Bits Bucket for May 9, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Is any one else tired of the phrase “Unexpected” when it comes before any economic news? I mean if its good it was unexpected, if it is bad its unexpected. It is unreal listen for it before any economic report its insane. All of these economists should be fired if it is allways such a shock to them.
Lexicon
Attorney / Real Estate Agent / Economist
Unexpected
Surprised
No one could anticipate
“Is any one else tired of the phrase “Unexpected”
I am tired of the word peak….
Home prices off 21.8% since peak
Updated 11/25/2008 9:32 PM |
By Anna Bahney, USA TODAY
peak?
How about… Never Never Land, Crack Smoking, Borrowing and Lending Binge, People thought Realtors told the truth or we could combine something like….
(Leuters) -Home prices off 61.8% since Crack Smoking People thought Realtors told the truth.
By jeff saturday
WASHINGTON | Fri May 6, 2011 5:50pm EDT
(Leuters) - Mortgage finance giant Fannie Mae (FNMA.OB) on Friday said it would ask for an additional $8.5 billion from taxpayers as it continues to suffer losses on loans made to Crack Smoking People who thought Realtors told the truth prior to 2009.
How about: “Median housing prices still x% above 2.5x median income.”
Bottom
I’m tired of the word “bottom,” as in, “The real estate market will bottom out by the end of next year.”
For how many years now have they already been saying this? (I’m thinking about five years…)
I’m tired of being the only one in the room (save for perhaps the DH) that believes otherwise.
Bottom
I’m tired of the word “bottom,” as in, “The real estate market will bottom out by the end of next year.”
May 6, 2011, 11:46 PM ET
Calling a bottom- now is time to buy real estate
After all that anger about me finally investing in real estate for the first time in my life, I was searching for some of my old “Sell all your real estate now!” posts from 2005-2007 and found this whopper of an article. Notice how I finish up the article, which I wrote originally back in August of 2007:
Let’s review what actually happened after I wrote that. Real estate prices crashed causing “more waves of mass repricing of assets” which caused uh, not just “more turmoil” but an entire financial system collapse. The Fed did indeed “‘bail’ out” those financial markets and we are now in what I have recently been telling you guys is probably the third inning in this reinflating “echo tech bubble”. (How quaint was my putting quotations around the “bail” part of bailout. Bailouts weren’t quite as much a part of the lexicon back then as they are today, eh?) I update how we should be positioned now in the spring of 2011 after the reprint below.
…
My favorite is the “little known” law or rule that seems to appear when someone from the neo-con cabal has lost money, and the taxpayers are on the hook for it.
New game for the articles of the day:
“Unexpected” = slam a beer
“Not giving it away” = Shot of JD
(to be done that evening when no driving is involved)
“Jobs report” = throw another marshmallow in the hot chocolate.
Almost as bad and hearing a baseball announcer say “They scored three UNANSWERED runs!”
Actually, I have an answer: First guy hit a double in the gap, next guy walked, next guy hit a three run home run over the left-center wall. There’s your answer!
All of these economists should be fired if it is allways such a shock to them.
What?! We mean we shouldn’t pay them more so we can keep that talent?!
Definitely.
Also getting tired of the use of the word decimated, when they really mean devastated.
Didn’t we bomb Libya for less???
——————
Egypt: Muslim rampage against Christians continues, now 12 dead, 232 wounded
Jihad Watch | 5-9-11
Egypt: Muslim rampage against Christians continues, now 12 dead, 232 wounded
(AINA) — Christians Copts in the area of Embaba were attacked Saturday evening by Muslim Salafis. The attacks lasted for 14 hours. The Muslims fired guns and rifles and hurled Molotov cocktails at Coptic churches, houses and businesses. 12 Copts were killed and 232 injured. The church of Saint Mina church was the first to be attacked. According to its pastor Fr. Abanoub the attack started at 5.30 PM on Saturday May 7, when church parishioners noticed a large number of Salafis, estimated at 3000 men, congregating near the church. Anticipating trouble, the army was called. The Salafis went to the church and asked to search it because they believed a Christian girl named called Abir, who had converted to Islam, married a Salafi and wanted to revert back to Christianity, was hiding inside the church. The Muslims circulated a rumor that the husband of Abir received a call from her asking him to save her as she was being “tortured” inside the church.
According to Fr. Abanoub the Salafis started shooting at 5:30 but the army arrived at 10 PM. “I called everyone, but no one bothered to come.” He said six policemen came and left when they saw the shooting. There were also snipers shooting the parishioners from rooftops. “I mourn all those young people who died. We now must ask for international protection.”
The second church attacked by Salafis was St. Mary and St Abanob, also in Embaba. Muslims prevented the fire brigade from reaching it. Copts were also shot. This video shows the wounded brought inside the church.
The third church attacked was St. Mary Church in Wehda Street in Embaba, the ground floor of which was completely torched (video).
An apartment complex inhabited by Copts, near St. Mina Church, was set on fire after being looted. Another two houses were torched (video).
Does anyone still believe that Islam is a religion of peace?
Stuff like that always happens when people OD on the opiate for the masses. A quick look into the history books confirms that Christians don’t have a better track record than Muslims. Hey, my God/Prophet/Guru is better than yours!
Just sayin.
Does anybody believe that humanity is a race of peace?
I believe individuals prefer peace to war, up until the point where their means of survival is in jeopardy.
their means of survival is in jeopardy
Or greed….
that reminds me of a documentary i watched recently. it’s a nat geo doc called “stress: portrait of a killer”. one PHD in the film observes baboons and the impact of their social stresses.
basically if we were to get rid of all the alpha male type “a” assholes in the world we would be alright.
But people like to follow liars and maniacs. It gives them a sense of belonging to something.
IPads would never have been invented if it wasn’t for the A’s.
When I took psych 1, one of the profs talked about personality types. He read a list of questions and had us keep a record of the answers. We generally knew that the questions were about personality type and that a yes was a characteristic for a type A personality, so any validity is totally thrown out the window. Anyway, he asked how many people had zero. A few scattered hands went up. Same for the ones. Same for the twos. Then he asked how many had X (I think it was something like 7) or more. The entire two front rows raised their hands and no one else anywhere in the room.
He started laughing - hard. So did the rest of the room. Except the first row (second row got it) who didn’t start in until they turned around and saw the hand distribution.
Yes. Plenty of people practice their religion in peace, just like Christians, but they rarely make the news.
The crazies are the ones who make the news.
The crusades ring bell?
Or that Christianity is?
Does anyone still believe that ANY religion is a religion of peace??
Does anyone still believe that Islam is a religion of peace?
Does anyone believe that any religion is peaceful?
Kinda sums up the differences between red and blue states…
Kinda sums up the differences between union goon controlled states and right to work states
Kinda sums up the differences between …
—————————–
Keats “vote with their feet and wallets” and leave for Texas
GOOD BYE AND GOOD LUCK
As we leave Illinois for good, I wanted to say goodbye to my friends and wish all of you well. I am a lifelong son of the heartland and proud of it. After 60 years, I leave Illinois with a heavy heart. BUT enough is enough! The leaders of Illinois refuse to see we can’t continue going in the direction we are and expect people who have options to stay here. I remember when Illinois had 25 congressmen. In 2012 we will have 18. Compared to the rest of the country we have lost 1/4rd of our population. Don’t blame the weather, because I love 4 seasons.
Illinois just sold still more bonds and our credit rating is so bad we pay higher interest rates than junk bonds! Junk Bonds! Illinois is ranked 50th for fiscal policy; 47th in job creation; 1st in unfunded pension liabilities; 2nd largest budget deficit; 1st in failing schools; 1st in bonded indebtedness; highest sales tax in the nation; most judges indicted (Operations Greylord and Gambat); and 5 of our last 9 elected governors have been indicted. That is more than the other 49 states added together! Then add 32 Chicago Aldermen and (according to the Chicago Tribune) over 1000 state and municipal employees indicted. The corruption tax is a real cost of doing business. We are the butt of jokes for stand up comics.
We are moving to Texas where there is no income tax while Illinois’ just went up 67%. Texas’ sales tax is ½ of ours, which is the highest in the nation. Southern states are supportive of job producers, tax payers and folks who offer opportunities to their residents. Illinois shakes them down for every penny that can be extorted from them.
In The Hill Country of Texas (near Austin and San Antonio) we bought a gracious home on almost 2 acres with a swimming pool. It is new, will cost us around 40% of what our home in Wilmette just sold for and the property taxes are 1/3rd of what they are here. Crook County’s property tax system is a disaster: Wilmette homes near ours sell for 50% more and their property taxes are ½ of ours. Our assessed home value was 50% higher than the sales price. The system is unfair and incompetent.
Our home value is down 40%, our property taxes are up 20% and our local schools have still another referendum on the ballot to increase taxes over 20% in one year. I could go on, but enough is enough. I feel as if we are standing on the deck of the Titanic and I can see the icebergs right in front of us. I will miss our friends a great deal. I have called Illinois home for essentially my entire life. But it is time to go where there is honest, competent and cost effective government. We have chosen to vote with our feet and our wallets. My best to all of you and Good luck!
http://illinoisreview.typepad.com/illinoisreview/2011/03/keats-vote-with-their-feet-and-wallets-and-leave-for-texas.html#tp
They’ll be back when they need to go into a nursing home.
New York has the same cycle with Florida. People complain about the taxes and leave, and then come back for the benefits when they need them, and never connect the two in their rationalizing little minds.
an amoeba would react to stimuli in the same fashion.
New York has the same cycle with Florida. People complain about the taxes and leave, and then come back for the benefits when they need them, and never connect the two in their rationalizing little minds.
Something like that happened in my own family. But, when my mother’s mother left FL, she didn’t go back to NY.
She came to PA, expecting to live with us. Mom wasn’t having it. She valued her marriage too much.
So, Mom set Grandma up in a nearby apartment. Where she lived until she went into a nursing home. Place where she died was the county home.
“…and then come back for the benefits when they need them…”
That’s because “people are smart.” If New York was smart they’d reduce those benefits until they were on a par with states like Florida.
At 60, I’m wondering if this gentlemen took an early retirement or did he find work that he feels will be stable till he does. Maybe w/that 40% difference in sale the price of the 2 homes he feels he’s home free? Jettisoning the need to be near an income source changes everything.
The answer is in the article:
Former State Senator and Republican Cook County Board President candidate Roger Keats and his wife Tina are leaving Illinois to live in Texas.
How nice of Mr. Banana to leave this out of his HBB post. I wonder how high Senator Keat’s INSANE! PUBLIC! PENSION! is going to be? Or, if he owned a business, I wonder how much he profited off the public services which allowed him to operate in an environment which is infrastructure-rich and corruption-free.*
What a nice loyal thank-you card to the taxpayers of Illinois who allowed you to sell out, Senator!
————
*And yes, Keats may complain all he wants, but compared to anywhere else in the world, Illinois is corruption-free… except for those truly corruption-free countries where the taxes are even higher.
+1
how high Senator Keat’s INSANE! PUBLIC! PENSION! is going to be ??
And taking it with him to a state with no income tax…
Yes, as banana says, looks like those Republicans are just fine and dandy with UNION GOONS… so long as the unions goons are on their side.
He’s leaving a state that had far lower taxes as a percent of its residents’ personal income than the U.S. average for decades. A state that didn’t fund its pensions. But those pensions are going to be paid anyway, thanks to a huge income tax rise. That he won’t be paying while he collects his pension.
+1. The individual version of privitizing the profits while socializing the risk.
Again, I advocate for a residency requirement for public pensions for situations just like this one. If all Keats wanted to do was live cheap, he could have bought a house outright in any one of a hundred towns in podunk Illinois. Then at least Illinois could re-capture some of the tax money they paid him over the years, in the form of state income or state sales taxes.
Great point, but this issue gets messy real fast.
A few months ago I wrote about our mayoral candidates floating the idea of lifting residency requirements for city workers. Our first responder heroes were pushing hard for it because they also want the option to live in the lower cost(tax) suburbs - also without giving up anything with regards to their pensions.
The search to privatize the gains and socialize the losses has trickled down the social ladder a lot further than many would like to admit. This is turning into an everyman for themselves scenario and the problem is far larger than could ever be caused by a few scapegoats - this is a societal issue.
Our first responder heroes were pushing hard for it because they also want the option to live in the lower cost(tax) suburbs ??
Suburbs ?? $**t….We have first responders that live in other STATE’S !!!
Aren’ they going to have a problem responding quickly with a serious commute? Don’t they call in additional responders when emergencies are big enough? Those folks need to be close enough to get to their stations efficiently.
Those folks need to be close enough to get to their stations efficiently ??
The power of the Unions…
It won’t be a problem, until it is a problem.
The Alfred E. Neuman MBA program
Power of Unions? What about the wimpiness of politicians? All the union can do is ask, put something on the table. If the person on the other side says “no,” then the issue is essentially over. Cops and firefighters aren’t allowed to strike.
Cops and firefighters aren’t allowed to strike ??
Well I suppose not but they have a much bigger stick to play with rather than a strike…Collective Bargaining through Arbitration…It doesn’t get any better than that…
Arbitration is usually not binding. If a union gets binding arbitration (bad idea) it’s granted by politicians.
Ha ha ha. Nice one oxide.
Another Ministry of Truth moment.
According to the Cook County Recorder of Deeds, Tina Keats and her former husband paid $420,000 for the house in 1988.
Price Points: When they first listed the house for sale in January 2009, the Keatses were asking $1,148,500. They reduced the price twice, the second time in July 2009, to $995,000. When they put the house back on the market in January 2011, they were asking 72 percent of what they had wanted two years earlier. That’s why it sold so quickly this time, according to their agent. “Buyers are savvy now,” Neuschel says. “When the right value comes onto the market, they have looked at so much [property] already that they’re not afraid to make a decision quickly and pay close to the price, or pay above it if there are multiple offers.” She said that there were multiple offers on the Keatses’ home, but she wouldn’t say whether that pushed the ultimate selling price above the asking price. (I’ll update with that information when the closed sale is recorded.)
More info on Mr. Keats:
“Republican Roger Keats scored just 26 percent against Toni Preckwinkle in last year’s Cook County Board President’s race.”
“Roger Keats was a State Senator 16 years, and led the struggle for passage of historic legislation in Illinois, such as establishment of judicial sub-circuits that allow minorities to elect judges, reform of the banking system, and fundamental reform of public transit for the better.”
The comments on this page are a little less supportive of Mr. Keats, and echo what we’re saying here.
http://capitolfax.com/2011/03/21/roger-keats-flees-to-texas/
I love the Internet.
It has never been easier to sort out the BS from the facts.
Me too. But it makes me think that us sharing the facts here is not enough. Methinks we oughtta be trolling other blogs and comments sections and depositing the FACTS.
Not that I have the time for that.
But there are people out there getting paid to troll and post INCORRECT INFORMATION, with the understanding that if misinformation spreads just as quickly, if not faster, as the truth.
I love the Internet.
It has never been easier to sort out the BS from the facts.
“But there are people out there getting paid to troll and post INCORRECT INFORMATION, with the understanding that if misinformation spreads just as quickly, if not faster, as the truth.”
You mean like the people who say that you can’t tax the rich, because they’ll move/somehow quit making money?
Or that since taxing the wealthy won’t immediately pay every single cent of our debt off, we therefore shouldn’t even bother taxing them?
Or the people who say our entitlements are unaffordable, when what’s actually unaffordable is our current health care system?
Those kind of paid trolls?
I am surprised at one point in the article. I can’t believe that Illinois (or at least Cook County) property taxes are as high as those in Texas for a similar tax appraisal value. After all, Texas has no state income tax.
Where does the money go in Illinois? (That was a high hanging curve ball).
It is probably worth pointing out that these folks are from the suburbs. A lot of our suburbs are seeing rapid - and I stress RAPID - changes in demographics and the former tax advantages a lot of those folks enjoyed are quickly being eroded. The whole suburban phonomenon here got its start with the search for lower taxes, looser codes - all the way back in the 1850s!
So, just as the factories left the city proper for the suburbs in the 50s, and then to the Sun Belt some of these residents are following the pattern. Perhaps one day we’ll cross paths again - over a Margarita in Cabo or at a bar in the Shangai airport?
It is going to get very interesting here before this is through.
illinois deficit 13 billion population 12million average income 23k in 2001.
Texas deficit 20 billion population 24million average income 19k.
GDP per capita 45.9k vs 50.3k in illinois
Not a huge difference in abillity to pay off the debt in my book.
Take away oil and Texas would look like Mississippi.
“Texas would look like Mississippi”
Actually, it would look like Mexico.
It already does look like Mexico. Take a side trip to the Rio Grande valley (Laredo to Brownsville) and you’ll see what I mean.
Take a side trip through South Dallas…
Swing by South Houston and East Houston too
Or West Dallas. Or out by DFW. Or……never mind.
When I visited my sister in Dallas a few years ago I was suprised to find the shoppers exiting the local WalMart have their shopping carts checked to see if they match the receipts. It reminded me of my years in Mexico City where uniformed security guards did the same at grocery stores.
And regarding Dallas, I used to think that Denver was a fugly town. Dallas cured me of that right away.
I prefer Mexico to Mississippi, just saying…
Are Illinois sales taxes really in the 15%-20% range?
No, the city is the highest for sales tax and they’re rolling back a quarter - around 10% but that is inclusive of the state sales tax itself which is around 6.5%.
State income tax was 3% and recently went to 5%.
Texas state sales tax is 6.25%.
Cities can add another 2%.
“……..3% and recently went to 5%.”
OMG!!!!!! A 66% increase!!!! Time to throw some tea in the harbor!!!!!!
Well there’s more to the story, the revenue from that 66% increase was already spent before it was approved. Currently Springfield is trying to float a bond sale to close the pension funding gap. The increase was sold using the angle that it would preclude the need for them to borrow more. They could probably raise it another 66% and the budget would still be dicey.
Take away oil and Texas would look like Mississippi ??
BiiiiiinnnnnGO………
Having lived in Texas for a few years, I’d pay double taxes in ANY state to avoid Texas again.
Dallas in 1986 was kinda cool.
Dallas 2011 is our Banana Republic future. Isolated pockets of the superrich surrounded by Third World poverty. Public infrastructure becoming pay-per-use. Toll gates every 5 miles.
If you visit Dallas, make sure you pack about 10 pounds of change.
Toll ways are now cash free, they will bill you.
I bought a car in TX, it had no plates, so I ran every toll and laughed all the way home to NM.
Yep, along with a few extra dinero for a “processing fee.”
They are trying that crap here in Maryland. Developers, after years of buying off county executives, were finally allowed to build a new road. Cost: $1.65 to go 6 miles on weekdays. $1.15 on weekends. No toll booths. You have to have a transponder, or else they flash you and bill you + a few extra dinero for processing.
Problem is, there are few toll roads in the area,* so nobody has a transponder, nobody is going to go get one just for a 6-mile road, and nobody is going to tolerate sending a check for $4.65. As a result, few people are using the road, to the point where they are advertising the road on the buses.
————-
*The only toll road nearby is the Dulles tollroad, and that’s in VA. This is in Maryland. Few people would use both on a regular basis.
Problem is, there are few toll roads in the area,* so nobody has a transponder, nobody is going to go get one just for a 6-mile road, and nobody is going to tolerate sending a check for $4.65. As a result, few people are using the road, to the point where they are advertising the road on the buses.
Back when I-80 was completed across PA, the Turnpike experienced quite a drop in business. I don’t think it ever recovered.*
I can remember my teachers saying that I-80 was such a good deal that they wouldn’t cross PA on the Turnpike again, even though the Pike was a lot closer to us.
—————–
*Turnpike was and is a toll road. OTOH, PA I-80 was and is a freeway.
My feelings as well. The state has a run down, 3rd world feel to it, at least where the little people live.
That was my impression when I bicycled across Texas in 1982. If you were well off, great place. If not, it was the dumps.
What got me was their “nobodys gonna tell me what to do” mindset, the total hodgepodge of construction. They’ve never heard of a zoning board
Drive down Belt Line Road…..expensive houses/condos, then a couple of blocks down, an industrial park……then upscale shopping, another industrial park. ghetto housing, then a business park, and industrial park, more McMansions….
The rich aren’t going to survive there, if the S ever HTF. Their highly paid security guards/police are never going to be able to get to them. At least quickly.
Another thing that’s always weirded me out about Texas is the crime. The year I lived there my car was vandalized more than once, I was offered drugs by a pusher in downtown San Antonio during broad daylight (I was overdue for a haircut that day, so I suppose I looked “shady”) and almost got mugged on more than one ocassion. I was attending college and had a part time job at a uniform store (lots of fun). One day at closing time (6 PM) the manager asked us if we could all (there were about 8 of us) wait at the bus stop with one of the co-workers, as apparently some shady types were “after him”. Oh and one time at a self serve car wash a crazy looking woman approached me and demanded I give her money for booze. Nothing like this ever happened to me since I left the Lone Star state.
My brother lived in Brownsville for a few years and had to get his house wired as they had a few break-ins in their golf course community home.
My sister lives in an Dallas exurb. One day a cable TV tech showed up at her door unannounced. My sister wouldn’t let him into the house and called the cable company. They said no one had been dispatched to her house. The guy showed up in an unmarked van and vanished as she made the call. She was really creeped out after that, but he never came back.
X - there is strict zoning in Dallas. Unfortunately, the zoning boards are run by real estate developers.
Houston has no zoning. There is not too much difference between the two nowa days.
What got me was their “nobodys gonna tell me what to do” mindset, the total hodgepodge of construction.
That’s what gives it its “lived in” look.
My sister lives in an Dallas exurb. One day a cable TV tech showed up at her door unannounced. My sister wouldn’t let him into the house and called the cable company. They said no one had been dispatched to her house. The guy showed up in an unmarked van and vanished as she made the call. She was really creeped out after that, but he never came back.
I must be a real meanie, but I don’t open my door to anyone unless I’ve made arrangements in advance. Could be like this morning — Jack the cooler guy came over to get the cooler checked out and started for the summer. I’d made the appointment with his wife last week.
OTOH, there was that Saturday afternoon door-banger. I wasn’t expecting anyone to come here, so I didn’t answer the door.
Sunday morning, as I was heading out on my bike, I noticed a length of what appeared to be kite string stretching across the driveway, the front garden, and part of the neighboring property. No kite was attached.
Someone was probably looking for a lost kite, but y’know what? Before I went out for the errand-running ride, I was washing windows in the back yard. Didn’t see any downed kites back there.
Sounds just like when I moved from California to Florida 30 years ago. House prices 1/3 to 1/2. No state income tax, etc.
Kinda sums up the differences between … facts and fiction…
Texas? The state with a deficit as large as California’s, yet the worst pensions, wages, education and social services in the nation?
Irony, how does it work?
It has the same prison population as California, with only 61% of the general population. So the average Texan is almost twice as likely to endup behind bars.
Both states lead the nation in number of prisoners.
I despise parasites like this. They sell their overpriced POS in The Peoples Republic of Illinois and infest Texas pricing out the locals. We’ve coined a term for them here on the HBB; equity locusts. Its been happening all over the country. West and eastcoasters selling an overpriced dump for $500k and moving to flyover country and buying a $250k Mcmansion. I hope they’re real proud of themselves for screwing over their fellow countrymen who bought their previous house and are now likely ruined financialy for life. I hope they built his house on a rattlesnake den.
BTW, my wife and I just closed on our house recently and couln’t be happier. Our realtor lanlord wanted to jack the rent so we bolted. Our new house is three times as nice with a comparable mortagage payment to what we were paying in rent. Thanks to all the HBB for slowly restoring some sanity in an insane world.
BTW, my wife and I just closed on our house recently and couln’t be happier. Our realtor lanlord wanted to jack the rent so we bolted. Our new house is three times as nice with a comparable mortagage payment to what we were paying in rent. Thanks to all the HBB for slowly restoring some sanity in an insane world.
Okay, stewie, here’s a frosty glass raised in your honor. Here’s to homeownership that’s sensible.
Bottoms up, everyone!
congrats, stewart.
Congratulations on your new house, Stewie!
“Kinda sums up the differences between union goon controlled states and right to work states”
I really wish all of the libertarians would get together and move to the same place and leave the rest of us alone. I think it would be really wonderful to see an experiment in a true libertarian paradise.
Would it really be all sweetness and light with the blessings of prosperity as many seem to believe or would it devolve into a dog eat dog hierarchy with most dogs at the bottom of the pile? Would the free market dictate a clean and wholesome environment or a cesspool?
I really wish all of the libertarians would get together and move to the same place and leave the rest of us alone.
That reminds me of when people of various political stripes threaten to leave the country if their side loses the next election. It’s easy for the lefties to say…there are plenty of lefty homelands out there to choose from (if they can get in). For righties the U.S. IS the homeland. There’s nowhere else for them to run to.
Then it would appear that in the marketplace of ideas, the ideas of lefties are out competing the ideas of righties.
Or perhaps the places that embrace libertarian ideals just don’t look like what libertarians expect them to look like.
LOL!!!!
Nice, Happy2bHeard!
Could not agree with you more about all the libertarians moving to some state or country and creating their utopia…and leaving the rest of us alone with our “union goons” and the benefits they provide.
It would be a fantastic experiment! (And we both know exactly how it would turn out, too.)
Then it would appear that in the marketplace of ideas, the ideas of lefties are out competing the ideas of righties.
You might be right..err…correct. However, be careful about cornering something that has nowhere else to run.
‘I really wish all of the libertarians would get together and move to the same place and leave the rest of us alone. I think it would be really wonderful to see an experiment in a true libertarian paradise.’
freestateproject dot org /choosenh
Great post, banana. You got them all riled up!
Home Market Takes a Tumble
wsj.com
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.
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.
Three more months of real estate price declines would bring the total consecutive months of price declines to an even 60 = 5 years.
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.
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.
…
60 months is exactly how long they went up every month during the boom. Should anyone be surprised if the decline lasts just as long?
Or if the decline erases all the gains during the boom? Don’t forget to factor in the declining value of the dollar when measuring declines, though — i.e. a falling dollar means a nominal price decline of less than 67% is necessary to erase 200% appreciation.
Is the dollar falling relative to other currencies, or relative to domestic purchasing power?
Hard to say where things are headed, as we are in a period of high volatility in both currencies and commodities, due in no small part to the never-ending Eurozone debt crisis.
May 9, 2011, 11:30 AM ET
Surprise! Dollar and Commodities Both Rallying
Mini Market Paradox today, largely thanks to Greece.
The dollar has turned around from earlier losses and is putting in a solid session. At the same time, commodities prices are higher, rebounding form last week’s vicious sell-off that drove silver down nearly 30% and oil down nearly 15%.
Usually when the greenback is up, commodities don’t gain ground. That’s because a stronger dollar, all things being equal, means you need fewer of them to buy the same amount of stuff.
But all things aren’t equal this morning. The euro-zone is going through another spasm of fiscal-driven angst and bargain-hunters are active in the battered commodities market.
In the euro-zone, S&P’s downgraded Greek debt deeper into junk status, underscoring the widespread belief that Greek debt will need to be restructured. The downgrade comes as eurocrats grapple with how to solve the fiscal mess in Athens, with no easy options in sight. EU finance leaders discussed the issue in Luxembourg over the weekend.
“It is not clear whether the discussions included more money, a longer repayment term — dare we say, a restructuring of the repayment schedule? — lower interest rates, new conditions or all of the above,” said High Frequency Economics in a note this morning. “We believe the answer is all of the above.”
…
““We believe the answer is all of the above.””
First they were gonna kick Greece out of the Euro-zone if it didn’t submit to forced austerity, now they’re begging and bribing Greece not to leave the Euro-zone. Looks like the Greeks called their bluff. I’m sure the rest of the PIIGS are watching with interest (no pun intended).
“Mr. Humphries now believes prices won’t hit bottom before next year and expects they will fall by another 7% to 9%.
…
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.”
The trouble with these estimates (at least as described by the WSJ) is that they seem to use a rich model of the supply side without mucj considering the post-bubble-collapse demand side. So long as the labor market is in the dumps and household balance sheets are (in many cases) hundreds of thousands of dollars under water, demand will remain as dead as a door nail, and there will be no end-user support for prices north of $500K, which is what sellers anywhere near more desirable areas of the West Coast seem to expect. Good thing we have myriad all-cash investors coming in to snap up homes at deep discounts to their 2006 bubble-top prices, or we would have a real problem.
Alright, I’ve got my marching orders: Hanging on till the Fall.
I seem to run into Harry Dent’s sentiment more and more. It’s an older video but talks about how he expects things to go through the summer and into fall. So far he’s on point. For the fall he expects a crash worse than 2008.
http://finance.yahoo.com/blogs/daily-ticker/harry-dent-major-crash-coming-stocks-commodities-already-20110331-080715-415.html
Another link from that page is a more recent interview w/John Mauldin, author of The End Game. He makes the oft repeated point that there is no escaping that we need to go through some pain to deal with our economic crisis but it’ll be worth it as we’ll be able to experience growth again once on the other side. The fondly remembered hbb favorite Texas Chick referred us to him years ago and I’ve been reading his newsletter that goes out to “his million closest friends” ever since.
“Sell in May and walk away.”
However, the comments point out the Harry Dent predicted DOW 41,000, so why should we believe him now?
John Mauldin was too positive for my ideals in 2008/9 too. For a while I was afraid he’d flopped to shillville but he’s back warning us w/specifics again. 41k DOW is pretty funny. Gotta pull that one up and see if it was an argument for hyperinflation.
He was blindsided by the housing bubble.
Mauldin and his buddies make lots of graphs, travel, have the time to talk-up capitalism over fancy meals, etc., but they don’t bring any value to the table - just added expense to everything you and I need. However, when they over-extend themselves and it goes wrong they all agree that a socialist bailout is the answer.
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.
I’m curious, with news that prices are falling almost everywhere in the U.S., why any well-informed end-user would choose to buy now?
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.
…
I receive email letters from realtors I’ve ran into at open houses before. Funny you mentioned why people would buy, because the last e-letter gave seven reasons:
1. Taxes.
2. Appreciation. (Yes; citing past appreciations and that ownership is expected to grow by 15% in the next decade)
3. Equity.
4. Predictability. (Rent can go up)
5. Freedom. (You can decorate, update and renovate your own home which increases your long term investment potential.)
6. Savings. (equity = savings)
7. Stability. (Living in the same area allows for building long lasting relationships for yourselves and your children.)
The “softer” sides of the list above, i.e. psychological benefits of owning, are not without merit. So I found myself looking at a beautiful house for sale last night as we took our evening stroll. But, as I was intrigued to look up more details on this listing, a truck full of black teenagers rushed by me shouting “FAGGOTS!”
We live in a pretty affluent and nice neighborhood, and this kind of things have never happened to us before. So I took this as a sign from above and quickly moved on.
“Stability. (Living in the same area allows for building long lasting relationships ”
Renting won’t stop you from staying in the same area. And buying a house won’t stop your job from moving to another city, county, or country. It’s all about job security now.
Her reasons, not mine.
Of course, she’s a Re-al-TOR!
She researched it.
“Stability. (Living in the same area allows for building long lasting relationships”
Been here almost six years, with increasing levels of community involvement. I notice that not having to make an unaffordable mortgage payment or to do yard work actually frees up more time for volunteer activities. By contrast, folks who stretch their budgets to the breaking point in order to live in ginormous, unaffordable McMansions typically don’t volunteer or contribute to school fund raisers; they are too busy working their hinies off paying tribute to Megabank, Inc.
I was a real schmooze about town back when I rented.
And, now that I’m even closer to real schmoozie things like the university and Downtown, I’m even more of a get-out-and-do-stuff type. Face it, some people are just born to schmooze.
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.
Anyone think there might be any merit for the idea that the above numbers are shaking out like this because the sheriff’s office seemed more aggressive w/the sub-prime crowd but once the foreclosures entered the crowds that were a little up the food chain foreclosure moratoriums and shadow inventory had entered the scene. Maybe the subprime crowd doesn’t understand or read about the whole squatter approach. Just a thought.
No. Higher-income ppl got into their subprime loans at a later time. Hence, they also started to reset at a later time.
At higher income levels, not only did they re-fi into those loans at a later time, but they also qualified for longer grace periods — 5 years instead of 3 years, or two months.* If a lowlife and an engineer got their loan on the same day in 2005, the lowlife would have been kicked out years ago. The engineer would have been issued a NOD only now.
———–
*Some of the true subprime loans reset up from the teaser rate after only 2 months. Hence the re-al-TOR phrasing that “I can get you INTO this house for just 3.9%.” The FB got into the house, and that’s about it.
“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.”
Interesting. I heard just the opposite today from a real estate “expert”. –that cash investors are competing to snap up lower-end homes, keeping prices at low but stable levels, while homes over 500,000 or so are declining in value. It was a local (SF bay area) news program, but the conversation was about real estate nationally.
“…while homes over 500,000 or so are declining in value.”
My impression is that they sit on the market and don’t sell. Just for fun, I looked up some data on Redfin dot com for multi-million dollar San Diego County listings. There is no shortage of $2.5m+ homes listed for sale, and some have twisted in the wind for quite a while. This fire-sale special has been listed for sale already for 1,687 days, or 4 years, 226 days (1,461 + 226 = 1,687). From its location, it appears that it was literally in the path of the Witch Creek Fire, which occurred in October 2007, less than four years ago, and hence after this home was listed for sale.
$2,595,000
14415 Cypress Pt Poway, CA 92064
Beds: 5
Baths: 6.5
Sq. Ft.: 7,828
$/Sq. Ft.: $332
Lot Size: 1.23 Acres
Property Type: Residential, Detached
Stories: 2
View: Evening Lights, Golf Course, Mountains/Hills, Panoramic
Year Built: 2003
Community: The Heritage
County: San Diego
MLS#: 061082404
Source: SANDICOR
Status: Active
This listing is for sale and the sellers are accepting offers.
On Redfin: 1687 days
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.
…
But they are hemorrhaging cash to pay the nut every month.
Never understood the connection.
If prices were stable - they would still be hemorrhaging cash to pay the nut every month
If prices were even going up - they still would hemorrhaging cash to pay the nut every month
Maybe - they couldn’t afford the nut in THE FIRST PLACE…
Maybe - they couldn’t afford the nut in THE FIRST PLACE…
That was a given. For many, the plan was to flip the house when the teaser rate ran out, buyt a Beamer with the appreciation and buy another house woth 0% down to flip 1-2 years later.
Lather, rince, repeat.
Then we ran out of shampoo.
Ran out of water, maybe? Plenty of easy credit shampoo to lather to a “froth,” but without greater fool water to rinse, you can’t repeat. And dangit, you can’t get the credit shampoo out of your hair…
And then it runs down into your eyes and burns and burns and you wind up crying dunking your head in the toilet to try and get that mess under control.
He also fails to mention the so-called “squatter’s rent” phenomena (live rent-free in your underwater home for 18-24 mos before the bank finally gets around to foreclosing)…
Realtors Are Liars
Realtors Are Liars
WASHINGTON | Fri May 6, 2011 5:50pm EDT
By jeff saturday (Leuters)
(Leuters) - It was confirmed today that Realtors are Liars. Multiple reports citing anonymous sources say Realtors are Liars.
“The sources would only allow us to use the material on condition of anonymity,” jeff saturday told ABC News. “Given the significant impact of the Realtor story, we felt the public’s interest in seeing what officials had to say about how it was reported and fact-checked was greater than in keeping that information to ourselves because the officials wouldn’t come on the record,” saturday continued. “We independently contacted several sources for the story.”
http://library.realtor.edu/citing/liars/apa.php - 27k
lmao…. beauteous!! Leuters!!!
You tricked me. I really did try to click on the link.
Oops! library.realtor.edu seems to be having issues.
Questionable foreclosure cases, once handled by David Stern’s offices, to be heard in court today
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 5:34 a.m. Friday, May 6, 2011
The ninth floor of the Palm Beach County courthouse was thick with attorneys Friday as the first case management hearings to determine the status of thousands of former David J. Stern foreclosures began.
Lawyers for the banks, lawyers for the homeowners, and even lawyers handling the transfer of files from Stern’s firm to new firms huddled around a large easel set up outside Circuit Court Judge Meenu Sasser’s courtroom.
There were 500 hearings set for Friday, evenly split between morning and afternoon, and despite a bit of chaos as people searched for their file numbers on the easel, morning operations inside the courtroom ran mostly smoothly.
If homeowners hoped foreclosures would be dismissed because no one would appear to represent the banks, they were disappointed.
“I didn’t think they would be this organized,” said Boca Raton-based foreclosure defense attorney Ron Kaniuk, of Ricardo, Wasylik & Kaniuk. “I thought we’d have more dismissals.”
Defense attorney Kaniuk said the appearance of so many bank attorneys is in contrast to foreclosure mediation sessions with homeowners, where the lender representatives usually request to just call in.
“The fact that we have bank representatives here today to appear for substitution of counsel but they won’t come to speak with homeowners is a crime,” Kaniuk said. “In mediations, they show up by phone.”
COMMENTS
I personally know of 4 homes in Victoria Grove in RPB that Stern had under his thumb… They have been stalled in the court system for months. I am on the HOA and these non-payers need to go…
JJ
7:21 AM, 5/6/2011
And the saga of the worst housing crisis continues …
strategic defaulter
8:20 AM, 5/6/2011
All B.S..these deadbeats aint moving anytime soon..first u delay,then u ask for docs,then u ask for mediation,then u ask for more time,then u ask to change lawyer,then u cry fraud, then u do it all over again..a JOKE.tired of the deadbeats in Olympia like Amy Bromberg or Julee Schneider or Mark Plaxen..lets play the deadbeat game..it will go on forever.living in Olympia is being amongst the deabeats and squatters.either pay or get your butt out of here!Banks should monitor their lifestyle.Fraud!
Mike
11:27 AM, 5/6/2011
Oscar Garcia is a bum who hasn’t paid the mortgage on a number of “investment” properties in PB County for over 2 years- including a property in Cypress lakes preserve in lake Worth. Yet clowns like him keep renting the properties out and keeping the rent while lenders and communities suffer. What will the Courts do to to these types of bums? To me it looks and smells like fraud and theft.
Oscar Garcia Fraud
3:00 PM, 5/6/2011
http://www.palmbeachpost.com/money/foreclosures/stern-foreclosure-cases-being-reviewed-at-the-palm-1457998.html - 83k -
The Wall Street Journal’s take on Zillow is behind a pay wall, but it was just as predicted here. The federal government borrowed money to get some young people to overpay, and now that they are done house values are falling.
The young people will have to pay off the debt. And unlike those over 55, will have their Social Security and Medicare benefits cut to pay off the debts because they have “time to adjust.” Well, one way to adjust is not to buy a house until the price is so low that the person over 55 who sells it to you is forced to in effect give back all those debts they ran up.
One money quote from the article from an analyst about tight credit: just as during the housing bubble people were getting loans they couldn’t pay back, now people are being denied loans they could pay back. Now, just think how much people in finance are paid to distinguish between the two.
“The young people will have to pay off the debt.”
My SIL is among the $8K tax credit debt slaves. (I warned her, but she seemed none too interested in learning anything about consumer finance…)
If she lives in San Diego she might be forgiven. Home prices in America’s Finest City have always been high, even though jobs pay a lot better in LA.
I recall in the 80’s that San Diego would get a lot of equity locusts from LA. I got tired of hearing them babble about how “affordable” San Diego was. And they drove prices up, even though good paying jobs were hard to find.
“If she lives in San Diego she might be forgiven.”
Try West Salt Lake — but at San Diego condo prices (almost $200K for a 2br condo in the middle of the desert…).
“Try West Salt Lake ”
Roh, roh Shaggy!
Local paper (comes free to my apartment building, but I think they charge if you get it delivered to the door of a house) had a “featured” home for sale this week that pretty much floored me on the financials. Condo (they usually feature 5 bedroom houses). About the same square footage of my one bed/one bath, but I think it was two beds/two baths so the rooms are fairly small. Just inside the beltway. Not walking distance to the Metro but biking distance. And the complex has a shuttle bus to the Metro at some times. Includes a parking space and access to the grounds which are probably fine, but very adjacent to…well…the Beltway. $350K. So the interest alone at 5% is around $1450 a month. And get this, the monthly fee? Over $1300 a month which I assumed included taxes. So add the two together (plus some principle payments and insurance and you are talking about close to $3000 a month. Oh, and in my situtation, only the interest part would be tax deductible because anything over $1400 a month and you are getting into alternate minimum tax so the tax savings max out at less than $400 a month for federal and maybe a bit more for state/county.
Anyone who thinks that it is “cheaper to buy” in Montgomery county Maryland has a lot more math to learn. The location premium for my place over the one for sale (better area/school district, car not absolutely needed, shuttle bus takes you to grocery stores as well as Metro, closer to downtown DC, still includes utilities and has 24 hour door coverage, etc) should be at least $500 a month.
With that level of monthly expenses, you would literally have to give it away to make it a better deal than renting in my building (unless you really needed the extra bathroom and separate bedroom).
Looks like we are in the same area - I live off of the Rockville Pike by Grovesnor and see the 2/2 condos and townhomes for sale at a high price. Add in everything you said PLUS the HOA fees and I have no clue who the heck could buy these things.
A townhome down the street from us is listed for $750,000 plus HOA, plus taxes, plus interest and insurance……Just not worth it.
Montgomery County listing have fallen into predictable categories:
1. Old conversion condos — cheap. They are desperate for new HOA cash.
2. Older townhomes — many, sort of reasonable.
3. Condos Townhomes McMansions post 2001 — bubble built and still bubble-priced, especially condos built on the tail end 2006-2007. I wonder who’s propping up the builders finances? They clearly aren’t paying back those construction loans.
4. SFH of all stripes — practically non-existant under a half-mil unless you’re the team from This Old House.
Sean,
Well, lots of people *could* buy these things. I could. I just wouldn’t. It is a bad deal. I would be paying substantially more for a place with a layout that is worse for my situation. The tax savings would not come close to covering the extra costs. A car would be absolutely required, where now it is a nice extra. The commute is longer and I would become responsibe for maintenance of internal spaces and risk special assesments for external maintenance. If not taking the shuttle bus to the Metro, I would have to pay for parking which is never required here.
The “can” and the “will” are very far apart.
If not taking the shuttle bus to the Metro, I would have to pay for parking which is never required here.
I guess I’m weird, but I absolutely adore riding public transit. Be it the bus, an above/below ground system like Metro, what have you, I love it.
I enjoy the people-watching, chatting with people, or just watching the scenery pass by. You sure can’t do that as easily in a car. Or a bicycle, for that matter.
It bothers me when I hear people say that house prices in San Diego have always been high. I asked my parents and my grandparents about that, and they said no. House prices in San Diego have always been affordable. It wasn’t until I got old enough to notice that they started becoming unaffordable.
“Always” is a very long time.
But since the mid 80’s San Diego was damn unaffordable, at least for us. There was a brief respite in the mid 90’s, but after that it was back to “zoom to the moon”.
According to zillow, the dump we once owned in Escondido is still worth more than the much bigger (2x) and nicer house we have out here. That Escondido house peaked at 600K and is supposed to be worth 300K. You could get something like that in my little burg (which has a higher median income than Escondildo) for half the price, and it would have a basement.
My mom bought our 3/1 house in 1978 for $80k. I believe she was earning about $20/hour at the time.
Or was it $50k? I always get confused because the house was built in 1950 and it confuses me to have two 50’s in one thought. It was either $50k or $80k.
But in SD you can play out side all year. CO is beautiful 6 months of the year.
I have some friends who bought a small house in San Marcos (North County) in the late 70’s for about 80K. At the peak of the bubble they got cold calls from realtors knocking on their door, telling them they could get 600K, and the place was a real fixer upper. I told them to dump it an move out here. Alas, they didn’t have the nerve.
“But in SD you can play out side all year.”
People think that, but I recall staying indoors a lot in the winter because it was “cold”.
If you have to heat your house, then it isn’t warm.
My boss’ daughter is in the same $8k problem: promotion that requires relocation, condo next to her’s just sold for 50% less than what she paid, and she took the $8k tax credit. Needs to hold the condo until next January to not have to replay the credit.
Why single, fresh out of college, upwardly mobile people (with a degree in accounting, no less) would purchase a single bedroom condo is one of the great mysterys of the world to me.
I just met such a person over the weekend.
Guy’s a grad student at the University of Arizona, and he just bought a condo. Wanted to make this purchase before house prices started going up again.
My recitation of reasons why prices aren’t headed up anytime soon were not treated as welcome news.
The masses still believe that house prices only go up, and that the current situation is just a hiccup.
The masses still believe that house prices only go up, and that the current situation is just a hiccup.
I think you’re right.
In the scenario described above, I mentioned that house prices here in Tucson are still above historic metrics for incomes and rents.
Guy didn’t even ask me what those metrics were, and they’re frequently discussed here.
For those just tuning into the HBB Channel, those metrics are: 3x median local income should result in the median house price, and 100-120x the monthly rent should result in the optimal purchase price range for an income property.
There can be no other explanation as to why buy a place when you are in school. It’s virtually certain that you will move away when you graduate.
When I was in college in the early 80’s (I transferred to California, where I graduated) I only knew of one student whose parents bought a condo as an “investment”. It was in the “La Jolla Village” area. In the end they sold it for a small loss. Had the hung onto it for a few more years they would have made a killing, but hindsight is 20/20.
Unfortunately sometimes it works. Co-worker — the one who bought in 1984 or so in California — bought a house that was 4.5x his income because “real estate was screaming up.” He needed roomates at first and struggled to pay the mortgage. After a few years of sacrificing, it was much easier for him to make the mortgage payment. And sure enough, by 2000 when he sold, the house had quadrupled in price, and his pay was far higher. However, this was at a time when people really did get pay raises, especially young guns out of college, people didn’t have to move every 5 years, and people didn’t have to pay back much student debt.
(This co-worker is also the lucky type. If I had tried a stunt like that, I’m sure I would have lost the job and gone BK.)
I’ve managed to convince him that times are different now, but he still throws the occasional tantrum. Just last week he complained to me that his apartment raised his rent 4%. (long story why he’s paying rent now) I — just off of negotiating down to a 12% increase — pulled out the tiny violin, and he didn’t speak to me for days.
Because real estate always goes up. Duh.
Why single, fresh out of college, upwardly mobile people (with a degree in accounting, no less) would purchase a single bedroom condo is one of the great mysterys of the world to me.
“Now, just think how much people in finance are paid to distinguish between the two.”
Great point!
Corollary: This should be an excellent time to invest in NEW mortgage debt. (Not the old-vintage toxic variety, mind you…)
Right. If you are in a position to distinguish with absolute certainty that no one has mixed up the two.
There are one hell of a lot of “extend and pretend” losses out there looking for a home away from the wealthy. Knowing this, I’m afraid to put a dime into anything.
“If you are in a position to distinguish with absolute certainty that no one has mixed up the two.”
This apparently can be quite challenging, when Great Vampire Squids have to find a greater fool to match the smart guy on the other side of every toxic mortgage trade they set up.
Now they have to find a greater fool with money or access to credit.
The over-55 crowd enjoyed the luxury of obtaining and holding a job, without going into much student debt and without uprooting every 5 years to move to the new job.
If the over-55 crowd wasn’t able to pay off debt in this favorable environment, how are the under-55 crowd going to do it? I almost sympathize with the iPhoning, Facebooking, Bieber-drooling young masses. If the only future I had to look forward to was a McJob, I’d block it out too.
In think those age 35 to 55 took all the McJobs, so those younger won’t even have those.
I feel sorry for them too.
Bankers make money making loans. This will not last much longer.
“Bankers make money making loans.”
It must help a lot when the Fed hands out zero-interest loans on a discriminatory basis to bankers, which the bankers can turn around and loan to consumers at ‘market rates.’ That’s a pretty cool way to collect tribute from debt serfs.
Even better when they can loan right BACK to the Treasury.
And again at ‘market rates.’
Well, one way to adjust is not to buy a house until the price is so low that the person over 55 who sells it to you is forced to in effect give back all those debts they ran up.”
yea that would work, evens everything out eventually
Except that most of the folks over 55 took a big hit to their pensions/jobs/investments just like those under 55.
Indeed, if you were that old Corporate America painted a huge bulls eye on your back.
“And unlike those over 55, will have their Social Security and Medicare benefits cut to pay off the debts because they have “time to adjust.”
Brought to you by the House Republicans.
I think there are 4 parts to this strategy. First, keep the votes of older constituents who are more likely to vote than their younger counterparts - blatant pandering.
Second, kill the long term support for Social Security and Medicare. As older folks die off, younger folks will become a larger percentage of the voting population until SS and Medicare can be done away with altogether.
Third, inflate away the SS benefits of older folks. In 30 years, that $1000 payout will be $2000 in nominal dollars and worth $250 in inflated dollars.
Fourth, gradually reduce Medicare payouts to the point that no provider will accept Medicare patients. At the same time, gradually increase deductibles to the point at which all seniors on Medicare will have to pay for expensive insurance policies to cover the gaps or pay out of pocket or forego treatment. It’s working with Medicaid.
I have come to the conclusion that the only way to defeat this plan is to lobby the Republicans to include the over 55 set in the cutbacks.
Eco- No pension here. Colo - More correctly both forehead and ass. Happy - Spot on! Approaching 60 with no pension and few job opportunities despite having/because of admitting (on some resumes) an MBA, I can be resolute and deal with my wife ’s and my future.
Current college grads and those with a HS degree or less? I feel much more empathy for them. Globalization, here we come.
All we hear is radio ga ga…
This morning my travels took me to Pioneer Court on our Boul Mich, where WGN Radio plays its live feed on loudspeakers to passersby. It’s a very, very busy spot.
While the bus took its sweet time an interview came on with the RE editor of Chicago Magazine. They began to discuss the double digit price decline throughout the metro area. Now this probably is no big deal to us here, but two things struck me about this live radio interview:
1. The frank and candid way that the price declines were discussed. At one point the RE editor called one of the announcers a “lucky man” when that announcer related that two of his recent offers on houses had fallen through. They went on to discuss how the price declines to date have meant that some local people are where they were 11 years ago - paying all the time - and now having little reason not to walk.
2. The fact that this interview was being broadcast on WGN - which along with its partners at the Tribune are some of the biggest RE pumpers around. WGN Radio is where our middle aged folks get their news, the station has a legion of loyal listeners throughout the region. So, it is no little deal that they not only covered this topic during their “prime time” Monday morning drive program - but that they did so in a tone and with langauge that made it crystal clear that the local housing market is poised for more price declines and that many, many people are underwater with many more to come.
This message is what thousands of middle aged, middle income Midwest residents woke up to this morning. The interview closed with the announcers and guest saying that it all probably makes houseowners want to put their fingers in their ears and go “la la la la”.
Someone recently said….
Holders of HELOCs and second mortgages are going to lose a great deal of money. So far, few of these losses have been recognized, and lenders are in no hurry to do so.
I have a particular Chicago area housewife in mind as I read edgewater’s report. My schadenfreud story: She moved out about 2007. Before her house sold here, I tried to suggest she rent there instead of buy. Too late, she told me. They already were under contract. “Don’t worry”, she explained. “My husband is a VP and has been referred to as a genius most of his adult life. Life is good.” A few e-mails back and forth explained they were looking at condos outside the city area in addition to their home because she wanted a get away. She liked the prices so much they were thinking about 2. (chuckle)
Man do I wish I was still in touch w/her today. She’d never admit she was wrong but I would enjoy watching a few hard scared swallows and an eye twitch.
“My husband is a VP and has been referred to as a genius most of his adult life. Life is good.”
That’s funny. A high IQ and 50 cents will get you a cup of coffee.
As someone worried about inflation, I wonder where you can get such a cup for that amount anymore regardless of IQ? Not in NYC.
It’s a place called Home Kitchen.
You need to be really smart to find a place that sells a cup of coffee for fifty cents.
Folks, the price declines here are real and they are significant. For years the pumpers told us Chicago didn’t have a bubble and would navigate this unscathed. I’m looking at you DC, Toronto, Shanghai…
Seattle knows what we’re talking about, their timing is similar. All we were was a little late the party, but at least we didn’t miss the strippers!
And may your gaze fall full upon DC.
Same old-same-old here. Cheap condos aplenty if you want to pay lots of HOA fees. Mid-price townhomes aplenty if you still want to share walls. SFH? Not so much.
Oxide, buy now or be priced out forever!
And San Francisco, too.
And may your gaze fall full upon DC.
This is no BS.
I DON`T KNOW WHY BUT 2 MILITARY JETS ARE SCEAMING ACROSS THE SKY BACK AND FORTH IN THE AIR ABOVE TEQUESTA, East Coast North Palm Beach County Fl.. Sorry, caps locked. Been here since 1983 and never saw that before.
Once again, no BS
Military jet update
They are gone, came from west to east, out over the water turded around, back over land then back over water turned and went south. Low, fast and loud.
turded… Should have been turned. But I think I like the word turded.
Hedge fund traders who made campaign contributions out for a spin?
Team Six is coming for you, jeff. You’ve angered the banksters.
Local news:
After 657 days, the fixr has a full time job again.
(of course, this requires going back back to a 2004 pay rate)
He even get health insurance!
The long personal nightmare is over……..
Well…”over” might be premature :-), but congrats!
One thing I noticed, was how quick your so-called “friends” seemed to disappear, the longer this thing strung out. I’d sure like to see what the current suicide rate for 40-50 somethings who have been out of work for 1-2 years is. Of course, along with every other government generated number, I’m sure its being manipulated.
We need a new Steinbeck.
Fortunately, I had one buddy who’s been there, starting back in 2004, and is doing okay now. Just going over and helping him out with stuff, or grabbing lunch at the local bar every once in a while helped.
And no, I wasn’t whining 24/7/365, or bumming money off people.
I was able to muddle thru doing part-time stuff, and because I didn’t have to pay for a house, or have crazy payments on cars/credit cards/toys, etc.
I’m telling you this, though…….muddling along for two years treading water financially SUCKS. I had no real illusions about retirement, but for sure I know it isn’t going to happen now. If for no other reason, the two pension plans that I’m vested for are going to get stolen by the banksters, one way or another.
Congrats GS.. My brother just drove to North Dakota to take a 3-month job refurbishing oil pumping stations. He was at 7-months looking.. mortgage payment, 2 kids.. I feel for ya man.. buckle down and save your pennies.. you will make it..
A bunch of the younger guys from around here are heading the same direction. All kinds of contractors servicing oil field and railroad equipment hiring up there.
One thing I noticed, was how quick your so-called “friends” seemed to disappear, the longer this thing strung out. I’d sure like to see what the current suicide rate for 40-50 somethings who have been out of work for 1-2 years is. Of course, along with every other government generated number, I’m sure its being manipulated.
I’ve noticed the same thing in my own life.
A few weeks ago, I was telling a group of people who I consider to be friends about my participation in a weekly event’s drawing. Local merchants donate the prizes, and hey look! I won! Twice, in fact!
I won two gift certificates, for which I was most grateful. Why? Because, with those certificates, I was able to afford new socks.
My friends have continued to be friends, and this hasn’t always been the case after I’ve shared stories like the sock story. I’ve had more than a few folks who I thought were friends become scarce. Or disappear.
In good times, your friends know you. In bad times, you know your friends.
“…muddling along for two years treading water financially SUCKS.”
Been there, done that, agree. But there is life after unemployment. Enjoy!
“of course, this requires going back back to a 2004 pay rate”
Could be worse. I just clawed my way back to my 2001 pay, ten years after getting laid off and taking a huge pay cut in the replacement job. If I get a decent raise this summer (and I might) I will be finally ahead in nominal $$$. That said, I don’t ever expect to recover the purchasing power I had 10 years ago. I have made the required adjustments to my standard of living expectations.
And before I forget, congrats and good luck. It ain’t easy doing what you just did.
Fortunately, this blog gave me enough info to realize what was going to happen, and get some financial ducks in a row in time.
That, and to realize that this wasn’t going to be any run of the mill recession, and that I’d probably be out of work for a long time, no matter what the talking heads said.
Like many other fields, about 50% of the guys in it are still looking for full time work. Nobody is hiring or training the newbies. Which means that when all us old guys keel over/retire, the newbies will have to train themselves by trial and error.
I’ll probably be driving a lot in the future……
“the newbies will have to train themselves by trial and error”
I’m not likin’ the sound o’ that, considering the what results of errors in your field.
But congrats!
Could’ve sworn I wrote a Yay! and I’m so happy for you in here but it’s not showing up. So I’ll go for try #2 and say I’m glad you have some relief on that front.
Thanks.
I get the feeling that your story is a lot like mine. In that, since the 80s, you have seen your job’s workscope/workload/responsibility expand, but have seen your pay basically frozen, at best. The 90s to guys like us was a decade of 6% inflation, but 2-3% “pay raises”.
I’ve been in the work force since 1973. The job market has been in a recession for probably 2/3rds of that time. I’ve got 32 years of experience in a field where your knowledge really doesn’t become “obsolete”, but I’m getting paid (inflation corrected) less than I was as a newbie in 1979.
I’ve seen the financial industry turn into the giant, blood sucking, squid that it is today. Starting with the merger and leveraged buy outs back in the 80s.
No matter how badly managed this stuff was, or how badly they screwed over the employees of the companies they bought out, the Wall Street Banksters always seem to walk away with all the cash.
No matter how badly managed this stuff was, or how badly they screwed over the employees of the companies they bought out, the Wall Street Banksters always seem to walk away with all the cash.
Where’s SEAL Team Six when ya need it?
Pointing their guns in the wrong direction.
Through the late 90’s I was hanging in there, getting decent raises. College tuition at local State U’s was in the $2000 range (per year). I was saving 10% + 6% match in to the 401K. Annual vacations were the norm in our household.
Then in 2001 the house of cards collapsed. Was laid off, and while lucky enough to find a new job within weeks I had to take a 30% pay cut. A lot of things changed after that. Vacations became infrequent (the last one was in 2008). State U college tuition skyrocketed, nearly quadrupling by the time my kids started (still “cheap” when compared to the local private U’s that charge up to 30K). I used to have health insurance where an office visit was a $10 copay and pharmacy was covered at 100%. Now I pay more out of pocket for an HD plan with a $3000 family deductible. The only reason I have a late model car is because I got it for 60% of MSRP when Pontiac was shut down.
And I’m one of the lucky ones.
I was a salaried exempt at one of the Wichita OEMs during the 90s. Didn’t matter how you performed on your performance review, everybody got the same 2-3% “raises” and no COLAs.
Left for a couple of reasons…….
-The career/promotion track got screwed with.
-Got tired of working 700-800 hours of O/T a year, when a newbie working fewer hours made more money than I was. Had to cover the shop on Sat/Sun every fourth weekend. I’m pulling straight time, all the guys working for me are pulling time and a half/double time.
One of my co-workers had an aneurysm, another hung himself. It got to the point that I started getting bad headaches around 2:30 every day, about the time I had to start heading for work. (Funny, they went away when I changed jobs). Knew if I stayed, the place would end up killing me too, so I baled.
My story is not untypical of how things are run in the US anymore. Run your lower and middle level managers into the ground while they try to keep the wheels from falling off.
It got to the point that I started getting bad headaches around 2:30 every day, about the time I had to start heading for work.
Few things are worse than having a job like that. I had one once (the one I landed after I was laid off). I recall the feeling of despair seetling in every Sunday night. Fortunately I got out of there after 18 months. Curiously, a few months after I quit the owner fired his management team and hired new, even more predatory guys to replace them.
Happy for you fixer…
Local news:
After 657 days, the fixr has a full time job again.
(of course, this requires going back back to a 2004 pay rate)
He even get health insurance!
The long personal nightmare is over……..
Yayyyyyyy!
And, Fixer, if I ever find out that I’m about to board a plane that you’ve worked on, I’m not just going to walk on. I’m going to run and have a big smile on my face. Because it would be a privilege to ride on any aircraft that you’ve had a role in.
You’re good, man. May many more good things come your way.
glad about the job too.
Congratulations. Delighted for you. Really and truely delighted.
Start making a few doc appointments as soon as that health insurance kicks in. I know you’ve said you have been ignoring things.
-Polly
P.S. I made more in 1996 than I do now.
Congrats on the job. I hope that it’s closer to where you live so you won’t have to keep up your long, expensive commute. Wife’s about to go back to work and I don’t relish the idea of paying for the gas for her commute!
The folks I’ve been contracting with decided to turn it into a full time position. Which is one of the reasons I took the contract position to begin with.
I could have told them that, but they listened to their Used Airplane Salesman. (Hey, it was their first airplane).
First priority will be to buy a house.
Just kidding.
Yaaaayyyyyy!
Congrats.
Business has been dead here for 2 months. Have a beer for me.
Good job!! I am still hunting and yes, looking to make half of what I was.
Okay, AVOCADO, you’re on my “Yay!” list too. I’m looking forward to the post that says you’ve found something good so I can cheer for you too.
And, while we’re on this cheerful subject, I just finished a website project that the client back-burner-ed six months ago. I’m also in hot pursuit of another client, whose project has been moribund for almost as long.
Also have two more projects that need completion (working on ‘em!) and I landed a nice, juicy new project last week.
So, life is looking a bit brighter around here.
Which is good, because I just put out almost $200 bucks to get my cooler going for the summer. (Its water line needed a bit o’ work, and that kicked the price up past what it usually is.)
Husband’s current job pays about what he made in’98. Fortunately the kids are grown, so that helps some.
Good luck, Avocado! Keep your chin up.
Hey, congrats! You always sounded like a no-nonsense down to earth guy in your posts. Just the kind of guy I’d have loved to work with. People like you SHOULD have jobs. Certain other long unemployed whiners on this board make a strong case for why they AREN’T unemployed.
Certain other long unemployed whiners on this board make a strong case for why they AREN’T unemployed.
That should read AREN’T employed.
“After 657 days, the fixr has a full time job again.”
Gosh, you’re lazy. I guess you were living it up for 22 months.
Congrats, fixr.
Congrats on the job X-GSfixr!
X-GSfixr
Congrats X-GSfixr!
Gulfie!
I’m so happy for you, I could just spit!
Hope this one works out a WHOLE lot better for you than the last one did, and that you get yourself back to where you want to be. And no dumbazz boss, either.
Best.
Warning PDF:
NY Fed Q1 Report on Household Debt and Credit (30 pages w/some individual state charts)
Of course we know shadow inventory and moratoriums skew the picture. Still worth a look-see.
Um about that link to the PDF file:
NY Fed Q1 Report on Household Debt and Credit
http://data.newyorkfed.org/research/national_economy/householdcredit/DistrictReport_Q12011.pdf
Cartoon that explains the teacher (and public union) bashing perfectly:
http://drlapin.org/BuenaVista/Teachers.jpg
Uh, not exactly.
More like public employee union members with retroactively enhanced pensions and CEOS with stock bonuses pointing at each other, and running off with loot.
If you are in SF and are a teacher, you probably pay 9 percent into your own pension, will pay California state income taxes on your future pension income, won’t get Social Security, and will have to work beyond age 55.
But in New York, things are rather different. Hence my different cartoon.
But no one is making any distinctions about the relative degree of guilt between the public employee unions and the taxpayers in different places. If they did, the NYC teachers would be in deep doo doo. And BTW, the former head of the NYC teacher’s union is now the head of the national teacher’s union.
The New York Times had an article over the weekend about how California teacher pensions are not excessive. They haven’t had any articles about what has happened to NYC teacher pensions for some reason.
I would say that in most states the original cartoon is very applicable. Even here in the Centennial state , where taxes and teacher pay are low, teachers are demonized. My HS aged son was and is still considering a career as a high school teacher, but is having second thoughts as he’s watching his own teachers get laid off and have their pay cut.
Public-sector pensions vary.
The only constant is that the plans are underfunded. And who, pray tell, had control over that?
In New York, the unions who control the state legislators, that’s who.
Which is why all those retroactive pension enhancements passed without a single “no” vote.
It’s not just about salaries, though. The entire teaching profession has been demonized even before the pensions and union bashing began.
What is going on with public schools is part of a larger, systemic effort to privatize education. PTB will not be satisfied until all health care, education, and retirement is privately-run.
There may be money in public education for the bigwigs (administrators, consultants, union leaders) but I don’t see any of my colleagues getting rich.
The point of public education is to have an educated populace - A NECESSITY FOR DEMOCRACY.
The corporatacracy want to gut public education.
I would say that in most states the original cartoon is very applicable. Even here in the Centennial state , where taxes and teacher pay are low, teachers are demonized. My HS aged son was and is still considering a career as a high school teacher, but is having second thoughts as he’s watching his own teachers get laid off and have their pay cut.
“health care, education, and retirement is privately-run.”
Don’t forget prisons and bottled water, and they are trying their darnedest with energy. btw, I notice these are all NEEDS, and dire needs at that. If they invested in wants or even mild needs, the public would walk away. So they speculate in true needs.
These vultures are no different than the guys who charge gouge prices for ice during a power outage.
http://prudentbear.com/index.php/thebearslairview?art_id=10534
“There appear to be two possible trajectories. On the one hand, Bernanke may be right and the rise in global commodities and energy prices may be temporary (but this has other unpleasant implications, as I will get to shortly). On the other hand, if the current trajectory of commodities prices, energy prices and price levels in general continues beyond the end of the year, then by early 2012 it is likely that prices will be rising much more rapidly than in the 1970s, with the Fed panting helplessly in pursuit.”
This guy is not far off, IMHO.
In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago.
The reason: liberal bureaucrats place such absurd restrictions on raising rent and evicting tenants that property owners (if there is such a thing under liberal tyranny) are going Galt.
Increasingly, small-time landlords like [Wayne] Koniuk [who has been prevented by landlord restrictions from freeing up a room for his own son in his own building] are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades.
“Vacancy rates are going up because owners have decided to take their units off the market,” said Ross Mirkarimi, a progressive member of the Board of Supervisors. He attributes that response to “peaking frustrations in dealing with the range of laws that protect tenants in San Francisco that make it difficult for small property owners to thrive.”
Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.
Where you have government coercion, you will have ruinous consequences, even if they are often unintended. Where property rights are infringed, you will have injustice and waste. Yet no matter how many times this is proven, the liberal commitment to ham-fisted coercion remains inviolate. This is because coercion is not a means, but an end
http://www.moonbattery.com/archives/2011/05/san-francisco-l-1.html
This will be a fun fight. The other possiblity is that more and more rich people have pied a terres in San Francisco, and weren’t around when the Census Bureau came knocking.
Whatever the reason, the growth in vacant units is not in the vacant for rent or vacant for sale category, here or elsewhere.
I didn’t read the whole article because it’s too bone-headed to waste that much time on. $XX is better than $00. If you are a landlord who can’t figure that much out, then there is something wrong with you.
I was wondering about that myself. Unless you’re a bankster, an non performing asset is a very bad thing.
Some on this board say that SF is the only place that’s decent to live. Then bitch about the rent/price of real estate.
Can’t have it both ways. That’s what makes the USA great. You can live in the People’s Republic of San Francisco, or the Banana Republic of Texas. Os someplace that fall somewhere between the two extremes.
The number of places that remain vacant for years here in SF is atounding. Rents are high here - I mean really high. A SFH in a decent nabe can fetch 3K a month.
Who are these people keeping all these places vacant and how can they afford it?? It is truly mystifying.
I didn’t read the whole article because it’s too bone-headed to waste that much time on. $XX is better than $00. If you are a landlord who can’t figure that much out, then there is something wrong with you.
Prop 13 makes it easier to leave rental stock vacant.
$XX is better than $00. If you are a landlord and can’t figure that much out, then there is something wrong with you.
OK, Big V, I’ll pay you $2/hour to spend all your free time running errands and doing chores for me, mowing my lawn, washing my clothes and dishes, getting me groceries, etc., etc.
What, you’re not interested? You’re not making anything in your spare time, isn’t something better than nothing?
The rental produceds passive income, dear. If you think you can get more for your money elsewhere, then you should sell it. Otherwise, renting it out is the only thing that makes any sense.
The vacant inventory is due to REO.
It’s not very passive when you have to be constantly fixing damage from tenants and fighting them in court when they don’t pay rent.
As for selling, well the problem is the wishing price effect we all know and love. There are plenty of vacant houses where I live in the Lehigh Valley, some investor owned. If the PTB would let the market crash and burn the way it should, we could start to clear out this inventory.
It’s not very passive when you have to be constantly fixing damage from tenants and fighting them in court when they don’t pay rent.
That’s what always torqued my former landlady’s jaw. Given all the “fun” she had dealing with her other tenants, it wasn’t passive income at all.
Ah, so the truth comes out. The problem is not with liberal policy, the problem is with wishing prices. I see now.
The race to the bottom is getting so intense that even Chinese workers are too expensive.
http://www.businessweek.com/magazine/content/11_20/b4228039775369.htm
“Foxconn workers in Shenzhen aren’t the only ones getting raises; pay has been rising in other cities, too. “The coastal areas are facing the worst labor shortages for three decades,” Credit Suisse economist Dong Tao wrote in a May 1 report. Gou, 60, has been shifting production away from southern China toward interior cities such as Chengdu, Wuhan, and Chongqing, where labor is about one-third cheaper.”
Wanna bet that cabbages, rice and noodles aren’t one third cheaper in China’s interior?
I wonder how long until our iToys are made in sub-saharan Africa?
I think the NASA budget should be cut to zero.
God help us all, if they discover a race of humanoids, who work a 36 hour workday, have six hands, and process human verbal BS into nutrients.
The MNCs will be building giant space container ships, to haul all the stuff here.
Ships that will be paid for by Joe Q Taxpayer, of course.
The CDC is using banksters instead of lab rats for testing Ebola virus samples. Because the lab techs were getting emotionally attached to the lab rats.
You do know that China has been making heavy, physical investments in South Africa for years, right?
I wouldn’t worry too much about Africa. Africa makes the Middle East look like a peaceful, united, happy place.
Africa was just a rhetorical alternative, being that it’s probably on the bottom of the list due to its inherent instability.
But where will they move the factories once inland China becomes too pricey? Latin America is far too expensive, I guess there’s IndoChina still. Maybe Uganada will be the next big offshoring hub?
The current migration is to former Eastern Bloc countries and has been for several years.
Believe it or not, it turns out that for higher end production needs, they are cheaper than Chindia.
I’ll bet 10 to 1 this will require a bail out at some point
Captives provide insurance to their parent companies, and the term originally referred to subsidiaries set up by any large company to insure the company’s own risks. Oil companies, for example, used them for years to gird for environmental claims related to infrequent but potentially high-cost events. They did so in overseas locations that offered light regulation amid little concern since the parent company was the only one at risk.
Now some states make it just as easy. And they have broadened the definition of captives so that even insurance companies can create them. This has given rise to concern that a shadow insurance industry is emerging, with less regulation and more potential debt than policyholders know, raising the possibility that some companies will find themselves without enough money to pay future claims. Critics say this is much like the shadow banking system that contributed to the financial crisis.
Aetna recently used a subsidiary in Vermont to refinance a block of health insurance policies, reaping $150 million in savings, according to its chief financial officer, Joseph M. Zubretsky. The main reason is that the insurer did not need to maintain conventional reserves at the same level as would have been required by insurance regulators in Aetna’s home state of Connecticut.
nytimes.com/2011/05/09/business/economy/09insure.html?_r=1&hp
I’m going to become my own “shadow work force”
Take on a job for the big bucks, set up a LLC, then pay a untrained 12 year old under the table to do the work for me. Better yet, have them pay ME to attend my new “magnet school”.
Doesn’t have to work forever. Just long enough for me to score big, then GTFOOD.
You have problem with Corporate Communist Capitalism©®™, comrades?
So, some Muslim clerics are getting their panties in a twist over how OSB was “buried at sea”.
Another US crime against humanity.
Never mind that there is a significant portion of the US population that would have been okay with putting his head on the end of a pole, marching it in a parade down Broadway, wrapping the body in bacon, having an old fashioned bonfire, and mixing the ashes with some pig feed.
Never mind the standard mutilation of about every US prisoner that the Iraq insurgency and Taliban can lay their hands on.
In my mind, it’s a square deal. Nobody’s happy.
Yum! Bacon wrapped bbq! If they paraded him down the main street of Green Bay, there’d be nothing left for the pigs!
ps: congratulations on the job, brotha.
I liked Jay Leno’s “Now he get to swim with the seals”
(OSB was “buried at sea”.)
Not sure why this made the news but figured I’d pass it on as it’s two more quick sales in the area:
Former Barenaked Ladies singer Steven Page sells house in Fayetteville, moving to Manlius
Fayetteville, N.Y. — Former Barenaked Ladies singer Steven Page and his girlfriend, Christine Munn, have sold their Fayetteville home and plan to move to Manlius at the end of the school year.
In June 2009, Page paid $265,000 for the four-bedroom, two-bathroom brick house at 309 E. Genesee St., in Fayetteville, according to Onondaga County real estate records. The historic home was listed for $260,000 by Hunt Real Estate; the sale price hasn’t been disclosed yet.
Munn said Monday that the home the couple purchased in the village of Manlius is larger, and has five bedrooms. One of those bedrooms will be turned into a studio for her to work on her sewing. She makes customized cloth diapers and accessories and has a website, esbaby.net. Munn declined release the address of their new home.
http://www.syracuse.com/news/index.ssf/2011/05/steven_page_former_barenaked_l.html
Hmmm, I was wondering what was up with this band. Sounds like they’ve gone through a few personnel changes.
I’m of the mind that a concert billing featuring the New Pornographers and the Barenaked Ladies would be a hoot. And we have a few local bands with suggestive names that would jump at the chance to be the warmup act.
The band, w/o Steven, is touring right now. They were up at the nearby Turning Stone casino about a month ago.
This brought back some memories for me. When I was in college we went to Toronto to record because of the exchange rate. Because of this, we were able to hire Everett Ravenstein as a producer and record at his country place. Amazing experience. BNL recorded there, but that didn’t excite me as much as the fact that Rush did a bunch of stuff (Presto) there.
Upstate has been the “Barenaked Belt” for quite some time. In the 90’s they would grill throughout their shows. They’re pretty funny, too. You go anywhere else and practically nobody had heard of the Hip or BNL, but they damn near sold out Buffalo every time they played the arena (was HSBC back then). I pitched BNL a song back then, but it went nowhere.
Long story short: I just realized the dollar’s purchasing power has been halved since my college days… I hear helicopters…
My bad, USD is .96 CAD, back then USD was about 1.50 CAD…
$ story painful nonetheless.
BNL wasn’t totally unknown. When we lived on the Cape I remember what I think was a free concert they did in government center in Boston. It was a wall to wall people
and tv coverage looked like they had great fun.
I seriously need to get out of Florida (with a nod to Alpha):
“A conservative billionaire who opposes government meddling in business has bought a rare commodity: the right to interfere in faculty hiring at a publicly funded university.
A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5-million for positions in Florida State University’s economics department. In return, his representatives get to screen and sign off on any hires for a new program promoting “political economy and free enterprise.”
http://www.tampabay.com/news/business/billionaires-role-in-hiring-decisions-at-florida-state-university-raises/1168680
Buy the media (Faux News), astroturf the internet (’it’s impossible to tax the rich- and socialist!’), field fake grass-roots political movements (Tea time!), then take control of the universities.
It’s a good thing we let the mega-rich have such low tax rates, since they do such productive things with the excess money. Like take control of our country.
“Like take control of our country.”
In the name of freedom, no less.
Remember to bend the knee when the chariot rolls by.
Same thing’s happening here in Tucson. Our local alt-weekly just did a story:
Freedom From Regulation? The Koch brothers pump money into a new UA center
And, if that headline doesn’t make you barf, this part of the story will:
In an interview with the Weekly, Schmidtz characterizes the Charles G. Koch Charitable Foundation as a minor Freedom Center patron, having pledged a mere $1 million. But among the center’s other contributors is a major donor whose identity Schmitz says has been kept secret, even from him.
To learn more about this secret donor—and to find out about any other Koch donations to the school—we contacted Stephanie Balzer, communications director for the UA Foundation.
In an e-mail reply, Balzer sidestepped the question about other Koch donations on campus. She also would not identify the mysterious donor, writing that “we do not disclose any information about anonymous gifts to the University of Arizona Foundation.”
Here’s why:
My last full-time job was with the UA Foundation. And I worked in the communications office. Which meant that I would have hand in publicizing generous gifts like this one. (Yes, that last sentence is meant to be sarcastic.)
Jeez, I hope Ayn Rand’s rotting zombie corpse isn’t going claw her way out of the grave and come after me for saying this, but these guys are starting to make Soviet Russia look good. At least in Russia they had an upside to compensate for their omnipresent commissars enforcing a suffocating and corrupt ideology, ie their people were fed, housed, and had free education and health care.
We seem to be headed for the *worst* of all possible economic systems.
Whoops, that was supposed to be a response to Muggy’s comment about the Charles Koch & the FSU.
Yeah, good point:
Soviets: we pretend to work, they pretend to pay us
Kochistan: they work, we pretend to pay them
As for Rand, naw, she won’t be back; being undead for you is burdensome, why can’t it be enough for Ayn to be dead just for herself?
Yah never know! Just remember: head shots.
I’ve come to the sorry realization that the Cold War kept us on our best behaviour to demonstrate to all those 2nd and 3rd world potential allies and satellite countries that our system was the best way to go. We had an ideological competition going with the russkies. Now that the those bad old russkies are just another block of nuclear tipped oligarchs, we have set our economic sociopaths loose to rape, pillage, burn and kill without restraints of any kind. And our favorite trading partners in China are still unapologetic, unreformed communists using more or less slave labor to create the good we crave. IPad tovarich?
Interesting - A segment on CNBC online that doesn’t sound like a sales seminar presented by the NAR or the banks. Very unusual. On local radio, any stories about housing - except for the most recent story about the housing price drop, from Zillow - does two things: 1) Laments the drop in housing prices, talking about how it’s an unequivocally bad thing, with the hosts voicing approval, and 2) Urges the listener to get out and buy because we’re “bouncing along the bottom” and prices aren’t going much lower than this. This piece was a bit different, a bit more reflective of reality.
FYI, this is a link to a video, with sound, and second, if the link is bad, you can probably google “banks blocking housing recovery”, which is the title of this segement:
CNBC’s Diana Olick has the details on the drop of home value and insight on whether banks are standing in the way, with Matt McCormick, Bahl & Gaynor Investment Counsel and Susan Wachter, Wharton Business School
http://finance.yahoo.com/video/cnbc-22844419/banks-blocking-housing-recovery-25170322
Every so often, we get to see a pie chart of government spending, broken out by entitlement spending, defense spending, and other categories. Does anyone know of one with the Wall Street/housing bail out category included?
I’m curious to see get an idea of much longer the government can keep up the artificial inflation of real estate/Wall Street and what kind of percentage it is of the federal budget.
* LAW
* MAY 10, 2011
Reports of Mortgage Fraud Reach Record Level
By ROBBIE WHELAN
Reports of mortgage fraud, which have been increasing since the housing boom, rose to their highest level on record in 2010, Treasury Department figures showed.
The Financial Crimes Enforcement Network, a Treasury agency, reported 70,472 “suspicious activity reports” related to suspected mortgage fraud, up from 67,507 in 2009, or a 5% increase. That’s the highest number recorded by the government since tracking began in 1996.
At the height of the U.S. housing boom, in 2006, more than 37,000 fraud reports were recorded. In 2001, before the housing market heated up, there were 4,695 reports of suspected mortgage fraud.
Much of the suspected fraud being reported took place several years ago and is only now coming to light, according to Lexis-Nexis’s Mortgage Assert Research Institute, a data service, which issued a report Monday highlighting the statistics.
The past suspected frauds are surfacing as financial institutions and mortgage lenders, still handling a high number of mortgages falling into default and foreclosure, take “a look back to see if people misstated or misreported their income,” said William Grassano, an agency spokesman.
Fraud artists are refining their schemes to take advantage of market distress, the report said. For example, some real-estate brokers, in a scheme known as house “flopping,” target homes that are underwater—meaning their owners owe more than the market value of the house—and obtain artificially low valuations of homes.
Then, using these valuations, the brokers convince the lender to agree to a short-sale, in which it sells a home for less than the mortgage. The buyer, in turn, quickly sells the home at market value, profiting, along with the broker, from the difference in sale prices.
“If people are about to lose their jobs or lose their homes, there are scammers out there who are ready to go in for the kill,” said Grassano.
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