO. It would seem that what we need is effective govt that roots out bad behavior.”
Then we agree!
But many seem to think government is everywhere and always a problem, and its absence is a solution in itself. I think the MERS disaster is a great reminder that sometimes this isn’t so.
What I was referring to was when govt protects those who break the law, or looks the other way. Isn’t that a problem? Can there be anything worse than regulators who fail to regulate? Cuz then we think we have our backs covered when we don’t.
Where was the SEC on the MERs thing?
Can there be anything worse than regulators who fail to regulate?
If you’re a rich guy who stands to be even richer without regulation, then there’s nothing BETTER than regulators who fail to regulate. Remember all those folks who said “don’t tell me how to run my business”? Yeah, THEM.
And the same rich folks bought off some congresscritters to make sure that the regulators either didn’t enforce regulations, or to make sure that there were no regulations to enforce.
Where was the SEC during MERS? They were too busy approving monopolistic mergers and acquistions which resulted in banks that were too big to fail.
That is a great comment-the bottom line of much of the government preoccupation with the wrong end of issues if the “perpetual election campaign” and being concerned with their next contribution is going to come from or NOT come from-that does not include actual voters, but mostly the large corporate interests that are underpaying, under employing us or otherwise devaluing us. Bye Bye Middle Class-and most of them without so much as a whimper-because they are clueless.
In the present arrangement the government is simply the shadow of big business. You can change nothing by attenuating the shadow.
What is the government going to have to do to convince the naive that the government is all about looting the people and nothing else? Americans are mere farm animals and pretty much act same!
Honestly, when is is going to become crystal that the government is not your friend, never has been, and may just kill you?
Government schools have really indoctrinated a great number of herd animals(humans) into believing the impossible.
Government is the problem not the solution.
Ben sez: “Blanket statements that govt is a problem or solution are overly simplistic, IMO.”
lint sez: “Government is the problem not the solution.”
“Government is the problem not the solution.”
A perfect example of what I was talking about. A nihilistic belief that all government is bad, in itself.
Thank you, lint.
And Oxide, you’re dead on.
A policy of deregulation, stemming from a belief held by Greenspan and the Fed on down that markets were self-regulating, resulted in three decades of non-regulation of the financial industry.
We’re reaping its bitter harvest now.
‘markets were self-regulating…three decades of non-regulation of the financial industry’
So there was no SEC, congressional oversight of GSEs, FBI, etc, for 3 decades? The Fed itself is a regulator. Here’s where a major disconnect occurs in the political blame game; one of the biggest deterrents to taking risk is that you lose money. But my whole life I’ve heard too big to fail stated as fact. Of course, big corporations will make huge mistakes if they feel they won’t suffer the consequences. Isn’t it the govt that decides that?
What about the political consequences? Did the congress members that failed us lose their seats?
Were laws broken? If so, why aren’t there more prosecutions? And isn’t prosecuting criminals a govt function?
Every part of the system failed us during the housing bubble. The real question for us today is, what do we do now? IMO, this isn’t the time to try and score political points about regulation, govt, etc. But rather to make firm choices about these financial markets and when people break the rules, punish them for it. Make it clear that if these corporations gamble, they will pay the price if they lose.
“IMO, this isn’t the time to try and score political points about regulation, govt, etc.”
Political blame games are a great propaganda tool for taking the focus off the real problems and the necessary reforms to fix them.
So there was no SEC, congressional oversight of GSEs, FBI, etc, for 3 decades?
Corporations don’t change their behavior to fit the laws, Ben. They pay congressmen to change the laws to fit their behavior.
One man’s “Congressional oversight” is another man’s “nanny state.” All a corporation has to do is convince the sheeple of the “nanny state” POV, buy off a few white-bread congresscritters who agree, and voilá! No more pesky Glass-Steagall to tell them how to run their business!
‘They pay congressmen’
That’s another political problem, IMO. You can have as much govt/regulation as you want and it won’t fix that issue.
Think about it; is the money that flows to DC illegal? If not, isn’t it the govts (and also the citizens) responsibility to change the laws?
PS; don’t forget the revolving door between WS and DC.
“Think about it; is the money that flows to DC illegal? If not, isn’t it the govts (and also the citizens) responsibility to change the laws?”
Yet another area where we agree. Right now politics is a money race, and the wealthy have most of the money to dole out. Is it a surprise that the wealthy get all the breaks?
Reasonable regulation of the financial industry, campaign finance reform, ending the revolving door between gov and regulated private sector industries?
You sound like a Democrat, Ben.
And I’m not trying to score political points, I’m trying to point out ‘teachable moments’.
There are some here who seem to think that every problem suffered by the financial system was caused by govt regs, and everything will be solved of we completely ‘free the markets’ from any and all regulation.
MERS serves as an excellent example that not everything is better left to the free market. Some of that government regulation is the product of centuries of hard-learned experience. It’s what allows free markets to work.
Let’s not throw the baby out with the bathwater.
No, I’m a libertarian with a small L. Have been my whole life. But I am always open to good ideas, no matter where they come from. I believe that if we put partisanship aside more often we could fix a lot of the problems in this country.
When I read posters here tearing into this group or that, I often think it’s wrong headed. For example, does anyone really think that if their faction got in control, everything would be right with the world? No one has a monopoly on the truth, and all sides have their points. Most of the time, we are closer to agreement than we realize, but there are powers out there that work to keep us from consensus. This is why I don’t think in terms of left/right, conservative/liberal. IMO, those are false dualisms the PTB use to keep us divided.
The problem of money in politics has got to be addressed before we can make progress, and then we can convince people to buy into the system and chip away at the apathy.
“When I read posters here tearing into this group or that, I often think it’s wrong headed.”
For the record, I am nonpartisan, though I am occasionally guilty of partisan baiting.
I think there are a lot of little factions between small “l” libertarians. Some are capitalist purists, some socialists, some religious, some atheist, some anarchists, some minarchists. The commonality is that we “l”ibertarians have a certain higher level of awareness. The danger is that some of us (not you Ben) are misled and become conspiracy theorists.
I had the luxury to read the libertarian theory from Murry Rothbard, Morris and Linda Tannehill, Lysander Spooner, Harry Browne, and Ayn Rand and I met self-described libertarians who were trying to keep the hippie movement from 13 years earlier going (back in 1980). I later ran to the Ayn Rand section and was disappointed in the cultism of her loyal team, such as Harry Binswanger in the early 80s.
Then I decided what was best was to drop out of politics and work for a living! The Harry Browne lifestyle.
Is that really Bill in Tampa, or is it Charlie Sheen in disguise?
I think both Democrat and Republican politicians are scum.
“Blanket statements that govt is a problem or solution are overly simplistic, IMO. It would seem that what we need is effective govt that roots out bad behavior.”
Government by its very premise is a gun being pointed at a human being so as to encourage that human to do that which is demanded…or else.
The premise of using or threatening to use lethal coercion to root out bad behavior is farsical. Pointing a gun at someone is bad behavior and will result in further bad behavior both on the part of the government and the individual.
Ben, why not solve all of your arguments with a gun instead of having rational discussions among your purely voluntarily relationships? You promote the idea of having an effective government that does just this very thing. An effective government is quite forceful, intimidating, and lethal to all those who oppose it if it is threatened.
lint,
I’m familiar with what the state is and does. I would like a more libertarian govt in the US, but having messed around in politics for years, I also know we don’t live anywhere near that type of society. So often the question is what do we do within the system we have? If we dislike the use of state force, and don’t involve ourselves with the debate about what this govt should be doing now, we only marginalize ourselves and make our voices weaker.
Having taken similar positions as yours for many years, I believe that we have to take the long route and hope people move toward our position. Anyhoo, someday’s I feel more like my anarchist roots, someday’s I want work within the system. Every once in a while I remember I haven’t ever found a better place to live anywhere else in the world.
“An effective government is quite forceful, intimidating, and lethal to all those who oppose it if it is threatened.”
I hope to never live in a country where Lint is dictator.
“An effective government is quite forceful, intimidating, and lethal to all those who oppose it if it is threatened.”
That really does ring a bell; isn’t this Qaddafi’s government you just described?
And if they are so effective, how come the U.N. is intervening as I type?
Did the number of FB’s who get to live rent-free forever just increase, or am I missing the relevance of this news?
I’m asking myself exactly the same question.
I’m sure I oversimplified the situation, but it is early out where I live, and no coffee has touched my lips in 24 hours. However, if I were in the situation of a FB who knew Freddie Mac and MERS were involved with the origination and registration of my loan, I know that I would be conducting some title research starting today.
Who would have thought that buying well beyond one’s means at the height of the bubble could pay off so handsomely? Kind of like winning the lottery. FBs and banksters win.
Whose the bagholder in these cases? Is it the American taxpayer (assuming the principle on the loans were federally guaranteed)?
Any person who uses currency to pay for things they really need is the bagholder. Any person who did not get caught up in the whole stupid bubble and knew better is the real victim.
This is about ensuring that F+F get GOOD title to properties when servicers foreclose. Because it the title is impared, the losses will be even greater. I just think it’s interesting that they even have to include the fact the they won’t pay the servicer any transfer fees required under state law. Kind of “YOU made this mess, you’re going to pay the costs to fix it.
I wonder is this going to be the next screwy stimulus package…bad title then let’s bulldoze 1,000,000 homes that have been vandalized and decaying in the FloRiddah heat and the Detroit freeze?
You cant even put section 8 peeps in these homes or high rises without the ACLU suing.
We need jobs…right?
——–
Kind of “YOU made this mess, you’re going to pay the costs to fix it.
“You cant even put section 8 peeps in these homes or high rises without the ACLU suing.”
Harsh but on target…
“This is about ensuring that F+F get GOOD title to properties when servicers foreclose.”
Sure it is!! It doesn’t at all relate to holding property off the market longer while hoping things will turn around. It doesn’t at all relate to taking heat off F&F’s balance sheets and hiding more from the public. Nah, only relates to good prudent business. Could use a little napalm here this am to get to the bottom of things.
Me confused. Freddie Mac is going to have something recorded, but they aren’t going to pay the fee for it? How does that work?
Housing market: 13% of all U.S. homes are vacant
cnnmoney March 28, 2011
High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.
And it’s only getting worse: The national vacancy rate crept up to just over 13% according to last week’s decennial census report. That’s up from 12.1% in 2007.
“More vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.
Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).
The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.
These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.
“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”
But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.
In Maine, more than two-thirds of the 160,000 vacancies were vacation homes in 2009; Vermont had a similarly high concentration.
Compare them with Connecticut, which has a vacancy rate of just 7.9%, the lowest of all the states. If you back out the vacation properties from the statistics, the states have very similar vacancy rates: 6.1% for Connecticut and 7% for Maine.
Some states have high vacancy rates even after backing out the second homes: Florida’s is about 10%; Arizona’s is 10.7%; and Nevada’s 11.4%.
Besides Connecticut, the other states with lowest vacancy rates are California, Iowa, Illinois, Virginia and Washington, all at 9.2% or lower.
“If you back out the vacation properties from the statistics,”
I wonder how they do this.
alpha,
Census report breaks out the stats.
link:
http://www.census.gov/hhes/www/housing/hvs/qtr410/files/q410press.pdf
True but…One of the things that happened a lot in the runup was people mortgaging their primary to buy a second property. And if people have to sell, one of their properties, the vacation/prospective retirement house is usually what they try to sell. Anecdotally, early on in the crash, vacation areas cratered pretty quickly. So just because a vacant house is a vacation property doesn’t mean the owners aren’t desperate to sell it. So I’d be curious to compare those census vacancy rates for vacation areas with the rates from 2000. To the extant that they’ve ballooned, they’re still a problem of too much housing for too few people.
It doesn’t matter WHY they are empty. The fact remains they are empty as the deflationary spiral(as it relates to housing) rages on. There will be a time for liquidation by the owners of these empty shacks and that time is right in front of us.
Why wouldn’t they just hold on to them forever at prices where they will never sell? They aren’t just going to give them away.
They don’t need to sell them now that foreclosure/eviction is off the table.
Be nice to see these rented out at least. The rental market here in San Diego is flooded with FB’s who have been pushed out and are flooding our apartments. Rents where I live are going up a good 10% this year leaving us looking at the possibility of moving for the first time in a long time, but where?
And where are you supposed to find tenants where it’s like the Arctic Circle for 6 months out of the year?
Rich, retired boomers of course. Duhh.
Census: Millions of livable homes stand vacant across the U.S.
By Kyle Daly | 03.27.11 | 5:11 am
Newly released Census data reveal that, as other evidence suggests, the recession has battered some areas harder than others. Census Bureau statistics show that 11.3 percent of residences in the U.S., about 13.2 million homes, stood vacant in 2010. There was a great deal of variation, however, among the 50 states.
The “gross vacancy rate” — the percentage of households that were empty at any time during the year — stands considerably higher, at 14.3 percent. The figure of 11.3 percent comes from the year-round vacancy rate, which is a better metric of economic vulnerability, as it doesn’t include homes that are lived in seasonally or households that often mark seasonal variations in residency, such as apartment buildings in college towns.
The count of vacant homes only extends to residences that are deemed livable. The Census Bureau’s definition of vacancy explains:
Vacant units are excluded if they are exposed to the elements, that is, if the roof, walls, windows, or doors no longer protect the interior from the elements, or if there is positive evidence (such as a sign on the house or block) that the unit is to be demolished or is condemned.
…
“Vacant units are excluded if they are exposed to the elements, that is, if the roof, walls, windows, or doors no longer protect the interior from the elements, or if there is positive evidence (such as a sign on the house or block) that the unit is to be demolished or is condemned.”
Sounds like a large swath of Detroit’s housing might not officially be vacant, after all.
So where is the shadow inventory in this? Not easy to pick out, it seems:
Page 3 of the report
‘Vacant year-round units comprised 10.8 percent of total housing units, while 3.3 percent were for seasonal use. Approximately 3.0 percent of the total units were for rent, 1.6 percent were for sale only, and 0.6 percent were rented or sold but not yet occupied. Vacant units that were held off market comprised 5.5 percent of the total housing stock. Of these units, 1.8 percent were for occasional use, 1.0 percent were temporarily occupied by persons with usual residence elsewhere (URE), and 2.8 percent were vacant for a variety of other reasons.’
These numbers are by thousands. The ‘vacant for a variety of other reasons’ came to 3,602 in the 4th quarter of 2010.
For comparison, there were 3,969 vacant year round for rent and vacant year round for sale is 2,052.
So how much is in foreclosure limbo? I’m gonna do a little more digging.
Ben, do a Google search for “LPS Mortgage Monitor”. They just released their data for the end of February. They estimate 2.2MM homes in the foreclosure process (not yet REO, but foreclosure proceedings have begun).
Delinquencies remain about twice the 1995-2005 average,foreclosure inventories are 7.8 times historical “norms”.
From the 3/2011 LPS presentation (just posted):
“Option ARM foreclosures have increased dramatically over the last six months. Non-agency prime is the only area where delinquency increases were observed.”
Lotsa great info in this presentation!
“Loans in foreclosure outnumber monthly foreclosure sales by a factor of over 30:1. Foreclosure starts are over 3 times the level of foreclosure sales.”
p. 23
Total Noncurrent = 6.9 million as of 2011-02
“Total Noncurrent = 6.9 million”
How would you adjust from this number to the likely number of homes in the current or future foreclosure supply pipeline which are likely to come back on the market as REO over the next five years?
PB-
One thing that I’ve been focusing on is new delinquencies…the pig for the most part appears to be in the python. Take a look at the month end January report, there is a nice chart showing the number of “new” 90+ day delinquencies. It shows that in that most delinquent category, there are fewer new 90+ day delinquencies than in 2008 at the same time.
Lots of good data though….I wish they released the data sooner though (I think they are done compiling by the middle of the month, but don’t put on their website until the end of the month.
“(I think they are done compiling by the middle of the month, but don’t put on their website until the end of the month.)”
Perhaps they charge a free for getting the analysis while it is still fresh?
“fee,” not “free” (my Freudian slip obviously was showing…)
Comment by Professor Bear
2011-03-28 10:42:03
Lotsa great info in this presentation!
“Loans in foreclosure outnumber monthly foreclosure sales by a factor of over 30:1. Foreclosure starts are over 3 times the level of foreclosure sales.”
——————
Wow. That’s some good stuff right there.
“And it’s only getting worse: The national vacancy rate crept up to just over 13% according to last week’s decennial census report. That’s up from 12.1% in 2007.”
Does anyone else see the bias in the reporting? Comparing to Pre-Lehman?
Year-on-year, the reported vacancy rate from the front page of the press release rate has fallen year on year from 13.4% to 12.1%. In Q4 2008, the number was 13%. Where I come from, that’s getting better, not worse.
Also worth noting, the lowest number for Q4 data since 1996 was 9.4%, so let’s put the numbers in perspective.
A few years ago a couple in our community invited us to accompany them for dinner at a club facility in an “upscale” gated lakefront community. Afterward we went to see their offspring and spouse who had just flown in from California to spend the weekend there. This place was their third house and it was a very nice house indeed. But they only used it a few times each year for a long weekend or maybe a week.
BTW, the male spouse was a retired Cali firefighter and the parents later bragged about his 6-figure pension at age 40-something (I forget the exact age).
Doubtful.
Storm’s over, it’s safe to come out now…
Gold Declines on Rally to Record Price, Signs of Improving Economy in U.S. ~ Bloomberg
Gold declined for a third day in London as some investors sold the metal after its rally to a record and on signs the U.S. economy is improving. Silver, platinum and palladium also fell.
The U.S. economy grew at a 3.1 percent annual rate in the fourth quarter, revised up from a 2.8 percent estimate issued last month, data showed March 25. Gold reached a record $1,447.82 an ounce on March 24 as fighting in Libya, the Japanese nuclear crisis and concerns about European debt boosted demand for a protection of wealth.
“The U.S. numbers have not been all that awful,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “The market has had a huge move up and the higher we go up, the more chance of a bigger correction.”
That goes to show that you can print your way to prosperity…at least for now.
Correct! And anyone that believes the storm is truly over hasn’t a clue as to what is heading our way.We are not kicking a can, we are kicking a 55 gallon drum.
This future that the can is being kicked to is already engulfing us, whether we reckon it or not.
Years ago, there was a fishing fad that involved a hypodermic needle and nightcrawlers. You would inject the worm with air to make it a floater.
The Fed is injecting fiat into the Wall St Nightcrawlers like crazy, more than they can handle, and they are farting fiat into commodities speculation. Yet, the total amount of money floating around is shrinking. M1 way up, but with a negative multiplier M3 is falling. The biggest asset the majority of people have is falling in price like a rock. Wages are falling like a rock. It’s hitting in areas now that were supposed to be secure; house sales in the NE off 50%, public employees loosing benefits, state and local government layoffs, etc.
While the tide is going out, the Fed makes our situation worse by robbing the many to float the Nightcrawlers. The Nightcrawlers are parasites, but the Fed is the Predator. The Fed wants us to fear inflation, ha, that’s what they have done to us massively for over 30 years. The momentum has changed course. They can’t stop the tide but they can and are making it more painful for most with their triage. Less money, higher prices for what you need, lower prices for what you’d like to sell, unless you’re a Nightcrawler. Welcome to Deflation, Central Banker style. It’s here already with bells on.
Fishing with live bait is plain ol’ cheatin’.
Good post, Blue Skye.
Nice analogy wmbz. Pretty painful on the anatomy!
Each of us needs to “cut a check” for some $200,000 to pay off the known US debt. One could argue this debt should never have existed, but it does.
The ONLY two choices are inflate the debt away or default.
There is no third choice for some Utopian austerity plan where incomes and tax revenues remain constant while cutting expenses and costs to pay off the debt.
The current strategy appears to be to allow the debts to default and then bail out the bondholders, which will end up creating a new breed of ultra wealthy banks and corporations and millions of abjectly poor citizens.
“There is no third choice for some Utopian austerity plan where incomes and tax revenues remain constant while cutting expenses and costs to pay off the debt.”
I agree, austerity plans will only decimate incomes and consequently tax revenues.
My guess is that its going to be inflation. As someone said the other day, that’s when J6P will finally understand that something is terribly wrong (when ground beef is $10/lb).
Pretty much already happening. The decimated tax revenues have of course set those of us whose incomes have already been decimated up against the unions who are waking up to a brave new world having discovered tax revenues are way down and want more tax to make up the losses.
The powers that be should be pumping money into small and medium businesses in every form possible right now to encourage hiring and discourage off-shoring, but the way I see things panning out is pretty bleak.
IMO, if it were going to be inflation, then it would already be inflation. Notgonnahappen. Just IMO.
But we HAVE seen inflation over the past few years. When prices are well above where they would be without all this money pumping, that is inflation.
Also, look at asset prices: bonds, stocks, commodities, even housing are all UP during “The Greatest Recession Since the Great Depression.”
BTW, got gas today, and it is now well over $4.00/gal.
There is plenty of paper precious metals but the real stuff not so much:
http://www.chinamining.org/News/2011-03-25/1301017140d44114.html
Seems to be quite an effort to keep the paper price from going up.
Ahhh, you guys are just a bunch of worriers! The recovery is upon us and things are only getting better. Have a little more faith in the vision and judgement of our economic leaders. A few vacant/foreclosed houses are not going to stop or even slow down the rocket-ride to prosperity that is America.
/sarcasm
You only have a simultaneous major earthquake, tsunami, nuclear meltdown, pan Arabian revolution and European debt crisis about once a century, so enjoy your gold price fear factors while they last.
The year is young. Party on!
Exatctly. The stock market has proven that it can weather any “perfect storm” thrown its way. Wall Street is completely immune to reality - a perfect perpetual money-making machine operating in that sanctity of is own private vacuum.
I used to think they were kicking the can, because they hoped a “black swan” would come around, and bale them out.
Now, I think it equally as likely that they are looking for a “black swan” to come along, so they can blame/pass the buck.
PB - gold, like all risk investments, will fall in the short term if quantative easing stops. Buying a bunch of gold puts would be a good insurance play for gold investors if this really does come to pass. The trillion dollar question is can the Fed really stop buying US treasuries? A 13 trillion dollar debt which rolls every 3 years is very expensive to finance especially if buyers become scarce. Bill Gross doesn’t want treasuries. I don’t think the Japanese are going to be in the market. But the Fed Governors seem to be spreading the word that even QE2 may be ending early.
“The trillion dollar question is can the Fed really stop buying US treasuries?
…
Bill Gross doesn’t want treasuries.”
I’m wondering why Gross doesn’t want them if Fed purchases are a sure thing for the indefinite future?
Gross must know that “da FED” is on the endangered list?
Professor:
What about Japan? They are going to need a lot of cash to rebuild….will they sell UST’s or quit buying?
Will the Japanese people use their savings to buy the new Japanese Tsunami bonds….like the war bonds my parents did in WW2?
“They are going to need a lot of cash to rebuild….will they sell UST’s or quit buying?”
Sounds like a good time to sell PMs to raise cash for rebuilding.
I have the feeling not all of those towns and villages will be rebuilt. Population in that part of Japan has been shrinking for years.
I have the feeling that nothing will be built in the exclusion zone for quite a while. How large that zone will be is the troubling question.
Don’t the Japanese have their own printing press?
The word is the Japanese printing press is down, waiting on parts…
I have the feeling not all of those towns and villages will be rebuilt. Population in that part of Japan has been shrinking for years.
Japan has already reached the tipping point of population decline. The country has a rapidly aging population with relatively few young people coming into reproductive age.
Same thing will be happening in China by around 2050.
“Japan has already reached the tipping point of population decline.”
Yup, that’s what happens when the Family Formation costs sail into the stratosphere. We are also starting to see this here in the USA. Of the few 20 somethings I know, none are even thinking of having kids someday, unless they are Mormons.
Sorry, but I just gotta chime in…Family formation costs? Only intelligent, responsible types are considering such mundane factors. The idiots with no means are breeding like crazy as usual. What you have stumbled upon is the “Idiocracy Phenomenon”. See the movie if you must know details of the outcome -as painfully stupid as it is to watch, the movie offers tremendous insight on the future of humanity.
“Of the few 20 somethings I know, none are even thinking of having kids someday, unless they are Mormons.”
The way things are headed, pretty soon Mormons may be the only surviving remnant of the U.S. Caucasian subpopulation.
Funny, my wife and I have one couple in our group of friends that doesn’t have kids. And contrary to what I would have thought, literally all of those with kids have more than one. All have jobs and as far as I know are supporting their brood on their own dime.
Not sure if this phenomenon is occurring elsewhere or only in my little world, but it seems like people are having lots of babies recently. Could also be a function of my age and the age of the people I associate with. However, still seeing most large families (4+ kids) in what appear to be lower income households families. The one exception for me is a mormon friend that has 4 kids and also makes a good living.
Funny, my wife and I have one couple in our group of friends that doesn’t have kids.
Wouldn’t that be an example of friend self-selection at work? Meaning that if you’re married with kids, it’s likely that your friends are too.
Yes, that makes sense, except we don’t have any kids ourselves so doesn’t apply in this situation.
We’re always saying we need to befriend more kid-free couples so we can do more kid-free activities. It’s been much harder to find other couples that don’t have kids than I would have thought. Love my nephews and friends’ kids, but would like to take better advantage of our DINK status as well.
Also good to have something to offset the “when are you having kids” bombardment my wife gets from all the mothers out there. Apparently it isn’t possible to be happy without having kids. I guess the euphoria we feel while we spend our time and money however we choose is something other than happiness. Maybe a side effect of too much sleep and/or vacations.
I am surprised silver is $37 oz since there is a lot of silver available you can still mine for $5-10 oz…
I see this type of number quoted quite often. Where are you guys getting this number?
I think developing new sources is a bit higher than that.
Much higher just look at this recent article about gold mining: http://uk.reuters.com/article/2011/03/22/uk-mining-summit-idUKLNE72L01W20110322
Foreclosures’ hidden risk: Debt that haunts for two decades
By Kimberly Miller and Christine Stapleton
Palm Beach Post Staff Writers
Posted: 11:21 p.m. Sunday, March 27, 2011
He once lived just steps from the ocean in a home valued last decade at more than $500,000 . But John Ericksen has fallen - far - and the bank that took away his Juno Beach home last year isn’t done with him yet.
In November, Riverside National Bank won a $151,461 claim against the down-and-out handyman who now resides in a one-bedroom trailer in Riviera Beach’s scruffy Ocean Tide mobile home park.
Called a “deficiency judgment,” the claim is what Ericksen, 59, still owes on the loan for a home he’s already lost.
“They are actually trying to get money from me?” said a surprised Ericksen when contacted by The Palm Beach Post. “Good luck with that one. I’m pretty much out.”
In Florida, banks have five years to file for a deficiency judgment and up to 20 years to collect.
But nearly six years into the state’s foreclosure onslaught and with more than 100,000 foreclosures filed in Palm Beach County since the real estate bust, the number of deficiency claims sought by the banks is minuscule.
Foreclosure defense attorneys and mortgage industry experts say that despite the lack of claims, the deficiency judgment is not a hollow threat. Banks are just too overwhelmed right now processing the foreclosures to switch gears and pursue the money they’ve been shorted.
For homeowners who thought their worst financial days were behind them when the foreclosure was final, experts predict things could get much worse.
“In two or three years the banks are going to get caught up and they will want to get that money back on their books,” said Melva Rozier, a West Palm Beach attorney who handles foreclosures.
And it doesn’t seem to matter if you have nothing.
http://www.palmbeachpost.com/news/foreclosures-hidden-risk-debt-that-haunts-for-two-1353778.html?cxtype=rss_news - -
“Debt that haunts for two decades.”
Some bad news for the free lunch crowd.
No FB dollar shall be allowed to escape. What dollars that can’t be gotten now will be gotten later.
There is a message here for the thousands of lemmings who think they can stay and not pay, but I doubt if they will understand it.
I am recalling an old adage, something about difficulty in obtaining blood from hard, cold stones.
The FB’s ability to pay is a function of time and lenders/collectors may indeed adapt to increasingly rejoining the collection effort down the road as the FB’s fortunes stabilize or improve. Those loans are a claim on the FB’s labor and in a wired society those FBs will find it hard to escape. It’s a full time job to live off the grid, and alot of the FBs we read about don’t seem like they could live like the Unabomber.
“…don’t seem like they could live like the Unabomber.”
Not sure about other parts of the country, but our rabbit population seems extremely healthy these days.
What if all the FBs are indefinitely collecting UE benefits? Is the system going to go after the system?
Who can indefinitely collect UE? Really looks like 99 weeks is all anyone is going to get. As the headline UE number slowly edges down (for whatever reason), the 99er’s are fast being forgotten. The 99er’s would be wise to consult with some of our veterans of foreign wars for the low down on what happens to marginalized folks in the collective conscience once the herd “moves on”.
What happens in 99 weeks when the same people still are without jobs? What’s the matter, you don’t think extend-and-pretend applies to the jobless? Have you learned nothing about how things now work?
Lizzie, you don’t get to make things up just because they fit your sense of outrage.
If you have evidence that anyone is getting UE money after they use up 99 weeks, provide it. I have heard nothing of the sort, and I’ve been paying attention.
As for what happend when the 99 weeks are up and they don’t have jobs? They stop getting money. Extend and pretend only applies when tyou have something as complicated as bank reserve requirements and generally accepted accounting principles to mess around with. It doesn’t apply to a real live person who either is or isn’t getting a check.
With all due respect, Polly, how did we arrive at 99 weeks then? Did they not just recently expand the program? What makes you think the lawmakers won’t do it again? I do know a guy who knows a guy who has been getting UE for over three years (I know it sounds a little weak on the verifiability). Systems can be scammed (lazy disgruntled Americans are great scammers). Don’t forget alternative programs which are indefinite such as food stamps, either. Is everything black and white with you attorney-types?
The 99 week extension was quite a while ago. There were a lot of articles about people reaching the end of their 99 weeks a number of months ago. At no time since then have I heard anything about an extension. There is no way such a bill would get out of committee in the current House of Representatives. Did you miss that we have a new Congress?
The fact that you might have one example of a person who is getting more money than the rules allow means nothing. That is not an extension of the program. There will always be a few people who manage something like that. Having two social security numbers would be the most obvious way to pull it off, but that isn’t a program. That is fraud.
And food stamps aren’t UE checks. You can’t use it to pay rent or the doctor or sneakers. UE pays about half of your base salary up to a fairly low maximum. Food stamps don’t care how much you used to make - just how little income you have and how many mouths you have to feed.
There is plenty of stuff to be upset about in this economy without making things up.
I bet it somehow gets extended further - or a new progam will be started or some kind of hocus-pocus, at which point I will post an “I told you so”.
We are getting off the original idea which is: How will lenders (the system) collect debt from the jobless, penniless masses?
Liz, you know many, many people have used up their 99 weeks, right? My wife hit 99 weeks a year ago and has got zero since. She spend about a year trying to get a job with no success then decided to go back to school. I’m happy to say she is graduating from nursing school in May and expects to have a job sometime this summer.
I would say benefits won’t be extended again. A few places like Michigan and Florida are even cutting them.
“I bet it somehow gets extended further.”
Not with a GOP controlled house.
howiewowie: Where did the $ come from for her to go “back to school”? I am guessing she is not paying cash. There is always a program after the program it seems like.
GOP-controlled house means zip. You have been sold the proverbial bill of partisan goods. An independent-controlled house, now that would get my attention.
OK, liz. Put a date on it. We all know predictions are useless without some sort of time frame. Will the extension be before Memorial Day? July 4th? Labor Day? End of federal fiscal year (September 30th)? Thanksgiving? New Years?
Give us a date and we’ll revisit the issue then.
Well lets see…the last extension went through in late december piggybacked with the Bush tax-cuts-for-the-rich extension, that extension was good through the end of March. That being the case, I am guessing new stuff is probably brewing right now that we do not yet know about. I give it a month, maybe less before the “crisis” is being formally addressed/comromised through Congress. The bene’s will be retro, of course.
OK, I’ll put it on my calendar for the end of April.
“…like the Unabomber.”
Be vewy vewy qwiet!
I’m wookin’ fo wabbits…
I’m a mean mistweetah
A wabbit feastah
And I pwedict
A bwoody Eastaw
A scuwowing shadow
And dah shadow was dis wabbit
And dah night aiwah echoes
Kill dah wabbit!!!
Kill dah wabbit!!!
“Well lets see…the last extension went through in late december piggybacked with the Bush tax-cuts-for-the-rich extension, that extension was good through the end of March.”
But it wasn’t extended beyond 99 weeks. 99 weeks was extended to more people, but once you’re a 99′er, the party’s over. There’s no way the GOP will extend those bennies beyond 99 weeks.
99 weeks is it. Period.
After that you’re either working or heading for jail.
Crime is WAY up in my neighborhood and I live in a very middle and very large, middle class neighborhood. (30,000+ homes within a 5 miles radius)
I don’t even want to think what it’s like in the lower end nabes but I’ve heard it’s bad. Real bad.
Liz, the money is from student loans. We will start paying them back six months after she graduates.
Nothing a BK won’t solve.
““In two or three years the banks are going to get caught up and they will want to get that money back on their books,” said Melva Rozier, a West Palm Beach attorney who handles foreclosures.”
We’ve said before on the HBB that this is going to happen. I also wonder, given the banks have 20 years to collect, if they’ll go after the former FBs when its time those folks to withdraw money from their retirement accounts. Today money in certain kinds of retirement accounts is protected. But withdraw that money and, if its in the 20-year collection period, a portion of it would be fair game, no?
The Stay-and-not-pay crowd think they are screwing the banks but actually they are doing the banks a favor.
If a house is left vacant then it deterioates quite rapidily and not only brings down its own value but brings down the value of the houses next door and down the street. It would be worthwhile for the banks to PAY someone to live in a house just to keep its value up and the value of the surrounding houses of which it holds the mortages for.
Combo:
Man i wish landlords would understand that…you don’t screw a good tenant…and if you want to break the lease by selling the house you pay the tenant to move….
“It would be worthwhile for the banks to PAY someone to live in a house just to keep its value up…”
The question, for those who are into this sort of thing and whose circumstances are sufficiently felxible, is that of exactly how to qualify as the person the banks PAY to live in a house, just to keep its value up.
I’m guessing one of the qualifications would require the absence of kids.
“I also wonder, given the banks have 20 years to collect, if they’ll go after the former FBs when its time those folks to withdraw money from their retirement accounts.”
I don`t think it will be the banks collecting. I think the debt will be sold to a new ferocious breed of bill collectors who will have a lot more to go after than $5k-$10k in bad CC debt.
In fact I will make a prediction. There will be a “new law” written to protect victims of foreclosure being hounded by bill collectors for deficiency judgments at funerals and weddings.
The best bankruptcy is a well planned one, but in a pinch an unplanned bankruptcy will satisfy.
Corollary to “the best divorce is a well planned one…”
‘“They are actually trying to get money from me?” said a surprised Ericksen when contacted by The Palm Beach Post. “Good luck with that one. I’m pretty much out.”’
Sad news for lenders: You can’t squeeze blood out of a turnip.
This reminds me of the latest episode of The Simpsons. It seems that Homer’s former psychologist is down on his luck; since The Great Recession has eliminated all demand for luxury services, he lives with former aromatherapists and travel agents at a homeless encampment. Homer nonetheless hires him to treat Bart.
Later, when Homer and Bart decide to sue for malpractice, the doc says, “Go ahead and sue me; all I have to my name is the split tree where I live.” The last scene shows Homer and Bart kicking back in front of the TV, inside the hollow of the split tree.
“Sad news for lenders: You can’t squeeze blood out of a turnip.”
There are a lot of these “victims” who are not turnips. And there will be plenty of time to go through the vegetable garden.
Better luck trying to cash a Greek bond.
“Better luck trying to cash a Greek bond.”
I know 1 gentleman that walked away from 3 Fl. condos and he has $450k in the bank, $250k which came from cash out refis. That has to make him at least a tomato. Oh, and he has said It`s no problem they aren’t going after anybody.
That guy already has a plan to stash that cash and file BK I am sure. The proverbial “taxpayer” will never get any of it.
Did you know they made 1 bedroom Duplex trailers?
I think they were 12×70 with 2 separate entrances 1 bedroom, bath and a LR/kitch combo…..cheap, rentable by the week…saw a lot of them in SC
In November, Riverside National Bank won a $151,461 claim against the down-and-out handyman who now resides in a one-bedroom trailer in Riviera Beach’s scruffy Ocean Tide mobile home park.
“They are actually trying to get money from me?” said a surprised Ericksen when contacted by The Palm Beach Post. “Good luck with that one. I’m pretty much out.”
Methinks that he’s not the only one.
Recall that old expression about the difficulty in getting blood out of a turnip. Then visualize a great big turnip field…
Repeat after me: Nuclear energy is safe, cheap and clean.
After reading some of the reports this morning, a little birdie tells me there’s gonna be some big moolah in cancer treatment centers down the road. And, gee, no one will know why there’s so much cancer.
Got granite counter tops?
Nuclear energy can be made safe, cheap and clean.
Sure combo, but it’s very expensive to do so, and unhealthy, not to mention astronomically dangerous.
Not on this planet.
Palmy, I presume you no longer drive or ride in a car?
I presume you are related to the gal who suggested I not wear a condom.
LOL, Blue Skye!
I have not posted recently on the subject because because after the crisis hit, I bought some uranium stocks at the low. I wrote call options on the stocks to cover myself. It has worked out quite well even with today’s dip. The smart money knows nuclear will be back. This only means more will be built in the developing countries and fewer in the developed. There will be more cancer caused by burning coal than this leak. Despite all the hype no one has died from radiation and the chance for a catastropic event has now passed. The reactors are ruin and the local area will have to have a serious cleanup but the death of nuclear, no way.
The Chinese coal pollution problem and its impact on the West Coast is even worse now:
http://select.nytimes.com/gst/abstract.html?res=F40C13F739550C728DDDAF0894DE404482&pagewanted=1
“a little birdie tells me there’s gonna be some big moolah in cancer treatment centers down the road”
Don’t they have a National Health system in Japan?
Sometimes we gringos forget that we’re the only 1st world country with a for profit health care sector.
Japan has a for profit healthcare system although hospitals must be non-profit. You are not required to have insurance in Japan.
And check out TR Reid’s book, Sick Around the World, for an American’s first-person account of how the Japanese health care system works. He and his family were well-treated in this system. And very respectfully. Much more so than what one experiences here in the USA.
There are new nuclear technologies which effectively limit the maximum heat generated in the way the rods and alloys are created. These can go for decades producing heat. The older water cooled models? Well what happens when the cooling system is damaged?
Traveling Wave Reactor
Guy probably can’t even pronounce New-Q-Lor.
Realtors Are Liars
And by April 15th the Federal Income tax is gonna make realtors are liars more than selling real estate.
No sales = less lies
More like; No sales=more grandiose, outlandish tall tales
Not liars. More like “yes men”. They tell buyers and sellers what they want to hear.
Realtors are Repeaters. They don’t generally make up original lies, but they repeat all the ones they hear.
In other words, they are echo-chambers.
Is it true that there are 12 million more American foreclosures expected over the next five years? If so, why would anyone in their right mind buy a home at this point, given the fire sales that await?
American Dream Turns Into Nightmare
Elected officials should act to prevent bank fraud.
Netra Halperin · Kīhei
POSTED: March 24, 2011
The Wall Street, Lehman Brothers, IndyMac, mega-bank crisis of 2008 was just the tip of the iceberg of America’s financial and real estate market de-stabilization. It has morphed into the foreclosure crises with 6.6 million Americans having lost their homes since 2007 and 12 million more expected nationally within the next five years.
Unfortunately, Maui has the highest per capita rate of island foreclosures, joining over 20,000 families in Hawaii suffering through this traumatic experience during the last year alone. The federal government gave banks like Bank of America billions of dollars for loan modifications. These financial institutions, instead of providing loan modifications to struggling homeowners, pocketed most of the money, led borrowers to believe that they would be eligible for modification, and then evicted them from their homes anyway!
On the surface, it appears simple: homeowners aren’t paying their mortgages, so they should lose their homes. However, it is actually much more complex.
It all started with banks selling inflated mortgages to Wall Street investors. By the 1980s, investors began suing the banks for fraud. To settle with investors, banks needed to raise money. Starting in 2003, the banks created defective loan products called “ARMs” that were set to explode into higher payments that they knew the borrowers would not be able to afford. Normal income and verification requirements were intentionally eliminated. This lulled people into loans, and they were reassured “not to worry” about the eventual interest rate hike and promised that they could refinance.
Borrowers were duped, much like Hawai‘i’s previous administration, who bought $647 million in securities in mid-2007 after the Wall Street bubble burst, totaling over $1 billion in securities’ loss aka “shortfalls;” or Maui County’s previous administration, who also in 2007, was conned by Merrill Lynch into purchasing $44 million in (what quickly became illiquid) student loan auction rate securities. This bank fraud is the primary reason that the people of Hawai‘i and Maui County had to endure teacher furloughs—and continue to be subjected to devastating reductions in other critical services.
…
If so, why would anyone in their right mind buy a home at this point, given the fire sales that await?
Because you live in an area that the bust is going to miss? I don’t expect many foreclosures in DC, except for the outer suburbs dotted with crappy McMansions and attached product.
Oxide, the bust is not going to “miss” your area. It’s not going to miss anywhere. It is creeping in toward DC, just like it’s creeping toward everywhere else.
No surprise that government workers are specially protected from a government-caused problem, and it will be no surprise when it turns out that they can not prevent the ramifications of their own actions.
Don’t be one of those “It’s different here” people.
The “American dream” turned into a nightmare when prices of a basic need became an investors plaything and EZ credit caused prices to more than double, leaving millions unable to afford any home.
I am not saying it is right to take a loan bigger than you can afford, but I clearly remember the sales pitches from Realtards back then telling me to get in while I still could and let the house appreciation take care of any problems I might have.
I would jeer at them telling them I was already priced out for ever. One pressed, and I started to tell her about a place I did have an interest in. I went on to tell her of the 19 bedrooms and 5 acres of beach front property in La Jolla as well as a nice gatehouse etc. I even told her it was discounted by a million making it a steal at $29 million. She incredulously told me I could not afford “that” to which having sprung the trap I responded I could not afford a $600,000 one either and she gave up…
Good one, GH.
Homeownership should not be part of the American Dream
Posted by Nin-Hai Tseng, writer-reporter
March 15, 2011 8:30 am
Most banks want to securitize loans made to borrowers buying homes with little money down. Did we learn nothing from the financial crisis?
…
Cash is king Professor. Condos in Palm Beach County are selling to cash buyers at about 12 cents on the bubbly dollar. Banks need to go back to a conservative 20% down model and hold the note.
And mortgages should be written for no more than ten years, fifteen years for expensive areas.
5 year mortgage paper, 7 year max. Just like the old days.
In my neck of the woods, a 2-3 bed rambler 1960’s crapshack runs about $300K. With 10% down and a 5-year mortgage at 5%, the monthly PITI runs approximately $5500 a month, which is more than my entire take-home pay.
I recall that a lot of people rented for life in the old days…
“5 year mortgage paper, 7 year max. Just like the old days.”
Wow, how far back was that?
My fathers first house right after the war and his second house in the 1960’s. Also my grandfathers homestead in the 1930’s was a 5 year note with a balloon payment at end.
I’ll bet if loans were 7 year max (sounds like a car loan these days) then that $300k crapshack would still be $80k and ordinary folks could still afford to buy it. Might still take a bit of doing, bot affordable for regular working folks.
Most bank robbers want to legalize bank robberies.
Who are we to stand in their way? They’re capitalists. CAPITALISTS I SAY.
That is true, regulation is impeding commerce in the form of bank robbery.
Truth is that bank robbery is legal when the bank is doing the robbery.
Most bank robbers want to legalize bank robberies.
Actually the smart ones would probably prefer that it remained illegal so that it’s easier to keep the business to themselves. What they really want is some sort of assurance that when they get caught they can avoid jail and instead pay huge fines upwards of maybe 10% of the amount they stole.
Shoots & ladders (aka “tricks and traps”) housing market to end soon?
New Direction Sought for Mortgage Market
Task force proposes ending Fannie Mae, Freddie Mac
By Andrea Hayley
Epoch Times Staff Created: Mar 24, 2011 Last Updated: Mar 24, 2011
WASHINGTON—A government proposal to phase out ownership of mortgage giants Fannie Mae and Freddie Mac has brought to the fore Americans’ dream of home ownership and how to preserve it within private markets.
“I really believe that home ownership is part of the American dream for a lot people, and I believe that you have to start from that place, but it’s got to be sustainable. That dream can become a nightmare if it is unsustainable,” said Jared Bernstein, economic adviser to Vice President Joe Biden, and also the executive director of the Middle Class Task Force.
As the housing bubble crash of 2008 showed, “it can become a slide out of the middle class as much as a ladder into it,” Bernstein said on Thursday in a discussion with the Atlantic and National Journal.
The senior economist’s comments reflect the views of a white paper released in February outlining the government’s position on housing market reform. “Reforming America’s Housing Finance Market” was released by the Department of Treasury and HUD.
…
Funny how no one wants to talk about jobs, especially steady, good paying jobs where you don’t have to find a new job and migrate like a hobo every 2-3 years.
Instead they continue to push on the string, hoping that tax credits and other nonsense will somehow get people who earn $500 a week or less to buy a house.
Lets be real, if you are earning $500 a week in todays world, you are in a very bad way. I make a whole lot less than I used to, but a whole lot more than that, and we do not live grand lives at all…
GH,
I think a lot more people than you’d suspect have to live on $500/wk. (or less). This is exactly the problem, as Colorado has pointed out.
Option ARMs: American Dream Or Mortgage Nightmare?
by Lisa Smith
Option adjustable rate mortgages (ARMs) give would-be homeowners a way to purchase a big house with only a small payment. They also give current homeowners a way to reduce their mortgage payments. While these benefits may seem to be just what the doctor ordered following years of rising prices in an overheated housing market, BusinessWeek magazine has labeled option ARMs “Nightmare Mortgages.” In the September 2006 article that sported that name, BusinessWeek stated that the option adjustable rate mortgage might be “the riskiest and most complicated home-loan product ever created.”
…
Oh, they will mostly all be fine, as long as wages escalate and interest rates stay near zero.
“the riskiest and most complicated home-loan product ever created.”
Which is why they were meant for speculators and investors who used them for short-term cash flow purposes. IIRC, they weren’t meant to be used for end-users. Since then, they’ve turned into “affordability” tools to allow people to “get in.”
Imagine a world where we only allow those with a 20% down payment to “get in” and we quit trying to put everyone in a house. There’s part of your solution to “affordable housing.” The end game is that no “risky and complicated” ARM related products are needed for one to afford a home.
Good lord, these were the primary cause of the bubble to begin with. With ordinary “old fashion” loans, docs and 20% down the bubble would have got about 1/3 of the distance it did.
Getting A Mortgage: How The Process Has Changed
Thursday, March 24, 2011
In the heyday of the housing boom in 2004 and 2005, lenders used to joke that “all you need to get a mortgage is be breathing.” Times have changed. Between the real estate market debacle and the banking crisis, standards for loan approval have tightened far beyond breathing.
…
No, say I don’t have to produce….
A pulse?
Joe Bageant passed away this weekend :-(. Thanks to whoever it was here that introduced me to him.
March 9, 2011 1:18 AM CST
Remember those who struggle
by Gregory Poole
Anyone who has read my most recent columns has become more familiar with the problems that exist on this campus. But while we sit here and debate the detriment of inflated housing prices or being forced to purchase a meal plan, these small issues are trivial compared to the problems that many families face every day during these hard economic times.
To them, having a place to call home is a tremendous blessing that, at the moment, many Americans cannot say they have. It is after watching documentaries on the effects of the recession and world poverty that I can now say that we should certainly be thankful for what we have.
On Sunday, the CBS show “60 Minutes” showed the forgotten people of this recession: the children. When the housing bubble burst and factories began to close at an accelerated rate in 2008, many families who were living the American Dream suddenly began to live a nightmare, as they lost their homes due to a lack of income to pay the mortgage. As a result, many children who went to upscale and middle-class schools, were in extracurricular activities, and lived in middle-class neighborhoods now find themselves living in hotel rooms, hungry and destitute.
…
Welcome to the last 30 YEARS.
Editorial: Hard lesson on easy credit
Wednesday, March 9, 2011
Home ownership plays a leading role in the uplifting drama that is the American Dream. But when the financial industry, with Washington acting as an eager accomplice, granted too many risky mortgage loans, an economic nightmare inevitably ensued.
So don’t misread this recent front-page headline in Wall Street Journal as bad news: “Banks push home buyers to put down more cash.”
When lending institutions make it more difficult to obtain a mortgage, that makes it more difficult in the short term for the housing market to recover from its devastating decline. But over the long term, requiring a down payment that reflects a persuasive ability to pay off the loan is simply good business.
Last year, roughly 3.8 million U.S. homes went into foreclosure, a record that experts predict will be eclipsed this year. That devastating trend stems directly from the folly of too-easy credit.
From the Journal: “The move to force home buyers to lay out more cash is driven mostly by banks, who have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices. Many home buyers placed little, if anything, down during the boom.”
That “boom” became a colossal bust with terrible consequences far beyond the housing industry. Many banks are now requiring down payments of 20 percent — or more.
Treasury Secretary Timothy Geithner told the House Financial Services Committee last week that Washington should still help low- to moderate-income Americans get home loans.
But that doesn’t mean borrowers — especially those with shaky credit histories — should be encouraged to take on mortgages they can’t afford.
…
A watched pot never boils.
* HEARD ON THE STREET
* MARCH 28, 2011, 9:30 A.M. ET
Rate Rise Likely to Jolt Stocks
By RICHARD BARLEY
Investors beware: The time of easy money is drawing to a close. The European Central Bank has been hammering home the message that a rate increase is more than likely April 7. The start of a rate-hiking cycle often upsets risk assets as investors adjust their expectations. This time is unlikely to be different.
…
Don’t worry. This will take care of it. It will give people confidence.
http://www.washingtonpost.com/politics/odds-of-government-shutdown-rise-as-parties-snipe-over-faltering-budget-talks/2011/03/26/AFdVK9cB_story.html
(Washington Post had a major site revision a week or two ago and I can no longer cut and paste a paragraph or two for a teaser. The title shows up in the text of the link.)
“The title shows up…”
Odds of government shutdown rise as parties snipe over faltering budget talks
They risk overposturing if that is a word. Both parties are essentially the same when it really comes down to who they represent and who they do not (special interests which can muster sufficient money to interest a politician are represented, while the rest of us rot)
Polly, can you cut and paste the whole article into the reply box, and then delete everything except what you want? It’s working for me…
—–
“Since $10 billion in cuts had already been approved in two temporary funding resolutions, that position would require Democrats to come up with only an additional $20 billion to $25 billion, some of which Democrats hoped to take from health-care and agriculture subsidies programs.
But on Tuesday, according to Democrats, House Republicans changed the terms, insisting that negotiations start with the House-passed bill and that Democrats identify the cuts they couldn’t accept….Such a move would force Democrats to go on record defending programs that Republicans had identified as wasteful.
…“If Democrats don’t have a plan, do they intend to shut down the government because they can’t agree among themselves?” Boehner asked in a statement issued not long after Cantor’s. “The status quo is unacceptable, and right now that is all Washington Democrats are offering.”
Schumer’s office shot back in a statement that “after days of positive negotiations, with significant flexibility shown by the Speaker, the House Republican leadership is back to agonizing over whether to give in to right-wing demands that they abandon any compromise on their extreme cuts.”
—–
Will There Be a QE3?
By Larry Doyle Mar 28, 2011, 8:59 AM Author’s Website
Is there really any doubt that virtually all our markets, especially commodities and with the exception of real estate, have been propped higher as a direct or indirect result of the Federal Reserve’s policy of quantitative easing? I have no doubt.
The question remains outstanding just how far the Fed, in concert with its banking friends on Wall Street, has gone and will go to further manipulate our markets. That question may never be fully answered. What a shame! For those who believe a preponderance of truth, transparency, and integrity are the cornerstones for long term fiscal health and financial well being our markets remain a decidedly challenging arena.
…
Why except housing? It seems that the PTB have managed to prop up housing prices quite nicely, TYVM!
Yawn…
The world’s third-largest bank is bust
By Simon Caufield Mar 28, 2011
The Fed will have to fire up the printing presses again
The world’s third-largest bank is bust.
It is a US bank with $2.55 trillion of assets. Only BNP Paribas and Royal Bank of Scotland are larger. It’s way too big to fail.
When it goes bust, it will be bailed out. And Ben Bernanke, chairman of the US Federal Reserve, will have no choice but to fire up the printing presses all over again.
Today, I want to tell you how to protect your wealth against the inflationary impact of the dollar flood that will result.
…
“It is a US bank with $2.55 trillion of assets.”
Is this story for real? If so, why no mention of the name of the bank in question.
‘Tis a puzzlement.
Name is there, further down the article. None other than the Fed.
How can you go bust when you have the franchise to conjure money out of thin air?
Exactly. Makes no sense to me, either.
why no mention of the name of the bank in question.
The world’s third-largest bank is bust
….Have you guessed which bank I’m talking about? It’s the US Federal Reserve Bank itself.
The Fed is bust – and that’s not just my opinion
I’m serious. It may be the US central bank, but it’s still a bank like all the rest….
Who bails out the FED?
The technology called the printing press…
Sounds like an internet rumor. The Fed can print money therefore it cannot go bust.
The article implies it is bust by banking standards, but we know better.
And how is the freakin’ Bank of Scotland BIGGER than the Fed????
Apparently it has a larger “balance sheet” whatever that means. I guarantee you that if both were called on to pay up $10 trillion, one actually could and the other could not…
The Financial Times
Bernanke braves the Fed-bashers
By Clive Crook
Published: March 27 2011 20:06 | Last updated: March 27 2011 20:06
Ben Bernanke, chairman of the Federal Reserve, chose an interesting moment to announce, as he did last week, that the Fed will depart from tradition and start holding quarterly news conferences. The first is scheduled to follow the next meeting of the Federal Open Market Committee on April 27. The Fed chief will not be short of things to discuss.
Unless common sense intervenes – rarely a winning bet in Washington – the US government will run up against its statutory debt ceiling in late April or May. The prospect of a government shutdown, and even of a default on US government debt, could be imminent. In addition, the Fed’s controversial bond-buying programme – QE2, as it is known – is due to end in June and questions arise about what, if anything, will replace it. There are grumblings about bank profits. There are grumblings about inflation. Analysts want to know what the Fed proposes to do about the $2,000bn of bank reserves on its balance sheet.
Meanwhile, Fed-bashing is again all the rage on Capitol Hill. Many Republican newcomers to the House of Representatives want the central bank brought to heel.
Public opinion is hardly rallying to the Fed’s defence. Mr Bernanke is no hero to the US public… . Voters think the central bank is partly to blame for the “Great Recession” (which is true, though the big mistakes were on Alan Greenspan’s watch) and that its efforts to stabilise the economy have failed at ruinous cost …
…remember two things. First, in the US, the decisive interventions that stopped the recent recession from turning into something much worse were made not by Congress or the Treasury, but by the Fed. Second, those interventions were not exclusively “monetary” – thus falling within the terms of the classical case for central-bank independence – but quasi-fiscal.
…
Can you imagine Terry Schiavo’s doctors looking at her smiling face on video, saying, “She’s looking pretty good. Maybe it’s time to remove the feeding tubes.”
Fed Should Consider Curtailing Stimulus Program, Bullard Says
March 28, 2011, 12:04 AM EDT
By Scott Hamilton
March 28 (Bloomberg) — St. Louis Federal Reserve Bank President James Bullard said policy makers should review whether to curtail a plan to buy $600 billion in Treasury securities, noting that the U.S. recovery may not need that much stimulus.
“The economy is looking pretty good,” Bullard said to reporters in Marseille, France, on March 26. “It is still reasonable to review QE2 in the coming meetings, especially this April meeting, and see if we want to decide to finish the program or to stop a little bit short,” he said, referring to the second round of so-called quantitative easing.
…
In the end, that’s what they did, no?
Not even remotely. Removing a feeding tube to allow her to die is very, very different than removing a feeding tube because you think she is “looking pretty good” and doesn’t need it anymore.
Yep. The latter would clearly be a colossal instance of malpractice.
Everyone foolishly thinks Terry’s heart monitor is the stock market. Little do they know the stock market monitor is hooked up to a parasitic vampire squid’s strong pulse as it lays hidden under a sheet with its own feeding tube drawing Terry’s fluids as fast as they are administered by the doctors.
Terry Schiavo? Really? Seek help.
Sorry if this is a re-post. I thought it was worth the read:
www appraisalinstitute org/ano/newsletter/DisplayNwsLtrArticle.aspx?volume=12&numbr=5/6&id=13720
Four States Consider Legislation Barring Distressed Sales as Comparables
“Four states – Illinois, Maryland, Missouri and Nevada – are considering legislation that would prohibit or restrict the use of “distressed sales,” such as foreclosures and short sales, as comparable sales as a part of a residential real estate appraisal.
Homebuilders and real estate sales agents are concerned that the prevalence of distressed sales, and their subsequent use as comparables, is resulting in the appraised value of residential properties not matching the contract sales price, or in the case of new construction, the cost to build.”
The appraisal has to match what I “need” to get out of the house.
Below average sales prices should not be used to figure the average.
If we price houses below the building cost, we would have to stop building houses.
So how do you know building costs? Are you actually going to believe KB? How about Centex? Pulte? How about your private guys? You think they’re any less of a liar than realtors?
Building costs are generally set and not terribly hard to calculate. Building costs have exceeded distressed sales for the past year plus in South Florida. Why they’re still building at all is the mystery to me.
“Building costs have exceeded distressed sales for the past year plus in South Florida.”
I don’t understand. What does this mean?
Why should reality (foreclosures and short-sales) stand in the way of successful marketing?
Why should reality (foreclosures and short-sales) stand in the way of successful marketing?
Or higher tax appraisals.
When I went to protest my prop tax appraisal a few years back, the couple next to me were being told the price they paid for their home that year wasn’t relevant because it was “too low”. So the appraisal office simply wouldn’t consider it, even though it’s the most relevant piece of information in determining the value of the house.
But the fraudulent purchase that led to the foreclosure/distressed sale represents true value and was used as a previous comp to set property tax rates, etc.
Exactly.
Yeah, I could see that zany idea getting traction in IL alright. Unduanted in their efforts to legislate fariness the boyz at the statehouse will now attempt to legislate reality. Maybe they could pass a non-binding resolution undoing the Japan earthquake while they’re at it.
So, these states are trying to make sure that there will be NO private mortgage market in their states without…say…50% minimum downpayments? Because that is what I would do if I were a lender. You can’t adjust from neighborhood to neighborhood or you would get accused of actually using the distressed sales as limits on the amount loaned.
Even the GSEs would have to think three times about lending if they weren’t allowed to use all the sales as comps.
How much “consideration” is actually going on here? Is there any real legislation that people think might pass?
“Is there any real legislation that people think might pass?”
Links to the bills in question are at the bottom of the article.
If I were a betting person, I would bet that any entitlement scheme whatsoever would be passed in MD. This is an entitlement scheme for the realtwhores and their henchment, therefore it will pass and pass big. The MD consumers have brains that have morphed into cotton candy, so they will believe this is wonderful. Meanwhile the illegal aliens, who have been welcomed with open arms, will continue to rape, stab, shoot and drunkenly run down their benefactors.
Oxide, the MD tax burden is increasing phenomenally as a result of the entitlements and the millstone posed by these circumstances. Anymore, it’s hard to tell the difference between MD and CT. Please call me for a some reality dosing before you consider buying anything in MD - it is all going to wind up looking like Lanham. I can tell you item by item what will happen next on the way to the ultimate hollowing out.
Homebuilders and real estate sales agents are concerned that the prevalence of distressed sales,
So now legislators are making laws at the whim of the NAHB and NAR? Dang those must have been some good hookers.
Where’s our vaunted “capitalism” when you need it? Oh that’s right, capitalist on the way up and socialist on the way down…
Sounds like a form of price controls to me, which always fail.
Hmmmm …I think they should stop using the rainfall on rainy days as a part of the calculation for “average rainfall” in my city. That might give people the impression that the average is actually the average. I wish it were dryer.
WHAT THE FFFFFFFFFFFFFFFFFFFFFFFFFFFFFF?
Realtors Are Monsters
Can we make a rule that realtors can only be one deragotory association per day? Is that too much to ask?
There is nothing more dangerous to the PTB than a gubmint employee who makes a proactive effort to do a job, even before they start getting paid or even hired to do the work!
Op-Ed Columnist
The War on Warren
By PAUL KRUGMAN
Published: March 20, 2011
Last week, at a House hearing on financial institutions and consumer credit, Republicans lined up to grill and attack Elizabeth Warren, the law professor and bankruptcy expert who is in charge of setting up the new Consumer Financial Protection Bureau. Ostensibly, they believed that Ms. Warren had overstepped her legal authority by helping state attorneys general put together a proposed settlement with mortgage servicers, which are charged with a number of abuses.
But the accusations made no sense. Since when is it illegal for a federal official to talk with state officials, giving them the benefit of her expertise? Anyway, everyone knew that the real purpose of the attack on Ms. Warren was to ensure that neither she nor anyone with similar views ends up actually protecting consumers.
And Republicans were clearly also hoping that if they threw enough mud, some of it would stick. For people like Ms. Warren — people who warned that we were heading for a debt crisis before it happened — threaten, by their very existence, attempts by conservatives to sustain their antiregulation dogma. Such people must therefore be demonized, using whatever tools are at hand.
…
I wonder if there anything we can do to support Elizabeth Warren?
“February pending-home sales index up 2.1% at 90.8″
http://www.marketwatch.com/story/february-pending-home-sales-index-up-21-at-908-2011-03-28
Yet pending sales are down 8.2% when measured year on year.
Why must the media distort, misrepresent and lie for the Lying Realtor Crime Syndicate?
I thought I read about a bunch of January contracts not going through, so I wondered if some of these February contracts could be from buyers trying again.
The media serves the banks as do the politicians as do entire nations. Homes generate massive debt of which the banks are the prime beneficiaries.
SATURDAY, MARCH 19, 2011
The Dangers of Lessons Unheeded
By LESLIE P. NORTON
A Nobel Prize-winning economist says the West hasn’t learned much from Japan’s long slump or the struggles of Hoovernomics.
The exceptionally lucid Columbia University professor is one of the world’s most widely quoted economists, especially since he won the Nobel Prize for Economics in 2001. It’s easy to see why: A prolific author, he helped wake Americans to the consequences of economic integration with the global economy (Globalization and its Discontents, 2002), published a gritty analysis showing the surprisingly high costs of the Iraq War (The Three Trillion Dollar War, 2008), and most recently, explored the forces behind the financial crisis (Freefall: America, Free Markets, and the Sinking of the World Economy, 2010). Often controversial, but always worth listening to, Stiglitz shared his views about the global economy while in Japan, where he attended meetings after the earthquake. Then, he flew to China.
…
Incompetent, but powerful sociopaths make lousy students.
Eco, did you hit the incorrect ‘reply’ button? Your comment - uncharacteristically - doesn’t follow from a cursory read of that segment. I am interested in hearing your argument.
Disclosure: I think whoever predicted the debacle that would emerge from the world economy thingie was more right than wrong. As I recall, Ross Perot was the first public figure to talk about a great, sucking sound…
“The Dangers of Lessons Unheeded
…
powerful sociopaths make lousy students.”
Works for me…
Jane, there were many forecasters even as far back as the 1980s who predicted our current situation… but they didn’t control this country nor did the other messengers of doom that came after.
“Negative thinking” and all that, don’t ya know. Bad for fraud, er, business.
The people that DID have control were proven sociopaths.
Oh. I get it now. OOPS. Agreed.
What do the rest of us do now?
Jeez, I wish the idea of “The Statesman” would emerge as an aspirational goal for would be politicians. The whole arena is just so rank anymore.
Are Rio Realtors liars too?
Brazil’s housing carnival stokes bubble worries
http://www.reuters.com/article/2011/03/25/us-brazil-housing-idUSTRE72O00220110325?pageNumber=2
Reuters) - Listening to Jose Carlos de Vasconcellos talk about Rio de Janeiro’s property market is like being transported back to the bubble days in the United States or Europe.
The 60-year-old, who came out of retirement to join Brazil’s swelling ranks of real estate brokers, is convinced that property in the beachside city is a one-way bet despite a near doubling of house prices in just three years.
“I’m confident that the market isn’t going to slow down any time soon,” he said, taking a break from his afternoon class at a Rio school for real estate brokers….
…Rio, boasting picture-postcard scenery and plans for big investments ahead of the soccer World Cup in 2014 and the Olympic Games two years later, is not alone in a Brazilian housing boom that is inevitably raising fears of an asset bubble in one of the world’s hottest emerging markets.
Since early 2008 — just as the credit crunch was biting in the developed world — residential property prices in Rio have risen 99 percent …
…Rio’s swankier addresses, such as beachside Leblon or Ipanema, are catching up with the eye-watering prices of Manhattan and central London with three-bedroom apartments changing hands for 2 million reais ($1.2 million) or more.
….over 3,300 new brokers were registered in Rio state last year, a nearly ten-fold increase from 2005.
(but) there is plenty of evidence that the boom is well-founded….
…Brazil’s economy grew a sizzling 7.5 percent last year, driven by record-high employment and confident consumers who are swelling the middle class and eager to get a foot on the housing ladder, often with the help of credit.
Millions had for long been locked out of owning property because of a lack of financing, but the mortgage market is now growing rapidly on the back of unprecedented economic stability, bringing home ownership into reach.
With a national housing deficit estimated at more than 7 million units, there is plenty of pent-up demand.
“The boom is real. We don’t have any bubble and there’s not a chance of one because the percentage of GDP (of mortgage debt) is very low and the lower classes have been left out of this market for many years,..
…Mortgage debt in Brazil is indeed relatively low, standing at about 4 percent of GDP compared to about 15 percent in China in 2009, and much higher levels in developed economies. (about 70% in USA) Brazilian banks have stricter standards too, generally lending no more than 80 percent of a property’s value….
…”(Rio) has everything — beaches, sun and business all together and there’s not much more room to build. However much prices go up, there will always be people wanting to buy,” said Carmen Garcia, a 49-year-old (real estate agent) student.
“Rio) has everything”
What’s the average wage, say for a degreed cubicle dweller? $1000 USD a month? Or more?
What’s the average wage, say for a degreed cubicle dweller?
I think about $1,250 USD a month in Rio but I’ll ask around.
Nope, no bubble there!
Glad to see you survived Carnival.
Brazil is different. The poor will save the real estate market!
There’s a bubble in the favelas too?
A lot of drug gangs were “foreclosed” which helped to raise the value.
* March 23, 2011, 1:39 PM ET
Housing Inventory Increases, Listing Prices Fall
By Nick Timiraos
Memo to sellers: you’ve got more competition this spring. Price those homes accordingly.
Nationally, the inventory of unsold homes on multiple-listing services increased by 0.6% in February from one month prior. Over the past year, inventory is up by 13%, according to Move Inc. The data covers all single-family homes, condominiums, and town houses listed on nearly all multiple-listing services across the country.
For the month of February, listings increased in 107 markets versus January, and they declined or stayed flat in 39.
..
Ah, the relentless passage of time shakes another bushel of FBs from the tree.
Is the word, ‘unexpected’ being replaced with the phrase, continually mystified?
In an article with the teaser line, Rising rents a hopeful sign amid the housing bust:
One Sign the Housing Bust Could End Soon
The depth of the housing downturn has continually mystified economists, many of whom expected a turnaround by now, thanks to low interest rates and what seems to be a sustainable economic recovery.
http://news.yahoo.com/s/usnews/20110328/ts_usnews/onesignthehousingbustcouldendsoon
A lot more could be said about this article and the assumptions in it, a lot.
Ummm, right. “Low interest rates” are going to make housing prices go up. This, after a decade of “low interest rates.”
Perhaps today’s buyers are a bit smarter than the NINJA crowd, and they might understand that when interest rates are at historical lows (and prices high), the only direction rates can move is up (and prices down).
It makes more sense to buy when rates are high. Bring them on.
Ha, ha, ha! This is a real knee slapper!
“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country”
-Anne M. Tompkins, U.S. Attorney, March 18, 2011 [von NotHaus trial]
What next: Waterboarding anyone who dares to question the Almighty Fed?
Up and Down Wall Street
FRIDAY, MARCH 25, 2011
Glasnost at the Fed
By RANDALL W. FORSYTH | MORE ARTICLES BY AUTHOR
By meeting the press, Bernanke will try to bolster wavering support for U.S. monetary policy.
Nearly two decades after the collapse of the Soviet Union, a measure of glasnost has arrived at the Federal Reserve.
The central bank announced Thursday Fed Chairman Ben Bernanke will hold press conferences four times a year after meetings of the Federal Open Market Committee to shed light on the conduct of monetary policy.
That the Fed, a government agency that engages in Soviet-style central price fixing in an attempt to command and control the economy, has avoided answering directly to the public this long is amazing.
But, just as war is too important to be left to generals, the public was become aware that the value of their money is too important to be left to solons who previously have been only minimally answerable to them.
To his credit, Bernanke has been aware that the Fed has had to speak directly to the American public to explain the actions of his agency, an unelected branch of government that wields tremendous power over the economy and thus the nation.
After the Fed joined in massive efforts to bail out the financial system following the panic of 2008, Bernanke took the unprecedented step of appearing on the CBS news magazine 60 Minutes. The result was a portrait that couldn’t have been crafted more positively by the Fed’s own PR staff. Even so, the subsequent vote on Bernanke’s nomination for a second term received a record number of nays instead of the usual nearly unanimous approval from the Senate.
…
Trust, but verify.
Why am I not laughing?
Economic espionage and sabotage is as old as governments.
What happens when you keep a large supply of housing off the market and don’t rent it. When a lot of people living in expensive housing have to down size.
From CNN
It’s not usually welcome news when the landlord hikes your rent. But for the housing market, rising rents may be one of the most hopeful signs in years.
Me thinks CNN as usual is misreading the situation completely.
Yeah, coming from the same crowd that continually tries to sell rising fuel and food prices as signs of the imminent return of unbridled prosperity.
What exactly is it again about paying more for life’s necessities that is supposed to better position people to buy overpriced housing stock?
In other words, they want to return to the ratio of [house price = 120 x monthly rent]
…but they want to do it by raising rents, not by dropping house prices. Never mind that incomes can’t afford either! This is the exct situation in DC.
Like I said I read an article a year ago which suggested the FED could start leasing apartments and keeping them empty to drive up housing.
And the same situation in San Diego.
90.8 what is that number ? Grasping at straws kind of news as a double dip looms.
WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes unexpectedly rose in February, a trade group said on Monday, pointing to a modest pick-up in home sales.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February, increased 2.1 percent to 90.8.
Economists had expected the index, which leads existing home sales by a month or two, to fall 1.0 percent after a previously reported 2.8 percent decline.
“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who have been on the sidelines,” said NAR chief economist Lawrence Yun.
Compared to February last year, the index was down 8.2 percent.
Pending Home Sales Index = crap we made up out of thin air
International Journal of Political Economy Vol. 38, No. 2 (Summer 2009),
Too Big To Bail: The “Paulson Put,” Presidential Politics, and the Global Financial Meltdown
Part II: Fatal Reversal– Single Payer and Back
Thomas Ferguson and Robert Johnson
…
How did this “plan” work out for them?
This paper is the second part of our study of the world financial crisis. Part I, “From Shadow Banking System to Shadow Bailout,” appeared in the previous issue of this journal (Ferguson and Johnson 2009). The discussion centers on the “Paulson Put” that defined the “Shadow Bailout”—the effort by the Treasury and the Federal Reserve to put off high-profile financial bailouts until after the 2008
presidential election. The role Fannie Mae and Freddie Mac played in the collapse of the Paulson Put is traced at length, along with the failure of Bear Stearns and the eventual nationalization of the GSEs (government-sponsored enterprises). The Lehman bankruptcy receives detailed attention in the context of the U.S. presidential election. John Taylor’s recent arguments about the relative (un)importance of the Lehman episode are examined and rejected. The establishment of the Troubled Asset Relief Program (TARP) and its aftermath are also examined in some detail.
PBear! How impressive! Did you work on the paper? I want your autograph!
Thank you for bringing this great analysis to a public forum. You have enlarged my understanding and enhanced the vigor of my brain cell!
“…enhanced the vigor of my brain cell!”
Let me enhance its vigor a bit more: The human brain has on the order of 10-100 billion neurons. Hopefully you meant to say brain cells?
err…umm…that was my stab at humor.
Looks like the trade unionists and anarchists know how to ‘create’ some work, just destroy other peoples and public property…
Trade unions’ mass demonstrations result in damage to public and private property.
Saturday’s protest in London is another ugly example.
“They were cleaning up the mess in London yesterday — replacing the windows at the Ritz, fixing the wooden façade at Fortnum & Mason and attending to a vandalized Trafalgar Square in the wake of Saturday’s protests — and riots — by trade unionists and anarchists. Think it can’t happen here? Think again. The British press reports that up to half a million people took part in the demonstrations, 200 were arrested and more than 160 injured — including 84 police officers, 11 of whom had to be hospitalized. Why? Because Prime Minister David Cameron announced a $130 billion cut in public spending.”
~ Barbarians Within
Campaigners for the tax-avoidance protest group UK Uncut have claimed senior police officers “tricked” them into a mass arrest after a peaceful protest inside Fortnum & Mason’s in London on Saturday.
Activists say they were given repeated assurances by a chief inspector from the Metropolitan police that they would be shown to safety after the protest, which she described as non-violent and sensible.
However, when protesters left the luxury Piccadilly store on police instruction, they were kettled, handcuffed and taken into custody.
Their claims are backed up by footage, obtained by the Guardian, showing that, rather than being asked to leave, the protesters inside the luxury food retailer were told they were being kept inside for their own safety.
This is exactly what happened with the student protests and why things started getting broken.
Yeah, always a good idea to piss of the very people who have nothing to lose.
Real good idea.
A bit of wonderful news from Tucson: Over the weekend, I was at a party. Met a guy who used to be an attorney in the southern Arizona office of our state’s attorney general’s office. He’s recently gone into private practice.
Remember how I’ve been ranting and raving about that company I made the mistake of choosing for originating my mortgage? And how they tried really hard to push me into a subprime loan, even though I was qualified for prime? And, at my insistence, prime is what I go.
Well, the guy at Saturday’s party told me that this particular company was put out of business. Not because of what could have happened to me, but because of this thing called fraud.
Note: In the above link, that mortgage company is mentioned in the paragraph about the $60k settlement.
“And how they tried really hard to push me into a subprime loan, even though I was qualified for prime?”
That happened to me once as well. They were very rude to me, insisting that I was a deadbeat and I should be happy to get a subprime loan. I told them to screw themselves and was able within a few weeks to refi into a lower rate “Prime” mortgage.
After I was so insistent on getting a prime-rate loan, things went totally fubar. And I can’t help but think that this was the mortgage originator engaging in retaliation. Here’s a synopsis:
During the initial interview with this company, I was asked for my mailing address, which is a post office box. I told the interviewer, who would be handling my mortgage paperwork, to send any correspondence to the post office box, rather than to my street address.
The reason I gave was this: The street address mail went into my landlady’s mailbox. I didn’t want her to know, much less suspect, that I was looking for another place to live until I’d found one.
A few days after that interview, the loan approval letter arrived at the street address. And it was handed to me by the landlady.
Right after I got that letter, I called the company and repeated my original request that all correspondence be sent to my mailing address, rather than the street address.
Shortly thereafter, a Fedex delivery arrived at the street address. It was a tin of cookies from the man who had done that initial interview. And it had a “Thank you doing business with us!” note.
Nice gesture. Or so it seemed at the time.
When the cookies came, I was still about three weeks away from closing on my house. During that those three weeks, everything went to blazes. Most notably, I waited and waited and waited for the paperwork that would tell me what my closing costs and monthly house payment would be.
Finally, three days before the closing, I asked my real estate agent for this information. He was having his own problems getting answers from the mortgage company, and he told me that I’d have to contact them. (By this time, my agent was so exasperated that he couldn’t call the mortgage company without getting into a shouting match.)
So, I called the man who had interviewed me and was supposed to be handling the paperwork. He told me that he’d e-mailed the closing cost and house payment information the week before. I told him that I didn’t receive it, and would he please send it again?
He did, and it went straight into my spam e-mail file. This missive had a cryptic subject line, several paragraphs that referred to the software used to send the e-mail, and an attachment with a long, convoluted filename. No wonder my e-mail software flagged it as suspicious.
Well, as the late night infomercial people like to say, “That’s not all!” The mortgage company also had the real estate agent and the title company put verbiage into the house contract that delayed my closing by three days. It was only through the kindness of the sellers that I was able to move in when I did.
In just one month, I became convinced that this company’s name should have been the Masters of Disaster. To put it mildly, the concepts of timely and careful communication with customers eluded them.
Thanks for sharing your experience, Slim.
While I don’t think FBs are without guilt, there is no doubt that the mortgage lenders (and associates) are primarily to blame for our current mess. They were the ones with the professional knowledge, while buyers were looking to them for assistance and advice.
Glad to hear you were able to get a prime loan. Good for you for fighting for it.
This along with the ‘unexpected’ good news in the housing market, it may be time to break out the party balloons!
~ U.S. Economy: Consumer Spending Increases More Than Forecast (AP)
Americans increased spending more than forecast in February as incomes climbed, easing concern that rising food and fuel costs might derail the consumer demand that makes up 70 percent of the U.S. economy.
On the radio this morning they were saying that the higher spending, which outpaced income gains, was due largely to increasing gasoline prices. Also saw the same in the Denver Post.
also on radio, mortgage broker says new sec rules says brokers may not get paid from sale of house. they will be arrested. somebody find that article.
government in charge of commissions and pay checks. this could mess up the dream of lazy realtors.
That article is a classic example of “ergo hoc, propter hoc.”
No you effing CNN morons, Americans spent more because they didn’t have a damn choice!
Within the last 12 months, inflation has been ~50%! For those of you that STILL haven’t seen it, be patient. You turn is coming and you’re gonna love it!
WTH! Didn’t some here post a report last week that stated radiation was good for you? This should be double plus good.
~ Hazardous Radiation Detected Outside Damaged Japanese Reactor
(Bloomberg)
Radiation levels that can prove fatal were detected outside reactor buildings at Japan’s Fukushima Dai-Ichi plant for the first time, complicating efforts to contain the worst disaster since Chernobyl in 1986.
So its really contained this time?
FROM CNBC On Monday March 28, 2011, 12:40 pm EDT
At least four Goldman Sachs executives flew into Japan last week to speak with nervous ex-pat employees about radiation fears, according to a person familiar with the situation. They also conveyed another message: don’t leave Japan and don’t leave Tokyo.
Employees at the investment bank’s Japan offices are worried about radiation levels affecting their families, the person said. Many were asking if they could temporarily relocate out of the country or perhaps move to a location in southern Japan, farther away from troubled nuclear power plants. The were told that they should not leave Tokyo, according to the person.
Several meetings were held last week between senior Goldman executives and Tokyo-based employees. At least one meeting was held in a large conference room on one of the five floors of the Mori Tower in Tokyo, which houses Goldman’s offices in Japan. Senior executives attending the meeting included Michael Evans, the firm’s head of emerging markets and Asia chairman, and Ed Forst, the co-head of Goldman’s investment management division. Lloyd Blankfein was testifying in the insider-trading case against Raj Rajaratnam last week.
“The message was clear: no one is to leave. If you do leave, you can’t come back and expect to still work for Goldman,” the person said.
Let me finish…..
“After the meeting, Evans and Forst donned radiation suits, were escorted to the airport by a police escort, boarded their Global Express as quickly as they could, and told the crew to lean on the power levers, to GTFOOD as soon as possible…..”
Leadership used to mean that you wouldn’t tell anyone to do anything that you wouldn’t do yourself. How quaint.
When you’re doing God’s work you can’t just get up and leave at the slightest sign of trouble. Wussies!
Just think of the great sacrifice those Goldman guys who are staying are making for humanity,, er…I mean profits and bonuses.
Going down with the ship is for those in steerage. Ever thus to dead-beats. Goldman’s got the chopper on the heli-pad…
It seems to be having a hard time lifting off…must be something really heavy inside.
Radioactive Plutonium Found in Soil Around Damaged Japanese Nuclear Plant
VOA News March 28, 2011
Yumi Saitou, who lives in Fukushima, is silhouetted as she is tested for possible nuclear radiation at an evacuation centre in Fukushima, northern Japan, March 28, 2011.
Photo: Reuters
Officials say evidence of highly radioactive plutonium has been detected in the soil in five locations around Japan’s earthquake-disabled nuclear reactor.
Operators of the Fukushima nuclear plant quoted by Japan’s Kyodo news agency said Monday they believed the plutonium was seeping out from the nuclear fuel in the damaged reactors.
The Tokyo Electric Power Company (TEPCO) that runs the plant said they did not believe the levels were high enough to be considered a risk to human health.
…
Plutonium in the soil is bad?
Not at all. It’s just a bunch of panic mongers, tree huggers and America hating homos that want to give it a bad rep. I took a few laps this morning in the spend fuel rod containment basin. Nothing to worry about, honestly. Even TEPCO says so. I mean its their plant, they must know best.
I guess its ok as long as they say the levels are acceptable. The really good news is that plutonium-239 only has a 24,000 year half-life, so in time everything will be just fine. Probably a great time to buy an oceanfront condo near the plant.
Between 1945 and 1980, we were subjected to radioactive fallout, first from US, then Chinese atmospheric testing.
During these same years, we had arguably our greatest scientific and engineering achievements.
After 1980, the tests stopped. And we started to get our azz beat with the stupid stick.
Coincidence? I think not.
Baby Boomers = Mutants
Gen X = Reversion to the mean
hoping my 18 month old son’s generation will be dubbed Generation FU.
My daughters are “Generation WTF?”
Maybe they’ll just lump them all together and call them generation F.
More like generation “F’d.”
Bond Report
March 28, 2011, 11:39 a.m. EDT
Treasurys fall for eighth day
Comments by St. Louis Fed’s Bullard, other speakers also in focus
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices extended their decline Monday, pushing benchmark 10-year yields up for an eighth session, after a pair of reports showed some improvement in U.S. consumer spending and home sales, reducing worries about the economy’s trajectory that recently supported demand for bonds.
…
So reports that came out only today are responsible for the previous week’s bond action? Not to mention the dubious nature of those reports themselves.
Gotta keep the top dogs bonus money pouring in…
Northern Rock To Cut A Further 680 Jobs
UK, Monday March 28, 2011~ Sky News Business
Nationalised lender Northern Rock says it expects a further 680 job losses by the end of the year as it moves to drive down its costs.
Northern Rock branch in the City of London
Investment bank Deutsche Bank is advising Northern Rock on its forthcoming sale
The taxpayer-owned bank, which recently posted a £232.4m pre-tax loss for 2010, said the cuts are necessary as it tries to return to profit and prepare for sale into private ownership.
Fewer than 2,000 people will work for the bank following the latest job losses, compared to a workforce of 6,500 before the State bailout in 2008.
Ron Sandler, Executive Chairman of Northern Rock plc, the ‘good bank’ hived off from the nationalised lender, said, “Economic and trading conditions remain very challenging for a bank like Northern Rock”.
“In order to meet our agreed objectives, we must continue to manage our cost base, which is too big relative to the size of the company - regrettably, this will involve job losses.”
The company said it would try to minimise compulsory layoffs with a voluntary redundancy package.
Mr Sandler added that it had been “an unsettling time for our employees, who have been through a lot in the last few years.”
The Unite union, which represents bank staff, described the news as “appalling”.
Just think how much money they will make, and how big those bonuses will be, when they $hit-can the last 2000.
“Estimates are that about $1 billion has already been spent on an undeclared war in Libya.” ~ Sen. Richard Lugar
“Estimates are that about $1 billion has already been spent on an undeclared war in Libya.” ~ Sen. Richard Lugar
Recall that this man was one of Obama’s closest friends in the Senate. The Audacity of Hope has much to say about their relationship during Obama’s (brief) Senate career.
One thing I don’t understand about these estimates. The military industrial complex insists on a big standing military in any event. So now the are doing more fighting instead of hanging out.
Are these net costs, or total costs? Isn’t the net cost just the cost of replacing spent ammo and caring for wounded fighters? Or did the one plane that was shot down cost $1 billion?
Is Europe Slipping Towards Default?
Monday, 28 Mar 2011 | CNBC
“You are in your car, driving on an icy night. You are trying to ease your way up a steep hill. Suddenly, your vehicle stops, then slowly it begins to slide down the hill… backwards. Nothing you try – accelerator, brake, turn, coast – is able to arrest your decent. You slip down the hill with ever increasing speed. As you go, the hill gets steeper, and steeper and steeper. You realize that an uncontrollable force has taken control of your destiny…”
These are the words Carl Weinberg, the chief economist at High Frequency Economics, uses in a market note to describe to plight of the euro zone following Friday’s disappointing European Union summit which saw a “euro plus pact” deferred until June due to technical factors.
Those technical factors where public opinion in Germany and Finland as witnessed by another election loss for Angela Merkel in regional elections over the weekend in yet another sign that neither those being bailed out nor those doing the bailing can sell the implications of the euro zone crisis to voters.
Following the failure to reach an agreement at the summit, news began to leak of a new facility from the European Central Bank aimed at boosting liquidity in a deal that has been described by an ECB source to Reuters as “tailor-made for Irish banks.”
Weinberg said there is nothing on the table that can stop the euro zone falling into crisis.
“Not only is there no solution in hand, but there is no inkling that any idea on the table at this summit could plausibly avert a default on substantial portions of euro land’s sovereign debt,” he wrote.
“You are in your car, driving on an icy night. You are trying to ease your way up a steep hill. Suddenly, your vehicle stops, then slowly it begins to slide down the hill… backwards. Nothing you try – accelerator, brake, turn, coast – is able to arrest your decent. You slip down the hill with ever increasing speed. As you go, the hill gets steeper, and steeper and steeper. You realize that an uncontrollable force has taken control of your destiny…”
Dad’s advice on 4-wheeling: “Never ‘take a run at it’. If you don’t have enough traction to climb it slowly, you don’t have enough traction to stay on the hill if you don’t make it to the top”.
True.
Don’t ask me how I know…….
You also don’t have enough traction to keep the front wheels pointing in the right direction, if you get out of shape, and start doing a poor imitation of a “drift car”.
Tell that to the hill climb crowd!
Those guys accept the risk of sliding+rolling uncontrollably all the way back down. I think most of us would prefer not to be in the back seat if the economic version of that takes place.
Baby on board. Don’t be such a puss.
OK, you go first and then I’ll join you at the top :-).
American Rubber Stamp Co. closing after 67 years
Republican-American
WATERBURY — Vincent Lentini has long known that today would be a tough day.
Lentini, 57, is closing the family business today, shutting down The American Rubber Stamp Co., the enterprise his father, Pompeii Lentini — known to friends and family as Pomp — launched in 1944.
American Rubber Stamp manufactures and retails wood-handled rubber stamps that are used in tandem with a small rectangular pad of ink, about the size of a tin of Altoids. Aside from wood-handled stamps of every shape, size and function, the store also sells both metal and plastic self-inking stamps that don’t require ink pads; daters, or adjustable stamps that can be used to stamp dates on documents and packages, and a variety of engraved signs and nameplates.
Vincent Lentini, who began working at American Rubber Stamp as a pre-teen, bought the business from his dad when Pomp retired in 1986. Running the store had been his only career; working in it is the only full-time job he has ever known.
As of Tuesday, he’ll be looking to establish a new career.
“It’s a bittersweet moment for me,” Lentini said. “On the one hand, it’s sad to have to close the business your father started so many years ago. On the other, I sometimes look at this as a new beginning, a fresh start, a chance to branch out in a new direction.”
The first option he’ll explore is a career in real estate, though he concedes that might be difficult in the current economy.
Too bad…….when you had the kids visit the office/shop, you were guaranteed to entertain them by giving them a few pieces of paper, and the rubber stamps and stamp pads from your desk.
i guess uncovering the robo signing fraud hurt their business?
That is a well written human interest article. Compare it to any of the ones you’ve read recently. It has detail, chronological order, does not attempt to manipulate, includes interviews. I’m really impressed.
Too bad about another American goods producer shutting down. However, Waterbury has changed over the decades as well, and not for the better. The property taxes there are some of the highest in New England.
I stopped in a bank today, actually a credit union to break a $20 bill for a purchase I was making off of craigslsist. The credit union said no, had to have an account there. Luckily Dominoes Pizza was open. F’ banks!
Obama says too much testing makes education boring (AP)
WASHINGTON – President Barack Obama said Monday that students should take fewer standardized tests and school performance should be measured in other ways. Too much testing makes education boring for kids, he said.
“Too often what we have been doing is using these tests to punish students,” the president told students and parents at a town hall hosted by the Univision Spanish-language television network at Bell Multicultural High School in Washington, D.C.
Obama, who is pushing a rewrite of the nation’s education law that would ease some of its rigid measurement tools, said policymakers should find a test that “everybody agrees makes sense” and administer it in less pressure-packed atmospheres, potentially every few years instead of annually.
At the same time, Obama said, schools should be judged on criteria other than student test performance, including attendance rate.
“One thing I never want to see happen is schools that are just teaching the test because then you’re not learning about the world, you’re not learning about different cultures, you’re not learning about science, you’re not learning about math,” the president said. “All you’re learning about is how to fill out a little bubble on an exam and little tricks that you need to do in order to take a test and that’s not going to make education interesting.”
“All you’re learning about is how to fill out a little bubble on an exam and little tricks that you need to do in order to take a test…”
I don’t know, that sounds like the perfect prep for becoming a yes man. After all, that’s what they all want isn’t it, more yes men?
A bunch of idiots who were taught nothing more than how to fill out little bubbles is how Obama got to be President.
“All you’re learning about is how to fill out a little bubble on an exam and little tricks that you need to do in order to take a test and that’s not going to make education interesting.”
GMAT…most people on this blog could make a perfect score on that damn test given the time…the math section at least.
but it’s set in such a fashion that you are forced to learn the “tricks” to complete it in the time given.
at least that was my experience a million years ago.
President Barack Obama said Monday that students should take fewer standardized tests and school performance should be measured in other ways. Too much testing makes education boring for kids, he said.
True story from the Arizona Slim Family File: Back when I was about to finish kindergarten, it was time for the Reading Readiness Test. One of those annual year-end rituals.
One problem: Little Slim kept finding problems with the way the questions were worded. And I kept asking the teacher about them.
She got angry and flunked me.
This greatly annoyed my mother, who had notice that I was already putting letters together and “reading” signs when we were out driving around. My pronunciation of the Esso gas station sign came out as “three-esso,” but I was on the right track.
Well, Mom went into the kindergarten and demanded to see a copy of the test. The teacher furnished one.
Mom decided that the test was full of poorly worded questions, and that such a thing shouldn’t stop her from enrolling me in first grade. And that’s what she did.
I was the first kid in my first grade class to learn how to read. So there, Reading Readiness Test.
So much for the predictive value of standardized tests…
“She got angry and flunked me.”
You are reminding me of the little girl in my class who accused me of cheating because I could answer all the textbook questions which had her flummoxed.
Bush’s “No Child Left Behind” plan has done almost as much damage as letting the Banksters run free.
Schools teach to the test. That’s it. No time allowed to go off on interesting tangents, or obscure subjects, or anything else. No time to slow things down if someone doesn’t understand. So what happens? They may know the answer, but they don’t know how they go there.
The schools pretend like the kids are learning, and the kids pretend like they understand.
“No time allowed to go off on interesting tangents, or obscure subjects, or anything else.”
Not in all cases!
Future Problem Solving Program International, Inc.
Welcome
Founded by creativity pioneer, Dr. E. Paul Torrance, Future Problem Solving Program International (FPSPI) stimulates critical and creative thinking skills, encourages students to develop a vision for the future, and prepares students for leadership roles. FPSPI engages students in creative problem solving within the curriculum and provides competitive opportunities. Future Problem Solving Program International involves thousands of students annually from Australia, Canada, Great Britain, Hong Kong, Japan, Korea, Malaysia, New Zealand, Portugal, Russia, Singapore, and the United States.
FPSPI Mission: To develop the ability of young people globally to design and promote positive futures using critical, creative thinking.
To develop the ability of young people globally to design and promote positive futures using critical, creative thinking.
They’ll have high hurdles to outperform the TrueGeniuses of the Current Era:
0.000015% Federal funds rate
That ain’t workin’, that’s the way you do it
Money for nothin’ and your chicks for free
Now that ain’t workin’, that’s the way you do it
Lemme tell ya, them guys ain’t dumb
Maybe get a blister on your little finger
Maybe get a blister on your thumb
ARTIST: Dire Straits
TITLE: Money for Nothing
Lyrics and Chords
I want my, I want my MTV
I want my, I want my MTV
Ellis Paul Torrance
From Wikipedia, the free encyclopedia
Modified by Hwy50 (this version is for “critical-thinking adults”)
Verbal tasks using nonverbal stimuli:
Product improvement task:
In this task common
toys“money/gold” is used andchildren“critical-thinking adults” are asked to think of as many improvements as they can which would make the “money/gold” ‘more fun to play with’. Subjects are then asked to think of unusual uses of “money/gold” other than ’something to play with’.Unusual uses task:
In this task, along with the product improvement task another task (unusual uses) is used. The
child“critical-thinking adult” is asked to think of the cleverest, most interesting and most unusual uses of the given “money/gold”, other than as a plaything. These uses could be for the “money/gold” as it is, or for the “money’gold” as changed.Hwy50 would like to try this lil’ experiment at “GoldenManSucks Inc.”… kinda like “tempering the steel”.
I’m no fan of Bush (as many of you know) but I have to give him credit for that program.
But it was the local school boards that sabotaged it. Local school boards will throw every single child under the bus to thwart ANY plan that they didn’t personally create out of their self important, Napoleon complex, pea brains.
The problems with education can be laid squarely at 2 doors: school boards and parents. Period.
And what can teachers do but to teach to the test given that there is huge pressure from “pay-for-performance” these days?
And frankly, the school boards don’t care either as long as they “hit their numbers.”
But what difference does it make? I can’t tell you how many successful businesses owners and well off employees I’ve met who can’t read or write above the 6th grade level.
“TEPCO officials said Sunday that radiation in leaking water in Unit 2 was 10 million times above normal — a report that sent employees fleeing. But the day ended with officials saying that figure had been miscalculated and the level was actually 100,000 times above normal, still very high but far better than the earlier results.”
10 million versus 100K. So they were only off by a factor of 100 when measuring radioactivity. I knew guys that worked construction for years and still didn’t know how to read a tape measure, no joke.
Maybe all the guys that knew what they were doing fled and now they’re stuck with the rejects from the temp agency. Did you look at the pictures? Their protective gear consists of rubber boots, a raincoat and some duct tape. Not looking good…
I saw them using a blue home-depot tarp over guys who had been “contaminated”. How come in the movies they have all this space-age gear, but in the real thing they use K-mart supplies?
Because space age gear is expensive and nobody wants to spend the money until you actually need the stuff. And then the disaster hits and the “space age gear store” is too far away even if you had the money.
They are walking around the plant wearing raincoats and they are not dropping dead. I guess when they say the radiation levels even at the plant are not life threatening they must be telling the truth. Hype it as much as you want but despite not using seawater in a timely as they tried to save the reactor,(which I guessed had happened and was confirmed recently) the radioactivity released has not created a major threat to health. The second worse nuclear disaster in history still has not caused as much health damage as a Chinese coal fire electric plant. You can measure the pollution in CA by them and it is a major problem on the West coast.
…yet.
We have years to find out what the full consequences of this disaster will be.
I’m not nearly as optimistic as you, unfortunately.
Block that pass
Kick that @ss
Don`t let em scoe
Greetings from Key West. I am with the family on our annual trip.
We used to say the word “capitulation” a lot here, and I don’t see it yet in the St. Pete area, but let me tell you: it is here for the Florida Keys. US1 South was lined with ‘For Sale’ signs and bank auction signs. Some of my fav Key West spots are gone. Blond Giraffe! Noooo!! There aren’t many people walking around either, which feels very uncomfortable given the usual upbeatness of the area.
I was just explaining a Banyan tree to my son, and a man came up to me and said, “I am dying and I don’t have much time left, but it’s a miracle the way you talk to your child. It’s makes me think the world will be o.k.”
And then he turned and walked away.
“…but it’s a miracle the way you talk to your child. It’s makes me think the world will be o.k.”
And then he turned and walked away.
FREAKY! That memory will live on for a while…
He was right Muggy. I often shop at the discount grocery stores and it’s scary the way many parents treat their children.
Worse than animals. There is NO doubt upon seeing it that they making future criminals right before your eyes.
“I am dying and I don’t have much time left, but it’s a miracle the way you talk to your child. It’s makes me think the world will be o.k.”
And then he turned and walked away.
An early titled song by Boz Scaggs, “Moments”
Columbia Records March 1971
Alone, Alone
And I found a friend who says he cannot sleep at night
He lies awake and balls his fists to beat the fright
He says it’s hard to get ahead
And things are better done than said
It’s a lonesome situation here
Hard and long and gone
Turn his head and look away
Alone alone…
Turn his head and look away
Alone alone…
And I found some friends who turn their heads and look away
(”Man what’s wrong with you”)
With all their reasons sounding good for things they say
I was just explaining a Banyan tree to my son, and a man came up to me and said, “I am dying and I don’t have much time left, but it’s a miracle the way you talk to your child. It’s makes me think the world will be o.k.”
And then he turned and walked away.
Wow, that sent shivers up my spine.
Not sure if that’s tragically sad, or good (the way you spoke to your son made him feel more positive — good for you, BTW).
Deputies: 17-year-old girl assaults mother with gun to get new vehicle
Mar. 28, 2011 dculver@news-press.com
A 17-year-old girl was charged Friday with aggravated assault with a deadly weapon, unlawful possession of a firearm and battery after deputies say she pulled a gun on her mother during an argument.
Rachel Anne Hachero was upset because her mother wouldn’t co-sign on a vehicle purchase, according to a Lee County Sheriff’s Office report.
The teen’s mother told investigators Hachero threatened to kill her when she refused to co-sign for the vehicle.
Hachero then confronted her mother at home with a gun and pistol-whipped her head, according to the report.
After pistol-whipping her mother, Hachero pointed the gun at her mother’s head and stomach and told her she was going with her to sign for the car, according to the report.
The mother told investigators Hachero ordered her mother into the vehicle and demanded she drive to the dealership to sign for the car or she would shoot her.
Hachero and her mother then went to Sutherlin Nissan on South Tamiami Trail, where she had her mother sign for a 2004 black Nissan 350Z. Hachero left the dealership in the vehicle.
The mother told investigators she went through Hachero’s purse Friday while Hachero was at school and located the gun, drugs and drug paraphernalia.
The mother told investigators she did not want to press charges against Hachero, because she had recently been accepted to several Ivy League colleges.
Deputies decided to charge Hachero due to the nature of the incident.
Ivy League? She’ll make the prefect Wall St. banker!
What was I saying about sociopaths?
“OBAMA LAUNCHES MORTGAGE RESCUE PLAN
March 28, 2011
…the government will cut your mortgage payments by up to $12,000 a year.”
That’s almost half our annual rent in payment reductions! Do renters qualify? Where do I sign up?
Ya better call tonight if you want to reduce your payments by $1000/month!
Bill would kill loan modification program
March 28, 2011 5:00 PM By Ellen Yan
House lawmakers are scheduled tomorrow to debate the bill to kill the federal mortgage modification program for struggling homeowners.
Republicans, who control the House, said President Obama’s Home Affordable Modification Program has been ineffective and they want to take unused funding to help balance the budget.
But Obama and supporters of the program say it’s better than nothing. Under the program, lenders, investors and loan servicers get incentives to lower borrowers’ monthly payments, including by stretching the mortgage period and lowering interest rates.
…
Hey All,
It’s me. I’m back again. Don’t you guys think this blog is just the greatest?
My neighbor is bitter because her cousin is old and in a nursing home. They are going to sell her house, but can only get $140k for it. They thought they were gonna get 2-3x that much. Boo hoo!
“I’m back again.”
On the HBB, in SD or both?
boo hoo hoo…. They’re fortunate that they’re getting that much for the dump.
Don’t you guys think this blog is just the greatest?
hicHichicc,…that’s affirmative!…(did I lleps that right?)
Yep, this blog is the best!
Cramer = Stoopid oaf
Housing recovery not even lurking in the shadows
By Logan Mohtashami
Benzinga Columnist
March 16, 2011 11:11 AM
When I challenged Jim Cramer on his call in January that housing had hit bottom and would begin its recovery this year, I had good reason. A huge back log of foreclosed homes in the shadow inventory pipeline had not hit the market yet and waited in the wings, like the proverbial elephant in the room. I knew this. It is my business to know.
Mr. Cramer admitted on Mad Money that buyers would be reticent if they knew there was a huge back log coming due. However, since Mr Cramer isn’t in the Mortgage business, and doesn’t closely monitor the real time situation in housing, he doesn’t see the “elephant” just behind the curtain.
Well, with today’s numbers it is clear that builders know the elephant has emerged.
…
“Well, with today’s numbers it is clear that builders know the elephant has emerged.”
Where do we put the giant elephant turd? May I suggest Jim’s front lawn.
* MARCH 28, 2011, 4:29 P.M. ET
RATE FUTURES REPORT: Rates Seen Rising On QE2’s End
By Jacob Bunge
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–Investors on Monday grew confident that benchmark interest rates will begin climbing later this year as the U.S. Federal Reserve moves closer to ending easy-credit efforts.
Traders raised expectations for the Fed to begin lifting its key rate and for banks to charge one another more interest as positive signals also emerged from the U.S. consumer and housing sectors, both closely watched by the U.S. central bank as it seeks to guide economic recovery.
Atlanta Federal Reserve President Dennis Lockhart in a speech Monday said that the Fed’s second round of “quantitative easing”–a $600 billion scheme to purchase Treasury bonds–will be completed as “originally designed” in June as economic conditions improve.
Signs of that progress were evident Monday in a bigger-than-expected rise in consumer spending levels in February, alongside a surprise increase in the sale of previously owned homes for that month. With an important report on employment due out Friday, investor focus has shifted away from the conflict in Libya and the still-tenuous situation around a quake-damaged nuclear power plant in Japan, traders said.
“Unless we see a massive directional shift in Libya or Japan, we’ll see more of this focus on U.S. economic fundamentals,” said Mark Hawkinson, a Chicago-based floor broker with Newedge.
…
On prices, central bankers are people, too
Kevin Carmichael
Washington— Globe and Mail Update
Posted on Monday, March 28, 2011 4:30PM EDT
It looks like central bankers read their reviews.
“Contrary to popular opinion, Fed officials actually do eat and fill up their gas tanks,” Atlanta Federal Reserve Bank President Dennis Lockhart said Monday in a speech.
Inflation is a sensitive subject around the Fed these days. As food and gasoline prices rise, there’s a reflex action to assume inflation is on the rise. And it is – only not in a way that concerns Mr. Lockhart.
Mr. Lockhart did more in his speech than declare that “central bankers are people too!” He explained how he interprets the mandate of the policy-setting Federal Open Market Committee: “To control the inflation rate we all experience – the so-called headline inflation. In other words, I interpret the Fed’s price stability mandate as requiring the FOMC to manage the growth rate of the average of all prices, including food and energy.”
j…
Wealth Effects Revisited 1978-2009
Karl E. Case, John M. Quigley, Robert J. Shiller
NBER Working Paper No. 16848
Issued in March 2011
We re-examine the link between changes in housing wealth, financial wealth, and consumer spending. We extend a panel of U.S. states observed quarterly during the seventeen-year period, 1982 through 1999, to the thirty-one year period, 1978 through 2009. Using techniques reported previously, we impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time. We estimate regression models in levels, first differences and in error-correction form, relating per capita consumption to per capita income and wealth. We find a statistically significant and rather large effect of housing wealth upon household consumption. This effect is consistently larger than the effect of stock market wealth upon consumption. This reinforces the conclusions reported in our previous analysis.
In contrast to our previous analysis, however, we do find – based on data which include the recent volatility in asset markets – that the effects of declines in housing wealth in reducing consumption are at least as large as the effects of increases in housing wealth in increasing the course of household consumption.
Fannie and Freddie: a fool’s errand
Review by Christopher Caldwell
Published: March 21 2011 01:03 | Last updated: March 21 2011 01:03
Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance, by Viral Acharya, Matthew Richardson, Stijn van Nieuwerburgh, Lawrence J White, Princeton, RRP£16.95, $24.95
It is comforting to think of the late, calamitous bubble in US subprime real estate as having been caused by greed. If greed were the culprit, Americans could become better people as they grew more solvent. Unfortunately, there is a strong case that sentimentality and social conscience did as much to drive the US economy into a ditch as hard-headedness and lust for profit. Four New York University finance professors make a version of that case in Guaranteed to Fail.
The US real estate market is more heavily supported by government than any other in the west. Big tax breaks – from deductions for mortgage interest to exemptions from capital gains – subsidise homeowning over apartment-dwelling. But the jewels in the crown of US housing policy are the government-sponsored enterprises (GSEs), which by 2009 guaranteed or owned $5,390bn worth of mortgages. The Federal National Mortgage Association (Fannie Mae), which dates from the New Deal of the 1930s, and the more recent Federal Home Loan Mortgage Corporation (Freddie Mac) are not quite government agencies, since executive salaries there used to run into the tens of millions. But neither are they real private companies, since the US president appoints board members. Rather they are corruption-sowing hybrids, profitmaking groups that carry an implicit guarantee of government support – or did, until their bail-out in September 2008 made it perfectly explicit. The authors believe the GSEs will cost as much as $350bn and will net out as the most costly part of the federal banking rescue.
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I’m guessing the final tab will be quite a bit higher than that, but agree with the author’s premise.
The very worst thing we can do is explicitly privatize the profits and socialize the losses, and that’s exactly what the GSEs do.
These guys are missing it, IMHO. They apparently don’t realize the connection between Fed-funded mortgage interest rate buydowns and artificially high housing prices.
And the economists who still don’t get the problem with using mortgage debt to fund consumption expenditures are REALLY missing it. Got underwater mortgages???
America’s housing overhang
By James Mackintosh
Published: March 23 2011 19:31 | Last updated: March 23 2011 19:31
One of the ways the US Federal Reserve’s second round of quantitative easing is supposed to work is by increasing share prices, so boosting household wealth and encouraging spending.
If the past is anything to go by, the Fed might have been better off using its $600bn QE2 cash to snap up property. The “wealth effect” on spending from rising house prices has long been known to be more powerful than that from rising shares. A paper from Karl Case, John Quigley and Robert Shiller, two of them creators of the Case-Shiller house price index, shows the economic power of housing. An average of their estimates suggests consumer spending is taking a $240bn-a-year hit thanks to the 30 per cent or so fall in house prices between 2005 and 2009.
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Right. The spending isn’t taking a hit because Americans aren’t able to use rising housing prices to mask their diminished wages with debt that they won’t ever be able to pay off.
Housing Booms in Canada
Home prices north of the U.S. border are on a fresh tear, raising worry at Canada’s central bank, which has warned about rising debt levels, and among some economists, who say the market is ripe for a correction.
Government Shutdown Grows Likelier
Talks between congressional leaders and the White House on a deal to fund the government for the rest of the year appear to have slowed.
* THE SATURDAY ESSAY
* MARCH 26, 2011
The Price of Taxing the Rich
The top 1% of earners fill the coffers of states like California and New York during a boom—and leave them starved for revenue in a bust.
By ROBERT FRANK
[TAX] Max Whittaker for The Wall Street Journal
Brad Williams, above, a former economic forecaster for California, warned that the state was overdependent on the rich.
As Brad Williams walked the halls of the California state capitol in Sacramento on a recent afternoon, he spotted a small crowd of protesters battling state spending cuts. They wore shiny white buttons that said “We Love Jobs!” and argued that looming budget reductions will hurt the Golden State’s working class.
Mr. Williams shook his head. “They’re missing the real problem,” he said.
The working class may be taking a beating from spending cuts used to close a cavernous deficit, Mr. Williams said, but the root of California’s woes is its reliance on taxing the wealthy.
Nearly half of California’s income taxes before the recession came from the top 1% of earners: households that took in more than $490,000 a year. High earners, it turns out, have especially volatile incomes—their earnings fell by more than twice as much as the rest of the population’s during the recession. When they crashed, they took California’s finances down with them.
Mr. Williams, a former economic forecaster for the state, spent more than a decade warning state leaders about California’s over-dependence on the rich. “We created a revenue cliff,” he said. “We built a large part of our government on the state’s most unstable income group.”
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Welfare for the Wealthy
SmartMoney Blogs
The Tax Blog
The latest news, insights and tips about taxes
* March 25, 2011, 3:12 PM
Million-Dollar Homes Face More Audits
By Arden Dale
Some people who owe more than $1 million on their homes are coming under the microscope at the Internal Revenue Service over how much of their mortgage interest they can deduct on their tax returns.
The number of taxpayers involved could be in the tens of thousands because in some parts of the country, many homes sell for more than $1 million and even a buyer who puts down 20% or 30% may need to borrow. The amount of interest at stake is substantial, in some cases as much as $50,000 to $60,000 on a $1.1 million mortgage.
The IRS didn’t comment, but the scrutiny follows a period of confusion by taxpayers, advisers and even some IRS agents about how much interest can be deducted, based on what kind of debt the homeowner holds. Tax rules distinguish between two kinds of home debt. There is home acquisition debt, which is a loan used to acquire, construct or substantially improve a qualified home, and is secured by the home. Then there is home equity debt, which is any other kind of loan that is also secured by the home.
Some tax advisers were telling clients it was acceptable to deduct all interest on a single mortgage of up to $1.1 million. Others contended that the limit for mortgages was $1 million, but they could also deduct interest on another $100,000 in a home equity loan, according to Melissa Labant, tax technical manager at the American Institute of Certified Public Accountants.
IRS guidance last June helped set the rules straight. The agency said acquisition loans over $1 million may also qualify as home equity indebtedness. Now, says Labant, it is clear the taxpayer can deduct interest on the full $1.1 million, even if he has only one loan. The development, she adds, is “good news for taxpayers.”
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* ENVIRONMENT & SCIENCE
* MARCH 29, 2011
Radiation Detected in U.S.
By ROBERT LEE HOTZ And JENNIFER LEVITZ
Traces of radiation from the crippled nuclear plant in Japan are being detected in states from California to Massachusetts, carried across the Pacific on broad rivers of wind. But state officials say there is no public health risk.
Concern spreads over radioactive levels in eastern United States although officials claim there is no reason to panic. Video courtesy of Fox News.
“The levels that we’re detecting are extremely, extremely low—we’re talking about many orders of magnitude below what we would consider a risk,” said Eric Matus, a radiation physicist for the Nevada State Health Division. Radiation has been detected at two monitoring sites in the state.
U.S. states, which aren’t recommending protective measures for the public, are reporting tiny amounts of radioactive iodine known as iodine-131 that is seen in the early stages of a nuclear reaction. It has a short half-life of eight days, meaning that in that time, half of it will have decayed to a non-radioactive state, a process that will continue until it is undetectable, Mr. Matus said.
Trace amounts of radiation are also being detected in Canada, South Korea, China and Germany, according to wire reports.
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With prices dropping and a shadow inventory of homes in mortgage default numbering in the millions, what is the hurry to buy?
And why not call a spade a spade: Home prices are dropping, not slowing.
Home Prices, Consumer Confidence in U.S. Probably Decreased
March 29, 2011, 12:03 AM EDT
By Alex Kowalski
March 29 (Bloomberg) — Residential real estate prices probably dropped in January by the most in more than a year, raising the risk that home sales will keep slowing, economists said before a report today.
The S&P/Case-Shiller index of property values in 20 cities fell 3.2 percent from January 2010, the biggest 12-month decrease since November 2009, according to the median forecast of 29 economists surveyed by Bloomberg News. Another report may show consumer confidence declined in March as gasoline prices climbed.
Rising foreclosures are swelling the number of houses on the market, which may lower prices further in coming months. Falling home values, in turn, may keep potential buyers on the sidelines waiting for better deals, hurting construction and consumer spending as owners’ equity evaporates.
“The more home prices fall, the easier it is for people to wait to buy, and that can reinforce the downward cycle,” said Steven Blitz, a senior economist at ITG Investment Research, Inc. in New York. “The flip side is people still need to sell because you’ve got a lot of people who have stressed budgets.”
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RepublicanRepublitardOp-Ed Columnist
American Thought Police
By PAUL KRUGMAN
Published: March 27, 2011
Recently William Cronon, a historian who teaches at the University of Wisconsin, decided to weigh in on his state’s political turmoil. He started a blog, “Scholar as Citizen,” devoting his first post to the role of the shadowy American Legislative Exchange Council in pushing hard-line conservative legislation at the state level. Then he published an opinion piece in The Times, suggesting that Wisconsin’s Republican governor has turned his back on the state’s long tradition of “neighborliness, decency and mutual respect.”
So what was the G.O.P.’s response? A demand for copies of all e-mails sent to or from Mr. Cronon’s university mail account containing any of a wide range of terms, including the word “Republican” and the names of a number of Republican politicians.
If this action strikes you as no big deal, you’re missing the point. The hard right — which these days is more or less synonymous with the Republican Party — has a modus operandi when it comes to scholars expressing views it dislikes: never mind the substance, go for the smear. And that demand for copies of e-mails is obviously motivated by no more than a hope that it will provide something, anything, that can be used to subject Mr. Cronon to the usual treatment.
The Cronon affair, then, is one more indicator of just how reflexively vindictive, how un-American, one of our two great political parties has become.
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Actually, I think this inquiry is relatively fair. I make no assumption that I can exercise my right of free speech using my employer’s computer equipment.
When I was working at the University of Wisconsin many moons ago, limitations on personal use and appropriate use guidelines were made broadly available.
what?