The Housing Bubble

Realtors Are Liars

July 1st is the start of the new fiscal year in NY. I thought this was the year we were going to see real changes due to the end of the 2 year federal stimulus injection but except for the poorer districts haven’t seen much change locally. I was pretty surprised about this. Does this mean the borrowing merely continues? Or that announcements have not been made yet?

Goooood Morning all you low life renters out there and welcome to WHBB where it`s a beauuuutiful day in West Palm Beach. It`s gonna be a hot one so why don`t you grab that For Sale sign and bring it along for shade. This is cousin Jethro spinnin the hits and this one is from Tony I`m being foreclosed on in Orlando and Dawn and it`s goin` out to all those victims who have been livin rent freeeee for years.

Here`s Tie A Yellow Ribbon

I’ve lost my home, I’ve had my time
Now I’ve got to know what is and isn’t mine
If you received my letter telin’ you I’ve lived for free
Then you’ll know just what to do if you still want me
If you still want me

Send a mortgage cram-down to my wife and me
It’s been three long years
That I’ve lived for free
If I don’t get a mortgage cram-down for my wife and me
I’ll load up the bus
Forget about us
Put the blame on me
If I don’t get a mortgage cram-down for my wife and me

Hey lawyer, please look for me
‘Cause I couldn’t bear to see what I might see
I’m really in foreclosure, and my bank she holds the key
A simple mortgage cram downs` what I need to set me free
I wrote and told them please:

Send a mortgage cram down to my wife and me
It’s been three long years
That I’ve lived for free
If I don’t get a mortgage cram-down for my wife and me
I’ll load up the bus
Forget about us
Put the blame on me
If I don’t get a mortgage cram-down for my wife and me

Now the whole damn block is cheering
And I can’t believe I see
A big eviction notice hangin ’round the old oak tree

O.C. home values fall $5.4 billion
May 25th, 2011, by Jon Lansner

Orange County home values have fallen a collective $5.4 billion in six months, according to a study by CoreLogic done for the Real Estate Research Council of Southern California.

This math shows that all Orange County homes were worth of total $386.9 billion in the first quarter — down $1.8 billion (0.5%) from 2010′s final quarter after falling $3.6 billion (0.9%) between the fourth and third quarters of last year. CoreLogic compiles this estimated value of by tracking every residential property vs. other indexes that are based on what homes sold in a particular period. This recent drop in value is not totally surprising considering that many other barometers have shows real estate sluggishness since last summer. And one likely culprit for the price weakness is the end of tax incentives offered to house shoppers through June 30 of last year.

Orange County’s recent price drop is slightly worse than the rest of Southern California. The combined values of homes in the 6 other SoCal counties tracked by CoreLogic was $1.537 trillion in the first quarter — down $18 billion (or 1.16%) compared to the third quarter of 2010. Only Riverside County’s collective home value rose in this six-month period among SoCal’s 7 counties. In that same period, Orange County homes fell $5.4 billion or 1.37%.

Orange County’s recent value drop essentially wiped out a year of value gains that started in the fourth quarter of 2009.
Posted in: Home prices • corelogic • Real Estate Research Council of Southern California

Visualize Economic Collapse

I put through a post I don’t know if it will survive the filters.

It appears the NAR is urging its membership to write Congress and tell them to vote No on requiring 20% downpayments. My realtor had referred to a meeting where they were told sales would collapse if new regulations governing Qualified Residential Mortgages (QRM) took place because people had already spent the money.

We should probably write Congress and tell them it’s what the system needs.

How to Beat the Market: Follow the Trades of 19 Senators on the Senate Armed Services Committee Who Own Stocks on Prohibited List

Want to beat the market? Here’s how: Take the investment picks of Congress.

In a new academic study, four university professors examined investment results on more than 16,000 stock transactions made by 300 House delegates from 1985 to 2001. The result was clear: They beat the market by an average of 0.55% per month, around 6.6% a year. The professors note a previous study showed members of the U.S. Senate did so well they outperformed hedge funds.

In fact, if members of Congress didn’t beat the market, they’d be bigger morons than you already think they are. Why? Because insider trading laws don’t apply to members of Congress…

You heard that correctly. The Securities and Exchange Act does not apply to members of the U.S. Senate or House of Representatives. Congressional ethics rules say Congressional members aren’t allowed to use privileged information for personal gain. But it’s just a rule, not a law. It’s not legally enforceable. And it’s obvious they’re taking excess profits out of the stock market…

This must be one of the most underreported financial stories of the century. Take one example: The Senate Armed Services Committee forbids staff and presidential appointees requiring Senate confirmation from owning securities in more than 48,000 companies that contract with the Defense Department.

But 19 of the 28 senators on that same committee held assets worth between $3.8 million to $10.2 million in companies on the prohibited list between 2004 and 2009.

19 Senators Own Stocks on Prohibited List

The “new” academic study referenced by Stansbury and Associates is Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives. The data isn’t new. The data is from 2001, as the email even states.

The email goes on to say that “19 of the 28 senators on that same committee held assets worth between $3.8 million to $10.2 million in companies on the prohibited list between 2004 and 2009″.

That is new, at least to me, but is it really new news? I will return to that question in a moment. First consider this question …

Should Insider Trading Laws Even Exist?

My answer: It is debatable whether there should even be insider trading laws, but if such laws should exist at all, the one place they should be just happens to be the one and only place they are not: Congress.

For a nice discussion on my answer above, please consider Robert Murphy’s article Is Insider Trading Really a Crime?

Where’s the Beef?

Returning to the forwarded email, please note that the allegations regarding “19 of 28 senators”.

Who are those senators? You may prefer that phrased as a question we have not heard for a while, “Where’s the Beef?”

While pondering “Where’s the Beef?”, I point you to The Daily Crux article Disgusting rules allow Congress to profit from insider trading

… I also told you on Tuesday how famous investors like Bruce Berkowitz and John Paulson were taking advantage of the government’s heavy-handed regulation and backstopping of the financial system.

Well, Berkowitz and Paulson are late to the party. They’ve got nothing on Amy Friend, the chief counsel to Senate Banking Committee Chairman Christopher Dodd. At the height of the crisis, when the government was making plans to bail out AIG and other large financial institutions, Friend bought $1,000 to $15,000 stakes in Morgan Stanley, Wells Fargo, AIG, Fannie Mae, Freddie Mac, Federal Home Loan Bank bonds, and Fannie Mae debt.

Friend bought FHLB and Fannie Mae debt in June and July 2008, just days before President Bush signed a bill that gave the government housing finance agencies big cash injections from the Treasury. Friend is still in the game today, helping to draft Dodd’s sweeping overhaul of the financial regulatory system.

If you or I did what Friend is doing, we’d wind up like Martha Stewart. But for her, Senate rules say it’s perfectly legal. No SEC investigation. No insider trading violation.

http://globaleconomicanalysis.blogspot.com/2011/05/how-to-beat-market-follow-trades-of-19.html

~ Henry Ford said on February 11, 1934: “Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again.”

-Hard to believe that a person could be this uncompassionate and evil. When all one needs to do is spread others inability and failures on to everyone else, via goobermint.

OECD: America risks a crisis unless it raises interest rates

America runs the risk of a crisis unless it raises interest rates and lays out a plan to cut its deficit by the end of the year, a leading economic think-tank has warned.

By Richard Blackden, US Business Editor
8:30PM BST 25 May 2011

Interest rates should be lifted to 1pc by the end of the year from their current band of between 0pc and 0.25pc, according to the latest semi-annual outlook from the Organisation for Economic Co-operation and Development (OECD).

Doing so would avoid the Federal Reserve having to raise rates more quickly later to counter inflation, according to the think-tank’s economists.

http://www.telegraph.co.uk/finance/economics/interestrates/8536547/OECD-America-risks-a-crisis-unless-it-raises-interest-rates.html - -

Murder house for sale: Would YOU buy a home where three people were killed in a decade? By Fiona Roberts 27th May 2011

It doesn’t quite fit with a real estate agent’s usual spiel: three well-appointed bedrooms, a large garden - and three murders.

Welcome to 9337 Columbia Boulevard, Silver Spring, Maryland, a house with a bloody past which has gone on the market for $515,000.

Bloody past: Three people have been brutally murdered in this two-storey colonial home, which has now been put on the market for $515,000

The family of Mr Betts, a popular middle school principal, wanted the home to be bulldozed after he was shot in his bedroom in April last year by an 18-year-old he met on a gay chatline.

Instead, the 1936 two-storey brick house went up for sale again after his relatives returned it to the bank.

It originally went on the market in April, for $535,000, but the asking price was lowered by $20,000 earlier this month.

Under Maryland state law, real estate agents do not have to tell prospective buyers if the house has been the scene of a murder.

So when Mr Betts, a principal at Garnet-Patterson Middle School, bought the property in August 2003, he had no idea a little girl and her father had been brutally murdered there the year before.

Erika Smith, nine, was pistol-whipped and shot in the back at point-blank range by Anthony Kelly, who broke into the kitchen on August 6, 2002 wearing a wig and a fake beard.

She screamed ‘daddy, daddy’, and her accountant father, Greg Russell, ran to help his little girl - but it was too late.

Then Kelly turned the gun on Mr Russell, shooting him at least six times, before picking up a New Testament with $3 hidden inside and running off.
It was part of a violent crime spree including two rapes, for which Kelly received two life sentences without parole after he was found guilty in 2008.

When Mr Betts discovered what had happened in his new home, he tried desperately to get out of the deal.

His family’s attorney, Rene Sandler, told NBC: ‘He was saddened, he was shocked, he was upset and did everything he could to rescind the purchase of this house.’

When he was told he couldn’t, he asked two ministers to bless the house in an attempt to rid it of any evil spirits.

Then on April 14, 2010, he met 18-year-old Alante Saunders on a gay sex chatline.
Killer: Alante Saunders, 18, pleaded guilty to shooting popular school principal Brian Betts in the bedroom of his house in Maryland

On the market: The house, the scene of three murders, is for sale on Zillow with an asking price of $515,000. It has been reduced from $535,000

The next day, Saunders and three other teenagers entered the house and shot Mr Betts in his bedroom in what police believe was a deliberately-planned robbery.

Saunders pleaded guilty in November and was given a life sentence with all but 40 years suspended.

The murder of the popular principal, who had been an advocate for local school reform, prompted an outpouring of grief, and 2,000 mourners attended his memorial service.

Mr Sandler said: ‘If the Betts family had their way, they would have bulldozed this house, they would have done a memorial permanently for Brian K Betts.’

Read more: http://www.dailymail.co.uk/news/article-1391221/Would-YOU-buy-home-people-died-just-years.html#ixzz1NYZuTAVX

I do not like the patriot act. I also do not like Arizona, where the cops will break your door down and immediately begin spraying bullets from semi-automatic weapons, killing everyone in sight. Wife and baby home? Too bad. This makes me think we all to do more than just stock up on semiautomatic weapons. We need to build defenses around our houses to keep the cops out.

From yesterday’s Wash Post article about Sarah Palin’s bus tour:

Asked the purpose of the trip, Tim Crawford, the treasurer of Palin’s PAC, said, “Because she wants to see how this nation was built and get fired up about that.”

On her Web site, Palin wrote: “I’ve said many times that America doesn’t need a ‘fundamental transformation,’ instead we need a restoration of all that is good and strong and free in America! So, together let’s prepare ourselves for the days ahead by reminding ourselves who we are and what American stand for.”

From Reuters: Consumer spending tepid as inflation accelerates

High food and energy prices in April kept inflation elevated last month, with the personal consumption expenditures price (PCE) index rising 0.3 percent after advancing 0.4 percent in March.

The core PCE index — excluding food and energy - increased 0.2 percent on month after rising 0.1 percent in March.

As I have said about this area before, prices are affordable in neighborhoods where “average people” don`t want to live.
That is why there is not ” a line in front of real estate
offices.”

Falling prices, low-rate mortgages put record number of homes in South Florida within the grasp of average people

By Jeff Ostrowski Palm Beach Post Staff Writer
Posted: 8:03 a.m. Friday, May 27, 2011

You could call it the upside of the downturn: Housing affordability in Palm Beach County hit a new high during the first three months of the year.

Thanks to plunging home prices, resilient incomes and low mortgage rates, 77.5 percent of homes sold in the first quarter were within reach of a median-income family, according to an affordability index released this week by the National Association of Home Builders.

Plunging prices are a painful but necessary part of any housing recovery, economists say.

“At least one piece of the puzzle has returned,” Wells Fargo economist Mark Vitner said. “Affordability is in place.”

Although sales of homes have picked up, the favorable affordability numbers haven’t created boom-like conditions.

“Everything is aligned in a straight line to make housing unbelievably affordable,” said Douglas Rill, who owns Century 21 America’s Choice in West Palm Beach. “You might think that with that kind of affordability, there’d be a line in front of real estate offices. But sadly, that’s not happening.”

http://www.palmbeachpost.com/money/real-estate/falling-prices-low-rate-mortgages-put-record-number-1501812.html?cxtype=rss_real-estate_25296 - -

Just another lowlife lying POS…Voters are smart!

March 18, 2011 ~ ABC News

President Obama told a bipartisan group of members of Congress today that he expects the U.S. would be actively involved in any military action against Libya for “days, not weeks,” after which he said the U.S. would take more of a supporting role, sources tell ABC News.

Repairman Faces Charges Of Cleaning Out Bay Area ATMs, Refilling Them With Counterfeit Bills

REDWOOD CITY (CBS SF) – It was en elaborate heist that nearly paid off, big time. An ATM repairman swapped out fake bills for real cash, police said, getting away with $200,000.

The phony $20 bills coming out of some Bank of America automated bank machines last July 4 didn’t fool anyone. They were printed on a photocopier and stuffed into the ATM by a serviceman, who took the real money and fled, according to investigators.

“He went into seven of these machines, took the cash out and replaced it with counterfeit, and not sophisticated, just simply taking some bills, placing them on the Xerox machine, cut them up and put them in its place in the machines,” said Steve Wagstaffe, San Mateo County District Attorney.

The real money, $200,000, was on its way out of town, along with 64-year-old service man Samuel Kioskli, police said. Two weeks ago, Kioskli, of San Francisco, was arrested in Phoenix.

Pending home sales dive 11.6 percent in April
Reuters

NEW YORK (Reuters) - Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.

U.S. consumer sentiment improved in May as job gains offset high gasoline prices, while inflation expectations diminished, a survey released on Friday showed.

Charlie Sheen puts Sober Valley Ranch up for sale, porn company makes offer. L.A. Times

Heads up: Actor Charlie Sheen appears to be making some big changes in his life and has just listed his long-time Sherman Oaks residence for $7.2 million, according to The Real Estalker.

While the world knows Mr. Sheen is now unemployed (Ashton Kutcher is set to take over Sheen’s role on the sitcom “Two and a Half Men”), a Forbes report shows Sheen racked up about $40 million over the past year, so it’s obvious that Sheen isn’t selling because he can’t afford the mortgage payment.

And Sheen already has a cash offer on the table! An online porn site has reportedly offered Sheen $4million for the house, and says it would fill it with porn stars, as Sheen once said he wanted to do.

Not only that, the former owner would be welcome to come over any time.

Sheen has owned his Sherman Oaks residence on Aubrey Road since 1997, buying it for $2.5 million. Just this past March, Sheen purchased a second home about nine houses away in the gated community of Mullholland Estates. The second estate, which has a recorded sale price of $6,999,999 (listed for $7.5 million) is just a few blocks away from the Sheen home that just went on the market.

The reported idea behind the purchase of the second McMansion, in addition to allegedly purchasing a few more properties in the neighborhood, was to give one to ex-wife Denise Richards and another to Brooke Mueller (Sheen’s soon-to-be ex-wife). Apparently his torpedo of truth exploded on that idea and Sheen has decided to list the Aubrey Road home he has owned for over a decade.

Sheen’s Sherman Oaks mansion is a custom-built Mediterranean estate with 5 bedrooms, 7 bathrooms and nearly 8,000-sq ft of living space. Other features include a private screening room, and a professional outdoor kitchen with dining area, pool, and spa.

No doubt that the world of Sherman Oaks real estate is on deck for some real estate crazy, but only time will tell what exactly it might be.

Some personal anecdotes from the housing front:

A friend of mine gave one (of her two) rental properties back to the bank, and got a deed-in-lieu approved and done. AFAICT there will be no deficiency judgement. I was surprised at how quick and clean this went, compared to how we usually hear these things go. I don’t hear much about deeds-in-lieu happening very often, but friend is greatly relieved.

An acquaintance of mine missed their first mortgage payment. This one doesn’t have very good money management skills. Still gets her hair colored and nails professionally done regularly, lunches are always take-out, the family took three vacations (so far) in 2011. I don’t think this is going to end well.

Revisiting Barney Frank
By Neal Boortz

So Slobbering Barney Frank finally admitted helping Herb Moses get a job at Fannie Mae during the early 1990s. Who was Herb Moses? Hunky Herb was Barney’s boyfriend at the time. Why does it matter? Because Barney Frank was on the committee that regulated Fannie Mae at the time he helped his lover get the job … and then for the next few years when Herb Moses was one of the Fannie Mae executives pushing the very Fannie Mae loan guarantee programs that led to our housing and mortgage crisis, while escaping rigorous oversight from Congress. A conflict of interest? Hell ya! But not according to Slobbering Barney Frank. He says, “If it is (a conflict of interest), then much of Washington is involved (in conflicts). It is a common thing in Washington for members of Congress to have spouses work for the federal government. There is no rule against it at all.”

Working for the federal government, fine. But serving on the Congressional committee that oversees your lover’s job? In 2003, the Bush administration proposed altering the regulation of GSEs like Fannie Mae and Freddie Mac. Barney Frank had this to say at a hearing of the Financial Services Committee on the subject:

” I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury”….

ALEXANDRIA, Va. – A judge has ruled that the campaign-finance law banning corporations from making contributions to federal candidates is unconstitutional, citing the Supreme Court’s landmark Citizens United decision last year in his analysis.

In a ruling issued late Thursday, U.S. District Judge James Cacheris tossed out part of an indictment against two men accused of illegally reimbursing donors to Hillary Clinton’s Senate and presidential campaigns.

Cacheris says that under the Citizens United decision, corporations enjoy the same rights as individuals to contribute to campaigns.

The ruling from the federal judge in Virginia is the first of its kind. The Citizens United case had applied only to corporate spending on campaigning by independent groups, like ads run by third parties to favor one side, not to direct contributions to the candidates themselves.

Happy Crazy Headline Friday

Man arrested for stealing gun after it’s thrown from reckless vehicle with flat tire caused by bullet hole

http://www.santacruzsentinel.com/ci_18151607?source=most_viewed

SANTA CRUZ - A report of a reckless vehicle with a bullet-ridden tire and a gun found on a Westside sidewalk led to the arrest of a 19-year-old man Thursday night.

Police said just after 7 p.m., someone reported the reckless vehicle in the area of West Cliff Drive and Sacramento Avenue. Witnesses said someone threw a gun from the vehicle, which reportedly had a flat thanks to a bullet in the tire, according to Lt. Larry Richard. Witnesses said the gun was lying on the sidewalk when a man walked by, picked it up and headed north on Stockton Avenue toward Modesto.

The video is funny. (And it’s free)

(Congressman (R)) Rob Woodall Won’t Give Up Government Health Care ‘Because It’s Free’

http://www.commondreams.org/headline/2011/05/25-4

WASHINGTON — Moments after preaching extreme self-reliance to one of his constituents, a Georgia Republican told a gathering in his district that he will continue to rely on government-subsidized health care “because it’s free.”

…comments he made…to a retired constituent who told him her company does not provide retiree benefits.

“Hear yourself, ma’am. Hear yourself,” Woodall told the woman. “You want the government to take care of you, because your employer decided not to take care of you. My question is, ‘When do I decide I’m going to take care of me?’”

Woodall was asked why — if he believes in such self reliance — he doesn’t forgo his government health care plan.

“I have a question about taking care of you. You have government subsidized health care, but you are not obligated to take that if you don’t want to. Why aren’t you going out on the free market in the state where you’re a resident and buy your own health care? Be an example,” said a constituent in the new video.

…”It’s because it’s free. It’s because it’s free,” he said. “The same reason I went out to Walgreen’s and bought ActivOn and I don’t have any arthritis pain: Because it’s free. …

Wall Street Higher As Dollar Lifts Commodities
{Perky headline masks dollar weakness.)

Guys and gals with a knack for spinning negative trends into something positive work every day weaving the headlines and subheads in financial news.

“Dollar lifts commodities” has a nice ring to it. “Wall Street Higher” is good copy, too. And it’s true! The dollar’s weakness today has definitely boosted the price of gold. It was $1,536.70 per ounce in the noon hour spot market.

The word “weak” is missing from the headline above, as in “weak dollar lifts commodities.”

← It’s not easy to write about money and economics. They may affect us all, but the subjects are simultaneously boring and confusing. Even a good friend will go glassy-eyed if flaws in today’s system of currency and credit are raised. “Federal Reserve Notes not backed by anything of intrinsic value? Geez. . .who cares? Just put more of whatever they are in my pocket.”

About half the voting population thinks “money problems” would be solved if the government would more efficiently shake down the rich, Robin Hood style. Take from the rich and give to the poor.

It’s Marxist ideal - -”From each, according to his ability, to each according to his need.”

The problem: It doesn’t work.

The National Association of Realtors® keeps claiming there’s never been a better time to buy, but nobody believes it anymore.

http://reason.com/blog/2011/05/25/survey-says-owning-a-house-is?

Reason Magazine said this. Do you see? Nobody believes NAR anymore. Do you hear me NAR-Scum? I know you’re reading…. nobody believes you anymore. Do you know why? I think you do. You’re liars. All of you. You’re dishonest. Corrupt.

None of you can be trusted.

This is about a month old, so you all have probably seen it already. But i just love the logic of this lady:

msnbc
Rules for ‘jumbo’ mortgages to change this year

WASHINGTON — Bethany and Karl Schreiber are hunting for a nice big house in the pricey Washington, D.C., suburbs and they are facing a deadline: In just a few months their third child will be born, and the tiny two-bedroom they’ve been inhabiting will officially get too small.

But there’s a second deadline looming for them as well. Beginning on Oct. 1, the government will dial back on the size of mortgages it guarantees in high-cost areas like San Francisco, New York and Washington.

After that, the maximum loan amount that Fannie Mae and Freddie Mac will back is scheduled to drop from $729,750 to $625,500. And that may make mortgages more expensive or harder to get for buyers like the Schreibers, who are shopping in the $700,000 range and would prefer to make a downpayment of 10 percent or less.

“If we wait a year, we may not be able to afford as big a house,” Bethany said in an interview. “Rates and housing prices are probably going to go up.”

………………

Seriously? (a) Lending is going to be curtailed, and you think prices are going to go up? (b) You expect interest rates to go up, and you think prices are going to go up? What an idiot.

Ben probably knows all about this

NY times about blogging http://finance.yahoo.com/news/My-Blog-Is-Also-Paying-My-nytimes-1951716015.html?x=0

Casting the digital equivalent of a message-in-a-bottle into the Internet’s vast sea of content, many people start Web sites or blogs hoping that they will find an appreciative audience for their precocious parrot videos, cupcake recipes or pithy commentary on everyday life. The dream, of course, is that they will develop a large and loyal following — and potentially profit from it.

“I tell people if they want to start a blog just to make money, they should quit right now,” Mr. Pavlina said. “You have to love it and be passionate about your topic.”

A friend sent me this today:

http://influenceexplorer.com/

“Influence Explorer provides an overview of campaign finance, lobbying and federal spending data.”

I am finding myself less excited about having correctly maneuvered the house part of the bubble and more worried about the future.

Yes, I know worrying is suffering in advance, but I can’t control the feeling.

http://www.dogpeecantstopsantorum.com