Bits Bucket for March 31, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Fed to Name Banks That Borrowed From Discount Window in Crisis
- Mar 31, 2011 - Bloomberg
For most of its 98-year history, the Federal Reserve has operated with all the transparency and enthusiasm for change of the Vatican. Now the ultra-secretive Fed is starting to change its ways, if somewhat grudgingly. Some of the new openness, such as Chairman Ben S. Bernanke’s plan for quarterly press briefings, is the central bank’s idea. Much of it comes under duress.
Today, the Fed is set to disclose which banks borrowed from its discount window during the darkest moments of the 2008-09 financial crisis. This unprecedented view of the emergency loans the Fed extended to hundreds of banks is the result of a March 21 Supreme Court decision that left intact lower court rulings ordering disclosure in lawsuits filed by Bloomberg LP, the owner of this magazine, and News Corp.’s Fox News Network. Still, the Fed won’t disclose the collateral it accepted, which would reveal the risks it took. Future discount window borrowings will be made public, though only after a two-year delay, thanks to the new Dodd-Frank financial reform law.
Given the prominent role the world’s biggest banks played in causing financial losses worldwide, largely because of what investors didn’t know or didn’t understand, some say the loans should be made public at once, Bloomberg Businessweek reports in its April 4 issue. Only then, the reasoning goes, would investors and counterparties of a Fed borrower be able to manage their own risks. “The free-market system only works if it’s fully informed,” says Lynn E. Turner, who battled the Fed over disclosure issues while serving as the Securities and Exchange Commission’s chief accountant from 1998 to 2001. “There’s a lot of similarity between the Fed and an SUV with blacked-out windows.”
“There’s a lot of similarity between the Fed and an SUV with blacked-out windows.”
What kind of guys drive around in that sort of vehicle?
“What kind of guys drive around in that sort of vehicle?”
The kind the ladies have in their fantasies?
Especially when they are also sporting that sexy bulge… in their back pockets.
Bankers. Blacked out Large SUS’s the best for them now!
Clipped from TDR
Item: (AP) - Damage from the housing bust is spreading to areas once thought to be immune.
In at least 14 major US metro areas, prices have fallen to 2003 levels - when the housing bubble was just starting to inflate. Prices will likely drop further this year, making many people reluctant to buy or sell. That would push down sales and prices more.
The depressed housing industry is slowing an economy that has shown strength elsewhere. And it’s starting to hurt those who bought years before the housing boom began. In some cities, people who have paid their mortgages for a decade have little or no home equity.
Prices have tumbled in familiar troubled spots, such as Las Vegas, Cleveland and Detroit. But they’re also at or near 10-year lows in Denver, Atlanta, Chicago and Minneapolis - cities that weren’t as swept up in the housing boom and bust.
“It’s been tough on the lower class but it’s filtering up,” said Paul Dales, senior US economist with Capital Economics. “It may be only a matter of time before it hits the wealthy.”
Just about the only major market weathering the second wave of the housing downturn is Washington. Home prices there have risen 11 percent in the past two years.
~ A Daily Reckoning note: the zombies are doing just fine, thank you. It’s the rest of the nation that suffers. Money flows from the people who earn it to the protected financial sector…and to the feds themselves. Is it any wonder that profits in finance are back to their 2007 level? Or that, overall, debt is now even higher? Or that people in the zombie capital are actually richer today (thanks to automatic wage hikes in the federal government, plus property value increases)?
Squares with what I’ve been seeing, but don’t tell that to the agents.
Last week my mom showed me some official/public house sales notices she clipped from the newspaper for her neighborhood. The recorded sales prices were all over the map, but fully a third were at mid-1990s levels. (no kidding, mid-1990s) When I pointed this out to her, she said: “well, I could get more than that, couldn’t I”?
I thought I had taught her better, I hang my head in shame.
—->When I pointed this out to her, she said: “well, I could get more than that, couldn’t I”?<—-
And this is what is so fascinating about the Great Housing Fraud. Discussions with close friends/family always include this idea that “it’s those houses over there that are worth alot less now, but not my house” even though “over there” is the street 50 feet away. It’s truly a detachment from reality by any measure.
-Realtors Are Liars
It is the essence of human mania. All evidence contrary to the chosen theme is dismissed. It works when we think we’re going to get rich, it works when we are in love, it works in politics, & etc.
Absolutely! The psychology behind this is downright fascinating. And yes, “over there” is now “over here”. The passage of time reveals more and more to us.
For a little history -
There was a mini housing bubble (compared to today) from 1988-1991. Prices went up about 30-40% overall in a few years. It popped in 1991 with the recession and the gulf war. Prices pretty much came down to the median and did not budge to about 1999.
I still remember articles from the mid 1990 that stated how it was cheaper to buy than rent and that people still did not want to buy…
There was a housing bubble in the cities that had the closest association with the dot-com bubble, including the one I live in. It deflated very quickly when the dot-coms crashed.
I didn’t notice any price declines in Seattle in the early 2000’s; if anything, that’s when prices started shooting up more rapidly around here.
The deflation did not happen in the Silicon Valley, which has perhaps the closest association with the dot com bubble.
Housing crashed in Texas in 1988 when the S&L fiasco hit.
2banana,
You’re correct in your recollection.
Hard to say how the upscale areas around San Diego are faring, as would-be sellers who can afford to wait tend to list their homes at prices where they never sell, resulting in a severe shortage of comparables on which to judge market value.
Meanwhile DC is partying like it’s 2005. Daily I am receiving flyers from realtors and homebuilders for new homes. Oh sure, the prices are down A LITTLE, but it’s all for exurban spec housing. Just yesterday I got a flyer from a realtor for a spacious 2-bed condo. Price was NOT listed.
The Federal Goverment is like a giant vacuum sucking in tax dollars from the rest of the country. They’ll get through this just fine.
Just yesterday I got a flyer from a realtor for a spacious 2-bed condo. Price was NOT listed.
Here in Tucson, our weekly Meet Me at Maynards walk around Downtown Tucson goes past an oh-so-charming barrio adobe restoration that’s on the market. There’s a “for sale” sign with an info flyer box attached.
The flyer doesn’t include a price, but I know it to be $650k. (One of my fellow walkers, who seems to have some sort of real estate business connection, named that figure.)
So, whenever see my fellow walkers admiring the house — and looking at the flyer — I holler out the price. I usually add some commentary like “$650k for a wigwam? Wa-a-a-ay too high!”
There’s something about hollering about high prices in a restored barrio that just makes me feel good.
3 years later and people still think “it’s different here?”
Long ways to go. Long ways.
So, once the inflation genie is out of the bottle in earnest, what will the Bernake do then?
Wal-Mart CEO Bill Simon expects inflation ~ USA TODAY
U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday.
The world’s largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”
“Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers.”
What a surprise! Send a few trillion dollars to China and - who would have ever guessed it? - China uses these trillions to buy up raw material from all over the world and drive up the prices.
Where are we going to get all our useless, cheaply made, disposable crap now?
OMG! We may have to learn to do without!
we will still get it, just in smaller packages (for the same price)
Vietnam and Cambodia and India and Guatamala. We already do — check the labels.
China has some serious problems that have been ignored. For example, it has a real shortage of coal and it is a coal fired economy. They burn coal with levels of sulfur, mercury and arsenic that we would not even consider. One of the reasons they have about 100 nuclear plants planned. They have about 38 years supply of coal at present production rates but they already have become a major importer of coal and with that reserve base will soon hit peak coal. Their aging population is well known, as well as their pollution problems, but their shortage of water, not so much. I think many U.S. companies will have to find another source of cheap labor soon. Maybe the Middle East, perhaps what is driving policy? Good luck with that. I think because we have taken religion out of our history books and its importance in the forming of our government, we have a lot of people that just don’t understand the importance or religion to that region.
” I think because we have taken religion out of our history books and its importance in the forming of our government, we have a lot of people that just don’t understand the importance or religion to that region.”
While many like to think we are a “Christian Nation” the truth is that most Americans are religious illiterates, even when it comes to the their own putative religion. For instance, the number of people who identify themselves as “Christian” and who are unaware of the vicarious atonement of Jesus’ crucifixion is astounding. For instance, my in-laws, who claim to be Lutherans, have zero understanding of their alleged faith.
If we don’t understand who we are, what chance do we have of understanding others?
While many like to think we are a “Christian Nation” the truth is that most Americans are religious illiterates, even when it comes to the their own putative religion.
It’s worse than that. Most Americans are Snooki-Stupid. We’re sinking deeper into IDIOCRACY by the day, it seems.
“Snooki-Stupid” -LOL, I love it! JSP is now JSS
So very well stated Colorado.
The level of ignorance of those calling themselves “Christians” is stunning. Absolutely stunning. For instance, they love to quote the 10 commandments and unknowingly refer to the 613 laws(both found in old testament) and expects everyone to adhere to them. The old testament law is the antithesis of Christianity.
“If we don’t understand who we are”
I’m not sure who you think we are is who we are. Gotta say that I’m pretty glad that there nobody in a funny hat (isn’t that always the way?) telling me not to eat meat on Fridays, or that having the host touch my lips in a sin or that I can’t eat shell fish, drink booze or have non-procreative s3x with my wife.
Yeah I joined a prayer group at my church, and remember the ladies being so impressed that I actually read scripture and stuff, because it’s so hard to read you know.
Yeah I joined a prayer group at my church, and remember the ladies being so impressed that I actually read scripture and stuff, because it’s so hard to read you know.
Wait a minute. You joined a prayer group. At your church. And your fellow members were impressed that you actually read the book on which your faith is based?
Yeesh!
For instance, they love to quote the 10 commandments and unknowingly refer……..
Most professed Christians are not even aware that there were originally 15 commandments.
http://www.youtube.com/watch?v=8YX-gqRdK_8
Every professing Christian should read the Bible cover to cover. Giving it their undivided attention. The mamby-pamby God of most modern congregations is not the deity described in those pages. And for those who say the Old Testament was invalidated by the New Testament, Christ himself said that not one iota of the previous laws had changed.
Christ himself said that not one iota of the previous laws had changed.
Was that during his “Eye for an eye, tooth for a tooth” speech?
“the Bible is merely God’s teleprompter.” -B. Obama
“Most professed Christians are not even aware that there were originally 15 commandments.”
Gotta love Mel Brooks.
“I’m not sure who you think we are is who we are.”
The overwhelming majority, who when polled, claim to be Christian. They aren’t all Protestant Fundies or Catholics.
Just saying that a lot of those folks don’t have a clue regarding even the most basic tenets of Christianity, even the ones that span across denominational lines.
I once asked a guy (a cultural Methodist) why Jesus died on the cross. He looked befuddled. The he offered: “To make people feel bad?”
I once asked a guy (a cultural Methodist) why Jesus died on the cross. He looked befuddled. The he offered: “To make people feel bad?”
Atheists Know More About Religion
I once asked a guy (a cultural Methodist) why Jesus died on the cross. He looked befuddled. The he offered: “To make people feel bad?”
lol Now that’s funny.
Another thought: While a growing number of Americans are not professed Christians, we are culturally, a Christian nation. Understanding our roots can only help us understand who we are today, even if that is a post Christian nation.
“The overwhelming majority, who when polled, claim to be Christian. They aren’t all Protestant Fundies or Catholics.”
Pew has it at 78% Christian, so the country identifies as being overwhelmingly Christian. However, I was feeling like Tonto when he says to the Lone Ranger, “What do you mean ‘we’, kimosabe?” with the talk of getting back to our Christian heritage. I agree with many of the posters who decry the religious ignorance of those who purport to be religious. Going to church on Christmas and then yelling about the sanctity of marriage doesn’t quite cut it for me. Then again, neither does going everyday and saying the same thing.
Whatever, to each his own. Just stay away from my booze, pork, history books and recreational s3x of whatever type I choose, thanks!
MrBubble
“Understanding our roots can only help us understand who we are today, even if that is a post Christian nation.”
Fair point.
Another thought: While a growing number of Americans are not professed Christians, we are culturally, a Christian nation. Understanding our roots can only help us understand who we are today, even if that is a post Christian nation.
I’ve told that to friends with kids with no clue of that kind of understanding.
One got mad but I kept talking.
“And for those who say the Old Testament was invalidated by the New Testament, Christ himself said that not one iota of the previous laws had changed.”
I like you brother Sammy but this is a false play on what I wrote and a false assertion on your part. Christ did not say anything like that.
“Do not think that I have come to abolish the Law or the Prophets; I have not come to abolish them but to fulfill them. I tell you the truth, until heaven and earth disappear, not the smallest letter, not the least stroke of a pen, will by any means disappear from the Law until everything is accomplished” (Matthew 5:17-18).
Thus the curse or rather the burden of the law was diminished because of him. And yes the law and it’s commandments is an ugly curse because nobody can live up to it except for JC. I’m no longer subject to that curse and oppose anyone who attempts to subject me or others to it.
Yeah, if ‘not one iota of the previous laws had changed’, then christians would still have to be following the laws of kosher, and stoning our sassy kids to death, and sending all menstruating women to live in a hut outside of the village, until they’re done menstruating. (Call me old-fashioned, but the last one seems reasonable.
)
The Mosaic Law applies to Jews, not to Christians. Just so we’re clear on that point. And I’m not so sure which if any of the laws were actually divinely handed down.
“The Mosaic Law applies to Jews, not to Christians.”
Correct. Yet nutjobs posing as Christians declare the death penalty Christian.
So Wally World is the American consumer’s chief bulwark against inflation?
This echoes, albeit in an entirely different tone, those euphoric stories from the late 1990s that claimed that low-cost Chinese manufacturing was key to the middle class’ boundless prosperity. No kidding, there were plenty of stories about this back then - go look ‘em up.
When “Cheap Chinese $hit” becomes just “Chinese $hit”.
Testify, Sistah Liz! Maybe some day the sheeple will wake up and stop voting for politicians who reward corporations for off-shoring US manufactoring jobs. It’ll take a grinding depression to get to that point, however.
“Inflation” in prices but not in wages is called….
If there was serious inflation - housing prices would be booming. Real Estate is an excellent inflation hedge. That is not happening.
It’s a Redistributiondeflation. Less money, but what there is still flows to Gotham. Letting our banks speculate in our basic necessities is a really bad idea. Printing money for them to do so is really really bad.
The logical hedge to address the higher cost of life’s necessities for the average joe is a smaller lifestyle. Smaller house, smaller (or no) car, smaller wardrobe, shorter vacations, even smaller meals.
Warning: Smaller lifestyles are dangerous to a “grow or die” economy. You know the kind, the one the GDP junkies keep pushing.
Warning: Smaller lifestyles are dangerous to a “grow or die” economy. You know the kind, the one the GDP junkies keep pushing.
Uh-oh! Does that mean that we, the smaller lifestyle types, are now subversives?
“Less money, but what there is still flows to Gotham.”
And that’s one problem no even Batsy can solve. Busting the Joker is child’s play by comparison.
Inflation in prices but not in wages is called….
“…charging what the market will bear.” We are, very simply, spending more of our income on needs. And those prices on needs (the speculator’s wet dream) will rise until there is no disposable income left. Even then, the market will charge a little higher and dare households to find a leetle extra income for whatever it is. But what is left? The norm used to be for a one-income households, and Mom would go to work to get ahead. But now, a two-income household is considered survival level.
We can’t go to three-income households — oh wait, we can! Families can take a two-room apartment in a bigger house. Or perhaps the two incomes can take on a second job each to make it four incomes.* Or their kids can quit school and go to work to help the family — hell why not, if they’re breaking the unions anyway, I’m sure child labor laws are next on the chopping block.** Or we can forgo the health insurance to pay for the smaller servings of food. I look forward to kids hanging from the fire escape to avoid fainting. Only this time it won’t be just a picture in the textbooks.
———-
*In fact, drumminj suggested that yesterday, when he offered to take on a second job to pay for his retirement.
** please note that this doesn’t apply to ALL children, oh no. The precious children of the rich will not have to work, and will still have the best schooling.
“And those prices on needs (the speculator’s wet dream) will rise until there is no disposable income left.”
Maybe not. All vectors do not extend to the moon. There is surplus capacity in all production areas. Rising prices due to speculation/manipulation leads to accumulation of stockpiles, which eventually leads to dumping and collapse.
I’m not sure this applies to “needs,” Blue Skye. Are there really stockpiles of gasoline around, to where the price has to drop to drain down those stockpiles? Or food, or healthcare, or electricity? And those stockpiles can be manipulated too, to keep prices high. Exhibit A: the stockpile of high-price housing.
Blue Skye, we are a 75% consumer driven economy. Here’s how it works:
You’re losing money because people can’t buy things, so you fire your employees who can now… no longer buy things.
There’s an old saying: “It’s good to save money in business but you can save yourself right out of business.”
Regarding Exhibit A: We doubt that the manipulations and holding off market will succeed in keeping the price up forever. It already isn’t.
Also, people are creative. Some of us have figured out how to work around the housing manipulations a bit. If food and such cost more than one can earn clerking, there is a work around for that too. Outside the window of my aluminum tent lies a thousand acres of prime yet untilled ground, and beyond that billions of gallons of sweet water. Very much surplus capacity.
As for oil, we’ve practically stopped building houses. There are 7 some million fewer of us driving to work every day. Biggest economy in the world. Yet oil goes back over $100. Haha!
There is surplus capacity in all production areas. Rising prices due to speculation/manipulation leads to accumulation of stockpiles, which eventually leads to dumping and collapse.
Got $19.00 barrel Oil?
That’s not how things work! If the consumers grow faint, the government will spend the money for them and send them the bill.
“Got $19.00 barrel Oil?”
No, but the only oil I’m using today is Extra Virgin.
Two comments:
Blue Skye, not everyone has the priviledge of a few acres of empty land and a nearby lake. Not that I’m not trying for that, but the young need to pack away money before they can afford that kind of lifestyle. If i want to live like Laura Ingalls Wilder, then I better be prepared for Laura Ingalls Wilder food storage, healthcare, and transport.
Eco, I don’t think corporations — or at least their execs — are worried about the day that people suddenly stop buying their products. The execs themselves will simply jump out with the golden parachute. They already have enough money to last them for life sipping mai-tais on the beach. And besides, such companies will just fire the worker bees before they touch their own salaries.
Oxy, I am not living the high life, well by my standards yes but not the high cover charge life. I’m just saying I see land all over the place that sits unproductive. Not the least of which is expansive lawns. If we didn’t have overcapacity in food production we could garden the heck out of this place. High prices are not because of undercapacity.
LOL, years ago when I had the farm my church approached me regarding supporting their food bank. Times were tough. I said sure, anybody that you think needs can have a garden plot there in the pasture. Oh no, they wanted me to produce potatoes there and give them to the foodbank, or let my land for free to one of their elders who could do the job and give the owner’s cut to the foodbank.
The precious children of the rich will not have to work, and will still have the best schooling.
“The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. …They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well.
From:
Tax the Super Rich now or face a revolution
Commentary: A ‘Super-Rich Delusion’ is leading us to ruin
http://www.marketwatch.com/story/tax-the-super-rich-now-or-face-a-revolution-2011-03-29?pagenumber=1
“We can’t go to three-income households…”
We can just as soon as the Repubs get those changes to the child labor laws they want!
Google “republican child labor law”
Right now, they’re testing it out at the states level.
Real Estate is an excellent inflation hedge. That is not happening.”
REITs sure went up
““Inflation” in prices but not in wages is called….”
currency devaluation.
Was in Walmart just last night. LG 46″ 1080p LCD: $598. So, inflation isn’t hitting everything equally,
Inflation on needs deflation on wants…
Hurt your toe and need a doctor? Bwaaa Haaaa Haaa
Need gas for your car? Bwaaa Haaaa Haaa
Need a place to live? Bwaaa Haaaa Haaa
Want a bigger TV
Cheap Cheap Cheap
That pretty much sums up our current situation I think
Inconceivable! Ben Bernanke assured us his trillions in fiat current creation would have no effect on inflation.
http://www.bloomberg.com/markets/commodities/futures/
Rising food costs have been the catalysts behind the wave of unrest in North Africa and the Middle East (NOT a fervent desire for democracy as the neo-con pundits would have us believe). Food riots in 30 countries preceeded the 2008 financial crisis (that has been deferred, not solved, by a tsunami of central bank liquidity-creation). Asian leaders, in particular, must be watching the price of rice with great apprehension. The great unwashed who spend more than half of their desposable income on food, and do not have the US dollar as their reserve currency, will not take kindly to being more financially hard-pressed than they already are.
“U.S. consumers face “serious” inflation in the months ahead for clothing, food and other products, the head of Wal-Mart’s U.S. operations warned Wednesday.”
Ahead?! Then just what hell is that we’ve had so far, you lying sack of crap!
Indeed. Since I cook on weekends I check out the supermarket flyers on Wednesdays. Prices sure have been going up. Less steak and more ground beef lately. Even chicken seems to be going up.
Like Han Solo said “We’re all gonna be a lot thinner!”
I feel a little hopeless today….turned down for a job producing a radio show for a former Air America host because i am not a dyed in the wool liberal. See what this log has done to me…..it kept me open minded.
“…because i am not a dyed in the wool liberal.”
What’s the saying?:
“Fake it ’till you make it”.
just walk around mumbling “tax… bush…. tax… bush… teabag….bush…tax” and you’ll fit right in
don’t forget ‘chimpyMcHalliburton Faux News blah blah’
“Chimpy” is so 2006.
“Kochtopus” on the other hand is the current usage.
And “Faux News” is never out of style.
Thanks, it’s hard to keep that stuff straight if you don’t stay on top of it.
Liberality has its boundaries!
“…i am not a dyed in the wool liberal.”
I can fake dyed-in-the-wool liberal or conservative as needs be…
OK — I could never fake being a Palin supporter or a Rush Limbaugh fan. Personal integrity has its hard boundaries.
It’s also hard to keep a straight face.
I always feel those radio peeps are just entertainers.
You don’t have to be pro-crime to work on CSI do you?
When I was volunteering at a radio station - essentially as a volunteer segment producer - I was actually writing copy (guest introductions and interview questions) that came out of the host’s mouth. If he disagreed with what I had written, he had to be able to do the edits in 5 to 10 minutes before we went on the air, do it on the fly or just make up different questions himself about a book he hadn’t read. A really, really talented person can write from another person’s viewpoint and in his or her “voice” but it takes a lot of skill to do it. And doing it for a long time (writing stuff you don’t believe in at all) is likely to cause depression. See the number of burned out lawyers as an example.
A really, really talented person can write from another person’s viewpoint and in his or her “voice” but it takes a lot of skill to do it.
This might work for a lefty writing for a conservative show as one on the left could be expected to betray their core (although faulty) principles for pay. And what principles of value are they really betraying?
However a true conservative, a true American, especially one who believes in God, Jesus and Liberty, could not easily prostitute their beliefs and write for a left leaning show–especially a show with a subversive, Socialistic and/or Marxist agenda.
Cute, Rio.
However, as cute as it is, I was being fairly serious. Political leanings didn’t mean too much when I was writing a prep for a book about the number zero or Peggy Fleming’s autobiography, but it came up more than you would think. The book about bird migration was also about international environmental issues since birds have a tendancy to ignore customs. And that doesn’t even cover the ones that were actually about political issues. I had a book about the death penalty and felt very much like I had to consult with the host before I started. I was fairly sure that Leonard was against the death penalty, but there are a lot of reasons to be against it and I needed to be sure the questions and intro were consistent with his views. He probably could have done that one with nothing more than a quick look at the dust jacket blurb, but we didn’t work that way on our show. The idea was for me to provide a list of questions that could be read verbatim if he was running a 102 fever and could barely string a coherent sentence together.
I suppose producers have different jobs on different shows, but if you are choosing guests to book and writing and/or researching for the host, you have to have the right instincts so the show reflects that person, not you.
However, as cute as it is, I was being fairly serious.
Maybe you missed my point.
I was trying to prove your point (to write from another person’s viewpoint) by being not seriously “cute”.
I got it, Rio. Nicely done–on several levels.
turned down for a job producing a radio show
Geez, aNYdj that’s a bummer. Did you need a job now to eat & live or are you just lookin’ for other empoyment?
Refusing a paycheck for mind over belly might not be too cool in this eCONomy
Hope you can find work where your “political tastes” don’t interfere with just accomplishing a skills task.
fannie mae turned me down.
me: so what are your concerns about th future of the company?
vp: (leans in intently) let me as you a question…now tell me…do you have a 30 year mortgage?
me: ummm…no.
vp: (visibly taken aback) ummm…ok…what about your neighbors…do you think your neighbors have 30 year mortgages…or you coworkers?
me: (smirk) i know a few that have more than one…yes.
vp: well…without fanniemae the 30 year mortgage would not exist…people would need 20 to 30% down to buy a house…and americans…just don’t like to have to do that.
me: interesting.
vp: and if something does happen to Fanniemae…it would take years to unwind our $ 3 trillion balance sheet…and i personally don’t think they are ever going to go away.
the feedback i got was that i was too laid back.
just to add…the 4 people i interviewed with inlcuding the vp were very nice…knowledgeable people that i could have definately seen myself working well with.
I’ve known a couple of folks who work(ed) for the twin GSEs. Like you say, very nice folks. One of them left Freddie before the SHTF…
“well…without fanniemae the 30 year mortgage would not exist…people would need 20 to 30% down to buy a house”
Tell the b*st*rd off. Sure the 30-year mortgage would exist, but only for people with 20% down. That was norm until just 10 years ago. And if prices are going down as much as they say, then that 20% is going to be within the reach of a lot of people soon.
‘people would need 20 to 30% down to buy a house’
This gets back to what the first question should be if one accepts the idea of a housing bubble; when did it start? Because if we can determine that, we’ll understand a lot more about where we are headed. IMO, these companies are dead-guys walking, and the larger down payments are sure to come back. If this is true, prices will fall much further than people realize, and the number of underwater “owners” will skyrocket. Why? Because we generally don’t understand just how unaffordable houses really are. And don’t forget; if the loan is 15 years, the amount you qualify for at any given income drops accordingly.
‘our $ 3 trillion balance sheet’
Note that you don’t hear trillions mentioned in news stories about the GSEs and “what to do” with them. But it’s there, always has been. I can show any intrepid reporter Fannie Mae houses where the firm lost over 100% of the loan. If you go back to the down payment issue, or the loan term issue, you can see that the only things holding up the GSE balance sheet are GSE lending practices. And even that is an short term illusion.
So how will that work out? One can only guess, but it reminds me of the big dig in Boston, or the Golden Gate bridge rehab; they start out saying it will cost some number, and down the road it still isn’t done and the cost is 10 times higher, maybe more. How will “americans…just don’t like to have to do that” go over when SS or medicare are being cut, other services cut, ect., and the GSE bill turns into a trillion, then 2 trillion, with no end in sight?
we generally don’t understand just how unaffordable houses really are.
Which is why the elimination of the down payment requirement was so crucial. It’s one thing to buy a $500k house and roll everything into the low-interest monthly payment, it’s quite another when the bank asks for your $100K in cash. Tends to put things in perspective pretty darn fast. If FB’s had spent a half-hour or so playing around with Bankrate’s mortgage calculators and adjusting interest rates on a hypothetical ARM, they would have understood full well how unaffordable their houses were.
“Which is why the elimination of the down payment requirement was so crucial.”
It might also helped if the Fed ended its interest rate suppression program (”extended period of low rates…”).
‘why the elimination of the down payment requirement was so crucial’
Yes, and how did we get there? It must have been a self-feeding function; lower down payments, looser loan rules, equals higher prices. Then “golly, we’ve got to make it easier to get a loan, and lower down payments or people won’t be able to afford houses!”
This isn’t that hard to understand. The question is, when did this begin, and how far did it go? Just how big is the housing bubble?
Another thing, and I may be going out on a limb here; even if you disregard the fact that the GSEs have cost us a bunch of bucks, they were never a good idea. They served only to make houses less affordable; the exact opposite of what they were intended to do! This is relevant today, because look at the various interests line up to tell us we must have this system, and they must be resurrected.
“They served only to make houses less affordable; the exact opposite of what they were intended to do!”
Isn’t that SOP for DC programs: Announce a program to have the exact opposite effect from its real impact?
“If FB’s had spent a half-hour or so playing around with Bankrate’s mortgage calculators and adjusting interest rates on a hypothetical ARM, they would have understood full well how unaffordable their houses were.”
Or if they could do 5th-grade math, they could easily have figured out what the annual interest expense was on a mortgage, and then divided by 12.
Hey Ben, the housing bubble certainly didn’t begin by getting rid of downpayments. That was later on, and just blew the bubble up more. There have been local booms and busts for decades, but that was based on income from jobs. Examples: oil income in Texas, innovation jobs in Silicon Valley.
So for the root cause of this housing bubble I guess we need to dig back to the first time the housing bubble went national, which indicates a national causality. Also we need to find when house prices were first disconnected from jobs and income.
My honest guess would be a two-fold cause with a host of enablers: FIRST the regulations were loosened in the late 90’s, like the repeal of part of Glass-Steagall which made it very easy to securitize loans up the food chain. However, that wasn’t enough because loans were too expensive to make mass-securitization profitable. SECOND when Greenspan dropped interest rates superlow after 9/11 loans became pretty cheap. So now you have cheap loans which you do 30-year math on to make it look profitable, and a largely unregulated way to sell loans, which you do 30-DAY math on to collect the fees. Both are national phenomena. When securitization made loans somebody else’s problem, the house was disconnected from the income and down-payment savings.
I would say this started in mid 2002. The general public got heavily involved in mid-2003. (I vaguely remember that option ARM’s were made available to the public at this time — Texas?)
Then you had enablers: the implied government guarantee of Fannie/Freddie; outsourcing and insourcing of jobs finally hit the white-collar class so credit had to expand, chasing risky profit because the 2% bond was swallowed by inflation, and of course the NAR drawing on the decades of responsible living (and steady jobs!) of our parents to sell us our own American dream.
The question is, when did this begin, and how far did it go? Just how big is the housing bubble?
My recollection:
The Bay Area California (Ground Zero IMO) began rising well above the rate of inflation in 1998. It paused for almost one year after 9/11 and started really blowing up in 2002 to about 2007.
Southern CA, (which did have a smaller bubble from 87-90 and declined from about 91-94) began to rise well above the rate of inflation in about 2001-2.
I think 2002 is when most parts of the USA had entered “bubble territory” but Bay Area California started bubbling in the late 90s.
2001-2 is when the really crazy loans started coming out and interest rates were brought way down by the Fed.
but Bay Area California started bubbling in the late 90s.
What was a newly minted millionaire from Grocery-dot-com gonna do for valley digs?, build a Victorian in Modesto?, commute by helicopter?
Silicone went BOOM!
Stucco went BOOM!
next:
$457,000 Deere Tractors w/ low-cost implement$ & their
legalregistered owners.And if prices are going down as much as they say, then that 20% is going to be within the reach of a lot of people soon.
In a free market (which we apparently don’t have), a buyer could choose a downpayment percentage and lenders could decide what to charge him (including a default risk premium) based on his credit record and downpayment percentage. Those with worse credit or lower downpayment percentages would have to purchase more expensive loans — kind of the opposite of the toxic subprime loan product which was so much in vogue pre-2007.
michael
Sorry to hear of your interview woes, but proud that you would not be a corporate parrot to the VP, and that you were getting to the nuts and bolts, to see if it was a fair marriage. That interview must have been one of “those” moments you’ll have etched in your memory.
So, 20% down is a bad thing? I remember our envelopes for each item in our budget in 1982, when the envelope was empty, we had no money left. That’s how we came up with our first down payment. You’d better believe we would go without, before we would lose our home to the bank.
That VP has chutzpah, and not in a good way. Good grief. I know you were interested in the position, but wow, that post was a sad commentary of stupidity, greed, and corp narcissism.
Mike..
Thats great insight into their corrupt culture.
Thank you.
vp: well…without fanniemae the 30 year mortgage would not exist…people would need 20 to 30% down to buy a house…and americans…just don’t like to have to do that.
Hmmm, ISTR my parents having to have at least as much skin in the game when they got a construction loan for the house they had built during the mid-1960s.
They got a 20-year mortgage and paid it off in the mid-1980s. Mom’s still quite proud of that.
“…fannie mae turned me down.”
Keep trying. At least the job market is on an upswing; I’m sure you will find something if you keep looking.
VP: Well… without fanniemae, the 30 year mortgage would not exist… people would need 20 to 30% down to buy a house… and Americans… just don’t like to have to do that.
Interviewee: Well. If people can’t afford houses, houses will get less expensive… 20% of 56 thousand dollars is a heck of a lot less than 20% of 560 thousand dollars… right?
VP: Well, I owe five-hundred and… Gaaaaah… thousand… <stroke> Gak! Gak! Gak! <thump!>
.turned down for a job producing a radio show for a former Air America host because i am not a dyed in the wool liberal.
Sorry to hear that, DJ.
I hope you find something cool soon.
Any chance you could do something like Girltalk?
aNYCdj, unemployment is a lot higher than the official numbers. And the entertainment industry has always been one of the hardest markets to work in.
Don’t take it personally.
As for radio, just about THE most corrupt and/or inbred of them all.
aNYCdj, unemployment is a lot higher than the official numbers. And the entertainment industry has always been one of the hardest markets to work in.
Here in Tucson, I volunteer at a community radio station. Periodically, the station has open meetings for those who are interested in becoming volunteers.
More than a few would-be volunteers are interested in becoming deejays. And, you guessed it, the lion’s share of our deejays are also volunteers.
Some have been volunteer deejays for a couple of decades. I’m reminded of one lady, one of the most popular Saturday deejays, who can barely make it upstairs to the broadcast studio. Walking and climbing stairs aren’t easy when you wear a leg brace. But she comes in every week, does her show, and calls her time on the air her weekly mental health break.
Now, how do you start out as a volunteer deejay at our station? You take the deejay course. That’s 100 bucks. Then you audition and get accepted for airtime.
Then you fill in for other deejays, quite often in the wee hours of the morning. Wanna volunteer to get up at 2 a.m. to handle a show for an ailing fellow deejay? You’d be surprised at the number of people who are ready, willing, and able to do so.
Then, if you’re still around, you get a regular show.
… and get lucky enough to EVEN find a nice setup like this.
You do know how lucky you are, right Slim?
ou do know how lucky you are, right Slim?
I feel very fortunate to be among this station’s off-air volunteers. Matter of fact, I’ve only been on the air once — was pitching for donations during a pledge drive.
Family trying to buy foreclosed home stranded in extended-stay hotel in Orlando
Foreclosure deals can strand buyers:
http://www.orlandosentinel.com/business/os-foreclosure-extended-stay-20110330,0,26585.story
Oh please. She is there completely by choice. Any lawyer who couldn’t get her out of that purchase agreement should be disbarred. It would be nuts to continue with the purchase of a house that has since lost 8% of its value anyway.
Please, Kim, let’s not detract from a perfectly good MSM victim story.
The dreamers are back. In the last two weeks I’ve seen a 40% increase in listings in my area of interest. Comps have been selling around assessment. Not one of the 20 or so new listings is withing 20% of assessed value. I like to look at land records to see how much wiggle room sellers have. Many of these people bought since 2004 and actually have little margin. The choices for the spring selling season in the Boston burbs are sellers get their wishing prices, short sales start popping up, or very few sales. Maybe it’s starting to hit the fan here. Its about time. Now I just need interest rates to jump and perhaps I’ll consider jumping in.
Like I say Hobo, New England was late to the Housing Fraud Festival. Deluded, underemployed debtors were convinced that prices would not fall. What amazes me is prices lost ground for a decade or more during the 1980s and 1990’s. How one could forget that quickly speaks to the mind bending power of the mania experienced during the Great Housing Fraud.
“Comps have been selling around assessment. Not one of the 20 or so new listings is withing 20% of assessed value.”
Are the assessed values at levels where you are willing to buy? If so, there is an easy strategy: Make a series of offers on houses whose assessed value is at or below what you would be willing to pay for them at the level you believe they will assess. Eventually one of the dreamers will wake up and sell you the home at an affordable price.
I think about 30% below assessment it where I want to buy. I I have a ways to wait
Hobo
Our back up offer home, in case nothing else came on the market, sold last night. In our area of So Ca, there is a choice of 16 homes in our area in our price range. Take all the two-story homes away, and we have 3 to pick from, all overpriced. Our issue is, we aren’t willing to pay $230sf to have it worth a lot less next year. All these FB’s living in their home free is leaving the MLS dry as a bone.
Is part of your areas issues the FB free living, too? Are sellers willing to wait 120 days to get an offer?
This housing market for buyers, sucks in So Ca.
“All these FB’s living in their home free is leaving the MLS dry as a bone.”
Buying now is a bet this situation will continue indefinitely.
Wow, our teardowns are going for 230/sqft. But no, we haven’t had any delinquency reportings in our area. It is a rather affluent area with a median household income of 100K and a median home price of 600K. And as Professor Bear pointed out, many do what is termed an Austrian or Australian auction of gradually lowering their prices til somebody bites. It is very common to see 6 to 8 month old listings that go away in the winter and get relisted in the spring.
I agree better to wait than overpay.
“Austrian or Australian auction”
I have been trying to figure out whether this term is linked to the collapse of the tulip bubble. If anyone can provide historic evidence, I am interested.
Dutch Auction
I wasn’t even close.
According to wikipedia:
“The Dutch auction is named for its use in the Dutch Tulip Craze.”
However, they give no further information about its origin.
Investorwords says:
“Named after the famous auctions of Dutch tulip bulbs in the 17th century, it is based on a pricing system devised by Nobel prize winning economist William Vickrey.”
I like Mr. Vickrey:
(wikipedia)
Vickrey’s economic philosophy was influenced by John Maynard Keynes and sharply critical of Chicago school of economics and the political focus on balanced budgets and inflation in times of high unemployment.
“Eventually one of the dreamers will wake up and sell you the home at an affordable price.”
This sounds more like speculation than home buying! Why would anyone want a house so badly that they are willing to pay these prices without total discrimination. I refuse to buy unless I get what I want and where I want it and for the price that I want.
“I refuse to buy unless I get what I want and where I want it and for the price that I want.”
Will you force the seller to agree to a contractual requirement to come back and feed the squirrels?
This Time It’s different.
“At no time in the last 200 years have commodity prices risen as fast and as high in the last decade without a sharp decline.”
http://www2.macleans.ca/2011/03/26/carney-this-time-its-different/
But they are not making any more oil or gold or copper…
…or land…
Imagine if Realtors could sell these commodities using their awesome sales skills. The commissions would just roll in.
At no time in the last 200 years (exempting Weimar Germany) have we had a Fed chairman as willing to inflate away government debts and obligations, and print trillions in backed-by-nothing digital dollars to bail out Wall Street speculators and encourage more speculative excesses, with the full backing of the political establishment. If the dollar loses its reserve currency status, we the US will be will and truly screwed.
This Time It’s different
It might be a bubble and it is being affected by Fed Money but it is different too. Millions are joining the middle-class around the world (35 million in Brazil alone) and they want their toasters and blenders.
From the article:
Carney said the rise of the middle class in India and China does mean this boom is different than all the others that have come before it
Not only have great vampire squids survived the Fall 2008 financial crisis, but they have emerged more powerful and pernicious than ever before.
MARKETS
MARCH 31, 2011
TARP Watchdog Spars Over ‘Too Big to Fail’
By ANDREW ACKERMAN
WASHINGTON—In his final day on the job, a federal bailout watchdog squabbled publicly with a Treasury official over the legacy of the $700 billion Troubled Asset Relief Program as both individuals testified before lawmakers.
Neil Barofsky, the departing special inspector general for TARP, warned that the same “too big to fail” firms that nearly brought down the financial system in 2008 have become bigger and more interconnected and continue to maintain an unfair advantage over smaller competitors.
The federal bailout also fell far short in helping Main Street by encouraging greater bank lending or assisting enough homeowners with troubled mortgages, he said, speaking before a House Oversight and Government Reform subcommittee. He called a TARP-funded mortgage modification program a “colossal failure.” The House voted Tuesday evening to end the program.
“TARP’s most significant legacy may be the exacerbation of the problems posed by ‘too big to fail,’ particularly given the manner in which Treasury executed the bailout, largely sparing executives, shareholder, creditors and counterparties, reinforcing that not only would the government bail out the largest institutions, but would do so in a manner that would do little harm to the responsible stakeholders,” Mr. Barofsky said.
…
Neil Barofsky, the departing special inspector general for TARP, warned that the same “too big to fail” firms that nearly brought down the financial system in 2008 have become bigger and more interconnected and continue to maintain an unfair advantage over smaller competitors.
My prediction: Barofsky will head to the sidelines for a few months. And what will he be doing there? Writing an “insider’s account” sort of book.
Look for it in bookstores early next year. It’ll be a bestseller.
“The pain in Spain
is hard to ascertain.”
OlympiaGal is enjoying a good chuckle from afar…
BUSINESS
MARCH 11, 2011
Pain in Spain Is Hard to Ascertain
By JONATHAN HOUSE And SARA SCHAEFER MUñOZ
MADRID—Spain’s central bank said the country’s lenders will need €15.15 billion ($21.07 billion) in new capital, but Moody’s Investors Service published a far higher estimate that spooked markets and called into question the credibility of Spain’s figures.
The Bank of Spain’s disclosure on Thursday, aimed at providing a new yardstick for the cleanup of the country’s ailing banks and shoring up investor confidence, was overshadowed as Moody’s downgraded its rating on Spanish government debt to Aa2 with a negative outlook, from Aa1 previously. The ratings firm cited as one of the reasons for the action its estimate that Spanish banks have capital needs of between €40 billion and €50 billion, in line with many analysts’ estimates. In a more stressed scenario, it estimated they could need €110 billion to €120 billion.
The downgrade contributed to a selloff in global stock markets and caused Spain’s cost of funding to jump, with the difference between the interest Spain pays above the German benchmark rising to 2.27 percentage points from 2.20 percentage points Wednesday. The euro also slumped against the dollar.
Spain is the euro zone’s largest troubled economy, and investors worry the region’s other governments might lack the will or resources to rescue Spain if it can’t pay its debts, potentially sinking the common currency.
…
Spain is the euro zone’s largest troubled economy, and investors worry the region’s other governments might lack the will or resources to rescue Spain if it can’t pay its debts, potentially sinking the common currency.
Yep. And since Spain does not control its own currency, they can not print their way out of their troubles.
They actually have to come up with “real” money.
So when will they switch back to the Peseta?
The downgrade contributed to a selloff in global stock markets and caused Spain’s cost of funding to jump
Moody’s Investors Service published a far higher estimate
So, the “TrueEnabler’s™” / “TrueOurAAA+isjustanopinion™” are still yappin’ & stampin’…and the Global “Financial Brains” still drop to their knees? Oh, my!
(Hwy50 chewing on a carrot, bugsy style):”eh, say Doc have a Looney Tunes AAA carrot, Daffy urinated on ‘em, but since he’s a “free range” duck, we still’s get to label ‘em “Organic”.
Portugal debt crisis takes turn for worse
By Barry Hatton
5:30 AM Wednesday Mar 30, 2011
Portugal’s financial tailspin gathered speed despite political efforts to contain the acute debt crisis that is also unnerving the 17-nation eurozone.
The interest rate on Portugal’s 10-year bond surged to a euro-era record of 7.9 per cent yesterday - an unsustainable borrowing cost for the cash-strapped country.
Also, ratings agency Standard & Poor’s lowered the credit worthiness of the five biggest Portuguese banks and warned it may cut the country’s credit rating later this week due to political uncertainty after the government resigned last week. That development compounded Portugal’s already daunting problems.
Analysts predict Portugal will soon need a bailout like those given to fellow eurozone nations Greece and Ireland.
…
As news of the Japanese earthquake, tsunami and nuclear meltdown recedes, the Eurozone financial disaster is coming into plain view.
“…forcing many of construction barons into bankruptcy.”
It sounds like the Irish haven’t yet developed free (taxpayer-provided) too-big-to-fail insurance programs to keep construction barons afloat during hard times, as we apparently have in the U.S. I can’t help but wonder about the legality of protectionism in some sectors (home construction, auto manufacturing, investment banking, etc) while letting others fall under the bus (so far as I am aware, restauranteurs and used home sellers in the U.S. are on their own, as they don’t qualify as too-big-to-fail).
Irish Prepare to Learn Full Cost of Banking Crisis
Ireland suspends trade in Bank of Ireland, Allied Irish Banks before stress-test results
The Associated Press
By SHAWN POGATCHNIK Associated Press
DUBLIN March 31, 2011 (AP)
FILE - This is a Thursday, Nov. 4 2010 file photo of a Bank of Ireland building in Dublin, Ireland. Bank of Ireland shares fell 7 percent Wednesday March 30, 2011. (AP Photo/Peter Morrison, File)
Ireland prepared to learn the full cost of its banking crisis on Thursday when the results of stress tests were expected to reveal that four banks need billions more in aid, likely giving the government extra ammunition in its campaign to force some of the losses on international investors.
As the results loomed, market tensions were at a high, forcing the suspension of trading in the shares of Bank of Ireland and Allied Irish Banks. Irish Life & Permanent and the Educational Building Society were also being tested.
A senior Irish banker, Mike Aynsley, said he expected the tests to conclude that the four lenders would need another euro18 billion to euro25 billion ($25 billion to $35 billion) to strengthen them against any future shocks.
That figure would come on top of the euro46 billion ($65 billion) that Ireland, a nation of just 1.8 million income-tax payers, has already paid to prevent the outright collapse of five banks since 2008. Ireland has repeatedly been forced to raise its worst-case estimates of bank losses as its property market sinks deeper, forcing many of construction barons into bankruptcy.
…
“As news of the Japanese earthquake, tsunami and nuclear meltdown recedes”
Got milk?
As interest in the story recedes, that is. Blown-out, melted down reactors using weapons-grade plutonium-239 take a little longer to make “go-away”. About 24,000 years (half-life of Pu-239) and the story will be over.
It will take a little longer than that. Go look up the definition of “half-life”.
Well, at least the problem will be half-assed solved by then.
And in 48,000yrs, it will be three-quarters solved. And in 72,000yrs, it will be 7/8ths solved. And in 96,000yrs, it will be 15/16ths solved. And…
By then, the Japanese debt may be mostly payed off.
This “full cost” doesn’t include non-performing mortgage loans. And the EU’s banking “stress tests” are a proven joke.
I’ve maintained all along they are following the U.S. housing bubble trajectory but with a 5-year lag.
Chart of the Day: Is This the Chinese Housing Bubble?
By Derek Thompson
Mar 16 2011, 5:05 PM ET
Residential housing investment as a share of China’s GDP has tripled from 2% in 2000 to 6% in 2011 — the same mark U.S. housing hit before imploding.
…
Are Chinese banks TBTF? What is their government’s stance? (I’m afraid I already know the answer.)
“they are following the U.S. housing bubble trajectory but with a 5-year lag.”
Monkey see, monkey do.
Ask the People’s Liberation Army.
March 21, 2005
“China ended the favorable interest rates for private housing loans Thursday..At the same time, the minimum down payment in cities with rapid housing price increases was raised from 20 to 30 percent…By the end of February 2005, outstanding commercial housing loans exceeded 1.65 trillion yuan ( US$200 billion), accounting for 23 percent of the commercial banks’ medium and long-term loans.”
“If the housing bubble burst and the borrower could not make the repayment, the commercial banks will be faced with a large amount of bad debts.”
March 30, 2005
“China’s rising property prices pose a threat to the stability of Asia’s second-largest economy. Excessive growth in housing prices has directly undermined the ability of city residents to improve their living standards, affected financial and social stability…Local officials who fail to take measures to rein in growth will be held to account. ‘The State Council’s tone is very harsh,’ said Fan Weiwei, a Beijing-based economist.,’People’s expectations of future property prices will definitely be changed. The likelihood of further price surges is becoming minimal.’”
China’s intertwined financial and political elites are profiting very nicely from the housing bubble. It is the Great Unwashed who are suffering. The 64 dollar question is, how long before China’s urban and rural poor erupt in rage at being the collateral damage for the debt- and speculation-fueled chimera of a hot-money “boom.”
It is the Great Unwashed who are suffering
Thus cometh a “TrueTsunami™” of epic discontent.
I saw a news item (video) a few weeks ago about a Chinese shopping mall (the biggest one in the world) that is a ghost town, lacking both customers and tenants. The mall iteself had hundreds of employees (not retail employees), so I guess it was too big to fail.
A lot of eerie foortage. They enter one of the few shops in the mall and the lonely clerk says she hasn’t sold anything all week.
http://market-ticker.org/akcs-www?post=183316
Another day, another Chinese stock cratering due to dodgy financials. (It was ABAT yesterday). Chinese official economic and financial data should be viewed as even more suspect than our own.
I’ll be brief: “TrueBambooLie™”
Oh my…
At Least 40 Civilians Dead In Tripoli Strikes: Vatican Official
Reuters | 31 Mar 2011 | Reuters
ROME (Reuters) - At least 40 civilians have been killed in air strikes by Western forces on Tripoli, the top Vatican official in the Libyan capital told a Catholic news agency on Thursday, quoting witnesses.
“The so-called humanitarian raids have killed dozens of civilian victims in some neighborhoods of Tripoli,” said Giovanni Innocenzo Martinelli, the Apostolic Vicar of Tripoli.
“I have collected several witness accounts from reliable people. In particular, in the Buslim neighborhood, due to the bombardments, a civilian building collapsed, causing the death of 40 people,” he told Fides, the news agency of the Vatican missionary arm.
Libyan officials have taken foreign reporters to the sites of what they say were the aftermath of Western air strikes on Tripoli but evidence of civilian casualties has been inconclusive.
The Libyan government can’t kill civilians, if we kill the first. BTW, 2000 marines are on the way to Libya but don’t worry Obama tells us no ground troops. Of course, that does not include special forces or CIA operatives (that may have been ground troops the day before) so I am not worried.
Aslo talk of supplying weapons to the rebels like the Chinese did to the Viet Cong in that litte non-war.
Opie taking a ride on the ol’ slippery slope?
Sounds about like Vietnam.
Are we backing the Varmint Cong this time?
Sounds like how Iran-Contra started.
How will the banksters cope with this? I guess they could decree that everyone has to buy a home, similar to the U.S. health insurance concept.
Personal Finance Reader
Home buyers on strike
Rob Carrick
Globe and Mail Update
Posted on Tuesday, March 29, 2011 10:15AM EDT
Home Buyers On Strike
Concern about a housing bubble in Australia has risen to the point where first-time buyers are urged by a group called Prosper Australia to stay out of the housing market. Read all about it on Canada’s own Greater Fool blog, or check out the Prosper Australia website.
…
Mar 31, 2011
Biden: ‘Good progress’ on budget talks to avoid shutdown
07:39 AM
By David Jackson, USA TODAY
Meanwhile, back at the budget talks …
Vice President Joe Biden said last night that Democrats and Republicans are “making good progress” on a budget deal that would avoid a government shutdown, and have agreed to a specific number on budget cuts: $73 billion.
…
A $73 billion cut out of a $1.7 Trillion deficit (not the actual budget) = about 4% deficit reduction.
Big deal unless this is going to be followed up by massive cuts in the 2012 budget.
The proposed budget is $3,819 Billion. $73 Billion is less than 2% of that amount.
“The proposed budget is $3,819 Billion”
That’s almost $13,000 per US resident, about half the median wage earned, or about $51K for a family of 4.
There’s no way the middle class can pay for this. The near two trillion dollar deficits are permanent. When the SHTF it’s going to be utterly spectacular (and messy too, so don’t stand close to the fan if you know what’s good for you)
2012 is an election year. Good luck getting anything done with those clowns.
Spending needs to be cut and the tax code simplified. Eliminate BS deductions and lower the tax rate.
Is TurboTax that complicated for you?
Just look how great TurboTax turned out for Timmay.
You shouldn’t need a program or CPA to do your taxes.
I don’t need either. Do you?
Eliminate BS deductions and lower the tax rate.
Iffin’ you can’t get both, Hwy50 suggests you start with your 1st idea, 1st.
But you can get both. Without BS deductions on corporate or personal returns tax rates would decrease.
No. RATES would stay the same. The amount of actual tax paid would go up, because the IRS would see more income. Congress would have to eliminate deductions and lower rates separately.
Washington Post has been reporting $33 billion - on top of the $10.5 billion that was agreed to in the last two extensions.
Sorry. $23 billion on top of the already agreed to $10 billion for $33 bilion total as per Ezra Klein. Details not set, but they have a number to aim at. This is progress, but we are not at “this is going to be easy” yet.
Not sure why the Fed can’t have both: Jobs now, inflation later?
Irwin Kellner
March 15, 2011, 2:39 a.m. EDT
Decisions, decisions
Commentary: Fed faces tough choice between jobs and prices
Mandate on inflation and deflation is just cover for bailing out banks. They care not what unemployment is.
They care not!
what unemployment is.No need to elaborate.
So if they cause high or hyperinflation, companies will suddenly start hiring people in droves ? I’m not following the logic here.
They’ve been looking at the Philips curve for too long.
Second week in a row (that I know of) where the new jobless claims numbers were “lower” than the previous week after the previous was “revised” higher giving the impression of an obviously “engineered drop” in the number. It appears that the maufacturing of a positive headline is far more important than reporting the truth. The precious headline number is everything.
Still a whopping 388K, which not too many years ago would have been considered a disaster. Now its the new normal.
How long until we hit the 50,000,000 mark for foodstamp recipients?
End of the year.
U.S. News has an article titled, “What It Will Take to Fix the Housing Market.” They list six things that must happen.
More job gains
Fewer foreclosures
A stable homeownership rate
Clarity from Washington
Rising rents
Some courageous buyers
The 5th one is happening. And there are always SOME courageous (foolish) buyers, but it should have read, “Enough courageous buyers.”
And the rest of the list? No time soon.
http://finance.yahoo.com/news/What-It-Will-Take-to-Fix-the-usnews-3674178090.html?x=0
“What It Will Take to Fix the Housing Market.”
Just one thing -
Average housing stock that costs about 2.5x the actual yearly income of the average home buyer.
The rest of the stuff is fluff
They’ll bulldoze the excess inventory before allowing prices to fall that low.
“They’ll bulldoze the excess inventory before allowing prices to fall that low.”
Trudat.
Remember, bubble prices, and therefore bubble taxes, feed the beast. It’s a good thing for the average family that banks and governments operate independent of each other.
/snark
They’ll bulldoze the excess inventory before allowing prices to fall that low.
They’ll have to bulldoze it because houses deteriorate rapidly when vacant.
That list is missing something, but I just can’t put my finger on it.
I think I might know. How about a hype-driven frenzy-like bubble of epic proportions driven by unscurpulous over-leveraged greedy banksters selling AAA-rated MBS to the whole World while underhanded mortgage brokers pimp no-down, no-doc loans to anyone with a pulse.
I think that might just do the trick.
I like your anger.
Geez, that sounds sooooooooooooooo complicated!
Hows about they just lower the age requirement for reverse mortgages, an accept the appraisal value that MegaBankInc. computer model estimated for 2032?
Oh liz, that will trick will never work again… until the next time.
$$$
Restart the securitization, duh.
And I still don’t like this idea that people are encourage to buy only because their rents are rising. Houses used to cost 120x rent and 2.5x income. I suspect that rent will go up to match 120x rent,* but prices are ~5x income.**
5x income is the new normal, just like needing two incomes, just like unaffordable health insurance, just like 13-ounce “pounds” of pasta. They are slowly boiling the frog, so to speak.
————
*In DC we still aren’t there. My house would probably sell for $320K or so, which is ~175x rent.
**for a house that matches the class of worker. For example, in DC, a white-collar household can easily afford a 3-bed tract crapshack. But white collar generally belongs in something a little nicer, with the tract homes for blue collar.
Rent and mortgages are almost the same where I live.
There are not enough investors or courageous buyers to take up the inventory that’s just sitting on the banks’ books.
“Investors” and “courageous buyers” helped get us into this mess to begin with. I call them Flippers and FBs. Until local communities start imposing punitive fines on mortgage-holders of vacant, unkempt properties, and the banks are forces to use true mark-to-market accounting (and allowed to fail), we won’t get to the bottom of this mess.
Until local communities start imposing punitive fines on mortgage-holders of vacant, unkempt properties, and the banks are forces to use true mark-to-market accounting (and allowed to fail), we won’t get to the bottom of this mess.
I’ve been having a field day reporting such properties to the City of Tucson. And, guess what, after just sitting there looking dumpy for lo these many months, those places are getting cleaned up in a jiffy. I don’t know what those city inspectors are saying to the property owners, but it’s working.
As for me, I’m going to keep right on reporting.
Today’s courageous buyers and investors often have cash. That’s one major difference. These folks with cash wouldn’t be so quick to part with it if they had the whole story from an inventory perspective.
These folks with cash wouldn’t be so quick to part with it if they had the whole story from an inventory perspective.
Having cash doesn’t mean that you’re smart about spending it.
Bad Andy
We’re cash buyers for a primary residence, and you’re right. One of the factors is the age of the buyer. We’re losing years of our lives, so we are will to make a compromise, but not willing to throw large sums of money away. It’s a balancing act of time vs.money.
FHA buyers are over bidding around our parts, and that’s who we’re up against. Hey, no skin in the game means they can walk. We’re cash, price matters (but so does time). We have many rents going. All will stop when we buy.
Fine, let ‘em use of their cash. At least they aren’t taking out loans that I’ll have to bail them out of. Some weeks ago I asked if there was enough shadow cash to buy all the shadow inventory. My suspicion is NO, not at these prices.
Can I find amongst you a “courageous” buyer for an ounce of gold at $10,000?
Seems to me expecting folks to pay current prices is not much different except of course you can find ounces of gold for around 1450 which would make my “wishing” price unrealistic
http://news.yahoo.com/s/afp/20110331/bs_afp/spainenergyalternativeenvironmentresearch
no mention of how much oil it takes to make oil.
Finally, after two weeks down with a busted hard drive, thanks to a sneaky, fast, and devastating
virus that destroyed my computer, I’m up and running.
Would someone direct me to that neat little program
that shows new posts here at the housing blog?
Would appreciate the help. I lost everything.
You only missed a big wave and a war. Everything is cool now.
Wow..do you have a link to the wave and the war?
Wow..do you have a link to…the war?
Domestic or Foreign?
When this is over will we all be eligible to join the VDW?
Insufferable bloggers…all I want is the link
to the program…really wish all you children
would behave.
…all I want is the link
to the program…
Rancher:
http://mysite.ncnetwork.net/res14l147/joshuatree.html
P.S.
viruses don’t do Macs
Bless you, my son. Go forth and sin no more.
Beatification is coming for the Mac world.
Bless you, my son. Go forth and sin no more….Beatification is coming for the Mac world.
Gee thanks “rancher”. Just trying to help… You sound bitter because you just got owned….Bad
Keep it up and you will again…
No, just trying to inject a bit of humor into
this thread. So I’ll disregard your comment.
No, just trying to inject a bit of humor into
this thread. So I’ll disregard your comment.
I’m sorry then if I didn’t get it because humor rocks but it’s not the easiest thing to convey on blogs sometimes.
search on druminnj (sp?). He posted a few days ago to follow his homepage link.
If you’re looking for drum’s Joshua Tree Extension for Firefox, here’s your link. And, in even better news, he just created a version that works like a charm with Firefox 4.0. (I’m using it right now.)
Glad to hear, as my fingers are tired from repeatedly typing
etc …
Free anti virus:
Avast (rated top 5)
Spybot Search & Destroy (look for the FULL name. there are copycats and they are spyware. download only from safer networking.net) Another top 5 and free.
If you are running Vista or Win 7, be sure to turn on your firewall.
If you are still running XP (god help you) download Comodo firewall. Free and rated number 1.
As a computer tech I deal with viruses all the time. Norton Antivirus is currently the most effective with relatively small impact on system resources or for free go with MS Security Essentials. For a good quick system scan download and run MalwareBytes.
If your machine is infected with a root-kit you will need to deal with it in Safe Mode or from a bootable disk before you can get control of the computer.
Gotta be more to the Sokol/Berkshire/Buffett corrupt bankster story. Given the timing, is it possible that the Raj RatafatIndian bankster trial has shed some relevant testimony which shook the tree?
He bought a bunch of shares of company A for himself and then recommended that Berkshire buy company A. How hard is that to figure out?
I mean why did Buffet spill the beans on this right now. He could have kept quiet about it unless…
…unless he actually really does care about his reputation for straight-shooting, and expecting his employees to behave in a manner that is above reproach?
My impression is that the story is overblown, esp if he did in fact disclose to Buffett that he owned shares of the company when he recommended it for acquisition, as they are saying he did.
Of course, Buffett might simply not appreciate having an employee front-run his purchases, even if he discloses that he did so.
That’s the thing. Apparently Buffet says he knew about and was fine with Sokol’s share purchases. If so, does that say about Buffett’s integrity? Also, why would WB then point that out as a problem? None of it really makes sense, there has got to be something far worse that is being covered with this. I just hope something else shakes loose. I just love watching banksters get stripped naked. Masters of the Universe are really quite ugly underneath their $billion dollar skivvies.
Buffet could have not purchased the company.
Sokol
So, ol’ Warren can still fling a mean “snowball”. Wonder if Sokol will get a xmas card & a box of See’s this year?
Paging Polly: Ta’ Da! Major rumblings about extending jobless benefits in GA (granted this is not beyond the Federal level which is really the discussion we were having). Just to show the controvorsy is alive and well and well, controvertial:
http://blogs.ajc.com/business-beat/2011/03/31/power-breakfast-jobless-benefits-running-out-for-thousands-of-georgians-state-taxes-grady-resignation-suntrust-repays/?cxntfid=blogs_business_beat
I promise I know how to spell it!
The comments, as usual, say more than the article.
And Michigan is trying to cut the benefits that come out of the state fund by 6 weeks down to 20. Rumblings are not a passed program.
And this is not the same as a federal extension of jobless benefits beyond 99 weeks. I’ll get back to you on that at the end of April as promised.
And that isn’t even an article about extending benefits. It is about some modification (unspecified but called a “tweak”) that Georgia has to do for its citizens to be eligible for the benefits that the rest of the country is already eligible for.
Try again.
completely missed my point. Thank you for your time.
Liz, UE will not be extended beyond current guidelines.
Any news relating or alluding to doing so is false hope for distraction purposes only.
Be prepared for a serious increase in crime this year.
I think this story is exciting: http://www.platinum.matthey.com/media-room/news-room/hyundai-unveils-blue2-fuel-cell-concept-car/800482810.html
It does not talk price but I have always been more excited about fuel cell technology than battery powered cars. Lot easier to fuel with the existing fuel network. Having cars get four times the gasoline mileage with fuel cells, domestic drilling, developing NGV including fuel cell vehicles creating hydrogen with NG, coal to liquids, thorium nuclear reactors and wind and solar where economically competitive seem like the way to develop energy independence. Think we need to move there quickly since peak oil is a lot closer than most people think, with conventional oil, I think we have reached it. The fact that Libya and Iraq are two of very few countries that have the reserves to substantially increase production and have nothing to do with the foreign policy of W or Opie. (sarcasm off on last sentence now).
It is powered by a fuel cell electric system that delivers 90kW of power and fuel economy of 34.9km per litre.
Well, since they got it from blue-print to hardware level, they should increase their sales by ripping it (fuel cell electric system that delivers 90kW of power) from the chassis/transportation model and pack it for rural home energy uses. Yeah, just put it in a plainjane box and ship it.
“It is powered by a fuel cell electric system that delivers 90kW of power and fuel economy of 34.9km per litre.”
That’s 82 mpg
I seek things, non-grid related.
Wind and solar house with ~300 mile range electric car = eff you giant corporations.
“Wind and solar house with ~300 mile range electric car = eff you giant corporations.”
What, are are all those devices one-offs that were made in a garage shop?
What’s wrong with using plain Nautural Gas for car fuel? The conversion is relatively simple to any gasoline car (not quite as simple with newer computer-controlled models, but new cars could easily be built). When I was in New Zealand over 20 years ago most cars had a clylindrical tank in the trunk for CNG and the driver could actually switch a valve in the trunk to run on either gasoline or natural gas. Carburetors would make a comeback and what stimulus that would create unless we just bought them from the Chinese (ugggh_).
What’s wrong with using plain Nautural Gas for car fuel?
All the taxis in Rio are required to run on it. Cleaner air but way less trunk space.
same deal in Buenos Aires
120HP? Eh, pass.
H2 getters in reverse you will need more of this stuff Platinum or Palaidium
A getter is a pladium or platinum piece of metal used to “get” H2 out of sealed electronic packages H2 can damage certain electronic chips.
A fuel cell can be a reverse getter releasing H2 so it’s not explosive. I don’t really know too much about them though.
Catalytic converters also use the same rare earth metals
seem way more useful than Gold
It’s scary to think that so many other countries’ real estate bubbles are still inflating (CH, AU, CAN, etc). The potential for contagious feedback throughout the global economy due to the mutually-reinforcing collapse of multiple housing bubbles seems quite high.
* REAL ESTATE
* MARCH 29, 2011
Housing Booms North of the Border
Some Economists See Canada’s Market Ripe for a Correction, With Debt Rising to Worrisome Levels
By MONICA GUTSCHI And DON CURREN
TORONTO—As much of the U.S. housing market limps along, home prices north of the border are on a fresh tear, fired up in part by a borrowing binge that has sent Canadians’ debt to record levels—and now higher than their notoriously profligate U.S. neighbors—while income growth pokes along.
There are signs that debt-laden Canadians might not be able to adjust if rates rise. Above, construction workers building homes in Calgary last May.
All that has raised worry at the country’s central bank, which repeatedly has warned about rising debt levels, and among some economists, who say the market is ripe for a correction—maybe a steep one.
David Madani, Canada economist at Capital Economics, an independent research consultancy based in London, says Canadian housing prices could be in for a 25% drop in the next three years, a correction he says is warranted by the now-inflated ratio of house prices to income.
House prices have risen to almost 5.5 times disposable income per worker, well above the long-term historical average of 3.5, he says.
“We’ve been through a fairly hefty housing boom over the last 10 years, and the next three years is going to be an unwinding of that,” Mr. Madani says.
…
Would the news of radioactivity in U.S. milk tend to increase, decrease or have no effect on housing demand?
* ASIA NEWS
* MARCH 31, 2011
Radiation Traces Found in U.S. Milk
By STEPHEN POWER
The U.S. government said Wednesday that traces of radiation have been found in milk in Washington state, but said the amounts are far too low to trigger any public-health concern.
The Environmental Protection Agency said a March 25 sample of milk produced in the Spokane, Wash., area contained a 0.8 pico curies per literlevel of iodine-131, which it said was less than one five-thousandth of the safety safety guideline set by the U.S. Food and Drug Administration.
…
It might increase the demand for fallout shelters, Prof. Bear!
Ahhh. That amount of radiation is good for you and they are not even charging you extra for it. Normally you would have to pay for that much goodness.
Can’t these people stick to standardized units? So far I’ve heard sieverts and curies — with prefixes from pico to micro — and the prevalent “X number of times higher/lower than is allowed” which is mostly meaningless. Never mind that Japan and the US probably have different allowed amounts.
And Curie and Sievert measure totally differnent things. Curies are disintigrations/second, and sieverts are units of energy, like calories or joules.
Can that radiation be traced to Japan? For all we know it could have come from Hanford.
Curies go best with rice, but can be too spicy if not used in moderation.
Whatever happened to good old Roentgens?
Too hard to spell?
What a hoot! If people knew how much radiation was coming from their granite counter tops they would have a heart attack on the spot.
HAHAHAHAHAHAHAHAHAHAAHA
Remember the announcement back in August 2007 that “subprime will be contained to $200 bn”? How did that turn out?
Fed, forced by court, releases lending details
10:06 a.m. EDT, March 31, 2011
WASHINGTON (Reuters) - The Federal Reserve on Thursday released the names of banks that borrowed from its main emergency lending facility during the financial crisis after having run out of legal appeals to block publication.
The 25,000-plus pages of document released by the central bank provide an unprecedented view of which banks needed the most help during the crisis.
They detail not only the bank names but how much they borrowed from the Fed’s so-called discount window for period of August 8, 2007, to March 1, 2010.
…
“so-called discount window”
Interest-free loans for banksters to lend out to others at ‘market rates.’
Perhaps the American monetary base is safe until the next global financial meltdown? That said, I have a hard time imagining a bankster turning away billions of bailout dollars due to “stigma” issues.
* MARKETS
* MARCH 31, 2011, 3:08 P.M. ET
Citing Stigma, Critics Say Banks Now Less Likely to Tap Fed
By LUCA DI LEO And MAYA JACKSON RANDALL
Banks may become more reluctant to borrow directly from the Federal Reserve after the central bank on Thursday disclosed which financial institutions came to its discount window during and in the aftermath of the financial crisis.
The Fed’s first-ever disclosure of how many banks used its traditional emergency-lending tool spans from Aug. 8, 2007, to March 1, 2010. That includes borrowing details around the period that investment bank Lehman Brothers Holdings Inc. collapsed on Sept. 15, 2008, which transformed Wall Street and ushered in unprecedented government intervention to prop up financial markets. Discount-window loans hit a peak above $110 billion at the end of October 2008.
The disclosure, brought about by lawsuits from Bloomberg LP’s Bloomberg News and News Corp.’s Fox Business Network, marks the government’s latest step in providing more information about the Fed’s controversial rescue efforts during the crisis. (News Corp. is the parent company of The Wall Street Journal.)
In December, the central bank was forced by the Dodd-Frank financial overhaul to lift the veil of secrecy on nearly all the $3.3 trillion of credit it funneled to different parts of the economy and the financial system during the crisis—except for discount-window loans, the oldest lending tool in the Fed’s arsenal.
The disclosures “will send discount-window activity into a deep freeze for at least a generation,” Lou Crandall, a veteran Fed watcher at Wrightson ICAP, said ahead of the release. He is convinced that headlines about institutions “milking” the government for cash during the crisis will persuade banks to stay away from the window.
…
Budget Woes Could Mean Big Cuts at Community Colleges
Community colleges facing $800 million in funding cuts
Community college classes and enrollment could be slashed next year.
6:02 a.m. PDT, March 31, 2011
LOS ANGELES (KTLA) — California’s budget problems could mean significant class reductions at community colleges across the state.
As budget talks stall in Sacramento, the 112 community college campuses are facing $800 million in funding cuts for the coming school year. That is double the amount suggested in Governor Jerry Brown’s budget proposal.
Chancellor Jack Scott says that could mean that 400,000 fewer students would be able to enroll.
Long Beach State may be forced to cut 222 classes in the fall, turn away 1,000 students and eliminate more than 30 staff positions, President Eloy Oakley told the Los Angeles Times in a telephone briefing.
The three community colleges in San Diego plan to cut more than 1,000 classes and turn away 20,000 students, Chancellor Constance Caroll said in the same briefing.
…
Yet another rung cut from the ladder of upward mobility.
In California budget, they all fall down
Debra J. Saunders
Thursday, March 31, 2011
Gov. Jerry Brown won the blame game and lost the budget.
Brown began with a proposal to put a measure on the ballot to extend the 2009 tax increases on income taxes, sales taxes and the vehicle license fee. It was a gamble. Voters rejected a similar tax measure in 2009. Most GOP lawmakers have signed no-new-taxes pledges. Even Brown didn’t dare campaign on today’s tax plan - and he’s a Democrat.
Then came the bargaining. Republicans say that Brown wouldn’t give on spending dear to the public employee unions that helped elect him. The Brownies say that the Party of No kept heaping new terms onto their wish list so that negotiators never could get to yes.
Senate Republican Leader Bob Dutton told me he thinks Brown could have picked off two GOP senators if Brown had agreed to GOP proposals for pension reform, a spending cap and regulatory reform. But Brown would not give on applying pension reforms to current as well as future employees, and he wanted too loose of a spending cap.
Brown spokesman Gil Duran said he would not comment on “specifics on negotiating points,” but insisted there were “multiple deal breakers.” One of the five GOP senators who talked to Brown confirmed as much.
…
So how’s CA going to pay for all it’s spending ? Sell more tax free bonds ?
I have been following some properties on the net to see what the trends in days on the market, total views over a set time period, etc. Yesterday I went back to check on some and they were listed as sold, the ‘this is not a short sale’ type. When I checked further they were listed as sold “Arms-length-transactions”. Seems this is the new lingo for bank repo’s or short sales. Area is San Juan Bautista, right on the fault line, in a gated area. The houses are selling in the $500K, gate fee currently around $250/month, taxes around $600/$700 per month and miles from needed services. $4/$5 dollar gas should help strain the monthly nut and if a good tremor comes along road resurfacing should raise the gate fee quite substantially.
It’s amazing to me that with unemployment still topping 10%, San Diego rents are already climbing as though the economy had recovered. I suppose markets are very forward looking!
What’s making San Diego County rents go up?
Experts across the nation point to three key economic drivers
By Lily Leung
Thursday, March 31, 2011 at 6 a.m.
…
The San Diego rental market is stable and will likely see steady increases this year tied with the normal rate of inflation, according to property managers and data analysts. Peter Dennehy, a vice president of John Burns Real Estate Consulting, says the local market echoes what’s happening nationwide: Rents are increasing as an anemic economy gains strength and fewer people can afford to buy a home. The consulting company, which has an office in San Diego, projects rent locally will jump 30-plus percent within five years.
Similar increases are expected in other areas, including Seattle and Boston.
“People are out shopping,” said apartment manager Luis Leguizamo, who recently tacked on $25-30 a month for residents at the Loma Portal Apartments, near Point Loma.
“The economy is somewhat stimulated,” he added. “People are in the position to move and consider paying a higher rate.”
…
I can’t find an online link to the graphs that show up in our dead tree edition of the SD Union-Tribune, but as usual, there is a disconnect between the data and the spin of the various MSM-favored ‘experts’ quoted in the article. In particular, the current rental vacancy rate of 5.1% (more than one out of twenty units vacant) is near the highest level in a decade, and more than five times the level under 1% that was reached in 1999 (1 in 100 units vacant). The accompanying graph shows the March 2011 “adjusted” rental rate of $1,335 up from the level of $1,200 of a decade ago, but lower than its recent high level of a year or so ago.
It is not clear to me whether a 5%+ vacancy rate is sustainable, or whether it portends higher rents or lower rents going forward, but it seems more consistent with lower future rents than higher rents, as every landlord needs tenants to rent to, and competition for cash-strapped tenants could just as easily end up driving rents down as up.
Lots of previous homedebtors need new places to live. Eventually, foreclosed homes will make it back on the market as rentals and compete with apartments for tenants driving down rents. But that process takes time and the recently displaced need shelter now.
“Lots of previous homedebtors need new places to live.”
For that matter, everyone needs a place to live. That’s one of the reasons that real estate always goes up (besides “everyone wants to live here” and “all real estate is local”).
Missed your previous post about vacancy rates. New entrants to the rental pool may not be aware of the vacancies and can be coerced into paying excessive rents as they have to find something in relatively short order and because “everyone wants to live here”.
“…may not be aware of the vacancies…”
If there were sufficient monopoly power in the rental market (as there apparently is in the owner-occupied housing market), there could be a pricing advantage to keeping units off the market in order to drive up rents on available units. This would particularly be the case if below-market-rate lending were available to the monopoly owners of the rental units.
Not sure this is anything like the actual San Diego rental market; just giving an explanation for why the vacancy rate COULD have climbed over the past several years without commensurate downward adjustment in rents.
If there were sufficient monopoly power in the rental market (as there apparently is in the owner-occupied housing market), there could be a pricing advantage to keeping units off the market in order to drive up rents on available units. This would particularly be the case if below-market-rate lending were available to the monopoly owners of the rental units.
There are plenty of renters — and, truth be told, homeowners — who would be baffled by the preceding paragraph. Which means that, if their landlord is raising the rent, well, it’s going up and it’s time to shell out more money. Or move.
“…if their landlord is raising the rent,…”
That is one of the risks of renting, for sure. But landlords face a reciprocal risk of finding decent tenants, especially when the vacancy rate is at 5 percent, which suggests that there is a relative shortage of tenants relative to what landlords generally think they need to charge in rent in order to cover their costs.
Of course, if there are large players in the game who have very cheap credit available to buy and hold empty units off the market until the economy comes back, the above discussion is moot.
5% vacancy is nothing! As a landlord, I would welcome such a level. In the hotel/hospitality industry I was involved in for many years, the breakeven was 73% (27% vacancy). I keep my rental rates below market, take great care of the guest unit, and have had family members (not mine) as long as 12 years without any problems.
PB, get real! Remember the rate of frictional unemployment? Doesn’t that approach your mythical 5% figure?
I used to trust you -
Brazil vs Banksters:
Interesting tidbit on Brazil and Banksters. Brazilian banks are highly regulated thus no TBTF bailouts were needed. Now ex-pres Lula tells Portugal not to take a IMF bailout because the cure is worse than the disease. Now I read the IMF wants Brazil to spend less money on social programs to contain the inflation that USA’s Fed is foisting on the world with hot-money. Yea. Let me say that again. The USA controlled IMF is telling Brazil to spend less money on its people so to calm the Bond market’s fear of the inflation that the US Federal reserve is creating in Brazil………wow
Brazil says no way dude, we’re going to do it our way and check inflation by regulating/taxing your B.S. hot money because we think helping our people is more important than enriching you rich, criminal banksters. Here’s a snip from an article on how Brazil is trying to assert some independence in a few areas of USA/Bankster control.
Brazil stares down the US on Libya
Tensions over Middle East policy are increasing, despite Barack Obama’s recent visit to Latin America.
http://english.aljazeera.net/indepth/opinion/2011/03/201133014435832732.html
The US-controlled International Monetary Fund (IMF), for example, is demanding that Brazil, one of the world’s fastest growing economies, calm bond market concerns about inflation by reining in social spending.
(Brazil President) Dilma’s economic team has so far balked. It argues instead that inflation can be controlled by government regulation of “hot money,” that is, the ability of foreign capital to place speculative bets on, and reap enormous profits off of, Brazil’s currency.
This might sound a bit technocratic, but it is in fact a big obstacle to the IMF’s bid to restore its lost role as what economist Mark Weisbrot has described as a “creditor’s cartel” in Latin America, the chief mechanism through which Washington imposes “discipline” on economies, like Brazil’s, that shows too much independence.
So it looks like Washington’s goals are the same in Brazil as they are here.
Print money for the elite, then keep inflation at bay by driving the middle class into poverty and the poor into the ground.
Don’t be gettin’ uppity, serf!
After all, if Rep. Tom Marino, a member of the House Foreign Affairs Committee and the House subcommittee on issues related to African foreign policy, doesn’t know Libya is in Africa, what makes you think you’re better than him, huh?
SD schools contemplate new worst-case scenario
By Maureen Magee
Wednesday, March 30, 2011 at 8:06 p.m.
The San Diego school board is contemplating a much worse fiscal problem, even as it makes headway ratcheting back some preliminary budget cuts approved two weeks ago.
Trustees earned some praise on Tuesday for pecking away at the $114 million in preliminary budget cuts adopted March 10. They will rescind more than 200 pink slips and save some school nurses, music teachers and counselors.
But massive reductions in state education spending that loom in Sacramento could far overshadow those efforts.
With Gov. Jerry Brown’s proposed tax extension off the table, or at least off a June ballot — and other mounting uncertainties with state finances — school districts are bracing for a new worst-case scenario.
For the San Diego Unified School District, that means the projected deficit of up to $114 million to next year’s $1.04 billion operating budget could grow by $50 million or more, said Chief Financial Officer Ron Little.
The governor walked away from the negotiating table this week, saying his attempt to reach a bipartisan agreement foundered amid increasing Republican demands. Republicans wanted, among other things, a spending cap, pension changes and certain corporate tax credits in return for providing the four votes Brown need to put his tax extension on the June ballot.
“I’m not convinced the state will come through. I’m not even convinced we will have enough money to open schools in September,” said San Diego school board member John Lee Evans.
…
Is betting a stock will go down now illegal?
Barry Minkow pleads guilty to conspiracy
Minkow’s attorney says he was ‘deluded’; sentencing is slated for June 16
By Dean Calbreath
Originally published March 30, 2011 at 2:03 p.m., updated March 30, 2011 at 3:16 p.m.
Barry Minkow, outside the sanctuary following services at the Community Bible Church in Mira Mesa.
Barry Minkow, a former conman who until recently was pastor of the Community Bible Church in Mira Mesa, pleaded guilty today to conspiracy to commit securities fraud.
Minkow, 44, who resigned as pastor earlier this month after telling his church that he intended to plead guilty, said he intends to cooperate with authorities in the case, which involves his attempt to manipulate the stock of home-building giant Lennar Corp.
Although he is now free on bail, faces up to five years in prison and three years of probation as well as up to $350,000 in fines and penalties at his sentencing hearing, slated for June 16.
Last week, federal authorities formally charged Minkow with trying to drive down the stock price of Lennar Corp. in a scheme that involved “shorting” the stock - or essentially betting that it would go down.
…
It looks to me like Minkow was right:
The Associated Press March 29, 2011, 4:42PM ET
Builder stocks fall as home price decline persists
BOSTON
Shares of homebuilders slipped Tuesday after a closely watched housing index showed that home prices are falling in most major U.S. cities.
Analysts expect further price declines heading into the summer season, which could further slow the recovery for an industry which is coming off the worst two years for home construction dating to 1959.
The Standard & Poor’s/Case-Shiller index released Tuesday shows that home prices dropped in 19 cities from December to January, the sixth consecutive month that the index fell. A majority of the metro areas tracked by the index now have home prices at levels dating back to 2003, just as the housing boom began. In four cities — Atlanta, Las Vegas, Detroit and Cleveland — home values are at their lowest point in 11 years.
The report followed a Commerce Department announcement on Friday that new-home sales plunged in February for the third month in a row.
…
Published March 31, 2011
Real Estate by AnnaMaria Andriotis (Author Archive)
Buyers Shun New Homes
Why New Homes Don’t Sell
Once a common home buyer’s dream, new homes have lost some of their appeal. Instead, it’s fixer-uppers and foreclosures that have been capturing buyers’ attention, creating a window of opportunity for those still looking for new construction.
While the real estate market has struggled across the board, new homes have been hit harder than ever before. Existing home sales are down about 3% in the last year, according to the latest data from the National Association of Realtors. That’s peanuts compared to new home sales, which have fallen a whopping 28%, according to the U.S. Census. To some extent, existing homes have always recovered before new construction, but analysts say this situation is so extreme that it could delay a meaningful recovery for the new-home market by two more years. “It’s not looking promising for new housing,” says John Vogel, adjunct professor of real estate at Dartmouth’s Tuck School of Business.
The reason for the discrepancy is clear, experts say: New homes are currently 29% more expensive than existing homes, about double the typical margin, according to the NAR. At the same time, there are some radical discounts in the existing home market, foreclosures and short sales specifically, which accounted for nearly 40% of all sales in February. (In 2010, they accounted for 25% of all sales, according to RealtyTrac dot com.)
…
This story just bumped up against one of my pet peeves. Here goes:
Stories like this one refer to the object that is for sale as a home. And I beg disagree. A home is something you *make* — you don’t buy it or sell it.
[ rant off ]
Barry Minkow? Again?? I thought his name rung a late 80’s bell.
Barry Jay Minkow (born March 17, 1967) is a former businessman, pastor and convicted felon. While still in high school, he founded ZZZZ Best (pronounced Zee Best), which appeared to be an immensely successful carpet-cleaning and restoration company. However, it was actually a front to attract investment for a massive Ponzi scheme. It collapsed in 1987, costing investors and lenders $100 million—one of the largest investment frauds ever perpetrated by a single person, as well as one of the largest accounting frauds in history. wiki
Maybe they could put his skills to good use as a bank examiner while he is behind bars?
ZZZZ Best Carpet Cleaning
August 27, 2006 2:32 PM
Exclusive: Barry Minkow on starting ZZZZ Best Carpet Cleaning at 16.
It Takes One To Know One
Former Con Artist Goes Undercover To Expose Possible Scam
By Rebecca Leung
(CBS) This story originally aired on May 22, 2005.
If you were going to start a Hall of Fame for con men, Barry Minkow would have to be one of the first inductees. He was one of the most famous stock swindlers of the ’80s, and certainly the youngest. At 20, he was the boy wonder of Wall Street, and CEO of a $300 million company. At 22, he had been convicted of 57 counts of fraud, and was off to federal prison.
Now 39, Minkow is back in the spotlight, not for committing fraud, but for exposing it. He says he is seeking redemption by going undercover to help federal law enforcement agencies crack a number of important cases, proving that when it comes to con men, it takes one to know one.
…
400,000 / 3,000,000 = 13.3% enrollment reduction — OUCH!
Calif Community Colleges cutting enrollment
The Associated Press
Posted: 03/31/2011 05:06:23 AM PDT
SACRAMENTO, Calif.—The 112-campus California Community Colleges system may be forced to enroll 400,000 fewer students and cut thousands of classes because of the state budget impasse and funding shortages.
Chancellor Jack Scott said during a telephone news briefing Wednesday that community colleges funding cuts are tragic for students hoping to continue their education and transfer to universities.
Nearly three million students attend state community colleges.
…
Solidarity against the Kochtopus!
Wisconsin Professors Unionize, Defy Walker’s Law on Collective Bargaining
By Mark Niquette - Mar 31, 2011 9:19 AM PT
Lisa Theo cast her vote yesterday to join a union that may not be able to negotiate a contract for her and said, “That felt good.”
Theo, a geography instructor, and her University of Wisconsin-Stevens Point colleagues were voting in a two-day election to be represented by AFT-Wisconsin after the passage of a law championed by Republican Governor Scott Walker that would eliminate collective bargaining for faculty members.
It would be the fourth state campus to vote in favor of representation since Walker introduced the bill Feb. 11, saying it is necessary to mend the recession-battered budget. The measure, which has been challenged in court, touched off weeks of protests. Professors say Republicans are using the budget crisis to attack education with the union bill, by proposing funding cuts and by seeking e-mails sent by a UW-Madison professor who wrote a blog posting and a New York Times opinion piece opposing Walker.
“We’re going to stand up for our rights, and we’re going to keep fighting until we get them,” Theo said in an interview.
…
I can recall my mother dissing the AFT because she thought it was too radical/leftist. ISTR that, at the time, she was represented by an NEA-affiliated union, so perhaps that entered into her thinking.
Metals Stocks
March 31, 2011, 11:53 a.m. EDT
Gold rises 1%, trades in record territory
Earlier someone asked where America was going to get its cheap labor from, if not from China. I don’t think it will be the other Asian countries, it will be from Africa. The following opinion kind of explains the drive to get a Central Bank going in Libya:
“What will work, if we read all this correctly, is that Africa is going to be targeted for the world’s next big monetary inflation. That’s the reason for the World Bank’s involvement now. Africa is to become, in our estimation, the world’s next China. This has two advantages for the power elite. First, it creates an entity that can purchase yet more sovereign debt from the West – yet another buyer of last resort, a function that Japan once served and China as well.
Second, and just as important, the inflationary magic of central banking tends to blow up economies rather quickly, which gives the elite the ability to point to its ruinous system as a miraculous alleviator of poverty. What is not explained of course is that just as printing money-from-nothing can inflate an economy rather quickly, the after-effects are sour indeed. Argentina, Japan and now the US (with China to come) are left raped and helpless following such inflationary episodes, which may last as much as two decades, or even longer.
Inevitably, the economic imbalances that are left behind include massive unemployment, industries that have no outlet (or even purpose) and a ruinous decline in overall prosperity, equity and individual portfolios. The wealth of the nation is revealed as nothing more than monetary inflation and the wealth of individuals and families is suddenly drained away with the overall economic collapse. All this is, perhaps, in Africa’s future.”
http://thedailybell.com/1821/Watch-Out-Africa-The-World-Bank-Has-a-Plan.html
Earlier someone asked where America was going to get its cheap labor from, if not from China. I don’t think it will be the other Asian countries, it will be from Africa.
Of all the continents from which America attracts immigrants, Africa has sent us the best educated. More doctorates among them than all the other continents.
Africa is going to be targeted for the world’s next big monetary inflation
Does Africa have any natural resources that can be
exploitedpurchasedutilized by the “fly-by-night” GlobalMaterialAquistionTeams?If so, are “they” going to ask, buy, steal, deceive, trick, manipulate, borrow temporarily, (or ALL of the above) from the good nations/people of Africa.
“Professional” & “Ethical” might be their only impediments in their
Crusade“bidness” quest.The cheap global labor market path has been projected as thus:
In the 1970s and 80s it was Japan.
This eventually transmuted to Taiwan/South Korea.
This then migrated to India/China.
It is currently moving towards former Eastern Bloc countries and will then move to Africa. (the Chinese are already re-industrializing large parts of S. Africa)
U.S. Auto Sales to Post First Drop in Seven Months on Gas Costs
~ Bloomberg
U.S. automobile sales probably fell for the first time in seven months in March as the crisis in Japan and the highest gas prices in more than two years hurt consumers’ confidence.
March light-vehicle deliveries, to be released tomorrow, may have run at a 12.9 million annual rate, the average estimate of nine analysts surveyed by Bloomberg. While higher than a year ago, it’s less than the seasonally adjusted rate of 13.4 million in February, according to Autodata Corp.
The conflict in Libya helped push gas prices to the highest since September 2008, slowing truck and sport-utility vehicle sales. Confidence among U.S. consumers fell more than forecast to a three-month low this month, the Conference Board said March 29. The group said 3.6 percent of Americans plan to buy a new auto in the next six months, down from 3.9 percent in February.
“A lot of uncertainty in the geopolitical environment, with the crisis in Japan and Middle East unrest, affects consumers’ tendency to make big-ticket item purchases,” said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California. “There’s hesitancy by consumers to pull the trigger on car purchases.”
US Auto Sales Post First Drop in Seven Months on Bloated Lot Inventories: - fixed it.
It took only seven months to stuff the channel.
Not much demand for $20K subcompacts, or anything else for that matter.
“U.S. Auto Sales to Post First Drop in Seven Months”
That’s was bound to happen after dealers raised prices on cars hoping to cash in on Japan’s disaster.
This despite 0% interest for 72mo on some cars and trucks
The 50% of the workforce that is making $25K a year isn’t going to have an 800 FICO for that 0%.
love Cal citizens most are in total denial. One such friend told me over the phone ” I live in Cal everybody still wants to move here I’ll never worry about my value”. My reply:
Gen Custer said the same thing to his men, why wait soldiers we can defeat them Indians we need no help?
Never mind if our kids can’t get an education — we get to enjoy lots more sun than the rest of yous.
Nobody I know wants to move to CA. Or New York for that matter, not unless they are fresh-off-the-boat immigrants who don’t know any better.
CA - PC gone wrong
NY - Lawless corptacracy
Both - think they are the center of the nation.
Here is $20 bn in “found money” which banks could potentially use to pay fines and penalties due to cutting corners on collections and foreclosures.
Bank Mortgage Shortcuts Dodged $20 Billion in Costs, CFPB Says
By Carter Dougherty - Mar 29, 2011 8:36 AM PT
Signage stands outside the Wells Fargo corporate headquarters in San Francisco. Photographer: Noah Berger/Bloomberg
Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) led U.S. mortgage servicers that may have jointly avoided more than $20 billion in costs since 2007 by cutting corners on collections and foreclosures, confidential estimates by the Consumer Financial Protection Bureau show.
The bureau provided the analysis in a seven-page Feb. 14 presentation to state attorneys general led by Iowa’s Tom Miller, who are pressing banks to accept billions of dollars in fines and concessions, including principal reductions on home loans, after a probe of foreclosure practices. A $5 billion penalty would be “too low,” and banks can afford more, the agency found.
“Rough estimates suggest that the largest servicers may have saved more than $20 billion through under-investment in proper servicing during the crisis,” the bureau wrote in the document. “A penalty based on servicing costs avoided would have little effect on Tier 1 capital ratios,” a measure of financial strength, it said.
…
We could start by requiring BofA to pay federal income tax. Like GE, they’re in the “zero federal taxes” club.
“TrueReducethedeficitNOW!™” = “lower Corpooration Inc. taxes NOW!”
I’m as cornfused as a baby in topless joint!
What are you Slim, some kinda dang socialeest/commie?!
We have to keep incentives for talent like that!
Hell, everybody knows it’s that damn union janitors who get paid too much and have those 5 figure pensions that’s the problem! Not some corporation that doesn’t pay income tax on 14 BILLION dollars in profit!
MARXIST!
They Follow Orders
Gary Barnett on something else wrong with the military.
http://tinyurl.com/46qeh9g
Even though a sure nuff atheist, I say amen to that brother!
Gary D. Barnett is president of Barnett Financial Services, Inc., in Lewistown, Montana.
How does Gary make a living?
F as in Financial
F as in Fear
F as in Find-a-life
How does a US soldier make a living?
Kills, rapes, pillages, coerces, intimidates, tortures.
Kills, rapes, pillages, coerces, intimidates, tortures.
Why do you keep telling us about Hezbollah and Hamas? Gosh.
How does a US soldier make a living?
Kills, rapes, pillages, coerces, intimidates, tortures.
Man did I miss out. All I got to do was play some music, put up some tents, pull some guard duty, and take down some tents. Oh, and shoot a gun once in a while to make sure I still remembered how.
You took my tax money in the form of a government welfare check payment. You took part in collective theft from me and mine. The government makes nothing and must steal every penny its gets to pay you.
You were part of murder, inc. and did not get a chance at the action. You must be upset.
Your service to the international banks is not appreciated by this American.
Troll alert.
You took my tax money in the form of a government welfare check payment. You took part in collective theft from me and mine. The government makes nothing and must steal every penny its gets to pay you.
Actually they worked really hard into talking me into taking the job. Sorry they stole the money from you…not something I understood much about at the time. Since I was NINETEEN and just trying to figure out how to make a living.
You were part of murder, inc. and did not get a chance at the action. You must be upset.
Nah, it was a good time except for the high level of idiocy. There were far too many stupid people in charge for you to ever convince me there was a conspiracy anywhere near the level I was working at.
Your service to the international banks is not appreciated by this American.
You have a point. My point is just that teenagers don’t know any better. So why hate on them? You’d be much better off focusing on the people who orchestrated the whole thing rather than the peons.
The peons in this case would be the US soldiers / errand boys that carry out the carnage and theft for the bank. There is no conspiracy at the lower levels of the military as conspiracy requires intellect. Conspiracy is at the imf/world bank level. Soldiers are merely pawns as those who are not held fast be abject denial know. Looks like you know this Carl.
“My point is just that teenagers don’t know any better.”
Then educate them. I certainly do with great success. State schools make cannon fodder which is why youngsters don’t know any better”
“So why hate on them? You’d be much better off focusing on the people who orchestrated the whole thing rather than the peons.”
US soldiers are murdering people for no lawful or national security reasons AFTER taking an oath not to do so and at my considerable expense. Soldiers that have no intention of sticking to their word should not have guns or be put into combat. I have clear justification to view the typical American soldier as no less that an enemy of my family and community. Do you think that the US military top brass and the world bank will stand down upon my request to do so? Of course not Carl. So why would you suggest that I expend energy in the banks direction? I make it a point to engage in this topic at all social functions. I am getting more and more brains thinking about this issue. I know for a fact that my discussions have resulted in children not enlisting in the military or law enforcement. If I had taken you advice to engage the engineers of these wars then these engineers would have several more of cannon fodder. I saved two brother’s lives that wanted to join the marines and go to Afghanistan. Real results Carl. These brothers can now focus on sane and productive lives, know the joy of marriage and children and not be PTSD cases for their duration. Also, these brothers will not be taking the lives of brown people that live in “fill in the blank”.
Nice to see oil over $106.00
if you’re long oil
“if you’re long oil”
Or give a hoot about the planet. Just like Woodsie the Owl.
Or give a hoot about the planet.
Compared to income, in Brazil, gas was for years about quadruple the price compared to the USA.
This is why the cars are small here. This is partially why Brazil is now energy independent.
Brazil will have no wars for oil. Brazil already paid billions to not have to go to war for oil.
If USA was not so beholden to Exon’s campaign contributions, USA might not be at war now.
And American oil companies are not even paying much in American taxes.
So we fight and die for corporations but we need to cut social programs because corporations are not paying taxes.
We’re smart.
I think I’m a quart low! -
Electrolux plant in Webster City closes today
Business & Economy ~ Radioiowa.com
After 73 years in business, the Electrolux washer-drier factory in Webster City will close today as 500 employees walk out for the final time. At one time, the facility employed 23-hundred workers. Production at the plant is being moved to Juarez, Mexico. David Toyer, an economic development consultant for Webster City, says the community will survive this serious setback.
“There’s going to be some challenging times ahead, at least in the immediate future,” Toyer says. “There are some great programs and services available for the workers through the trade adjustment assistance and other things that a lot of other agencies are doing to help the people out who are being dislocated.” Last summer, Webster City was selected to serve as the manufacturing center for an Ames-based electric car company. Toyer says he’s gotten numerous inquiries about the progress of this new venture, called the EnVision Motor Company.
The proposal holds “wonderful” promise for Webster City, but he notes, “Obviously, it hasn’t taken off as fast as many people would have liked it to, but what they’re doing there and the foundation they’re building for their business is going to be better in the long run. I anticipate great things from them.” When announced last July, it was hoped the electric car factory would employ up to 300 people, but it’s still in the planning stages. Webster City is also home for a plastic mold manufacturing facility, a chicken hatchery and an ag chemical distributor and manufacturer. Toyer said firms are hiring in the community and new businesses are being shepherded.
After 73 years in business, the Electrolux washer-drier factory in Webster City will close today …..the plant is being moved to Juarez, Mexico.
dang
Each dishwasher will ship with its own drug cartel war corpse.
Too expensive. They’ll just ship the head.
For a truly depressing take on the Juarez situation, read Charles Bowden’s book, Murder City. Made me wonder why anyone still lives there.
Sony’s MMO Makers Close Three Studios, Lay Off One-Third Of Workforce
~ kotaku.com
Sony Online Entertainment, makers of D.C. Universe Online and Free Realms, closed three studios and will lay off nearly a third of its workforce, Kotaku has learned.
Word began spreading when George Broussard, best known as the co-creator of Duke Nukem Forever, tweeted earlier this evening that SOE was seeing layoffs and “studio closure is possible.” Kotaku has confirmed through a source familiar with the matter that the closures affect SOE’s studios in Seattle, Tucson, Ariz. and Denver. Half of the workforce at SOE offices in Austin, Texas were pink slipped along with a sizeable portion of San Diego. In sum, it accounts for nearly one-third of SOE’s manpower before today.
See aNYCdj, it’s not you, it’s just rough in the entertainment biz.
What Recession? California Mansion Sells for $100M | FOXBusiness
New home sales may still be in slumpsville, but not in the world of one Russian billionaire.
Yuri Milner, a Russian billionaire investor, paid $100 million for a mansion in Los Altos Hills, Calif., marking the highest known price paid for a single-family home in the U.S., according to the Wall Street Journal.
The 25,500-square-foot home was not on the market at the time the deal was done, the Journal reported. Among its many luxury amenities, the French Chateau-style mansion has a ballroom, home theater, wine cellar, indoor and outdoor pools and outdoor tennis court. Design plans for the house began in 2001 and the home was completed around 2009, according to the report.
The buyer, Milner, is the head of Digital Sky Technologies. According to the WSJ report, his investments include Web giants Facebook and Groupon, along with Zynga, Inc. Milner purchased the property from Fred and Annie Chan; Fred is the founder of ESS Technology.
As of right now, Milner has no immediate plans to move into his new home, the Journal reported.
Few deals are known that rival this one in size, according to the Journal. Here are some cited in the report as notable mentions: In 2007, investor Ron Baron paid $103 million in East Hampton, N.Y. for 40 acres of vacant land. In 2008, an investment company linked to Russian fertilizer billionaire Dmitry Rybolovlev paid $95 million for an estate owned by Donald Trump in Palm Beach, Fla.; Mr. Trump had been asking $125 million. Former Global Crossing chairman Gary Winnick around 2000 acquired a Los Angeles estate in the Bel-Air neighborhood in a complex deal involving money and property for more than $90 million.
This house is 8 miles and many millions away from mine.
Clipped from the 5Min. Forecast
0:00 — We’ve reached a milestone in the history of U.S. energy consumption. Gasoline prices, adjusted for the cost of living, sit at an all-time high.
According to the American Petroleum Institute, the $1.47 per gallon Americans paid in March 1981 — as the Iran-Iraq war raged early in Ronald Reagan’s presidency — equals $3.46 today.
The national average this week, according to AAA? $3.58.
0:10 — Oil is touching another 19-month high this morning, a barrel of West Texas Intermediate fetching $106.42.
0:16 — It’s at this moment, this week, that President Obama gave a speech on energy — setting out the goal of cutting oil imports by one-third over 10 years. This would be accomplished, he says, by…
Finding and recovering more domestic oil
Boosting fuel-efficiency
Turning to “cleaner” alternative fuels.
0:23 — “I’ve been listening to dumb presidential addresses, particularly on the topic of energy, since the mid-1960s,” says our resident oil field geologist Byron King. “But I have to confess that Obama’s speech sets a new low point for utter ignorance, if not conscious mendaciousness, on the topic of energy.”
For starters, that reduction of oil imports by a third over a decade? That’s not over the next decade. “The start date is Mr. Obama’s inauguration, in January 2009,” Byron points out. “How convenient. Just on the basis of the recession, U.S. oil imports have fallen from 11 million to 9 million barrels.
“Perhaps we should morph the current recession into another Great Depression and accomplish that one-third reduction goal quickly, once and for all!
“Then there’s the idea of blaming oil companies for not drilling their offshore leases. This from the president whose administration has imposed an almost one-year ‘moratorium’ on issuing permits for offshore exploration and drilling. And who, by the way, opposes extending all leases, as a matter of course, by the amount of time that the Department of Interior has refused to issue permits.
“The bottom line is that Obama’s speech yesterday was one more in a descending series of bad speeches, over many decades, from a long chain of U.S. presidents.”
And it does nothing to change Byron’s long-term energy investing thesis: The world will continue to run on liquid hydrocarbons (that is, oil) for decades to come… and that fuel source will be more and more difficult (and expensive) to pull out of the ground.
“0:00 — We’ve reached a milestone in the history of U.S. energy consumption. Gasoline prices, adjusted for the cost of living, sit at an all-time high.”
Uh - weren’t they even higher during Summer 2008?
I agree with much of what he said but not this.
“Then there’s the idea of blaming oil companies for not drilling their offshore leases. This from the president whose administration has imposed an almost one-year ‘moratorium’ on issuing permits for offshore exploration and drilling
We have a lot of permits we are not drilling just sitting on (ie driving up the price of oil) we would like the gov to issue more so that we can sit on those as well.
So oil consumption in the US has dropped from 11 to 9 million barrels. Interesting. Is this during the so called recovery??
“U.S. oil imports have fallen from 11 million to 9 million barrels.”
Told ya the price increase was artificial.
By searching the net I found that:
Crude and petrolium product imports peaked in 2005 at 5,005,541,000 barrels and dropped to 4,289,772,000 barrels in 2010.
Farmers and Seed Producers Launch Preemptive Strike against Monsanto
The Cornucopia Institute ~ March 30th, 2011
Lawsuit Filed To Protect Themselves from Unfair Patent Enforcement on Genetically Modified Seed
Action Would Prohibit Biotechnology Giant from Suing Organic Farmers and Seed Growers If Innocently Contaminated by Roundup Ready Genes
NEW York: On behalf of 60 family farmers, seed businesses and organic agricultural organizations, the Public Patent Foundation (PUBPAT) filed suit today against Monsanto Company challenging the chemical giant’s patents on genetically modified seed. The organic plaintiffs were forced to sue preemptively to protect themselves from being accused of patent infringement should their crops ever become contaminated by Monsanto’s genetically modified seed.
Monsanto has sued farmers in the United States and Canada, in the past, when there are patented genetic material has inadvertently contaminated their crops.
A copy of the lawsuit can be found at:
(http://www.pubpat.org/assets/files/seed/OSGATA-v-Monsanto-Complaint.pdf)
ABOUT DAMN TIME!
Woo-hoo!
Yesssss!
Goldman Sachs Borrowed From Fed Window Five Times, Data Show.
(Bloomberg)
Goldman Sachs Group Inc. tapped the Federal Reserve’s discount window at least five times since September 2008, according to central bank data that contradict an executive’s testimony last year.
Is it really within the scope of the Fed’s charter to loan billions of dollars to foreign banks at below-market interest rates while leaving many American households and businesses fully exposed to the bottom of the bus?
The Financial Times
Fed data reveal how it helped European banks
By Robin Harding and Matt Kennard in Washington and Suzanne Kapner in New York
Published: March 31 2011 19:25 | Last updated: March 31 2011 19:25
Two European banks used almost half of the Federal Reserve’s emergency lending as the financial crisis peaked at the end of October 2008.
Dexia of Belgium borrowed $26.5bn and Depfa of Germany used $24.6bn in overnight funds from the Fed’s discount window on October 29 2008, according to documents released by the US central bank on Thursday.
The numbers show that the two European banks were in an even more precarious position than previously thought in the autumn of 2008, reliant on US central bank funding that could be turned off overnight.
The discount window is the last refuge for banks that are unable to borrow elsewhere.
Central banks use it to lend at a penalty rate to banks with liquidity problems, taking some of their good assets as collateral.
Use of the Fed’s discount window peaked at $110bn at the end of October 2008 as the financial crisis reached its worst point after Lehman Brothers collapsed in September.
Almost 74 per cent of that lending went to the New York branches of foreign banks.
The latest revelations that foreign banks were such big users of the discount window, as well as the Fed’s other crisis-lending programmes, are likely to raise questions among members of Congress who think the Fed overstepped its authority.
Other big users of the discount window on that day were Wachovia, which borrowed $15bn, Bank of Scotland, which took $11bn, and Norinchukin of Japan, which borrowed $6bn.
These funds are in addition to money that banks borrowed from other Fed programmes that were similar to the discount window, such as the term auction facility.
On October 29 2008, Dexia borrowed $5bn from TAF and Depfa had taken $2.5bn.
“In October 2008, Dexia was one of the banks most dependent on the central banks and especially the European Central Bank,” the Belgian bank said.
…
The bottom of the bus? Pick yourself up and dust yourself off.
It’s the tires you have to watch our for and most people are road kill.
“Pick yourself up and dust yourself off.”
I wasn’t trying to describe my personal situation, but rather the general political situation of American households and businesses getting left out of the low-interest-rate bailout lending party, which apparently included many foreign banks. I am very curious whether the Fed’s charter actually states they have the legal right to do this.
I see nothing wrong with this, SO LONG AS YOU DON’T BAIL OUT FOREIGN INVESTORS WITH U.S. MONEY!
The Financial Times
Bernanke says foreign investors fuelled crisis
By Robin Harding in Washington
Published: February 18 2011 13:25 | Last updated: February 18 2011 13:25
Foreign investors’ hunger for safe US assets helped to cause the 2007-2009 crisis by encouraging banks to turn risky mortgages into AAA rated bonds, Ben Bernanke, US Federal Reserve chairman, argued in Paris on Friday.
“The preference by so many investors for perceived safety created strong incentives for US financial engineers to develop investment products that ‘transformed’ risky loans into highly rated securities,” said Mr Bernanke, presenting a new research paper that he co-wrote with other Fed economists.
…
Fools rushing in, fine with me as long as there are no bailouts.
Bernanke says foreign investors fuelled crisis
what a sack a #$^*
The Fed is great at pushing whacked out theories to the point where they are generally accepted by the economics profession.
Governor Walker, meet Judge Sumi.
P.S. Whatever happened to NYCityBoy? I miss his incessant ad hominem attacks in response to every mention of the Wisconsin governor’s union busting tactics.
National Briefing | MIDWEST
Wisconsin: Judge Again Halts Law Stripping Union Rights
By THE ASSOCIATED PRESS
Published: March 31, 2011
A judge on Thursday halted Gov. Scott Walker’s plans — at least temporarily — to cut most public workers’ pay and strip them of most of their union rights. Judge Maryann Sumi of Dane County Circuit Court issued a declaration stating in no uncertain terms that the collective bargaining law that led to weeks of protests had not taken effect, contradicting Republican arguments that it had because a state office published it online. Governor Walker, a Republican, said his administration would comply, despite misgivings.
…
P.S. Whatever happened to NYCityBoy? I miss his incessant ad hominem attacks in response to every mention of the Wisconsin governor’s union busting tactics.
IDK. Curious. And why did Joey stop posting after the November elections?
A watched pot never boils.
‘Shadow inventory’ of 1.8 million homes could prolong housing slump
The glut of troubled homes not yet on the market represents a nine-month supply at the current sales pace. That’s in addition to 3.49 million previously owned homes already on the market.
By Alejandro Lazo, Los Angeles Times
March 31, 2011
A glut of troubled homes not yet on the market threatens to prolong a housing slump already burdened by weak job growth and a lack of enthusiasm among buyers.
This so-called shadow inventory amounted to 1.8 million properties at the end of January, Santa Ana mortgage research firm CoreLogic reported Wednesday. While that was a decrease from 2 million properties in January 2010, it remained about a nine-month supply because the sales pace has weakened this year in the absence of federal tax credits for buyers.
“We are still talking about a very large supply by any measure,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “It is going in the right direction, but we are continuing to look at a situation where there is going to be downward pressure on house prices.”
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Oh goodie! I guess we learned absolutely nothing from the recent financial debacle…
Subprime Bonds Return
Subprime and other residential mortgage bonds that helped trigger the financial crisis are back in vogue with long-term investors, in the latest sign that American credit markets are healing after the worst downturn in a generation.