Bits Bucket for May 8, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Where is oil headed now? Back to $30/barrel? Place your bets!
I couldn’t believe the number of news stories predicting cheap gas by the middle of summer due to a one day drop in oil prices.
Joe6Pack is broke. No money for gas means Joe won’t be buying much gas which means gas prices will be coming down.
The Great Contraction rolls on…
Not sure what J6P can or cannot afford has much to do with oil prices in the Great Vampire Squid era…
What the Vampire Squid can do over the Short term is distort the market, but over the long term the market always wins.
When The Squid distorts the price of oil on the upside then drillers step up their drilling, refiners step up their refining, etc., and lots of supply comes on the market. But at the same time consumpion drops off and eventually so does prices.
Wait and see.
Totally agreed on the long-term. I was talking about short-term effects.
The drop-off in consumption is also driven by a long-term adjustment, not quickly reversed, as the U.S. fleet transitions from gas guzzlers to economy cars. This happened between the 1970s and the mid-1980s, and it is happening again as I type.
I believe the long-term is shorter than one would think.
A lot of drilling and such has been happening due to the expected future demands of China. Not saying these demands will not eventualy be satisfied but it seems to me China is sort of a bubble in itself and thus its current demand is for oil is also bubblish.
It’s noteworthy that the prosperity of China has depended on the (borrowed) prosperity of the West. This Western prosperity has ground to a halt because the borrowing that fueled this prosperity has ground to a halt which means the money flow from the West to China has slowed.
China needs money to buy oil just as everyone else needs money to buy oil.
I’ve been spending a lot of hours over the past several weeks pouring over stock data looking for something to buy. What I have been noticing - sensing rather - is a weakness in Chineese stocks.
For example: Stocks seem strong on the surface but then suddenly there is a lot of issuing of new shares by the companies, something the companies have not done before, as if the companies are cashing out on the demand for their shares while they still can.
Nothing concrete, just a feeling that not is all as it seems.
“The drop-off in consumption is also driven by a long-term adjustment, not quickly reversed, as the U.S. fleet transitions from gas guzzlers to economy cars.”
The shuttle company I work for has 7 large passenger vans at any given time. We are slowly shifting to all compressed natural gas vehicles. Super Shuttle is doing the same. To put this in perspective, and we’re a SMALL company, we use about 200 gallons of gasoline a day. Current price for cng is $2.00 gge (gallon gas equivalent), so you can imagine the savings over time. As fleets across the country switch over, this will have an effect as well. Certain states don’t have the cng pumping infrastructure in place, but California seems ahead of the game here, thankfully.
What about supply?? and Joe 6 pack is broke, but is Woo Choo Wang broke or Symba Maha?
Oil stays high and keeps climbing, no more easy oil out there.
I want to see the oil co tax breaks go to wind mill farms now. Peeper South Dakota and WY with them.
Over the long term oil will continue its slow inexorable rise in prices. But IMHO easy money speculation has driven this spike in prices just like the last one. Just another bubble being blown, at least partly caused by the Fed’s continued acceptance of bottle caps and pocket lint as security as it tries to blast through the zero bound.
“But IMHO easy money speculation has driven this spike in prices just like the last one.”
Exactly! J6P is just cannon fodder for the negative impacts of easy money speculation in commodities.
We might have a slight decline in gasoline based on the one day drop but oil we be headed higher over the medium and long term. A resumption in Libya supplies could delay the rise but the simple fact is that consumption will increase faster than production over the next few years. The defacto if not dejure moratorium on drilling in the Gulf imposed by the Obama administration is a major factor along with his foreign policy. The reduced drilling will really hit but next Summer when the oil wells would have come on line. We should expect to take out the oil highs by them. So $150 a barrel is my estimate by May 2012.
“$150 a barrel…May 2012″
What is your estimate for when the oil bubble will burst?
To be honest, I am surprised the oil still seems endless in supply. Everyone on both sides of the issue of whether prices will go up or down knows that oil is a finite resource.
Conspiracy theorists are still probably spinning stories about the cause of Matthew Simmons’ death. He wrote “Twilight in the Desert.”
We are not running out of oil.
We are running out of cheap oil.
Finally. You nailed it. Did you catch the comment coming out of Mexico last week that they wouldn’t be able to export any oil by the
end of the decade? And we get 20% of our
oil from them….
No I did not catch it. Thanks. Found it. Mexico is our third largest supplier of oil. I can see the possibility of slow increases in the price of oil to where it’s $10 per gallon by 2021 on the average in the U.S.
“We are not running out of oil.
We are running out of cheap oil.”
Agreed with you there, Bill.
Corollary: As oil prices head up towards $150/bl, the profitability of exploiting expensive oil increases, resulting
in developing the infrastructure to extract it. Soon the faster rate at which expensive oil is extracted drives a stake through the heart of the bubble. It’s a matter of when, not whether.
Mexico without oil exports. I see armageddon. That gov is barely holding it’s own against the drug lords as it is. They will export oil, their population will just use a lot less as will the US population. Poverty can really reduce demand.
A lot of oil production is unviable at $40/bbl.
When it hits $90-100, all kinds of production is viable. Along with alternatives (like CNG).
Over time, our energy sources will become more fragmented (or diversified, if you are an optimist).
Fleet owners will look hard at converting to CNG. Freight railroads are looking at electrification of main lines. Different hybrid vehicles will be developed for specialized uses (that big, flat, expanse on the roof of 45 foot trailers would be a nice place to install solar panels……).
Because of CAD/CAM, customized configurations will be more easily designed and manufactured. Which is the direction that US manufacturing needs to be heading anyway, since competing for “mass production” with China is (currently) a losing proposition
Soon the faster rate at which expensive oil is extracted drives a stake through the heart of the bubble and with it globalism.
PB, for a bubble to burst you need a bubble. The price of oil is rising because it is becoming increasingly scarce. It will stop rising when alternatives become available at that price. If we go the way of coal to liquids we could cap it right now since we can produce oil from our coal at $85-90. Instead we have decided to use exclusively alternatives. I do not see them as even starting to become competitive to we hit $150 a barrel and with some forms of solar not until we hit $300 a barrel. Look the wind turbines seem attractive but the newest biggest ones produce 1.5 megawatts. A modern nuclear plant produces 1200 megawatts and displaces 50,000 barrels of oil a day. Thus, you need about 800 wind turbines to displace 50,000 barrels a day of oil, a those turbines are only competitive when oil reaches $150. One of those deep wells in the Gulf could produce the same for less than $100. The real inconvenient truth.
Funny how the biggest government promoter
of wind energy, Denmark, has now renounced
that position and stopped all new wind energy
generation. Seems it’s not cost effective.
Imagine that?
Here is an IEA report: http://omrpublic.iea.org/
If you look at the numbers you do not see a bubble but prices being driven by supply and demand. Also, see that virtually all the excess capacity is in Saudi Arabia. I believe that Simmons is right and this capacity is illusory.
I predicted the engineered silver crash but said and still believe by next year we will be at nominal record prices. The crimex raising the margin by 84% and the MSM running bearish stories certainly hit the price but in the end paper trading does not create or destroy supply and prices will be driven by supply and demand including the supply of fiat currency. I see no end in printing so I see no end in price increases. I am off to Costco, everyone have a good day.
http://tinyurl.com/4bav3mb
60,000 acres worth of windmill to produce the equivalent of one 1000 megawatt nuclear power plant. That’s 93 square miles of windmills.
20,000 acres of solar panels, - which is better. 33 square miles.
There is plenty of real estate in the U.S. that is not on earthquake fault lines. Hurricanes and tornados are no match for the thick walls of the reactors.
“…for a bubble to burst you need a bubble. The price of oil is rising because it is becoming increasingly scarce.”
To have a bubble, you need a new era story about why it is different this time and not a bubble.
I recall paying $1.35 per gallon of unleaded gasoline in 2002 in New Jersey. So the price tripled in nine years. It can easily triple by the year 2020.
Got TIPS? Got Gold?
“Got TIPS?”
I am highly confused about how TIPS work; is the interest rate fixed, or does it adjust with inflation? The WSJ posted below seems to suggest both. Is the point that TIPS interest rates are not designed to adjust sufficiently to keep pace with inflation?
* MAY 2, 2011
Investment Strategy
The Best Inflation Hedge?
A mix of holdings may beat relying only on Treasury inflation-protected bonds
By MICHAEL A. POLLOCK
As rising prices of oil and other commodities fan fears about inflation, many investors have been stocking up on U.S. Treasury inflation-protected securities or shares of mutual funds that invest in those securities.
The principal value and interest payments of TIPS rise along with any increase in the consumer-price index. And, of course, Treasury debt of all kinds is considered to be among the safest of investments, an advantage over alternative ways of buffering a portfolio against inflation.
But some investment managers argue that TIPS alone aren’t the ideal solution in an environment, like the current one, in which interest rates could be poised to rise significantly as inflation accelerates. That’s because sharply higher interest rates would eat into the value of TIPS in an investor’s portfolio.
…
I just posted a WSJ article that suggests TIPS interest rates and principle are both adjusted for inflation, but my reading is that only principle adjusts; thus, for instance, if you bought TIPS to yield, say, 0%, you will never earn interest on your investment, though you could enjoy (nominal) capital gains if inflation is positive.
Not sure this is a bad insurance choice compared to parking your money in, say, short-term bond funds yielding near 0%, as if inflation goes up and bond yields rise towards historic levels, you could cash in your (inflation-adjusted) TIPS to purchase traditional Treasuries. By contrast, your short-term bond fund principle could get hammered by a period of high inflation coupled with not-so-high rates before you had a chance to capitalize on higher-yielding long-term bonds.
…
How can I calculate the inflation adjustment to my principal?
Treasury provides TIPS Inflation Index Ratios to allow you to easily calculate the change to principal resulting from changes in the Consumer Price Index. To determine your inflation-adjusted semi-annual interest payment, simply follow this three step process:
1. Locate your TIPS on the TIPS Inflation Index Ratios page. Follow the link and locate the Index Ratio that corresponds to the interest payment date for your security.
2. Multiply your original principal amount by the Index Ratio. This is your inflation-adjusted principal.
3. Multiply your inflation-adjusted principal by half the stated coupon rate on your security (i.e., 2%). The resulting number is your semi-annual interest payment.
…
One further consideration: TIPS principle rises with inflation and falls with deflation, but it’s guaranteed at the initial principle amount.
What happens to TIPS if deflation occurs?
The principal is adjusted downward, and your interest payments are less than they would be if inflation occurred or if the Consumer Price Index remained the same. You have this safeguard: at maturity, if the adjusted principal is less than the security’s original principal, you are paid the original principal.
What are the maturity terms for TIPS?
The maturity terms for TIPS are 5 years, 10 years and 30 years.
Yes PB, with TIPS there is not much on the down side: You never get less than your original principle at maturity.
I read that with today’s Series I Savings bonds yielding 4.6%, the advice is to buy the full $10,000 worth ($5,000 in paper form and the balance electronic form) and then sell in 12 months and incur a 3 month interest penalty. Your annual interest would be about 1.7%, which is better than most CDs.
The same advice column says if you want to hold an inflation protected government security long term, get a 10 year TIPS. If there is a purchase limit, it is much higher than $10,000.
Smart investers hold / buy precious metal bullion coins and TIPS.
OTOH if the CPI-U rate keeps making the Series I variable yields 4.6% or more, the Series I bonds are a great asset to hold in the long term. The tax advantage over TIPS is compounded since you are only taxed (only at the federal level) when redeeming. And if the bond is used for education the interest is not taxed at all!
“Funny how the biggest government promoter
of wind energy, Denmark, has now renounced
that position and stopped all new wind energy
generation. Seems it’s not cost effective.
Imagine that?”
I searched for evidence of this, closest thing I found was this, which isn’t really close at all:
http://au.news.yahoo.com/thewest/a/-/wa/9254653/storm-grows-over-plans-for-denmark-wind-farm/
If you could point us or me in the right direction regarding
Denmark renouncing wind power and stopping all new wind generation, that would be helpful.
Which brings up a question.
For the past three years, parts for wind turbines have been clogging the highways and railroads locally for the past 2-3 years.
Suddenly, that traffic has completely disappeared. The Union Pacific has a long string of 85′ flatcars that have been modified to haul these components, sitting on a storage siding locally.
Wind is an intermittent resource that provides cheap energy when the wind is blowing. At the present time, natural gas turbines generate more cheaply than wind does. They are also able to follow demand. Natural gas is not likely to increase in price any time soon, making it difficult for wind to compete. Until there are penalties for pollution or an increase in RPS requirements, new generation from wind is likely to be flat.
how can it burst, we are running out, price climbs until we find a replacement. so far, nothing exists.
“We might have a slight decline in gasoline based on the one day drop but oil we be headed higher over the medium and long term. A resumption in Libya supplies could delay the rise but the simple fact is that consumption will increase faster than production over the next few years.”
Where are you getting these “facts?” Domestic oil consumption has been steadily declining since 2005. Also, the 15% drop thus far in crude prices equates to a roughly $.65 drop per gallon of gasoline. Curiously, gasoline hasn’t even fallen. This isn’t about supply and demand, this is about pigmen killing economies for selfish greed.
Oil is a finite resource.
Saudi Arabia is jacking up the price of crude. They have economic turmoil and must keep prices high to stave off riots in their country. Same thing for other OPEC countries. The oil companies are passing on the costs to the consumers.
Oil is a finite resource in the same way water is a finite resource, which says nothing about massive speculation in the commodities markets with easy money from the Fed.
“Oil is a finite resource”
Don’t forget oxygen or sunlight.
SA is producing near full tilt, there just isn’t much spare capacity anywhere now. If new alternatives can keep up with new demand maybe the worldwide economy can pull this off.
Otherwise, it’s the Olduvai gorge in steady slinky steps down.
uh oh. I cant believe the smart folks on here don’t think oil is finite. Water is infinite, but clean water is getting scare. Takes a lot of energy to make water clean these days.
Let me try to find the best written, academic article on peak oil and I wist post for the non believers.
It is easy to not believe, much less guilt that way.
Did you notice that the US just reported its first net positive trade balance on petroleum products in the last report?
Some would say that selling to foreign interests those refined products is the cause of high gas prices. I would agree, but before we start whining about collusion we should understand what a fungible commodity is and how it behaves.
If we get a collapse in Chindian economies then I could see oil going back to $30-40/bbl but right now even low 5-10% growth in the east is more than making up for the demand destruction in the US.
All I know is that everybody had been saying “we’re running out of oil” since the late 60s.
And every time we get a run up in the price, suddenly we’re waist deep in the stuff.
Seems few are paying attention to the positively massive oil boom taking place in North Dakota right now or, rather, the epic bust in the making.
X-GSFixr - Look at the US mainland oil fields. All past peak. I guess you never heard of Hubbert’s Peak. The oil fields in Texas still have lots of oil in them. But the costs are prohibitively high to extract the remaining oil. Hence the U.S. did not run out of oil. It ran out of cheap oil and has to import instead.
That’s just it. When the price is right, all kinds of oil suddenly shows up. And alternative sources. And more efficient ways of using it.
There’s all kinds of places on the planet that, for various political and economic reasons, nobody has even looked for oil yet.
Whoever comes up with the best solutions to these problems will get rich.
XGS, think of it as riding a pogo stick down an indoor flight of stairs with a low ceiling.
Where is oil headed now? Back to $30/barrel? Place your bets!
If so, that should finally break the back of the Great Canadian Housing Bubble.
New census numbers show Palm Beach County’s 85-plus crowd grows 41%
Taking a break from his poolside card game at the Century Village retirement community near West Palm Beach, 87-year-old Lou Hazan tried to offer some insights into the modern octogenarian lifestyle while the other players razzed him.
“Sometimes it’s a little hard trying to find a woman that’s about 20 years younger than me,” said Hazan, a widower who moved to South Florida about 15 years ago.
http://www.palmbeachpost.com/news/new-census-numbers-show-palm-beach-countys-85-1455748.html - 98k -
Driving around and looking at houses in SE Florida the past several years, I came to the conclusion and told my wife that a lot of these people aren’t going to be in these houses much longer.
They do not just live in the retirement communities, many of the neighborhoods we have been looking in have a mix of 40 to 50 year olds who bought in the 90`s of which some refied up to boom levels, younger FB families who bought near the peak and some of the 70+ crowd who ain’t gonna be there forever. The 70 year old lady across the street from where we are now passed away about 2 months ago, her kids have the house on the market at a near peak fantasy price.
“Sometimes it’s a little hard trying to find a woman that’s about 20 years younger than me,” said Hazan, a widower who moved to South Florida about 15 years ago.”
A lot of these guys are looking for a “nurse with a purse”. Believe it.
Nothing’s more pathetic that two old biddies fighting like a couple of schoolgirls over some flaccid old geezer.
Unless you’re the flaccid old geezer
BA-DUM-BUMP!
I think it was here I read this one.
New guy shows up for dinner at the old folks home, sits at a table alone. After a bit an old biddy comes over and introductions are made. She asks where he’s from. He says central New York. She asked what had done for a living. He answers, “I spent the last 30 years in Sing Sing for murdering my wife.” She replies, “Oh, then you’re single?!”
Hats off to the flaccid old geezers who can still win ladies’ hearts.
Every town in America has a flock of geezers that meet at McDonalds every Saturday morning (for the geezer/AARP rate coffee), usually wearing khaki or powder blue jumpsuits, bitching about anything and everything under the sun.
My aunt refers to them as “The Rusty Zipper Club”.
They can also be found on most HOA’s!
In 1992 one of the first jobs I got as a Drywall Contractor was a Chinese Restaurant in a strip mall near the Villages of Oriole, a retirement community in Delray Beach.
At about 6pm I was up on a scaffold finishing up the
framing on a soffit that had to be ready for inspection the next morning. The door which was papered off opened and a man that I am guessing was 85+ stuck his head in with several other senior citizens peering in behind him and asked… Is this going to be an Oily Boyd? Beat to heck from what had already been an 11 hour day that I knew was going to be 13 hours before it was over I said…Excuse me? Agitated and in a louder voice the man again asked… Is this going to be an Oily Boyd? I replied….Sir, what exactly is an Oily Boyd? Now almost angry the man said…. You know, if you eat before 6 it`s cheaper!
I explained to him what I did and that I had no idea what the menu or the Oily Boyd policies of the restaurant would be when it opened. He turned to the crowd of senior peepers behind him who were all asking…what did he say? And I went back to my soffit framing feeling fortunate that I had not been attacked by a gang of cane yielding seniors who didn’t get the answer they wanted.
That is too funny! Oily Boyd!
Did that old man look like Moe of the three stooges?
Meanwhile across the pond…
Sunday Times Rich List 2011: Fortunes of super-rich soar
The richest people in Britain have seen their fortunes soar by a fifth in the past year even as much of the UK is struggling to recover from the recession
http://www.telegraph.co.uk/finance/personalfinance/8498759/Sunday-Times-Rich-List-2011-Fortunes-of-super-rich-soar.html
Remember: of the 1%, by the 1%, for the 1%
It’s GOOD to be the Banksta!
Wow, my CU has two REOs listed. I can link directly, but the link is in the middle of the page.
https://www.pittsfordfcu.org/
It would be nice if every bank did this, even better if every bank was FORCED to do this. FWIW, I am still surrounded by zombie houses owned by zombie banks.
Then you need this!
http://www.randomhouse.com/crown/zombiesurvivalguide/index2.html
On February 13th, 1933, journalist Garet Garrett wrote:
“This is what is new in this depression, and wherein it departs from history. In previous depressions, a bank that was book solvent and unable to pay its depositors had no alternative. It was obliged to go into bankruptcy and liquidate. A railroad that could not pay its creditors simply went into receivership and was liquidated. And so on. Such a thing as Government going into debt itself in order to assume and underwrite the debts of private enterprise was hitherto unimaginable.”
~ Today the average American can’t imagine the government NOT assuming responsibility for bankrupt institutions. Even citizens who have done a poor job of managing their own financial affairs are begging for rescue from the federal government. (Read - taxpayer.) Thanks to the pioneering of Roosevelt and his band of academic experts the American habit of self-sufficiency and personal responsibility has been washed away. We are now, for the most part, a nation of subsidized dependents crying to have our bills paid by someone else. Even if we get into a financial mess of our own making we don’t want to pay the penalty. We want a bailout.
“Such a thing as Government going into debt itself in order to assume and underwrite the debts of private enterprise was hitherto unimaginable.”
So at what point did the separation between government and too-big-to-fail private sector enterprises largely dissolve? 1933? 1913? Or earlier?
And then is it possible to get the country focused on self sufficiency again w/o a complete collapse? If so, how?
It might work to create a smooth transition process that would allow new firms (e.g. well-managed banks) to replace failed ones.
Government bailouts to enable failed institutions to continue operating as zombie enterprises does not seem like a sound plan.
When you look at who’s invested in those zombie institutions, it’s a perfectly sound plan- for maintaining a stranglehold on political power and obscene wealth at the expense of every hard working citizen.
Carrie:
It unlikely due to such disgusting political pressures
But #1 in my book is we have to force all Americans to learn to read, write and speak English.
The amount of people who fail a simple math test at a retail store is incredible. They had to put pictures of the items on a McD cash register
If you want any govmint assistance then you have to sit in class 30hrs a week to learn English, even the old folks!
We need to end all early releases from jail, unless you can read the NYTimes in front of a judge or parole board.
“But #1 in my book is we have to force all Americans to learn to read, write and speak English.”
Muchas veces me preguntan porque es tan dificil aprender ingles.
No es tan dificil aprender hablar Inglés.
While I agree in principle with everything you said aNYCdj, the problem is it’s not practical. We are FUBAR.
1. People who are literate tend to demand higher wages. This is being fought at all costs by corporate America.
2. We can’t afford the education we have now. I really wish that nobody was allowed to leave school without mastering the basics, but who’s going to pay for that?
3. We can’t afford the prison/jail system we have now either. We would have to spend billions on more facilities and staffing. We already have the world’s highest prison/jail population.
Literacy would go a long ways to neutralizing the PTB and cutting crime, but that can’t and won’t be allowed to happened.
More cake?
(today’s typos are from ym hangover)
Make prison only for violent offenders, end the drug war, plow the millions in savings into education. It’s a start.
I think things are bad, too, but I have a little optimism simply due to the massive amount of work that will need to be done to re-build this country. That sounds like it would be a bad thing, but I find that people are better off when they have meaningful work to do. There is a lot of untapped potential in the American people that could be harnessed for constructive ends, rather than telling people that their patriotic duty is to go shopping.
A lot of studies of younger generations show that they have this impulse, and they have observed how badly their elders have messed things up so they can “rebel” by turning away from that worldview. They’ll have their work cut out for them, but at least it will be rewarding work.
“Prolonged inflation never ’stimulates’ the economy. On the contrary, it unbalances, disrupts, and misdirects production and employment.”
~Henry Hazlitt
$200,000 Lifeguards to Receive Millions in Retirement
Townhall.com | May 8, 2011 | David Spady
Public outrage over lavish government employee compensation and pensions is becoming more heated as new revelations about excesses seem to crop up every week. The latest: Newport Beach, California, where some lifeguards have compensation packages that exceed $200,000 and where these “civil servants” can retire with lucrative government pensions at age 50.
Newport Beach has two groups of lifeguards. Seasonal tower lifeguards cover Newport’s seven miles of beach during the busy summer months. Part-time seasonal guards make $16 to $22 per hour with no benefits. They are the young people who man the towers and do the lion’s share of the rescues. Another group of highly compensated full-time staff work year-round and seldom, if ever, climb into a tower. According to the City Manager, the typical Daily Deployment Model in the winter for these lifeguards is 10 hours per day for four days each week, mainly spent driving trucks around, painting towers, ordering uniforms and doing basic office work—none are actually manning lifeguard towers.
Like many communities across California, the city of Newport Beach is facing the harsh realities of budgeting with less revenue after housing values and the stock market plummeted. Now the city’s full-time lifeguard force has finally come under scrutiny. Next week the city council will decide if cuts are needed to the full-time lifeguard force where last year the top earner received $211,000 in pay and benefits, including a $400 sun protection allowance. In 2010 all but one of the city’s full-time lifeguard staff had annual compensation packages worth over $120,000.
Not bad pay for a lifeguard - but what makes these jobs most attractive is the generous retirements. These lifeguards can retire at age 50 with full medical benefits for life. One recently retired lifeguard, age 51, receives a government retirement of over $108,000 per year—for the rest of his life. He will make well over $3 million in retirement if he lives to age 80. According to the City Manager, a new full-time guard costs less to hire than what is spent on this one retiree. The city now spends more taxpayer dollars on retired lifeguards than it does on those who are working.
Now I know I picked the wrong career. If I retire today, I figure I could earn $98,000 annually from my investments (not including social security). But a lifeguard at my age retiring today can get $108,000 annually - excluding social security?
I could have skipped college and just hang out on the beach watching over the young hot curvy women in thong bikinis. Instead I had a windowless work environment most of my 26 year career.
Grr!
We missed our chance, Bill! If only we had had perfect foresight, we could have enjoyed the beach life instead of office drudgery…
Another group of highly compensated full-time staff work year-round and seldom, if ever, climb into a tower.
They sound like middle management in Corporate America. Much better paid than the individual contributors that do the actual work. But I suppose that the lifeguard management can “justify” their huge salaries, just as the pointy haired boss in Dilbert does.
Ah, but do those “lifeguards” belong to a union?
Why do I have a feeling those lucky lifeguards are “somebody’s” relative?
Exactly, CarrieAnn. You’re not getting that job without knowing somebody with their foot already in the door. Regular Joe’s have absolutely zero chance of landing such a position.
Nice button pushing article. So typical of California.
“Total compensation package” means pay AND benefits and paid time off. This term is always used to inflate what would otherwise be just another normal pay rate.
“$200,000 Lifeguards to Receive Millions in Retirement” reads the headline, yet we have to dig deep into the article to see that’s it’s only ONE employee and most likely, the head administrator.
We also have to dig deep into the article to that, lo and behold!, most of the staff is part-timers who make far, FAR less that 100K.
Now I remember why I hate California. And NYC as well. Over-hyping of insignificant problems to keep the sheep from seeing who’s REALLY bending them over.
If there’s any town in The USA that can afford $108,000/year retiree lifeguards, it’s Newport Beach, California.
Wiki: “….more than a quarter of the households have an income greater than $200,000…..” “….median income for a household in the city was $110,511, while the median family income was $162,976…..”
“Portfolio.com ranked Newport Beach as the richest city in the US”.
Of course, no run of the mill lifeguard would be okay for the residents of Newport Beach.
From the Newport Beach City website:
“Both the Lifeguard trainee and Cadet position require…..pass a competitive ocean swim, run swim run tryout. The top candidates from the tryouts may be invited to an oral interview…….provides lifeguard trainees the opportunity to further skills and techniques used in ocean rescue, emergency decision making, first responder medical treatment, and public assistance.”
And are there residency requirements?
And another little tidbit from Wikipedia:
“Its shores are mostly occupied by private homes and private docks…..”
Seems to me that private property owners should be providing their own lifeguards.
If you really want to give 2banana a heart attack/stroke, just have him take a gander at the “Job Descriptions/Class Specifications” page of the Newport Beach website.
2banana a heart attack/stroke
No 2banana stroke here.
I am not the fool local taxpayer paying for $200,000/year lifeguards and 3 million dollar pensions.
Got to LUV them public servants!!!!
NB is also the fraud capitol of CA. Life guards might as well scam too.
You could not pay me enough to swim out on a huge day at the Wedge to save some redneck on a boogie board.
I want to be a lifeguard.
Does anyone have any idea how $50 bn in so-called “squatter’s rent” is actually funded? I personally am skeptical that greedy bankers would willingly be so generous as to just give away $50 bn without a little help from Uncle Sam, but I don’t pretend to know the details.
And as for terminology, wouldn’t “squatter’s loot” or “squatter’s plunder” better capture the concept of somebody living rent-free while spending the money owed to creditors on personal consumption expenditures? “Rent” mischaracterizes the arrangement as a monthly housing expense paid by the plunderers.
Does “squatter’s loot” qualify as taxable income for the squatter?
‘Squatter’s rent’ gives homeowners cash for debts
Bob Willis,John Gittelsohn, Bloomberg News
Sunday, May 8, 2011
Melissa White and her husband stopped paying their mortgage in May 2008 after it reset to $3,200 a month, more than double the original rate. That gave them extra cash to pay off debts and spend on staples until their Las Vegas home sold two years later for less than they owed.
“We didn’t pay it for about 24 months,” said White, who quit her job as a beautician during that period after becoming pregnant with her first child and experiencing medical complications. “What we had, we could put towards food and the truck payments and insurance and health things I was dealing with.”
Millions of Americans have more money to spend since they fell delinquent on their mortgages amid the worst housing collapse since the Great Depression. They are staying in their homes for free about a year and a half on average, buying time to restructure their finances, and providing an unexpected support for consumer spending, which makes up about 70 percent of the economy.
$50 billion this year
“Squatter’s rent,” or the increase to income from withheld mortgage payments, will be an estimated $50 billion this year, according to Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The extra cash could represent a boost to spending that’s equal to about half the estimated savings generated by cuts to payroll withholding in December’s bipartisan tax plan.
“We’ve had a lot of government transfers to the household sector; this is a transfer from the business sector to households,” Feroli said. “It’s a shock absorber that has helped the consumer ride out the storm.”
…
Does anyone have any idea how $50 bn in so-called “squatter’s rent” is actually funded?
Via 0% interest loans from the Federal Reserve? The bank pays no interest on the non performing loan funds and the “squatter” keeps the house occupied.
Or, the bank, because it doesn’t foreclose, keeps the mortgage on its books and counts the mortgage as a loan that is performing - and maybe the bank is even chalking up interest on this “performing” loan.
In effect the squatter gets the amount of the monthly payment awarded to him as a balance sheet item.
Extend & Pretend: The squatter gets a win because he doesn’t have to make an outlay of cash to the bank, and the bank gets a win because it can show to the world that it has a performing loan where there really isn’t one.
The economy gets a win because the amount of money that should go to the bank (and would be kept by the bank instead of flowing out into the economy again) is instead spent on stuff by the squatter and thus is going out into the economy and circulating.
The banks aren’t making loans to squatters directly but one could say they are making loans to them indirectly.
It’s all good (and it will remain good … until it doesn’t).
“…the bank gets a win because it can show to the world that it has a performing loan where there really isn’t one.”
I find that exceedingly difficult to imagine; wouldn’t this kind of deception constitute outright fraud?
If true, then I begin to suspect the concept of “trust” has been replaced from the operation of the U.S. banking system with that of “officially-sanctioned fraud.”
fraud
noun \ˈfrȯd\
Definition of FRAUD
1a : deceit, trickery; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b : an act of deceiving or misrepresenting : trick
It’s only fraud if the accouting rules say itis fraud. When the accounting rules are bent in such a way that Extend & Pretend is the norm then there is no fraud.
Something like if you want to make the crime rate go to zero then make everything legal.
“It’s only fraud if the accounting rules say it is fraud.”
I suggest you notify the folks at Merriam-Webster immediately so they can correct their definition.
Merriam-Webster has been pushed aside to make space for The Minister of Truth.
“In effect the squatter gets the amount of the monthly payment awarded to him as a balance sheet item.”
I’d call it a cash flow item, but I certainly wouldn’t refer to it as ‘rent,’ as it is pretty much the antithesis of paying rent.
The rent is being paid - more accurately, the housepayment is being paid - it’s just that the bank is doing the paying instead of the squatter.
In effect the bank is loaning the squatter the money to make his housepayment to the bank.
The bank (in normal times) would never willingly make a loan to a deadbeat squatter. But when time are abnormal (such as they are now) then loaning money to deadbeats is what the banks are in effect doing.
Joe Straight can never borrow money from the bank but Joe Squatter regularily borrows money from the bank every month.
“Joe Straight can never borrow money from the bank but Joe Squatter regularly borrows money from the bank every month.”
A system that punishes financial prudence and rewards profligacy is destined to fail.
To clarify, encouragement of profligacy at the individual level leads to an unaffordable level of aggregate profligacy. We are already there.
HOA foreclosures climbing as associations seek ‘revenge’ on delinquent homeowners
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 11:23 a.m. Sunday, May 8, 2011
Fed up with late dues and mounting maintenance bills, some homeowner associations are motivated by spite, over sound business sense, to foreclose on delinquent owners.
Property managers and condo board advisers say taking title to a property for a few thousand dollars in unpaid association fees in a “vengeance foreclosure” isn’t always the best answer.
But emotions can override fiduciary smarts when a neighbor is tapping the cable TV for free.
And because it’s easier for an association to foreclose than a bank - no proof of ownership necessary, no issue with robo-signed documents - attorneys say the number of HOA foreclosures is climbing as boards get bolder.
“These are your neighbors, and they are foreclosing on you,” said Michael Rabin, whose association foreclosed on his Royal Palm Beach home after he racked up more than $10,000 in late fees. “If they don’t like you, they can do whatever they want. It’s scary.”
When a homeowner association forecloses and takes title to a home, the idea is the board will be able to rent it out until the bank forecloses as the primary lien holder. With banks taking years to foreclose on some properties, the board can potentially collect thousands of dollars.
If Mr. Rabin racked up $10K in late fees, I would foreclose on him too, even if I DID like him.
So many victim stories, so few victims….
I suspect that HOA fees are the reason behind the very cheap condos — $75-90K — that can be had in the outskirts of DC. All of those condos are 1975-1980 vintage apartment conversions. Which probably need a LOT of work. And are ugly to boot. Even if I bought one of those things cash, they’d probably ask me to pay for maintaining the rest of the sorry building.
I don`t see any RAMP here. Or it would say…..
RAMP offers help for renters who can’t (or don`t want to) pay rent.
Refinance options when you’re underwater
By Marcia Passos Duffy • Bankrate.com
Highlights
HARP offers refinance help for borrowers who have kept up with payments.
HAMP offers modifications for borrowers who can’t pay mortgage.
Short sale may be best for homeowners who can’t get other help.
Homeowners whose mortgage balance exceeds the current property value know the futility of trying to get a refinance. Refinancing options for so-called “underwater” mortgages are limited because most lenders require some equity in the property — ideally about 20 percent.
However, borrowers should not give up hope. Options do exist, especially via the government’s Making Home Affordable program.
First option: HARP
If you meet certain criteria, your underwater loan may be eligible for a refinance through the federal Home Affordable Refinance Program, or HARP. The program allows qualified borrowers to refinance a loan that is from 105 percent to as high as 125 percent of a home’s value.
However, not every underwater loan qualifies for HARP. First, you must not be on the road to foreclosure: Any delinquent payments in the past 12 months will automatically disqualify you from eligibility.
Second, either Fannie Mae or Freddie Mac must own the loan. You can find a loan lookup tool and other calculators at the government’s Making Home Affordable Web site.
Your ability to take advantage of HARP will depend on payment history and other factors including credit score, the structure of the current home financing and specific lender guidelines.
“Can it help everyone? No,” says Jason Bonarrigo, senior mortgage banker with Wells Fargo Home Mortgage of Boston.
However, Bonarrigo has closed several HARP loans and says it’s worth investigating eligibility.
“If refinancing through HARP can shave $300 or $400 off a monthly mortgage payment, it can sometimes make a difference between keeping and losing a home down the road,” he says.
http://www.bankrate.com/finance/refinance/refinance-options-when-you-re-underwater-1.aspx - 68k -
Guess what folks…..
Realtors Are Liars
“Guess what folks…..”
Could it be that Realtors are honest, hardworking people who would put the best interest of their clients ahead of their own personal financial gains?
No.
Well then, Realtors must be liars.
Yes….. indeed they are Jeff. Liars.
I watched The Inside Job last night. It just reaffirms the information I’ve gathered over the past several years. It reminds me of that bumper sticker - “If you’re not outraged, you’re not paying attention.”
With the Obama administration, they wound up choosing all the architects of the collapse. I really hope Elizabeth Warren manages to make some inroads with Obama. The forces arrayed against the CFPA are titanic.
There was a moment the movie chronicles when there could have been revolution. And even the heads of the giant finance companies betrayed some fear. And there could have been change right there. But the moment passed when the US government decided to put future generations on the hook to pay off Wall Street. Now, there will just be a slow leak, the patient (the US economy) becoming increasingly ashen, while Wall Street and the Too Big To Fail institutions become wealthier and the US slowly transitions to overt plutocracy.
It would have been the same no matter who the president was. Wall St. OWNS the government.
We’re WAY past the transition to a plutocracy. Way past.
More cake?
There was a moment the movie chronicles when there could have been revolution. And even the heads of the giant finance companies betrayed some fear. And there could have been change right there. But the moment passed when the US government decided to put future generations on the hook to pay off Wall Street.
Nope, I think the moment passed when all that happened and the sheeple and those who were very well aware of what was going on knew and understood every step and did nothing. That’s when the perpetrators realized there was no reason to fear.
“With the Obama administration, they wound up choosing all the architects of the collapse.”
Can you elaborate? By “architects,” do you mean creators? Designers?
If so, my next question is, are you serious? What timeline are you following?
+1, “Inside Job” is a must see. So is “Food Nation.”
We must educate the lemmings before it is too late.
I just listened to a real estate segment on local news radio just now. It once again became apparent that there’s a basic conflict of interest between a buyer and his real estate agent. Both want to have the buyer purchase the house; however, the buyer wants the lowest possible price and the real estate agent wants the highest possible price.
The highest possible price is in the real estate agent’s interest.
For years, I’ve been struck by this conflict of interest. Are there more honest ways to do this transaction? Too bad the NAR has such tight control over the real estate market information.
Yes there is. Five simple steps
Step 1
Prosecute realtors for omitting and or with-holding information from the buyer.
Step 2
Prosecute realtors for suggesting or otherwise implying they’re working for the buyer.
Step 3
Prosecute realtors for deliberately or otherwise knowingly misrepresenting the value of a listing.
Step 4
Prosecute NAR under the RICO statutes for operating and profiting from an ongoing crime syndicate.
Step 5
Breakup NAR for monoplistic practices under the Sherman Anti-Trust Act.
Why? Because……..
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Realtors Are Liars
Here’s a Mother’s Day story from San Luis Obispo, CA
“Michelle Magee’s life began in a Hispanic home in Indiana, where her brother was doted upon and Michelle and her sister … weren’t.”
http://tinyurl.com/3tjfwea
With unemployment far higher than official stats, this is the new normal.
“…….emotionally abusive…….”
Please, let’s lose this term.
My ex- called me “emotionally abusive” when I bitched about her pi$$ing away $1000+/month on horses. And the $3000 Kirby vacuum cleaner. And the water softening system…
Which is why I always ask “What’s the rest of the story”, when I see this stuff in the local fishwrap, or on Oprah/Dr.Phil.
Yikes, rms. Although California is already paying for her two genetically burdened offspring, this facially-bejeweled out-of-stater is about to stick us with another. While acknowledging that misfortune comes to us all, and that there is a social contract implicit in our American ideal, here is one mother’s reply to this smug reporter’s preachy little screed:
Here’s how I do unto others and I would have them do unto me:
I don’t gestate offspring I cannot afford to care for. I don’t require others to assume the financial responsibility for their housing, food, education, medical treatment and “special needs” and then go out and gestate another.
And I don’t write sob stories about people who don’t have the social responsibility your God gave a garden salad and then chide them to read Jesus’ ironiclly cynical little homily to those who do. If you want to make your point, please pick a more sympathetic subject to use as an example?
Happy Mother’s Day to you, too.
Did you see those comments? Looks like sympathy is wearing thin in liberal San Luis Obispo as the financial wreckage crushes middle-class California families. Ten years ago you wouldn’t see such comments from that area.
“Hurricanes and tornados are no match for the thick walls of the reactors….”
True, assuming that the power and backup systems for controlling the cooling rods are equally hardened.
If I were a nuc operator, I’d be doing a review of my power and backup systems, to make sure that we don’t have a repeat of what happened in Japan. Maybe even add some more redundancy.
But that just me. As has been repeatedly demonstrated over the years, bean counters and professional management types would rather shortchange the maintenance (and pay 5 times as much to fix the damage in the future), and pocket their bonus now.
Every. Single. Time.
Technical fields may differ, but the way our highly trained so-called “management professionals” manage things is a constant.
- Experience costs too much
- It’s better to pay five newbies minimum wage, than one guy who has his $hit together market value.
- Fook ups by the newbies will be billed to the “training” budget. Especially if they were doing exactly what management told them to do.
-Accounting wise, it is cheaper to do something over five times, than it is to do it right the first time.
-When the troubles occur, throw the support and maintenance staff under the bus first. This helps the bottom line immediately, but costs a bunch later. Preferably, after you’ve cashed your bonuses and options.
- All kinds of freebies can be obtained from politicos, by the mere threat of packing your crap and moving elsewhere. (The “I’m gonna take my ball and go home” rule).
Any I missed?
Really. Quality management is worth it’s weight in gold, because there is so much crappy management out there.
Our problem is we are paying “worth it’s weight in gold” rates, for less than mediocre, self-serving management.
Refugee Influx Challenges Syracuse’s North Side
“She is among nearly 1,000 refugees who arrive in Syracuse each year. They have fueled explosive population growth on the North Side, which is expected to continue, according to Catholic Charities and InterFaith Works, the city’s two resettlement agencies.
But until they become self sufficient, the influx of newcomers is straining essential services, like schools, public assistance and soup kitchens, while forcing police to serve more vulnerable residents. The greater need comes at a time when city and county governments have shed jobs and struggled to control costs.”
This refugee program has been bringing people to Syracuse for years. I like the idea of helping someone in a tough situation but am starting to wonder if certain people and you know who they are benefit, while the great CNY taxpayers in general pick up the tab.
http://www.syracuse.com/news/index.ssf/2011/05/refugee_influx_challenges_syra.html
A family with one unemployed parent and 11 children — like N’Shombo’s — would receive about $3,000 a month in public assistance for rent and food stamps, Sutkowy said.
Plus free health care, plus free education for 11 kids, plus free…etc.
More likely about $100,000/year in freebees.
Ain’t America grand?
The suckers of the world.
Even the “wretched refuse” can find work when the economy is growing, like it was in the first third of the 20th Century.
I just love how these religious groups keep bringing refugees here, but when it comes time to pay the bills, dumbazz taxpayers get to contribute, whether they were consulted about the wisdom of bringing in refugees or not.
How about a total moratorium on allowing people to enter the country, whether they are the “refuse” or not?
Call it the “When you find yourself in a hole, quit digging” Law of 2011.
How in the hell is she going to be able to hold a job with 11 kids?
REAL ESTATE
MAY 9, 2011
Home Market Takes a Tumble
Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008
By NICK TIMIRAOS And DAWN WOTAPKA
Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.
[HOMEVALUE-p1]
Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.
Last year, the housing market showed signs of improving as price depreciation slowed in some markets and stabilized in others. In response, a number of economists began forecasting that housing would hit a bottom in late 2011, then begin to recover. But the improvements, spurred by federal programs that gave buyers up to $8,000 in tax credits, proved fleeting. Sales collapsed when the credits expired last summer, and prices in many markets have been falling ever since.
While most economists expected sales to decline after tax credits expired, the drag on the market has been greater than many anticipated. “We expected December and January to be bad” as the market reeled from the after-effects of the tax credit, said Stan Humphries, Zillow’s chief economist. But monthly declines for February and March were “really staggering,” he said. They indicate “a reflection of the true underlying demand, which is now apparent because most of the tax credit is out of the system, and it’s being completely overwhelmed by supply.”
Mr. Humphries now believes prices won’t hit bottom before next year and expects they will fall by another 7% to 9%. Other economists revised their forecasts. In April, the chief economist at mortgage company Fannie Mae, Doug Duncan, said home prices in the second quarter would be 5.3% lower than the previous-year period, down from his earlier estimate of a 2.6% decline.
The estimates, which are based on data from the mid-1990s on, come from a proprietary computer program that takes into account sale prices for nearby homes that appear comparable, the size and other physical attributes of the home, its sales history and tax-assessment data, Mr. Humphries says.
Prices are decelerating in large part because the many foreclosed properties that often sell at a discount force other sellers to lower their prices. Mortgage companies Fannie Mae and Freddie Mac have sold more than 94,000 foreclosed homes during the first quarter, a new high that represented a 23% increase from the previous quarter. More could be on the way: They held another 218,000 properties at the end of March, a 33% increase from a year ago.
The companies are bracing for more bad news: On Friday, Fannie reported a $6.5 billion net loss, largely as it boosted loan-loss reserves in anticipation of falling home prices.
Paul Dales, a senior U.S. economist with Capital Economics, says prices could fall by as much as 10%, down from his previous forecasts of around 5%. A March survey of more than 100 economists by MacroMarkets LLC forecasts a 1.4% drop in prices this year, down from the December estimate of a 0.2% decline.
Other home-price indexes also show weakness. The widely followed Case-Shiller index published by Standard & Poor’s showed that prices climbed from April 2009 until last summer, when they started declining as tax credits expired. Today, prices are on the verge of reaching new lows, the index shows. The Case-Shiller index tracks repeat sales of previously owned homes using a three-month moving average.
According to the Zillow index, a handful of California markets and Washington, D.C., saw price appreciation last year, but that has since reversed. Mr. Humphries attributes the “double dip” in those markets, which include Los Angeles, San Francisco and San Diego, to the way in which the tax credit stimulated demand from buyers. When the tax credit went away, markets were left with rising supply from foreclosures but with less demand from buyers.
…
The WSJ is reporting that prices have declined in the national U.S. housing market for 57 straight months. Three more months of declines would bring us to an even 60 months — five straight years of declines.
And the serial bottom callers’ refrain that “the market will bottom out by next year” is beginning to give way to gloomier forecasts which more-or-less acknowledge that there is no housing bottom in sight.
Boo-yah!
No Respite From Housing Recession in First Quarter
Stan Humphries
May 8th, 2011
Home values fell three percent in the first quarter of this year, marking a pace of decline not seen since 2008 when the housing recession was at its worst. Home values fell one percent between February and March and 8.2 percent from March 2010. The cumulative decline in home values since the market peak is now 29.5 percent (see Figures 1 and 2).
There was little escaping the housing downturn in Q1 2011. With only one metro showing positive year-over-year change (Honolulu MSA), and one remaining flat (Pittsburgh MSA), the vast majority of U.S. markets logged declines over the past 12 months. The metros hit hardest were geographically diverse with Ocala, FL, Pueblo, CO, Detroit and Atlanta experiencing the sharpest yearly declines.
Homes in the bottom price tier lost the most value in the first quarter, while homes in the top tier lost the least amount of value. The value of homes in the bottom tier fell 13.9 percent year-over-year, while homes in the middle tier fell 8.7 percent and homes in the top tier fell 4.3 percent.
Nearly three-quarters (74.5 percent) of homes in the United States lost value from Q1 2010 to Q1 2011. That’s up from Q4 2010, when 69.2 percent had lost value, but is down substantially from a peak of 85.5 percent in Q1 2009.
A record (37.7 percent) number of homes sold in March were sold for a loss. The rate of homes selling for a loss has steadily increased since June 2010.
Negative equity in the first quarter reached new high with 28.4 percent of all single-family homes with mortgages underwater, from 27 percent in Q4.
Foreclosure liquidations rose throughout the first quarter after falling in late 2010 following the “robo-signing” controversy. In March, one out of every 1,000 (0.1 percent) homes in the country was lost to foreclosures, up from 0.09 percent in in December 2010, their lowest point since November 2009 (see Figure 3).
Foreclosure re-sales reached a new peak in March 2011, representing 23.7 percent of all sales during the month compared to 17 percent in March 2010. Foreclosure re-sales have been increasing steadily since June, when they made up 14 percent of all sales.
Because of the strong depreciation in the first quarter, we’ve revised our forecast for the total home value decline nationally in 2011 to 7-9 percent (previously 5-7 percent) and our forecast of the bottom from late 2011 to 2012 at the earliest. As always, our expectation post-bottom (where we define the bottom as the end of consistent monthly depreciation) is for a long period of below-normal real estate appreciation during which time we work out the remaining overhang of excess housing supply.
…
Apparently Brett Arends is out of the loop on the “squatter’s rent” phenomena?
And this comparison to Japan reminds me about their housing prices: Over two straight decades of declines, with no bottom in just yet. But don’t worry folks: It can’t happen here, in America!
Brett Arends’ ROI
May 9, 2011, 12:01 a.m. EDT
Housing crash is getting worse: report
Commentary: But all this bearish news makes me bullish
By Brett Arends, MarketWatch
BOSTON (MarketWatch) — If you thought the housing crisis was bad, think again.
It’s worse.
New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.
Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.
And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.
Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.
“There’s no way we can get to flat, from these depreciation levels, in the last nine months of the year,” says Zillow economist Stan Humphries. “Demand is a lot more anemic than we had previously thought.”
…
Remember Japan’s “zombie banks”? These were the financial institutions that haunted that country’s economic recovery after the 1990 crash. They staggered on with huge losses they could never repay — the walking dead.
Here in America we have “zombie homeowners.” Millions of them. According to Zillow, a record 16.3 million families are upside-down on their home loans. Sixteen million! And many are a long way upside-down. Their homes may never be worth as much as their mortgage. But they are hemorrhaging cash to pay the nut every month.
…