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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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Obama Goes All Out For Dirty Banker Deal
POSTED: August 24, 11:17 AM ET
A power play is underway in the foreclosure arena, according to the New York Times.
On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
In Schneiderman we have at least one honest investigator who doesn’t agree, which is to his great credit. But everyone else is on Wylde’s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.
Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.
Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.
http://www.rollingstone.com/politics/blogs/taibblog/obama-goes-all-out-for-dirty-banker-deal-20110824 - 60k -
Is there any chance Schneiderman plans to enter the presidential race? I’m immediately interested in any candidate who doesn’t let the banksters roll him.
And if Megabank, Inc had nothing to hide, why would they be so keen on including blanket immunity as part of the robo-signing settlement Don’t fall for it, state AGs! Crooks belong behind bars.
Housing
You’re Going to Hear a Lot About Eric Schneiderman
By Adam Sorensen Thursday, August 25, 2011
He’s the guy who bucked the Obama administration on a nationwide investigation into foreclosure fraud and got booted from the executive committee of state attorneys general who are working to reach a settlement with banks. The disagreement between Schneiderman, New York’s AG, and Treasury Secretary Tim Geithner, HUD’s Shaun Donovan and Iowa Attorney General Tom Miller, the lead negotiator in settlement talks, boils down to scope and timing. Shahien Nasiripour explains:
The Obama administration wants these issued settled quickly and cleanly. Schneiderman, along with AGs from Massachusetts, Delaware and Nevada, don’t want to agree to anything that will give banks immunity from further prosecutions they might want to pursue later. Basically, Miller and the feds want to stick to mortgage servicers — the people foreclosing on homes without proper documentation — while Schneiderman et al. hope to go after securitizers — those who packaged sketchy loans during the financial crisis. The facts of the conflict aren’t so extraordinary, but it’s turned very political and very public.
After pressure from the administration failed to sway Schneiderman, Miller basically shut him out of negotiations on Tuesday. The press got wind and Schneiderman, emboldened, sent a note to his campaign e-mail list, essentially telegraphing that the speedy-resolutioniks could stuff it:
…
When you get right down to it, Barrack Obama is a politician from Chicago.
“On the other side is the Obama administration, the banks, and all the other state attorneys general.”
I hope the Tea Party people can step away from their religious pandering for long enough to take note of who stands for what on the issue of blanket immunity for criminals in the banking system.
Actually, I think that this overstates the to which other AGs are down with the 20billion “get out of jail (nearly) free” plan. ISTR that Delaware and several other states have expressed reservations the plan.
Ya gotta point there.
Mine own state of AZ isn’t exactly down with this agreement. And I recently read that WA’s state AG, a Republican, is having major misgivings about it.
Protecting White bankers and increasing punishment on his own people…disappointing? Nah maybe he is just the overseer for the plantation boss.
———–
But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.
“His own people” ?!
Seriously, give it a rest, dude. Or at least get a sense of irony….
The possibility exists that Schneiderman is merely grandstanding to advance his own visibility. He’s basically looking to follow the Spitzer/Andrew Cuomo route from the AG office to higher office.
It doesn’t make him wrong, but throw your suspicions in more than one direction in this case.
you are saying that one man against an entire political machine with billions of dollars backing it is doing so as political grandstanding?
politically…that is not a good move…look at ron paul.
the status quo is what get’s you elected round these parts.
he either believes in what he is doing or he is stupid.
Looks like he’s going to be the last hope for those of us that think white collar criminals need to be put in jail.
“The possibility exists that Schneiderman is merely grandstanding to advance his own visibility.”
I hope some politician who is truly willing to root corrupt behavior out of the U.S. financial system grandstands his way into the White House. I’m fed up.
Schneiderman reminds me a lot of Joe Sestak, who used to represent PA District 7 in the U.S. House of Representatives. Recall that Sestak ran for Senate last year, and he knocked of Arlen Specter in the Democratic Party primary.
During the primary season, the Obama administration tried to offer Sestak a job. Apparently, they didn’t like the fact that Sestak was challenging Republican-turned-Democrat Arlen Specter.
Well, Sestak raised a big stink and turned down the job offer.
Sestak didn’t win the Senate race against Toomey, but he did kick up quite a bit of dust. Some of which landed on 1600 Pennsylvania Avenue.
Expect to see a lot more of this in the next 15 months. It’s going to be a very interesting time.
Will the layering of the Great Recession onto the aging of the Baby Boomers, coupled with record low marriage and birth rates, soon turn the U.S. into a nation of impoverished geezers (except for the likes of Jamie Dimon, of course)?
U.S. marriages at record low
‘People are no longer following some lockstep script about when it is time to get married’: prof
CBC News
Posted: Aug 25, 2011 9:43 AM ET
Last Updated: Aug 25, 2011 1:18 PM ET
…
The number of Americans getting married is at an all-time low, in line with other countries, and are also waiting longer to marry for the first time.
The U.S. Census Bureau, in the first analysis of its kind, reported Thursday from Washington that as a whole, since 1970, the median age men get married has risen from 22.5 to 28.4, while women are becoming first-time brides at 26.5 on average, compared to 20.6.
…
Marriages at record low
Analysts also say younger people, in particular, may be increasingly choosing to delay marriage as they struggle to find work and resist making long-term commitments in the recent recession.
“People are no longer following some lockstep script about when it is time to get married,” said Pamela Smock, a sociology professor at the University of Michigan.
As a whole, U.S. marriages are now at a record low, with just 52 per cent of adults 18 and over saying they were joined in wedlock, compared to 57 per cent in 2000, according to the U.S. census data. The never-married included 46.3 per cent of young adults 25-34 — the first time the share of never-married young adults exceeded those who were married, 44.9 per cent, with the rest being divorced or widowed.
The number of marriages North America-wide has been declining for years, due to rising divorce, more unmarried couples living together and increased job prospects for women.
…
And now I know why. I’m in the “getting married” process, and it’s a real nightmare. Everything is at least 2X the cost that you’d expect (wedding markup, if I just threw a black tie party for the same number of people it would 1/2 the cost, no doubt). The legal system has it’s hand out to structure all the finances (prenup, trusts, etc). And, just to make matters a little worse, the government is grinning it up over all this because we’re going to pay a significant amount more in taxes (for the rest of our lives) after the wedding.
I would never do this if my SO (who happens to be the love of my life, which is the only reason I even entertained the idea) wasn’t so set on it. But, basically, after all this money/time/effort, after the wedding, we’ll be exactly as we are now (the pre-nup and trusts strip all the normal financial obligations; we’ve lived together for years) except for a lot less money in the bank and an ongoing increased tax burden to the state for the privilege of being married ..
Our wedding, just for a frame of reference, is going to cost about (if you take everything we’ve spent on it) 6,000-7,500 dollars per hour for about 75 people. And this isn’t some “huge production”, it’s a formal wedding in Palm Beach, but no “crazy” luxuries.
And that figure above doesn’t include the rings…
But that’s at least a durable item, the wedding is just 6-7 hours and then gone forever.
The rings are probably more valuable these days if you melt them down and sell the gold…
They’re platinum.
Well, at least hers are. I’m getting a titanium ring; they are cheap, I like the way they look, love the way they feel (light as air and cool on the skin) and I’m a bit “hard” on my stuff, titanium rings are just about indestructible.. And, if I do manage to break it, it’s only another few hundred dollars to get another one. 
Good thinking! My mom’s wedding ring always fascinated me, with its diamond set in platinum rather than gold.
Make sure you don’t get it too small.
I seem to recall that a friend’s husband was interested in a ring in an odd metal (titanium sounds familiar) but they decided against it when it was explained that in the event of a hand injury involving swollen fingers, it would be almost impossible to cut off and could require the removal and reattatchment of the finger.
Just sayin’
My father taught me two things that really stuck–support the company that supports you and don’t wear jewelry around machinery. I stopped wearing jewelry when I was doing electronice repair years ago, included my wedding ring. I only wear it now for special occasions. Someone asked me about that about 20 years ago. My reply was, :If I need a ring to remind me I’m married, I’ve got problems a ring won’t solved.” Husband doesn’t care. 40+ years shouldshow that I’m not going anywhere.
Quit wearing my ring when I laid it across some uninsulated terminals on a flap drive motor when rigging flaps one day. Arc welding ensued. Ex- got her panties in a huge know about it.
My husband doesn’t care. Of course he doesn’t wear a ring either for much the same reason I stopped
OK you offended a DJ…LOL………
The truth why its 2x as much…there really is a lot more time and effort that goes into making a wedding go smoothly…multiple meetings with the couple, music selection, consulting with the venue and even a visit to make sure as it happened to me get plugged into electric outlets that were hooked up to coffee machines that blew the fuse when turned on, and nobody knew where the fusebox was……
Or electric knives that caused major static in the speakers during the garter toss…. or the worst was being hooked up to a dimmer outlet that shut down my equipment when they turned the lights down during a packed dance floor doing Mony Mony….
And you like to get paid for each hour you work, well so do I.
So yes it really does cost more in time and expenses to do a wedding over say a High school reunion, where a couple of phone calls and a few playlist changes is all that you really need to do.
———————
And now I know why. I’m in the “getting married” process, and it’s a real nightmare. Everything is at least 2X the cost that you’d expect (wedding markup, if I just threw a black tie party for the same number of people it would 1/2 the cost, no doubt)
DJ,
The prices for the DJ aren’t that bad actually. It’s more the food/venue and the flower and photography that are out of this world. I worked it out, our wedding photographer (2 people) is making about ~750/hour for the time there actually taking photos of us. Now, there’s some time in Photoshop and/or Lightroom, and some investment in camera gear.. But 750/hr?
Flowers.. 5K. I better not even be able to walk into the venue there’s so many flowers in there.
And then, of course, the venue and meal. Around 200/head. I could take everyone to the Capital Grille and let them have at the menu and not hit that number.
AZ Slim our resident photographer should be able to explain the costs involved.
Now here is a BIG cheap idea…Get married in January…everybody will give you a discount…except in resort areas…
Also another reason its high is a lot of wedding people it’s their only job….there is no day job with a steady salary and bennies….so who has to pay for those?
And unless you are in a resort area not many people are able to get married on a Wednesday. so you need 50-75 weddings a year to make an acceptable living
AZ Slim our resident photographer should be able to explain the costs involved.
And here I am!
My understanding of wedding photography is that you’re charging for the time on scene doing the shooting of the event. Then you’re charging for post-processing, which can eat up several more hours.
Post-processing is where you go through all of the photos, decide which are suitable for presentation to the client, and then you fire up Photoshop for a major retouching session. After all, if your Bridezilla has an acne flareup two days before the wedding, she doesn’t want that in the photos.
Then you present the photos to the client. Like a lot of photographers, I do this via online password-protected galleries. The client can review the photos in the gallery, then choose which ones he/she would like to purchase as prints or download as digital files.
Here’s where my understanding starts to get hazy. I’m not a wedding photographer, so I don’t know if people still buy albums of prints from the photo studio, or if they just download digital files and have prints made from them.
Yes slim, back in the old days before DSL say 1999 the photog would have to meet again a couple of times with the couple to show proofs and decide to make prints and albums..
on line lowers the cost but still most people do not understand the hours of editing a video to make it fun to watch and not fast forward the dull scenes.
Last month one of our Graphic artists got married and we went to his weeding. The DJ was there for a short time mainly for the introductions and then it was a computer playing all the songs. I was somewhat surprised and this wedding reception took place at a posh country club.
It is those coming after the baby boomers, or at least those starting in the second half of the baby boom (born after 1956) who no one notices, who will be impoverished.
But Europe, China, Russia and Japan have a much bigger demographic problem than we do.
It is those coming after the baby boomers, or at least those starting in the second half of the baby boom (born after 1956) who no one notices, who will be impoverished.
Being of late 1957 vintage, I can certainly relate!
I’ve long been convinced that the arse-end of the boom has had a much rougher path through life than the kids who were born right after WWII.
We noticed them getting the better jobs in the late 1960s/early 1970s when we had to fight over the scraps later on. We also took it on the chin when it came to the costs of housing, health care, education, insurance, and transportation.
Needless to say, we’re not the happiest bunch of forty-somethings and fifty-somethings.
The 30-somethings and 20-somethings have it even worse. They have to fight over the scraps left from both halves of the boomers who can’t/won’t retire — and pay back extensive college loans at the same time.
Some thing better, some things worse. As somebody born in ‘63 I can confirm that it was easier to get into college in a time when every years crop of high school seniors was smaller than the last one. OTOH, retirement plans just keep getting worse and worse if you weren’t grandfathered in under the “old plan”
Yeah…..I figured out a while back that the economy has been in “recession” over half the time I’ve been in the labor force.
Started working during the first “gas crisis”. The Vietnam era VA Benefits went away in 1974, or thereabouts, basically turning them from a “Defined Benefit” plan into a 401K.
This came to my attention when I went to school with a bunch of 25-30 year old Vietnam vets. School to them was party central….free tuition, free flying lessions, checks for housing, etc. Us 18-22 year olds were scraping by on whatever minimum wage jobs we could find…….and when they found out you were a student, they were ALL minimum wage jobs)
Inflation until 1981, when the pay raises/COLAs never seemed to quite catch up with the rises in prices. The airplane market went totally down the crapper until 1988-89. Recession again in 1990. Another decade of wages/COLAs of 3% (no matter how “productive” you were) and the actual inflation rate being more like 6-8%.
Then the Tech bubble blew, September 11 followed by a recession which basically never ended for anyone who wasn’t in real estate or a bankster. Finally, the Greater Recession.
The beatings will continue, until morale improves.
I would love to see the variety of demographic changes in the last ten year. Marriage, home ownership changes, states with the highest net inmigration or outmigration, etc.
year=years
I can see why people aren’t all hot to crank out little slaves to the national debt.
My “little slaves” are all learning foreign languages, “just in case…”
Como se dice “we’re screwed”?
Estamos chingado.
The number of marriages North America-wide has been declining for years, due to rising divorce, more unmarried couples living together and increased job prospects for women.
…
What? Not gay marriage?
yup Steve not many people throw a 10 year shack up party …and boy do gays love to spend money…..what a boom for the wedding pros.
Geezerville USA, here we come:
Grandparents play a bigger role in child-rearing
HOPE YEN, Associated Press
Updated 05:46 a.m., Friday, August 26, 2011
WASHINGTON (AP) — America is swiftly becoming a granny state. Less frail and more involved, today’s grandparents are shunning retirement homes and stepping in more than ever to raise grandchildren while young adults struggle in the poor economy.
The newer grandparents are mainly baby boomers who are still working, with greater disposable income. Now making up 1 in 4 adults, grandparents are growing at twice the rate of the overall population and sticking close to family — if their grandkids aren’t already living with them.
…
IMO this influence of grandparents on young families might be a good thing in that the grandparent’s life experiences can be drawn on by the young families who haven’t yet acquired them.
This is how it used to be in man’s hunter/gather days; the village Elders couldn’t earn their keep by what they no longer could do but they did earn their keep by what they knew. The Elders were considered the repository of wisdom and were thus highly respected.
If nothing else maybe life experiences of the old will help keep the young and nieve from being taken in by the financial sharks that are forever circling about. Not saying the old can’t be taken, just saying the old usually can’t be taken as easily as the young.
Unless the old are slow learners, which often seems to be the case.
This development should also be good for future affordable housing prospects. Grandparents moving in with children and grandchildren reduces demand for housing units, adding downward pressure to prices which are already in descent.
Except see story above about people waiting longer to marry.
I’m already grandmother age if you go by some of my former classmates but my kids are only early teens. If they wait as long as we did to marry, we’ll be 70 by the time their kidlets show up and as we experienced w/my in laws that may make us just a bit too old/slow to chase toddlers. In our present case now that they’re in their 80s it’s more like we send over the kids to check on them. I haven’t been asking them to do driving duty as much as I feel it’s starting to be too hard on them.
My 91-year-old mother still drives, though only locally. Great gene pool, I guess -
“Life experiences of the old…….”
Most of the old around here still think real estate is a good investment, that “buy and hold” is how you should handle stocks, and that you will get ahead if you work hard.
And, oh yeah, getting married at 18 and kicking out babies ASAP, so Great grandma gets to see them before she dies.
If hard work was all that was needed to succeed, Mexicans would be running Goldman Sachs.
If hard work was all that was needed to succeed, Mexicans would be running Goldman Sachs.
Ya gotta point there.
But, sad to say, I’m seeing something among the first generation of children. They’re not interested in busting their you-know-whats the way their immigrant parents did.
I see this playing out next door. Mom still gets up in the wee hours of the morning to go over and clean offices and labs at the University of Arizona. Dad/boyfriend/whatever used to do the same thing until he retired in 2005. These days, he works at various jobs and also does landscaping work. I should also mention that neither adult is a spring chicken.
But their teenager? Laziest person on the block. Hasn’t gone to school in years. Doesn’t help out much at home. If there’s yard work or cleanup to be done outside, the adults do it.
I guess she’s too tired from running the streets all night, but that’s the way it is. And, yes, the neighborhood association keeps a very careful eye on this kid.
“Most of the old around here still think real estate is a good investment…”
Good point. I would guess that most of these ‘wise’ old grandparents are Boomers, whose life experiences are mostly about living large during boom times, not saving pennies during a bust.
IMO this influence of grandparents on young families might be a good thing in that the grandparent’s life experiences can be drawn on by the young families who haven’t yet acquired them.
I agree.
My father, my aunt, and my late uncle grew up in a house where my grandfather’s mother lived with them. Aunt Jean seemed to be Granny’s favorite, and during their time together, Granny taught Jean the Cornish culture.
Is the U.S. population shrinking?
Economic turmoil taking its toll on childbearing
By Sharon Jayson, USA TODAY
Updated 8/12/2011 8:10 AM
Women starting families today might not think they have a lot in common with women during the Great Depression, but a new government analysis of birth data suggests otherwise.
The U.S. birth rate fell by four percent between 2007 and 2009, with some researchers blaming the steepest decline in more than 30 years on the dull economy.
The struggling economy may be causing women of childbearing age to have fewer or no children, suggests demographer Sharon Kirmeyer of the Centers for Disease Control and Prevention, lead author of two reports out Thursday that analyzed historical childbearing data.
Census data show that in 2010, 18.8% of women ages 40-44 were childless, echoing a trend from the 1930s found in the CDC analysis. Of 100,000 women born in 1910 who turned 25 in 1935 at the height of the Great Depression, 19.7% were childless by age 50.
Demographers know that fertility rates drop during economic turmoil.
“The longer this goes on, the more likely it is to lead to a prolonged shift in fertility,” says Mark Mather of the non-profit Population Reference Bureau.
Sociologist W. Bradford Wilcox of the University of Virginia in Charlottesville studies marriage and birth trends and has a consulting company that issues periodic fertility forecasts.
For women in their 20s and early 30s, Wilcox suggests “an uptick in childlessness” and one-child families. “The recession is driving the fertility rate down. A larger share of women will be forgoing or postponing births until the economy kicks into high gear,” he says.
The total number of births, a record 4.3 million in 2007, dropped 7% to 4 million in 2010, he says. The total fertility rate was 2.13 births per 1,000 women in 2007; his estimate for 2010 is 1.91 births.
…
Take out the immigrants birth rates (both legal and illegal) and Hedge Fund wives, we might be negative already…..
We have been.
Right through the 1980s and into the 2000s, the birth rate of native born women has been about 1.9. 2.1 is needed for ZPG to account for childhood mortality.
Legal immigrants have been closer to 2.6 and illegals at 3.1.
Yes, the faltering economy probably has lowered that for all groups, but I suspect it has a lot more to do with fewer illegals.
The faltering economy also has to do with fewer illegals. Who in their right mind would jump on board a sinking ship?
Same thing happened during the Great Depression. Immigration into the U.S. dropped like a rock.
So, you are saying it had more to do with money, instead of the “wretched refuse, yearning to breathe free?”
(snark off)
So, you are saying it had more to do with money, instead of the “wretched refuse, yearning to breathe free?”
(snark off)
In my own family, it sure as heck had to do with money.
On my father’s side, great-grandfather left County Cornwall after the collapse of its economy. British Empire brought in cheaper tin from Malaysia, and tin mining was Cornwall’s main industry.
Goodbye, tin mining in Cornwall. And goodbye to thousands of Cousin Jacks and Cousin Jennies.
On my mother’s side, it was money as well. Her grandfather was a dispatcher in Fort William, Scotland. He found people to unload ships.
When that work dried up in Fort William, he went to Halifax. In Halifax, he heard that he could make more money as a dispatcher in NYC. So, off to American he went.
Is this a ripe opportunity to add to gold holdings, or more like the last chance to quietly exit your positions before resumption of panic?
Gold Rises, Reducing Weekly Decline, as Lower Prices Fuel Investor Demand
By Nicholas Larkin and Glenys Sim - Aug 26, 2011 3:25 AM PT
Gold gained in London as falling equities and the metal’s biggest weekly drop in more than three months spurred investor demand before a speech by Federal Reserve Chairman Ben S. Bernanke.
Gold slumped as much as 11 percent in the three days through yesterday after touching a record $1,913.50 an ounce on Aug. 23. European equities fell and the dollar weakened versus most major currencies as traders waited to see whether Bernanke will signal further steps to support the economy when he speaks at 10 a.m. New York time. He’s said the central bank will keep borrowing costs near zero at least through mid-2013.
“It’s going to be about what Bernanke says or doesn’t say,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said by phone today. Falling equities “are providing support for gold as a safe haven. There is of course some bargain hunting” after this week’s drop, he said.
Immediate-delivery gold gained $12.82, or 0.7 percent, to $1,786.97 an ounce by 11:17 a.m. in London. Prices are down 3.5 percent this week, the most since May. The metal for December delivery was up 1.5 percent at $1,789.80 on the Comex in New York.
Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. Before this week, gold climbed for seven consecutive weeks, the longest run of gains since April 2007.
…
Is the banking panic over, now that Bank of America has been rescued?
August 25, 2011, 2:09 pm
Risks, Rescues and Remorse
By FLOYD NORRIS
Warren Buffett rode to the rescue of Bank of America today, as he did for Goldman Sachs in the dark days of September 2008.
…
It is a sign of both the prestige of Mr. Buffett and of the fragility of markets that either of these deals were available to him.
Of course, there are risks in being a rescuer. A rescuer needs to use cash it can afford to lose, and it needs to have the judgment and courage to refuse to throw good money after bad if things do not go according to plan.
In August 2007, Countrywide Financial, a major home lender, was bailed out by B of A, which invested $2 billion in convertible preferred stock. It was convertible at a discount to current market value. B of A stock rose on the news.
A few months later, with Countrywide in deeper trouble, B of A agreed to take over the whole company for stock then worth $4 billion. The deal closed July 1, 2008. By then B of A was trading for about half what it was worth when it first invested in Countrywide. It had a lot further to fall.
It was one of the worst mergers ever. B of A has yet to reach the bottom of the sinkhole of legal liability created by Countrywide’s reckless lending policies.
But for that rescue by Bank of America, this one — of Bank of America — would not be necessary.
Call me crazy, but I’m not sure why BofA had to pay anything for Countrywide. They should have been **given** C’wide.
“Of course, there are risks in being a rescuer.”
lol
It was one of the worst mergers ever. B of A has yet to reach the bottom of the sinkhole of legal liability created by Countrywide’s reckless lending policies.
This is the key point in the above story. In a very perverse way, Countrywide is the gift that keeps on giving.
Az Slim
LOL
I’m noticing that some jobs at BOA have a dream list of Math,Physics, and other hard majors, and most of these positions don’t include working on Algorithms. With a 500:1 applicant to job opening, they can get top notch people on the cheap.
jobs at BOA have a dream list of Math,Physics,’
thats what my brother does at BofA he has a masters in Math and Physics from Alaska
they can get top notch people on the cheap.”
No I doudt it, they get alot of foriegn programers not top notch by any means. My brother says top notch talent does not last long there. This is in Simi valley the old Country wide building I think.
Top notch talent goes to google.
As long as they are not over weight. Google likes ‘em slim.
Kind of like a social disease.
That’s one big pile of poo, searching for an ever bigger carpet.
Why are so many economists in favor of forcing group A of American taxpayers to pay for losses on group B’s mortgages? I suggest all the economists who came out in favor of this flavor of mortgage relief be asked to start up a Share-the-wealth Trust, into which they can collectively pool their personal funds to provide the mortgage relief they are recommending.
Posted at 03:20 PM ET, 08/25/2011
Can the Obama administration refinance your mortgage?
By Ezra Klein
(PAT WELLENBACH/ASSOCIATED PRESS) This morning, the New York Times reported that the Obama administration is considering a plan to “allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent.” That would mean up to $85 billion in stimulus a year, significant relief for many homeowners who are struggling to make their payments, and the beginning of a new effort to address the troubled housing market. It’s also an idea with a significant expert pedigree: It’s been endorsed by such disparate thinkers as Berkeley’s Brad DeLong, the Peterson Institute’s Joe Gagnon and Glenn Hubbard, ex-chair of George W. Bush’s Council of Economic Advisers. So it should happen, right?
Sadly, no. My efforts to confirm the story have been pretty fruitless. I don’t think the chances of a major new refinancing policy are very good. First, you have to ask how it would pass — and no, the Obama administration couldn’t simply wave its wand. Second, you have to answer some thorny policy questions that have bedeviled the administration’s previous housing efforts, and basically boil down to whether taxpayers are willing to subsidize housing debt.
Passing the plan is probably the toughest challenge. Most people think that the Obama administration “owns” Fannie Mae and Freddie Mac, and so it can basically tell them to do whatever it wants. That’s not how it works. The Housing and Economic Recovery Act of 2008 put Fannie Mae and Freddie Mac under the control of the newly created Federal Housing and Finance Authority.
The FHFA is not like, say, the Treasury Department. It’s an independent agency, and right now it’s under the care of acting Director Edward DeMarco, a holdover from the Bush administration. Senate Republicans blocked the Obama administration’s nominee, Joe Smith, after he expressed some support for using Fannie Mae and Freddie Mac to heal the housing market. Any plan would either need to go through him or through Congress. And both DeMarco and the Republicans in Congress seem mostly interested in limiting Fannie and Freddie’s short-term losses so they can be spun off from the government.
…
Senate Republicans blocked the Obama administration’s nominee, Joe Smith, after he expressed some support for using Fannie Mae and Freddie Mac to heal the housing market.
——————-
At least the Republicans are good for something.
Even the radical Tea Partiers…at least they are trying to prevent the govt/Fed from pushing tons of money into the system and taking on all kinds of added burdens from the private sector. It’s the only thing savers/non-debtors can hang their hopes on.
—Even the radical Tea Partiers—
They don’t seem at all radical. More radical have been the condemnations tossed willy nilly at them
—Even the radical Tea Partiers—
They don’t seem at all radical.
Right…..
http://www.youtube.com/watch?v=0Q7XH8lfGMc
“Why are so many economists in favor of forcing group A of American taxpayers to pay for losses on group B’s mortgages? ”
1) this particular suggestion is not that. Person B would still have to pay the same amount, just at a lower interest rate. Make the payment closer to rent, maybe the underwater owners are less likely to walk.
2) Because we have been growing debt at 3x the sustainable rate for 30 years. It can’t be paid back. If someone else (everyone else) doesn’t pay, then the debt poofs, the money poofs, people lose faith in money, and we get a long and ugly depression.
Make the payment closer to rent, maybe the underwater owners are less likely to walk.
Ding, ding, ding! We have a winner!
“…and we get a long and ugly depression.”
Darrell, aren’t we already there?
longer and uglier
Thanks for posting this P-Bear. You saved me the work. It is an outstanding explanation of why this thing isn’t going to happen. Excellent insights. And, everybody, please go read the whole thing. My jaw about hit the ground when he explained why Fannie/Freddie would have to give up their rights to be able to force the banks to take back the fraudulent loans in order to do this. The problems are literally insurmountable.
Combine that with Dean Baker’s analysis that the $85 billion is just way, way too high, and you can see why this program is not happening.
Why are so many economists in favor of forcing group A of American taxpayers to pay for losses on group B’s mortgages?
Which group do these folks belong?
The 34% of American’s who own their homes mortgage free
Renters
That is a jaw dropper…Unfortunately that is the sort of reason that this just might come to pass…If the banksters get firmly behind it in an effort to prevent being forced to eat all the poo loans that they wrote. The rest is just window-dressing. Just put a consent decree where they promise to obey the law THIS time, and you’ve got a bit S***Sundae that might pass…
“Fannie/Freddie would have to give up their rights to be able to force the banks to take back the fraudulent loans ”
I wonder if accepting the refi (could you opt out?) would similarly turn your non-recourse first mortgage into a recourse mortgage- as usually happens when one refis in a non-recourse state, no?
In AZ, only the amount abive the original loan becomes recourse. I think the exact wording is something like “monies not used for the original purchase of the home” become recourse.
So, if they made you bring the closing costs to the table and jsut rolled the exact same amount, I do not think it converts it from non-recourse to recourse.
What is more “volatile” now: Gold or the dollar?
Gold has biggest drop since 2008
Investors speculate on market stability
Aug 25, 2011
BLOOMBERG NEWS
Gold plunged $104 in New York, capping the biggest drop since March 2008, on speculation that financial markets may be stabilizing, eroding the appeal of the precious metal as a haven.
Bullion has tumbled more than 7% in two days, erasing gains in the past two weeks that sent the metal up as much as 16% since Aug. 5 to a record $1,917.90 an ounce Tuesday. On Aug. 16, Wells Fargo said in a report that rising speculative demand from investors had pushed the market into a “bubble that is poised to burst.”
“This is liquidation from a crowded trade,” Adam Klopfenstein, a senior market strategist at MF Global Holdings in Chicago, said in a telephone interview. “In the short run, there’s more optimism and that doesn’t bode well for gold. Investors have been using gold more as a fear barometer than a proxy for inflation.”
Gold futures for December delivery plunged 5.6% to settle at $1,757.30 on the Comex in New York, the biggest decline for a most-active contract since March 19, 2008.
“The motions that you are seeing are now indications of a market pop,” Erik Davidson, the deputy chief investment officer at Wells Fargo and one of the authors of last week’s report, said in a telephone interview. “People should keep in mind that a reserve currency does not fluctuate as much as gold.”
…
It’s amazing how none of these articles mention the real reason gold dropped: the CME raised margin requirements for the second time this month - this time by 27% (first time it was by 22%). Of course this is going to cause a bunch of people to be forced to sell due to margin calls. The bastards did the same thing for silver, dropping it from $50 to $38 a few months ago.
It’s funny how they never raised margin requirements for things like houses, bank stocks or tech stocks.
On the other hand, they ban naked shorting of selected financial stocks (both here and in Europe), but look the other way when JP Morgan aka Bear Stearns naked shorts silver.
How on earth are we supposed to play this rigged game, where the rules change when things get too hot for the privileged parties, without selling our souls to the devil?
Like myriad other Fed-funded bubbles that recently preceded it, I expect the gold bubble to end badly.
Americans Turn to Gold Over Stocks
Posted: August 26, 2011 at 6:20 am
Stocks are supposed to be the ideal long-term investment because the history of the market is that it rises relentlessly, with a few bumps along the way. But Americans have turned their backs on equities in favor of gold. That is probably a good decision.
According to a new Gallup poll, “Thirty-four percent of Americans say gold is the best long-term investment, more than say so about four other types of investments. Real estate (19%) and stocks (17%) are distant second choices.”
…
Yep.
Cramer is pimping it just like he was pimping DotComs in 1999, REITs and home builders in 2006…
When Cramer is screaming buy, buy, buy, I’m going no where near it.
Yep, Cramer drives the sheeple-bus.
“Thirty-four percent of Americans say gold is the best long-term investment”
Until it’s not. I remember a time when Real Estate was listed as the best long term investment.
Weekend Question for Everyone.
Hurricane Irene is going to slam into the bubble territories of NJ, NY, CT, RI and MA.
These bubble states have barely come down (especially Long Island and NYC) since the pop of 2006.
How will the hurricane affect the decline?
Empty houses rotting away quicker?
Insurance money NOT going into rebuilding?
Hidden inventory being brought into the daylight?
Little money from the Feds for disaster relief?
The excuse people need to just walk away?
Hastening the pace of localities to declare bankruptcy to get away from insane public union contracts (as city in RI recently did just this)?
Barely come down? my house has come down 30%. Thankfully, I’m not near the water. Maybe, my house value will go up, since the shoreline properties are always the most pricey.
I spent the 2004 hurricane season in Gainesville, FL when Charlie, Frances, Jeanne, and Ivan all came through the state in a 6 or 7 week period. It was very draining mentally and the storms caused a lot of damage. For the record, I absolutely hate hurricanes.
In 1985 hurricane Gloria got as high as a category 3 or 4 hurricane before making landfall on Long Island. The eye broke apart very quickly and the damage was much less than anticipated.
That said, I suggest we wait until after the storm passes before taking on this topic.
Did I mention that I really hate hurricanes?
Good thing you put your hatred of hurricanes on the record. I had you in the “loves hurricanes” category all these years!
I hate ‘em.
Guess we are going to see how those folks up north who were telling the folks in New Orleans how worthless and scummy they were, are going to get the chance to show everyone how it’s done
I still have a very fond spot in my heart for the people I met in coastal MS when I was doing post-Katrina reconstruction. Want some Southern hospitality with your disaster relief? Well, make your way to the Gulf Coast.
The northeastern US? Hospitable? Not as much.
If there is any karma at all, the Faux News studios will be Ground Zero for the hurricane landfall.
I think your remote control channel change button would suffice.
Ben Bernanke to Wall Street: “DROP DEAD!”
Bernanke Offers No Plan for New Stimulus
By BINYAMIN APPELBAUM
Published: August 26, 2011
JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the economy is recovering and the nation’s long-term prospects remained strong, an upbeat assessment that offered little indication of any plans for additional measures to boost short-term growth.
Mr. Bernanke’s much-anticipated remarks follow the Fed’s announcement earlier this month that it intends to hold short-term interest rates near zero until at least the middle of 2013, a reflection of its view that growth will not be fast enough during that period to drive up wages and prices.
“With respect to longer-run prospects, however, my own view is more optimistic,” Mr. Bernanke said in his prepared remarks. “The growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years.”
…
(Bernanke approaches the podium, pauses momentarily and begins to speak…..)
“Ehhhhh……..well……..I got nothin’…….”
(sits down)
Are home prices up or down in your state?
House prices down in most states
Nationally, prices of homes using Fannie Mae- and Freddie Mac-acquired mortgages dropped 5.9% in the second quarter compared to the same period of 2010, the Federal Housing Finance Agency said this week. Put another way, home prices on an inflation-adjusted basis tumbled 10%. Of the major metropolitan areas, the biggest price decline was 14.1% in Atlanta-Sandy Springs-Marietta in Georgia. By contrast, prices rose 3.7% in Pittsburgh.
So…….what does a parent tell an 18 year old about what she should do to get ready for the future?
I have no idea what to tell her. An education is a major investment, and if the present trends continue, a total crap shoot on whether that investment will break even, much less give her any kind of advantage over some $10/day guy in Bangalore or Harbin.
Especially when she doesn’t have any idea on what to major in. And knowing her, college will be a waste of time/money if she goes, and doesn’t find a subject/career path that interests her. And doing math and science just for the sake of taking them, is not a great motivator for her.
Her mom, an RN, is pushing the nursing route. She isn’t that interested, and it seems to me that that’s what everybody and their brother is working towards. In 5 years, we are going to be overrun by “health care professionals”
Depression set in this week, when she saw all her friends heading off to college (blissfully unaware on how hard it is going to be to pay back $80-100K in student loans). That, and working two shifts at the “casual eating establishment” and taking home exactly 30 bucks.
I never had the remote possibility of going to college, so I have no idea what to tell her. I see this country going into Banana Republic mode, if present trends continue (and no evidence to indicate that they are)…….maybe that’s just the natural order of things.
To me, there’s a lot to be said for staying out of hock, and living in a bunker for the next ten years, until the dust settles, and JPM, GSucks, the Chinese, Brazilians, Indians and Saudis have a chance to divvy up the carcass.
She’s 18 years old. I don’t think she has to decide right now what to do with the rest of her life.
The fact that she’s working is a good sign, even if it’s not a great job. Not many 18-year-olds have great jobs, nor should they. Not many people start out at the top. Ultimately, I think many more young people are going to going to go to college part-time while holding a job. Makes a lot more sense financially than starting out adulthood deep in debt.
I had 56 different jobs by age 26, at which time I sold my newer RX-7 sports car, abandoned my lease on a house on the boardwalk in Newport Beach, CA, and got serious about education.
Some of us need time to explore. Result of AA, BA, MBA and two successful careers. And huge loans that took years to pay off. Retired at 53.
Worked out just fine. In this economy, student loans seem very, very risky. Guess I got lucky, but I was 5-10 years late in being employable anywhere that included a pension.
X-GSfixr, if she inherited your handy-fixer genes, by all means encourage her to enter the trades. After all you’ve told us about the aerospace industry, I don’t think she’ll be too interested.
But there’s plenty of other stuff that needs maintenance and repair.
It’s frustrating, in a way. I could help them navigate a career path in the airplane business.
(Aerospace Lesson #1- Lots of pilot’s kids become pilots. Hardly any mechanic’s kids become mechanics. There is a reason for this.)
OTOH, when you consider where the airplane business has gone since 1980, and where it continues to go, the fact that they are staying the hell out tells you how smart they are.
Auto mechanic? Or HVAC.
Or if she’s hot, she could go to your state college and marry a med student. That’s a good ROI.
My dad was a pilot for a bombardier’s training school somewhere in Texas during WWII. Drafted as a Canadian citizen in an American college, he served. AS X-GS said, pilots kids want to be pilots. Passed my ground school at 17, took flight school and got airsick, especially in power-off stalls. Ok, next!
So…….what does a parent tell an 18 year old about what she should do to get ready for the future?”
What is she good at ? I went into engineering but I also like to draw so I do PCB design, when I can, boring test engineer the rest of the time.
testing some extremly poor preforming cables right now, swiss made what junk and unexpected from the “swiss” ha
Sometimes you have to take the boring hard stuff like math to prove yourself so companies will let you play with their 100K and up toys.
I agree about your prediction on nursing when respiratory therapist’s advertising making 90K per year with a 2 year degree , seems likely to draw in too many of them in the future.
BTW we can’t find new graduates with a minimum of a BSEE who wants to do test and validation, werid huh ? I almost don’t beleive it but whatever. They all must want to be designers.
She is good at arguing, and isn’t afraid/intimidated by much. Everybody thinks she is 22-23 years old, because she doesn’t screw around/goof off like the typical 18 year old.
She’s seen enough of the general public to think that about 50% of the population is effed up.
I figured she’d be either:
-a trial lawyer/prosecuter,
-a stripper, or
-a used car salesman
Sales is very hard to outsource.
So is pole dancing and trial lawyering.
If she enjoys dramatics — say, plays or musicals in school — she might do well as a trial lawyer. Reason: There are a lot of theatrics in the courtroom.
It’s late, but I think we all need to revisit our plans for the next leg down.
A random list of things I wonder about (relating to the next leg down):
1. Should I stay or should I go? (Oil City Plan revisited)
2. Should my wife go to grad school?
3. Didn’t the GD consist 0f 4 legs down (so really, we’re at the top of the third)?
4. Cash?
5. Ways to save money. All kidding aside, my wife and I are winos and discovering that box wine ain’t that bad saves us about $30/mo.
6. What do we truly need?
7. How might my job be in danger? How can I future proof myself?
8. Despite our political differences here, we all agree that intervention with housing is screwing everything up. How can we discuss this with our neighbors and colleagues without “outing” ourselves or coming across as doomer a-holes?
9. Talkin’ about my generation… what’s in store for Boomers? X’ers? How about the kids I see every day in our high schools. WTH are they going to do? Go to college? Why? Work? Why? The deck is so stacked against them, why not stay at home and play video games?
Time to batten down the hatches on Wall Street. Of course I’m talking about Ben Bernanke’s “no QE3 for liquidity addicts” Jackson Hole speech; Hurricane Irene will prove far more temporary than the financial panic, which simply won’t go away.
It’s interesting to note that Mitt Romney is (figuratively) about to get into bed with John Paulson, the guy who worked with Gollum Sucks to put together a portfolio of some of the sh!tt!est mortgage assets, ever, to unload on unsuspecting, hapless greater fools, who were dumb enough to put their trust in Wall Street scam artists.
You go Mitt! Between publicly-announced plans to construct a ginormous new La Jolla ocean-front castle, and your overtures to a notorious hedge fund scam artist, you are setting a tone of too-privileged-to-lead in advance of the inexorable political trench warfare of the 2012 presidential race.
MARKETS
AUGUST 27, 2011
Wall Street Ready for a Real Storm
By STEVE EDER, ROBIN SIDEL and DAN FITZPATRICK
A pedestrian walks by the iconic bull near Wall Street in September 1999 during Hurricane Floyd. The Street is bracing for another drenching.
Three years after Wall Street weathered a financial crisis often likened to a giant storm, the financial world was bracing for Hurricane Irene to deliver an unwanted dose of the real thing.
The storm’s approach prompted the New York Stock Exchange to take down the giant flag that normally hangs on the façade of its Broad Street headquarters and spurred J.P. Morgan Chase & Co. to extend Friday hours at its 376 New York City branches.
Irene also forced a flurry of weekend staffing decisions at big financial companies, including Goldman Sachs Group Inc., Citigroup Inc. and American Express Co., all of which have major operations in the Lower Manhattan zone under the city’s evacuation order.
American Express, which is headquartered in the World Financial Center near Manhattan’s southern tip, told employees to “use your best judgment and inform your leader” if they needed to leave early to prepare for the storm, according to an internal memo. It wasn’t immediately known how many employees left work early.
Nomura Securities, which also has offices in the World Financial Center, told workers the hurricane could mean that “our ability to operate from our offices on Monday will be disrupted.” It set plans to operate out of a site north of New York City.
Among the New York headquarters that could be hit by Hurricane Irene over the weekend are American Express (pictured), Goldman Sachs and the New York Stock Exchange and Deutsche Bank.
Goldman said it has plans in place to keep employees safe while serving clients. Citi said some employees may work from other locations on Monday. A contingency planning committee at Morgan Stanley was set to convene via telephone over the weekend.
The storm’s approach didn’t just affect big companies. In the Hamptons, a popular upscale summer spot, deck chairs were being swept inside and a least one big weekend bash was being canceled.
Hedge-fund billionaire John Paulson and his wife, Jenny, had planned to host a fund-raiser for Republican presidential hopeful Mitt Romney at their estate in Southampton, N.Y., on Sunday.
Financiers from the New York region were expected to attend, but the event was canceled because of the storm, according to people familiar with the situation. One attributed the postponement to “an abundance of caution.”
…
“an abundance of caution”
Are East Coasters a bunch of spineless wusses? First a teensy-weeny earthquake shakes them to the core; now a category 1 hurricane has them scared silly.
Hurricane Irene risk forces first-ever NYC shutdown
By Martha T. Moore and Kevin McCoy, USA TODAY
Updated 7m ago
NEW YORK – City officials ordered more than 300,000 residents to leave waterfront neighborhoods and announced the impending shutdown of the city’s vast transit system, two unprecedented precautionary steps forced by the threatened fury of Hurricane Irene.
…
“You only have to look at the weather maps to understand just how big this storm is, and how unique it is. And it’s heading basically directly for us,” Mayor Michael Bloomberg said at a news briefing Friday afternoon. “This is very serious. Do not be fooled by the sun outside. You just can’t wait until gale force winds and driving winds begin.”
Irene will likely be a Category 1 hurricane when it reaches the city…
Politician’s battle cry: “A good crisis is a terrible thing to waste.”
Op/Ed
8/26/2011 @ 10:14PM
Get Real: Hurricane Irene Should Be Renamed “Hurricane Hype”
I am a senior fellow in climate studies at the Cato Institute and in research and economic development at George Mason University. I am a contributing author and reviewer of the United Nations Intergovernmental Panel on Climate Change, which was awarded the Nobel Peace Prize in 2007. My writing has been published in major scientific journals, including Climate Research, Climatic Change, Geophysical Research Letters, Journal of Climate, Nature and Science, as well as publications like the Washington Post, Washington Times, Los Angeles Times, USA Today, Houston Chronicle and Journal of Commerce. I have a Ph.D. in ecological climatology from the University of Wisconsin at Madison.
The author is a Forbes contributor. The opinions expressed are those of the writer.
Patrick Michaels
Over the years the National Hurricane Center (NHC) has employed the world’s best experts on Atlantic tropical cyclones, from “Dr. Bob” Simpson, to the mediagenic Neil Frank and on to the current director, Bill Read.
The lifesaver-in-chief was probably Frank, who indefatigably crisscrossed the nation educating the public to the dangers—hidden and obvious—that accompany these curiously seductive weather systems. His era was one of many innovations, including extensive use of satellites, and tailoring the “names” of storms to the culture where they roam in order to attract attention.
One of Frank’s nightmare scenarios goes like this: A strong hurricane threatens a heavily-populated resort area with few escape routes, such as the North Carolina Outer Banks. Vacationers reluctantly abandon their $20,000/week palaces on Pine Island for 36 hours in an immobile SUV conga line, drenching tropical showers, and no toilets. The storm falls apart or unexpectedly turns away from land. Lotsa folks rent for more than a week, so they return, an equally strong storm shows up, and they don’t leave. The title of this movie is “how to die in a 10,000 square foot house-boat”.
…
Would Monday be a good day to sell all of your stocks, in anticipation of a six-month-long non-QE3 Wall Street financial meltdown?
Is Gawd sending a message to The One?
I vividly recall the week when W was sent a similar message in NOLA.
Obama’s vacation stormy from start
By Dave Wedge and Chris Cassidy
Saturday, August 27, 2011
President Obama fled Hurricane Irene’s wrath for Washington, D.C., last night after an unrelaxing nine-day Martha’s Vineyard vacation marred by a freak earthquake, a flood of dismal economic news and turmoil overseas — all of which had critics howling and questioning his leadership.
“The whole thing has exhibited that he’s not in touch with real, hard-working, voting, taxpaying Americans,” said Greater Boston Tea Party spokeswoman Christen Varley. “It’s nice to see the cosmic justice in him having to cut his vacation short. I smirk at that.”
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