Bits Bucket for May 11, 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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Re-posted for the morning crew:
Best place to buy a home right now - Rochester, NY
http://www.forbes.com/2011/05/09/best-places-to-buy-a-home-now.html
Worst place to find a job - Rochester, NY
http://realestate.yahoo.com/promo/worst-cities-for-finding-a-job-in-2011.html
That there is hilarious Muggy.
Says it all.
You’re screwed whether you are in Rochester or NYC, but in different ways.
That’s precisely the issue with this entire debacle. If you want to work, you will pay the toll booth a kings ransom for shelter.
So much for businesses moving to “low cost” areas.
Like you said yesterday, if NY were really so oppressive, why is IBM here?
The truth is that the CEOs don’t want to live in Wichita KS or Amarillo, TX. They like their big city lifestyle, with its fancy restaurants, entertainment and shopping options. A Texas Roadhouse, a metroplex and a mall with a Dillards and a generic Macy’s doesn’t cut it for them.
It’s a great time to retire!
There has never been a better time to buy a bicycle.
You’ve got that right.
A very nice fellow recently opened a bicycle shop just north of the University of Arizona campus. And it’s proven to be such a success that he needs to hire help so he can step back from the day-to-day tasks and work on the business.
Apparently, there has never been a better time to steal my bicycle. Two in two months. But the new one is never out of my sight.
Anybody else doing Bike to Work Day tomorrow from Marin to SF? I’m in a convoy of two so far if you want to join. 20 miles = 1.5 hours…
Only if you live where it’s safe ti ride one.Sadly, I don’t.
We’ve been working pretty hard to make it safer where we live by joining and supporting the local bicycle coalitions and volunteering. We’ve gotten new bike boxes painted, traffic diverted, new bike lanes, parts of the city excluded from automobiles on summer weekends, etc.
We still have some catching up to do when compared to other US cities and many foreign ones, but it’s happening.
Yup home affordability is tied to job availability. Would either author discuss the influences brought on by the other measure? Add in escalating taxes to the mix, shake well and watch the implosion.
Thanks for the laugh this morning, Muggy.
Naw, we are all going to get mega-paying bureaucrat jobs in DC. ” DC will encompass the World ” seems to be the plan.
I was talking with my brother, who lives in Raleigh NC, about how dismal the job market is over here in the Centennial state. He seemed surprised to hear that. He recently changed jobs, getting a nice pay increase in the move. He was genuinely surprised to hear that things are still “tough” out here.
I reminded him that flyover country is very far away from the “beast ” (DC and NYC) and that consequently we get a lost less “trickle down” from all the deficit spending and bail outs.
I also know a guy who was a city attorney in Ft. Collins. He recently landed a Federal job that pays about twice what he was getting and is in the process of moving the family to the DC area.
For some people the good times are still rolling.
here on the other coast in high tech land I feel I might as well be working for the Chinese
they buy most of our stuff. I think we re-ship out of asia to get a 5% tax rate.
huawei the 800 lb gorrilla of telecom
“He recently landed a Federal job that pays about twice what he was getting and is in the process of moving the family to the DC area.”
Try to stay in touch with this guy if you can. The howls about the cost of living here in the DC area will be very amusing. If he isn’t paying an absurd amount to live under a roof, he will be commuting 2 hours each way. There are a few fed jobs far enough out in the burbs that you can live in an area with reasonable housing costs and not spend your whole life in a car or train, but they are not that common.
“For some people the good times are still rolling.”
Yes. And they are the first to wonder why everyone is being lazy and complaining.
“Try to stay in touch with this guy if you can. The howls about the cost of living here in the DC area will be very amusing.”
They lived there before and are equity rich. Their Ft. Collins house was a paid for McMansion (he’ll probably have to sell it at aloss).
He’s also a retired Air Force Officer (he was a JAG or something like that).
They don’t worry about money.
He’s also a retired Air Force Officer (he was a JAG or something like that).
They don’t worry about money.
One of my friends is a retired USAF officer. He doesn’t seem to worry much about anything — just a real happy-go-lucky sort of guy. OTOH, his wife seems to handle the worrying duties for the two of them.
Rochester; meet Buffalo.
This bubble was just an intermission in the decades long slide into decay for Western NY. The NY countryside is a great place to live when you pay little or no real estate taxes and get your income from somewhere else.
The winery bubble seems to be deflating finally. A couple of tasting rooms still being completed from last year and I don’t see any new ones breaking ground.
The winery bubble seems to be deflating finally. A couple of tasting rooms still being completed from last year and I don’t see any new ones breaking ground.
My mother and father are both born-and-raised New Yorkers. Mom’s from Tough-a-lo (Buffalo) and Dad’s from Yonkers.
They wouldn’t drink CA wine on a bet. It’s gotta be NY State wine or it isn’t wine.
Now, mind you, I’m more of a beer gal than a wine snob, but I have to admit that the folks have good taste in NY wineries.
Well, if you are of the opinion that good wine comes from vines that have had to overcome the hardship of making it in tough soil with lots of rocks in it, then New York is the way to go. The glaciers left upper NY state quite a bounty of rocks the last time they retreated.
Rochester NY is my hometown, and I’d move back in a heartbeat if I could. Good schools, nice area, great things to do but it gets a lot of snow, which causes the wimps to move to Florida and Arizona. Personally I’d take the snow over living in Florida any day!
Sean, are you in Florida? I am in the St. Pete (originally from Pittsford/Mendon) area and agree with you 100%. I don’t know how long you’ve been on the HBB, but I’ve been posting for years that I would move back if I could.
I have a buhzillion friends in the same position.
No, I live outside of DC now, but originally from Henrietta. I would move there tomorrow and buy a place on Conesus Lake if my wife could find a job up there (hard to do in her field of work). People see Florida as sunshine, beaches and parties - I see it as old people driving slow, strip mall after strip mall, idiot rednecks and sweating your “you-know-whats” off every day. I’ll take January in my snowmobile blazing across the Southern Tier over hicks stumbling around A1A or Ybor City any day.
My friend is a realtor in Rochester and he says things are moving along up there, not at a blazing pace but its moving. Looking at his listings and comparing what I would get around the DC area for the same price is just sad.
Not much of a HBB poster, but I do enjoy this website. Gives great perspective on the housing market and I enjoy reading Bens thoughts.
From May 23 Forbes, page 38 (sorry, no link):
Wonga: Bankers are passe’. Let’s let computers decide who gets loans.
The article tells of a couple of guys that came up with an computer algorithm that would sidestep the human decision making process of deciding who to make a short-term loans to (and who not to make them to) and instead turn this decision process over to a computer. The computer rejects 70 percent of the applicants, and of the ones it does accept it charges an annual percentage interest rate of …
FOUR THOUSAND PERCENT!
This is in Britain. It’s not coming to the U.S. because, according to the article, the regulatory environment is too shaky.
4000% sounds about right to me.
“4000% sounds about right to me.”
Then one of us is nuts.
“Then one of us is nuts.”
Now we are starting to make some progress.
I would imagine that the computer took inputs of likely default rates, collection costs, and a desired return on risk capital and then just calculated the required rate.
I don’t believe they force people at knife point (because there are no guns in Britain) to sign the loan docs.
Besides, the limeys live in a socialist workers paradise with free healthcare and council housing, whyever would a person need a payday loan?
The actual rate is 4214%. Wonga is a pay day loan site, the longest loan they will grant you is 30 days. In the UK we have recently had an explosion of advertising for pay day loans, most are unsecured loans but some will advance you money against your car/van/motor bike.
Thank you for the overseas info! Are payday loans as prevalent in the England as they are in America?
Whats the difference between payday loans and illegal drugs ?
Thats right nobody forces you to take it
I’m not sure if they are as prevalent in the UK as the USA. All I can say is that over the last few years we have had a explosion of advertising for pay day loans, loans secured on your car and sell your unwanted jewellery ads. I’ve also seen a rapid rise in pawn brokers and cash converter type shops.
If you visit the average small town high street in the North of England, the mix of shops would be fast food, charity shops selling second hand goods , the odd craft shop, a cash converter type store, lots of bookies (place you can bet) and the odd run down public house.
Times are tough here, as with the USA we believed we could all get rich selling houses to each other. Now reality has hit and people are desperately trying to keep a float, although to be fair a lot of people are still just floating down De Nile, but the crocodiles are circling and every so often you see someone disappear under the water.
Pay day loans, loans on vehicles and sell you old broken jewellery advertisements have become much more common in the UK over the past few years. Other growth areas for advertisements are, where you mis-sold a financial package (you may be entitled to compensation), have you had an accident (where’s there blame there’s a claim). If it wasn’t for this type of advertisement I think commercial daytime television would fold.
On the high street of most small northern (and from what I’ve seen a lot of the poorer southern towns), there has been an explosion of pawn brokers, second hand charity shops, book makers (gambling), cash converter type shops and fast food outlets.
Reality is hitting and we have discovered that you can’t get rich shipping of all your industry to China and India; and you certainly can’t get rich selling houses to each other.
Thanks!
When those high streets are full of nail places and Chinese restaurants, then you will know that you have arrived.
Sorry forgot the tattoo shops, sun bed/nail haunts (latest crazy is fish pedicures). The fast food joints are mostly Indian, but we have are fair share of Chinese restaurants and chippies.
Sounds EXACTLY like America.
Aaaaah, the vig is back.
http://finance.yahoo.com/news/Treasury-No-fire-sale-of-gold-cnnm-3965952837.html?x=0&sec=topStories&pos=8&asset=&ccode=
“This just in from the Treasury Department: The United States will not be unloading its nearly $400 billion stash of gold to delay hitting the debt ceiling.”
Truthspeak or truth?
That would cover what? 2-3 months of deficits?
They might as well keep it, it’ll be worth a lot more (in USD) in the near future.
It is just talk to manipulate the price of gold lower. There is a real question on whether it has already been leased out already. I remember a while back there was talk of doing an audit of fort knox but that went no where.
Interesting. Why bother to deny it unless it is actually a possibility. I guess it may happen, but not until about $5,000 per ounce.
But Treasury is already warning lawmakers that holding a giant yard sale of government assets isn’t a responsible move.
Certainly not responsible. But legal, unlike many other responses to mandated spending and mandated lack of authority to borrow. And in the absence of other legal options, that might be what’s left. Certainly if Timmy threatened to do this it might put pressure on Republicans to approve an increase in the debt limit. Normally, of course the laws of supply and demand would mean that any selling of the gold stockpile would cause the price to plummit. But since this would tend to decrease demand for dollars at the same time, the reduction of the dollar price would be moderated somewhat. What other assets can the government sell? Naming rights to the national parks? Goldman Sachs/Gate park anyone? Exon/Mobil National Wildlife Refuge? The NationsBank Capitol Building?
Maybe they could get some lease/back deals like the state of Illinois. What could they get for the Grand Coulee Dam? The Levees on the Mississipi?
“What other assets can the government sell?”
It owns a lot of land, with mineral rights.
Finally we can get rid of these commie national parks and end their unfair competitive advantage over privately-owned parks.
I bet a Chinese company will pay good money for the Grand Canyon.
Time to make a list of stuff the government can sell……the Defense Department has all kinds of cool toys.
- A couple of our retired aircraft carriers to India. (Heard a deal to sell one was in the works)
Better yet, give it away, in exchange for selling them an Air Group of Super Hornets, and Hawkeyes.
-M-60 and early M-1 tanks to the general public. One per customer. Be the first on your block.
A guy down the street from me has an M35 deuce and a half and a CUCV. The other day I passed a house that had what looks like an old M3 White Scout Car in the driveway. That one didn’t look driveable though.
The White House website lists several hundred unused small buildings that the government is intending to sell/abandon to save money. Like the 10×30 ft warehouses on one of the Civil War battlefields.
Man, they better be careful what they try to sell. Developers have been drooling over those battlefields for years, becuz they aren’t making any more land within commuting distance of DC, you know. They think we’re all going to camp out for the opportunity to snap up a luxury condo on Antietam.
When I win the lottery, I’m going to Yugoslavia and find either an M-36, or M-18.
“I bet a Chinese company will pay good money for the Grand Canyon.”
They can license with Disney and call it “Disney’s Grand Canyon Adventure”
Put some condos right along the edge…a few waterslides…
The Free Market, baby! Just get out of its way!
Please note: always replace the word company with military when preceded by the word Chinese!
Pay? Heavens no, they’ll just agree to a long-term “Chicago Parking Meter” arrangement for the admission fees.
Speaking of GoldmanSachs, Matt Taibbi has another scathing article in Rolling Stone this month. They are the new Public Enemy No. 1:
http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511
In the article, he brings up the story of an austrailian hedge fund who got ripped off for $100 million.
Which brings up a question in my mind. Why have no foreign governments charged GS with fraud?
Maybe the PRC should come up with a few indictments. They shoot people over there, using an express line. You can’t tell me that the banksters didn’t screw the Chinese like they did everyone else.
Charges…..arrest warrants……requests for extradition. No escape. Wonder how the DOJ would handle that request?
Even if they just get 30 years, the possibility of banksters being torn from their Brooks Brothers and $500 lunches, and thrown into solitary wearing black pajamas and eating rice from a bowl with fingers and chopsticks would make everything worth it…..
Actually, the Chinese now use mobile vans to execute prisoners by lethal injection.
http://en.wikipedia.org/wiki/Execution_van
It’s not a bad idea. We could just have the execution vans roll up to Goldman Sachs HQ in NYC.
Weapons of financial mass destruction.
‘By summer’s end, buyers and sellers in some of the country’s most upscale housing markets are slated to lose one their biggest benefactors: the deep pockets of the federal government. In this seaside community of pricey homes, the dread of yet another housing shock is already spreading.’
‘We’re looking at more price drops, more foreclosures,” said Rick Del Pozzo, a loan broker. “This snowball that’s been rolling downhill is going to pick up some speed.’
‘For the last three years, federal agencies have backed new mortgages as large as $729,750 in desirable neighborhoods in high-cost states like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans. With the economy in free fall, Congress broadened its traditionally generous support of housing to a substantial degree.’
‘But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.’
‘Michael S. Barr, a former assistant Treasury secretary, said the federal government’s retrenchment would be painful for many communities. “There’s always going to be a line, and for the person just over it it’s always going to be an arbitrary line,” said Mr. Barr, who teaches at the University of Michigan Law School. “But there is no entitlement to living in a home that costs $750,000.”
http://www.starnewsonline.com/article/20110511/ZNYT01/105113007
“The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.”
Perhaps the homes won’t be more expensive. Houses comparable to mine continue to sell for $1 million, in a middle class neighborhood that has been a middle class neighborhood for 100 years.
It’s a 1,500-square-foot row house, nearly 100 years old, with no garage, and little yard. When some of my neighbors bought, the neighborhood was redlined.
So the “$750,000 home” thing implies a mansion. That might be true of a Texas McMansion that was just built. In some of these markets, what you have is a $400,000 home that someone is asking $750,000 for.
I think that’s the whole point. The government shouldn’t be offering support to the 750K asking price. Without government intervention, this $400K home may revert back to a $400K price.
Of course the “real” equity/value is just an opinion; and everybody’s got one.
“1,500-square-foot row house, nearly 100 years old, with no garage, and little yard.”
Did you say 1 MILLION dollars? As in, 1 followed by SIX zeros? Wow. Where are you again?
“Without the government covering the risk of default, many lenders would have refused to make the loans.”
Gee, price in the risk of borrowing and the tons of money that used to be available suddenly vanishes. What a surprise.
Take away the Welfare for the Wealthy transfer payment from Main Street American tax payers to fund federally-guaranteed “affordable housing” loans in amounts up to $729,750 for those rich enough to purchase coastal zone housing at $1m+ prices, and suddenly the appeal of buying the biggest home you can “afford” loses some of its luster.
Think of those poor OC housewives…the humanity!
How is the average illegal fruit-picker supposed to buy his dream mcmansion then? And I thought this was the land of opportunity.
Now he will be able to get it at the affordable price of $625,500 instead of having to pay yesterday’s unaffordable price of $729,750.
Your digits are about right but your decimal point is in the wrong place.
Unfortunately I cut and pasted those figures from right out of the article Ben posted above (and which I posted late last night on yesterday’s Bits Bucket).
I think combo was being snarky. Those McBoxes are going to plummet to $62.5K, right?
“Your digits are about right but your decimal point is in the wrong place.”
That’s what she said.
It surprises me that Congress writes flat numbers into its legislation. $729,750 means different things in different parts of the country, and does’t account for inflation. Why not set the price limit to, say, 3x the median income of the county of residence, or some similar formula? If that’s all you can afford, then the gov will help you out. If you can afford a larger home but you still want the gov help, you are free to buy down from what you “deserve.” Problem solved.
Oh, and by the way, why not make the mortgage interest deduction price limit the same as the loan backing price. Another problem solved.
“If that’s all you can afford, the the gov will help you out.”
This “gov help you out” mentality distorts the hell out of markets. If the loan cannot stand on its own then maybe it shouldn’t stand at all.
The flat numbers are proof that the short-sighted bean-counter bankers get to make the laws of the land, not the people.
I agree and maybe there is another reason. If the amount rises with inflation, Congress does not get the “credit” for raising the amount. Since the game is to use the public’s money to bribe people to vote for them, having to vote to raise the limit while soliciting campaign donations to raise the limit and then using congressional mailings to brag about raising the limits sure beats just allowing it to rise naturally.
Why not set the price limit to, say, 3x the median income of the county of residence, or some similar formula?
————
Because living in a high-cost part of the country isn’t a right it’s a choice. Because it’s real easy for cities to game their median income to suit their residents (kick the minorities out).
Because that would be just another handout to the wealthy.
How many reasons do you need?
Also because that would result in more money going to “high cost states,” altering the political ballancing act that gets these sorts of subsidies passed in the first place. And there is the circular logic of “high cost.” Those areas are high cost because they have jobs with good salaries that will support higher prices. Employers pay higher salaries because those areas are “high cost.” Allowing government subsidies to to preferentially support higher prices in some areas just encourages this sort of wage/price spiral.
I guess I could “choose” to stock shelves at Wal-mart, because those are the only jobs available in low-cost areas.
It wouldn’t be hard to come up with a better formula. The gov has a locality-pay formula, maybe base it on that to avoid local manipulation.
How would it be a handout to the wealthy?
You won’t get to “choose” anything because there would be a waiting list for those jobs.
Because then the county will start trying to figure out a way to mess with the median income numbers. A flat number, at least, is enforceable without sending a dozen auditors to make sure that the county isn’t finding some way to stop counting low earneds come census (or other data gathering) time. It does not create the same effect across the country, but enforceable carries a lot of weight with administrators. No one wants their law to become the “dirty statisticians/accountants/whatever full employment act” of the year.
I’m glad we’re not helping the upper middle class/entry level wealthy buy their homes but I just see the eager beaver buyers that wanted to get into this niche moving down to lower price points and helping to clear out that inventory.
The taxpayers will then be left holding the bag on the the multitude of empty “dreamhomes” now left behind. Ughhhh.
My point is in the high cost states they aren’t dream homes. They are middle class homes the middle class overpaid for.
“Even those who bought ahead of the changes, scheduled to take effect Sept. 30, worry about the effect on values. Greg Peterson recently purchased a house in Monterey for $700,000. ‘That doesn’t get you a palace,’ said Mr. Peterson, a flight attendant.”
Perhaps Mr. Peterson is buying a house in a neighborhood that would have been lived in 30 years ago. But flight attendents earned more then, adjusted for inflation. And the house cost less then, adjusted for inflation. Something has to give.
“Something has to give.”
I predict it will be home prices. (A fight attendant in a $700,000 home?)
As someone who know a LOT of flight attendants, most of them aren’t very smart.
Don’t most flight attendents make $12-15/hr? Even if he’e earning more than that, how could he possibly afford a 700K house (the property tax alone is 7K per year)? Even a well paid pilot (there still are some left, I know a guy who flies for DHL, he makes 200K) would have a hard time swinging that.
As someone who know a LOT of flight attendants, most of them aren’t very smart.
I’ve known a few in my time. Hate to say it, but I agree with the most not being very bright.
OTOH, the pilots and the mechanics are some of the sharpest folks I know.
And did I tell you about that baggage handler I once spent a weekend at astronomy camp with? One of the sharpest amateur astronomers I ever met. Our entire camp class was blown away by him.
The guy spent the downtime between planes reading journals in the various sub-fields of astronomy. He liked the job because of the downtime — it helped him stay up with astronomical research.
FAs make $40-60k depending on how many hours they work.
An FA can buy a house near any major airport and still get to work.
“FAs make $40-60k depending on how many hours they work. ”
My daughter was thinking of appying at Frontier Airlines. The starting pay was about $12/hr.
Colorado,
Not sure why my previous post didnt show up - but keep in mind that $12 does NOT equate to a 40 hour work week in the aviation world. It is based off of about a 100 work month. (FAA Flight times limit how much we can work).
She’ll make less than $20,000 her first year, then slowly climb the scale, pinging out around 35ish for Frontier. (By the way, have her go to SouthWest, JetBlue or Alaska. Much better company to work for than “Frontier”
They also get paid an hourly per diem while away from their home domicile.
By the way, have her go to SouthWest, JetBlue or Alaska. Much better company to work for than “Frontier”
One of my former bosses worked for Southwest. He worked at the check-in counter at the Tucson Airport.
According to ex-boss, it’s not easy to get a job at Southwest. Lots and lots of hoops to jump during the hiring process.
They also get paid an hourly per diem while away from their home domicile.
——————————————————
Yeah, about a buck 50 every hour. Helps cover meals and such, but so many of them bring ramen noodles and save their per diem to cover a part of their rent check or mortgage.
Its something, but not like they get $150 a day while they are on the road.
Like everywhere else, flight attendants USED to make a decent living.
Did you know that on some air shuttle routes, the pilot is barely making $16hr? As a part-timer?
Yeah, that makes me feel warm and fuzzy all over, too.
Yeah I’m from the coast and my hometown is at these price points for a 3000 sq footer on a splat of land so I understand your comments. But this is a national program and it affects different areas in quite different ways.
So who was this program primarily designed to help? What does $729k buy you in the hardest hit cities? Here’s a list of the top 25 worst in 2010.
http://www.csmonitor.com/Business/new-economy/2010/0729/Foreclosures-ease-in-cities-hit-hardest-by-housing-crisis
What about other harder hit states? NV, AZ, FL, MI
NYC/Downstate NY is just beginning to show pain and so is my hometown. IMHO, they were never the target cities of this program.
But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average,’
good
Put another way, “but now Democrats and Republicans agree that the taxpayer should no longer be responsible for
homes valued well above the national averagebailing out banks for these idiot loans, which were all likely to be no-doc anyway.”better
With due respect, I don’t see this as a big deal at all as it relates to interest rates. The difference between agency backed debt and non-agency backed debt is approximately 0.5%. For each $100k borrowed, this is $30 per month. So, for a $700k loan, this is $210 per month. If you can’t handle an extra $210, you shouldn’t be buying a home that requires a $700k mortgage.
This marginal $210 is generally not going to be the difference between someone affording a house or not. The bigger impediment to people buying is sentiment.
And, the bigger issue by far is whether and when larger down payments will be required…for everyone, not just those people looking to borrow in that narrow window between $600k and $730k.
Realtors Are Liars
The bold should really emphasize the point. Great idea.
funny!
Realtor Realtor pants on fire.
Lietors?
“Lietors?”
Realtor Realtor Pants on Fire.
By jeff saturday, staff writer May 10, 2011: 5:01 PM ET
NEW YORK (Leuters)-according to the National
Association of Realtors (NAR), Realtor`s pants are actually on fire.
http://money.leuters.com/2011/05/realtor_pants/fire_home/index.htm - 112k -
When typing “realtors are …” into google’s query field it pre-fills with: idiots, crooks, useless, evil, stupid
Tried it. LMAO!!
I also tried it. Not a complimentary adjective on the list.
Hey, Hwy likes that idea! Lookie here:
Dick Cheney is a war criminal
Karl Rove: I’m Darth Vader, Cheney Is a Sith Master
Cheney is a Creep
Dick Cheney is a BITCH
Dick Cheney is a traitor, He Is a Terrorist
Is Dick Cheney Dead Yet?
You keep repeating the same obvious point. What I want to know from you is…in today’s America, who isn’t a liar?
The shilling media?
Bond raters?
Appraisers?
Acutaries?
Accountants?
Stock analysts?
Investment advisors?
We’re all salesmen now.
You left out the biggest one - the government
who isn’t a liar?
My cousin’s… make their own lemonade,…in Ohio!
Foreclosures crush home prices; down 30% from 2006 peak
Foreclosures crush home prices
By Les Christie, staff writer May 10, 2011: 5:01 PM ET
NEW YORK (CNNMoney) — Home prices continued to plummet during the first three months of 2011, falling 4.6% from a year earlier.
The U.S. median price, according to the National Association of Realtors (NAR), dropped to $158,700 for a single family house. Condo prices fell even harder — 10.4% to $152,900.
The median home price has now slumped 30% from its 2006 high of $227,100, and prices have fallen nearly 7% so far this year.
“We’re seeing prices dropping faster than they did in 2010,” said Pat Newport, an analyst with IHS Global Insight. “That’s troubling. Falling home prices precipitated the recession and are slowing the recovery.”
NAR blamed much of the latest price drop on sales of foreclosed properties. These “distressed” property sales accounted for 39% of the market, up from 36% from a year earlier.
“That’s a key problem,” said Newport. “There are a lot of bad loans in the foreclosure pipeline and we don’t know how many strategic defaults [people walking away from their mortgages] will result.”
http://money.cnn.com/2011/05/09/real_estate/metro_home_prices/index.htm - 112k -
“That’s troubling. Falling home prices precipitated the recession and are slowing the recovery.”
That’s silly. The sooner home prices reach an affordable bottom, the sooner the recovery can gain speed.
The sooner home prices reach an affordable bottom, the sooner the recovery can gain speed.
For the little people. The 1%ers will take a big bath, hence the can kicking.
Redfin had an interesting blog on the SF Bay Area. A quote:
“If you look at the homes the banks are selling, it’s easy to see that falling prices are the result not simply of deflation, but an actual decline in asset quality: many bank-owned listings are in sad shape. When a pretty house hits the market, everyone lines up to buy it. But most houses aren’t pretty, and prices overall keep dropping.”
They are reporting very strong activity for good quality homes, but there aren’t many good quality homes hitting the market, so the “median” prices are being skewed by more low quality homes hitting the market.
Let’s stick with looking at measures that actually look at same home sales, the median sales prices don’t tell you anything.
Greece to conduct bold sell-offs in return for aid: report
reuters
On Wednesday May 11, 2011, 5:26 am EDT
ATHENS (Reuters) - Greece is nearing agreement for supplemental EU/IMF loans of 50 to 60 billion euros to cover its funding gap in 2012 and 2013 in exchange for bold privatizations, Greek newspapers reported on Wednesday.
The centerpiece of the new deal, the paper said citing EU/IMF sources, would be a very bold program of privatizations. It gave no further details.
Jamie Dimon is considering picking up a few islands to garage his Eastern yacht fleet…
I had first heard this concept being expressed as using some of Greek assets as collateral for their rescue loans. It was mentioned this approach was a great vehicle for keeping the masses in line as austerity measures were applied. If people feared losing their country piece by piece, they’d stay at work and keep their frustrations behind closed doors.
I bet some Chinese company will pay good money for the Acropolis.
Have you seen it? It a real fixer upper.
Good one!
Maybe they can flip it!
You know the rule…..the first side to make a hitler comparison loses. Yesterday alpha-sloth made a Hitler comparison. In this case though, I don’t think it is alpha’s side who loses, I think it’s the whole HBB community.
Let’s not go there, folks. sometimes people just disagree, and have different points of view.
drummin j: You assume the current non-productive have something to offer, or as much to offer as those who are currently productive.
alpha-sloth: Am I the only one who hears echos of Hitler in words like these?
I stand by my statement (question, really). Dividing the populace up into ‘producers’ and ‘nonproducers’ strikes me as very similar to what the nazis did to dehumanize their future victims. I won’t adhere to some silly, made-up ‘rule’, that mentioning Hitler makes you lose the argument- no when the parallels are there. The inflationistas sure like to talk about the Weimar Republic.
And how many times have I, or people like me, been called a socialist or communist, because I think the wealthy should pay the same rates as the rest of us, and the same rates as they paid during the heyday of America’s power and wealth- when we were neither a socialist state nor a communist state but rather the world’s most powerful and successful democracy.
“I won’t adhere to some silly, made-up ‘rule’, that mentioning Hitler makes you lose the argument- not when the parallels are there.”
Agreed. Those who ignore history are doomed to repeat it.
“I won’t adhere to some silly, made-up ‘rule’, that mentioning Hitler makes you lose the argument- not when the parallels are there.”
I agree. And who made up that rule? And why? Who would benefit from such a rule?
And saying one hears ‘echos of Hitler’ is not the same as calling someone a Nazi- although as I pointed out, I’m frequently called a commie/socialist here.
But I don’t cry about it. I just whip their Kochtopus a$$es in the ensuing argument.
But I don’t cry about it. I just whip their Kochtopus a$$es in the ensuing argument.
Hwy’s public schoolyard dodge ball lesson #4:
You out!, iffin’s it hits you in your foot or a blast to your face. There was a large bully of a fella that use to ALWAYS pick on the weak ones. He didn’t last long. He was big, he was a bully, …wasn’t all that smart, found out after school one day that even the weak have big sisters & big brothers, who have ears and hear tales of mischief.
And Remember - Nazi is slang for the “The National Socialist Workers Party of Germany”.
Are you implying that they were “commies”?
It’s odd then that socialists champion taking care of the poor, whereas Nazis champion killing the ‘non-productive’ (or sending them off to ‘camp’).
“It’s odd then that socialists champion taking care of the poor”
That’s about all they do is “champion” taking care of the poor, that is how they assume power. What happens after is a different story.
Oh, the Nazis were ‘taking care’ of them all right.
“It’s odd then that socialists champion taking care of the poor”
That’s about all they do is “champion” taking care of the poor, that is how they assume power. What happens after is a different story.
I know dude, look at the Swedes. It’s crazy.
“…whereas Nazis champion killing the ‘non-productive’ (or sending them off to ‘camp’).”
Why does this sounds awfully and recently familiar?
Hmmm.
I know dude, look at the Swedes. It’s crazy.
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
You’re hysterical. But hey at least your gang of back slappers can high five you when you use words like Kochtopus and T-bagger while you compare people who disagree with your politics with those who perpetrated the holocaust.
at least your gang of back slappers can high five you when you use words like Kochtopus and T-bagger while you compare people who disagree with your politics with those who perpetrated the holocaust.
He was not “comparing” a political point. He was comparing an ideology-a philosophy that shares values shared by Hitler and the Nazis, who as you just mentioned, perpetrated the holocaust. I saw no inaccuracies in the comparison. Did you?
If you think about it carefully, objectively, and in the context of what those “values” wrought in history, you might change your mind on who you want to “high-five”.
Hitler and the Nazis aren’t mentioned enough these days.
It was because of apathy and going-along-to-get-along that Hitler rose to power.
20+ million people died in WW2. Don’t think it can’t happen again for exactly the same reasons.
20+. Million. People. Died. Directly from the war.
Apathy and going-along-to-get-along. The same reason Wall St. now owns our government and half the workforce makes less than $500 week and our jobs get shipped overseas to communists countries.
“Hitler and the Nazis aren’t mentioned enough these days.”
I’ve got several Polish friends who would agree. I visited Auschwitz last September. Whoa, was that an eye-opener. Black and white pics in high school history books can’t do that place and period justice.
Sadly, some younger Germans I’ve met seem to have this “yeah, it was terrible but quit holding it against us” attitude. (Getting back to your “Don’t think it can’t happen again…” comment) I don’t think they mean it maliciously but there is a sort of apathy that time has let seep in…
Chinese oil demand: http://www.chinamining.org/News/2011-05-11/1305097892d45302.html
Even with slower growth, China will be importing oil at a growth rate of around 10% a year since their domestic oil production cannot keep up with even a 8% gdp growth rate, so a larger and larger percentage of consumed oil with be imported.
True until it isn’t. A bursting bubble or continued inflation might put the brakes on that consumption. US consumption has fallen for the last 6 months.
True, but with their centralized command economy and warehouses full of greenbacks they can kick the can way down the road.
We’ve done it for decades, and we don’t have any money!
Brisk home sales don’t stop decline in prices
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
Although South Florida home sales are chugging along at a boom-time pace and outperforming the national real estate market on a volume basis, home values continue to experience far more turmoil than the national market, a new report from real estate firm Zillow shows.
South Florida home values shed another 1.8 percent in the first quarter of the year, slipping to levels that are on par with 2002.
In the first three months of 2011, Zillow’s home value index for Miami-Dade, Broward and Palm Beach counties dipped to $137,300, a 12.8 percent decrease from the same quarter last year. The national home value index was $169,600, down 8.2 percent.
Sales of single-family home and condos rose each month during the first quarter, but the increases were propelled by all-cash deals to buy cheap foreclosures.
“We are going to have the sales volume because at the low-end prices are going to continue to be [low],” said William Hardin, professor of finance and real estate at Florida International University. “In the end, those distressed sales are going to bring down values in the neighborhood.”
Home values have fallen 55.4 percent from their peaks in June 2006, back down to April 2002 levels. Nationwide, home values have fallen 29.5 percent from 2006 peaks.
The problem of negative equity remains an especially staggering one in South Florida: 47.7 percent of all single-family homes with a mortgage are underwater, up from 43.5 percent last year. Nationally, the negative equity rate is 28.4 percent.
http://www.miamiherald.com/2011/05/09/2208975/brisk-home-sales-dont-stop-decline.html - 88k -
This is pretty telling. Demand is “small” compared to supply, so an increase in demand does not affect the supply demand ratio enough to raise prices.
And here’s a small demand case-in-point from Tucson:
It was the root canal that took five years
Key quote from this op-ed piece:
We lowered the price. Once, twice, thrice. Even so, the “buyers” got fewer - and pickier. One woman criticized the microwave oven. Hey, no problem since it didn’t come with the house. Another couple feared the few interior steps would be too hard for their turtles to navigate. You can’t be serious.
Couldn’t they have installed a turtle elevator?
A couple of former neighbors built quite the elaborate back-yard habitat for Wilson and Amelia, their desert tortoises.
Then they had one of those “We gotta get outta this place!” moments and put the house up for sale. They bought another house about two miles away.
I’ll never forget their real estate agent’s sale sheet. It was quite adamant on the fact that the tortoise habitat would not convey.
No word on what’s happened with Wilson and Amelia. The couple has since moved out of state.
BTW, they’re renting the house they moved to after exiting this nabe back in ‘06.
They tried to sell the “moved-to” place last year. And it didn’t sell, even though they did take quite the meat axe to the price.
BofA Billions in Loan Losses at Stake on Moynihan Outlook
May 10, 2011, 12:13 PM EDT
By Hugh Son
May 10 (Bloomberg) — At Bank of America Corp., where the company’s home-price forecasts have proved too good to be true, billions of dollars of new losses are at stake along with the credibility of Chief Executive Officer Brian T. Moynihan.
The 51-year-old Moynihan, who succeeded Kenneth D. Lewis in 2010 after the worst housing market since the Depression, has tied his firm’s performance to a recovery in home prices this year — a prediction more optimistic than one made by the bank’s own economist. Underestimating the slump in U.S. real estate led to $3 billion of expenses in the past two quarters, and Bank of America said it may suffer $1.5 billion in losses for every four percentage points that declines exceed forecasts.
Home prices may begin a “gradual improvement over the second half,” Neil Cotty, the company’s chief accounting officer, said last month. Michelle Meyer, the bank’s senior U.S. economist, predicts the market won’t hit bottom until 2012. Rival lenders and analysts say the drop could exceed 10 percent
“If you put on a pair of rose-colored glasses with respect to the housing market, then you can defer the recognition of provision costs and buy time to earn your way out of the hole,” said Tony Plath, a professor of finance at the University of North Carolina in Charlotte who follows Bank of America. “It’s wrong, but that’s what’s going on.”
‘Long and Painful’
Meyer, whose arrival in August from Barclays Plc was accompanied by a news release praising her expertise in housing markets, sees foreclosure sales as a drag in the months ahead.
“There’s a long and painful path before the housing market looks normal,” Meyer said in an April 20 interview on Bloomberg Television’s “Bottom Line” with Mark Crumpton. “Our view is that we’ll see a 5 percent drop in national home prices this year; it could be larger. The increased share of distressed sales will continue to exert downward pressure on home prices.”
http://www.businessweek.com/news/2011-05-10/bofa-billions-in-loan-losses-at-stake-on-moynihan-outlook.html - -
“If you put on a pair of rose-colored glasses, with respect to the housing market, then you can defer the recognition of provision costs and buy time to earn your way out of the hole.”
“… buy time to earn your way out of the hole.’
So what’s the going price of time? How much time will they have to buy what will it cost them?
Or, rather, cost us?
“.. you can defer the recognition of provision costs …”
I wish I had this option in my personal life. How come the banks have this option and I don’t?
Sounds like the standard extend-and-pretend approach often discussed here. Is there anything new and different mentioned in this article?
I believe for consumers it’s the zero rate transfer offers from credit cards.
It makes you wonder how much longer can the banks reduce the amounts they claim they need for loan losses. Seems like their attempts to boost their “earnings” will soon be coming to an end. In a related matter, looks like our government will be selling off its stake in AIG at a low stock price, of course, they know the true direction of the economy so better something than nothing.
Pssst… You can’t have loan-losses in a fake recovery.
One other comment and it has to do with deficits and why the Obama deficits are even worse compared to the Bush deficits and relates to AIG. Under the budget rules, loans are treated just like spending. Thus, when a loan was made to a bank under TARP during the Bush administration it was treated like an expenditure. However, when the TARP loans have been paid back they have reduced the present deficit. I remember Howard Dean being almost gleeful on CNBC on the money that would be returned from TARP.
Yes, Obama did inherit a major recession but that also was an opportunity. The standard rule is the deeper the recession the sharper the recovery. Why this did not happen is the 14 trillion dollar question. P.S. This is not a defense of Bush, he mishandled Iraq, wanted to destroy our country with open borders to promote the multi-nationals and allowed China to manipulate trading to destroy many small manufacturing companies in this country. However, I do not see Obama pursuing any policies that are different on either China or immigration and he has added Libya to our wars before we are even out of Iraq. I have been reading more about Ron Paul’s positions on his website, unfiltered by the MSM, and he may be our only hope for positive change.
“The standard rule is the deeper the recession the sharper the recovery. ”
Where are these standard rules written down?
We had a sharp recovery from the last depression- after a decade in recession, and a world war.
The last few recessions have all had ‘jobless recoveries’, the last recession being ended by opening the credit floodgates and blowing a housing bubble.
What’s the standard rules got to say about that?
link about recessions and recoveries and forecast of the recovery which took into account special factors but still the recovery has not matched the forecast: http://www.econbrowser.com/archives/2009/07/a_vshaped_reces.html
The wholesale offshoring of our job base was camoflaged by all the money being sloshed around during the housing bubble. If not for the bubble, Main Street would have still been hurting from the 2000-01 recession.
Now whether this happened all on it’s own, or if it was an intentional plan to distract the sheeple remains to be answered.
So here we are. 90% of your purchases are made overseas, and you have a hard time finding anything “Made in USA” anymore.
Think any of it is going to come back? Guess again. The cost savings would have to be significant, and it assumes that all the MNC’s “Joint Venture” partners will let it happen. (Yeah, right).
So we are where we are at. 1-2% growth for as far as the eye can see.
The good news is that the problem will fix itself in 20 years. Government has gotten themselves in a position where they can’t raise any revenue. The turnips are broke, and the people with all the money own all the attorneys and accountants, and if that fails, are threatening to take their ball and go play somewhere else. No tax receipts means no more money for Medicare/Medicaid.
As someone mentioned in an article the other day, when comparing public/private health care systems, if you can’t afford private care, your wait time for services is “infinity”. So, kill off enough of your citizens at an earlier age, either intentionally or by benign neglect, and government spending fixes itself. This is what happens when you have the “run government like a business” crowd in power. Gotta get rid of all those non-performing assets.
Want to see the USA, circa 2025? See Brazil, circa 1970. I see absolutely nothing in the trend lines to make me think it’s going to turn out otherwise.
“Want to see the USA, circa 2025? See Brazil, circa 1970.”
+1 Except we won’t look as good in swimsuits.
“Except we won’t look as good in swimsuits.”
Or be anywhere nearly as good in soccer.
IMHO the only solution is for the dollar to fall enough for the US to become competetive again. And of course since we DO have a pretty efficient economy, that DOESN’T imply a wage equality between the US and China. But it does imply that wages would be closer than they are today. Of course those who lose the most in that scenario are those who HAVE dollars as opposed to those who rely on their labor.
What’s really most interesting to me about this tsunami of articles about downward pressure and expectation of price drops, is that it’s the beginning of the selling season and they’re virtually telling anyone who might be on the fence to sit back, the prices are going to come down more. We’ve never seen this before.
They’re not even hedging their bets and hoping things bump along. This is a 180* change.
Exactly Carrie.
This was my comment to Mrs. just the other day. The corporatist media is telegraphing declining housing prices/double dip at 50,000 watts.
Why? We speculate that the Housing Crime Syndicate is laying groundwork for another TireKickerTaxCredit.
Another idea is they’re attempting to lower sales expectations to get sellers to pull out of the market.
Any others?
Another idea is they’re attempting to lower sales expectations to get sellers to pull out of the market.
Or get sellers to lower prices.
I suspect another tax credit is in the works.
Or get sellers to lower prices.
But that is exactly what they don’t want.
BTW, are you in the municipal construction or operations biz?
Wife is going thru a BofA foreclosure. We are FB’s who willingly paid too much and are underwater by 150k (paid 400k, loan is 300k; the last unit to sell sold for 155k)
Last month the MSM in Bend prints; Deshcutes county foreclosure activity drops!! last month. (Bend Bulletin). Yesterday, same paper prints, foreclosure activity soars!! Does mention that Recontrust is responsible for 80% of this “spike”. Recontrust pulled all its foreclosures; then re-added them. So all of this dipping and soaring was completely expected from our perspective. The MSM sure seemed surprised though.
Two news stories; the first giving people hope in a recovery, due to the statistical drop from these auction sales being pulling off the block. (Foreclosures drop! yay) then less hope yesterday(foreclosures soar! boo); when nothing really happened other that BofA pulled its OR foreclosures to examine their processes then refiled them.
So her date is late August now. Bofa accepted a short sale offer on the neighbor’s house at 155k (from another 2007 sale at around 400k). And Bofa/ReconTrust has at least 4 other homes in this development scheduled for auction.
So will they auction off the family home in August; or reschedule again as has been their habit? To try a short sale(thinking of starting off at $1.00 to solicit offers and then let the bank decide; as they do regardless of the realtor set short sale price) or let the bank continue to extend and pretend?
We do keep the place in decent shape; wife would short sell it if only we only knew what the bank would accept in her case; otherwise we will continue pretending it’s our home, even though we haven’t paid since last April.
I’m thinking they’re laying the groundwork for QEIII.
Why put a wet blanket over a whole season of sales just to introduce a credit to generate sales?
Not sure about that, the first one is now coming under some of its harhest criticism to date in the press.
Realtors Are Liars
Consulting biz for municipal utilities…
Maybe I’m giving the NAR too much credit, but I suspect they could see the value of hitting sellers over the head with a 2 x 4 and getting them to lower the price. Surely the NAR sees the value of the Wal-mart approach and selling more houses at less comission per house?
Like any well run business, I’d hope that the NAR or one of the big brokerage houses has ran an analysis on the cost to the agency of selling a house. The overhead is virtually the same in this day and age due to online advertising; the only variable is the cost of going to the house and taking photos. It would make sense to promote churn at the expense of dollar value comissions just to cover the overhead.
For example (very simplistic), assume my office space, equipment leases, etc. are running my brokerage house $10,000 a month, and the cost to me to sell a house is $1,000. As long as my brokerage house comission is more than $1,000 I make a profit. I’d rather sell 10 houses with $2,000 comission than 5 houses at $2,500 comission. If lowering the price 20% can move more houses, I’ll do whatever it takes to get sellers to lower their price 20%.
The overhead is virtually the same in this day and age due to online advertising; the only variable is the cost of going to the house and taking photos. It would make sense to promote churn at the expense of dollar value comissions just to cover the overhead.
And I know from the experience of one of my friends that most agents are going the DIY route for photography.
Friend used to do a lot of architectural interior photography on high-end properties. Even that business dried up. Agents got point -n- shoot cameras, and that was more than good enough.
Yours Truly isn’t set up to do architectural photo work. Nor do I want to be. Friend’s experience is the reason why.
Chile…. we’re in the same biz.
I’m thinking they’re laying the groundwork for QEIII.
I think that contrary to what a few regional Fed honchos say, that QE3 is in the bag. Someone has to buy all those treasuries.
My guess is that the major players have been able to sell all of their crappy MBS they were sitting on when the bubble burst. They’ve off loaded or hedged their stocks. Now they are sitting on a mountain of cash.
Next step would of course be to crash the market.
Then buy up everything for pennies on the dollar. Then bail the system out again.
They control the printing press, they control the gov, they control the MSM.
That’s because bad news sells. When people are worried, they will buy the paper/turn on the TV to get more information to alleviate the worry…it’s biology meets Mr. market.
I find it interesting that when home prices were rising during the bubble, after prices had already reached all-time highs by nearly every measure, and the near 100% news articles were about how prices were going to continue to go up, very few people were willing to say that price levels were unsustainably high and that prices would have to fall from the then current levels.
Those few people were John Paulson, this blog, and some others who made a lot of money going against the herd.
And now, when home prices are falling, after prices and housing activity have already reached all-time lows by many measures (affordability, housing starts, price/income, price/rent, etc.), and near 100% news articles are about how prices were going to continue to fall, very few people are willing to say that price levels are unsustainably low and that prices would have to rise from current levels.
Those few people include John Paulson…
Which loans did Fannie + Freddie Taxpayer buy?
And which loans does BoA hold now? The Prime Option ARM’s in the second hump of the Credit Suisse graph?
Who bought the old subprime loans/
His Wikipedia bio says he’s never “dug a ditch” in his life.
“Talent!” WINNING!
Why buy today when you can buy later for 50% less?
you are supposed to be afraid of inflation. Bernanke is meant to be a scary monster but really he is more like a really terrible clown-act.
In the race to the bottom, you have to find that sweet spot to buy before you get laid off or take a pay cut.
dum dum dum da da dum dum Under pressure…..
(Reuters, 5/10) - The U.S. Postal Service posted a $2.2 billion net loss in its second quarter and said it might be unable to pay its debts by September.
The agency, which has been battling falling mail volumes and competition from FedEx (FDX.N) and United Parcel Service (UPS.N), said it expects to hit its borrowing limit by the September 30 end of the fiscal year, and will have to default on payments to the federal government unless Congress intervenes.
Ice, Ice, Baby.
“The agency, which has been battling falling mail volumes and competition from FedEx (FDX.N) and United Parcel Service (UPS.N),”
Interesting. I sometimes sell DVD’s and books I no longer want on Amazon. When I ship them its WAAAAYYY cheaper to use the post office as opposed to UPS or FedEx. UPS and FedEx might give Amazon great deals on two day shipping, not not to little old me.
Also, how much do FedEx or UPS charge to deliver a letter? I know they do, because my mortgage company sends me letters asking me to refi, and the send them via FedEx.
$1.74 at my company.
So its 4x what the post office charges.
No wonder they’re broke. They have the worst of both worlds: they’re supposed to be self sufficient (no subsidies) but are not allowed to raise their rates without the gov’ts permission.
A formula for failure if you ask me.
First class mail is one of the greatest bargains around.
http://www.cockeyed.com/citizen/stamps/stamps.php
Maybe if we privatized them and eliminate all the government waste.
Oh wait… we already did that.
How’s that workin’ out?
ReaItors Are Liars
Why stop at two? See how many Ben will allow.
Does anyone have a link to the story about St. George
$1.2 mil, 6k sq.ft. homes selling for $300k?
Tried to tell the Rosenbergs they were building too many damn houses in St George…but everyone was moving there to retire you see…
Got negative equity?
San Diego Union Tribune
Zillow: Underwater mortgages in SD on the rise
By Lily Leung
Tuesday, May 10, 2011 at 12:38 p.m.
About one in four single-family homeowners with mortgages in San Diego County are in properties that are underwater, according to a recent report from real estate site Zillow.
The county’s rate of negative equity — when the value of a home is worth less than the mortgage — rose to 26 percent in the first quarter from 22.3 percent during same period in 2010.
San Diego’s rate is slightly lower than the nationwide rate of 28.4 percent, a new high for the nation. The previous high for the U.S. was 27 percent, in the last quarter of 2010.
Zillow’s numbers show Phoenix ranked highest in negative equity percentage at 68.4 percent with Tampa (59.8 percent) and Atlanta (55.7 percent) following.
The increase in underwater homeowners follows drops in home prices across the country that mirror those during the recession, Zillow researchers said.
“Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” said Stan Humphries, Zillow’s chief economist. “With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011 … underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates make it almost certain that we won’t see a bottom in home values until 2012 or later.”
In early 2009, the negative equity rate was as high as 31.7 percent in San Diego County but has been steadily decreasing, hitting 19.6 percent in the third quarter of 2010 before bumping up to 21.8 percent at the end of the year.
Negative-equity rates in San Diego County, since 2009:
Q1 ‘09: 31.7% | Q2 ‘09: 28.7% | Q3 ‘09: 25.2% | Q4 ‘09: 23.5%
Q1 ‘10: 22.3% | Q2 ‘10: 20.9% | Q3 ‘10: 19.6% | Q4 ‘10: 21.8%
Q1 ‘11: 26.0%
———————————————————————–
Zillow dot com, first quarter 2011
Area Negative equity
1 Phoenix 68.4%
2 Tampa 59.8%
3 Atlanta 55.7%
4 Sacramento, Calif. 51.2%
5 Riverside, Calif. 50.7%
6 Miami-Fort Lauderdale, Fla. 47.7%
7 Minneapolis-St. Paul, Minn. 46.2%
8 Chicago 45.7%
9 Cleveland 41.4%
10 Denver 41.0%
11 Detroit 36.3%
12 Portland 35.9%
13 Seattle 34.4%
14 St. Louis 31.2%
15 Baltimore 29.6%
16 Washington, D.C. 29.5%
17 United States 28.4%
18 San Diego 26.0%
19 San Francisco 25.7%
20 Philadelphia 22.1%
21 Los Angeles 21.0%
22 New York City 17.1%
23 Boston, 16.9%
24 Pittsburgh 6.8%
25 Dallas n/a
26 Orlando, Fla. n/a
Note: Negative equity refers to percentage of single-family homes with mortgages
7 Minneapolis-St. Paul, Minn. 46.2%
8 Chicago 45.7%
9 Cleveland 41.4%
Yeah, no bubble in the Heartland, huh?
Don’t forget Denver. Some neighborhoods got very bubbly in central and downtown Denver. 41%! Mamma mia! And the bubble prices ain’t coming back.
16 Washington, D.C. 29.5%
The hell? Then why aren’t DC prices dropping yet? (at least on SFH).
On Marketwatch today:
Rich enjoy 65% of value of all tax breaks
From the article:
“People in the top fifth of income enjoy three-fourths of the savings from itemized deductions”
“Nearly one-third of all refundable credits go to the poorest one-fifth of all households”
Cue the wish-they-were-rich apologists for the Wall Street pigmen: Linda the Lunchlady lives lavishly. Adding to yesterday’s bits, perhaps a “final solution” is needed to address these non-producers?
Arbeit Macht Frei. “To Serve Man”
We have work for you “in the east”. And cheap luxury housing. All you have to do is take a nice little train ride…….
It already exists, in China. It’s called Foxconn City, in Shenzhen.
The nazi analogy is bit too much, but fascist pigmen posting here that want no one to EVER get a pension, vacation, sick time, health insurance, would love to see the entire planet turned into Foxconn City. They, the enlightened 1%, hard at work as the Overseers of the globalized 21st century corporate capitalist/communist plantation.
but fascist pigmen posting here that want no one to EVER get a pension, vacation, sick time, health insurance, would love to see the entire planet turned into Foxconn City.
Care to identify any such poster? I’ve never seen anyone argue for that. Perhaps you can dig up a post to support that such a person exists or that view is represented on this blog?
This view was well represented on this blog during the weeks/month that Wisconsin Governor Walker and his opponents/protestors were discussed here.
This view was well represented on this blog during the weeks/month that Wisconsin Governor Walker and his opponents/protestors were discussed here.
again, I sure don’t recall anyone arguing for what you’ve suggested above. Want to dig up a post that specifically suggests no one should have any of these things, either in the public or private sector?
Anyone who supports a “free market” solution to the health care problem is supporting a plan that means that a significant percentage of the population will have to do without.
There is no such thing as “free markets” anymore. Anywhere. You can dream about it, but reality has repeatedly shown that insurance companies won’t insure anyone they deem as “high risk”, unless government says they have to. And to get around that, they spend a bunch of lobbying money to buy the government.
Medicare came about because nobody over 65 could get insurance. Now the plateau is 45-50.
1. Every day there are anti-pension posts here, usually coupled with phrases like “insane public pensions” and “union goons/thugs.”
2. The same crowd thinks health care is only for “producers,” but the talking points on that subject have been rather mild, because they know deep down that employer health care is likely to go the way of employer pensions.
3. Just yesterday we had a thread on vacation benefits, where some decried those lavish vacation-time buyouts.
4. We had a huge debate on whether it was the banks or the FB’s to blame for buying those houses. The little FB got the brunt of the blame (I think they deserve 25-30%, not more.)
5. How many times have I mentioned people dying on the street, or referenced Dickens and the Gilded Age, to answer a post?
6. And just yesterday, drummin posted rather ominously about separating producers from freeloaders.
There has been no specific reference to a Foxconn city-type entity on HBB, but the underlying me-me-me-me-me policy is what leads to such places.
Keep in mind that these top 1%, who disseminate the talking points, don’t need the money. They could live the low-level Oil City standard of living a thousand times over, never work a day, and still not want for basic needs. Yet, they want to deny everybody even one low-level standard of living. This is what I fight against on HBB.
6. And just yesterday, drummin posted rather ominously about separating producers from freeloaders.
Y’all are ridiculous. Are you seriously not capable of taking something in context? Do you not realize you chase away any dissenting opinion from the liberal echo chamber in here?
Get a f’ing grip.
Let’s look at the comment at the top of this thread:
but fascist pigmen posting here that want no one to EVER get a pension, vacation, sick time, health insurance,
The comment is that multiple posters here think no one should get ANY of these things. Not that there exist individuals who may believe one or two of these things, or one or two of these in the context of public employees.
Reading comprehension folks.
1. Every day there are anti-pension posts here, usually coupled with phrases like “insane public pensions” and “union goons/thugs.”
Yep, there are anti-union posters. And there are some that don’t believe public employees should be allowed to unionize against the taxpayers. It’s a reasonable position. Just because someone feels this way doesn’t make them a “fascist pigman”, nor support the position they want no one to have sick, vacation time, or a pension.
2. The same crowd thinks health care is only for “producers,” but the talking points on that subject have been rather mild, because they know deep down that employer health care is likely to go the way of employer pensions.
Rather than address the position, you try to dismiss it as a “talking point”. Intellectually lazy. And I’ve yet to see anyone who thinks that “health care is only for producers”. Can you back that up? As Happy asked yesterday - define “producer”.
3. Just yesterday we had a thread on vacation benefits, where some decried those lavish vacation-time buyouts.
Perhaps they did. Does that mean they also think no one should have any vacation time, or sick time, or health care? Does it make them a “fascist pig man”?
4. We had a huge debate on whether it was the banks or the FB’s to blame for buying those houses. The little FB got the brunt of the blame (I think they deserve 25-30%, not more.)
Yep, people blamed all sorts of actors. Again, how is this relevant to the initial comment?
6. And just yesterday, drummin posted rather ominously about separating producers from freeloaders.
How about you actually read what I posted rather than be overcome by your biases? I suggested that the “non-producers”, as referenced by other posters, don’t necessarily have anything to offer. It was suggested that the current “producers” move aside and let the “non-producers” in. Are you saying that all of the “non-producers” can produce in the way the current producers are? Or that they even care to? I’m a nazi for suggesting that perhaps that isn’t the case?
the underlying me-me-me-me-me policy is what leads to such places.
Are you really suggesting that this isn’t the “progressive” position? “I want stuff for me, but at YOUR expense?”
these top 1%, who disseminate the talking points,
Because your opinions are valid, but anyone who disagrees with you is simply regurgitating a talking point? How conceited.
Oxide, I’ve kept you and a few other of the strong-leftie posters here off ignore because you have actually been intellectually open-minded rather than making ad-hominem and strawman arguments. That doesn’t seem to be the case anymore. Rather than discuss actual positions you’d rather attack the poster, or attack some mockery of their actual position. Why would anyone choose to try to have an actual discussion with someone who engages in such tactics?
Personally, I’m done.
And none too soon…
I will admit there was exaggeration aplenty when one of the previous posts said that “nobody” should get a vacation or a pension. “Fascist” might be a little strong.
However, I believe that the anti-union posts, anti-universal healthcare posts, and similar are, if not on that train, they are on the beginning of that track. I’m trying to convince people away from that and nip it in the bud. So go ahead and put me on ignore.
“Personally, I’m done”
Same URL, this time tomorrow. See you then…
I’ve kept you and a few other of the strong-leftie posters here off ignore
Blessed be the child…that supports the War Machine Inc. & daily bash the weak. Jesus of Oaxaca
again, I sure don’t recall anyone arguing for what you’ve suggested above. Want to dig up a post that specifically suggests no one should have any of these things, either in the public or private sector?
Quit whining. You know exactly who he is talking about and why. Even full page attempted deflecting posts won’t change many’s perception.
Keep it simple, make ‘em all (individuals) take the standard deduction. If their lifestyle costs more it’s because of the choices they made.
Cue the wish-they-were-rich apologists for the Wall Street pigmen:
Do you understand the fact you commented/quoted?
Think about the types of things people can itemize. Do those with low income tend to have those types of expenses? Mortgage interest, property taxes, state income taxes - that are in excess of the standard deduction. Home offices? Business expenses?
It’s an incredibly slanted headline. The rich also pay the most in taxes…
What is it that you draw from this article?
The rich also pay the most in taxes…
Because they earn the most money, but let’s not forget the top 400 pay effective tax rates that are probably around 16% and probably much lower if you consider hidden money and shelters.
Note - You can’t tax slaves and people who work for nothing but food and shelter are essentially slaves.
Here is your best post from yesterday Drummy
- China has grown because of, wait for it, the strong consumption from the middle class in the USA.
Drummy - And this is relevant to the middle class being vital/necessary for a successful US how, exactly? Just because the US middle class is where China is making it’s money doesn’t mean that ** it’s necessary for the US to be stable, prosperous, etc.
So reducing the majority of Americans to poverty won’t in your mind affect how prosperous the country is, and you don’t think that mass poverty leads to social unrest and crime and political instabillity. What do you watch all day cartoon network?
Because they earn the most money, but let’s not forget the top 400 pay effective tax rates that are probably around 16% and probably much lower if you consider hidden money and shelters.
Exactly. It’s effectively a tautology, not some revelation. Same as the “rich get the most benefit from itemized deductions”. It’s obvious, it’s reasonable and expected. Not some great revelation or scam.
But you know we don’t agree on the “effective tax rate” issue, so let’s just leave that alone for now.
Regarding yesterday, you’re shifting the topic of discussion. I asked for anything to support the assertion bandied about here that a “strong middle class” is a necessary or key ingredient to a prosperous country/society/economy. You’re not addressing that topic.
Just because there’s not a strong middle class doesn’t mean everyone’s living in poverty. You have all these notions in your head of how things are/should be/will be. Perhaps you’re right, or perhaps you’re wrong. I’m simply asking for facts/statements/arguments to support the assertion. So far you seem to be doing everything other than actually providing that. Instead you put forth more unfounded assertions, such as the one above - that everyone will live in poverty if there’s not a strong middle class. A circular argument, no?
“I asked for anything to support the assertion bandied about here that a “strong middle class” is a necessary or key ingredient to a prosperous country/society/economy. ”
Can you name a ” prosperous country/society/economy ” that didn’t have a reasonably strong middle class?
Poverty and disease is not some game of symantics.
Oops. Foreign spelling.
“Semantics”
Instead you put forth more unfounded assertions, such as the one above - that everyone will live in poverty if there’s not a strong middle class.
Well most articles devide the population in terms of wealth into rich, middle, and poor. So if there is a shrinking middle class then either the middle class is becoming rich or poor. In this country the middle class is becoming poor.
So tell exactly what you meant by this statement
“Just because the US middle class is where China is making it’s money doesn’t mean that ** it’s necessary for the US to be stable, prosperous, etc.”
Tell us how doing away with the middle class will affect democracy, the economy, and stability in this country.
“Can you name a ” prosperous country/society/economy ” that didn’t have a reasonably strong middle class?”
I’ll take your silence as a ‘no’, mr j.
“Just because there’s not a strong middle class doesn’t mean everyone’s living in poverty.”
Please explain. I am not following this. How does a weak middle class support a democracy?
I’ve kept you and a few other of the strong-leftie posters here off ignore because ………
How intellectually brave of you……
How does a weak middle class support a democracy?
I don’t see where I mentioned democracy. I said that the lack of a strong middle class doesn’t mean everyone’s living in poverty. As in wealth, quality of life, etc. I’m sure one could relate this to the effectiveness of a democracy, but I made no such claims.
My comment was in response to this:
So reducing the majority of Americans to poverty won’t in your mind affect how prosperous the country is
The implication above being that the lack of a middle class = the majority of americans reduced to poverty.
“The rich also pay the most in taxes”
That’s because they make all the money!
oops- Shoulda hit f5 first…
Ok I’m bringing this up again. Because it didn’t get the attention it deserved. I used the emotionally charged word “non-productive” and sent the whole conversation in a direction that was totally different than where I intended the focus to fall.
What I said was 40% of the national budget was aimed at the non-productive groups. Let’s focus on that number for a few minutes: Forty percent!! 40!!!
I’m talking about monetary flow here. I am not commenting on whether or not the recipients deserve that money. I am not saying which group to take from. I am just saying the total sabotages our ability to support growth. That proportion as a total is just plain too much of a burden in an environment desperate for growth.
Someone pointed out recently that a soaring share of our government (all levels) is going to the retired and their debts, not to the future — infrastructure, R&D, education, etc. In contrast with the 1950s and 1960s, when those now old were young.
Probably 80% of the “non-productive” 40% didn’t choose to be “non-productive”. Somewhere along the line, someone decided that a $12/hour worker was “less productive” than a $5/day worker.
The time to have nipped all this BS in the bud would have been around 1995-2000, before the vast sucking sound got turned into a giant Shop-Vac. The PTB are belatedly realizing that they screwed up; but they can’t admit that they screwed up. So, like the housing market, the name of the game is “extend and pretend”, muddy the waters enough to keep the serfs confused and the torches and pitchforks in the closet, and pray for some kind of miracle to occur.
I couldn’t agree more.
A few brave souls pointed out that this was going to happen and the got shouted down.
So now we’re in a Dietrich Bonhoeffer moment, lamenting that no one is speaking up for us in our dire moment, because there is no one left to speak.
And it is a dire moment. A huge portion of the populace is completely dependent on the government for their survival, as there are no jobs for them. If that safety net disappears, what will happen? We certainly won’t be able to unload them on another country a la Mexodus (OK, maybe we can “export” the younger women to China as mail order brides. Better learn Mandarin fast).
Will the starving masses be rounded up into internment camps and fed gruel until they mysteriously disappear? And don’t say it can’t happen because this is America.
It’s not purely up to the government to “fix” this problem. Individuals have far more power, but I would argue most are too selfish/lazy to do something about it.
Shop at places that sell american-made goods. Don’t patronize companies that outsource their labor. Support local mom and pop shops, even if they cost more. Talk with them about their prices if need be, and see if you can get a discount for paying cash.
Government isn’t omnipotent. Everyone wants an easy solution - for government to “fix it”. The bottom line is that the shops that do what everyone here wants - paying a decent wage, employing americans (not illegals), etc….did and do exist. Many have gone out of business because of choices made not by the government, but by individual consumers.
Become part of the solution rather that expecting government to fix it for you without any personal sacrifice on your part.
(note that’s the general “you”, not you specifically X-GS)
Totally agree. Folks are so eager to be anti-tax until they need public assistance. The live on a flood plan, no insurance, house is flooded, they expect tax payers to bail them out. Their kid has a child out of wedlock?, we pick up the tab. Their elderly parents need expensive chemo, we pay for that too. Where do they think all this money comes from??? Don’t want to pay taxes?, fine. Then you better follow through with your libertarian ideology and take care of your own stuff. We really need to change the conversation and discuss what taxes actually pay for. We’ve demonized taxes for so long that people feel they are entitled to services without paying for them.
Totally agree. Folks are so eager to be anti-tax until they need public assistance.
I’m not sure where you get this from my post. And I can’t help but feel this strawman is directed at me since I’m one of the “libertarian” posters here.
Has anyone here spoken against taxes but then taken public assistance? Or are you just using that as an intellectually dishonest way of attacking the position?
I agree with part of your sentiment - people feel entitled, and don’t think of where tax money comes from (they come from your neighbors, friends, relatives..not “the government”). I fail to see how this has any connection whatsoever with anyone’s libertarian ideology.
I’m not sure it is directed at you. States (Republicans) do this on a regular basis. For example, Rick Perry the texas governor talked openly about secession, but then threw a pissy fit when the federal disaster funds request for the recent wildfires were denied. He of course is not the only one. The elderly across the US (who tend to lean republican) do the same.
For example, Rick Perry
Not that I want to defend Gov Perry, but there’s a difference between asking for the funds while still part of the union and, say, asking for them after seceeding. The latter would certainly be hypocritical. The former would not, IMO.
So I see nothing wrong with his approach here. Part of the “contract” of being part of the union, and having taxes taken from your constituents at the federal level is the promise of highway, disaster, etc funds. Nothing wrong with expecting that contract to be honored.
The will just blow it on race cars:
Texas Funds Formula One Race, May Fire Teachers
By Darrell Preston and Aaron Kuriloff - May 11, 2011 11:43 AM CT
Texas, which may balance its budget by firing thousands of teachers, plans to commit $25 million in state funds to Formula One auto racing each year for a decade.
Four years after motorsports’ most popular series left the U.S., Texas investors including Clear Channel Communications Inc. co-founder B.J. “Red” McCombs are building a 3.4-mile (5.5-kilometer) track to bring the event to Austin. Comptroller Susan Combs has agreed to pay $25 million for races through 2022, a subsidy questioned by critics and lawmakers as the state cuts costs to close an estimated $15 billion two-year deficit.
The F1 crowd goes to Texas. The same bunch that got their panties twisted over the lack of amenities in Indianapolis.
And when the track wasn’t up to their “standards”, parked the whole field after the pace lap, screwing about 200,000 paying customers.
Euro-Trash snobs meet the Texicans. This will be a million laughs. The real show will be everywhere but the racetrack.
If GSucks is the “Giant Vampire Squid”, Bernie Eccelstone is their first cousin.
“It’s not purely up to the government to “fix” this problem.”
I agree, in fact I don’t believe that the government can “fix” it. And while the private sector can fix it, it won’t, because every captain of industry fancies him or herself as some modern day version of John Galt or Sun Tzu.
And while the private sector can fix it, it won’t, because every captain of industry fancies him or herself as some modern day version of John Galt or Sun Tzu.
So you think it’s the “capitalists” that are the ones who can fix it ,rather than the individuals who serve as the “market forces”??
I’d argue it’s the opposite. The leaders will respond to market forces. We (”the people”) control that.
Sure they could fix it, they would stop offshoring and hire Americans.
But they won’t.
As for the masses acting in concert to turn things around - I wouldn’t hold my breath. We’ve already been indoctrinated to blame lunch ladies and school teachers for our woes, while we drive cars imported from Asia and complain about the lack of jobs.
The “Market” wants cheap, so I don’t expect “market forces” to provide jobs, not in this country.
The “Market” wants cheap
Well then the market gets what they deserve, and should stop their bitchin’.
At some point, you must reap the rewards of what you sow. The “people” have made some very poor decisions. And try as they might to blame “the rich”, it all comes down to them, electing the same people to office, and making short-sighted decisions with negative long term consequences.
Some lessons need to be learned the hard way.
I think you underestimate the how easily the masses can be manipulated.
“Some lessons need to be learned the hard way.”
Just ask Marie Antoinette.
It seems like there are two groups in the country that do “productive” work:
1) The underclass, which do the tough work, the heavy lifting.
2) The elites, which actually create new ideas, new engineering, new science, and new businesses.
The rest of us - kind of do window dressing-type stuff.
2) The elites, which actually create new ideas, new engineering, new science, and new businesses.
I think that your definition of “elite” doesn’t match the 1%ers definition. What you call “elite” they call “hired help”.
For the #2-5%, picking fleas from the 1%’s shiny fur = self-actualization
And there is a BIG difference between being a 5%er and 1%er. The 5%ers like to think they’re in the same club, but as George Carlin aptly pointed out, they aren’t even close.
Here’s another overly optimistic real estate turnaround story from Tucson:
37%+ of area housing sales are now cash
Key story quote:
Falling home prices began to attract investor interest not long after the market’s peak. Some of those buyers, who thought they were buying at the bottom, saw values sink even lower and they weren’t able to lease their properties at competitive rates, said Hank Amos, chairman and CEO of Tucson Realty & Trust Co. Some of those properties have begun to cycle back toward foreclosure, he said.
To which I say:
That’s what appears to have happened with a nearby rental house. From the looks of the place, the owner never even saw the NOTS posted on the door. He vanished quite some time ago.
This now-departed owner bought the place in ‘07 for $160k. It wasn’t worth that much then — or now.
And here’s a fun story comment:
Those realtors saying now is a great time to buy property are the same ones who in 2006 said buy, buy buy!
The Canadian economy may have problems of its own if China economy has a hard landing. Those investors planning on sitting on Tucson property may have many years ahead of them until it turns around and then price appreciation returns to normal 3%.
A Canadian buying a property here for all cash can also see a 30% decline in currency down the line especially if China blows up economically.
Canadians who as a herd are buying property are buying in a frenzy just as Americans bought in 2006.
Realtors as a group have little credibility as experts in when to buy a property. Those buying property as investments are speculators and they can run away at the first turn of trouble.
From Yesterdays post w Drummy
1. Outsourcing has gutted environmental regs.
Drummy - So you’re saying now that there aren’t environmental regs in place which are incentivizing corporations to move operations elsewhere where no such regs exist?
Response: No you initially stated, If corporations controlled government, all those environmental regs wouldn’t be in place. My point is that as they have solidified power they have used gov to get around environmental regulation. Do most citizens in this country support outsourcing labor to countries that have no environmental regulation? No. They certainly don’t support tax breaks for companies that do this. The only conclusion then is that corporations have control of gov. Something you suggest they don’t have. Let’s look at other regulations they have rolled back. Glass Steagle comes to mind. LEt’s look at how the GOP has defunded the SEC and tried to do this to other regulatory agencies. Again your point was corporate elite america doesn’t control our gov.
1. Didn’t GE pay no taxes this year.
Drummy: You’re saying they paid no taxes whatsoever? State, income, property, social security, cap gains, etc? They didn’t give any government a single dollar?
Response: Again Drummy your statement was “If corporations controlled government, all those environmental regs wouldn’t be in place, nor the taxes that drive corporations to move operations outside of the US.” I’ve pointed out how they control gov to give them tax loopholes that force more of the tax burden onto other citizens and less of the tax burden on corporate ceo’s and stock holders. This is true at the state and federal level, but let’s just focus on federal. GE paid ZERO income tax, EXXON and many others do this as well. They control gov and get gov to hand them special loopholes to get out of paying taxes. The elite WS types and Hedgefund managers and CEO’s get gov to allow them to pay very low capital gains and dividend tax rates on INCOME they get from working, just by paying themselves in stock.
Drummy- The Center on Budget and policy priorities reports that the corporate share of tax revenue as a % of GDP is at record lows.
Drummy - This has nothing to do with the actual cost of doing business.
Response: - You need to read your original post. You stated corporations didn’t control gov and used high taxes as an example of how they didn’t control gov. I pointed out that corporations are paying less and less of total tax revenue as a percentage of GDP.
corporate share of tax revenue as a % of GDP is at record lows. It was 6% in 1950,3% in 75, and 1% in 2009. That sure as hell looks like corporations and the elite are winning to me.
http://www.offthechartsblog.org/what-should-corporate-tax-reform-look-like/
I think you need to re-read that whole thread. It was you who made the initial assertions. I pointed out the contradictions in your post.
The context of the whole thread was moving jobs out of the US. That was the context of both the taxation and environmental regs discussions - that those are what drive companies to move operations (and hiring) overseas.
Now re-read your post above. Notice that you’ve totally moved beyond that context?
And what does “That sure as hell looks like corporations and the elite are winning to me.” have to do with anything? No one said anything about winning or losing, except for you. Can we not discuss a single issue?
They are all part of the same problem.
-Doesn’t matter if environmental regs went away completely. Jobs aren’t coming back. We still cost too much.
-Doesn’t matter if we all end up working for Chinese payscales. See above.
-Doesn’t matter if taxes and paperwork is reduced. See above.
Basically, we’ve been trying to run a “trickle down economy”…..if we let all our jobs “trickle down” to China, we’ll make it up on volume. Or something. And somehow, the tide would lift all boats.
We are the only advanced economy that has bought into this crap. Anyone who can do math can figure out that, if even 20% of the population of Mexico, China and India came online. there would be a lot more people looking for jobs than there would be jobs to do.
Most countries have gone out of their way, and “wasted” taxpayer money protecting their industrial base. Not us. The PTB here bought into the utopian “free market” view. But as long as their are politicians, and people willing to buy them, a “free market” is one of those mythical creatures, like candy-crapping unicorns.
Noe correct me if I’m wrong, but the Republican/Tea Party/Libertarian answer to all this is to “double down” on what got us into the situation we are in now. The libertarians claim to be the party of virtue, but we don’t know what they will actually do if elected to positions of power. Everything I know tells me that they will be compromised, just like the current batch of slugs.
Noe correct me if I’m wrong, but the Republican/Tea Party/Libertarian answer to all this is to “double down” on what got us into the situation we are in now.
I think it’s a mistake to group those three together. Republicanism and Libertarianism are very different ideologies these days. I’m honestly not sure what the “tea party” represents these days..it seems to be some unholy intersection of the two, where it started with more libertarian roots.
Your comment implies a known cause to this problem, and presumably that cause is lack of regulation? Of too low of taxes on high income earners?
I don’t think that position is correct. I certainly don’t think it’s a “given” as many here seem to take. Rather than champion a political ideology or party at this point, perhaps we should do an honest investigation of 1) the problem, 2) the causes, and 3) possible solutions/ways of avoiding ending up back in this situation.
So far, it seems most just “know” the answers to 1,2,and 3 a priori, and the only solution is to not vote for a republican or a libertarian because they’re the root cause of everything bad going on.
-The mainstream Republicans will say anything to get back in power.
-The Tea Partiers have simple solutions, when the actual fix may require some not so simple answers. And the fact that a bunch of them seem to be aligned with the religious right concerns me even more.
-Libertarian plans have definite appeal, if you want to turn back the clock to the late 19th/early 20th Century. Which can be good or bad. I’m not convinced yet that we’re ready to go there. And other than getting rid of the Federal Reserve, there doesn’t appear to be a dimes worth of difference between the Libertarians and all of the above.
My personal plan is to vote against EVERY incumbent. Hell, throw a few Green Party or Communists into the mix. If nothing else, we’ll force the banksters to buy the government all over again.
NEW YORK (Reuters) - The three major U.S. credit rating agencies won the dismissal of lawsuits seeking to hold them liable as “underwriters” for helping banks structure securities transactions in order to achieve desired ratings.
The 2nd U.S. Circuit Court of Appeals in New York upheld the dismissal of three lawsuits against McGraw-Hill Co’s (NYSE:MHP - News) Standard & Poor’s, Moody’s Corp’s (NYSE:MCO - News) Moody’s Investors Service and Fimalac SA’s (Paris:LBCP.PA - News) Fitch Ratings.
The class-action plaintiffs, which included a group of unions, said they bought $155 billion in mortgage pass-through certificates. They alleged the credit rating agencies made misstatements and omissions in the certificates’ offering documents and thus were liable.
The biggest kick back scheme ever devised. You rate my MBS as gold plated and I’ll pay you a giant commission.
Nope, no fraud here!
“TrueFinancialCult™” + “TrueFinancialInnovation™” + “TrueSerialLiquiditist™” =
“Fella’s, we need some “TrueSerialEnabler’s™” in order for this National $cheme to work, anyone have names$ & $uggestions?”
Hey, don’t $ue, that’s just Hwy’s,…OPINION!
AWESOME! They finally nailed a hedge funder to the wall. Of course, the penalty he’ll probably wind up paying will be a fine for a tenth of less of what he stole. Which is to say, no penalty at all, basically.
http://money.cnn.com/2011/05/11/news/companies/rajaratnam_guilty/index.htm?hpt=T1
Personally, I think if you are convicted of stealing more money than an average American makes in a lifetime, that’s a life sentence with no parole. I further think if you’re convicted of stealing more than 10 average Americans make in a lifetime, you should be put to death.
My view is a little less harsh. I think anyone convicted of a while collar crime should be sentence to poverty, on the grounds that the worst off people who don’t cheat others should better off than the best off people who do cheat someone.
A poverty sentence would involve the loss of all family assets, including the clothes on their backs (for which cheaper cloths could be substituted).
And then for a period of time, the convict would have to live in a high poverty area at a poverty income, leaving only to work (no business travel permitted). They could earn as much as they wanted, but the excess would be donated to charity. Their families could choose to share their fate, or not.
I know one should stop looking at real estate listings when one buys a house, but it’s almost like an addiction for me. After 1 year in the new home, I just today saw a listing that I think I might have liked better than my house. Same price as mine. Appears to be in better condition. Little less yard (which is ok with me). Good neighborhood…although mine is better. I’d classify my neighborhood as #1 in this school district with this other neighborhood #2.
Oh well. 1 in a year isn’t too bad.
I’m helping my sister find a new apartment. I’m honestly a little shell-shocked at the prices they’re asking. I was spoiled having no rental increase for years prior to buying. And I read today that rents are expected to rise due to demand. Glad I’m settled for now.
i do the same thing … it’s like an addiction
We bought 2 years ago. Amazingly, our neighborhood has held pretty steady. (now, for those who bought in 2006 or so, not so much) The housing stock is very similar so it is easy to compare. When I see a house for less than we paid, I check and it inevitable has an unfinished basement, or the original kitchen, or something. So I feel pretty good - so far - and we are paying extra to our mortgage principal each month to keep ahead. We’ll see.
We bought almost 2 years ago, and I keep rooting for prices to get lower in our neighborhood. I know we paid too much, but we got a double-sized lot. But we have friends who are currently ‘priced out’ of our neighborhood who could probably swing it if we were to get 10% below where we were at the last ‘bottom’, so hopefully prices here will drop below our price point.
I have a friend who got married and still had the compulsion to shop around. It didn’t end well.
Buyers remorse is psycho-warfare tool of marketing.
Filed under: We’re “Profe$$ionals” & “Ethical” and …
From the “Inside Job”:
“we’re $orry, we didn’t mean to hurt anyone, we won’t do it again, $lap us on the wrist, we want our life-$tyle back, it won’t happen again, we promi$e!”
“These were private consultants who consciously deceived the district about commissions that they were receiving,” Santa Ana Unified Trustee Audrey Yamagata-Noji said. “There was a pattern of deception that went on for years.”
Commissions, totaling more than $3.6 million, paid by Blue Cross and other carriers to the consultants caused Santa Ana Unified to be charged millions in higher insurance premiums, school district officials said.
Judge orders consultants to pay Santa Ana Unified $2.5 million:
By FERMIN LEAL / THE ORANGE COUNTY REGISTER / May 10, 2011
SANTA ANA – A Superior Court judge has ordered former Santa Ana Unified consultants to repay the school district about $2.5 million from commissions they concealed while negotiating employee benefit contracts.
Judge Dallas Holmes ruled that consultant Kirk Montgomery, through his firm KM Employee Benefits Services, and his associate Bridget Sirkegian hid from Santa Ana Unified millions of dollars in commissions they were paid by Blue Cross and other carriers while working for the district over a 39-month period, from 2001 to 2004.
Judge Dallas Holmes ruled that consultant Kirk Montgomery, through his firm KM Employee Benefits Services, and his associate Bridget Sirkegian hid from Santa Ana Unified millions of dollars in commissions they were paid by Blue Cross and other carriers while working for the district over a 39-month period, from 2001 to 2004.
And, mind you, these are the same health insurance companies that are tighter than bark clinging to a tree when you try to get them to pay a legitimate claim.
But, but, but…. we all know it’s the overpaid teachers that waste the money!
Oil Drops Below $100, Gasoline Tumbles, on U.S. Supply Surge:
By Mark Shenk
May 11 (Bloomberg) — Oil fell below $100 a barrel in New York and gasoline tumbled the most in more than two years after an Energy Department report showed that U.S. supplies surged and fuel demand slipped.
CME Group Inc. suspended trading of gasoline, crude and heating oil on the Nymex for five minutes starting at 12:06 p.m., said Laurie Bischel, a spokeswoman for the exchange in Chicago. Trading was stopped after June-delivery gasoline fell 25 cents, the daily limit. Limits were widened to 50 cents a gallon for gasoline and heating oil and $20 a barrel for crude.
BWAHAHAHicHAHAHicHAHAHAHAHicHAHAHic* (DennisN™)
Why was trading stopped? Don’t they believe in free markets?
Only when they win.
Heads I, tails you lose. Anything else is unAmerican.
Why CEOs Avoided Getting Busted in Meltdown: William K. Black
In the Texas “Rent-a-Bank” scandal of the 1970s, for example, two ringleaders created a fraud network of 50 lenders that caused billions of dollars in losses. The watchdogs removed and sanctioned one of the main culprits, but because the crimes weren’t prosecuted, the same crooks reappeared in the 1980s to do it all over again, only on a bigger scale. Unless you imprison the fraudsters, sophisticated financial scams grow ever more destructive.
It seems as if we have forgotten this lesson.
http://noir.bloomberg.com/apps/news?pid=20601039&sid=aZQZMRXqypyY
previously:
Rehired to the same job a month later:
AS it focuses on patterns of behavior
IT focuses on patterns of behavior
FOCUSES on patterns of behavior
ON patterns of behavior
PATTERNS of behavior
patterns of behavior
patterns of behavior
patterns of behavior
patterns
OF
BEHAVIOR
“Oh yeah, a buffer……..the family had a lot of buffers (laughs)”
Willi Cici
Nobody “forgot” anything.
Hard work and digging around…
———————–
First Person: Living a Six-Figure Lifestyle on a $30,000 Salary
Yahoo! Finance | May 10, 2011 | Brian C. Hopkins
Like millions of Americans out there, I like the nicer things in life. I have an affinity for high-end cars, designer clothing, and name-brand home furnishings.
There was a time when I had the six-figure income to afford these things. That was before the crash of what has now become known as the dot-com era. After losing many nice things, I learned that even living at one’s means can be a risky proposition. So the challenge became how to continue to live that lifestyle while spending drastically less than I did before.
I wanted to figure out how I could afford these things at a $30,000-a-year salary, just in case I ever had another salary decrease. That planning all paid off when the great recession came. Here’s how I learned to have a six-figure lifestyle with a $30,000 yearly budget.
How to Get the Big Home
This one was all about patience, hard work, and discipline. First: New homes are out of the question. They’re generally overpriced. I almost bid on a couple of for-sale-by-owner homes, but just couldn’t get the right combination of price and neighborhood. I focused on HUD homes and foreclosures, and learned quickly that banks don’t want homes on their books. I found a HUD home in a neighborhood with prices averaging above $200,000. My home was more than 60% less than that. It required a bit of work — I spent a lot of free time on it as a do-it-yourself project — but in the end I had my nice home. No one knows that I paid less than $80,000 and that I have a monthly mortgage payment of less than $500…..
Getting the Car to Match the Lifestyle
I Love Movado Watches
Got to Have My Designer Clothes
http://finance.yahoo.com/news/First-Person-Living-Six-ac-2328933919.html?x=0
With used cars prices stubbornly high, I think his “get a cool car for cheap” advice is pure BS. If the car is worth a lot more than is owed on it, it can easily be sold for a modest discount.
And for kicks I looked at my local craigslist. Nothing but clunkers with well over 100K+ on the odometer listed there. No late model Mustangs with someone begging you to take it off his hands (Mustangs really hold their resale value these days).
Used car prices are going thru the roof around here.
Shoulda bought a couple of 3-4 year old Honda Civics on spec. last winter
No late model Mustangs with someone begging you to take it off his hands (Mustangs really hold their resale value these days).
I was at a car show this past Sunday. The featured cars were street rods, and quite a few of them were for sale. I think I saw a vintage Mustang or two out there.
Any-hoo, many of those cars were for sale. I saw very few price tags that weren’t in the five figures.
The lower priced cars were real fixer-upper specials. As in, you wouldn’t be able to drive them for several years.
I had to stop reading.
You don’t buy a house on 30K income that will be appraised back at its high price after you’ve fixed it up. The tax alone will kill you. Not to mention the insurance.
Used cars? I won’t touch anything less than $5K and over 10 years old. Repair bills and bad gas mileage will kill you.
The writer of this article strikes me as a bit of a braggart.
I know a guy like that. He owned a Porsche, Ninja, 4wd, scuba equipment, skis, house, and had a family. His secret of courser was to buy broken things and fix them. I followed him once from China Lake to Los Angeles in his 12 year old Porsche. He got all the approving looks from the chicks. He was just a third class petty officer and not earning much. His house was about fifty years old, but he knew how to stretch the dollar. He is retired and has another house in Louisiana, of course in a cheap area.
“The U.S. Department of Housing and Urban Development has launched a new interactive mapping tool for Community Planning and Development agencies, interested agency partners, and the public.”
via Metafilter
Mucho Cool! Tankxs!
OMG - here we go again!
We have learned NOTHING.
—————————–
A Renewed Crackdown on Redlining
In the wake of the subprime implosion, the Obama Administration has stepped up its scrutiny of disadvantaged neighborhoods’ credit access
Community activists in St. Louis became concerned a couple of years ago that local banks weren’t offering credit to the city’s poor and African American residents. So they formed a group called the St. Louis Equal Housing and Community Reinvestment Alliance and began writing complaint letters to federal regulators.
Apparently, someone in Washington took notice. The Federal Reserve has cited one of the group’s targets, Midwest BankCentre, a small bank that has been operating in St. Louis’s predominantly white, middle-class suburbs for over a century, for failing to issue home mortgages or open branches in disadvantaged areas. Although executives at the bank say they don’t discriminate, Midwest BankCentre’s latest annual report says it is in the process of negotiating a settlement with the U.S. Justice Dept. over its lending practices.
Lawyers and bank consultants say regulators and the Obama Administration are scrutinizing financial institutions for a practice that last drew attention before the rise of subprime lending: redlining. The term dates from the 1930s, when the Federal Housing Administration drew up maps using red ink to delineate inner-city neighborhoods considered too risky for lending. Congress later passed laws banning lending discrimination on the basis of race and other characteristics. “The agencies have refocused on redlining because, in the wake of the subprime explosion and sudden implosion, they are looking at these disadvantaged neighborhoods and not seeing any credit access,” says Jo Ann Barefoot, co-chair at Treliant Risk Advisors in Washington, D.C., which consults with banks on regulatory issues.
http://www.businessweek.com/magazine/content/11_20/b4228031594062.htm
“2banana and X-GS agree……..in other news, hell freezes over!”
They must be handing out sweaters in hell, because I also agree.
The trouble with lending in poor and minority areas was that, for years, it just wasn’t done. That’s where the redlining charges came from. And, yes, they were true.
Then the predatory lenders got busy and started targeting these same areas. Oh, did they ever.
The book Broke USA covers this topic in great detail. Well worth the read.
The issue isn’t making million dollar loans to starwberry pickers. It is should people who live in a certain neighborhood be excluded from borrowing from banks that take deposits in that neighborhood. If person A makes X he should be able to borrow some f(x).
“The O.C.!”
From “got stucco”…to…”hang your
realtorwallethat”New reality home show set in O.C.
May 11th, 2011, by Jeff Collins
“Showhouse Showdown” – patterned after a similar program from Ireland – is the latest in a long line of real estate reality shows such as “Extreme Makeover Home Edition,” “Flip This House,” “Million Dollar Listing,” and “Dress My Nest.”
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
This fellow should be smacked with a jail sentence no doubt, but the really, really big criminals go about their business of fleecing the system and the country daily, and loving every minute of it.
Rajaratnam Guilty on All Counts in U.S. Insider Case
May 11 (Bloomberg) — Raj Rajaratnam, the hedge-fund tycoon and Galleon Group LLC co-founder at the center of a nationwide insider trading crackdown, was found guilty in the largest illegal stock-tipping case in a generation.
A jury of eight women and four men in Manhattan returned its verdict today after hearing evidence that Rajaratnam, 53, engaged in a seven-year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies including Goldman Sachs Group Inc. (GS) He gained $63.8 million, prosecutors said.
The trial came as Manhattan U.S. Attorney Preet Bharara promised to crack down on “rampant” illegal trading on Wall Street. Rajaratnam was convicted on five counts of conspiracy and nine counts of securities fraud. Prosecutors today said he faces 15 1/2 years to 19 1/2 years in prison at his July 29 sentencing.
“Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over,” Bharara said in a statement after the verdict. “Rajaratnam was among the best and the brightest — one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing.”
What bull. He was greedy and corrupt from the beginning.
Just a belated note to the HBB.
Thanks for all the well-wishes and congrats yesterday.
And just a reminder.
The reality is that there are a lot of highly trained, experienced people out there who got thrown under the bus back in 2008-2009, and are still looking for work. Being at the wrong place at the wrong time has been the common story. It’s not a matter of “retraining”. There’s been no place to go to, even if you did retrain.
The size of my industry has shrunk approx 60% since 2008. I know this isn’t an uncommon stat for a bunch of industries. At 1-2% a year, we might get back to 2007 income and employment numbers 25 years from now. Assuming that nothing happens between now and them.
Agreed.
I was talking with my wife about all things we could afford to do 10 -20 years ago that are simply out of the question now.
Its a long list.
My industry has shrunk as well. The State U in Ft. Collins used to have 1000 students enrolled in CS and MIS (IT) programs circa 2000. Today they have fewer than 100. The kids know that being an “individual contributor” is the road to stagnant wages and recurring layoffs, so they’re all either in Biz School or training for a healthcare “career” instead.
Many will try, few will win.
“Healthcare Career” is the latest bubble.
Part of the reason health care will fix itself. All these people with newly minted Health Care degrees are coming on line, and will end up working for $15/hour.
And BTW, ran into a new health care scam yesterday……(from Wiki)
“Colchicine…….oral colchacine has been used for many years as an unapproved drug…….
on July 29, 2009 FDA approved colchacine….and gave 7 year marketing exclusivity to URL Pharma, un exchange for URL Pharma doing two new studies. URL Pharma raised the price from $.09 per pill to $4.85, and sued to remove other versions from market……..”
“Colchicum extract was first described as a treatment…..in the First Century CE. Colchicine was first isolated in 1820……”
NPR had a RN segment recently, and newly minted RN’s aren’t finding work. As the pool of insurance premium payers shrink, the pool of Nurses indeed shrinks. Anyone who thought otherwise is delussional . The beam of hope was the demand for RN’s will improve w/ 78M Baby Boomers needing health care. Where’s the salary $ going to come from? Goodbye high paying jobs.
Everything in the economy is interconnected.
We just dropped Kaiser effective June 1st.
You haven’t seen anything yet.
STates are rolling back medicaid.
Medicare is about to be put in a vice.
The health care industry is about to take a real slap of reality.
It will be interesting to see a large # of doctors who thought they were the elite tossed into the pit with the sinking middle class.
Postal Service reports billions in losses
Associated Press
WASHINGTON – The Postal Service is continuing to hemorrhage money, reporting a loss Tuesday of more than $2 billion over the first three months of the year and warning it could be forced to default on federal payments.
Such a default would not interrupt mail service to millions of Americans, but it could further hobble an agency struggling with a sharp decline in mail because of the Internet and a tough economy.
The agency says the $2.2 billion loss covers Jan. 1 to March 31, 2011 — sharply higher than the net loss of $1.6 billion for the same period last year. The post office also said it will have reached its borrowing limit, set by Congress, of $15 billion by the end of the fiscal year.
Unless Congress intervenes, the Postal Service said, the agency won’t have the cash for certain payment to the government, such as billions for a trust fund to provide health care benefits for future retirees.
“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” said Postmaster General and CEO Patrick R. Donahoe. “The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens.”
Total mail volume, about 41 billion pieces, was down 3.1 percent for the January to March period, compared to the same time a year earlier, the Postal Service said. A modest increase in revenue from standard mail wasn’t enough to offset the revenue loss from fewer pieces of first-class mail.
In the last three years, the agency has cut over 130,000 jobs. And it’s making more cuts, with the elimination of about 7,500 administrative jobs in regional offices.
The Postal Service does not receive tax money for its operations.
Total mail volume, about 41 billion pieces, was down 3.1 percent for the January to March period, compared to the same time a year earlier, the Postal Service said. A modest increase in revenue from standard mail wasn’t enough to offset the revenue loss from fewer pieces of first-class mail.
For those who aren’t familiar with the USPS terminology, Standard Mail is what a lot of us call junk mail.
And, speaking from personal experience, the costs of this type of mail has gone up quite a bit in recent years. (Printing and postal costs, I’m lookin’ at you.)
Add the rise of “stop junk mail” services like Tonic to the mix and you have a form of business promotion that’s on the way out.
Plus some of us are listed on the “opt out” list from the Direct Marketer’s Association (did it online). We love not getting junk mail from people we don’t do business with, or have no desire to do business with.
Federal judge issues arrest warrant for lawyer in mortgage-fraud trial
By JAY WEAVER and JAMES H. BURNETT III
The Miami Herald
Posted: 11:31 p.m. Tuesday, May 10, 2011
A federal judge Tuesday issued an arrest warrant for a defense attorney after he failed to show up for the start of a major mortgage-fraud trial of a former Plantation police officer, his brother and a real estate lawyer.
Guaracino’s trial is the second phase of the mortgage-fraud case, in which a group of current and former law enforcment officers, mortgage brokers, title processors and lawyers were charged with conspiring to defraud banks by falsifying loan applications and other documents to purchase dozens of investment properties during the real estate boom.
At the end of the first trial in April, a Fort Lauderdale federal jury acquitted four current and former law enforcement officers — including an FBI agent — but convicted two other former police officers.
http://www.palmbeachpost.com/news/crime/federal-judge-issues-arrest-warrant-for-lawyer-in-1467486.html - -
I don’t blame businesses for doing it. I blame politicians for allowing it. Either way, it’s outrageous.
Comcast taps FCC Commissioner Meredith Attwell Baker for D.C. office
May 11, 2011 | 12:58 pm
Cable giant Comcast Corp. has hired Federal Communications Commissioner Meredith Attwell Baker as senior vice president of government affairs for its NBCUniversal unit.
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/05/comcast-taps-fcc-commissioner-meredith-attwell-baker-for-dc-office.html?cid=6a00d8341c630a53ef014e885f13ac970d
The Japanese have a name for it - “descent from heaven” aka “amakudari”. It was an issue raised in the Fukushima crisis
I blame them both, business buys our politicians. Gov is a tool, the elite have stolen that tool from the people and are now using it against us. It’s no different then the don’t blame the gun blame the criminal arguement.
It is enough to make you vomit
Along with fellow Republican commissioner Robert McDowell, Baker opposed the controversial “network neutrality” rules approved by the commission’s three Democrats last year. Those rules, which prohibit phone and cable companies from interfering with Internet traffic on their broadband networks, are now facing legal challenges from Verizon and Metro PCS.
The companies are suing the FCC in the same federal appeals court that ruled against the agency last year in a case involving Comcast. The court said the agency had exceeded its legal authority in sanctioning Comcast for discriminating against online file-sharing traffic on its broadband network
Cable giant Comcast Corp.
Linda the Lunch Lady lives Lavishly!
heheeeheeeheehaahaaahaaheeehaahaaa… (Hwy50™)
Stay focused America! Get filled with “TrueAnger™”
Linda the Lunch Lady lives Lavishly!
Rent or Buy, a Matter of Lifestyle
By DAVID LEONHARDT
Published: May 10, 2011
New York Times
“Real estate agents across the country are aggressively making the case that now is a good time to buy a house. Mortgage rates are near record lows and will probably rise in coming years. Home prices may not be done falling, but they probably don’t have much further to go in most places either. Rents, on the other hand, seem set to increase, thanks to low vacancy rates.
“Renters beware,” warned a newsletter that I recently received from a real estate agents’ group.
[...]
The truth is that you can make just as strong a case in many places for renting. For starters, neither mortgage rates nor rents are likely to rise rapidly. Even more important, house prices, relative to rents, remain higher than their long-term average, especially in much of California, the Pacific Northwest and the New York region. In these places, among others, renting is often cheaper than buying — still. ”
http://www.nytimes.com/2011/05/11/business/economy/11leonhardt.html
Sorry to seem dense, but wouldn’t replacing Fannie and Freddie with “nothing” be just what is needed to get the private mortgage market back up and running? And why are federal guarantees even necessary? The mortgage market got along fine back when nobody realized Fannie and Freddie actually had them.
POLITICS
MAY 12, 2011
Bill Proposes Mortgage Shake-Up
By NICK TIMIRAOS
Two lawmakers, a California Republican and a Michigan Democrat, are set to unveil legislation Thursday to replace mortgage giants Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees.
The measure is a compromise between conservative Republicans who have advanced bills to build a mostly private mortgage-finance system and Democrats, who say the government shouldn’t abandon the mortgage market.
Fannie and Freddie were taken over by the government in 2008 as rising mortgage losses wiped out thin capital cushions. Taxpayers are on the hook for $138 billion to keep the companies afloat and stabilize mortgage markets.
Amid an uneven housing recovery, lawmakers have largely shied away from fashioning a successor to the failed mortgage giants.
Analysts say that the compromise proposed by Rep. John Campbell (R., Calif.) and Rep. Gary Peters (D., Mich.) may be the only plan likely to attract sufficient support from both parties on a politically explosive subject, particularly at a time when gridlock looms over issues such as how to curb federal spending.
Other policy makers, including Treasury Secretary Timothy Geithner, have publicly discussed the merits of a limited but explicit government guarantee of securities backed by certain types of mortgages.
Rep. Campbell said, “Rather than putting out a political marker, we can move a piece of legislation that is significant…and can actually become law. The only other approach that’s out there in a bill is one that replaces Fannie and Freddie with nothing.”
…
REVIEW & OUTLOOK
MAY 12, 2011
Obama’s Running Mate
Mitt Romney’s ObamaCare problem.
Mitt Romney travels to Ann Arbor today to deliver what his campaign bills as a major address laying out his “2012 principles for health-care reform.” These are likely to be sensible, but what we’ll be listening for is how he explains his health-care principles of five years ago.
As everyone knows, the health reform Mr. Romney passed in 2006 as Massachusetts Governor was the prototype for President Obama’s version and gave national health care a huge political boost. Mr. Romney now claims ObamaCare should be repealed, but his failure to explain his own role or admit any errors suggests serious flaws both in his candidacy and as a potential President.
…
BY THE NUMBERS
MAY 10, 2011, 9:06 A.M. ET
How the $8,000 Tax Credit Cost Home Buyers $15,000
Price declines have more than eclipsed savings, new numbers show.
By JACK HOUGH
The government’s recent $8,000 cash incentive for first-time home buyers has proved even more costly for recipients than for taxpayers, according to data released Monday. Typical buyers have lost twice as much to price declines as they received from the program.
The median home value fell to about $170,000 in March from $185,000 a year earlier, according to Zillow.com. That means a buyer who closed on a house just before the tax-credit program expired in April 2010 collected $8,000 but has since lost $15,000 in value. Those who bought earlier in the program have done worse; the median price is down $20,000 from March 2009.
“The $8,000 first-time home buyers tax credit . . . has brought many new families into the housing market,” the White House boasted in November 2009 upon announcing an extension and expansion of the program. Judging by sales declines since, that seems beyond doubt. Over the past year, the pace of existing home sales has fallen more than 6% and that of new home sales has fallen 22%.
The credit wasn’t great for taxpayers, either. IRS says it paid $26 billion in home buyer credits in 2009 and 2010, enough to cover the maximum $8,000 credit for more than 3 million buyers. (It says at least $513 million went for fraudulent claims. Some claimants hadn’t bought houses. Some filed twice. Some were under age 18 or incarcerated.)
…