Bits Bucket for June 9, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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10 Myths That Politicians Want You to Believe :By John DeFeo
NEW YORK (TheStreet) — The financial system is on the brink of collapse after trillions in bad loans were issued by greedy bankers. If you were a U.S. political figure, would you:
A.) Tell everyone to suck a lemon, and (maybe) let the economy implode.
B.) Fire the bankers who made the bad loans, prosecute the guys who broke the law and guarantee a portion of the loans in a grin-and-bear-it show of good faith.
C.) Reward the bankers who made the bad loans with billions of dollars in bonuses and guarantee every loan with U.S. taxpayer money (with interest, because we borrowed the money from China).
If you answered C, then maybe you should run for office, support laws that funnel billions to insolvent companies, retire from politics and start working for one of the companies you helped bail out. Heck, that’s what former Republican-senator Judd Gregg did (newly hired by Goldman Sachs).
But don’t worry, the revolving door between Wall Street and government is just a “myth”, and here are 10 actual myths that politicians want you to believe:
http://www.thestreet.com/story/11142443/1/10-myths-that-politicians-want-you-to-believe.html
1. The two men who served as principal negotiators for banking deregulation: Gene Sperling and Larry Summers.
2. The two men who President Obama appointed to become his top economic advisers: Gene Sperling and Larry Summers.
3. Two guys who happen to be paid millions of dollars in consulting and speaking fees by “too big to fail” banks: Gene Sperling and Larry Summers.
This is a massive conflict of interest. In my section of the government, you are not allowed to give a government contract to anyone who has worked on industry contracts in the same field.* You have to find another expert. If you knowingly give a contract to someone with a conflict on interest — especially a buddy or relative — that is one of the few firing offenses we have.
But this is a GREAT article. It doesn’t go into the depth that we do at HBB, but it does show that governance needs a lot more improvement and guidance. Unfortunately, these myths benefit the peope in Congress, especially their campaign money. Even if the majority party wants to do good by exposing the myths, the minority party will block it. (both sides.)
———-
*this gets complex if you have a large company where one division does industry work and another does gov work, but it’s very easy to distinguish COI for individual consultants/experts.
“…Gene Sperling…”
Another one of God’s chosen?
Oxy,
You are surprising me now. Is it possible that you are acknowledging that the person at the very tippy top of our political pyramid is obviously in a huge conflict of interest with the banks as a result of hiring these bank minions? Also that this is grounds for dismissal?
Two years ago I would have expected you to say that was part of his genious to keep his enemies close to him, so that he could better execute his master plan.
HAHA!
P.S. Geitner? Would he be on the list of bank minions?
Geitner has never worked for an investment or commercial bank.
He worked for the government his whole life.
Well he was never on the official pay-roll, but he has done lots of work for them and no doubt will be rewarded later.
Hold on, I thought Timmy was Pres of the NY FED, the private bank of private banks. That’s not working for the “government”.
“Conflicts of Interest” are the things that the little fish need to worry about.
Right. The Federal Reserve is a private, for-profit corporation.
Jon Steward asked Obama directly why he hired Summers, “the exact same guy” who had screwed it up the first time. Obama answered obliquely that he wanted Summers because Summers knew how things were done, or something like that.
I think Obama was going to try to pick Summers brain, but without succombing to Summers’ charms. I don’t know how well Obama succeeded. I think Obama went under the Wall Street spell for a little bit, but pulled out from under. Notice that Summers is gone, as are a lot of Obama’s former buddies like Roehmer and Axelrod. Obama is learning how to govern, it seems.
I guess we’ll see how strong the spell is moving along.
Notice that Summers is gone, as are a lot of Obama’s former buddies like Roehmer and Axelrod. Obama is learning how to govern, it seems.
I count six of his major economic team members as gone or about to depart. First, let’s start with the goners:
1. Jared Bernstein
2. Christina Romer
3. Peter Orszag
4. Larry Summers
5. Paul Volcker
The about-to-be-goner is Mr. White House White Board himself, Austan Goolsbee.
volcker left…that tells me all i need to know right there.
geithner stayed…that tells me all i need to know right there.
None of this stuff is illegal? Or is it that these big-name speakers on Megabank, Inc’s payroll are “too big to jail”?
Bill Gross: Treasury investors will ‘get cooked’
CHICAGO (CNNMoney) — Pimco founder Bill Gross reiterated his warning to cash out of Treasuries Wednesday afternoon.
Investors who have been betting on Treasuries are destined “to get cooked like frogs in an increasingly hot pot of water,” the well-known bond bear told attendees at a Morningstar Investment conference in Chicago.
Gross, who manages the $235 billion Pimco Total Return Fund (PTTAX), said real interest rates, which remove the effect of inflation to measure the actual yield an investor receives, have fallen into negative territory.
He pointed out that Treasury inflation-protected securities with a maturity of 5 years are trading at a yield of -0.5%. In October 2008, the 5-year TIPS’ real interest rate stood at 4%.
Why Pimco cut its bond holdings
Given the “staggering” drop in yields and the fact that, on a historical basis, they are low, Gross said interest rates can’t sink much further “absent a potential crisis in the dollar.”
Earlier this year, Gross slashed Pimco’s exposure to Treasuries to zero and placed short bets against U.S. debt. He also put about a third of the fund’s assets into cash.
“The dramatic influence of high real interest rates simply isn’t there anymore,” he said.
And ultimately, the Fed’s policy of keeping interest rates low through several programs including its purchase of $600 billion in Treasuries, or QE2, will have consequences. One of those will be higher interest rates…and that could hurt the economic recovery, which has already been showing signs of slowing down, Gross said.
“He also put about a third of the fund’s assets into cash.”
My kind of guy.
Look around and see for yourself all the evidence staring at you indicating a growing demand for the worthless unbacked fiat.
Look at and pay attention to the number of payday stores popping up everywhere, look at and listen to the number of commercials blaring to those who are desperate for cash.
The rates ate these paydy stores are not cheap and these commercials are not cheap; Those who are opening up payday stores and those who are buying air time are expecting some healthy returns on these outleys of money. These returns will have to come from somewhere, from somebody, from a bunch of somebodys.
Which boils down to:
Cash rules, and those who have cash get to rule over those who don’t.
Isn’t “cash” issued by the Treasury?
Or did he mean foreign cash?
hmmm…wonder where he put the other two-thirds.
Put your cash where you can use the product . Buy and hoard 100 watt light bulbs . They will be outlawed come Jan. 1st. We can’t see to read with the other types , a good 100 watts has no substitute. we admit we have been buying and hoarding at a rather grand scale . We now have 200 4-packs of USA made bulbs stored up , hoping to make it 300 packs before they run out . That will be a 50 year supply , so we’ll have a few to share …….besides , it is fun , and cheaper then playing Golf , shopping for bulbs before they are history .
There are some applications that those mercury flourescent bulbs will not perform. Unfortunately, there is a problem with the incadescents. They haven’t been made in the US for some years now. The Chinese crap ones have a low quality vacuum seal. I doubt seriously that hoarded bulbs will have a shelf life of 50 years, or even 10.
Yes i would love to put a Mercury bulb over a hot stove
Not all incandescent bulbs are being banned.
Wasn’t there a bubble in bulbs a few hundred years ago?
I happen to love the flourescents, the new ones colors are just fine, however, I am annoyed that I just cant find a simple 100 watt equivalent easily. I am looking to get some of the new LED ones, once the price comes down a bit more. I haven’t had to replace a lightbulb in 2 years.
I hope they can design some nice-looking decorative bulbs. It’s hard to take the clear flickering candle bulb out of a chandelier and replace it with that ugly white spiral.
“Buy and hoard 100 watt light bulbs.”
I’ve done the same thing with buggy whips and telegraph machines!
Back in the 1970s, my father hoarded pennies. Reason: He thought that the price of copper was about to spike.
I can remember accompanying him on a trip to inner city Philadelphia. Our destination was a coin dealer’s shop, where Dad purchased multiple canisters of pennies. After we got home, I helped Dad take them down to the basement.
Where they sat. And sat. And sat.
That anticipated spike in copper prices never happened. A few years ago, he asked me to find an eBay-savvy friend to help him sell off the canisters. I found such a person, and guess what? No takers. Not even a bid.
Pennies may go the way of the buggy whip too soon. Used to be the State of Illinois objected to discontinuing the penny because it had Lincoln on it. I got some new dollar coins recently in tool booth change and they are Lincolns! Bye bye penny.
But your dad was right. Those pennies are worth more as copper than as pennies! However, it’s illegal for citizens to destroy minted money, so you can’t sell them as copper scrap.
At least not in the US. Can’t be illegal in Canada. Shipping them to me would cost a pretty penny though.
You were allowed to destroy pennies upto 2006. You also can ship them outside the US anymore.
The Age of Borrowing appears to be closing. It is interesting watching what is going on in Greece. Looks like they won’t be borrowing anymore. European governments (and Obama) want to print money to give (at interest) to them so that they can pay what they owe the banks. Iceland said no, Ireland said yes, in Greece the people riot against spending cuts seemingly without insight into the debt slavery issue. Letting the banks fail and nationalizing them would seem more efficient, but it wouldn’t keep the supranational parasitic interest earning/politician paying system going on as it is. It doesn’t sound like the outcome in Greece can really break the EU, but some say that Spain is next up.
It is a much more fascinating drama playing out than the “Your Mama” discussions we are about to be overwhelmed with in the US as election year appraoches.
Great post, Skye. The EU badly needs to be broken. Feh, I’m not looking forward to those “Your Mama” discussions, either. I watched a very interesting two hour video last night. Our political system is a creation of the bankers, going back for over a century. It’s actually a policy they instituted at a meeting, to keep the sheeple fighting among themselves. We are right to protest the two party system, as it’s nothing more than a bankster see-saw.
End the FED. Break the EU.
“Our political system is a creation of the bankers, going back for over a century. It’s actually a policy they instituted at a meeting, to keep the sheeple fighting among themselves.”
It seems to be working quite well…
Which video was that, palmy?
Makes total sense to me. That’s why I don’t favor the two-party (or any “party”) system.
I’d prefer to vote for **individuals** with a track record that shows where they stand, and what actions they’re willing to take.
“The Age of Borrowing seems to be closing.”
Agreed. And the morphing of this Borrowing Age to another
Age is going to make for some “Interesting Times”.
A lot of our 70 Percent consumer-based economy is/was dependent on this borowing.
We are still going to have to borrow for houses, and probably big-ticket furniture and cars.
“A lot of our 70 Percent consumer-based economy is/was dependent on this borowing.”
The consumer based economy is toast.
ALL of our 70% consumer driven economy is based on borrowing.
ALL.
“Bill Gross: Treasury investors will ‘get cooked’”
Talking his book again?
I frankly don’t see long-term interest rates climbing through the roof any time soon, as the Fed apparently has them well-contained. As I often point out here, a closely-watched pot never boils over.
Realtors Are Liars
Real ton airlines.
Auto Dealership/Service Departments lie
U.S., U.K., Irish Borrowers Most Glum (Bloomberg)
More than half of U.S., U.K. and Irish borrowers are pessimistic about their economic outlook and personal finances, while Indians, Canadians and Australians are most upbeat, according to a survey by lenders’ mortgage insurer Genworth Financial Inc. (GNW)
A quarter or less of mortgage borrowers in the U.S., U.K. and Ireland feel positive about their economies, Richmond, Virginia-based Genworth said in its first International Mortgage Trends Report, released today. In contrast, nearly two thirds of respondents in India were optimistic and less than 30 percent in Australia and Canada were negative, according to the survey of more than 9,000 current and potential homeowners in the U.S., U.K., Canada, India, Ireland, Italy, Mexico and Australia.
“The rise of the middle class and a strong savings ethic will mean increasing personal wealth and higher demand for credit as Indian national prosperity grows,” Genworth said “The austerity measures introduced in Ireland have clearly had a negative impact on sentiment,” while rising living expenses and oil prices led to pessimism in the U.K. and high unemployment and falling house prices weighed on U.S. borrowers.
Ireland is considering selling homes at a discount in an effort to revive a housing market that has fallen 40 percent since 2007, while property values in 20 U.S. cities dropped in March to the lowest level since 2003. On the other side of the world, Citigroup Inc. (C) forecasts India’s economy will expand 8.1 percent in the year to March 31, 2012, and Australia is benefitting from a mining boom that’s keeping the unemployment rate at almost half the U.S.’s and pushing wages higher.
If I were a borrower, I’d be glum too, regardless of the state of the economy.
Posted on Thu, Jun. 09, 2011 03:13 AM
Commentary: U.S. looks headed for a big fall
Charles E. Richardson
The Macon Telegraph
If you’ve followed my column for any amount of time, you know I’m very concerned about the future of our nation. We’ve gotten fat, happy and arrogant. You also know that I believe the only way to restore our country is through education. We are, however handcuffed, bound by our own silly disputes that create gridlock. While some praise gridlock, it works to our disadvantage when getting nothing done is not an option.
We witness it every day. If Republicans come up with a plan, Democrats demonize it. The same applies when Democrats foist an idea. Our lawmakers and policy makers know what to do. They aren’t dense, but gathering the political will to move in a constructive direction is elusive. This plays right into the hands of our competitors.
We know we have to contain health care costs, yet the plan now known as Obamacare is used as a sledge hammer for the 2012 election season by Republicans. Rep. Paul Ryan, R-Wis., comes out with a plan that would change Medicare and Democrats use “mediscare” tactics to turn the debate in their favor.
We have a population that is easily led. For the most part, we don’t understand the issues and we don’t care. Just slap a red or blue label on it and we blindly slip our brains into neutral. We’d rather spout what we’ve heard or seen, but don’t know and understand. If it gets too complex — forgetaboutit.
We are in two, some say three wars, and we don’t want to pay for them.
Read more: http://www.kansascity.com/2011/06/09/2930559/commentary-us-looks-headed-for.html#ixzz1OmKEAiFj
FOUR WARS! Count us in for Yemen!
We are going to fight our way to prosperity.
We are going to fight our way to prosperity ??
Its what we do best…Blow it up & build it up…Repeat cycle…Why spend a trillion dollars investing in cancer research when we have all those defense contractors and the Pentagon dependent on that money….Think of the children…
Four wars! Woo-hoo! In my best Cameron character’s (from Ferris Bueller’s Day Off) voice:
“George W. Obama, you’re my hero.”
Don’t forget Syria!
“We have a population that is easily led.”
Lol. It’s difficult to over exagerate this simple statement.
As was said here the other day, ours is a nation that has been conditioned to respond to sound bites. If you can’t get your message across in a sound bite then you can’t get your message across at all.
Those who are good at churning out sound bites rule over those who aren’t so good, which means it’s not the content of the message that counts it’s the structure of the message that counts.
In our society a well structured lie will hold sway over a poorly structured truth.
I suspect that the penetrating power of sound bytes fades when the hearers grow hungry.
FDR won with the slogan:
I propose a New Deal
FDR also won by promising to make booze legal.
A carefully strurctured lie can be easily boiled down to a sound bite and can, all by itself, seem to be a simple statement built around a profound truth.
Here’s one I’ve heard for years: “You can NEVER go wrong by buying real estate in California.”
There is no elaboration of this statement offered by the speaker and there is no questioning of this statement done by the listener; The listener usually responds with a bit of nodding of his head as if he has just heard a Great Truth.
There’s never been a better time to buy a home
In our society a well structured lie will hold sway over a poorly structured truth.
In other words, its all how you sell it.
Combo:
Yes we still have plenty of doofuses who want to volunteer to be in the military with a lot of fightin and a shootin goin on.
IIRC, the dominant plurality of our armed forces come from the South by a wide margin. Sure, there are economic reasons for this, but it still strikes me kind of odd given that region’s inherent political leanings. They probably just see it as a job, and an opportunity, but it would be fascinating to dig deeper into how they process it all - how they reconcile it personally.
They probably do what most soliders have done throughout history - focus on family and home. Patriotism, as the media conceptualizes it, is probably the last thing on their minds.
We discuss the lack of jobs with futures for J6P types all the time here. That’s all it is…plus the negatives aren’t as important for southerners and rural folks as they are for urban types. I was fine with all of it when I went in…I was annoyed by the time I got out. Mostly because I assumed that any organization that asked for that much sacrifice from me would honor that by guaranteeing I would only have top quality leadership. That definitely didn’t work out like I expected :-).
Its not just the South. 25% of the grads at my kids’ High School try to enlist. For them its either that or working 2-3 part time minimum age jobs.
When daughter #2 graduated some Sargeant called us at home to hype the virtues of a military grunt career. I told him to get lost.
Top 5 states for enlistment:
1 Texas
2 Florida
3 New York
4 Pennsylvania
5 Illinois
http://www.statemaster.com/graph/mil_tot_mil_rec_arm_nav_air_for-recruits-army-navy-air-force
I know the Front Range doesn’t think of itself as rural, but in a lot of ways most of it still is.
“Sure, there are economic reasons for this, but it still strikes me kind of odd given that region’s inherent political leanings.”
Strikes me as odd with the region’s religious leaning as well. John Prine said it pretty well:
“Yer flag decal won’t get you into heaven anymore, they’re already overcrowding with yer dirty little war(s)
Ya know, Jesus don’t like killin’, now matter what the reason’s for and yer flag decal won’t get you into heaven anymore.”
Steve J,
Do you have that info per capita?
Polly, there’s a “per capita” tab in the website:
1. Guam
2. Montana
3. Oklahoma
4. Hawaii
5. Alabama
6. American Samoa
7. Texas
8. Luisiana
9. Kansas
10. Virginia
51. Ohio
52. Utah
53. California
54. Michigan
55. Puerto Rico
Very weird…
“I know the Front Range doesn’t think of itself as rural, but in a lot of ways most of it still is.”
So true. Of course when you think of the big deal they still make of the annual cattle show in Denver, it does say a lot.
Also a lot of rednecks turned construction subs made good money during the bubble and live in nice houses. The jobs outlook for their kids: not so good. Some will go to college, some won’t.
The kids of the poorer rednecks will try to enlist. I’m sure the recruiting Sarge takes them out for a spin in his F-350 and they get little pickup trucks in their eyes.
Strikes me as odd with the region’s religious leaning as well. John Prine said it pretty well:
“Yer flag decal won’t get you into heaven anymore, they’re already overcrowding with yer dirty little war(s)
Back when I was in college, I had an internship at a radio station in NYC. One fine day, when I was working the front reception desk, John Prine came in for an on-air interview.
A nicer person would be hard to find. I’m a John Prine fan to this day.
OTOH, Peter Gabriel came across as a real nerd. You could hardly get the guy to open his mouth for a simple chat in the lobby. I’d heard that he was quite bashful in person, but seeing it was another thing entirely.
Also a lot of rednecks turned construction subs made good money during the bubble and live in nice houses. The jobs outlook for their kids: not so good. Some will go to college, some won’t.
And with the edububble, the ones who don’t may be better off.
The kids of the poorer rednecks will try to enlist. I’m sure the recruiting Sarge takes them out for a spin in his F-350 and they get little pickup trucks in their eyes.
It’s not always just the poorest. Lots of kids whose parents are veterans are more open to the idea. We’re trying to break that chain…
“Top 5 states for enlistment:
1 Texas
2 Florida
3 New York
4 Pennsylvania
5 Illinois”
The per capita chart is interesting.
1. Guam
2. Montana
3. Oklahoma
4. Hawaii
5. Alabama
7. Texas
28. Florida
41. New York
37. Pennsylvania
38. Illinois
Mississippi is way low in both charts. North and South Carolina are also pretty low.
The USAF is the “intelligent” service.
They only send out officers to get shot at (mostly).
Not surprising that Oklahoma and Texas are on the list. Lots of Air Force bases in those states (and the Plains states in general).
Just the kids growing up and joining the family business.
Just the kids growing up and joining the family business.
I didn’t grow up around (and don’t live around now) active bases, but I saw a ton of that with the National Guard when I did that for a few years after getting off active duty. It’s very much a family business, and the poorest can almost live off it (along with under the table work and living with family). My wife and I used it to pay our rent while we were in college, and our GI Bill for monthly expenses. It was odd to see people “between jobs” using drill pay to get by for long periods of time. If you’re in tight with the full-timers who run the unit you can also pick up a decent amount of extra work between drills.
Slim –
He’s the reason that I started playing guitar. Sounded like something that I could do.
As for Gabriel, even though I abhorred the 80s, Shock the Monkey is still cool.
If you want to talk “double dipping”, go visit your local Air National Guard base.
Literally……guys are gov contractors turning wrenches all week, then change uniforms and work on the same airplanes on weekends.
Yup. The civilian job is for the pay. The NG job is for the extra retirement (including VA health benefits), a little extra spending money, a chance to get away from the family and do guy stuff on the weekend, and at least some money if you become unemployed. I didn’t resent them doing it, but I had no interest in doing it once I had a “real” job. I enjoy weekends with my family and not worrying about getting deployed.
DJ, for your information, many of those ‘dufuses’ enlist because THERE ARE NO OTHER JOBZ. A circumstance with which you are regrettably familiar, and which you appear unable to change. In contrast to said dufuses.
A good number of these ‘dufuses’ join because they have families to support. I guess that makes them even dumber, eh?
FACT WARNING: for every front line soldier there are ten in the supply, support and logistics chain. Not a cushy life by any means - during a shooting war the support jobs frequently involve seven day weeks and twelve hour days. My son - a B.S. in Chemistry - is one of them. He got off for Memorial Day. Never fear, you are getting your money’s worth for the $400 a week per person that comes out of your tax dollars. If, that is, any of your earnings comes from the taxable pool and you don’t cheat on your taxes.
In exchange for $4.76 an hour now, out of which meals, uniforms and housing are deducted, the ‘dufuses’ later get a network in the Reserves, the kind of educational allowance you wish you had, a fit body, and a mind which has had all the whining squeezed out of it. Admittedly, per Carl Morris and Dennis N, it’s e-z to lose some of the bennies if you don’t learn to keep your trap shut when you are rotated into a bad command. In civilian life, you get a bad command, you can walk away. Or, you can mouth off and get fired. Not so in the military. You’ve got to make the best of it while keeping your internal harmony. A course in how to deal with jerks. A life skill that is hard earned, and priceless, and forever sets your bar about what REALLY is a lousy job. You never really evaluate things the same way again.
Learning how to keep your trap shut, a shot at debt free schooling, a habit of fitness, thrift and industry that will be ingrained, and a ready made network when you get out. A fair trade is what I call it. And, for your information, attractive enough that 3/4 of the kids who want to make it, cannot get in. I’m tellin’ ya, people vote with their feet and these days, the military is a SWEET deal.
In sum, it’s a cheap shot to dismiss people for the choices they have made in good faith, after doing the best they can with what they have. You don’t hear anybody here calling YOU a dufus, do you? Arguably, your result is scarcely better.
“only way to restore our country is through education”
Well, you have a solution, but I rather doubt that the problem is caused by lack of education. Debt enslaves the highly educated as easily as the vulgar.
Right, if someone can do enough research to fully furnish and outfit a McMansion with the latest trendy furnishings and gadgets - they could have just as easily used that time, energy and aptitude to have learned about history, geography, engineering, etc.
There’s plenty of education/knowledge sloshing around out there - too bad much of it is misapplied/misallocated. Kind of like all that Capital.
History and, to some extent geography, are fast becoming manager-at-the-Gap degrees, and engineer is fast becoming my-job-went-to-an-H1B degree.
Failing that, engineer is fast becoming a “we can’t make money off R&D” degree, or a “we have a mature industry, we only hire 2-year grads to keep the equipment running” degree.
My advice to everybody:
If you’re going to a traditional bachelor degree college, DOUBLE MAJOR. Two degrees for the price of 1 (or 1.2 if it takes you 5 years).
If you’re iffy about a traditional bachelor degree, get into a 2-year trade school pronto, with a mix of theory and hands-on learning. I haven’t forgotten that news story about the two-year degree in wind-turbine maintenance in Kansas (or Oklahoma?). The students walked directly from the commencement stage into a job.
“get into a 2-year trade school…”
Oxy, most of the skilled trades require 5 years.
Such a trade school just opened in Denver (I forget its name). In the advert they touted “And you get to work outdoors!”
I don’t think that working on a wind turbine in Wyoming in the middle of winter will be a lot of fun. 10F plus wind chill … brrrr.
“…..wind turbine maintenance in Kansas…….”
Not anymore, it appears.
2-3 summers ago, the roads and rail tracks were filled with turbine blades being hauled to worksites. Traffic has dropped to zero this summer.
I’ll be able to report soon on the same from the Oswego River port, which two years ago was jammed with blades being distributed in the Great Lakes.
The local turbine maker, Vestas, is still doing brisk business. A lot of their sales are … hang on to your hats … for export!
SV, when you say five years, what do you mean? They certainly aren’t paying for five years of schooling. Or do you mean five years of apprentice/journeyman/master type program?
5 year apprenticeship.
OK, but the point is that it’s a JOB of some sort, with on the job training. You know, PhDs aren’t that different from the trades. You get paid near minimum wage to bone up on basics, get good at research, and learn how to write.
I pity the people with Anthropology degrees.
How many countries until it’s world war?
Normally I’d chuckle at such a comment…
But now … I’m shocked I’m actually giving it serious thought.
I’m not joking either.
We are in a replay of pre-WWI & II just going by the guidelines of stupidity, finance, resource market and empire.
Nobody could have seen it coming!
(’cept us, of course…)
The great property bubble of China may be popping
Bob Davis
From: The Wall Street Journal
June 09, 2011 11:39AM
Beijing’s most expensive property where apartments have sold for 300,000 yuan a square metre Source: AFP
AFTER years of housing prices gone wild, China’s property bubble is starting to deflate.
Residential prices are heading downward in some major cities, damping some undesired real-estate speculation but raising the prospect that the Chinese economy may slow more rapidly than anticipated with profound consequences for global growth.
Real estate is a foundation of China’s phenomenal growth record in the past two decades, and its health is crucial to China’s construction, steel and cement sectors.
Real estate is also a favoured investment of Chinese looking to get better returns than bank deposits pay.
Local municipalities and provinces depend on rising prices for land sales as well to fund infrastructure projects.
World Bank economists warned at a Beijing press briefing that a real-estate bubble was among the biggest economic risks China faces.
…
Real estate is a foundation
how many foundations do the have?
With the Chinese buying up everything in Vancouver, its bubble pop is not far behind.
I’m thinking many of the all-cash investors on the West Coast of the U.S. may similarly soon be sidelined by a Chinese bubble implosion that sucks their cash away into the vacuum of a ginormous financial tornado, similar to the one which swept the global financial system after Lehman Brother’s collapse, except this EF5 financial twister will make Lehman’s seem like an EF1 by comparison.
Stagflation: it’s what’s for breakfast
America: What is it?
It’s what China has for breakfast.
I’m going to the kitchen to make some scrambled eggs for breakfast.
Ditto here….Just finished mine…
Actually, yes, it is what’s for breakfast.
Just posted on Marketwatch:
Smucker warns of spike in production costs
Jam maker J.M.Smucker, also home to Folgers coffee, Dunkin’ Donuts and Jif peanut butter, said Thursday the cost to make its products will jump 25% over the next 12 months
Thank goodness we’re in a deflationary economy!
Boy, this is starting remind me of 1970’s Mexico City.
…as I’ve been saying since last year.
I lived through this in the 1970s and again in the 1980s. Knew it right away this time around. Too bad I was one of the casualties again.
Ben is correct. I don`t see anything anywhere that says the banks don`t own these loans, they only service them.
University of Arizona law professor Brent White thinks the past few years of banking scandals have reinforced the view that it’s not unethical to walk away.
“There’s a sense that the banks don’t follow the ‘rules,’ but somehow the little guy is supposed to –
Walk away from your mortgage? Time to get ‘ruthless’
By Les Christie June 7, 2011: 11:52 AM ET
NEW YORK (CNNMoney) — Should you keep paying your mortgage on a home that’s dwindling in value?
Take Jeff Horton, an IT manager in Orlando, Fla.
He stopped making mortgage payments on two homes in October 2009, a condo purchased for $140,000 in 2005, and a house he bought two years later for $265,000. He had occupied the condo until he bought the house, and then rented it out.
“I would have kept up the payments, but the condo was appraised for $54,000 and the house, $135,000,” said Horton.
To keep paying off the homes didn’t add up. He could rent a nice three-bedroom home in town for about $1,000 a month, less than half what he was paying for his mortgages, even after rental income.
Home price ‘double-dip’
Sometimes, borrowers have to acquire that ruthlessness.
Helen Sheridan purchased a townhouse condo in 2006 at the height of the boom in San Diego. She paid $630,000 for a place worth $450,000 today.
Some homeowners, however, can’t get past the stigma.
Gallagher represents a Florida couple, a dentist and a financial consultant who is well known in the area. They bought a house for $1.4 million during the boom, and considered walking away when it was appraised recently at close to $400,000.
“Ultimately, the couple did not default,” said Gallagher. “Given her public profile, she was worried about the backlash. She remains making payments on a deeply underwater mortgage.”
http://money.cnn.com/2011/06/07/real_estate/walk_away_mortgage/index.htm - 66k -
“Given her public profile, she was worried about the backlash. She remains making payments on a deeply underwater mortgage.”
Drank her own koolaid.
Its a recourse state…They probably have assets and their jobs have earning power…
Vacant McMansions for everyone!
I’ve been reading Mildred Pierce, set in 1931 socal doring the GD and end of a big housing bubble…complete with underwater tract house. lol, nothing new under the sun. I think my dad had big dreams of striking it rich in RE but the aftermath persuaded him to get a job with the phone co. and hang on for dear life.
Did your dad ever meet Ernestine?
No but he helped put in the exchanges that replaced her.
I’m going to have to traipse over to the UA campus and see if Prof. White’s book is for sale in the UofA Bookstore (yes, that is its name). This store has a very well-stocked Campus Authors section.
Given that the UA’s PR people gave White mega-publicity for the white paper that served as the basis for his Underwater Home book, I doubt that the campus bookstore would shy away from it the way our local public library has. I’ve suggested that title for purchase, and the library’s answer was…
…silence.
Given the power of our local REIC, I think I know the reason why.
If banking is so essential, such a core function of the economy, and poses such dangers when it goes bad that the government and Federal Reserve pledge trillions to nurse it back to profitability, why is it given such free reign to operate? Shouldn’t it be heavily regulated like a utility, if it has the ability to hold the economy hostage? They talk of “financial innovation”, but Volcker himself said the only societally beneficial innovation to come from the financial industry was the ATM.
If lending is a public good… I know it sounds fringe… but, if lending is a public good, why would the government itself not do it? I do understand the arguments for smaller government - give government more money and power and you lapse into corruption as politicians and bureaucracies get to hand out more and more money and favors, and you tend towards central planning.
The government pumps so much money to the banks in hopes that they will lend to people… is lending a public good, like roads?
I guess I’m thinking out loud - since government has no profit motive, it would quickly tend towards corruption and inefficiency, if it took over lending. And who’s going to clean up the government? The government? Heh.
On the other hands, non-profits have mission statements that aren’t profit-focused, rather they’re mission focused. But they tend to make lots of profit. See colleges and universities.
I see the government pumping so much money to banks, in order to keep them profitable and get them lending. Why not just straight up give the middle and lower classes that money, if they want to pump it into the economy ASAP?
End the FED. Now. Let the government issue debt-free money.
Neuromance, those are good thoughts. To be fair, heavy regulations were passed against the banks after the Depression. The past 30 years have seen massive deregulation, due to snake-oil soft talk and outright bribery.
In good times, companies fought for less regulation because “government shouldn’t tell me how to run my business.” In bad times, companies fight for less regulation because “we don’t want to hire because of REGULATORY UNCERTAINTY” which is code for “you know, have all these good JOBS see, and we wouldn’t want anything to happen to them.” It reminds me eerily of the Mob.
“The past 30 years have seen massive deregulation, due to snake-oil soft talk and outright bribery. “
Exactly. Along with massive consumer and civil rights rollbacks.
“The government pumps so much money to the banks in hopes that they will lend to people.”
I respectfully disagree. The government is a hostage of the banking system. Stockholm syndrome and all. The “people” are failing the banks, in that they increasingly can not or will not pay more and more interest. The government is giving the banks a feeding tube by borrowing directly, in the name of the taxpayer, to keep the flow of interest going to the banks. You can tell which pols are in on the corruption. They are the ones that insist the country Must Spend More Money, no matter what.
The government is, indeed, hostage to the banking system at all levels. From federal to local, our government is no longer a republic, but a corporation and corporations need banks in order to operate.
You have problem with Corporate Communist Capitalism©®™, comrade?
Excellent question, neuromance. Yes, one would wonder why the govt couldn’t just print up money as it’s needed by those who want to expand or improve upon productive capacity.
Shadow inventory and the Phx metro???
Inventory appears to be shrinking and I`m getting conflicting advice. One the one hand I`m being told the supply of bank-owned properties is only going to get smaller and on the other I`m being told banks are still holding back on the Phx inventory.
Question: If banks are holding back why aren`t they replenishing the supply now? I`ve been looking at homes in a certain areas and instead of 3-35 listings I`m now finding 15 or so.
Should I start to think about buying right now?
Or can I expect more bank owner properties to be hitting the phx market t soon?
Thanks for any advice you can provide.
My unqualified advice is to give it a little time. Inventory might be shrinking because good properties are being snapped up in the spring selling season. The shadow cash is coming out to play. I think we’ll have a better idea of the way things really are in the fall.
I was checking last night, and the outer DC burbs (Gaithersburg area) are suddenly putting out a little inventory for under $300K. McMansions and new build are still wish-prices, but smaller tract homes are appearing 2-3 at a time, at “reduced” prices.
Hey John,
Consider that most of the housing in the area was built to house house builders and speculators. That model seems to be broken. There are way to many houses, despite what you see listed any particular day. It is a little late to join the Ponzi Scheme, meaning that if you have to go into debt to buy, it’s a bad gamble.
IMO, the country has been back in Recession for some months now. Second step down in a flight of stairs is about to be realized. Join the ride if you must, but it is going to be bumpy.
2nd try…
This housing bubble has popped.
Whether certain areas are at the bottom is a point of debate.
However, once an area hits bottom, it will stay there for years and years. This will NOT be a “V” type recovery. More like an “L” type.
So take your time.
And do some math:
Find the average wage of your area (the census is a good place to start).
1. 100 x monthly rent = s/b cost of the house
2. 2.5x gross yearly income = s/b cost of the house
3. 40% monthly take home pay should equal cost of monthly carrying costs of the house (PI, taxes, utilities, upkeep, etc.)
If the numbers don’t make sense – you are not close to the bottom.
Unfortunately that doesn’t always apply. Last week I heard the first group of Spanish-speakers out on a nearby patio. That sort of ethnic group has no problem with putting 2 families (2-3 incomes) into a 3-bed rental home. Rather than managers lowering rent, people are shacking up to respond to high rent.
In those areas, buying is better bet.
My building has limits on the number of people that can live in each size apartment. In a one bedroom, no more than 2 people are allowed. I believe there is a further restriction on the number of different sources of income that can be used to qualify financially to rent. Then again, they aren’t hurting for people as near as I can tell.
My building does too. That’s why there’s one two-bedroom that has over 8 people in it 4 doors down and across from me there’s a 2 bed with 10 or over. I am the only 2 bedroom with only 2 people in it. In fact, I’m the only one with less than 4.
Agree. You think the apartment complexes are really looking? And how do they know how many incomes are in the house.
When I say “afford,” I gues I wasn’t being clear. I can afford my rent, yes. But the rent is too high for what I’m getting.
It wouldn’t be hard for ONE household — the one with the best English - to engage the apartment. All he needs to do is BARELY afford the apartment. Then he effectively sublets to his families, and they all have plenty of left over money. The main point is that it’s easy for them to pay the rent, at this complex or another, so there is no reason for apartments to lower rents or offer deals.
During my entire time of the housing bubble (2001-2007), I lived in in a high rise. My rent never went down. Never, even when people were fleeing to buy houses left and right.
The only way get your rent lowered is to move each year. Period.
oxide,
What you’ve noticed is something we’ve been dealing with here in SoCal for a long, long time. Some people are willing to live in squalor, yet they are able to pay a high price for it because there are so many people living in a single unit. So, the rest of us are forced to pay higher rents/prices because of this.
Look (google) for the Credit Suisse charts that show the coming ARM resets.
Then look for RE news in or about your area for foreclosures. Try to find outside the region news sources.
Lastly, go to http://hotpads.com/ and select the options for foreclosures/for rent/for sale in your area.
Draw your own conclusions.
Look (google) for the Credit Suisse charts that show the coming ARM resets.
Here’s the express bus to said Credit Suiss chart.
Thanks Slim!
You’re welcome!
That chart has shifted to the right quite a bit since I first saw it. The original one from a few years ago showed the reset activity largely ending in mid-2012.
Are the 2013 and 2014 resets in the new chart the result of mortgages that were issued after the first chart was created, or did some of the old ones get “extended and pretended,” or what?
Slim — Is that still current? It shows the tsunami crest in ARM resets still lies ahead, over the next 18 months.
I’m guessing the subsequent wave of high-end foreclosures will follow over the next five years or so (2012-2017), but that is just my personal, non-data-based hunch.
At any rate, there should potentially be no shortage of available high-end inventory over the next half-decade or so, especially given the amplifying effect of retiring baby-boomers trying to downsize from family-sized housing into something smaller, a trend due to continue for at least two decades from the present.
P.S. I really have no dog in the fight as regards high-end San Diego inventory, as even if I were a trust fund baby (which I am not), I would have no interest in living in any home larger than, say, 2200 sq ft. Our households’ lives are community oriented — i.e. towards outside the house.
finally starting to see some cracks in vienna, va 22180.
inventory for the upper end homes seems way up and prices of the 50ish style ramblers (which people are buying and tearing down) are finally dropping.
three years after the bubble popped…glad i waited. can’t wait for winter!
+1 — just posted the same above for Maryland equivalents.
What they building on the site of the tear-downs? It’s a little late to initiate a from-scratch McM flip project.
mostly custom homes…i like vienna for the proximity to Tyson’s Corner.
would like to live close to Tyson’s Corner but prices need to come way down.
How big are the custom homes? Cutie-patootie, mail-order floor plans? Soulless McMiniMansions? Single-unit townhome-ish stuff?
I could never live near Tyson’s. Worst traffic in the nation — and that was BEFORE they tore it all up. I can live without the LL Bean store for a few years.
“How big are the custom homes? Cutie-patootie, mail-order floor plans? Soulless McMiniMansions? Single-unit townhome-ish stuff?”
all of the above…i like cutie patootie myself.
i would like to live in McLean but even the mid 80ish ranch styles are over $ 1 million…on a nice lot that is.
the crappiest thing about vienna (and anywhere in fairfax county for that matter) is the property taxes are redonkulous.
Europe Is Warning Us
Townhall.com | June 9, 2011 | Victor Davis Hanson
ROME — If Americans think fuel and food prices are high, they should try Europe, where both can nearly double those in the United States — while salaries here are often lower.
Italians, like most now-broke Southern European countries, are desperate to privatize bloated public-owned utilities. Politicians are trying to curb pensions, and to encourage the private sector to hire workers and buy equipment, as a way of attracting wary foreigner parents to lend such perpetual adolescents more bailout money.
In theory, Italians accept that they are going to have to be a lot more like the Germans, and less like the Irish, Portuguese and Spaniards. In fact, they may end up like the Greeks, who are still striking and occasionally rioting because too few foreigners wish to continue subsidizing their socialist paradise. Red graffiti on Italian streets still echoes socialist solidarity, while Italian politicians talk capitalism to foreign lenders.
The European Union, like the 19th-century Congress of Vienna, can point to one achievement — a general absence of war in Western Europe for more than 60 years. Otherwise, almost all its socialist promises of an equality of result are imploding before their eyes.
The higher taxes go, the more people cheat on them, the less revenue comes in. There are sometimes two prices in Italy (and often elsewhere in Europe) — the official price that includes a high value-added tax that the unwary pay, and the negotiated, under-the-table, tax-free discount that the haggling shopper obtains.
Europe is essentially defenseless, as governments further trim defense budgets to keep shrinking spread-the-wealth entitlements alive. The French and British — the continent’s two premier military powers — have been trying for nearly three months to defeat Muammar Gadhafi’s ragtag nation of less than 7 million, itself rent by civil war. The ancestors of Wellington and Napoleon so far seem no match for Gadhafi or the Taliban. Both nations will soon be leaving Afghanistan in frustration.
Subsidized wind and solar power have not led to much of an increase in European electricity supplies, but they helped to make power bills soar. Highly taxed gas runs about $10 a gallon, ensuring tiny cars and dependence on mass transit. Central planners love the resulting state-subsidized, high-density European apartment living without garages, back yards or third bedrooms.
Has all the liberals in the US read this? They just cant stop themselves from dreaming of being like Europe.
Yeah, they have got to get better at wars.
“Has all the liberals in the US read this? ”
They’d probably say something frightening and complex, like: “Germany and the Scandinavian countries- which are all ’socialist’ by the demented definition of today’s Right- are doing quite well, despite having universal health care, strong environmental regulation, strong protection of workers’ rights, and strong social safety nets.”
“Has all the liberals in the US read this?”
No. Those living in ivory towers are too partial subject verb agreement to continue reading such unedited drivel.
Petard, meet hoist.
“are too partial subject verb agreement”
Missing preposition alert.
Hence my “Petard, meet hoist.”
“Hoisted by one’s own petard” is especially colorful if you recall the original meaning of “petard”:
The word petard comes from the Middle French peter, to break wind, from pet expulsion of intestinal gas, from Latin peditum, from neuter of peditus, past participle of pedere, to break wind; akin to Greek bdein to break wind.
they’ve got quite the immigrant base to support, too.
occasionally rioting because too few foreigners wish to continue subsidizing their socialist paradise
thank god for obama
How’s that Hope and Change working out for you now kidz?
“Italians accept that they are going to have to be a lot more like the Germans, and less like the Irish, Portuguese and Spaniards.”
They can only bend the culture branch so far…
Besides, who should change their cultural identity just to suit the global bankers? EU = Tower of Babel.
The European Union, like the 19th-century Congress of Vienna, can point to one achievement — a general absence of war in Western Europe for more than 60 years. Otherwise, almost all its socialist promises of an equality of result are imploding before their eyes.
I don’t think think that equality of result was ever a goal of the EU, if he means by that equal standards of living across the 27 member countires.
The ancestors of Wellington and Napoleon so far seem no match for Gadhafi or the Taliban.
Comparisons to the Napoleonic Wars are not appropriate here. The UK and France are not attmempting to use the full force of their military might to conquer Libya.
I think that I read somewhere that this guy Hanson is highly educated, or at least claims to be. Nevertheless, he spews this nonsense. He’s like Rush Limbaugh with Ph.D.
Someone sent me his last book, and I literally could not get past the third chapter, I was yelling at him so hard. I even tried twice.
From faulty premises to inane conclusions, the man is an embarrassment to whatever institution gave him credentials.
So we follow the lead of the Italy, the most corrupt country in Europe?
That tells me all I need to know.
And Europe is no way in hell, “defenseless.”
The author is a morn.
wow…my bad…i reckon it’s been 5 years since it has popped.
man time flies when you are renting…during the worlds worst real estate market depression.
FBs say county property assessments too low:
http://www.ajc.com/news/surprisingly-low-property-values-971241.html
More bad news
Does “had expected” = “unexpected” –> then DRINK!
QE3 will fix this…
—————————–
Weekly U.S. jobless claims rise to 427,000
Marketwatch | 06/09/11 | Jeffry Bartash
WASHINGTON (MarketWatch) - U.S. applications for unemployment compensation increased by 1,000 to a seasonally adjusted 427,000 in the week ended June 4, according to the Labor Department. Economists surveyed by MarketWatch had expected new requests to decline to 419,000. Initial claims from two weeks ago were revised up to 426,000 from an originally reported 422,000. The average of new claims over the past four weeks, meanwhile, dipped 2,750 to 424,000.
Found an interesting statistic on the last unemployment report. There was only an increase in employment because the government calculated that more companies were born than died. Without any hard data they found a creation of around 200,000 jobs due to start ups:
http://www.bls.gov/web/empsit/cesbd.htm
To be fair, the government has used this procedure for years but the ability to manipulate this number is huge and I think the possibility that they overestimated the net new jobs in this economic environment is high. We might have seen the first month of actual job declines since the so called recovery began.
Federal government pushes massive mortgage bailout; would rip off pension funds, bank shareholders
By: Hans Bader 03/10/11 1:45 PM
Back before the election, intellectuals with ties to the Obama Administration proposed a trillion-dollar bailout for some (but not all) underwater mortgage borrowers, as a way to increase consumer spending.
Now, the Washington Post reports that bureaucrats at the newly-created Consumer Financial Protection Bureau (CFPB) want to do something similar on a smaller scale. Their proposal would require banks to write off part of the mortgages of certain (but not all) mortgage borrowers who owe more on their mortgage than their house is worth. Worse, they would require mortgage servicers to write off loan principal on loans owned by other institutions, like pension funds, violating their property rights.
Virtually all of America’s pension funds own mortgage-backed securities. Pension funds that millions of people rely on for their retirements would lose billions of dollars due to reduced mortgage value. These demands are contained in a 27-page proposed settlement sent to the banks by the CFPB, the Justice Department, and state attorney generals who sued the banks over their recent foreclosure documentation lapses. Such demands flout court rulings like Louisville Joint Stock Land Bank v. Radford (1935), which overturned a federal law that wiped out mortgage value.
Meanwhile, the write-offs would reward the most financially irresponsible borrowers, while punishing responsibility. If you were thrifty, and made a big downpayment, you will not be eligible for a write-off, since your mortgage will still be smaller than your house is worth, even if your house declined in value. But if you saved little money, and took out a no-downpayment loan, your loan may be bigger than the value of your house even if the value of your house didn’t fall much. Even a small fall in value would leave you “underwater” on your loan, and thus eligible for a bailout under the proposed settlement, to reduce the size of your mortgage to less than your home value.
http://washingtonexaminer.com/blogs/opinion-zone/2011/03/federal-government-pushes-massive-mortgage-bailout-would-rip-pension-fund?quicktabs_1=0 - 116k -
Hee-hee. You wanna see private mortgage lending lock up completely? Maybe this is the first step in full govt takeover of mortgage lending, like they’ve done with student loans.
“Joe Sixpack just missed his third mortgage payment. Call out the SWAT team, we’re goin’ in!”
full govt takeover of mortgage lending, like they’ve done with student loans.
Nope, I can’t let that am-radio talking point go unanswered.
The only “government takeover” of student loans was for loans that the government backs up. If banks want to lend money to students or parents for college and back up those loans with their own reserves, the government isn’t going to stop them.
If anything, it was private industry that “took over” the gov-backed private loans in the early 2000’s, and jacked rates and put hardship on the students.* Well sure, let the gov take on the default risk while the banks collects the juicy fees. And this took place under Bush II and his complete control of Congress. Surprise surprise.
If anything, under Obama, the government was taking the gov loans back from private industry. Obama was so adamant about returning government loans back to the government that he dared to shoved that clause in the Obamacare health law.
————
*And they put that hardship on the students at the exact time that students needed it least, when they are out looking for the few jobs that haven’t gone to Chindia y et.
Swat teams raiding the homes of student load deadbeats.
Mortgage modifications and housing tax credits that hide the back-charges and taxes in the small print.
Bankruptcy rules changed just before the collapse while everyone was amassing huge debts.
New taxes on food in some states.
A continual piling on of tobacco taxes every election year.
Ever increasing sales taxes.
Inflationary monetary policies.
I understand that some of these items were pressured into place by special interests with deep pockets, but who exactly do we think is sticking it to the poor and middle class? Our benevolent Federal, State and Local Governments along with the Mob rule of State and Local ballot initiatives.
They can want anything they can think of, but this sounds like a proposal to make the voluntary measures of the last few years mandatory. They really can’t do it. It is in direct opposition to hundreds of years of contract law (the states inherited their contract common law from England, except for Louisiana).
Now, I suppose they could make doing it required for loans that were actually owned by the bank in exchange for something - like the banks staying in the FDIC (assuming that they could get the FDIC rules changed to require it - good luck getting that through this Congress). Requiring servicers to change the rules for mortgages they don’t own? Not a snowball’s chance in heck.
The Justice Department will be delighted to tell them that this will not fly. I strongly suggest you not lose any sleep over it.
In case you haven’t noticed, polly, Wall St. makes the rules and hasn’t been shy about breaking any of them as often as suits them or paying off Congress to change them in their favor.
The recent tightening of consumer fees? That’s just throwing us a bone while they rob the house.
“Virtually all of America’s pension funds own mortgage-backed securities.”
Yep, we’re boned. Welcome back to the 19th century.
DC’s plan is still to rob Peter’s bank account in order to pay off Paul’s mortgage?
Hmmmm…
Well, it looks like prices are finally coming down here in the Triangle. In the last few months, I’ve started seeing many short sale and foreclosure listings on the real estate website I like to use. I don’t really remember seeing them six months ago - at least not in the under $200k price range. Prices are even coming down in Cary, the suburb near Research Triangle Park where “everyone” wants to live.
Yet, still, the local governments are predicting that the driving time to the airport from one area (Fuquay Varina) will increase from 40 minutes to 90 minutes by 2035. Where do they think all these supposed newcomers will be moving from?
Commercial space is still being built like crazy, despite tons of empty storefronts in many plazas built in the last 5-10 years.
My brother bought a house in Fuquay Varina about 2+ years ago (against my advice). He put 20% down (the proceeds from a previous sale) and is now underwater as the developer is selling the same model he has for 70% of what he paid.
The knife began to fall just months after he closed. At the time he really believed it was different in Raleigh.
Everywhere you go, it seems like new plazas are popping up. Now, the area has had huge population growth in the last 20 years…but it seems like everyone assumes the influx from the north will go on for decades. I doubt that population growth will continue at the same rate. People have a harder time selling their houses elsewhere to move here. Also, home building has slowed a lot, so we don’t need any more construction workers.
From what I can tell, which is just anecdotal, it looks like prices may be down about 15-20%, at least in the $100-200k range. I think the paper said a few weeks ago that houses take 90 days rather than 45 to sell. Whatever you think of Zillow, it seems to show that the price drops have been since the early fall. The Zillow charts show many houses in this price range to be back to 2005 prices.
That is the common belief in Raleigh: “Everyone from NY and New England wants to move here”
Compared to NYC or Boston, Raleigh is paradise.
I think now it is everyone from Florida.
Commercial space is still being built like crazy ??
What type; Retail, Office etc. ??
Excellent study on the economic freedom of all the states:
The bottom 10 for OVERALL FREEDOM RANKING (Table 5):
40. Washington –0.196
41. Illinois –0.200
42. Ohio –0.215
43. Maryland –0.268
44. Alaska –0.300
45. Rhode Island –0.383
46. Massachusetts –0.393
47. Hawaii –0.445
48. California –0.487
49. New Jersey –0.505
50. New York –0.752
What do they most/all have in common???
——————-
Study: Calif. 48th in economic freedom
June 9th, 2011
Share California ranks 48th among the states on economic freedom, according to Freedom in the 50 States, a biennial study by Mercatus Center at George Mason University.
The Arlington, Va., center studies how markets work and tends to favor lower taxes and government regulation but also same-sex civil unions and marijuana decriminalization. Its study rates each state on 21 different issues with separate rankings for fiscal policy, regulatory policy, economic freedom and personal freedom. (Click on the map below for a larger view.)
jan.ocregister dot com/2011/06/09/study-calif-48th-in-economic-freedom/60197/
Wow, the Koch’s are everywhere.
I would love to see an updated edition (post 2010 election) version of Thomas Frank’s book: What’s the Matter with Kansas? discussing how people can be motivated to vote against their own economic self-interests.
The word “freedom” is a great emotional trigger for the reptilian/fear-brained.
“They attacked us on 9/11 because they hate our freedoms”
The only economic “freedom” that 2fruity supports is the freedom to work for less than $500/week.
I wonder how long until 80-90% of the workforce is under $500 a week? The end of the decade perhaps? And how long until the MSM stops bloviating about our “consumer based economy”?
How long? No more than 20 years. 10 at the soonest.
You have to boil the frog slooowly.
“What do they have in common?”
Pick me! Pick me! (waving hand wildly in the air….)
“Higher wages than the “Right to Work” states?”
“Wow, the Koch’s are everywhere.”
Good catch. The Mercatus Center at George Mason University is indeed a tentacle of the Kochtopus.
Well the South has always had more economic freedom. Before 1865, for example, you were free to own slaves.
Well the South has always had more economic freedom. Before 1865, for example, you were free to own slaves.
You were free to own slaves nearly anywhere in America before 1865.
And yes - there were plenty of slaves in the north.
And there were many free blacks who owned slaves.
Funny how the freedom loving South was the last bastion of slavery in the Union, and they were willing to go to war to keep it that way.
I suppose that if slavery were still legal today, it would be considered part of the “right to work” laws.
Ya think?
“You were free to own slaves nearly anywhere in America before 1865.”
http://en.wikipedia.org/wiki/Slave_and_free_states
The Northeastern and Mid-Atlantic States, including Massachusetts, New York, Pennsylvania, and New Jersey, had legally permitted slavery in the 17th, 18th, and even part of the 19th centuries, but in the generation or two before the American Civil War, almost all slaves in such states had been emancipated through a series of statutes.
The first U.S. region entirely free of slavery was the Midwest, which was ordained free under the Northwest Ordinance of 1787, passed just before the U.S. Constitution was ratified. The states created from this region—Ohio, Indiana, Michigan, Illinois, Wisconsin, and Minnesota —were generally settled by New Englanders and American Revolutionary War veterans granted land there. Because this region was entirely slave-free from its inception and separated by the Ohio River from the South—which was pushing an expansion of legal slavery into the West—the concept developed of “free states” in contrast to “slave states.”
etc.
Wikipedia can be fun.
Federal Law trumps your local statute
——————————
Dred Scott v. Sandford
Dred Scott v. Sandford, 60 U.S. 393 (1857), was a ruling by the U.S. Supreme Court that people of African descent brought into the United States and held as slaves (or their descendants,[2] whether or not they were slaves) were not protected by the Constitution and could never be U.S. citizens.[3] The court also held that the U.S. Congress had no authority to prohibit slavery in federal territories and that, because slaves were not citizens, they could not sue in court. Furthermore, the Court ruled that slaves, as chattels or private property, could not be taken away from their owners without due process.
http://en.wikipedia.org/wiki/Dred_Scott_v._Sandford
The federal government couldn’t forbid it, but the states could. That didn’t make a slave from a slave state free when he entered a free state, but it certainly meant that you couldn’t buy a slave in Massachusetts.
Ding Ding Polly!
2Banana, you don’t remember that right up until the Civil War, Congress conducted a delicate dance of admitting states to the union alternating Slave state/Free state, or two at a time, to keep the number of free and slave states equal? Missouri Compromise? Bleeding Kansas?
Go back to 8th grade.
2Banana, you don’t remember that right up until the Civil War, Congress conducted a delicate dance of admitting states to the union alternating Slave state/Free state, or two at a time, to keep the number of free and slave states equal? Missouri Compromise? Bleeding Kansas?
You want to show me where Congress freed any slave prior to the civil war? Or made it illegal? Or hindered it in any way? Or made one escaped slave free?
Liberal NE education strikes again…
While I am helping get a real education - go google how many irish immigrants died building the Erie Canal.
Before the Civil War, the states had FAR more power and autonomy than they did after.
Liberal NE education strikes again…
to smote drivel?
IMO the Civil War was about Federal control. The birth of the out of control leviathan can be traced back to the victory over the South.
The victors dictate history.
And before anyone brings out the race card, my vision of utopia doesn’t involve slavery. I’d would like to put the DC genie back in its cage though.
I wouldn’t. It’s the local governments that are out of control, the most corrupt, the most intrusive, the most exploitative and the least interested in equal justice, not DC.
You want to show me where Congress freed any slave prior to the civil war? Or made it illegal? Or hindered it in any way? Or made one escaped slave free?
Quite right, and in fact Congress passed the Fugitive Slave Act in 1850 which required law enforcement officers even in free states to arrest any known runaway slaves and hand them over to federal marshals, for return to their southern owners. Wisconsin is the only state that refused to enforce the law; its state supreme court declared the law unconstitutional. The US Supreme Court later overruled this decision.
Also, if you were a southerner who owned slaves, you were permitted to bring them with you to free states, and this act would not result in the slave having a claim to freedom. (Dred Scott decision.)
16,000,000 X $28,400 = a lot - 65% = a lot less
How Fast Does Your Car Lose Its Value?
By Marty Jerome March 6, 2008
As anyone who’s been shocked at trade-in time knows, cars age about as well as prom queens. By the fifth year of ownership, you can expect to have lost 65% of your vehicle’s value.
How many new cars are sold in US each year?
Answer:
Approximately 16 Million
http://wiki.answers.com/Q/How_many_new_cars_are_sold_in_US_each_year - 73k -
The Average Cost for a New Car
By Joanne Cichetti, eHow Contributor
According to the National Automobile Dealers Association, as of 2010 the average cost of a new car in the United States is somewhere around $28,400.
http://www.ehow.com/facts_5977729_average-cost-new-car.html - 46k -
By the fifth year of ownership, you can expect to have lost 65% of your vehicle’s value.
Bu the FOURTH year - your car should have been fully paid off.
With proper maintenance and good driving habits - that car should last at least 10 years.
At the end of 10 years (or about 200,000 miles) your car’s value will be about zero.
However - That is 6 years without a car payment or car debt.
And that is worth ALOT.
FYI – that is what they call a depreciating asset. Almost like a house.
“FYI – that is what they call a depreciating asset. Almost like a house.”
That was my point. Very similar to the % drops of a house around here in the last 5 years. But I don`t see droves of people saying I should have not been loaned the money to buy that car. More than a few of the upside down car loaners will roll the debt from one car loan into the next compounding the problem.
Well, in theory one should be able to pay off a car loan and the car should still be good for years (with occassional repairs).
What they don’t say (just like with houses) is that’s an average. Some are actually significantly better, and some are significantly worse. I love it when I can find a deal on something I want that just happens to be in the “way worse” category for some reason.
At the end of 10 years (or about 200,000 miles) your car’s value will be about zero.
It’s more like an asymptote - http://www.fao.org/docrep/w5449e/w5449ejw.gif - rather than a straight line depreciation from start price to zero. The car drops rapidly in value after the first several years, and then holds its value, dropping slightly year after year, while it stays in running condition. If it stops running - well, based on the occasional CraigsList perusal, even they command a few hundred dollars nowadays. A well maintained 15 year old vehicle with a couple of hundred thousand miles can command a couple of thousand dollars.
“By the fifth year of ownership, you can expect to have lost 65% of your vehicle’s value.”
That might have been true in the past. What I’m seeing today is depreciation in the 35-40% range for 5 year old cars.
I suppose that if you compare the resale value of a 2006 model with a the price of a comparable 2011, then the depreciation might look steeper, but that’s because new car prices have skyrocketed compared to 2006. In some cases the price increases are because new and ritzier versions of a model have been introduced (say like the Buick Lacrosse).
Used car prices are still much higher than in the past.
Used Prius prices are astounding.
Most used car prices are stunning. Anything under $10K is a clunker. I’m seeing dealers asking $10K for American cars with 100K miles on them.
“…dealers asking $10K for American cars with 100K miles on them.”
I’ve been looking at used Toyota Sienna XLE vans; lots with 80k+ miles, and asking prices north of $20k. Unreal!
A quick looksie at edmunds shows that new Sienna XLEs start around 33K, which means the typical one on the lot is probably close to 40K (for a Minivan!).
I’m beginning to think I’ll never buy a new car ever again.
I’ve never bought a new one yet and the odds keep getting lower.
I have bought one new car in my life (my current one, currently seven years old). I don’t plan to do it again. Used cars may be expensive, but they’re a heck of a lot better deal than new ones.
I pay cash for my cars, so I probably notice this more acutely than a Harry Howmuchamonth.
Buy Japanese: Problem solved.
Ride a bicycle. Problem really solved.
buying Japanese is not so easy as the earthquake disrupted the foreign new car supply line. Guy here in Bend at Toyota/Scion says he can not get any Scion product on his lot recently. So my father purchased a RAV4(looks alot better IMO than the Jeep like RAV 4 of the past; now it looks like any other “compact” SUV). pretty sharp; and he paid something like $21k
KBB on my used 2006 CRV= $14k. Seems depreciation is not so bad for late model rigs. KBB on 2500 Dodge Truck(gas powered V8) from 1999=$2k; and it has been low for years already.
Seems pretty good for the late model used car resaler right about now. Cash for Clunkers, plus disruption of supply line from natural disasters, plus Toyota safety recalls= high priced used cars (not that new cars are a good deal either)
Of course conditions always are changing…
Darn tootin’!
Yesterday, I played a little work-hooky and went out to run some errands on my bike. One of the errands took me to a local bike shop. For the first time in ages, the shop was NOT busy. I was the only customer in there.
Owner seemed relieved to have some time to get caught up on things. After all, the University of Arizona students will be back in town in less than two months.
I jokingly said that if his store really busied up, he could knock out a wall and move into the empty space next door. He disabused me of that notion right-quick. Told me that a new Italian-Jewish deli was about to open in that spot.
“Ride a bicycle. Problem really solved.”
Sort of, but then you have other problems. I broke another spoke yesterday (after the two last week) on my large rim, 36 spoke touring bike and couldn’t make it all the way to work. And I’ve only put 450 miles on it since I got it. Grrr.
Limped to the Sausalito ferry, which is halfway on my route. But I took my “sports car” today (Bianchi Imola) and made it much faster. Golden Gate Bridge on a bike just can’t be beat!
MrBubble
Sort of, but then you have other problems. I broke another spoke yesterday (after the two last week) on my large rim, 36 spoke touring bike and couldn’t make it all the way to work. And I’ve only put 450 miles on it since I got it. Grrr.
If you’re weighing in at well over 200 pounds, you might want to go to a wheel with more than 36 spokes.
Back when I worked in the bike shop, we built up a bike for a 400-pound guy who decided to get back in shape. I think he’d played football when he was younger.
ISTR that the rear wheel on the bike had 48 heavy-gauge spokes. And it was the first wheel he had where constant spoke breakage wasn’t a problem.
That’s me! I heard the term “clydesdale”, nope too heavy, then “super-clydesdale”, still too heavy, then “pachyderm” (over 230), juuuust right. Thanks for the tip. But 400 pounds on a bike. Damn!
I started breaking a lot of spokes on my hybrid and got the wheel re-built with a heavy Salsa rim. While I was waiting for it, I got a used Mavic that was bullet proof. Then the week after I switched the rims, the bike was stolen. Awful.
I am having the LBS wheel guy look at it this weekend. Maybe a deep-V rim? I’m already rocking 35mm tires, so the rim is pretty wide. Maybe just a rebuild? We’ll see.
The 28 spokes on the Imola held up fine for the 20 miles this morning. Soooo much faster!
MrBubble
“I broke another spoke yesterday (after the two last week) on my large rim, 36 spoke touring bike and couldn’t make it all the way to work. And I’ve only put 450 miles on it since I got it. Grrr.”
I had the same problem. One spoke after another. The factory wheels assume the bike will sit in the garage.
I replaced it with a “custom wheel” with 36 spokes. But they didn’t tighten it right, and more spokes broke. Had to go to a bike shop with a competent mechanic, get the wheel trued correctly, wait for all the damaged spokes to break, and FINALLY the problem was solved. No broken spokes in three years, at more than 3,000 miles per year.
Had to go to a bike shop with a competent mechanic, get the wheel trued correctly, wait for all the damaged spokes to break, and FINALLY the problem was solved.
Let me guess. The competent mechanic knew how to use a spoke tension meter.
Great advice! I’ll probably look over the “wheel guy”’s shoulder this weekend, as unobtrusively as I can of course.
3,000 miles/year, nice work! I’m training for a hilly century on October 1st, so I figure that 20 miles a day, 5 days a week plus a long ride on the weekend should get me up there in the miles.
Yep, my rear wheel is a Mavic 36h - custom built around a coaster hub believe it or not. (Love coaster brakes - always have.) My plan is transfer it to a new frame as the current one is getting beat up.
Silly me, I learned the hard way why all the serious bikers here have their wheels custom built. No store bought wheel has held up for me.
“coaster hub”
Old skool!
“Silly me, I learned the hard way why all the serious bikers here have their wheels custom built. No store bought wheel has held up for me.”
Yep. Just so hard to spend the kind of dough that will stand up against…The Pachyderm.
My new bike has billet wheels……..
and an engine……..
Sorry couldn’t resist. (45 mpg is nice though)
Cheers from another ‘fat guy on a bike’.
Speaking of bikes, I was on a fun ride on Sunday towing my tot behind me, and I kept passing and being passed by the same guy, with him always getting me on the uphill stretches. I asked him if he was trying to do a ‘constant pace’ ride or something, and he told me he was recovering from a broken neck he got in a bike crash, so he was the slowest guy out there.
I was impressed with his tenacity. The doctors were amazed he was walking, let alone riding his bike. (Spinal cord was compressed, but not severed.)
“recovering from a broken neck he got in a bike crash”
Jeebus, did you find out what happened (i.e. how can I avoid that too)?
Check out superclydesdale dot com. As a fat biker, you’ll appreciate the wisdom and wit.
Yes, I did the bike thing for 15 years, and was subject to 15 years of nearly being run over in non-existant bike lanes, exhausting myself on hills (even after five years of biking and being very athletic on top of it, so don’t tell me I wasn’t in shape in my 20s), falling over from the heat, falling over on the ice, hauling groceries with a crate and backpack in the snow, breathing fumes, getting asphalt dust in my eyes,and taking three times as long to commute. And I was lucky that at the time I didn’t have a job tha required a nice wardrobe, or I would have been hauling around changes of clothes too.
And for anyone that lives in a major metro area (except Manhatten which is its own beast), the distances are just too far to make a go of biking. If you live close-in enough to bike, rent is usually prohibitively high.
“Yes, I did the bike thing for 15 years, and was subject to 15 years of nearly being run over in non-existant bike lanes, exhausting myself on hills (even after five years of biking and being very athletic on top of it, so don’t tell me I wasn’t in shape in my 20s), falling over from the heat, falling over on the ice, hauling groceries with a crate and backpack in the snow, breathing fumes, getting asphalt dust in my eyes,and taking three times as long to commute. And I was lucky that at the time I didn’t have a job tha required a nice wardrobe, or I would have been hauling around changes of clothes too.
And for anyone that lives in a major metro area (except Manhatten which is its own beast), the distances are just too far to make a go of biking. If you live close-in enough to bike, rent is usually prohibitively high.”
Congrats on 15 years! Wow. I hope that I make it that long! It’s only been 4 years since I sold my car and it’s been OK so far. I’ve been hit mildly once and crashed a few times; however, we do have lots of bike lanes and the tide of bikers is rising high. Within SF, I can definitely beat my car driving friends most places (if you include parking time), but that’s just because the city is only 7×7. And there were ways to get around most hills, which isn’t the case now that I live North. The hills here are a pain for sure, especially when you’re hauling so much weight (I pack a lunch and pack a change of nice clothes).
But for the most part, until I get to the GG Bridge, I am away from traffic and fumes. And no ice or really bad heat (in the morning) on my ride. Lots of rain, but that’s why I have fenders and rain gear.
As for the expense of car-travel vs. a car, I can’t comment. I do know that I save $6 a day by not taking the ferry (one-way), but if I had a car and parked it in the Financial District it would cost $5 for the GG toll, $20 day for parking and $4 for gas, plus car insurance, registration, smog-checks, etc. I’m calling maintenance a wash b/c I break so much on my bike (although I DIY a lot). That might defray $150 or so a month in rent to get a place closer in perhaps?
As for getting there faster, I am taking a Zen-like approach. Why rush to make The Man rich? Jai guru deva.
MrBubble
“Buy Japanese: Problem solved”
I’ve had plenty of issues with Nissans and Toyotas. And when those suckers break, they aren’t cheap to fix.
NOTHING built since about 1990 is cheap to fix.
The upside is that almost all models last longer if you do regular maintenance.
200k is pretty much standard now before major repairs are needed.
But… yeah. I had to get a quote from my mechanic to change the spark plugs because a couple of them are behind the curl-over-the-top exhaust manifold. $200. Ouch! Why? Because they have to the manifold off! (he’s right)
How Fast Does Your Car Lose Its Value?
By Marty Jerome March 6, 2008
Aha! This article is from the middle of the meltdown. That was a good time to buy a used car. I came real close to buying a 2004 GTO with 40K miles for $12K. That same car would fetch 16K today.
Local anecdote: someone whose situation I have been following FINALLY just got a NOD on their place in Seattle, only 18 months after making the sensible move of stopping payments. So the foreclosure process is finally starting to move forward. It will be interesting to see how long it takes.
They have had the property listed in the MLS to try to sell it for that entire 18 months, and the bank has lost two offers by either being non-responsive for months (first time around), or by countering for an amount that is almost twice what the property is likely worth.
The first mortgage was owned by Fannie, and the second was owned by BoA, who was also the servicer, so they had seriously twisted incentives…
I watched a brief segment of a show called America’s Funniest Videos last night, and it occured to me that it must be the inspiration (or substantiation) of the Ow My Balls! program in the movie Idiocracy. Everyone was getting whacked in the cajones by sticks, baseball bats, flying objects and handrails while the audience laughed uncontrollably. The future is now!
I guess you have never watched a Three Stooges movie…
As a man, it’s a painful for me to watch any man get hit in that area. Women folks, enjoy all you can….:)
What about the Weiner-gate?
Even in Idiocracy, grown men did not take a shot of their area and send it to women.
Yep… many years ago it morphed from being a program about cute kids and pets into watching people get hurt (and somehow that being funny). I haven’t watched it in about a decade for that reason.
It got old fast, which is probably why they moved onto crotch hits and people falling on their heads.
Did you think “Idiocracy” was about the future?!
Here is a good set of quotes from Case and Shiller.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=af6VpFSzDE80&pos=3
“Robert Shiller, the economist who co- founded the S&P/Case-Shiller index of U.S. home prices, said a further decline in property values of 10 percent to 25 percent in the next five years “wouldn’t surprise me at all.”
“While it would be a surprise to see prices fall steeply, it’s possible for homes to lose more value if inflation picks up, Karl Case, co-founder of the index, said today. “You could have flat nominal prices but still have it go down 20 percent,” Case said during an interview at the conference. “If house prices stabilize, they could still go down in real terms. If we had inflation, it’d be great, because it’d mask a 25 percent decline.”
“A model for the U.S. may be Japan, where home prices fell for 15 years after that country’s real estate bubble burst in the early 1990s, Shiller said. “They lost close to two-thirds of their value,” Shiller said. “Then they went up for one year in 2006 and then they started going down again.”
Or Europe after the fall of the Roman Empire.
“If we had inflation, it’d be great, because it’d mask a 25 percent decline.”
Really? It’s that simple? Okay Karl, whatever.
It’d mask a 25 percent decline in the value of fixed-income pension promises too. Sounds really great, neh Karl?
‘“A model for the U.S. may be Japan, where home prices fell for 15 years after that country’s real estate bubble burst in the early 1990s, Shiller said. “They lost close to two-thirds of their value,” Shiller said. “Then they went up for one year in 2006 and then they started going down again.”’
I’ve been suggesting on the HBB for several years running that Japan might be a model for U.S. housing price declines, especially given the similarity of our aging populations and the fact that, like the BOJ, our central bank is pushing on a string.
Glad to learn that Shiller is catching up…
Update on cost of Libyan war:
http://www.ft.com/cms/s/0/11d5624c-920f-11e0-b8c1-00144feab49a.html#axzz1OnV2JJSx
think of all the teachers we could have hired and all the hungry children we could have fed…
Speaking of which - why don’t we see Cindy Sheehan and the daily update to the “war death toll” on the nightly news anymore…?
“Speaking of which - why don’t we see Cindy Sheehan and the daily update to the “war death toll” on the nightly news anymore…?”
Because the Corporate Owned MSM has been ordered to not report dissent against the wars?
I see people protesting the wars at street intersections all the time. Yet I NEVER see any coverage in the MSM.
Cindy Seehan is still out there. It’s just that the Dems used, abused and now pretty much abandoned her.
Because the Corporate Owned MSM has been ordered to not report dissent against the wars?
Somehow that only works only when the Warmonger has a D after his/her name.
“Somehow that only works only when the Warmonger has a D after his/her name.”
I seem to recall that the MSM was pretty much in favor of invading Iraq.
Yeah they are always for war. It’s like Christmas to them. Ratings bonanza. The # of reports on dissents, deaths and destructions depend upon who the prez is.
Yes, the dutifully helped stir the pot in 2002-3. Softball questions galore, the White House press corps pretty much rolled over and died back then. Don’t think they’ve come to life again either from the looks of it.
Yesterday, we were discussing the lack of reporting of “wilding” crimes in the Chicago area. Well, here’s a Chicago cop who’s trying to get the word out.
The only way to learn of this stuff is by word of mouth. And since we collectively do not socialize with the neighbors anymore, that will get trickier.
Well, then move into my nabe. We socialize face to face, via phone, and via e-mail.
My commute takes me right through the near north side neighborhoods in question. Funny, I used to think I wore a bike helmet in case of an accident but even with heat indices near 100 this week it was always on my head (itching like crazy sometimes) - but now seen as protection against attack.
One of the guys they attacked by first whipping a baseball at his noggin’. Thankfully he was wearing his helmet so he’s still with us today.
It’s interesting to watch these stories filter through the local psyche. So far there’s not appeared to be any noticeable decline in foot traffic or tourism - save one. There’s a large area of our North Ave. beach set up for volleyball. In summers past the nets would be crammed with games but on these past few afternoons there appeared to be only a few scrimmages (4-6) out of dozens and dozens of nets. That’s unusual.
Thankfully the front passed and north winds are howling off the lake today. Good riding weather.
Oh, and no, none of this “wilding” stuff is good for condo prices here.
I heard about this in the 80s. A fellow I knew was jogging through a questionable area of Philly - college kid - and someone hurled a rock at him, hit him in the head. He got away, but your story sounds quite similar.
That’s some messed up stuff going on in Chicago.
Thanks for pointing this out to us.
Hopefully, they will come down hard and heavy on these guys — and quickly. That’s the only way they’ll ever get it under control…that, and offer large rewards to people who turn them in and/or stop them during the attacks.
http://www.reuters.com/article/2011/06/09/us-usa-housing-shiller-idUSTRE75839I20110609
“As for when home prices might bottom, Shiller told Insider that was unclear and it was possible prices could slide for 20 years.”
20 years. Did you hear that deluded house-debtors? Shall I say it again Lying Realtors? 20 years.
Shiller is just trying to soften it for them.
Hey stock analysts, we’ve had 11 years worth of declines from the peak and it is possible that price could fall for 20 years.
Of course if we had more inflation, they may not drop in nominal terms.
Wage rates, too.
Veinte Años? Ay, caramba! Mi casa poquito dinero.
Amount of equity people have in houses: http://hosted.ap.org/dynamic/stories/U/US_HOME_EQUITY?SITE=UTSAC&SECTION=HOME&TEMPLATE=DEFAULT
I don’t think the housing ATM is coming back any time soon.
Now if only we can get rid of its replacement: living in your home w/o paying your mortgage w/no fear of foreclosure
“The old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past.”
~Chris Martensen
Well, unless you’re rich, that is.
US Is Nearing Even Worse Financial Crisis: Jim Rogers
Wednesday, 8 Jun 2011 By: Margo D. Beller Special to CNBC.com
The U.S. is approaching a financial crisis worse than 2008, Jim Rogers, chief executive, Rogers Holdings, warned CNBC Wednesday.
“The debts that are in this country are skyrocketing,” he said. “In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.
“When the problems arise next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around.”
The well-known investor believes the government won’t shut down in August if agreement isn’t reached on raising the debt ceiling, but he did say “draconian cuts” are needed in taxes and spending, especially military spending.
“We’ve got troops in 150 countries around the world. They’re not doing us any good, they’re making enemies. They’re costing us a fortune,” he said.
Rogers said he is “not long anything in the U.S.” and short on American tech stocks. He owns Chinese stocks as well as commodities and would love the world price of silver and gold to come down so he could “pick up the phone and buy more.”
He said he owns Chinese stocks, currencies and commodities, adding the Chinese yuan will be a safer currency than the dollar.
“The U.S. is the largest debtor nation in the history of the world,” he said. “The debts are going through the roof. Would you keep lending money to somebody who’s spending money and not doing anything about it? No you wouldn’t.”
He owns Chinese stocks as well as commodities and would love the world price of silver and gold to come down so he could “pick up the phone and buy more.
Considering China is probably playing the old part of the USA for this depression I wouldn’t be in any hurry to load up on Chinese stocks. Gold and silver…well…I don’t expect them to be cheap again until times are good. Could be a while. I’m still liking food and ammo.
Jim Rogers and guys like him are a big part of the problem, not the solution.
They won’t be happy until the US is turned into a clone of Russia, or the PRC.
Great if you are an oligarch. Not so great if you are a serf.
The trick will be seeing if they can continue to con the serfs into believing it was all caused by those parasitic, commie, Democrats.
“..parasitic, commie, Democrats.”
While those words seem to roll off the tongue, any real rebirth will involve stepping on the neck of the FED.
True, and not just the Fed, the member banks behind the Fed curtain.
Consumer Comfort Improves on Cheaper Gas
Bloomberg - Jun 9, 2011
Consumer confidence rose last week third consecutive time as lower gasoline prices lifted Americans’ outlook on their finances.
Consumer confidence rose last week for the third consecutive time as lower gasoline prices lifted Americans’ outlook on their finances.
The Bloomberg Consumer Comfort Index climbed to minus 45.9 in the period to June 5, the best showing since the end of April, from the prior week’s minus 47.1. Across income groups, sentiment improved the most among those making less than $50,000 a year.
A 26-cent drop in the average cost of a gallon of gasoline at the pump, from the almost three-year high of $3.99 reached on May 4, is giving consumers a little extra cash to spend on other goods and services. At the same time, unemployment at 9.1 percent and slowing job growth will weigh on households, threatening to block any additional improvement in sentiment.
Cheaper gasoline “has lifted sentiment temporarily off the mat,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Even so, “confidence, like the U.S. economy, remains stuck in second gear. The slowdown in private-sector hiring and increase in the unemployment rate poses a potent risk to consumer confidence heading into the second half of 2011.”
Other reports today showed the trade deficit unexpectedly narrowed in April and claims for unemployment benefits increased last week.
“giving consumers a little extra cash to spend on other goods and services.”
Never to save, always to consume. Never to conserve, always to waste.
Little pink houses for you and me.
At my house, the pitiful savings from lower gas prices went straight to groceries, thank you very little.
Sorry to hear that. Our savings rate is now much less since we started paying for child care. We could swing it on my salary (squeaaaaak) but we’re so afraid that she won’t be able to ever re-enter the work force and/or that I’ll lose my job, we are willing to work merely to pay someone else to raise our child and for the ability/opportunity to work in the future. This blows dead rats.
Ecofeco — you already cook at home, IIRC.
I do and trust me, it ain’t steaks and caviar.
Mr. B,
Sorry to hear of your situation. I wish to throw something in the bucket for you, having chased the earnings while a generation of children were born and graduated in my house. They remember the times I played in the dirt with them. They remember time I helped them with their school work. They remember chores and walks. They do not remember that I was a Plant Engineer, or how many hours I worked, or how much I made, or the projects that were defining moments in my career, or that six months I was unemployed. Some things only come around once. Jobs is not on that list.
Politicians are the only people in the world who create problems and
then campaign against them. -By Charlie Reese
Have you ever wondered, if both the Democrats and the Republicans are
against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation
and high taxes, WHY do we have inflation and high taxes?
You and I don’t propose a federal budget. The President does.
You and I don’t have the Constitutional authority to vote on
appropriations. The House of Representatives does.
You and I don’t write the tax code, Congress does.
You and I don’t set fiscal policy, Congress does.
You and I don’t control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one President, and nine Supreme
Court justices equates to 545 human beings out of the 300 million are
directly, legally, morally, and individually responsible for the
domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that
problem was created by the Congress. In 1913, Congress delegated its
Constitutional duty to provide a sound currency to a federally
chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason.
They have no legal authority. They have no ability to coerce a
senator, a congressman, or a President to do one cotton-picking thing.
I don’t care if they offer a politician $1 million dollars in cash.
The politician has the power to accept or reject it. No matter what
the lobbyist promises, it is the legislator’s responsibility to
determine how he votes.
Those 545 human beings spend much of their energy convincing you that
what they did is not their fault. They cooperate in this common con
regardless of party.
What separates a politician from a normal human being is an excessive
amount of gall. No normal human being would have the gall of a
Speaker, who stood up and criticized the President for creating
deficits. The President can only propose a budget. He cannot force the
Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole
responsibility to the House of Representatives for originating and
approving appropriations and taxes. Who is the speaker of the House?
John Boehner. He is the leader of the majority party. He and fellow
House members, not the President, can approve any budget they want.
If the President vetoes it, they can pass it over his veto if they
agree to.
It seems inconceivable to me that a nation of 300 million cannot
replace 545 people who stand convicted — by present facts — of
incompetence and irresponsibility. I can’t think of a single domestic
problem that is not traceable directly to those 545 people. When you
fully grasp the plain truth that 545 people exercise the power of the
federal government, then it must follow that what exists is what they
want to exist.
If the tax code is unfair, it’s because they want it unfair.
If the budget is in the red, it’s because they want it in the red.
If the Army & Marines are in Iraq and Afghanistan it’s because they
want them in Iraq and Afghanistan …
If they do not receive social security but are on an elite retirement
plan not available to the people, it’s because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they
hire and whose jobs they can abolish; to lobbyists, whose gifts and
advice they can reject; to regulators, to whom they give the power to
regulate and from whom they can take this power. Above all, do not let
them con you into the belief that there exists disembodied mystical
forces like “the economy,” “inflation,” or “politics” that prevent
them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are
their bosses.
Provided the voters have the gumption to manage their own employees…
We should vote all of them out of office and clean up their mess!
~ Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
Vote out all of the incumbents.
Better yet, vote out anyone who has ever help public office before.
At minimum, all that new money that will need to be spent to buy the government again might actually end up in the Main Street economy.
I thought he was dead.
Here’s something that’s making the rounds of the Tucson blogosphere: Using vacant foreclosed houses as the places of residence for newly registered voters.
It never ends, does it?
I thought they were using them for new Acorn offices?
ISTR that last year, the local ACORN-ies organized some sort of “stop foreclosures” protest that involved surrounding a house. I don’t know how successful it was. Especially when you consider that a lot of our foreclosures stem from:
1. Using the house as an ATM
2. Buying the house as an investment that will magically appreciate to the sky, even though the tenants are trashing the place
Prices soar on the used car lot. ~ NBC News
When Debra Neel went to check out used Jeeps recently in Indianapolis, she left with a bad case of sticker shock.
“We were looking around $4,000 or $5,000 for a good used car for a teenager,” but “you can’t find them anymore,” said Neel. That was readily confirmed by Bob Falcone, president of Falcone Volkswagen, Subaru & Saab in downtown Indianapolis.
Falcone said that a couple of years ago, Neel might have been able to get the 12-year-old Jeep she was considering at her $4,000 to $5,000 price point. The 2000 model on the lot, after all, has almost 90,000 miles on it and gets only 16 miles to the gallon.
Its price tag today: $13,900.
“It’s unbelievable,” Falcone acknowledged. He said the used car market is the strongest it has ever been in his 34 years in business.
Prices to soar 30 percent year over year
Dealers and automotive analysts say it’s the same across the country. A variety of factors, including the nation’s weak economic recovery, high gasoline prices and the March 11 earthquake and tsunami in Japan, have converged in recent weeks to send demand for used vehicles skyrocketing and supply plummeting, said Jeremy Anwyl, chief executive of Edmunds.com, which tracks new and used car prices.
“And that really shot up prices,” Anwyl said.
I’ve four leases expiring in October to manage. Two years ago the leasing co. told me to plan to bring a little money to the table - now they’re saying we might make out pretty well.
Nope. No inflation there! No siree!
Spent $4K fixing the blown head gaskets in my old Caddy. Did it right; dropped the motor, pulled the heads and installed a oversize head stud kit. Also fixed the upper/lower shortblock seals, etc..
(Google “Northstar Head Gaskets”)
Wasn’t sure I’d ever recover the money I put in. But now that I’ve fixed it the right way (with receipts to prove it), and eliminated the Achilles heel this car had, I’ve had more than a few people come up to me and make offers on it.
Problem is, I’d have to spend $20K plus, to get into something as nice, or better.
You’re so lucky you know how to do this work, x-GS!
Nice job!
Pretty amazing what knocking about 15 million vehicles (and half the dealers) out of the 2009-2012 production plans will do for prices (new and used).
never buy a used car off a lot. Use CL or eBay. Plenty of deals out there. Get a 1996 Volvo, 20+ mpg and a tank.
ALBANY, NY ( WKBW ) Governor Andrew Cuomo is expected to move forward with his plan to layoff up to 9,800 workers across New York State in early July. By WKBW News June 9, 2011
Cuomo says termination will go in waves starting June 15th.
The state will start with a system called “bumping.”
Here is how it works: If a job is on the chopping block, then an individual in that position who has greater seniority can potentially transfer to other positions now being cut.
Cuomo’s team has been negotiating with unions, civil service employees associations, and the Public Employee Federation since April 1st, when their contracts expired.
New York State Assemblyman Sam Hoyt told Eyewitness News, “It’s going to be contentious. I stand by Governor Cuomo in his attempt to take bold and serious action.”
Stephen Madaraz, President of the CSEA Union commented, “This Governor has come in with a pledge to get the economy going and moving us forward. To be looking at layoffs, you can’t possibly do that without having a negative impact on the economy.”
The official number of layoffs could be reduced depending on savings achieved through labor concessions.
Cuomo anticipates a savings of $450 million dollars in State workforce savings this year.
$450 mil/9800 = $46K per employee.
Sure. Overpaid Civil Servants. Everything will be hunky-dory when those freeloaders are kicked to the curb.
Lay off all the staff. Then bitch about the wait times for building permits, auto registration, drivers license renewals.
The American Way.
Damn NE liberal math!
We’d be in more of a crisis here if the FedGov wasn’t propping up Wall Street. It’s in NY, remember? If you want to see those servants of the state preserved, then everybody needs to pony up.
“Then bitch about the wait times for building permits, auto registration, drivers license renewals.”
Next steps:
1) Politicians will bitch about inefficiency in government, not to mention shrinking funds available to pay civil servants, and lay off even more government workers.
2) More bitching about wait times for building permits, auto registration, drivers license renewals, etc will ensue.
3) Politicians will bitch about inefficiency in government, not to mention shrinking funds available to pay civil servants, and lay off even more government workers.
4) More bitching about wait times for building permits, auto registration, drivers license renewals, etc will ensue.
etc etc etc
OK, so does anyone here know of someone (with a mortgage) who can beat five years without a mortgage payment? Seems we may have a record here…
Squatter Nation: 5 years with no mortgage payment
money cnn com/2011/06/09/real_estate/foreclosure_squatter/index.htm
People who steadfastly struggle to pay rent or mortgages = FOOLISH.
People who squat without paying rent or mortgages = CLEVER.
From the above article:
Squatter Nation: 5 years with no mortgage payment
By Les Christie June 9, 2011: 9:45 AM ET
Foreclosed homeowners have stopped paying their mortgages.
Millions are staying in their homes without paying their mortgages.
NEW YORK (CNNMoney) — Charles and Jill Segal have not made a mortgage payment in nearly five years — but they continue to live in their five-bedroom West Palm Beach, Fla. home.
Lynn, from St. Petersburg, Fla., has been living without paying for three years.
In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home.
They’re not alone.
Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.
…
Have recent buyers who brought a downpayment to the closing table, on their lender’s insistence, figured out by now just how quickly your equity can vanish down the drain in a falling knife hosing market?
Or is the typical current home buyer just as clueless and foolish as ever?
Jun 10, 12:28 AM EDT
Americans’ equity in their homes near a record low
By DEREK KRAVITZ and CHRISTOPHER S. RUGABER
AP Business Writers
WASHINGTON (AP) — Falling real estate prices are eating away at home equity. The percentage of their homes that Americans own is near its lowest point since World War II, the Federal Reserve said Thursday. The average homeowner now has 38 percent equity, down from 61 percent a decade ago.
The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. But even alluring rates have failed to deliver any lift to the depressed housing industry.
The Fed report is based on data from the first quarter of this year. Another report last week found that home prices in big cities have fallen to 2002 levels.
Normally, home equity rises as you pay off the mortgage. But home values have fallen dramatically since the bubble in prices burst in 2006. So many homeowners are losing equity even though the outstanding balance on the loan is getting smaller.
…
Has there ever been a worse time to buy a house?
Maybe 2006 was worse, but still…
Recovery at Risk
Unemployment claims stuck above 400,000
By Blake Ellis @CNNMoney June 9, 2011: 9:33 AM ET
NEW YORK (CNNMoney) — The number of Americans filing for first-time unemployment benefits rose again and stayed above the 400,000 mark for the ninth consecutive week.
While a level below 400,000 is typically associated with payroll growth, claims have now topped this mark for the last nine weeks.
There were 427,000 initial jobless claims filed in the week ended June 4, the Labor Department said Thursday. That was up 1,000 from the week before, and slightly worse than the 423,000 claims economists surveyed by Briefing.com had expected.
“Jobless claims above 400,000 are consistent with a recession, and they are also consistent with an economy recovering from a severe recession,” said Mark Vitner, an economist at Wells Fargo. “And now that we’re stalling instead of recovering, that’s pretty disconcerting.”
The four-week moving average of initial claims, calculated to smooth out volatility, totaled 424,000, down 2,750 from the previous week’s revised average of 426,750. While a slight improvement, the overall trend in the moving average over recent months has also showed an uptick in unemployment, said Vitner.
Unemployment benefits fading away
“This really begins to raise some questions of whether there are more long-term issues in the economy than people are letting on,” said Vitner. “I’ve been in the camp of no double-dip recession, no huge slowing in growth, but now I’m a little worried about 2012 — the economy just doesn’t have a whole lot of momentum right now.”
…
Can someone kindly explain our federal government’s interest in luring low-income people into purchasing homes during a period of falling real estate values? That seems to me like a sure way to lure many, many low-income households into bankrupting themselves.
Was that the policy objective? If not, then what, exactly, was the objective? In particular, wouldn’t the housing market work better if the private decision of whether or not to buy a home were left to individual households, absent the distortionary impact of costly ($20+ bn!!!) government incentives to make potentially-foolish decisions?
Op Eds
Poor are lured to housing market
By: Christopher Caldwell 06/09/11 9:54 PM
Special to The Examiner
There was supposed to be some good news amidst the dismal report card of the U.S. real estate market. On average, houses have lost a third of their value since the peak in 2006. Blighted Detroit has seen home prices fall to half their old level, and overbuilt Las Vegas is off by 60 percent. Standard & Poor’s Case-Shiller index showed that home prices are falling again, at their fastest rate since the days of the financial crash. Minneapolis real estate has lost 10 percent of its value over the past year.
These declines were “widely anticipated.” But that just means there is a two-month lag between most housing statistics and those of Case-Shiller, whose latest numbers date only from March. It decidedly does not mean that anyone in the government has a clear idea of how the real estate market works or a sense of what it will do next.
We can tell this by looking at the First Time Homebuyer Tax Credit, which stabilized the market for a while between 2008 and 2010. Its withdrawal is being blamed for the new softening of home prices. The tax credit was launched in 2008 as part of the Housing and Economic Recovery Act that President George W. Bush signed a little more than a month before the collapse of Lehman Brothers. HERA offered a $7,500 tax credit that took the form of an interest-free loan, to be paid back in 15 installments of $500 each, after a two-year grace period.
The Obama administration saw much to like in this Bush administration plan. In January 2009, a new version of it, expanded to $8,000 and turned into a government gift rather than a loan, became part of the stimulus bill. We know, in retrospect, that the basic pre-crash mistake of the Clinton and Bush administrations was to use financial incentives to drive the rate of homeownership far above its natural level.
But presidents don’t think in crises — they reach for solutions that are already on the shelf. The Bush tax credit became the Obama law and has since added about $20 billion to the budget deficit. But it has cost homeowners a good deal more than that.
…
It’s already been five years since the housing bubble collapsed, and yet here we are still talking about it, and the subject is still fascinating, not in the least because the aftermath clearly is still in overdrive.
Does anyone besides me find the lingering nature of this economic malaise to be more than a little bit troubling?
wasssssssssssup