Bits Bucket for June 11, 2011
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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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“JPMorgan Chase is forecasting another 4 to 5 percent drop in home values over the next 12 months.The bank said, a looming question is when and if lending standards will ease enough to boost demand.”
http://www.cnbc.com/id/43354054
Yup, the lending standards, that’s what’s holding my family back.
“…when and if lending standards will ease enough to boost demand.”
I’m guessing easy, sleazy lending standards may return by 2050 or so, once the current episode in financial history is generally forgotten by all but scholars of the Great Recession.
if lending standards will ease ??
Well, here is a “lending standard” that IMO, makes absolutely no sense whats so ever…
If, you have more than four residential mortgages of one to four units, a new loan for a new property is not even available no matter how well you qualify…50% down ?? Does not matter…The only thing available is a portfolio lender which basically means expensive money…That goes for refinancing also by the way…
Pay cash if you don’t like it. Why should “investors” be entitled to borrowed funds?
Why should “investors” be entitled to borrowed funds ??
Don’t “investors” borrow all the time ?? You just want to define “investor” as everything except for real estate I assume….
Pay cash if you don’t like it ??
Standard practice for business I guess…If you don’t have “all cash” you don’t get to play…
If, you have more than four residential mortgages of one to four units
Aren’t residential mortgages supposed to be for properties you actually live in, at least part time?
No…
Amazing how these guys continue to ignore the 800 pound gorilla.
20% of the country is un/under-employed, if you believe the government stats.
At minimum, another 20% could easily find themselves in Category #1, if the economy goes Tango-Uniform again.
Nobody in the remaining 60% is seeing anything in the way of pay raises, and they are seeing major inflation in the price of food and fuel (you know, those “volatile” things that can’t be tracked in government inflation numbers, and aren’t counted).
Employers know that they have 5 job apps for every open position, and are low-balling their employees accordingly.
I’m still trying to find a single article which actually sheds light on the problem with low wages and under/unemployment as they pertain to home sales and prices.
There have been a couple posted here, but they ARE far and few between.
Employers know that they have 5 job apps for every open position, and are low-balling their employees accordingly.
Which is why most workers have no bargaining power as individuals and is why Corporate America looooves “right to work” laws.
Yesterday drummin stated that he didn’t understand how people get “trapped” in their jobs. Its actually quite simple, as I saw it at HP. Since “the market” has body slammed wages, leaving that 20 year job will almost always involve a hefty pay cut, so the veterans put up with the microscopic to non existant pay raises.
As for job hopping to get a raise, that used to work (I am guilty of doing this myself) but more often than not lately I get offers that are below what I’m getting now. What gets to me is that they first act surprised when I say no, but then refuse to budge on the offer. (And then they bitch that there’s “no one to hire”)
Plus job hopping in this economy can be hazardous. I know more than a few people who were laid off months after starting a new job when things suddenly went sounth for their employers.
As for job hopping to get a raise, that used to work (I am guilty of doing this myself) but more often than not lately I get offers that are below what I’m getting now. What gets to me is that they first act surprised when I say no, but then refuse to budge on the offer. (And then they bitch that there’s “no one to hire”)
correct
Yes. Job hopping was the only way UP the pay scale for me too. They were lateral moves with a bit loftier titles and more responsibilities with each move. And what I’ve observed on the way up is that they higher you go, the more useless I and other contemporaries really are.
“Job hopping was the only way UP the pay scale for me too.”
Housing costs in the metro areas prevented me from “hopping” up the career ladder. I have been hugely impacted by the housing bubble despite my lack of participation and a 1,000-mile relocation.
“Employers know that they have 5 job apps for every open position”
Only 5?
When supply exceeds demand, does the price of the item tend to go up or down?
I worked for a high-tech company for the last few years leading to the tech bubble burst in 2002. In just a few short months the company went from paying bonuses to employees who brought in a qualified new hire, to the first of several rounds of layoffs. A few short months.
With automation firmly in place and robotics to handle more complex jobs just around the corner, I believe we now have a permanent surplus of willing workers. Able workers (for the jobs that can’t be done by machines)? Not so much.
I worked in one of HP’s largest assembly plants. That much vaunted automation isn’t all it’s hyped to be.
Not even close.
Dow ends below 12,000 yesterday.
(Aww, dat’s beautiful) (Hat tip to Jeff Saturday)
DJIA = 12K or bust!
Oops…
The DOW is completely irrelevant to this country.
It’s the headline everyone watches as a daily barometer for the economy. I would like to hear why you think it is irrelevant? Or is that just your (unsupported) view?
That was a horrible sentence. I should have written: “The Dow is completely irrelevant insofar as an indicator of the health of this economy.”
You may disagree, but in my world, the anecdotal evidence of extreme hardship amongst friends and acquaintances is in direct conflict with the halcyon days on Wall St.
I’ll accept the revision.
S&P is on its way to 1250.
then what?
1150….1050….
Entirely ignoring the incipient end of QE2 as a potential explanation for stock market declines, the MSM attributes them to a “loss of investor confidence.”
Heckuva job, MSM!
Stocks Fall on Dow’s Longest Slump Since 2002
By Nikolaj Gammeltoft - Jun 10, 2011 9:00 PM PT
U.S. stocks fell for the sixth straight week, giving the Dow Jones Industrial Average its longest slump since 2002, as investor concern that the global economy is slowing intensified.
Technology stocks and consumer companies reliant on discretionary spending led losses in the Standard & Poor’s 500 Index, dropping more than 2.7 percent as a group. PulteGroup Inc., the nation’s biggest homebuilder, slumped 11 percent for the largest retreat in the S&P 500. Visa Inc. (V) and MasterCard Inc. (MA) decreased more than 3.6 percent after the U.S. Senate rejected a six-month delay of a Federal Reserve rule capping debit-card swipe fees set by the companies.
The S&P 500 lost 2.2 percent to 1,270.98, its lowest level since March 16. The benchmark gauge for U.S. equities has also dropped for six consecutive weeks, the longest retreat since 2008. The Dow fell 199.35 points, or 1.6 percent, to 11,951.91. Its last weekly slump of this length was in October 2002, the start of a five-year bull market for equities.
“The market is still digesting that there’s been a softening in economic growth in the U.S. and other parts of the world,” said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees more than $38 billion. “That disappointing economic news has caused investors to turn more cautious. They could shrug off bad economic data in the first quarter. It’s harder to continue doing it in the second quarter.”
…
“softening in economic growth”
Yeah, the IV drip of FedStim is being tweaked back. You’re bound to feel some pain. You were never healthy, we just made you feel like it. At this point, we either have to up your dosage to keep you stable, which might kill you, or wean you off, which will hurt like hell. A decision hasn’t been made yet, at least I haven’t been told.
My understanding of the economics (admittedly limited) is that monetary stimulus doesn’t have any real effect until 18 months after it starts and that the effect ends about 18 months after it ends. That may refer more to lower interest rates, but I thought it applied roughly to QE as well.
What will be seen more quickly is effects from fiscal stimulus like spending. The federal money had some effect by propping up state and local employment (employee and contractor) and is now just about completely over. Plus no first time buyer credit inducing people to make bad decisions on buying houses. I see this as more about the end of the fiscal goosing, not getting close to the end of the monatary goosing. That decline is still ahead of us.
“…monetary stimulus doesn’t have any real effect until 18 months after it starts and that the effect ends about 18 months after it ends.”
That may be a reasonably accurate characterization of the effect of monetary policy changes (e.g. tightening or easing) under business cycle conditions, but I am not sure whether it holds under quantitative easing, where the alternative of no quantitative easing may imply little or no Fed-funded money flowing into the economy.
Aside from that, the discussion here is of the effect on the (forward looking) stock market, not the (backward looking) real economy. Under rational expectations, if investors believe QE2 will end at the end of June, they will jump ship sooner, not 18 months after the change.
Slight edit:
…under normal business cycle conditions…
Can you stand up?
I do believe its working. Good.
That’ll keep you going through the show
Come on it’s time to go.
Yeah, the IV drip of FedStim is being tweaked back.
It kept us going through the show, but we’re starting to no longer be comfortably numb. But like an addict I assume we’ll keep shooting anything we can to keep the pain away until there are no more options. Although the pusher may cut us off as soon as we’ve got nothing left that he wants.
The WashingtonCityPaper is the weekly local freebie rag targeted toward the the very liberal residents inside city limits. These are the folks that actually LIKE condos. The City Paper reports that there is a housing SHORTAGE, especially in the parts of the District proper (NW) which aren’t crime zones. (SE, NE)
“For the last two years now, reports have said the same thing with such regularity that they’ve ceased to even make headlines: The housing market is in freefall, except around here. The end of May, however, saw the release of perhaps the most eye-popping finding yet. While home prices had reached a new low for the recession nationally on the closely-watched Case Shiller Index, the D.C. area posted a robust 4.3 percent growth rate since last year. It was as if the real estate crash were already ancient history….
..The D.C. area has added 17,000 jobs in the business and professional services sector and 7,000 in retail over the last year, versus just 3,000 in the federal government. As of April 2011, the region has an amazing 5.4 percent unemployment rate—about half the nationwide average (although D.C. tops it, at 9.6 percent). The District added nearly 30,000 people over the last 10 years, and they all need somewhere to live.
…The real estate crash took about a year longer to hit D.C. than the rest of the country; housing prices didn’t fall off a cliff until mid-2007. When they did, people didn’t stop moving here, but developers—suddenly unable to borrow money—stopped putting up buildings to house them. ”
http://www.washingtoncitypaper.com/blogs/housingcomplex/2011/06/09/the-price-isnt-right/
Citypaper is the DC equivalent of the Village Voice, though without the long history intermitent really good investigative pieces.
“While home prices had reached a new low for the recession nationally on the closely-watched Case Shiller Index, the D.C. area posted a robust 4.3 percent growth rate since last year. It was as if the real estate crash were already ancient history….”
In D.C., MoCo and NoVA, buy now or be priced out forever.
Get inside the city gates before the barbarians arrive.
Proof that lending standards are still way to loose.
Flash mobs continue in Chi-town. Stay safe, edgewater john. Not even July yet and it looks to be shaping up as a long, hot summer.
Rahm says he has it under control.
I can’t think of a better-suited mayor to deal with roving mobs of hoodlums.
There’s one reason those don’t happen in Florida.
BANG.
Dump your shitty assets now, or ride the falling knife to the ground.
But quite honestly, I don’t understand the Fed’s urgency to unwind the toxic assets off their balance sheet. What would it cost them to hang onto these forever? I suppose one could interpret the sales as a deliberate attempt to stampede the Wall Street bovines.
Maiden Lane Sales Trigger Stampede to Dump Risk: Credit Markets
By Shannon D. Harrington, Jody Shenn and Sarah Mulholland - Jun 10, 2011 8:26 AM PT
Federal Reserve auctions of mortgage securities that the central bank assumed in the rescue of American International Group Inc. are fueling a selloff in credit markets as Wall Street rushes to hedge against losses on stockpiled debt.
Declines in credit-default swaps indexes used to protect against losses on subprime housing debt and commercial mortgages accelerated this month, reaching almost 20 percent in the past five weeks as the cost of the insurance climbs, according to Markit Group Ltd. The plunge this week started infecting everything from junk bonds to the debt of financial companies.
The Fed has been selling the $31 billion Maiden Lane II portfolio piecemeal after rejecting a $15.7 billion bid from AIG for the entire pool in March. Since then, Europe’s sovereign debt crisis has deepened and the U.S. recovery has shown signs of slowing, with unemployment rising to 9.1 percent, the highest level this year, and the economy growing 1.8 percent in the first quarter, less than forecast.
“Dribbling risk into the market makes sense if everything is good and continues to improve,” said Ashish Shah, the head of global credit investments in New York at AllianceBernstein LP, which oversees $214 billion in fixed-income assets. “But when you get yourself into a position where the Street suddenly feels they’re long inventory and the macro backdrop is weaker, now you’re selling into weakness.”
…
“But when you get yourself into a position where the Street suddenly feels they’re long inventory and the macro backdrop is weaker, now you’re selling into weakness.”
I wonder if it turns his stomach to hear people from Main Street parse a sentence. Sure truns mine to hear his.
But quite honestly, I don’t understand the Fed’s urgency to unwind the toxic assets off their balance sheet. What would it cost them to hang onto these forever? I suppose one could interpret the sales as a deliberate attempt to stampede the Wall Street bovines.
Any more I’m suspicious that it’s an intentional stampede that will end as soon as they get their way. I don’t know if that’s QE3 or something else. Obviously they can hang onto stuff forever if it suits them…which most of the time it seems to.
I’m thinking a QE3 announcement + renewed Obama stimulus will be on the way as soon as the people clamor for it. But first we need another dip into the abyss, with clarification that it was the Tea Party’s idea.
This will be good over the long run, as the whacky fringe of the Tea Party is about to be severely discredited for the consequences of their extreme tactics (nearly shutting down the federal government over Planned Parenthood funding, etc).
“But quite honestly, I don’t understand the Fed’s urgency to unwind the toxic assets off their balance sheet. What would it cost them to hang onto these forever?”
I totally agree, PB. The fact that they are unwinding anything yet, particularly in the face of continuing economic weakness and the broadening awareness of that fact is stunning.
The only explanation that makes any sense to me is that there is an agenda they want to push. QE3 or discrediting the folks clamoring for a govt shutdown would both make sense.
Reading what I wrote, it sounds tin-foily, but I can’t see any other explanation. I had assumed Maiden Lane would be wound down only when the MBS had all matured.
Thinking about dumping that unaffordable mortgage you will never, ever possibly be able to repay? Why not go for it — the banks want to relend to you, anyway.
FOOL n. Somebody who plays by the rules, without exploiting opportunities to profit by systemic cheating.
MONEY
JUNE 5, 2011
Mortgage Defaulters See More Access to Loans
Edited by CRISTINA LOUROSA-RICARDO
After years of turning down all but the best borrowers, banks and other lenders are now extending credit to a surprising group of customers: former homeowners who defaulted on their mortgages.
In another sign borrowing is easing up, some banks are extending credit beyond the best borrowers to include those with significant blemishes on their credit reports, says James Chessen, chief economist at the American Bankers Association. At the moment, borrowers who have defaulted on their mortgages — but are current on all other loans — are among the attractive candidates for new loans.
…
Multiple dead cat bounces all the way to the bottom.
Spot on. You have to have those multiple dead cat bounces along the way to bring more greater fools on board the ride to the bottom. Otherwise, the too-clever-by-half Wall Street folk who went all-in on real estate would bear the full brunt of the real estate collapse.
It’s kinda rational.
Think of it from the FB’s point of view.
When would you pull the cord? When you are $200K underwater? $100K? $50K? $25K? $10K? $5K?
You need increasing numbers at each level to make the same “profit”.
The rock-bottom hunters (a.k.a. this board) are like sooooooooooooooooooooo not with the program.
You bring to mind Thomas Schelling’s model of neighborhood segregation, wherein white folks and black folks have different threshold tolerance levels for the percentage of the other race they are willing to live near before they move away.
At the end of the adjustment process, everyone lives in a segregated community.
If I understand the applicability to your model, then under the right set of assumptions, by the end of the adjustment process, every FB walks away.
Is that about what you had in mind?
I was talking to the president of a company that provides financing to a lot of our new franchises and to my surprise she told me that if a person has bankruptcy or a tax lien then it is difficult but other than that they will look at all credit with scores above 600. However the rate will be higher than 15 percent and in some case higher than 20 percent for a 60 month period. I also got the sense they are not having a good year as far as business is concerned.
rate will be higher than 15 percent and in some case higher than 20 percent ??
So does the lender use a pen or a gun at the closing ??
The dumb, desperate and the hopeful sign on.
I met a woman in the laundry room yesterday (we have laundry on every floor) who said she has been renting in this building for 25 years. She likes that they keep making the building nicer around her (I’m pretty sure it didn’t have granite counter tops and pull out shelves in the kitchens in the 80’s). She loves not having to pay for repairs - she said it would have been $500 in this area to get a repairman to fix the disposal since they charge from the moment they leave their location until they get back. She said renting and investing the money you save is better than owning which oddly enough implies that in this area it has been cheaper to rent consistently for a very long time since she didn’t seem like a person who didn’t check on the difference regularly.
Hmm…maybe I’ll renew my lease for 2 years in the fall.
Note that she said “investing” beat owning which, with certain exceptions, has been true during most periods. The issue is whether you see yourself investing in somewhat risky investments like stocks. During most periods housing is generally a safer investment but with less reward. If you are just going to put your money in a CD or money market at 1-2% interest and buy a home in 2 years at a higher interest rate, I’m not sure you will come out ahead. If you buy stocks on the crashes and have a smart investment stategy (i.e., hold or sell on the way up and buy on the way down, rather than vice versa, always keeping a healthy cash reserve to buy in if the market plunges further), chances are you will come out ahead. That said, some ppl just feel happier owning a home, which you cannot really put a price on. Life is short and should be enjoyed. Some ppl however have less stress renting, and can travel without worries. It’s really a personal preference.
Natalie-
What’s your sense of the stock market for the balance of the year?
Thanks.
I am projecting a 5-10% further drop this Summer (with a brief period of the S&P below 1200), and that we close at S&P back up around 1350 as the Obama team needs to have a healthy stock market to keep the Democrats in and will do all they can to prop it up. I will start to pick more up around 1250 on the S&P, but very timidly. Below 1200 I will be cautious but not as timid. Always keep a cash reserve in case things really blow up. To not get trapped you have to buy on the way down and not sell out of panic. Also diversify. Unless you have some inside information, or do lots and lots of homework, you are better off in low cost ETFs. I do not expect the S&P to fall below 1100, but will have some money set aside in case it does. Its hard to see too much upside as I think 1400 on the S&P is FMV in a healthy economy, and we are not healthy.
“…that we close at S&P back up around 1350 as the Obama team needs to have a healthy stock market to keep the Democrats in and will do all they can to prop it up.”
I agree with you except as regards the timing. I expect the year to end on an extremely dismal note, with new stimulus announcements in early 2012 to herald green shoots of recovery as the 2012 election approaches.
Good strategy pre stock market peak. Buy on the corrections, let the winnings ride. Disasterous stretegy post peak. Grampa used to say: “Don’t gamble money you aren’t willing to throw away, now let’s go to the track and have some fun!”
One bet of his paid $6K in 1971. He threw a roll of Jeffersons on the kitchen table and told my fiance “there’s your wedding”. My gamble in that was for higher stakes, and didn’t pay off so well. I held all the way down though.
I agree that, as in housing, you cannot expect unreasonably high returns. I pulled out in 2007 and averaged back in during the bust, and took some money out when S&P was above 1300 this year. I do think the worst thing that you can do is pull it all out if you take a big hit. If you are not willing to invest more when you are way down, you shouldn’t be in. It’s a game of averages.
Note that I am referring to an entire portfolio and not individual stocks, which sometimes you should sell if they take a big hit.
“I do think the worst thing that you can do is pull it all out if you take a big hit.”
I pulled all of my meager stock holdings last month, but am dribbling in new money 100% into stocks. If there is a big swoon later this year (e.g. another quasi-Lehmann-collapse event), I plan to buy the dip.
This lady was not an “investor” in any sense that this board might understand. Her comment was about lower costs, not the market. She was well into her 70’s. Seemed like the type who got out of equities around retirement age which was likely a decade or more ago. And I doubt she ever worked either. The sigh about a woman’s work never being done while she carefully pre-treated every piece of clothing she had with her was a bit of a give away.
Again, the comment was about costs, not the stock market.
The point seems to be that she is quite “comfortable”, isn’t she?
Good for her! Sounds good to me.
Exactly. She values not having to deal with trades people and home repairs and yard care a lot, and that, combined with the costs of buying in this area make it the right decision for her. I’m starting to think that her calculation might be very close to my long term calculation as well.
And my work commute is a big part of it as well. As long as I am a reasonable distance to the office and can walk to the metro, my commute isn’t horribly long and costs me nothing. Driving and parking to the metro or to the office would change that a lot.
Commuting is one of the worst things I can personally think of from a daily grind point-of-view.
How do people do it, I simply can’t fathom!
In the whole “lifestyle” arena, not having to commute too much has to be number one on any smart person’s list.
Agree. Half an hour or more sitting on car/bus/train each way is not good for your heath. However if you walk or ride a bicycle to work, you can kill 2 birds with one stone.
Half an hour or more sitting on car/bus/train ?
With the technology that we have today its not really sitting…Many people are working…
With the technology that we have today its not really sitting…Many people are working…
Yep scdave, exactly. Non-distracted motion “entertainment” too!
I have a 6 mile commute to the airport, 7 miles to the manufacturing Plant, 8 miles to Grocery store. I live in the city and commute against the traffic out of the city. The time it takes me is about 6, 7 and 10 minutes respectively. Hey sometimes I make 2 or three trips from work to home in a single day to eat lunch or even take a nap.
Life is good without a commute.
Ride a motorcycle to work. You never see motorcycles parked out side of a psychiatrist’s office.
You do see a lot of trashed ones in front of the ER though.
Good source of spare body parts.
“How do people do it, I simply can’t fathom!”
Humans are amazingly adaptable creatures. I do it to provide my kids with a good yet affordable public education, and to avoid incurring hundreds of thousands of ‘real estate investment’ losses by buying a home or throwing away money on an unaffordable rental near the coast. But I do take the scenic route, which involves a beautiful view and manageable (i.e. moving) traffic.
Commuting in LA gridlock is over my personal line of insanity.
“You do see a lot of trashed ones in front of the ER though.”
That was my thought regarding motorcyclists who might have benefited from psychiatrist’s visits.
People are adapting to commutes with fancier cars. Climate control, sophisiticated stereo systems, cup holders. All they need is an on-board bathroom.
And in many cases, commuting is not exactly a choice. Yes, those who work menial jobs could probably make out far better on an Oil City plan — if they can keep the job. But if you have a career, you’re stuck with what you have (unless you want to play Bill the Nomad.)
I live on a boat. My office is on a boat. My office has a bathroom. Quite a convenient coincidence. I can commute without getting dressed. It’s a perk.
In MOST cases, commuting is not a choice. It’s a requirement.
“My gamble in that was for higher stakes, and didn’t pay off so well. I held all the way down though.”
LOL, Blue Skye! You have a way with words.
At any rate, I enjoyed your turn of phrase, though I commiserate in your experience with this “gamble”. Holding all the way down shows character, though that particular market does not necessarily reward it.
If you are just going to put your money in a CD or money market at 1-2% interest and buy a home in 2 years at a higher interest rate, I’m not sure you will come out ahead.
If mortgage interest rates are significantly higher 2 years hence, won’t house prices have to decline in compensation?
That’s a good question. How long after an interest rate hike will prices fall? Maybe the real determinant is the return of the down-payment and lending standards, not interest rates.
For example, banks are fighting like mad to stop the Qualified Residential program: if you don’t have 20% down, banks have to keep 5% of the loan before securitizing it. If banks can’t afford 5% risk, that means they don’t want to, or can’t, lend money at all.
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.
These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the “robo-signing” issue is particularly combative, it’s 807.
…
This is just disgusting as far as I am concerned…
Look on it as a bad investment decision, that was made for all the right reasons.
Common sense would have told you that there was NO WAY a property owner would let someone squat in a property for five years without paying for it.
It would have taken some real research and knowledge that the MERS fiasco would muddle the name of “property owner”, the PTB would screw up bad enough to generate a five year backlog, and that the government would find themselves dependent on tax revenues from the squatters, since they are the only people in the economy who have disposable income anymore.
“Idiocracy”; we’re there…..
I used to believe Karma would be a bi#ch for these people, but it won’t happen in my lifetime.
I TOLD YOU that we would see “free houses” before this was over.
I need to move to a new city soon. Need to find out a way I can jump on the “free rent” gravy train.
I TOLD YOU that we would see “free houses” before this was over.
Yeah, we just thought it would be for us…nobody thought the houses would be given to the people who helped cause the problem.
And, according to the article in another post, these are the same people who will be getting new loans from these same banks. Looks like the FB’s and the bankers win.
Op-Ed Columnist
Blocking Elizabeth Warren
By JOE NOCERA
Published: June 10, 2011
It’s official: Elizabeth Warren will return to the torture chamber known as the House Committee on Oversight and Government Reform on July 14. Earlier this week, Darrell Issa, the California Republican who is chairman of the committee, tweeted the news. Apparently, Democrats aren’t the only ones who use Twitter to harass women.
…
Alter: Foreclosure Mess Made Worse by Politics
By Jonathan Alter Jun 10, 2011 9:23 AM
In a sweet form of payback, a couple in Collier County, Florida, this week foreclosed on a local branch of Bank of America. Sheriff’s deputies and lawyers appeared at the bank and told the branch manager that if he didn’t pay the couple’s legal fees — as ordered months ago by a court in a wrongful-foreclosure case — they would seize the branch’s furniture and other assets. With TV cameras on the scene, the bank finally paid.
…
Do you read these old newspapers over and over, like they are fresh every day?
If this was already posted, I apologize. I have been fairly busy lately — just getting caught up.
But generally speaking, unless Ben objects, I think it is good to repost a high-impact one-day-old article. How often do you hear about a homeowner successfully suing a Megabank?
The article may only be a day old, but the story has been out for quite a while. I think he was just referring to that…
I recall seeing the story before, except the part about the aggrieved homeowners getting the deadbeat Megabank to make good on its debt.
Sorry, just seen it posted over and over. Didn’t realize that the “presss” was being repetitive.
The press often reruns old stories and most people never notice.
The press often reruns old stories and most people never notice.
It’s all good.
And I purposely repeat myself, again and again.
This summer is shaping up for the stock market much like the summer of 2000.
Don’t try and catch yourself a falling knife.
June 11, 2011, 12:00 a.m. EDT
Economy, U.S. debt in market spotlight next week
Results due from BlackBerry maker Research In Motion, Best Buy
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) — Economic data and the heated debate on Capitol Hill over raising the U.S. debt ceiling will likely be the biggest market catalysts next week, as U.S. investors brace themselves for a possible seventh straight week of losses.
A spate of international, federal and regional economic reports are scheduled to be released, which could lead to further declines if they underscore concerns that a global slowdown is under way.
Investors will get a look at the latest retail-sales figures, more development of bank regulations and some key gauges on the health of the economy in the coming days. Laura Mandaro highlights the outlook with Alexander Davis.
“When you’re in between earnings seasons, the focus is on the economic data,” said Wasif Latif, vice president of equity investments for USAA. “Investors will be looking to confirm the hypothesis that the economy has hit a soft patch.”
…
70% retail driven economy with half the workforce making substance wages.
Soft patch? No way! Who could have seen it coming?
“subsistence”
I’m becoming increasingly convinced the Fed is serious about stepping up to the plate and fulfilling its duty as a bank regulator. That’s good, because Wall Street clearly needs a rule of law if it is to survive.
June 10, 2011, 11:43 AM ET
Ben to Jamie: STFU
Jamie Dimon has his answer.
The J.P. Morgan Chase & Co. CEO pointedly asked Fed Chairman Ben Bernanke earlier this week whether he was worried more bank regulation would slow the economic recovery even more.
Apparently, Bernanke doesn’t think so.
…
Don’t EVER forget, Jamie, you exist at the pleasure of the FED. Look what happened to Dick Fuld.
Now, you jumped up little hairstyle, get back to work.
Really? I always thought it’s the other way around. Jamie owns the Bernak. If not Jamie, Rockefellers and Rothschilds certainly do.
Yup. But Bernanke can step down the moment Jamie gets too uppity.
Better the devil you know…
The Secret Knowledge: On the Dismantling of American Culture by David Mamet. on Amazon
Supposed to be a good read on how the political class has destroyed our culture while lining their pockets with our $$$
Like I’m not depressed enough? Bring on the gardening books and fantasy novels! Or something like Theodore Rex, which is what I’m reading right now. Trustbusters now exist only in history books.
“Trustbusters now exist only in history books.”
Optimistic take: Since we have a historical precedent in the U.S., there is no reason to assume the trust busters can’t rise again to the fore.
In fact, I pledge my vote to any presidential candidate who promises to bust the trusts (Obama excluded).
June 10, 2011, 12:01 a.m. EDT
Things could get ugly as debt cloud grows
Commentary: Washington will be at its worst and Wall Street nervous
By Howard Gold
NEW YORK (MarketWatch) — Stocks had a rough month in May and have continued to struggle in June. The Standard & Poor’s 500 index closed lower for five consecutive weeks through last Friday.
…
As QE2 ends, the debate over an increase in the debt ceiling will move to center stage. Dire warnings and brinksmanship from both parties will fill the headlines, airways and blogosphere this summer, showing Washington at its worst.
Investors, already worried about the struggling economy, will be biting their fingernails as they wait to see whether the U.S. government will default on some of its obligations.
That ugly process is likely to be bad for stocks in what’s already the seasonally worst period of the year. But a timely agreement between Democrats and Republicans — which seems remote now — could spur a rebound. The failure to strike a deal could have the opposite effect, of course.
“The rhetoric will get more confusing over the next few weeks, and markets hate uncertainty,” said Greg Valliere, chief political strategist of Potomac Research Group. He thinks a deal ultimately will get done.
…
“Investors … will be biting their fingernails.”
What comes after that?
The application of gobs of hand lotion…
Florida homeowner insurance rates are going (surprise!) up.
“In little over a month, more than a dozen insurers have asked state regulators to approve new rates that will force some customers to pay 70 percent more to insure their homes.”
http://www.heraldtribune.com/article/20110610/WIRE/110619972/2416/NEWS?Title=SUNDAY-PREVIEW-Florida-insurance-rates-to-soar
Might that have anything to do with the drop in home prices? Just another way to punish those who paid bubble prices.
Spank me, spank me, spank me, bayyyyybeeee, till I lose control!
Another advantage of renting: If your landlord’s insurance costs skyrocket, and they try to pass it through to you as a rent increase, you can move to a less expensive rental unit.
Home owners and wannabe-real-estate-investors turned landlords are the bagholders on this homeowners’ insurance cost increase.
Aah, the joy of home pawn-ership!
Weiner says online contact with teen not indecent
By RANDALL CHASE, Associated Press Randall Chase, Associated Press – Sat Jun 11, 6:13 am ET
WILMINGTON, Del. – A teenage girl from Delaware has been interviewed by police about online contact she had with U.S. Rep. Anthony Weiner, communications he has said were “neither explicit nor indecent.” Authorities said the teen didn’t say anything about illegal conduct.
The 46-year-old congressman acknowledged Friday that he had online contact with the 17-year-old girl but said there was nothing inappropriate. The New York Democrat issued his statement after FoxNews.com reported Friday that officers had interviewed the high school junior at her family’s home north of Wilmington.
Weiner spokeswoman Risa Heller said in a one-sentence statement Friday night, “According to Congressman Weiner, his communications with this person were neither explicit nor indecent.”
Neighbor Ben Melvin said the media was paying way too much attention to the Weiner episode.
“I don’t think it’s good for her and I don’t think it’s good for the nation,” Melvin said. “It’s a sideshow. It has nothing to do with his abilities as a representative. On the other hand it obviously shows some lack of judgment or something.”
A shirtless man approached reporters standing outside the family’s house and began threatening them with an ax. New Castle County police took the man into custody.
http://news.yahoo.com/s/ap/20110611/ap_on_re_us/us_congressman_twitter_photo - -
This Weiner guy is in his teens judging by his actions. He’s not a grown man. So he is texting his age group, I see nothing wrong with it.
I have to admit, I don’t get it either. Weiner is a wanna-be alpha male. No biggie. Weiner’s district is in NYC, Queens or Brooklyn. Not like the House of Reps is going to lose the seat.
A follower not a leader in real-life but I bet he owns the domain with each keyboard stroke.
“No biggie.”
I didn’t know that, I guess you have seen the pictures.
“…texting his age group…”
You mispelled ’sexting.’ It’s a serious legal offense, even if high school aged kids do it.
But since he is a big-name politician, I guess the law will give him a pass, as he has consented to undergo treatment.
On the internet, nobody knows you’re a dog. (New Yorker carton caption)
Or a child. (obvious corollary that should prevent at least public figures from ever sexting anyone)
An FBI agent gave a speech to one of the high schools I serve, and said something like, “if you’re in a chat room, and the person says they’re a man, they’re a man. If the person says they’re a woman, they’re a man. If they say they’re a hot teenager, they’re an old man…”
It was funny, but true. Point taken.
Comment by liz pendens
2011-06-10 11:49:23
Flopping: realtors are liars-
http://www.marketwatch.com/story/real-estate-scam-thats-devastating-prices-2011-06-10
Screwing the banks, read taxpayers - again, as well as other home owners in the neighborhood through fraud, forgery and swindle, and the rule of law will likely arrive late on the scene. It must be tough to be one of these cheap “suit-n-tie” peeps with no practical skills in a modern economy.
I learned a long time ago that RE is a lot like horse trading.
A LOT.
Realtors Are Liars
Are we having another blinding flash of the obvious?
Must be hard. You gotta wear shades, dude!
Auto dealers are liars
“Auto dealers are liars”
+1^2 Couldn’t agree more!
Wow! Debt builds self-esteem? I didn’t know that.
Want better self-esteem? Saddle yourself with mountains of credit card debt, new study claims.
Being crushed under a mountain of debt is typically frowned upon.
Not being able to pay for goods outright, and then being hit by extortionate interest rates which spiral out of control, is the stuff of financial nightmares.
But new research has suggested this could actually be a dream scenario for many young adults.
It claims those saddling themselves with credit card debt will feel empowered and have better self-esteem.
Feeling good: Racking up credit card debt boosts self-esteem, new study claims
Feeling good: Racking up credit card debt boosts self-esteem, a new study claims
‘Debt can be a good thing for young people – it can help them achieve goals that they couldn’t otherwise, like a college education,’ said Ohio State University assistant sociology professor Rachel Dwyer.
Her study found that 18 to 27-year-olds who had huge credit card and university loan debts had better self-esteem than their peers.
They also felt as if they were more in control of their lives, especially those in the lower economic classes.
Only the oldest of those studied, between 28 and 34, began showing signs of stress about the money they owed.
Professor Dwyer said her team was ’surprised’ at the results of her research into 3,079 young adults which examined data on two types of debt - loans taken out to pay for university and total credit card bills.
She said: ‘We thought educational debt might be seen as a positive because it is an investment in their future, while credit card debt could be viewed more negatively.
‘It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.’
‘Surprisingly, though, we found that both kinds of debt had positive effects for young people. It didn’t matter the type of debt, it increased their self-esteem and sense of mastery.
‘Some young people may be using credit card debt to help finance their college education – for items like textbooks - which is why they may see it as a positive. But there is no way to know that from the data.
‘Obviously, they are probably using credit cards for multiple purposes. Along with education spending, they could be using credit cards to pay for non-essential items.
‘They may feel good about their debt only because it allows them to buy the things they want without having to delay gratification.’
Professor Dwyer admitted that the results, which appear in the Social Science Research journal, offered ’some worrying signs’ about how young people view debt.
Read more: http://www.dailymail.co.uk/sciencetech/article-2000681/Want-better-self-esteem-Saddle-mountains-credit-card-debt-new-study-claims.html#ixzz1Oz6HRWLZ
“Feeling good: Racking up credit card debt boosts self-esteem, new study claims”
The data is wrong, due to selection bias. They would have to survey people living under bridges who bankrupted themselves by racking up too much credit card (and other) debt if they wanted to get unbiased results.
“Being crushed under a mountain of debt is typically frowned upon.”
Especially when it leads to homelessness.
This can be easily explained by simple psychology, where individuals who take on mountains of debt tend to be more optimistic about the future and their abilities to “somehow come up with the money” when it is needed.
A general why worry about the future live for the now way of living, which of course is a lot of fun on the way up and not so much fun on the way down.
“…where individuals who take on mountains of debt tend to be more optimistic about the future…”
Or does causality run the other direction: Those who are more (naively) optimistic about the future are more likely to take on mountains of debt? Seems like their statistical analysis may suffer from endogenous variable bias.
I’ve observed the progression first hand.
Kid get his first credit card, and it’s like magic. No more putting off that killer stereo/subwoofer installation, or the 22 inch rims.
Then, they get their own place and start working, and it dawns on them how long it takes to pay that money back. And you’ve got to pay it back, whether you are between jobs or not.
Its the toys that make them feel good, not the debt.
Her study found that 18 to 27-year-olds who had huge credit card and university loan debts had better self-esteem than their peers.”
Check back when they are broke and 50
You don’t even have to. Check back when they are broke and 28.
“between 28 and 34, began showing signs of stress about the money they owed.”
Interesting, non-housing article:
“Two decades ago amateur scientist Maurice Ward invented a material that could resist the force of 75 Hiroshimas. So why haven’t we all heard about it?”
http://www.telegraph.co.uk/technology/5158972/Starlite-the-nuclear-blast-defying-plastic-that-could-change-the-world.html
When I read that I start thinking about 100mpg carburetors. And cars that run on water. The article reeks of magical thinking. But I don’t totally rule out that he might actually have something worthwhile…I’m just really skeptical when I read stuff written like that.
If the stuff is as good as he claims, someone would have signed up for it by now.
For all we know (and assuming that it can back up all the claims), the reason nobody wants it is because it’s way too expensive/toxic to manufacture in commercial quantities.
It’s takes a very long time for game changing science and engineering to be accepted and then mainstreamed. Often, decades.
Also, google “graphene”, another miracle material that is going into production.
Saw this on local news and it damn sure worked, they said this guy was being taken to Washington. Never saw anything about it again.
Fla. Man Invents Machine To Turn Water Into Fire
POSTED: 1:22 pm EDT May 24, 2007
UPDATED: 2:53 pm EDT May 24, 2007
SANIBEL ISLAND, Fla. — A Florida man may have accidentally invented a machine that could solve the gasoline and energy crisis plaguing the U.S., WPBF News 25 reported.
Sanibel Island resident John Kanzius is a former broadcast executive from Pennsylvania who wondered if his background in physics and radio could come in handy in treating the disease from which he suffers: cancer.
Kanzius, 63, invented a machine that emits radio waves in an attempt to kill cancerous cells while leaving normal cells intact. While testing his machine, he noticed that his invention had other unexpected abilities.
Filling a test tube with salt water from a canal in his back yard, Kanzius placed the tube and a paper towel in the machine and turned it on. Suddenly, the paper towel ignited, lighting up the tube like it was a wax candle.
“Pretty neat, huh?” Kanzius asked WPBF’s Jon Shainman.
Kanzius performed the experiment without the paper towel and got the same result — the saltwater was actually burning.
The former broadcasting executive said he showed the experiment to a handful of scientists across the country who claim they are baffled at watching salt water ignite.
Kanzius said the flame created from his machine reaches a temperature of around 3,000 degrees Farenheit. He said a chemist told him that the immense heat created from the machine breaks down the hydrogen-oxygen bond in the water, igniting the hydrogen.
“You could take plain salt water out of the sea, put it in containers and produce a violent flame that could heat generators that make electricity, or provide other forms of energy,” Kanzius said.
He said engineers are currently experimenting with him in Erie, Pa. in an attempt to harness the energy. They’ve built an engine that, when placed on top of the flame, chugged along for two minutes, Kanzius told WPBF.
Kanzius admits all the excitement surrounding a new possible energy source was a stroke of luck. Someone who witnessed his work on the cancer front asked him if perhaps the machine could be used for desalinization.
“This was an experiment to see if I could heat salt water, and instead of heat, I got fire,” Kanzius said.
Kanzius said he hoped that his invention could one day solve a lot of the world’s energy problems.
“If I were to be bold enough, I think one day you could power an automobile with this, eventually,” Kanzius told WPBF.
http://www.wpbf.com/news/13383827/detail.html - 68k -
The problem is the machine that generates the radio waves that seperates the hydrogen from the oxygen uses electricity.
If you are going to use as much or more energy seperating the hydrogen and oxygen then you will get back recombining the hydrogen and the oxygen then you are really not getting something for nothing as the article implies.
Something for nothing: The concept doesn’t work in physics any better than it works in economics.
“The problem is the machine that generates the radio waves that seperates the hydrogen from the oxygen uses electricity.”
This is obviously one of the many reasons I am not a scientist.
Association fees and penalties: The other other alligator:
http://www.orlandosentinel.com/business/os-hoa-collections-20110610,0,2122471.story
Now that Ant-nee has been found to have “tweeted” a 17 year old girl his crowd has had enough. Pack your sh!t and get the hell out!
Pelosi, Wasserman Schultz, Israel tell Weiner he should resign By: CNN Senior Congressional Correspondent Dana Bash and CNN Senior Political Editor Mark Preston
New York (CNN) - Three weighty Democratic voices - including Nancy Pelosi - on Saturday called for the resignation of embattled U.S. Rep. Anthony Weiner, who has been under fire after admitting to inappropriate communications with women online.
The House Minority Leader, and the chairmen of the Democratic National Committee and Democratic Congressional Campaign Committee in separate statements called for Weiner to step down.
I can’t even imagine tweeting your Weiner to anyone, much less a 17-year-old girl.
“New York (CNN) - Three weighty Democratic voices - including Nancy Pelosi - on Saturday called for the resignation of embattled U.S. Rep. Anthony Weiner,”
Weiner don`t listen to Pilosi, stick it out.
“…stick it out.”
Isn’t that exactly what got him into trouble?
What`s the treatment center called? Any guesses?
Weiner seeks leave of absence from House
By DAVID ESPO The Associated Press
Posted: 5:51 a.m. Saturday, June 11, 2011
WASHINGTON — Under fierce pressure from fellow Democrats to resign in a sexting scandal, Rep. Anthony Weiner announced Saturday he was entering professional treatment at an undisclosed location and requested a leave of absence from Congress.
“What`s the treatment center called? Any guesses?”
Don’t know, but I have a guess on the title of the guy who administers the treatment:
“WEINER TWEETER TREATER”
LMAO
Um, Cottontail Ranch, NV?
WTF??? Barry and Plugs said over and over again that they would be creating 10’s of thousands of jobs a month through gubmint sponsored programs. In fact Plugs said as many as 500,000 per month. What has changed now? I don’t understand.
Obama: Private Sector Must Lead in Creating Jobs
By Nicholas Johnston - Jun 11, 2011 (Bloomberg)
President Barack Obama said the private sector must take the lead in creating jobs as the economy recovers, with the government assisting by making sure workers have the necessary skills.
“Government is not, and should not be, the main engine of job-creation in this country,” Obama said in his weekly address on the radio and Internet. “That’s the role of the private sector.”
We could learn a lot from Germany.
Really, what?
But we won’t.
“What has changed now? I don’t understand.”
Obama is not an economist, but he is a capable politician and a quick study.
“but he is a capable politician and a quick study”.
“quick study”? I think you over rate him, as most of the hope&changers do.
He tell people what he thinks they want to hear, like most polititians.
Yeah, and the Republicans said that companies would create thousands of jobs if only taxes were cut on the “job creators.” Well, Obama extended the tax cuts for them, GE pays NO taxes at all, the Republicans control the House of Representitives, and where are the jobs? Not even a green shoot.
Riiiight! SOS! It’s all the republican’ts fault, try and come up with something new. Although I am sure you can not.
It is their fault. How many times do I have to post this?
Republicans block ending offshore jobs tax breaks | Reuters
http://www.reuters.com/article/idUSTRE68R40I20100928
Talk about a smoking gun. And yet they get away with it.
Five members of the Senate Democratic caucus broke party ranks and opposed the bill, including Max Baucus, chairman of the tax-writing Finance Committee.
While most Democrats back ending tax preferences for multinational companies moving overseas, several have opposed tightening the rules, arguing they need to be examined within a broad overhaul of the tax code.
Gotta love the cesspool, such up standing
“public servants”…
D.C. City Scandals Evoke Fears of Return to Marion Barry Era
June 11, 2011| FoxNews.com
The corruption allegations that D.C. Mayor Vincent Gray (l) is facing have sparked fears that the nation’s capital has returned to the Marion Barry era. (AP)
With Washington, D.C.’s local government staggering under the weight of one scandal after the next, fears are growing that the nation’s capital has returned to the politically embarrassing Marion Barry era that was marked by the former mayor being sent to prison for six months after getting caught smoking crack in a hotel room.
Washington’s new mayor, Vincent Gray, has been fighting allegations of corruption since he took office in January, including charges of nepotism and political payoffs.
Council chairman Kwame Brown returned a customized luxury SUV late last year following embarrassing news coverage about how it cost taxpayers $2,000 a month. On Friday, District campaign finance authorities announced they were filing a complaint against Brown’s 2008 re-election committee after concluding an investigation into charges that it failed to report more than $100,000 in contributions or nearly $170,000 in spending, among other things.
Council member Harry Thomas agreed this week to give up the gavel on the powerful economic development committee amid a federal investigation into whether he misused $300,000 in city funds.
Council member Yvette Alexander is also under investigation for allegedly personally benefiting from funds earmarked for constituent services. Ted Loza, the former chief of staff to council member Jim Graham, is awaiting sentencing for taking a bribe from a taxicab representative to push legislation that would favor the industry.
April 11: Washington Mayor Vincent Gray is searched by police after being arrested during a protest on Capitol Hill.
April 11: Washington Mayor Vincent Gray is searched by police after being arrested during a protest on Capitol Hill.
And of course, there’s Barry himself, who is now a member of the council and who has been dogged in recent years by tax problems and accusations of kickbacks.
“This is even worse than the Marry Barry era,” said attorney William Lightfoot, a former member of the city council. “These are allegations of corruption and illegal criminal activity involving money. The conduct a decade ago was mismanagement, inefficiencies, budget gimmicks. Not illegal activity.”
Former Mayor Adrian Fenty warned during his campaign last year that a Gray victory would bring back the Barry era, which brought disgrace upon the district. In 1990, Barry was caught smoking crack in an undercover sting operation that ultimately led to him being sent to prison for six months beginning in October 1991. To the surprise of the nation, Barry won election again in 1994, but a Republican-led Congress took over the city’s finances, prompting Barry to opt against a run for a fifth term in 1998.
Read more: http://www.foxnews.com/politics/2011/06/11/dc-city-scandals-evoke-fears-return-to-marion-barry-era/#ixzz1P005rSg3
With the Capitol and the White House right there, the local D.C. pols clearly see all the sleazy shenanigans that go on at the Federal level. It’s only natural for them to want to emulate the big boyz.
Voters are smart!
Clipped from ABC News:
Weiner did pick up support from U.S. Rep. Charles Rangel, a New York Democrat who was censured by the House last year for ethics violations.
Rangel suggested that other members of Congress had done things more immoral than Weiner.
Rangel said Weiner “wasn’t going with prostitutes. He wasn’t going out with little boys.”
You mean he wasn’t elected on supposed “family values” while accosting adolescent boys like Mark Foley(r) or paying prostitutes to dress him up in diapers like David Vitter(r).
“Weiner did pick up support from U.S. Rep. Charles Rangel, a New York Democrat who was censured by the House last year for ethics violations.”
“Rangel suggested that other members of Congress had done things more immoral than Weiner.”
Sleaze and scum bags is as sleaze and scum bags does.
And I’m suggesting those people, R and D alike, should be gone…as should you, Charlie.
Rangel suggested that other members of Congress had done things more immoral than Weiner.
Rangel said Weiner “wasn’t going with prostitutes. He wasn’t going out with little boys.”
Lincoln’s letter to Mrs. Bixby was printed by the Boston Evening Transcript on November 25, 1864, the same day it was delivered to her by the Adjutant General of Massachusetts, William Schouler.[2][3] The following is the text of the letter as it appeared in the Transcript:
Executive Mansion,
Washington, Nov. 21, 1864.
Dear Madam,
I have been shown in the files of the War Department a statement of the Adjutant General of Massachusetts that you are the mother of five sons who have died gloriously on the field of battle. I feel how weak and fruitless must be any word of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering you the consolation that may be found in the thanks of the Republic they died to save. I pray that our Heavenly Father may assuage the anguish of your bereavement, and leave you only the cherished memory of the loved and lost, and the solemn pride that must be yours to have laid so costly a sacrifice upon the altar of freedom.
Yours, very sincerely and respectfully,
A. Lincoln
“died gloriously on the field of battle”
Ah, the old lie: Dulce et decorum est pro patria mori…
Is the U.S. headed for another Great Depression?
KONRAD YAKABUSKI
Washington— From Saturday’s Globe and Mail
Published Friday, Jun. 10, 2011 8:37PM EDT
Last updated Saturday, Jun. 11, 2011 10:09PM EDT
If a depression by any other name would feel as bleak, what do you call the current state of the U.S. economy? A number of influential American economists are no longer mincing words: They argue that deficit-obsessed politicians in Washington are setting the United States up for a repeat of the 1930s.
“What we’re experiencing may not be a full replay of the Great Depression, but that’s little consolation for the millions of American families suffering from a slump that goes on and on,” insists Nobel laureate Paul Krugman.
“At some point, the pain of high unemployment may lead to some new thinking in Washington – but until that time, welcome to the second Great Depression,” adds Dean Baker of the Center for Economic and Policy Research.
…
June 10, 2011, 12:01 a.m. EDT
Real-estate scam that’s devastating prices
Plus, one reader’s complaint about ‘offensive’ Bank of America ads
By Lew Sichelman
…
Like flipping, flopping is the intentional misrepresentation of house prices. But whereas flipping usually takes place when housing prices are rising, flopping occurs when values are depressed.
When a house is flipped illegally, it is “sold” for a greatly inflated value in order to obtain a mortgage that is far greater than the place is really worth. When the seller, who is often in on the scheme, is paid at closing, the difference between the actual selling price and the loan amount is split between the perps, who are usually industry insiders who know how to scam the system.
When a house is flopped, it is usually owned by a underwater borrower who has asked the lender to approve a short-sale at a price that’s less what is owed. Unbeknownst to the owner or the lender, the real-estate agent supplies one or more opinions of valuation that show the house to be worth one amount when it is really worth much more on the open market.
When the lender agrees to take the lower price, the agent purchases the property in his name or that of a straw buyer and immediately flips the property to an honest-to-goodness buyer-in-waiting at a higher price than the one negotiated with the lender, with the difference split between the participants.
…