Bits Bucket for April 17, 2011
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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I have noticed a huge surge in the number of “angry” people out there. Anger about fuel costs, food costs, etc. There really is a war against wealth. What will happen if things get worse? The pols are ALL useless, it doesn’t matter who gets in, they’re all bought and paid for already…
“There really is a war against wealth.”
Wealth?
I love how people toss this word around indiscriminately. Yes Dan there is a war going on… 30 years ago the filthy rich declared war on us peons and peasants and they’re winning.
So hows your housing adventures? Do tell.
The war is on wage earners and savers. some of those happen to be well off.
“The war is on wage earners and savers. some of those happen to be well off.”
You have a very skewed sense of “well off”. I’d hate to see your definition of poor.
a w-2 lawyer couple with a few kids in NYC can easily make over the $250K threshold.
their effective rate is probably 26% or so if they rent…twice that of warren buffet.
If $250k is well off to you then you have no idea what wealthy is. None whatsoever.
The “well off” blow $250k on a vacation.
i stand corrected…but $250k a year is the target for tax increases.
$250K IS well off everywhere but NYC and SF.
Yes, I think there should be a cost-of-living adjustment for federal taxes. A WEALTHY $250k family in Mississippi should not be let off the hook just because of the people in New York, who are upper-middle-class with that upcome, but not upper class.
Upcome, income, what’s the diff?
Well off = top 20% by income or assets. $250,000 would easily put you in that category. So would $1,000,000 in net assets, which is within the reach of many doctors or lawyers.
Wealthy = top 2%.
I think it’s a combination of angry and confused, which is worrying because when they look for someone to blame they may not correctly identify who is responsible.
+1000 . Although I do think the identification has been made, it’s a matter of metering out punishment.
Cue Reginald Denny
I have a confession to make.
I once stole the mustard from a Denny’s. I did it because the pics on their menu did not represent the dishes served.
There, it’s out there now.
that’ll show ‘em!
Hey we should send you over to Moody’s and Fitch and S and P so you can steal their mustard too.
Less than a decade ago, a $100 shopping cart at the local food store would be just about full. Heaped up maybe $120. Now, $100 is not enough to cover the bottom of the cart.
Meanwhile in the media we are being told that inflation isn’t as bad as we thing it is.
We sure could use some of that deflation now.
I think inflation is really just price elasticity and less increased global demand / cost. If deodorant goes from $3 to $7 I would still buy it. If it goes to $10 I might just stink. Retailers will soon meet price resitance or more of it. Overall I am very bullish about the US economy and dollar - depsite the massive printing of money. Read the “Gang of Six” in today’s NYT. The fact that the political discussion is about cutting government spending and getting the US finances in order is quite amazing. Something I never would have expected even 2 - 3 years ago. Though the answers will be ugly, that the questions are being asked is wonderful. Additionally for those (including me) who have some doubts about dollars, just what currency would you prefer? (Disclaimer, I do have some gold and Swiss francs but not much.) Inflation might push food and health care up some, but falling housing prices will mitigate some of those increases. In markets I follow closely prices are falling, falling, falling. Even Wash, DC which has been resistant. Yesterday in my favorite hood to watch (20008) I saw several very nice single family houses for under $1M. This is still high but have not seen such prices for a number of years. I now live in Arlington, MA. The price drops within the past year have seen pretty dramatic. I see lots of houses listed for what they sold for 6, 8, and even 10 years ago. Of course there are the over price houses that have been on the market over a year.
P.S. Some friends just sold a condo in DC - 20003 for 10% less then they bought it for 4 years ago. They were thrilled to sell so quickly, especially as there are several others in the complex that have been on the market a long time with crazy wishing prices. This probably helped. I think they are VERY lucky. The 10% loss plus taxes and condo fees are not significantly more than what they would have paid to rent a comprable place.
It’s elastic only if it snaps back.
It never does.
Wages on the other hand…
If it goes to $10 I might just stink.
better stay anonymous
It might depend on what’s in your shopping cart. For a single person I think I run up quite a bill at Trader Joe’s. But I buy lots of convenience and premium foods. Twenty years ago while working my way through grad school, for lunch every day, I ate rice and beans. They are healthy and the cost was under $1. The can of black beans was 69 cents and a five pound bag of rice was a couple of bucks. Today the can of black beans is 89 cents. Sometimes on special for 79 cents. The rice might be $3 or $3.50.
This reminds me of an attempted sob story on TV news. About a low income family. Single mom of course. They were “forced” to eat fatty unhealthy fast food for breakfast because the mean selfish (spelling?) tax payer did not provide school breakfast (organic would have been nice.) I still cook my oatmeal in about 10 minutes for about 30 cents a serving. How lazy can people be?
That said, paying extra taxes to get kids a decent breakfast would not really bother me. They might do much better in school as well. Besides teaching them better eating habits. Esp. if parent does not.
Yes, it’s the taxpayers’ fault that a lot of these low-income single moms got that way because they would drop their drawers for the Easter Bunny.
Canned beans? Wimp.
Actually, rolled oats cook up pretty well at a 2-to-1 water-to-oatmeal ratio with only two minutes in the microwave. If you short the water a bit, you can add milk after the fact.
And you always add dried fruit before you cook. It makes it nice and juicy.
Here’s a re-post from my post from yesterday.
Take a look at the chart in the article and take note of the price swings of the raw material that finished goods are made of and compare these swings - and especially to the latest peak that is forming or has formed - and compare them to the news headlines and the angst they cause among the unwashed masses.
Note today’s headlines that suggest inflation is running amok and the earth is running out of food and millions of people face mass starvation; These peaks coincide nicely with the headlines, or rather the headlines coincide nicely with the peaks.
Then take a look of what has happened in the past after these swings have reached their peak. What has happened in the past is the peaks decline and so does the number of gloom-and-doom headlines decline and the MSM moves on and latches onto some other stories to fire up the public.
http://www.dailymarkets.com/economy/2011/04/15/producer-price-food-inflation-crude-high-and-volatile-vs-consumer-goods-low-and-stable/
Which would be entirely reassuring if economics were physics. But it isn’t. If I drop a steel sphere and a clump of feathers in a vacuum over and over again, I expect them to fall at the same rate. And what happened to prices (absent a wage-price spiral) last time may happen again this time. But it might not. There are giant middle classes emerging in India and China and other places and they want more goods. There are people emerging from extreme poverty in the same places and they want more food. We are turning food (corn) into fuel at around zero increase in fuel capacity than just not doing it in the first place. Will prodicers be able increase production to adjust to the increased demand? Maybe, but no guarantees. Krugman posted on his blog yesterday that the billion price inflation index seems to have turned down. Good. But that doesn’t mean deflation. It just means that inflation isn’t has high as it was a month ago.
If this were happening you wouldn’t expect there to be riots. You wouldn’t expect the US cattle heard to be at 50+ year lows. You wouldn’t expect the US to be pushing hard again for ethanol. We all know that ethanol is just a mechanism to keep grain off the market. It’s net energy gain is small when corn is used. You’ll note that the US limits inport of ethanol from Brazil which has a much higher net energy gain.
I found this from
thepigsite.com/processing/articles/1247/china-livestock-and-products-semiannual-report-2011
China’s total beef consumption in 2011 is forecast to decline two percent to 5.5 MMT from an estimated 5.6 MMT in 2010. Per capita beef consumption is expected to decrease slightly to 4.1 kilograms in 2011 compared to 4.2 kilograms and 4.3 kilograms in 2010 and 2009 respectively.
This seems to dispel the notion that rising incomes in China are driving increased consumption. To fight inflation china has not allowed their currency to rise instead they have restricted credit. Thus the average chinese worker will have less purchasing power in 2011 not more.
The central banks have gone to the well too many times. Inflation fixes the problem of national debt and gdp only when there is wealth to strip. When people can send a previously stay at home mom to work, when they can get raises, when they have savings, and finally when they can borrow money. None of those apply today. The true goal is not to fix the system. If it were the gov would let large banks that gambled fail and support smaller better run banks to take over. The gov would not spend money on tax breaks for the rich but would slash payroll tax income tax and capital gains taxes for the bottom 95%. If it was about fixing the economy they would slash spending that doesn’t create jobs ie farm subsidies oil subsidies etc and instead create demand by building infrastructure and improving the energy efficiency of the the country. What’s going on now is about consolidating wealth and power.
“Inflation fixes the problem of national debt and gdp only when there is wealth to strip.”
The Fed’s War on Savers has successfully stripped the flesh off the carcass of America’s once-vibrant economy. But what’s to stop them from cracking open the bones in order to siphon off the succulent marrow?
The war on savers is not really a war at all, but a side effect. As long as debt could inflate returns on savings could be paid, and debt inflated so long and savings rates were so good for so long everyone thought this must be the way it really is.
To expect an 8-10% rate of return on cash is nuts and I agree 0.5% is nuts too when banks are apparently making the big bucks on the shrinking pool of credit worthy (usually savers too) customers, but these days debt defaults are still exceeding the ability of banks to earn. This seems less apparent as the FED is quietly moping up the mess behind the scenes and the banks are allowed to show the rest as “profit”.
The strip mining on the Western middle class is not being done by the FED, but by a relatively short list of multinational corporations whose power and influence is astonishing.
“The Fed’s War on Savers has successfully stripped the flesh off the carcass of America’s once-vibrant economy. But what’s to stop them from cracking open the bones in order to siphon off the succulent marrow?”
Exactly. And after the marrow runs dry, they’ll open a bone meal processing facility.
What’s to stop them?
-The bone. That’s us.
“-The bone. That’s us.”
I hope you are right. But I fail to see much of a will at the highest echelons of the U.S. government to enforce a rule of law. Rather, I see a collective tacit agreement to use wrist slaps as punishment for felonious levels of financial fraud. You can’t stamp out fraud with punishments that are orders of magnitude smaller than the crimes.
True dat.
The increased wealth in Asia is exactly balanced by the decreased wealth in the US. So no.
Much of the increased wealth insofar as China is concerned can simply be described as an economic lie.
“What will happen if things get worse?”
If anything can go wrong, it will
Every problem is replaceable with a bigger one.
If there is a possibility of several things going wrong, the one that will cause the most damage will be the one to go wrong
Things get worse under pressure.
Every solution breeds new problems.
You will always find something in the last place you look.
Traffic is inversely proportional to how late you are, or are going to be.
Anything you try to fix will take longer and cost you more than you thought.
There’s never time to do it right, but there’s always time to do it over.
whoever has the gold makes the rules
A Smith & Wesson beats four aces
Whatever hits the fan will not be evenly distributed.
The optimist proclaims that we live in the best of all possible worlds,
the pessimist fears this is true.
Behind every little problem there’s a larger problem, waiting for the little problem to get out of the way.
Two wrongs don’t make a right. It usually takes three or four.
When things go from bad to worse, the cycle repeats.
The two most abundant things in all the universe are hydrogen and stupidity.
Smile . . . tomorrow will be worse.
key to happiness is to be O.K. with not being O.K.
I used to have that Murphy’s Law book.
I think it was Dave Ramsey who said…
If you buy a house without 20% down while you are in debt, you will have to keep a spare bedroom because Murphy and his 3 brothers Broke, Desperate and Stupid will move in.
90% of everything is crud.
Friends come and go, enemies accumulate.
“key to happiness is to be O.K. with not being O.K.”
Exactly. I’m not ok, you’re not ok, we’re not ok….. but it really is ok.
It really is OK for realtors to lie.
The level of financial fraud and corruption is inversely proportional to the size of the punishment. With only wrist slaps in the denominator, you can expect really big financial crimes to continue going forward…
“The two most abundant things in all the universe are hydrogen and stupidity.”
Given sufficient stupidity, the abundant hydrogen can easily explode.
Ive noticed a huge number of angry drivers Seems like the broker people get, the more desparate their driving skills. Its amazing to watch people risk their lives in these flimsy metal boxes; and for what?
Its interesting how a person angry attitude in one area can bleed over into another area of activity. We all do it but when it come to driving it get dangerous for more than themselves. Yikes!
Well I notice the rude drivers a lot more in Phoenix than Tampa. The difference is striking. I don’t know what the deal is.
Guns? No, Floridians love their guns just as much as Arizonans. Snowbirds? No - both areas have them.
Maybe the Tampanite’s go to the beach or Disney to blow off steam?
“Ive noticed a huge number of angry drivers Seems like the broker people get, the more desparate their driving skills.”
Agreed. Saw a classic last night: Riding in a cab on the way to SFO, an SUV driver crossed three lanes of traffic without signalling, almost running our poor cab driver off the road in the process. Desperation breeds derelict driving.
Over half of the Phoenix drivers do not signal as they change lanes and rudely cut off other people. It is my major pet peeve.
Bill, I sometime hesitate to signal because people behind you use it as an excuse to speed up and not let you merge.
If you are polite enough to let people know what you intend to do, they use the information against you.
Bad drivers drive out the good.
“Bad drivers drive out the good.”
Similar principle: Bad bankers and borrowers drive out the good.
I’m aware of that spookwaffe, but I don’t want to become one of them that I curse. I want to lead by example. I will get to my destination anyway.
I know that in Tampa there is road construction going on in my nabe that is getting worse and worse in its congestion-causing. So I account for that and leave a few minutes earlier and sit in my A/C car listening to the Grateful Dead (channel 32) on Sirius…No stress.
I’d rather sit in my dead car and listen to AC/DC.
Here is another one that will show you how our gov has been taken over by the corporate elite
1. Medicare prescription drug plan forbids medicare from negotiating for lower prices. Thus drug companies are free to set what ever price they want, even though there really is no market mechanism.
2. The VA pays 58% less for the same drugs as Medicare part D.
3. There is a donut hole where Medicare participants have to pay for their own drugs after something like $3000. This likely forces seniors to pay the jacked up rates that medicare part d pays.
Whether that anger will result in REAL action or, as usual, just bitching out loud, but generally accepting their fates, is yet to be seen.
My money is on “nothing will change.”
There is no “war against wealth.” There is a resentment, by the thinking 5% of the population, against systemic fraud and looting by our financial elites, and the impunity with which they commit their crimes thanks to their co-option of the political process. But the dumbed-down 90% will ensure the economic warfare launched by the top tenth of one percent against middle America and the productive economy continues unabated, with all losses born by the dwindling taxpayer base and the mortgaging of our children’s futures.
Realtors Are Liars
Ol’Bubba
Of the 1%, by the 1%, for the 1%
http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105
Indeed, sooner or later comes the “off with their heads” moment.
It can, and will, happen here.
One of the saddest things I heard recently came from a buddy who had been solicited by a friend of his to tout the military to a young family member who wants to go to college. There’s no money for him to go to college, and his part time gig is basically a dead end. So the apparent solution is that he should go into the military. For what? To keep the world safe for Wall Street slime and corporate oligarchs?
I caution cash-strapped families who see this as a solution to their jobless youth as financial liabilities, as a way of “getting them out of the house”, so to speak. It can have a huge “blowback”, if that family member comes home severely maimed, mentally or physically. That family member can become even more of a burden in terms of time and economics. If the original intent of the family was to unload an aimless member on the military so as not to have them kicking around between jobs, or living in the basement or whatever, how will they feel having that person dependent upon them for care should they be injured?
Sure, go into the military if that’s what you truly want to do or pursue as a career. But as a financial solution for the family, no.
I agree, but for many the military is the new blue collar job that pays a living wage. They see no other way out. The recruiting sarge shows of his new Camaro SS to a bunch of impressionable kids, whose only other prospect is flipping burgers or stocking shelves for minimum wage (and part time to boot).
Spot on Colorado…
If I were in a teenager’s shoes, I would flip burgers or do whatever, and save, save, save- especially if I could still live at home. Ride a bike to work, and bank all of those paychecks. There is a light at the end of the tunnel, though the tunnel is long and dark. Hell if I’d volunteer for phony wars meant not to protect the country, but to enrich the lives of a select wealthy few.
Amen. Or votech for a trade doing plumbing, HVAC, auto mechanic, etc. The trades that most illegals can’t do. I’d give the finger to any family member or “friend” that suggested the military to me. And then I’d cut off all contact.
There’s also big bux to be made in fixing medical equipment like cat scans, MRIs, dialysis machines, etc.
Comment by palmetto
2011-04-17 10:39:58
Amen. Or votech for a trade doing plumbing, HVAC, auto mechanic, etc. The trades that most illegals can’t do.
Theres no such thing as “trades that most illegals can’t do.”
You pay them and they will do it; no matter how illegal, stupid or dangerous.
They busted one in dee-cee a few years ago for doing dentistry in a garage in back of a house in Mount Pleasant.
If For example, if you were “thinking evil” and you wanted revenge on someone who ripped you off, you could go to home despot and buy 4 shovels, then pick up a few illegals in the parking lot and drop them off at a house of your choice and tell them to remove all the sod while you go to the bank.
And then just drive home.
They will do it.
You CAN’T save on min wages. Let alone part-time.
For most families, if the teenager is working, they are now expected to support some costs for themselves, like clothes and food.
Bike? You should get out more often. Outside of NYC, or Chicago or Boston (as examples only) there is NO mass transit nor space to ride your bike to work. You MUST have a car. And even in those cities, not every job is accessible by bike or bus.
And last but not least, according to even official inflation, min wage should be $8.50hr to stay even with the rate from 1981. Real min wage should $12hr.
So yes, the military is about the only real option if you can’t go to college or know someone in the trades.
There is another option: oil field. I know guys without college degrees making 70K plus after just 5 years, but you have to specialize.
You paint with too broad of a brush, and should heed your own advice of getting out more. Not every place is Houston, TX. There are innumerable cities across this country where bicycles will suffice for transportation for young people. It may not be ideal, but we’re not talking about ideal. Furthermore, there are also many families which are happy to not charge their children room and board while they try to get on their own two feet.
Having two teenage daughters in the workforce/slaveforce, your eval is spot on.
Most of our minimum wage, service industry workforce (restaurants, grocery stores, anyplace that employs 16-20 year olds as the grunts) is dependent on subsidies from the Bank of Mom and Dad. Mainly in paying for the cost of transportation to/from work.
I fail to see what good it does to pressure kids to “go out and get a job”, when that $8.00 hour/minimum wage job costs $6.00 hour just for uniforms, and to get there and back
Would any of you work at a job where you “netted” $1-2 an hour?
If your kids don’t HAVE to work, don’t pressure them to work. At least not until the cost/benefit ratio gets straightened out.
Grizzly, I HAVE lived in other places.
The concentration of jobs are in the metros. And most metros a suicide for bikes and have poor to no mass transit service to the suburbs.
I fail to see what good it does to pressure kids to “go out and get a job”,
To keep them from turning into entitled lazy bums who are afraid to go out into the real world. At least it may force them into deciding what they’re going to do to pull themselves up. Too many parents are protecting their grown kids by making excuses for them.
I agree Montana. They need to find out really quick that they will mostly be working for others who are entitled, lazy bums and that the world is mostly “Dilberts” and not Horatio Algers.
And that your chances of being wealthy are about the same as the lottery, only you’ll have to work harder.
Teenaged unemployment rate is, IIRC, in the high twenties. And since this is ONLY the subset searching for a job, it means that people aren’t hiring teens.
So here’s the scenario: You get to your early twenties and are looking for a job, as you have been doing since you were in high school. They didn’t hire you before because they couldn’t afford you. Now they don’t hire you because you have no experience.
I didn’t have that particular scenario happen to me, but I *did* have one manager tell me they wouldn’t hire me because my college degree meant I’d want too much money. At the time I was broke and severely underfed and wanted *A* job, and this person wouldn’t hire me because (I guess) she thought I’d get uppity or something. Job hunting sucks. Especially when you’re hungry.
This is exactly how Sadam cemented power.
When the military/police are the only jobs in town you can get the new recruits to do some pretty bad stuff.
Just wait till the recruits are not even U.S citizens?
I suspect “unrest” in the U.S will be handled the same way it was in Iraq; always make sure the soldiers are unrelated to the population they are suppressing. The different states may need to lend their national guards to each other if they can’t trust their own members to fire on their brothers, sisters, moms, dads….
I’ve thought all along that keeping young people poor and unemployed is a plot by the gov’t to have a backdoor draft without actually having a real draft to make people be cannon fodder for their endless wars (now, three, I think. I haven’t read today’s news, so there could be more).
Testify, brothah. You nailed it.
BTW, how’s everything up in your neck of the woods? Did your area get whacked by the storms?
We got a lot of flooding, but thank God no tornado damage like they got down east.
Yesterday I met a Romanian couple whose kids attend the same grade school as ours. I couldn’t resist inquiring whether they lived there during Cauchesku’s demise, when revolution led to his beheading; they did. I see this situation as instructive regarding what measures a populace will eventually take if they feel their government is willing to indefinitely tolerate or even perpetrate injustice against the citizenry.
I wonder what will become of our bankers if justice is not carried out? Perhaps I am the only American citizen who has an incurable case of indigestion over what appears to be a steadfast tolerance of financial crime on Wall Street. But perhaps not. Only time will tell.
Heh. And Ceaucescu was widely regarded as an “enlightened despot” by our Cold War experts, back before the fall of the USSR.
Another real estate tycoon….
AUGUSTA - Dan Demeritt, Gov. Paul LePage’s director of communications and legislative affairs, resigned Saturday following revelations that five properties he owns in the Augusta area are in foreclosure.
One of the structures, a four-unit apartment building, was destroyed April 9 by a fire determined to be arson.
Savings Bank of Maine is seeking default judgments on four of the properties owned by Demeritt, a small-business owner who lives in Sidney.
Demeritt said in a release Saturday he is giving up his administration post, which pays him more than $81,000 a year, because he “has several unresolved business issues that need his immediate and direct attention.”
Demeritt — a graduate of Colby College who holds a master’s degree in business administration from the University of Southern Maine — links his unpaid taxes, bills and mortgages to business difficulties that began almost 2½ years ago, when he said he leveraged the value of his properties to buy other properties.
http://www.pressherald.com/news/governors-spokesman-resigning-from-post_2011-04-17.html
Lots of those state and local pols were flying high weren’t they. lol
True until it wasn’t…
The housing stock across our region is emptier than it was 10 years ago. Census data released last month showed that population growth in Orange, Sullivan and Ulster counties was met by a surge of vacant houses and empty apartments.
“We really were building for an out-of-town market because we thought. ‘If we build it, they will come,’” said Alice Dickinson, who leads the Orange County Rural Development Advisory Corp. “That was true for a long time, but when things hit the fan we ended up with a lot of high-priced houses and nobody to take them.”
Smith joined Town of Montgomery officials in 2006 to celebrate on a plot of land along Route 52. A developer was building six new homes that would sell for roughly $500,000 apiece and had agreed to leave a few parcels untouched to preserve a lovely view of the Shawangunk Mountains.
Two of those homes never sold. For five years they’ve sat amid overgrown grass.
“Clearly, the economy changed and those houses were upscale,” Smith said, noting similar cases in Monroe and New Windsor. “It was an overoptimistic project for an exuberant market that had no foundation.”
just wait until MID disappears. Those buyers of expensive homes will go poof. There isn’t a worse investment than a McMansion in the burbs right now, and this is after a massive drop in prices.
Yesterday PB put up some links of the possibility of the MID going away.
The myth is that the MID makes houses more affordable for young buyers. The reality is that the MID drives up demand for houses, thus increasing the value of the stucco box and makes house prices out of reach for young families.
If the MID goes away, conversely more people will be discouraged from buying but continue renting maybe five more years to save for the down payment.
IMO, it will be a radical move and there would be a lot of whining if they take the MID away. I recall that the deduction for credit card interest was removed in the 1980s, but I don’t recall the loud howls of protest. I did not have a credit card until 1989 anyway.
The better move is a flat income tax and remove all other tax deductions and all other taxes. I’m in favor of complete elimination of taxes except tariffs.
If the MID goes away ??
Goes away for whom ?? Single family homes ?? Apartments ?? Commercial real estate ?? Industrial real estate ?? Bare land ??
There is no MID for commercial real estate including apartment buildings. There is just deduction of business expenses including interest. A repeal of the MID wouldn’t touch commercial real estate.
There is no MID for commercial real estate including apartment buildings ??
Huh ??
MID = Mortgage Interest deduction…
Mortgage = Loan secured by property
Loan secured by commercial property = deductible interest
So I ask again;
If the MID goes away, for whom ??
Sharpen those skates Slim…
By CASEY STEGALL
FOX NEWS
PHOENIX - When the real estate market crashed in this country, the southwest was hit especially hard.
According to realtytrac.com , Phoenix, Arizona has the second highest foreclosure rate in America. But it’s that dubious distinction that’s attracting a new breed of buyer.
“There are a number of Canadian developers that have come in,” said Maureen Porter of Arizona for Canadians real estate.
They’re mostly taking advantage of a strong Canadian dollar.
“Investment homes were the primary focus because there are such great discounts in the foreclosure area, but now that our dollar is a dollar three today, we’ve got a lot more Canadians coming down and buying second homes,” said Porter.
In fact, so many are now flocking to the valley of the sun that Porter launched her own real estate company, catering specifically to buyers north of the border.
Check out the website, the only thing missing is officer Poncherello .
http://www.arizonaforcanadians.com/
The markets which have fallen the hardest- Vegas, Phoenix, etc., have seen a massive amount of speculators descend upon them, buying up masses of houses. But, this does not bode well for the long term, as these large markets need long term owners, not speculators looking to make a quick buck. I am absolutely SICK of single family homes being used as an investment vehicle. It’s not good for society.
I am absolutely SICK of single family homes being used as an investment vehicle. It’s not good for society ??
Ditto here….It could be easily curtailed also by requiring government backed loans to be owner occupied as a primary residence…
Ben,
Are you familiar with this outfit?
MESA, AZ - A down housing market was just the opportunity Rick Fisher needed to start a new business that in the end may actually help hard hit neighborhoods rebound
Less than three years ago Asset Preservation of Mesa was non-existent. Today, the company has more than 70 trailers and more than 100 employees who clean, repair, and maintain foreclosed properties.
“We started finding brokers who needed the homes maintained and we went from one to two to three to now 45 brokers we work with,” Fisher said.
But because of the sheer number of foreclosures on the market since the housing crash, banks and brokers for the first time are finding that it is critical to pay for consistent maintenance of those vacant homes.
“It is unfortunate that people are losing their homes but someone has to maintain them to help the neighborhood so the homes can sell,” Fisher said.
Each trailer is equipped with tools, yard equipment and cleaning supplies. Each one man crew spends about an hour every week or so at a given home simply making sure the property is safe, and looks good from the inside out.
http://www.abc15.com/dpp/news/region_southeast_valley/mesa/Foreclosures-turn-into-big-business-for-Valley-man
I’m surprised the banks will pay for this service.
When I was a repo-man the only accounts the banks paid quickly were the ones that the debtor paid to current including all repo fees. The auction bound stuff usually meant a long wait. If I complained then I wouldn’t receive any other work.
They are probably hiring illegal immigrants as a way to make it profitable. If so, I really hope they get nailed.
They probably are. I’ve done exactly that kind of work. It doesn’t pay for squat.
Maybe there are some atheists in foxholes, after all.
Republican economics
The rise of the anti-Keynesians
Paul Ryan’s intellectual hinterland
Apr 14th 2011 | WASHINGTON, DC | from the print edition
WHEN Republicans proposed slashing billions of dollars from federal spending this year, Democrats circulated predictions by economists that jobs and growth would be hit. John Boehner, the Republican speaker in the House of Representatives, countered with an economic expert of his own: John Taylor of Stanford University. “Nothing could be more contrary to basic economics, experience and facts,” Mr Taylor asserted on his blog, which Mr Boehner cited. By cutting government spending, he said, the Republicans would “crowd in” private investment and create jobs.
Mr Taylor, a prominent monetary academic, served under both George Bush senior and junior and advised John McCain during his presidential campaign. In the past few years he has become a strident and prolific critic of the monetary and fiscal stimuli deployed by the Federal Reserve and the Obama administration respectively, views that have received a warm welcome from House Republicans. For if there is one ideology that unites today’s Republicans, it is Keynesianism, whose nefarious influence they are determined to stamp out. “Young Guns”, the book-sized manifesto of Eric Cantor, Kevin McCarthy and Paul Ryan, leading Republican House members, devotes several pages to the evils of Keynesian activism and its exponents in the administration.
…
Paul ryan voted for TARP bailout for GM and tax cuts which are also Keynsian as they force the gov to borrow more. He voted for. He also voted for the wars which required more borrowing. So it isn’t that they don’t like spending it’’s that they don’t like spending that can’t be mined by the elite.
Shhhh… ASAIAC, Paul Ryan is a better gift to Democrats than Sarah Palin ever was. I was stunned to see all but four of those Republicans vote to privatize Medicare, and thus writing their own campaign commercials against themselves.
Weren’t these the same folks who were shouting “Obama’s gonna cut your Medicare”, and then they go and do it themselves?
Exactly oxide….Required question & answer for every candidate running for any D/C office will be;
Do you support the Ryan plan for privatizing Medicare ??
When I’m with the 55+ crowd, I *always* champion the republican cause of getting rid of SS and Medicare.
Actually, if it is in a debate the phrase is “ending Medicare as we know it” but privatizing works too. Part of Medicare Part D was a requirement for the states to set up volunteer programs so there would be staff available to help people do their Medicare D elections since it is so outrageously complicated. My parents are part of the program. They have to spend 10s of hours every year to take a recertification class and pass a test. Can you imagine how complicated it would be to sign folks up for a private program to cover their other Medicare expenses? Well, maybe not that hard since how many insurance companies acutally want to get into the business of insuring people over 65, most with pre-exixting conditions and without the huge additional pay off from Medicare Advantage.
insurance companies acutally want to get into the business of insuring people over 65, most with pre-exixting conditions ??
And the answer is obvious, “none”…None at least for a premium thats of this world…It would eventually reduce most people over 65 to poverty due to paying for your health care out of what ever assets you may have…After that, the burden would fall on the tax payer’s or you just live with the disease or injury or die from it….Wonderful idea…
“When I’m with the 55+ crowd, I *always* champion the republican cause of getting rid of SS and Medicare.”
Why do I get the sinking feeling that the payroll tax won’t go away when SS and Medicare get the ax?
Someone has to fund all those wars after all, and it won’t be the rich.
“It would eventually reduce most people over 65 to poverty due to paying for your health care out of what ever assets you may have”
Or move close to the border so you can be treated in Mexican clinics. Just duck when the rival drug cartels shoot at each other.
so you can be treated in Mexican clinics ??
Probably better to go to Thailand or India if you are going to pay for it yourself…
Insurance compnies want in, but they want in with gov picking up the tab and guaranteeing their profit.
“Probably better to go to Thailand or India if you are going to pay for it yourself…”
People living in poverty can’t afford plane tickets.
People living in poverty can’t afford plane tickets ??
Not talking about them…I am talking about anybody with any Asssssets…
Typical Rethugnican hypocrite…
For if there is one ideology that unites today’s Republicans, it is Keynesianism, whose nefarious influence they are determined to stamp out. “Young Guns”, the book-sized manifesto of Eric Cantor, Kevin McCarthy and Paul Ryan, leading Republican House members, devotes several pages to the evils of Keynesian activism and its exponents in the administration.
The other thing that unites these “Young Guns” is that they are completely servile to Wall Street and the corporate cartels.
The fatal flaw with Keynesian advocacy of government spending in bad times, is that the government will not stop spending in good times. We have 70 years of data to back this up.
Recheck your data- it’s wrong. The debt of WW2 was being consistently paid down by every post-war pres. Until Reagan.
Another sign of the collapsing credit bubble: Gambling is becoming increasingly illegal as the bubble continues to deflate. Next thing you know, they may even make it illegal for Wall Street investment banks to gamble with the backing of the full faith and credit of the Fed-Treasury too-big-to-fail bailout program, especially now that we know bailout money was sent to the central bank of Libya and to Japanese fishing cooperatives.
Winnipeg Free Press - PRINT EDITION
Game OVER
U.S. clampdown a massive blow to online poker
By: Marco Carreira
Posted: 04/17/2011 1:00 AM
Friday, April 15, 2011 might go down as one of the most shocking days in the history of poker — and I don’t think I’m exaggerating.
I wanted to discuss the Manitoba Poker Championship in this column, but due to the magnitude of Friday’s events, that will have to wait at least one more week.
Online poker has been dealt a brutal blow.
About five years ago, the United States government tried to ban online gaming, mainly online poker, because so much money was leaving the country to overseas banks. The Unlawful Internet Gambling Enforcement Act was passed. The fact the U.S. was not getting a cut of the online gaming market wasn’t sitting well with our neighbours to the south, so they decided to try to ban online gaming.
At the time, Party Poker was the largest site. In what was a definite shock to the poker community, the company instantly shut down its software to American players. They went from being the largest site to being almost non-existent overnight and since then, its site has never been the same.
So what happened to the U.S market at the time? Well, other sites didn’t seem to care about the U.S. government and the UIGEA and went ahead and kept allowing Americans to play on their sites. With good advertising and the continued growth in popularity of the game, PokerStars and Full Tilt Poker became the online poker giants.
On Friday, however, all of that changed. The FBI and and the U.S. Department of Justice issued a press release stating that 11 executives of PokerStars, Full Tilt and Absolute/Ultimate Bet have warrants out for their arrest on fraud charges and a couple of them are already in custody.
…
What’s amazing to me is why the vast majority is clueless as to this is happening?
That’s pricey: 13 items that cost more, or will.
~ CNBC
Four-dollar gasoline is just a part of it. As most any shopper knows, prices are climbing for everything from coffee and chocolate to tires and toilet paper.
The Consumer Price Index has climbed 2.7 percent in the past 12 months, according to government statistics released Friday. That’s the largest rise since 2009.
Price increases will continue in the months ahead as companies pass along the higher costs of raw materials, transportation and other expenses.
“When prices at the pump rise and wages don’t, already strained budgets show the pain,” says Diane Swonk, chief economist at Mesirow Financial in Chicago.
This creeping inflation doesn’t yet alarm economists, who don’t expect high inflation in the near future. That’s because many businesses are still wary about boosting prices when workers are getting meager raises, if any, and unemployment remains near 9 percent.
But even modest increases can pack a wallop with consumers in a tenuous financial position, says Scott Hoyt, senior director of consumer economics at Moody’s Analytics. “The increases in prices are going to be felt more severely now than if we were in a stronger economic environment.”
Here is a snapshot of some areas where prices are rising. More hints of what’s in store will come as corporations report quarterly earnings over the next several weeks.
AIRFARES
Airlines have been raising ticket prices steadily to pass on the expense of higher fuel costs. Domestic round-trip fares were boosted a half dozen times this year by $4 to $10 each. Over the six months that ended in February, fares jumped 22 percent, according to the Bureau of Labor Statistics’ index.
CHOCOLATE
Hershey’s raised its wholesale prices by nearly 10 percent in late March. Consumers may not feel the pinch until after the big Easter season, because many retailers will be able to make purchases at the old prices for about eight weeks.
COFFEE
Coffee prices jumped 27 percent between December and March as companies passed along their record cost of unroasted beans. Starbucks boosted the prices it charges retailers for packaged coffee by up to 12 percent — its first increase in three years. J.M. Smucker, which sells Folgers and Dunkin’ Donuts brands, has raised prices several times during the past year. Sara Lee, Kraft Foods and Green Mountain Coffee Roasters also have hiked prices.
FAST FOOD
Paying more for burgers? You will soon if you aren’t already. McDonald’s, like many of its peers, is dealing with higher ingredient costs and expects to raise U.S. prices this year. Rival Wendy’s/Arby’s is expected to raise prices later this year because of what it says will be 15 percent higher beef costs.
FRUITS AND VEGETABLES
Even adjusting for seasonal factors, the cost of fruits and vegetables has risen 23 percent in three months, including bananas up 10 percent and potatoes up 39 percent.
FURNITURE
Furniture manufacturers such as Ethan Allen and La-Z-Boy are increasing prices by up to 7 percent due to higher costs of cotton, yarn, leather and steel.
GASOLINE
$5 gas, anyone? Not yet, but it may be coming. Gasoline prices leaped 6 percent last month and have risen 28 percent in the past year. Consumers paid an average price of $3.81 a gallon nationwide on Friday, according to the travel group AAA.
HOUSEHOLD PRODUCTS
Diapers, soap, toilet paper, toothpaste, trash bags and many other everyday items all have been targeted for price hikes as companies from Kimberly-Clark to Procter & Gamble to Colgate-Palmolive respond to rising ingredient costs.
INSURANCE
State Farm and Allstate, the nation’s two biggest home and auto insurers, are pursuing further price hikes. State Farm just pushed through an average rate hike of 18.8 percent for Florida homeowners and is seeking double-digit rate hikes in select other states. Allstate has been raising its auto insurance rates in numerous states. It’s also aiming to impose more homeowners’ increases after already raising rates an average of 7 percent in 10 states in the fourth quarter of 2010 — citing a need to make up for the surge in weather-related losses.
JUICE
Tropicana, owned by PepsiCo, said last month it’s raising prices on some of its juices by 4 percent to 8 percent to cope with higher costs due to cold weather damage of Florida citrus crops. That means shoppers are paying more for Tropicana and Dole fruit juices.
Coca-Cola already had increased prices this year for its Minute Maid and Simply brands in the U.S. by 4 percent to 8 percent to cope with higher costs for commodities, fuel, packaging and fruit.
PACKAGED FOODS
Rising prices for corn, wheat and many other ingredients, along with fuel, have led to higher prices for packaged goods. Among those announcing price hikes: B&G Foods, maker of fruit spread, canned goods and sauces; ConAgra Foods, whose brands include Banquet, Chef Boyardee, Healthy Choice and Peter Pan; General Mills, maker of Nature Valley snack bars and Cheerios cereal; H.J. Heinz, world’s largest ketchup maker; Kellogg, which makes Frosted Flakes, Pop Tarts and other foods; spice maker McCormick & Co.; and Sara Lee, the maker of frozen desserts, Hillshire Farms lunchmeat and Senseo coffee.
Safeway, Supervalu and other supermarkets are passing the higher costs along to customers.
SOFT DRINKS
Big beverage makers are hiking prices because of higher costs for packaging, ingredients and transportation. The price of carbonated drinks was up 14 percent from December to March.
TIRES
U.S. tire prices climbed 6 percent in the six months ended in March. Cooper Tire & Rubber Co. boosted prices by 8 percent to 9 percent last month — its second increase this year. At the time of the announcement the company said natural rubber prices had increased more than 75 percent in a matter of months.
Copyright 20
I wonder if the CPI will reflect any of that! I’m guessing not.
Higher inflation equals higher GDP. It’s all good.
The rise is geographically uneven.
I saw a 50% increase in prices at the grocery store last year while other saw nothing. This year, the prices are back to about 2-3% per month, while other places are now seeing 20-50%. Everything else rose about 10%+. (insurance, clothing, etc.)
Except for gas, of course.
What’s amazing to me is why the vast majority is clueless as to this is happening?
It’s because the vast majority are so genetically, educationally, and culturally dumbed down they really don’t have a clue as to what’s happening. The 2008 elections proved that IDIOCRACY has overtaken us, and the 2012 elections will make that assertion incontestable.
Well thank the Furies that only the price of non-essentials are skyrocketing.
Has anyone come across the list of bailout and emergency aid recipients referenced in this Matt Taibbi article? If you see it before I do, please post.
POSTED: April 1, 12:23 PM ET | By Matt Taibbi
Why is the Fed Bailing Out Qaddafi?
Barack Obama recently issued an executive order imposing a wave of sanctions against Libya, not only freezing Libyan assets, but barring Americans from having business dealings with Libyan banks.
So raise your hand if you knew that the United States has been extending billions of dollars in aid to Qaddafi and to the Central Bank of Libya, through a Libyan-owned subsidiary bank operating out of Bahrain. And raise your hand if you knew that, just a week or so after Obama’s executive order, the U.S. Treasury Department quietly issued an order exempting this and other Libyan-owned banks to continue operating without sanction.
I came across the curious case of the Arab Banking Corporation, better known as ABC, while researching a story about the results of the audit of the Federal Reserve. That story, which will be coming out in Rolling Stone in two weeks, will examine in detail some of the many lunacies uncovered by Senate investigators amid the recently-released list of bailout and emergency aid recipients – a list that includes many extremely shocking names, from foreign industrial competitors to hedge funds in tax-haven nations to various Wall Street figures of note (and some of their relatives). You will want to see this amazing list when it comes out, so please make sure to check the newsstands in two weeks’ time.
…
Note that it was the Treasury Department, which is under The One’s direct control, and not the FED that did this. The metamorphosis into GWB continues.
Who’da thunk?
Are you suggesting the Fed was not in on the planning nor the execution? That doesn’t square with my perception, though I have not seen a full account of how the bailout played out. All I know is that Big Hank and Big Ben seemed to be moving in lockstep back in Fall 2008. And there is that President’s Working Group thingee…
Working Group on Financial Markets
“Note that it was the Treasury Department, which is under The One’s direct control, and not the FED that did this.”
It was the Treasury that lifted the sanctions on the banks, it was the Fed that loaned the money.
‘It was the Treasury that lifted the sanctions on the banks, it was the Fed that loaned the money.’
The PPT wrestles financial crises tag-team style.
Where do the reg’lar citizens of Libya put their paychecks? If Quadaffi and Selim-6-pack have accounts at the same bank, what do you do?
This is why it was such a huge mistake* to allow banks to essentially consolidate into a vertical monopoly where an entity such as BoA can do anything from gamble in derivatives using TARP money to offering checking accounts to the commoners. Hostage-taking is inherent in the system.
————–
*Wasn’t exactly a mistake..
unbeivable
I didn’t know the US Treasury had the authority to issue exemptions to executive orders. Doesn’t make much sense, does it?
It makes perfect sense if you recognize that so long as a crisis is in progress, none of the usual rules apply. That’s disaster capitalism in a nutshell…
Exactly.
A little known fact: Most of 20th century American capitalism has been based not on finding a solution to a problem, but creating the problem and THEN selling the solution.
Somebody’s got some ’splaining to do.
Fed lent to all comers in crisis
Posted by Colin Barr
March 31, 2011 5:29 pm
Banks weak and strong from all over the world flocked to the Fed’s discount window during the financial crisis.
Among two of the biggest emergency borrowers were Germany’s Depfa and Belgium’s Dexia, with loans totaling $51 billion at the end of October 2008. U.S. banks hit up the window as well, with Washington Mutual borrowing billions in the week before its collapse.
Documents released Thursday show that supposedly healthy banks were leaning heavily on emergency loans during the crisis. Three big banks – two of them among the supposedly healthier players on Wall Street heading into the financial crisis – were the biggest users of various emergency lending programs during a six-month stretch in the fall of 2008 and winter of 2009.
The Fed has long resisted disclosing the details of loans made at its so-called discount window, but it released thousands of pages of documents Thursday after the courts sided with Bloomberg and Fox in lawsuits seeking access to the information.
The Fed’s primary dealer tri-party collateral report documents the securities that various banks pledged in exchange for emergency loans, under the Primary Dealer Credit Facility, Term Securities Loan Facility and Fed open market operations. The PDCF and TSLF were created in 2008 to ensure investment banks could keep borrowing from the Fed when debt markets dried up, but loans under those facilities were classified as discount window borrowings.
The borrowings have since been repaid and the Fed didn’t lose money on the loans, but anger over the bailout of risk-taking, well-compensated bankers continues to put the Fed’s actions under a less than flattering light.
…
HEY, THEY DIDN’T LEND TO ME!
Right. I believe there are laws which prohibit lending discrimination. But as I mentioned above, during a crisis, when there are no atheists in the foxholes, none of the usual rules apply. That’s why disaster capitalists favor having really big crises as often as possible.
Equal Credit Opportunity for Consumers
Credit is used by millions of consumers to finance an education or a house, remodel a home, or get a small business loan.
The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit. This doesn’t mean all consumers who apply for credit get it: Factors such as income, expenses, debt, and credit history are considerations for creditworthiness.
The law protects you when you deal with any creditor who regularly extends credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Anyone involved in granting credit, such as real estate brokers who arrange financing, is covered by the law. Businesses applying for credit also are protected by the law.
…
“The Equal Credit Opportunity Act (ECOA) ensures that all consumers are given an equal chance to obtain credit.”
All borrowers are created equal. But banksters are more equal than others.
Yeah, we should file suit under the ECOA.
I personally am having a hard time understanding why deadbeat bankers who threw hundreds of billions of dollars down the housing market rat hole automatically qualify for zero percent Fed-funded crisis loans, while prudently managed households and small businesses are summarily disqualified. Is the Fed’s discriminatory lending standard solely based on the too-big-to-fail size standard, or is there some consideration of credit history involved in their underwriting formula?
That’s an easy explanation, PB. It’s because the retards who voted for hope ‘n change and their intellectual inferiors who voted for “McSame” sent an unambiguous message to Wall Street and their Republicrat enablers: rape at will - you can do so with impunity.
Wall Street won, America’s Main Street lost.
Stop reading here and get to work, debt slaves!
Wall Street won, so why is it so worried?
Shanny Basar in New York
12 Apr 2011
Has Wall Street really learned the lessons of the financial crisis? A series of articles in New York Magazine suggests that that the banking industry has much to celebrate after emerging relatively unscathed from the “barely averted apocalypse.” Why then, the magazine asks, do the banks seem so downbeat?
It could have been so much worse, the magazine says. On a day when the Independent Commission on Banking review in the UK stopped short of recommending for British banks, their Wall Street counterparts could also congratulate themselves on a narrow escape.
As Columnist John Heilemann writes in the article: “Whatever the ultimate effects of the financial-reform measure signed into law last year, there can be no doubt that Wall Street dodged the deadliest bullets that might have come hurtling in its direction: nationalisation, a breakup of the megabanks, strict limits on financial leverage. And if Republicans have their way, even the less Draconian new rules now on the books will be repealed.”
…
But, but, but Chuck you told me real estate has always appreciated in value…
HOUSING: Falling rates, prices create local buyers’ paradise
A loan payment on a median-priced house in North San Diego County in 2010 was $1,879, slightly higher than 2009, but otherwise the lowest since the mid-1990s in 2010 dollars —- and lower than most of the 1980s, when 15 percent interest rates made payments expensive.
Southwest Riverside County figures show an even steeper discount: A potential buyer could pay just $897 a month for a median-priced house in 2010. That’s $12 more than in 2009, but otherwise, in inflation-adjusted dollars, that’s the cheapest monthly payment in Southwest County in the past 30 years.
“In the last 20 years, I’ve never seen anything like it,” said Chuck Whitehead, general manager for Coldwell Banker’s Southwest Riverside operations. “I bought my first house in 1996, a four-bedroom for $124,000, and I could probably buy that same house for $124,000. All the appreciation we’ve gained in the last 15 years, it’s gone.”
http://www.nctimes.com/business/2d7be10c-dcf1-5c2b-a8a8-c02bf36e6b74.html
Southwest RIverside county is a smoggy armpit, far away from everywhere. I hear that people have to leave for work at 5 AM for their jobs in OC or north Sand Diego County or they will end up stuck in 2 hour traffic jams.
Why can’t they just ride their bikes?
“Southwest RIverside county is a smoggy armpit…”
That’s skydiving country!
“I bought my first house in 1996, a four-bedroom for $124,000, and I could probably buy that same house for $124,000. All the appreciation we’ve gained in the last 15 years, it’s gone.”
This sounds promising, but if true, there are still 13 years of future price declines ahead before prices reach 1983 levels, as predicted by Faster Pussycat. Maybe in four or so years from now?
Thanks to the Federal Reserve’s profligate fiat money creation, 2011 dollars are worth a lot less than they were in 1996. So your appreciation isn’t just gone; in terms of real buying power you’re in the hole.
I’m hoping that since Dudd-Fwank has proved a flop, perhaps Wall Street regulation can be revisited again in the near-term future, especially given the wave of populist anger the release of the Senate’s new report on Wall Street’s role in precipitating its own demise.
‘Shoddy, risky, deceptive’: inside the American mortgage crisis
Gretchen Morgenson, Louise Story
April 15, 2011
A voluminous report on the financial crisis by the US Senate describes business practices that were rife with conflicts during the mortgage mania and reckless activities that were ignored inside the banks and among their federal regulators.
The 650-page report, Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, cites internal documents and private communications of bank executives, regulators, credit rating agencies and investors.
The result of two years’ work, it focuses on institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit rating agencies Standard & Poor’s and Moody’s; and the investment banks Goldman Sachs and Deutsche Bank.
”The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions,” said Carl Levin, co chairman of the Senate permanent subcommittee on investigations, which published the report.
”The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”
…
Goldman Sachs
Long on chutzpah, short on friends
The firm that came to dominate world finance
Apr 14th 2011 | from the print edition
…
WHo needs friends when you have all the money?
I was thinking about this the other day. It dawned on me that money is the “last” way that people get rich. When you think about it, a person is rich when they can convince others to do their work and give them things.
If I can convince someone to make me a dress, give me some food, build me a house, then I’m rich because I could not have accomplished all those things on my own. But there have been rich people long before there was money, so how did they influence so many people to give them so many things?
Well, I think some of it must have started out with violence, some of it must have been religious, and from there the rest of it must have political (i.e., through “friends”). Then one day they invented money and that really helped to seal the deal for the folks who already had a bunch of stuff.
So that’s why, IMO, money isn’t everything when it comes to wealth. I think money is only a representation of how powerful you are in terms of violence, religious followers, and the freinds you keep.
I don’t think a person can be short on friends, yet still be long on chutzpah for very long.
“When you think about it, a person is rich when they can convince others to do their work and give them things.”
It’s a lot easier to do this when you have all the money.
Yep
“…a person is rich when they can convince others to do their work and give them things.”
Sounds like the modus operandi for a prostitute’s best customers: The ones who always come first.
It’s actually a two-fold solution, Big V.
Violence (enforcement of status quo) and some people’s natural inclination to be sycophants and move with the herd. (kiss butt)
Interesting perspective on the evolving political divide:
The GOP prepares to stick it to the poor
By Stephen Black
On Borrowed Time
Published: Saturday, April 16, 2011 at 4:30 a.m.
Last Modified: Friday, April 15, 2011 at 2:26 p.m.
Whoo-ha! You gotta hand it to the GOP. They got chutzpah. Evil chutzpah, but chutzpah nonetheless. Their new GOP motto is “We mess with the poor and aren’t ashamed of it.”
The greedy, big-pocket, never-have-enough-money gang in D.C. is going to reduce government spending. Hooray! When I heard that, I thought, “Well, finally they are going to tax the wealthy and greedy bloated corporations with their obscene profits.”
Nope. This is how they are going to cut spending. Get this: The Republican snake-oil men would “shift more of the rising medical costs onto Medicare beneficiaries. (The plan) calls for sharp cuts to Medicaid and health care for the poor and disabled and to food aid for the poor” (quote taken from The Associated Press).
The Republican plan is called the “Path to Prosperity.” Right. Prosperity for the greedy, and as usual the proverbial shaft for the poor and have-nots.
…
This is going to get very interesting. Once nearly 50 million get kicked off foodstamps and they look for jobs that don’t exist, what will they do? This could be a golden opportunity for Mexican drug cartels to recruit and expand on our side of the border.
Or maybe that would just allow the price of healthcare to drop.
“…look for jobs that don’t exist, what will they do?”
Some will go homeless, some will find illegal occupation, and some will take lower-paying jobs that do, or soon will, exist.
I was with you up to the “jobs” part.
As for what will they do, why they’ll do just exactly what the PTB want them to do: quietly disappear.
Not.
Get security smart now, people.
1. Rethuglicans 108 up, 68 down
Re-thug-li-cans : the plural of rethuglican.
Rethuglicans are the political enforcement thugs used as tools by wealthy individuals associated with big business and their political agendas. Their dogma is that of capitalism and anyone who questions the dogma is attacked voraciously as ignorant and is considered a terrorist, communist or completely insane.
The Rethuglicans primary concerns are the protection of wealth of the super rich, which have mostly inherited wealth akin to hereditary rule over successive generations. A typical part of their dogma is their indoctrination that all life is based on survival of the fittest, see Social Darwinism and Fascism, and only the fit deserve to exist. And their concept of those fit for the environment are those who have wealth, while all those who are poor are simply supposed to work for works sake in producing more wealth for the wealthy. Anyone who isn’t willing to work for the corporate agenda is a parasite and should be removed from society as an unfit whiner.
The dogma of rethuglicans is that their utopia can be achieved if the constitution didn’t exist and every action taken by an individual in society was motivated for the sole purpose of generating profit. The taking of profit from another person by force if necessary is acceptable as long as the people are not part of the wealthy establishment they represent. A person incapable of defending himself or herself obviously doesn’t deserve anything and should be eliminated from the genetic pool of the species, especially if seen as a potential threat.
…
Does this description pretty much fit Paul Ryan? If not, what are the key differences?
Rethuglican is just a transitionary phase of evolution. The ultimate Republican wet-dream is to turn Earth into A Ferengei type society.
I was just thinking that. We’d better start memorizing the Rules of Acquisition.
The GOP have been sticking it to the poor since Reagan.
Their path to prosperity is to burn the burns bridges and cut the rungs on the ladders and mine the path and then blame the less fortunate for being stupid and lazy.
You would think an Ivy League education would include some history on Marie Antoinette.
“Their path to prosperity is to burn the burns bridges and cut the rungs on the ladders and mine the path and then blame the less fortunate for being stupid and lazy.”
Sounds like a recipe for fast track societal decline from First World to Third World status.
The likes of Portugal should default on their debt
Conditional bailouts are a recipe for stagnation, social unrest and political turmoil – a co-ordinated debt default is preferable
Nuno Monteiro and Eduardo Sousa
guardian.co.uk, Friday 15 April 2011 14.30 BST
…
China’s central bank said on Sunday that it would raise lenders’ required reserves by 50 basis points, the fourth time this year. The move increases the required reserve ratio for the country’s biggest banks to a record 20.5 per cent.’
China’s housing sales rose 26 percent in the first quarter of this year as home buyers increased their purchases even as the government stepped up its measures to curb speculation. The value of new homes sold in the first three months reached 860.7 billion yuan (US$132 billion), the National Bureau of Statistics said yesterday.’
‘Overall sales value, including commercial properties and office buildings, jumped 27 percent year on year to 1.02 trillion yuan.’
From December 09, 2010
‘China’s top think tank has said that the country’s real estate bubble has soared in urban areas…”The government target is not clear and policy is incoherent,” Ni Pengfei, director of the Research Center for City and Competitiveness at CASS said in Beijing.’
“The country’s macro economy overwhelmingly relies on real estate, and people might invest in real estate when confronted by inflation,” he warned.’
‘An increasing number of foreign institutional investors are flooding into China’s property market, lured by the sector’s high investment returns and the country’s solid economic fundamentals. Statistics from the Ministry of Commerce showed that 114 foreign-funded real estate companies submitted applications in November, either for the launch of a new company or to boost capital for those already in existence. The figure is 2.71 times that of October.’
This is how a bust is magnified. It’s simple logic that as prices rise, demand should fall. But as these numbers show, a mania-like mentality is in place when speculators rush in at already sky high prices. The result is, a large number of participants are left holding the bag, instead of just a few.
One example was the builders in Las Vegas. The were bragging about outbidding each other for lots at record amounts, just before it fell apart. I recall speaking with a UHS back in 2005 or 06. He was going on about how many people were still buying. I told him that simply meant there would be that many more in foreclosure down the road.
It’s really not that hard to grasp; speculation isn’t a sign of strength in a market - it’s exactly the opposite.
“It’s simple logic that as prices rise, demand should fall.”
This is indeed simple logic if Price does not equal Value.
But when Price DOES equal Value then the value of something is determined solely by the price.
When the price becomes disconnected from the fundamentals that normally drive it then price is running all on its own and it acquires its own value, meaning the value it acquires is determined by its price.
When Price equals Value that means as the price goes up the value also goes up, which is a crazy way of thinking about things but nevertheless there it is.
But the reverse is also true; In the world of Price equals Value if the price starts to go down then the value also starts to go down, and it will keep on going down until value as determined by fundamentals reasserts itself.
This is the mania as driven by psychology, which is only one part of the mania. The other part of the mania is the money part. There must be made avaliable a large and continuing supply of money to feed the mania else the mania will sputter and die.
All this is simply my opinion, of course. I’m sure we’re about to hear other opinions.
““It’s simple logic that as prices rise, demand should fall.””
This doesn’t happen when people perceive a good as an “investment”, with a future return. In that case, higher prices breed higher demand.
With any other asset expected to remain flat or depreciate in value, yes, higher price equals lower demand.
‘higher prices breed higher demand’
That doesn’t make sense. Maybe in the very short run, in the “greater fool” line of thinking. But if this were true, every new hot stock would go up forever.
‘higher prices breed higher demand’
How about, “Growing evidence of corporate success leads to higher demand, breeding higher stock prices”? I agree that causality runs from value to demand to higher prices; the other explanation sounds like something which only makes sense with lots of central bank liquidity blowing price bubbles.
From The Economist:
“This apparent contradiction can be resolved. Financial markets do not operate in the same way as those for other goods and services. When the price of a television set or software package goes up, demand for it generally falls. When the price of a financial asset rises, demand generally increases.
Why the difference? The reason is surely that goods and services are bought with a specific use in mind. Our desire for them may be driven by fashion or a desire to enhance our status. But those potential qualities are inherent in the goods themselves—the sports car, the designer sunglasses, the fitted kitchen. Such goods may be means to an end but the nature of the means is still important.”
http://www.economist.com/node/16792858
I guess I’m parroting a column in The Economist, but it made sense to me. In some instances, higher prices indicate higher desirability.
1) In a simple consumer good example, wasn’t there an example with sneakers some years ago, where pricing them higher led to more demand? Might be apocryphal, but if true, a data point.
2) In financial markets, it does seem that people chase rising stocks.
Yeah, and why anyone thinks that the government in China can make it any different there is beside me.
“Yeah, and why anyone thinks that the government in China can make it any different there is beside me”
According to one article in Ben’s post, the Chinese govt. is “trying to curb speculation” (which is the opposite of what we did). I have noticed that when the Chinese govt really wants to get something done, it gets done. Whether they’re really making an all-out effort is another question.
the Chinese govt. is “trying to curb speculation”
http://thehousingbubble.blogspot.com/2005/03/remarkably-similar-housing-bubbles.html
‘China Daily…”The property market has witnessed four consecutive years of sizzling growth since 2001. Investment has risen sharply and, despite soaring prices, housing sales are also brisk. It is time for the government to intervene in the redhot housing market, otherwise it runs the risk of spiralling out of control. For many would-be urban home buyers, their dream of owning a home continues to disappear as house prices surge nationwide.”
http://thehousingbubble.blogspot.com/2005/03/china-cuts-off-housing-bubble-commie.html
‘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.”
http://thehousingbubble.blogspot.com/2005/05/shanghai-property-market-tumbles.html
“Shanghai’s new middle classes, every bit as obsessed by rocketing property prices as their British counterparts, are suddenly asking if the bubble has finally burst. After years in which prices rocketed out of all proportion to Shanghaiers’ still lowly incomes, the last month has seen the first falls being reported by local media.”
“Sales in April dropped from 30,000 to 10,000. Prices for some new developments have dropped by a fifth almost overnight, while officials say the fall is already averaging over five per cent.”
“Speculative investors have plunged into the market from elsewhere in China, Hong Kong, and further afield. There have even been private investors from Britain and Ireland willing to take a gamble. Prices rose by 19 per cent in the first three months of this year alone.”
http://thehousingbubble.blogspot.com/2005/03/china-worries-about-housing-cracks.html
“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.’”
Does it seem to anyone besides me a bit premature to predict Obama’s loss in the next election before the Rethugnicans have even fielded a candidate? What if, for instance, they field the Palin-Bachman ticket? Would that affect the likely outcome, and how?
DECLARATIONS
APRIL 16, 2011
Obama Is Likely to Lose
But Republican unseriousness may be his trump card.
BY PEGGY NOONAN
What if everything we think we know about the president’s political position is wrong? That’s what I think became clear this week.
…
I dunno man, but seriously I want Obama as president for a second term. I don’t want either of the two parties in control of both the legislative branch and executive branch. I am nostalgic for 1995-2000.
I especially want the legislative majority and executive office to really hate each other. Government shutdown is like frosting on the cake.
I take it you aren’t reliant on government contracts, then? Because the first thing to go in a government shutdown is contract work.
I do rely on them indirectly, but I welcome a shutdown. I’m ready to stop working and prepared over a decade for some event that would take me out of work a couple of years.
The last time government shut down I also was involved in work that was a contract (back in the late 90s). But it kept going.
Essentially, the pot of money is already locked up by most contract work. It is a different issue for those who get paid directly every week or month by government check. I get paid indirectly.
Much as I say defense spending is constitutional, I also say America cannot afford to be the world’s policeman. Yet I am not going to quit my work to make a political statement. Some other engineer will come along and take over my job.
Government contracts are already being cut. My section is already starting to do work in-house instead of instead of just keeping track of the what the contractors do. Some of the employees actually enjoy the technical work because that’s what they were trained to do, not contract management.
In the early 90s I was a federal employee. The trend at that time was BRAC, shutting down bases and cutting contracts. But even then, the trend was defense acquisition. That meant we were to phase out of development and just do contract monitoring. IMO, that sucked, so I got out of dodge and went to private industry.
If I get economically discouraged from defense work, I will consider it an opportunity for me to live where I want to live, not where the defense sectors are focused. My areas have been Southern California, New York metro, Washington D.C. and Arizona.
But downsizing my job to a “plowshare” job could get me into work in San Francisco, a city I always loved. It takes a lot of money to live there, but I don’t need much of a job, based on my savings anyway.
“I’m ready to stop working and prepared over a decade for some event that would take me out of work a couple of years.”
There is something to be said for unpaid vacations, so long as you have sufficient savings to carry you through. But it would get really ugly for J6P, who lives paycheck to paycheck.
“In the early 90s I was a federal employee.”
Were you working for Uncle Sam when they shut down the government in 1995?
Oh 1995? Yes. I went into private industry in mid 1996. I thought the shutdown was when I was in a Fortune 500 company in the defense sector in 1997 or 1998…
I did not get any furlough or loss of my salary in the 1995 shutdown. I did not notice.
A lot can happen between now and election day. If things get a lot worse, and they probably will, the GOP will successfully lay the blame at the Dems feet and take over the Senate and White House (maybe even if Sister Sarah is the candidate). The real question is if they can get a filibuster proof majority in the Senate. If they do, be prepared for a major transformation in the US as the GOP will dismantle any program that serves the middle class while increasing military spending.
Dismantle programs that serve the middleclass? Like the pyramid scheme known as Social Security? Like students loans that resulted in an higher education bubble. Medicare/medicaid which run deficits? Tax policiy such as interests mortgage deduction? Dept. of education which costs billions and has many bureaucrats but few if any teachers. Yes, let’s get rid of it. Also trim military spending. As Polly noted yesterday the Fed Gov is giant retire program with an army. Well such spending is unstainable.
an higher = a higher
retire = retirement
Need the eye glasses and the coffee
Everyone of those programs fell to the law of unintended consequences. Each and every one.
Social security ended up stripping wealth from one generation to serve another.
Student loans drove education prices through the stratosphere while reducing the quality of that education. These days a typical “middle class” student graduates with $50,000 - $100,000 in debt. I have heard cases where after defaulting 30% apr+ huge fees are charged on debts with NO statute of limitations. GO MIDDLE CLASS!!
Mortgage deduction resulted in higher house prices and lower tax revenue requiring taxes on renters be raised. The result it is harder than ever to go from poor to middle class as you will have high income, bad credit and no way to escape punishing taxes.
Some school districts (OK ill bite Irvine, CA) have administrative ratios of 1 administrator per teacher…
Health insurance, medicare, medicaid resulted in dramatically higher medical costs.
There are other things too, but you get the point.
“Social security ended up stripping wealth from one generation to serve another.”
DOn’t worry, once SS is cancelled they’ll use the payroll tax to fund wars. I’m sure you’ll sleep much better at night.
“Social security ended up stripping wealth from one generation to serve another.”
Yet Gen X & Y outnumber the boomers, thus putting lie to there being ANY problems with SS.
Don’t worry, we will all get our fatted cow social security check each month after we retire and until we croak. I am not counting on mine to be worth a dime in purchase power and would just as soon have had the money to invest where I saw fit.
I have maintained for several years now that the 2012 presidential election absolutely rides on who the Republicans nominate.
If the Tea Party Republicans continue to dominate the discussion in the primaries, then the Republicans are likely to nominate a candidate that is unacceptable to independents and Democrats. And the Democrats will be motivated to turn out in large numbers. If I were a Democratic strategist, I might secretly fund the campaign of the most extreme Republican that runs.
If the Republicans nominate a more centrist candidate, then they have a chance.
If the first and only black president does not get two terms, that will mean this is a racist country.
Now you don’t wan’t to live in a racist country do you?
Racial considerations aside, I’m thinking the utter ineptitude of Rethuglicans in fielding presidential tickets greatly increase the chances of a two-term Obama presidency.
Have you considered the dilemma which will face American voters if the Rethugs field a Palin-Bachman ticket? The voters could turn out to be collectively sexist or racist, depending on the outcome.
My contention is that since Wall Street couldn’t possibly find someone as subservient as Obama, they will direct the GOP wing of the Republicrat Party to field an unelectable slate to ensure his re-election. In a sane country any ticket with McCain, Palin, or Bachman on it would be rejected out of hand by the electorate, but in the Land of Snooki-Stoopid, unfortunately, the unthinkable is not outside the realm of possibility. President Trump, for instance.
Trump-Palin?!
Retch.
Obama seems to be doing a fine job ensuring our next president will be a religious whack case.
Worse, all three legs of our government will be strongly on the R side.
I think our country runs best when the president is either D or R and the Senate and Congress the other. That way no one really gets away with much either way. I doubt we would have had an ObamaCare, but I might have been able to go to CostCo and purchase the same group health insurance they give their employees…
There have been more and more prognosticators indicating a win for Obama in 2012. The _ublicans (censored for autofilter) have been making yet another fool of themselves recently.
“_ublicans”
Did you mean ‘_uglicans’?
Thank Heavens at least one Senator recognizes the need for a rule of law in the financial sector, to help encourage Wall Street financiers to serve America rather than perpetually tear Her down.
Now if we could just put the culpable banksters behind bars so the next generation of banksters doesn’t face the moral hazard temptation to repeat the same crimes!
In the Media
Apr 15, 2011 by Bill Lindner
Op-Ed: Senate Report details elaborate Wall Street Mortgage Fraud
A report released by the U.S. Senate paints a scathing picture of mortgage fraud on Wall Street enabled by the malfeasance and blatant disregard for oversight by Federal agencies that regulated them.
A 650-page report (PDF), titled “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse,” released by the U.S. Senate Permanent Subcommittee on Investigations chaired by Sen. Carl Levin (D-Mich) cites 5,800 internal documents and the private communications of bank executives, credit rating agencies, investors and regulators and details Wall Street’s fraudulent business practices and conflicts of interest that fueled the mortgage meltdown, undermined public trust in the U.S. markets in the months leading to the financial crisis, and reveals reckless activities that were ignored by the banks and their federal regulators.
As Washington has tried to ignore the massive Wall Street fraud — for which no one on Wall Street or their enablers has been put behind bars — responsible for the latest economic crisis in the hopes that it would go away, Senator Carl Levin, and Senator Tom Coburn (R-Okla) blasted Wall Street after 2-year bipartisan investigation on the main culprits responsible for the crisis. As noted by Common Dreams, the report (PDF) comes at a time when much of the feeling from Washington lawmakers is that Wall Street is being over-regulated by the new Dodd-Frank rules.
The Senate Committee’s report names several institutions that played a central role in the mortgage crisis, including Washington Mutual, the Office of Thrift Supervision, credit ratings agencies Standard & Poor’s and Moody’s Investors Service, Goldman Sachs and Deutsche Bank.
Four key areas of causes of the financial crisis were cited by the Senate panel:
• Risky mortgage lending as exemplified by Washington Mutual, which became the biggest U.S. bank ever to fail in September 2008.
• The failure of regulators to clamp down on lending abuses and risky conduct at banks in the years leading up to the housing bust and financial crisis.
• The AAA ratings given by big credit rating agencies to high-risk subprime mortgages that later went bad and helped cause the housing bust.
• The role of investment banks like Goldman Sachs and the finance deals they put together, which flooded the markets with risky securities
Pulling Back the Curtain on Shoddy, Risky, Deceptive Practices
In an interview, Senator Levin reportedly said “The report pulls back the curtain on shoddy, risky, deceptive practices” — often referred to as ’shitty deals’ by Senator Levin — “on the part of a lot of major financial institutions. The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”
…
So now that we have a 650 page report detailing Wall Street crimes against America, what is the more likely future path?
A. Green shoots of recovery result in a case of collective ennui and amnesia; consequently no criminal bankster serves a day of prison time.
B. A wave of populism sweeps over Main Street America, and the masses demand that justice be served by identifying, prosecuting and imprisoning the culpable.
Which is it gonna be, America: A. or B.?
C. Lawsuits.
Thank Heavens at least one Senator recognizes
Should have had this courage when it really mattered. Isn’t he the also one of the idiots who voted for handing 700 bil to banksters in 2008?
Late is better than never.
My question is, what happens to 650 page reports? Do they get added to the dustbin of analyses of waste, fraud and abuse in the financial sector, or do they serve as a blueprint for future prosecutorial action against the perpetrators?
Time will tell.
History says: dustbin.
Right. It seems likely the release of the 650 page report is intended to palliate the sheeple; they will assume the problem is now solved, completely missing the lack of follow-up punitive actions against the Wall Street perpetrators which could potentially eliminate the incentives for future crime while making a substantial dent in the nation’s oft-decried budget deficit.
WASHINGTON – As millions of procrastinators scramble to meet Monday’s tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
Now factor in that the elite also shelter income that doesn’t even get reported, they have overseas accounts and trust funds. Their real effective tax rate is probably significantly less than 17%.
I’m sure that once the GOP has a supermajority they will go after the under $500/week crowd, making sure that they pay their “fair share”. Hey, it costs $1,000,000 a year to put a pair of boots on the ground in the Middle East. Someone has to pay for that.
I helped a friend with her taxes yesterday. It took us a while, but I think we got it right. The refundable credits helped a lot. They might even be able to get their car fixed so they don’t have to rely on borrowing her father’s car when it is occasionally available. Having a car consistently available will allow both of them to work more, and the money to get it fixed will go to a local mechanic.
Now explain to me how making sure that money went to a gazzillionaire in NY in the form of a 28% highest marginal rate cut for ordinary income (cutting highest rate from 35% to 25% as in the Ryan budget proposal) will do more for the economy?
unfortunately the fraud that surrounds the EIC outways the good.
Really? Show me the stats. How do you know what “good” is done by the EITC and what bad is done by fraud related to it? Come on, I’m looking for hard numbers here.
my comment was based on my experience in the deep south as a CPA and a conversation with an IRS official at a seminar I attended years ago.
but here is one article.
http://www.marketwatch.com/story/irs-to-investigate-earned-income-credit-fraud
So 8 years ago (the article is from 2003) there was a push to tighten up enforcement and that means the fraud outways [sic] the good now? An IRS person is always going to be down on any fraud. That is their job. They don’t see the benefit to the people who claim it legitimately because, well, why would they even be looking at those cases.
Try again.
i will not try again.
i give up. you win.
well…the gazzillionaire definately is not paying the 35% rate now…maybe under the Ryan plan he would be paying the 25% rate?
(haven’t read it)
but we need tax reform…not necessarily just increasing the marginal rates on ordinary income.
the gazzillinaire’s are not ordinary…and do not pay taxes as such.
what obama needs to do is lead dammit! if i was him i would say to hell with clinton’s rates and to hell with the bush cuts.
this is my plan and this is why it will be good for the country. reform the whole damn thing so ordinary and non-ordinary incomes are treated the same…or at least reconcile the two.
Ryan refused to specify what “loop holes” he would close to broaden the base. It was all just hand waving. And while they don’t pay that 35% on much of their income since most of it gets converted to long term capital gains, I can just about guarantee, that they pay it on some part of their salary income - it is just that the salary is a small part of their overall income.
Oh, and if you thing that Ryan plans to extend that 25% rate to long term capital gains, I have a bridge to sell you.
Why would he act to reduce future campaign contributions from the Rethugnican base?
“Now explain to me how making sure that money went to a gazzillionaire in NY in the form of a 28% highest marginal rate cut for ordinary income (cutting highest rate from 35% to 25% as in the Ryan budget proposal) will do more for the economy?”
Because they create jobs! (sure those jobs are in India and China, but by god, they created those jobs!)
I am not super rich, but they like everyone else pay taxes in dollars not percentages. 17% or even 7% of several hundred million is more than most other people earn - in their lifetimes. The US government’s deficit is a spending problem not a tax problem.
“The US government’s deficit is a spending problem not a tax problem.”
And the spending problem is in the process of being dealt with, which means LESS MONEY will be spent, which means LESS MONEY will be flowing into the economy.
Less money flowing into the economy creates a scarcity of money which makes the money that does flow more valuable.
IMO, a person paying 40 mil in taxes on 100 mil in income is not denied anything that any reasonable human being requires or even would want…It is much different for a person making 60k and paying even 10k in taxes…That 10k in taxes has a direct impact on that persons ability to acquire something that they may need or want…
With that said, I agree we have a spending problem starting with the Pentagon…
Yes, and what’s left over after that 17% is taken out is a whole lot more than most other people earn in their lifetimes. In fact, if the government taxed the income at 35%, what would be left over is STILL a lot more than most other people earn in their lifetimes. So, you would rather have people starving in the streets just so that the rich can make a point? Because that’s where we’re headed.
That said, I agree there should be some kind of semi-forced job program after some period of unemployment, even if they are re-doing the nature trails and fixing the lodges built by the CCC.
*Tax Cuts = SPENDING*
Therefore DC has a spending problem.
Or DC has a tax problem?
BINGO
Spending and taxes are two sides of the same coin.
Eat the Rich
http://www.youtube.com/watch?v=661pi6K-8WQ&feature=player_embedded
Interesting post Rancher…I will pass along…
What BS propaganda
1. Why do they assume the rich would only pay it off in 1 year. Seriously even a 3 year old could see through this framing of the arguement. It’s like looking at a person who purchased a house comparing their income in 1 year to their debt and asking how they could pay it off.
2. They make it sound like they are slanting their calculation by using the two biggest corporations income. There are a lot of companies and there are huge bonuses that are paid to a large number of CEO’s.
The other issue not addressed here is that concentrating the wealth slows the velocity of money and this drives down demand and taxes and increases unemployment. Huge issues when it comes to paying down the debt.
Try again Rancher
I’ll never understand the lap dogs to the rich who get absolutely nothing for their service. In fact they get smacked in the head just like the rest of us.
Today’s word is : sycophant
“I’ll never understand the lap dogs to the rich who get absolutely nothing for their service”
Or do they? What do you think the Kochtopus is all about?
I think Brother Measton was referring to your average apologist for the filthy rich that frequent the HBB.
“…average apologist for the filthy rich…”
Did Ben or anyone else ever figure out whether paid PR consultants post here? I was long convinced that Joey and Eddie fit this description, but now I am curious if there are other Rethuglican hacks posing as Joe Housing Bubble Blogger?
It’s long been my belief that there are a few paid distortionists on the blog. Granted there are a few stupid wage earners out there championing the cause of the filthy rich but I don’t think any of them could operate a web browser.
In Darien, a Case of ‘Down in Front!’
$1.85 MILLION addition to a waterfront home here on the Long Neck peninsula has quite literally put a wedge between the homeowners and their neighbors.
In a dispute that underscores the premium attached to water views in the prosperous communities lining the Gold Coast of Fairfield County, the neighbors, Scott and Rosemarie Reardon, are suing the town, saying that planning and zoning officials erred by not subjecting plans for the addition to a more rigorous review process.
The construction partially obscures the Reardons’ view of Long Island Sound. Jim and Janeen Eckert are building the addition on property that lies between the Sound and the Reardons’ 10-bedroom colonial closer to the road. The Reardons’ lawyer, Alan Kaufman, equates the view loss with a potential $1 million drop in property value.
Mr. Kaufman outlined an ambitious legal challenge
http://www.nytimes.com/2011/04/17/realestate/17wczo.html?ref=realestate
Ah, one of the many pitfalls of paying for stuff with no tangible value. So you bought a view. But did you buy the right to make sure it can’t be obstructed? No? Then you didn’t buy a view.
Sorry, you lose. NEXT!
Poor, poor, oppressed millionaires!
Up until the last 6 months or so a good 20%-30% of the people who appeared daily in the booking blotter were illegals arrested for driving w/o valid licence DUI and such. Now they either stopped driving, stopped drinking, got legal or split. Probably the latter because when I drive by Center St. in Jupiter where there was a large community of undocumented immigrants (had to look that up) there are lots of “For Rent” signs and a lot less undocumented immigrant traffic.
What we are left with mostly is people who are here legally doing illegal things. Good looking crowd today though.
http://www.palmbeachpost.com/blotter - 43k
Doesn’t seem right to put their faces online when they haven’t been convicted of anything.
It’s not, but that’s the way it’s always been done in the country.
“Perp walk.”
U.S. Home Sales, Construction Probably Rose in March
~ Bloomberg
March increases in home sales and construction probably failed to make up for the ground lost the prior month, showing the U.S. residential real estate market continues to struggle almost two years into the economic recovery, economists said before reports this week.
Purchases of existing homes rose 2.5 percent to a 5 million annual rate after dropping 9.6 percent in February, according to the median forecast of 60 economists surveyed by Bloomberg News. Another report may show builders began work last month on 8.6 percent more houses following a 23 percent plunge.
“We’re unlikely to see any significant, fundamental rebound in housing in the near term,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut.
Housing, which pushed the economy into the recession, remains the weak link in the recovery and continues to weigh on consumer spending as home prices fall. Manufacturing, which has been at the forefront of the expansion, may cool in coming months as producers face supply shortages caused by last month’s earthquake and the nuclear crisis in Japan.
“As we head into the second quarter, there is a tremendous amount of uncertainty about where things are headed,” said Stanley.
The National Association of Realtors’ report on sales of previously owned homes is due April 20. The drop in purchases in February sent the median price of existing houses to the lowest level since 2002.
“U.S. Home Sales, Construction Probably Rose in March”
The collision of a pickup in U.S. home construction with an estimated 15 million homes in shadow inventory coming back on the market through 2015 should be a housing gloomster’s dream come true.
Got popcorn?
What’s mind-blowing is the fact that new homes are actually selling in some of the overbuilt markets, and for a lot more money than the foreclosures in the same neighborhoods. I don’t understand why somebody would be buying, though the prices are at substantial discounts as compared to bubble pricing.
Presumably most people would prefer a new home (of comparable quality) to an older one, and new homes (of comparable quality) should last longer than used homes. That said, my perception is that bubble-era price distortions live on; one consequence is that buyers funded with federally guaranteed, low-downpayment loans are still vastly overpaying for new homes compared to the price for which they could purchase comparable used homes. In short, the comps have not yet priced in post-bubble equilibrium; this is exactly what the Fed wants, as rational non-exuberance is the enemy of the irrationally exuberant hair-of-the-dog stimulating market churn which the Fed favors.
Super rich see federal taxes drop dramatically
Associated Press – Sun Apr 17
WASHINGTON – As Monday’s tax filing deadline nears, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.
Texas University Takes Cue From Kyle Bass to Hold $1 Billion in Gold Bars
~ Bloomberg
The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.
The fund, whose $19.9 billion in assets ranked it behind Harvard University’s endowment as of August, according to the National Association of College and University Business Officers, added about $500 million in gold investments to an existing stake last year, said Bruce Zimmerman, the endowment’s chief executive officer. The holdings are worth about $987 million, based on yesterday’s closing price of $1,486 an ounce for Comex futures.
The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.
“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
Gold reached an all-time high of $1,489.10 an ounce yesterday in New York as sovereign debt concerns boosted demand for the metal as a store of value. Gold has climbed 28 percent in the past year on Comex.
The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 6,643 bars of bullion, or 664,300 ounces, in a Comex-registered vault in New York owned by HSBC Holdings Plc (HSBA), the London-based bank, according to a report distributed at the meeting in Austin.
How to lose your endowment in 80 days.
Riiiight! That’s funny, chalk up another clueless.
Hey, lump it wumbiz.
Hey you can’t help yourself, stupid is as stupid does.
dummie
Unless the gold physically moves to Texas, nothing has changed. I wouldn’t trust the NYC crowd with a single penny.
That was pretty stupid of them.
Oh god, not the Basses again.
Gee, I wonder why they didn’t buy silver?
That’s only 5% of their fund.
JackRussell in DC… yesterday you mentioned you might know the deluded debtor who bought the house in Felton, DE and if I remembered the road.
It’s on Black Swamp Rd and the former owner is a “Tina Turner” and sold late summer early fall of last year.
Worried about Japanese radiation? Get used to it.
And avoid the temptation to snap up one of those California coastal homes at fire sale prices, as the radioactive fallout from the air that makes its way to the U.S. will fall closest to the coast in the greatest concentration.
SINGAPORE, April 17, 2011
Six to nine month timeline to end Japan crisis
P.S. Suryanarayana
It will take six to nine months from now to bring about an optimal “control” of Japan’s nuclear radiation crisis in the face of “many risks involved”. A two-step roadmap, focussed on the challenges at the quake-and-tsunami-hit Fukushima Daiichi atomic power plant, was outlined in Tokyo on Sunday
Alluding to the announcement, even before it was made by chairman of the Tokyo Electric Power Company (Tepco) Tsunehisa Katsumata, U.S. Secretary of State Hillary Clinton said in the Japanese capital that American experts “will analyse those plans”. Speaking after holding talks with Japanese leaders, Ms. Clinton said “we are doing everything we can to support Japan”.
Mr. Katsumata said: “In Step-1, we will ensure that the [emission of] radioactive material is reduced. In Step-2, we will ensure that the release of radioactive material is fully [brought] under control.” In any case, the more immediate task was to ensure that “the amount of radioactive material is substantially reduced”.
“Although there are many risks involved”, Step-1 should be completed in three months, with the subsequent three months to six months needed for Step-2. In achieving these goals, we will be focussing, for the time being, on cooling [the nuclear reactors and the spent-fuel], on containment [of the release of radioactive substances] and on monitoring [the efforts at] decontamination [of the environment].”
…
Saudi Arabia’s oil minister said on Sunday the kingdom had slashed output by 800,000 barrels per day in March due to oversupply, sending the strongest signal yet that OPEC will not act to quell soaring prices.
Consumers have urged the exporters’ group to pump more crude to put a cap on oil, which surged to more than $127 a barrel this month, its highest level in 2 1/2 years amid unrest in North Africa and the Middle East.
Oil Ministers from Kuwait and the United Arab Emirates echoed Saudi Arabia’s Ali al-Naimi’s concerns about oversupply and said rocketing crude prices were out of the hands of OPEC, which next meets in June.
“The market is overbalanced … Our production in February was 9.125 million barrels per day (bpd), in March it was 8.292 million bpd. In April we don’t know yet, probably a little higher than March. The reason I gave you these numbers is to show you that the market is oversupplied,” Naimi told reporters
Two Saudi-based industry sources told Reuters last week the kingdom had cut output due to poor demand, prompting selling by traders who saw it as a sign of a well-supplied market.
Could the inflation story all be smoke and mirrors?
Clearly us gas consumption has fallen for the last 5months.
This suggests world consumption is down as well.
Yahoo news
“…sending the strongest signal yet that OPEC will not act to quell soaring prices.”
Sounds like a strong signal that OPEC will act to fuel soaring prices.
As long as OPEC exists, there’s no such thing as a free market.
Before them came the Texas Railroad Commission.
Both basically designed to artificially restrict production, in order to keep prices high.
Not that there is anything wrong with that.
“Not that there is anything wrong with that.”
Economic theory says that cartels result in a suboptimal level of production, to the detriment of consumers and to the benefit of producers. But arguably, international cartels can get away with it, because there is no international law (at least of which I am aware) to stop them.
By contrast, the Sherman Antitrust Act is supposed to rein in domestic firms from engaging in anti-competitive monopolistic behavior. Unfortunately, perhaps due to corporate ‘free speech,’ U.S. antitrust law appears to have lost all its teeth.
Nothing wrong with it,
I agree to some point but I would rather the price was high due to taxes then due to funding islamic extremism and Big Oil.
How do the real estate experts ‘know’ that unaffordable pricing will soon return? Doesn’t the recent Japanese experience of two straight decades of real estate price declines, followed by devastating earthquake, tsunami and nuclear accident, suggest another possible way forward, towards restored affordability? I have a hard time imagining many folks eager to buy coastal California housing, anyway, given the rampant fears about breathing in radioactive fallout from Japan carried to California doorsteps on gentle coastal breezes.
The Associated Press April 15, 2011, 8:45AM ET
Calif home prices dip in March from year ago
LOS ANGELES
Home prices in California dipped 2.4 percent last month to $249,000 from $255,000 in March 2010, marking a sixth year-over-year decrease in a row as low-priced foreclosures and other distressed properties continued to dominate the market, a tracking firm said Thursday.
San Diego-based MDA DataQuick said the state’s median home price was up 2 percent from $244,000 in February, but stressed that prices usually increase between February and March.
Home sales fell 2.4 percent from 37,295 in March 2010 to 36,417 last month, the firm said.
Sales were up 33.3 percent from 27,320 in February, but a sales increase is also normal between the two months, DataQuick said.
“The housing market has certainly moved well back from the abyss of two years ago, but there is quite a ways to go before it’s even remotely normal,” said DataQuick president John Walsh.
…
I’m sure financiers and the central bankers who finance them prefer bubbles to their absence, as collapsing bubbles provide a great opportunity to transfer wealth from Main Street to Wall Street, with the stated purpose of saving the financial system from collapse.
Features April 14, 2011, 5:00PM EST
The Granddaddy of All Bubbles?
World markets are frothing like shaken Champagne, and doomsayers argue that today’s bubbles need to be deflated now before they get dangerously large
Phillip Toledano
It’s as if 2008 never happened. Once again the world’s investors are pumping up bubbles that will probably explode in their faces. After the popping of a real estate bubble led to the first global recession since the 1930s, world markets are frothing like shaken Champagne. Pundits claim to have spotted price increases that are unsupported by economic fundamentals in assets ranging from U.S. farmland to Israeli biotech to Australian housing to Chinese cemetery sites. Commodities have soared. Global junk-bond issuance hit a record in the first three months of the year. And Yale’s Robert Shiller calculates that the Standard & Poor’s 500-stock index is trading at 23 times earnings normalized over the past 10 years, compared with a historical average of 16. “I fear this is the granddaddy of them all, an almost-encompassing bubble right at the heart of monetary systems,” says Doug Noland, senior portfolio manager of the Federated Prudent Bear Fund.
Cassandras, pointing to the bankruptcies, taxpayer-financed bailouts, and joblessness caused by the last bubble, argue that today’s bubbles need to be deflated now before they get dangerously large. Many blame the Federal Reserve for keeping interest rates too low and pumping out a flood of money in search of yield that feeds bubbles around the world. Chinese authorities want the Fed to raise rates to relieve inflation in China. On Apr. 7 the European Central Bank raised its benchmark lending rate a quarter-point, to 1.25 percent. In the U.S., “What we’ve created is beyond moral hazard,” laments Brian Wesbury, chief economist at First Trust Advisors, a Wheaton (Ill.) fund shop. “People are coming to think that the market cannot go higher if the Fed isn’t helping it.”
Not everyone is in the grip of bubble-phobia, least of all Fed Chairman Ben Bernanke. The central bank remains committed to keeping rates ultralow until the economy shows more staying power. In an Apr. 11 speech in New York, Fed Vice-Chair Janet L. Yellen didn’t say anything about bubbles. But she rejected the contention that Fed policy is responsible for commodity price inflation, blaming the runup in oil and food prices largely on “rising global demand and disruptions in global supply.” She’s right: Commodities aren’t being hoarded, as they would be if investors were speculating on them. Inventories have fallen since last summer.
Some economists such as Jaume Ventura and Alberto Martin of Barcelona’s Universitat Pompeu Fabra go so far as to argue that bubbles are the price we pay for vigorous growth. They say the optimism reflected in sharply rising prices can become a self-fulfilling prophecy: Rising prices induce more hiring and investment. That generates the growth that justifies even higher prices, and so on in a virtuous upward spiral. Of course, eventually the bubble pops and causes a mess. Yet however jarring a boom-bust economy may be, they say, it’s better than an overregulated economy stuck in perpetual underperformance. “The bubble has costs. But you prefer the world with the bubble over the one without the bubble,” says Ventura.
…
it’s better than an overregulated economy stuck in perpetual underperformance. “The bubble has costs. But you prefer the world with the bubble over the one without the bubble,” says Ventura
Uhm better for who??? ahh yes bankers and the economists they finance.
Features April 14, 2011, 5:00PM EST
This Tech Bubble Is Different
Tech bubbles happen, but we usually gain from the innovation left behind. This one—driven by social networking—could leave us empty-handed
By Ashlee Vance
As a 23-year-old math genius one year out of Harvard, Jeff Hammerbacher arrived at Facebook when the company was still in its infancy. This was in April 2006, and Mark Zuckerberg gave Hammerbacher—one of Facebook’s first 100 employees—the lofty title of research scientist and put him to work analyzing how people used the social networking service. Specifically, he was given the assignment of uncovering why Facebook took off at some universities and flopped at others. The company also wanted to track differences in behavior between high-school-age kids and older, drunker college students. “I was there to answer these high-level questions, and they really didn’t have any tools to do that yet,” he says.
Over the next two years, Hammerbacher assembled a team to build a new class of analytical technology. His crew gathered huge volumes of data, pored over it, and learned much about people’s relationships, tendencies, and desires. Facebook has since turned these insights into precision advertising, the foundation of its business. It offers companies access to a captive pool of people who have effectively volunteered to have their actions monitored like so many lab rats. The hope—as signified by Facebook’s value, now at $65 billion according to research firm Nyppex—is that more data translate into better ads and higher sales.
After a couple years at Facebook, Hammerbacher grew restless. He figured that much of the groundbreaking computer science had been done. Something else gnawed at him. Hammerbacher looked around Silicon Valley at companies like his own, Google (GOOG), and Twitter, and saw his peers wasting their talents. “The best minds of my generation are thinking about how to make people click ads,” he says. “That sucks.”
…
“The best minds of my generation are thinking about how to make people click ads,” he says. “That sucks.”
When I was a kid I dreamed of manned missions to Mars and that maybe I would get to travel in space myself.
Now, I’m supposed to get excited over a smart phone.
Yawn.
Don’t own a “smart phone,” don’t do Facebook, don’t Twitter.
I guess I’m just a neo-Luddite who isn’t doing his part for the economic recovery?
Most “innovation” in the last half of the 20th century was figuring out ways of separating 10-24 year olds from their money. Why? Because they have the most disposable income, and don’t have to worry so much about such mundane things as “rent” “food”, “insurance”, etc.
Most “innovation” is cenetered around pornography.
Can’t say it doesn’t produce lotsa stimulus, can you?
In the 80s I was interested in surveying all the areas of artificial intelligence. I found that rule based systems, better known as expert systems, were laughably simple to create and the ones who made the most money hyped it to the suckers who knew nothing. A small businessman would pay some brash college grad $2,000 for an expert system, then inform his customers that he has an artificial intelligence program. I got a kick out of that.
Then in the 90s I got interested in digi cash and encryption, as well as remailers and pseudonyms and experimented around with them. Such things might come back very useful in the next decade and usher in a new renaissance all over the world and free man from men.
Don’t get me started about “Expert Systems”
The corporate jet OEMs are trying to replace all of their “old guy” Field and Customer Service engineers with newly minted 25 year old MEs, AEs, and EEs sitting in front of computer terminals with “Expert Systems”.
The trouble with Expert Systems is that their “solutions” are restricted to whatever was imputed into the system. And their solutions come from data sent in by the wrench-turners.
Now that the wrench-turners have figured out that the “Expert System” is a means for the OEMs, shops and aircraft owners to cut them out of the profit loop, by replacing them with lower paid guys using an Expert System, expect the system to lose it’s utility.
Yes. I think that outcome is going to occur.
I watched “Atlas Shrugged” - the movie today and I recall the scene from the 20th century motor works. The company went belly up after they instituted an eqalitarian policy effectively where the most productive employees get no more pay than the least productive. That outcome was predictable.
Right then it reminded me of the company from where I just came. The striking thing is not egalitarianism, but nepotism. It seems that the company was focused more on having married couples, father and sons, brothers, cousins, and also a small clique of drinking buddies in a certain age group. I never saw such a company. It is no surprise that this nepotism was given so much allowance that the company did not realize they were not focused on finding the best employee for the job. Only a friend, a brother, a son, or a spouse. And the big layoffs had to happen.
There are still a lot of relatives at the company. But one of two brothers got laid off. A son of an employee got laid off, a guy related by marriage to three cousins and a brother in law (a five-some) got laid off.
The chicken came home to roost for that company. I don’t see it recovering until they remove all the nepotism.
Didn’t get home from work until late last night, found out I missed the whole “divorce/pre-nupt/value of marriage” discussion.
Man, was I depressed.
I wouldn’t say you “missed” anything.
The truth of the matter is, if someone is living with another person for 10 years (not to mention co-mingling their finances), the whole “pre-nup” discussion is moot anyway.
I cannot for the life of me understand why one would marry someone who you also felt compelled to make sign a pre-nup.
Yeah, if you don’t trust someone to marry/domestic partner them without one, you shouldn’t be marrying them at all.
Unfortunately, most people get married before they are 25-30, which means they get married before they have time to figure this out.
You got a point. But Suze Orman also has a point. She likes the idea of pre nups and thinks all women should be in favor of them. The older you are, the more likely you have either a lot of net worth or want to protect your beneficiaries or both. I saw a recent article about 50-somethings who are marrying. A good deal of them are getting pre nups. By their 50s, many of them are on their third marriage and they regard a pre nup as a heavy shielded mine sweeper to rely on when they head back through the minefield.
Rhymes with “Tex”…
http://news.yahoo.com/s/afp/20110417/wl_afp/finlandvote
Finns have delivered a stunning rejection of their political establishment’s slavish adherence to a globalist and EU agenda at the expense of ordinary Finns. This puts Portugal’s bailout in doubt, and raises the spector that the PIIGS stringing-along of greedy bondholders will end in a series of massive, market-crushing defaults.
Finland’s vote might affect Portugal’s bailout
17/04 17:13 CET
Finland’s voters have been choosing a new government and the pre-election opinion polls suggest it might be much less enthusiastic about the EU than the last one.
It is even possible the result in Finland could affect Portugal’s request for an EU financial bailout.
…
Euroskeptic parties make gains in Finland vote
KARL RITTER, Associated Press
Updated 02:48 p.m., Sunday, April 17, 2011
HELSINKI (AP) — Finnish voters dealt a blow Sunday to Europe’s plans to rescue Portugal and other debt-ridden economies, ousting the pro-bailout government and giving a major boost to a euroskeptic nationalist party.
With all ballots counted, the biggest vote-winner was the conservative National Coalition Party, part of the outgoing center-right government and a strong advocate for European integration.
But its main ally, the Center Party led by Prime Minister Mari Kiviniemi, said it would drop out of the government after falling behind two opposition parties that have challenged eurozone bailouts.
The anti-immigration and staunchly euroskeptic True Finns don’t see why Finland should rescue Europe’s “squanderers,” while the Social Democrats have called for changes to how they are funded.
The outcome means conservative leader Jyrki Katainen will have to invite at least one of them to coalition talks, raising questions about Finland’s support for rescue packages that need unanimous approval in the 17-member eurozone.
“This result will give Europe gray hairs,” political analyst Olavi Borg said. “It will cause them problems over the bailout funds.”
…
Ire and Ice…
Charlemagne
A parable of two debtors
Does Iceland hold lessons for Ireland, and the rest of troubled Europe?
Apr 14th 2011 | from the print edition
EVERYONE in Iceland knows the tale of Bjartur of the Summerhouses, a crofter who, emerging from years of debt bondage, struggles against nature, misfortune and the curse of Ireland’s St Columba to be self-reliant. “The man who lives on his own land is an independent man,” he tells his dog. “He is his own master.”
The appeal of Bjartur, the central character in “Independent People”, an epic novel about Iceland’s peasantry, did much to secure the Nobel prize for its author, Halldor Laxness, in 1955. More than half a century later, Bjartur’s cussedness lives on. For the second time, Iceland’s people have voted to reject a deal to compensate Britain and the Netherlands for making good local deposits in the island’s collapsed banks. No matter that the revised deal offered Icelanders more favourable terms. Nor that the country faces prolonged economic uncertainty and a Dutch threat to hold up its bid for European Union membership.
The “no” camp argued that Iceland had no legal duty to stand behind €4 billion ($6 billion) of compensation to foreign depositors in Icesave, the online arm of a failed private bank, Landsbanki. The matter will now go to an international court, although Iceland says most or even all the money will be repaid from the disposal of Landsbanki’s assets. Beyond the legal arguments, the vote was an act of defiance. Icelanders were offended at their treatment by big countries, notably Britain, which had invoked anti-terrorist laws to seize Icelandic assets.
There is an epic quality about the way this remote island of glaciers and volcanoes has stood up to powerful states and economic orthodoxy. For its cheerleaders, such as Paul Krugman, an American Nobel laureate in economics, Iceland is a model for another north Atlantic island ruined by bad banks: Ireland.
Yet the Irish government has taken the opposite view. It guaranteed the obligations of Irish banks to a reckless degree, wrecking the country’s public finances.
…
So which has done better? The two islands experienced similar losses of GDP. Unemployment has been higher in Ireland, but Iceland has endured a bigger drop in domestic demand, and saw inflation reach 18% (it is now back to normal levels). The IMF predicts that Iceland will grow faster than Ireland this year and next, with half Ireland’s jobless rate. Iceland’s deficit and debt levels, and its credit-default swap spreads (a sign of investor confidence), look healthier than Ireland’s. Steingrimur Sigfusson, Iceland’s finance minister, says his country could “amaze the world with a speedy and good recovery”.
Not all Icelanders are so upbeat. Magnus Arni Skulason, a prominent campaigner for a “no” vote in the first Landsbanki referendum last year, says he is concerned about the uncertainty that a second rejection will cause. Iceland faces another downgrade by the rating agencies. Capital controls are likely to stay in place for several more years. Emergency loans from Nordic countries may not continue (Carl Bildt, the Swedish foreign minister, blogged that the vote was “worrying”). Iceland’s ability to raise exports is hampered by current aluminium-production capacity and fish stocks. Thorvaldur Gylfason of the University of Iceland, who issued early warnings about Iceland’s over-large banking sector, says it is too early to assess the long-term damage, be it difficulty in raising finance or intangible effects such as a loss of business confidence and the “recriminalisation” of a business class seeking to get around capital controls. “We should not be banging our chests and saying we got away with it.”
…
Between Ice and Ire
The right answer surely lies somewhere between Ireland’s near-comprehensive guarantee for the banks and Iceland’s bank default. The Irish state should bear some consequences for its mismanagement in allowing the housing bubble to inflate so far. But the senior bondholders of Irish banks should also take a hit.
…
The story of Bjartur cautions against overzealousness. His quest for self-reliance ends in failure, and those dearest to him pay the heaviest price. “The lone worker will never escape from his life of poverty for ever and ever; he will go on existing in affliction as long as man is not man’s protector.” In the end, Bjartur succumbs to the markets and St Columba.
Who’s buying all that shadow inventory?
By Alan J. Heavens
The Philadelphia Inquirer
April 17, 2011
PHILADELPHIA — Foreclosures, sad to say, are a fact of life in today’s housing market.
The number of U.S. homes in various stages of mortgage delinquency, though not growing as quickly as in the past three years, now stands at 1.8 million, according to
CoreLogic, a business-services and -information company.
This “shadow inventory” — about nine months’ supply — includes 470,000 houses already repossessed by lenders.
Last year, 28 percent of all homes sold in the United States were properties repossessed by lenders, said Rick Sharga, chief economist at RealtyTrac, a California firm that tracks foreclosures. In a normal year, he said, distressed homes would have been just 5 percent of the sales.
In much of the country — especially Florida, Arizona, and Nevada, the states hardest hit by foreclosures — the chief buyers of repossessed houses are either investors able to put down all cash or the 25 percent that lenders typically require, or first-time purchasers using mortgages insured by the Federal Housing Administration.
Nationally, investors gobble up more than half of the bank-repossessed properties.
“Most are rehabbing and renting them quickly to obtain a positive cash flow, then refinancing the property and taking the cash to buy another one,” Sharga said.
They are looking at three- to five-year investments, he said, “so the current short-term depreciation of real estate values isn’t a big deal.”
Other investors are doing wholesale flipping, Sharga said, buying “the most absolutely discounted properties, doing minor repairs and flipping to another investor, buying 20 cents on the dollar of the last sale price and selling for 50 cents.”
But in the Philadelphia region, especially the northern and western suburbs, where Prudential Fox & Roach agent Donald Sepety works, 85 percent of his primary buyers include first-timers and “pharmaceutical-company employees in the higher end of the market, who are going to fix up these houses anyway.”
“I handle two a month,” Sepety said. Having to deal with the banks and the legal system, “that’s all I have time for.”
…
Prediction: Future U.S. home price declines will turn out to be larger than Zandi expected.
More U.S. home price declines ahead, Moody’s economist warns
Sonya N. Hebert/Staff Photographer
In Dallas and the rest of the country, foreclosures will continue to drag down the housing market — including prices, Moody’s analysts predict.
By STEVE BROWN
Real Estate Editor
Published 14 April 2011 10:05 PM
Economist Mark Zandi expects the U.S. economy to continue to recover this year and do even better in 2012.
But he’s less bullish about the housing market.
“Housing prices will probably not hit bottom until the very end of 2011,” Zandi, chief economist with Moody’s Analytics, told an audience Thursday morning at a briefing for executives.
Zandi, whose predictions about the home market have been closely followed for years, thinks prices around the country will drop “another 5 percent or so.”
“Any price decline we do experience I would classify as overshooting,” he said.
…
Solano County’s March home prices decline nearly 8%
By Reporter Staff
Posted: 04/15/2011 01:19:47 AM PDT
Updated: 04/15/2011 07:29:02 AM PDT
Solano County home sales dipped nearly 8 percent in March compared to the same 2010 period, and the median home price in the same period, reflecting a Bay Area-wide trend, fell to $190,000, from $215,000, a real estate information service reported.
Still, regional home sales last month logged the best March in four years, barely, as prices slipped back a notch. A variety of indicators — including investor and cash purchase levels and adjustable-rate loan use — pointed toward a more normal market, though suggested that it is still a ways off, said a spokesman for San Diego-based DataQuick.
In Solano, 608 homes were sold last month, compared to 660 last year during the same month, a drop of 7.9 percent. By comparison, in the bordering counties of Sonoma and Contra Costa, home sales were up 10.1 percent and 0.1 percent, respectively.
A total of 7,051 new and resale houses and condos sold in the nine-county Bay Area last month. That was up 41.3 percent from 4,991 in February and up 0.2 percent from 7,040 in March 2010, according to Andrew LePage of San Diego-based DataQuick.
An increase in sales from February to March is normal, he added in a press release Thursday. Last month’s sales count was the highest for a March since 8,317 homes sold in March 2007.
“The housing market has certainly moved well back from the abyss of two years ago, but there is quite a ways to go before it’s even remotely normal,” said John Walsh, DataQuick president. “The Bay Area has
much less of a foreclosure problem than the rest of the state, but, by its own standards, it’s still a sizable problem that acts as a drag on prices. The big issue continues to be mortgage financing, which is still problematic for many potential borrowers.”
Last month, 345 newly built homes sold in the Bay Area, the lowest for any March in DataQuick’s statistics. The previous March low was 355 in 1993.
…
Shiller is the only housing market economist whose predictions have been in the ballpark, and I expect housing price declines to eventually surpass what seemed pessimistic back when he said this in 2008.
U.S. House Price Decline Could Be Worse than Great Depression, Economist Shiller Says
Posted Sep 04, 2008 01:36pm EDT
by Henry Blodget in Newsmakers
…
In part one of my one-on-one with Shiller, we discuss the grim outlook for U.S. housing, which he tackles in-depth in his new book The Subprime Solution. Highlights of our first discussion include:
Fast forward to 2011: Shiller’s predicted drop in U.S. home prices as of 2008 has already come to pass, to the level of 31 percent off peak. And for good measure, he is predicting a further 15-25 percent decline off the current level. If that comes to pass at, say, 20 percent further decline, the total drop in U.S. home prices would amount to ((1-0.31)*(1-0.20)-1)*100 = -45% — a pretty good haircut, especially since this is only in nominal terms. Factoring in supposedly-low U.S. inflation would reveal an even larger housing price decline.
There truly has never been a better time to rent.
Home Prices Slid in December in Most U.S. Cities, Index Shows
Andrew Harrer/Bloomberg News
New York and 10 other cities posted new Case-Shiller index lows in December 2010.
By DAVID STREITFELD
Published: February 22, 2011
Real estate prices slid in just about every part of the country in December, pushing a housing market that once seemed to be rebounding nearly back to its lowest level since the crash began.
At this dismal point, some economists and analysts say that the damage has been done, and there is nowhere to go but up. Many others argue that the market has still not finished falling.
And then there are those who maintain that, possibly, things are about to get a whole lot worse.
Robert J. Shiller, the Yale economist who is the author of “Irrational Exuberance” and who helped develop the Standard & Poor’s/Case-Shiller Home Price Index, put himself in this last group. Mr. Shiller said in a conference call on Tuesday that he saw “a substantial risk” of the market falling another 15, 20 or even 25 percent.
The 20-city Case-Shiller composite is already off 31.2 percent from its peak, according to data released Tuesday. Average home prices in Atlanta, Cleveland, Las Vegas and Detroit are below the levels of 11 years ago. A drop the size that Mr. Shiller says he thinks could happen would put Chicago, Dallas, Charlotte and Minneapolis there, too. It would create a lost decade for housing in much of the country even before the effects of inflation.
…
Real estate investing increases the risk of future arrest.
Nicolas Cage arrested
The latest celebrity news including actor Nicolas Cage getting arrested and this weekend’s box-office numbers. Video courtesy Reuters.
It looks like the farther to the west one moves, the more U.S. home prices have fallen. The chart which accompanies the story posted below shows price declines to date in the neighborhood of 50% in the U.S. Midwest and on the West Coast. If they are really off by that amount for such a broad swath of the Nation, then I am guessing U.S. home price declines have already surpassed their amounts during the Great Depression.
Most folks I with whom I periodically discuss housing haven’t a clue about this — yet.
Western U.S. Leads Nation in Price Declines
April 8, 2011 (Chris Moore)
Clear Capital released its monthly Home Data Index (HDI) Market Report which shows the Western region of the United States leading the nation in price declines (-4.3%), while in the rest of the U.S., prices remain flat. Prices through March in the Western U.S. have reached lows not seen since 2001 with the report calling the declines as having reached “double dip territory.”
The HDI reports that overall, quarter over quarter home prices fell by 1.3 percent.
“The latest data through March supports our view that many markets are continuing to see relief from the significant price declines we observed through January,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “While some markets are already in double dip territory, specifically in the West, widespread fear of a collective fall in market prices is overstated.”
Villacorta adds that it is Clear Capitals belief that the disparity in prices between the West and the other regions is based on the amount of REO saturation. Out of all the regions, only the Western region showed gains in its REO saturation over the previous quarter.
Quarter over quarter, prices in the West declined by 4.3 percent. Prices in the Midwest and the South remained unchanged for the quarter, and prices in the Northeast declined by 0.5 percent.
Compared to six months ago, prices in the West have declined 7.3 percent, while prices in the Midwest have fallen 7.8 percent, prices in the South have fallen 4.4 percent, and in the Northeast prices have fallen 3.6 percent.
Year over year, prices in the West have fallen 5.2 percent, increased 0.9 percent in the Midwest, fallen 1.1 percent in the South, and have increased 1.3 percent in the Northeast.
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This is going to be fun. I expect the Rethuglican freshman will vote to raise the debt ceiling, AND will get blamed for reneging on their promises to their Tea Party fanatic constituents.
Got popcorn?
As debt ceiling vote nears, the pressure’s on House Republican freshmen
By Philip Rucker, Sunday, April 17, 8:46 PM
They ran against debt. They swore and swore again that they’d cut up the nation’s credit card.
But now the 87 freshmen House Republicans are facing intense pressure from administration officials and even some natural allies on why they should — indeed, why they must — vote to allow the federal government to go even deeper into debt.
Financial industry executives, business leaders and Treasury Department officials are visiting the freshmen in their offices, briefing them in small groups and even cornering them at dinner parties. It’s all part of a behind-the-scenes campaign to school congressional newcomers in the economic stakes of Washington’s next big fiscal fight: over the debt ceiling.
The freshman class that gave Republicans the House majority will be a critical voting bloc in the looming clash over whether to raise the amount of money the government can borrow to keep it from defaulting on its loans.
“It is the big vote for all of us,” said Rep. James Lankford (R-Okla.). “I don’t think there’s been a week that I’ve been here where we’ve not had some kind of conversation with somebody dealing with debt ceiling issues.”
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Ok, so the above expectation in addition to Neuromance’s comment below is where combotechie’s formula crumbles. I don’t see any dealing with any spending. There will be MORE MONEY.
Comment by combotechie
2011-04-17 09:08:30
“The US government’s deficit is a spending problem not a tax problem.”
And the spending problem is in the process of being dealt with, which means LESS MONEY will be spent, which means LESS MONEY will be flowing into the economy.
Less money flowing into the economy creates a scarcity of money which makes the money that does flow more valuable.
“But if one thinks, as Law did, that monetary policy can drive economic growth, then the temptation is to create more money. And the banks will take that money and use it to finance speculation.”
http://www.economist.com/blogs/buttonwood/2010/07/monetary_policy_asset_prices_and_wealth
These kind of amazing stories are what make twisters so terrifying yet so fascinating. Kudos to the business managers in these stories for their quick thinking, which probably saved dozens of lives.
After Storms, a Widespread Path of Death and Damage
James Robinson/The Fayetteville Obsevrer, via Associated Press
A tornado that ripped apart a home in Fayetteville, N.C., was one of 92 to tear through the state Saturday, leaving at least 22 people dead and many hurt.
By KIM SEVERSON
Published: April 17, 2011
The terrified look in one of her employee’s eyes was the first clue Terri Rodriguez had that something was terribly wrong Saturday afternoon.
Nathaniel Ramey comforted Megan Hurst outside her grandmother’s house in Askewville, N.C., on Sunday. Dozens of deadly tornadoes hit the state on Saturday, causing widespread damage. More Photos »
The worker had been washing kitchen equipment behind Golden Corral, a popular restaurant in Sanford, N.C., when he spotted a giant black funnel cloud bearing down. It was one of more than 90 tornadoes — what one meteorologist described as a “family” of them — that hit the state on Saturday.
He ran to Ms. Rodriguez, who walked out the back door. She dodged a piece of flying wood, and then she saw it: a dark funnel cloud thick with wood and metal only a couple of blocks away.
About 140 people were eating in her restaurant, many of them in front of the thick plate-glass windows that run the length of the place.
“All I could think is that I have to get them away from the glass because I knew it would just cut them in half,” she said in an interview on Sunday. “I thought, where can I put them? Then I yelled: ‘Tornado! Everyone to my kitchen!’ ”
People packed into the meat cooler and behind the stoves. Others jammed into the restrooms. Then they waited. After five minutes, Ms. Rodriguez said, the darkness lifted and she peeked out the back door.
The tornado, she said, had bounced up, skipped the Golden Corral and made a sharp turn, setting down on top of a Lowe’s Home Improvement Center a few hundred feet away.
“I could see the roof was just gone and all of the Lowe’s stuff flying up in the air,” Ms. Rodriguez said.
The Lowe’s store in Sanford, a town of about 29,000 in the center of the state, was essentially demolished. But an estimated 70 customers were saved when another fast-thinking manager herded customers and his staff into a windowless storeroom.
The storm killed at least two people in the Sanford area and injured several more, according to Sheriff Tracy Carter of Lee County.
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Lowe’s Staff Save Dozens As Storm Hit NC Store
by The Associated Press
FILE - Emergency personnel work around a Lowes Home Improvement store after it was hit by a tornado in Sanford, N.C., Saturday, April 16, 2011. Homes and businesses were badly damaged Saturday by a severe storm system that whipped across North Carolina, bringing flash floods, hail and reports of tornadoes from the western hills to the streets of Raleigh.
SANFORD, N.C. April 17, 2011, 09:16 pm ET
More than 100 employees and customers at a home improvement store, crammed shoulder-to-shoulder seeking safety from one of the deadly storms that ripped through the South, screamed in near unison once the steel roof curled off overhead, the store’s manager said Sunday.
They all made it out alive Saturday, thanks to quick action by Lowe’s store manager Michael Hollowell and his employees, who carried out an emergency response plan they had learned. They herded everyone to the windowless rear area of the store, away from the direct hit out front.
“You could hear all the steel ripping. People screaming in fear for their lives,” Hollowell told The Associated Press.
Hollowell and his employees deserve credit for moving customers to a safe zone in the store about 40 miles south of Raleigh, said Sanford police Capt. J.R. Weeks.
“It can’t help but have saved lives,” he said. Since most of the damage was in the front, getting them farther away likely prevented some people from harm.
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My * is bigger than Mitt’s! Next thing you know, Trump will be trying to convince American voters that he has better hair than Mitt’s.
* = financial fortune
April 17, 2011, 11:59 AM ET
Trump Knocks Obama, Calls Romney ‘Small’
By Neil King Jr.
To hear The Donald tell it, he totally trumps President Barack Obama as a messenger and far outweighs Mitt Romney as a businessman.
Riding a surge in the polls recently, Donald Trump let loose on CNN’s “State of the Union” on Sunday, blaming Mr. Obama for soaring oil prices and disparaging Mr. Romney, the former Massachusetts governor and his potential rival for the 2012 Republican nomination, as “basically small business guy.”
Showing his usual flair for letting it rip, Mr. Trump said the U.S. had become “a laughingstock throughout the world” under Mr. Obama.
Were he president, Mr. Trump said, he would force the Organization of the Petroleum Exporting Countries’ major producers to lower oil prices—even though OPEC has no direct control over the price of oil—and would have invaded Libya “to take the oil” and not just to unseat leader Moammar Gadhafi.
When the CNN host, Candy Crowley, expressed dismay over the comment, Mr. Trump elaborated: “I’d take the oil. I’d give them plenty so they can live very happily. I would take the oil.”
He expressed nostalgia for “the old days, when you have a war and you win, that nation is yours.”
The real-estate magnate and potential 2012 candidate has enjoyed a sharp spike in the polls (click here and here) over the last month as average Republicans have cheered his pointed criticisms of President Obama. Contrary to all existing evidence, Mr. Trump has been particularly outspoken in questioning whether Mr. Obama was really born in the U.S.
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Perhaps if Trump was elected president, he could appoint Cramer as his chief economic adviser. It could get pretty humorous if The Donald succeeds in convincing America to fire Obama and hire him.
Foreclosure sales jump in California, firm says
Written by Business Journal staff
Wednesday, 13 April 2011 09:39
ForeclosuresForeclosure sales rose dramatically in March in most of the West, ForeclosureRadar.com said, although the firm attributed much of the increase to the month having more days than February.
In California foreclosure sales increased 35.1% overall but rose just 10.5% on a daily average basis, the firm said. Nevada foreclosure sales bounced back dramatically after falling in February, rising 109.5% even on a daily average basis.
In Fresno County, notices of default were up 12.6% in March versus the prior month but unchanged versus a year earlier. Foreclosure cancellations were up 34.98% month-to-month but down 10.46% versus a year earlier.
In Kings County, notices of default were up 3.95% in March versus the prior month but down 4.82% versus a year earlier. Cancellations jumped 55.56% month-to-month but fell 6.67% versus a year earlier.
In Madera County, notices of default were down 30.16% in March versus the prior month and significantly down 41.33% versus a year earlier. Cancellations were up 3.85% month-to-month but down 28% versus a year earlier.
In Tulare County, notices of default were up 22.37% in March versus the prior month and up 0.54% versus a year earlier. Cancellations were up 44.23% month-to-month but down 7.98% versus a year earlier.
In California notice of default filings rose to their highest level since October 2010, up 17.3% month-over-month to 26,615 filings, but only increased 3.2% on a daily average basis.
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Sunday, 17 April 2011
5-Part Series, Digging Out of America’s Foreclosure Mess; Part 1, Prolonged Pain
By Brenda Krueger Huffman
(AXcess News) Chicago – Have you weathered the Great Recession fairly well? Has your income and credit rating remained untouched? Are you still paying your mortgage on time just fine?
Has the high rate of business failures or record job losses not affected your household directly? Has the record number of foreclosures not affected your family directly?
If you answered “yes” to these questions, you are fortunate in America today. You may feel you have been smarter than those in trouble or lived within your means unlike them. This may be true.
You may have little if any compassion for those in foreclosure. Yet, as the ramifications of a prolonged recession and real estate market meltdown continue, it may also be true that for the grace of God go you.
As we all know, the housing market came crashing down around America in 2008. It’s still in a smoldering heap of trouble in reality no matter the political spin. The result is deep pain that will leave lasting scars mainly on the non-political and non-connected class of Americans.
There is plenty of blame to go around – Congress, Wall Street, banks, mortgage lenders, and even some home buyers. The sub-prime loans caused the first collapse along with the sub-prime adjustable rate mortgages (ARM). With 80% of Option ARM, including interest only, loans allowing for homes to be negatively amortized, top-tier borrowers can also end up in real trouble when the loan resets.
As more ARM loans reset, many homeowners will see their house payments double and even triple. Add in the continued high unemployment going into 2011, and things could get a whole lot worse again before it gets better with the already record foreclosure reality of 2008-2010
The first cause of record foreclosures may very well be written off with little collective sympathy by many as a result of “those who lived above their means and should never have gotten the mortgages they did.”
The recession is moving into its third year, and the recovery has been the worst since the Great Depression. The official unemployment rate has remained at or above 9% for a record setting 21 months. The official rate only counts those that are collecting unemployment benefits.
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REIC propagandists are coming out of the woodwork in an effort to hoodwink the sheeple into thinking that eliminating WELFARE FOR THE WEALTHY would be tantamount to a tax increase.
I guess by their logic, eliminating regular old welfare payments for the poor would also be a tax increase? Why not reduce taxes, by increasing the level of handouts to low income people? Taxes are bad for America, so eliminating them by increasing welfare would be good for America.
Any questions?
Elimination of mortgage interest deduction would hurt America
Larry Kush
Sunday, April 17, 2011 | 2:01 a.m.
In his budget speech Wednesday, President Barack Obama once again suggested a cutback in the mortgage interest deduction. Late last year his deficit commission proposed serious changes in tax policy that would harm housing on a number of fronts.
Innocuous as it may seem to some, there is a real possibility that these actions are just the first step in a longer-range campaign to eliminate the mortgage interest deduction for homeowners in general.
When government kills a deduction that’s been around as long as the mortgage interest deduction, they essentially are creating a new tax. Additionally, it would put the dream of homeownership further out of reach for America’s new families.
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What is the benefit of staying in a home that was purchased for 685,000. Owe 590,000. And would sell for about 400,000. MAYBE. Would the person break even in 3 to 4 years. Any opinions would be greatly appreciated. The home is located in No. Los Angeles County…