Bits Bucket for November 9, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Realtors Are Liars®
Yesterday I linked an article about the tax credit bought houses being underwater to the tune of more than double the credit. I bet the government’s response would be:
“We should have given a bigger credit”.
Absolutely that would be their response. The Housing Crime Syndicate pressures lawmakers for additional suckers. And make no mistake about it. Those who took the TireKickerTaxCredit bait were suckers. Your link to the article proves it.
You people wait. You think the TireKickerTaxCredit was a fraud…. the EmptyPocketTaxCredit lawmakers roll out post- election will send you over the edge. And have no doubts….. the newly elected lawmakers will do it for all the fresh campaign contributions they receive from the Housing Crime Syndicate.
You heard it from me first my HBB brothers and sisters.
Rates are sweet
and the deals are hot
Realtors tweet
Listing lies to be bought
As Roy Scheider deadpanned in *Jaws* after the shark nearly got him: “We need a bigger boat.”
Why do some suspect that RAL is a born-again repentant previous or current real- estate license holder??
Never was one nor will I ever be.
From yesterday’s bits bucket:
http://www.urbandictionary.com/define.php?term=calais
Calais:
The luxury version of certain holdens (usually commodore) full options.
“wow thats nice interior” “are your windows electric?”
“listen dickhead, this is a ‘Calais’ everything is electric and fully weapon.”
Well that clears that up. ‘Calais’ is when your commodore is fully weapon. Or your holdens.
Pardon me, I speak jive. Actually, I had the wife translate. The Holdens is a car maker in Oz and the Commodore is a make. Fully weapon could be a bogan (WHiskey Tango) term that escapes her.
Additionally, Holden is a subsidiary of General Motors in Australia, and the Pontiac G8 sports car from a few years ago was basically a carryover of a Holden model.
Huh?
The U.S. and Australia: two countries separated by a common language.
It’s now clear as mud.
So “Calais disregard” is dissing some Aussie’s lowrider’s ride. Got it.
ahansen –
Thanks for your advice on the homestead. Prices in SLO are still way too high, so we wound up renting in town, but we have a huge backyard for gardening. Starting with 4 rows of 4′x20′ a going from there. Probably room for 20 more rows like that if need be.
MrBubble
PS: Two of our neighbors work in LA four days a week and come home for the long weekends. Might account for a part of the high prices in addition to the “gold plated CALTrans pensionners” who retire to SLO that someone wrote about last week.
Hey, Bub,
Most likely LA County firefighters.
Glad you’ve got the garden going. Get the artichokes and asparagus in now so they can get a good head start for harvest in a couple of years. Need some well-aged horse poo?
Seriously, contact a local stables for all your fertilizer needs.
Drop me a line when you get a chance?
Spot on on one of them: LA fireman.
The previous tenant put in arties and asparagus, but in front and the LL made them pull them out. We plan to be here for at least 3 years, so your advice is well received. I will do that about the horse doo. I don’t want to think about how many bags of amendment that we’d have to buy otherwise and our cubic yard compost box and worms aren’t going to cut it. Scaling up!!
From Politico: Ohio Senate Bill 5’s repeal buoys Dems
“COLUMBUS - Republican Gov. John Kasich warned Democrats that they needed to support a hard-edged anti-union law or get run over by “the bus” — but on Tuesday Ohio voters left serious tread marks on Kasich and, quite possibly, the national GOP.
Unions hung a humbling defeat on Kasich, who has fast become his party’s poster boy for conservative overreach, by rolling back Senate Bill 5, a new collective bargaining law that bars public sector strikes, curtails bargaining rights for 360,000 public employees and scraps binding arbitration of management-labor disputes.
Democrats in Ohio and labor leaders hailed the victory - a rare win for progressives after a 2010 GOP sweep here that saw the turnover of five Democratic congressional seats - as a harbinger of national renewal and the first step in recapturing a state that has long been a national presidential bellwether.”
Politics is not physics. The fact that this state repealled this bill, is great for progressives, but it does not mean that there is any particular inevitability of similar victories. See, “Karl Rove, permanent conservative majority.”
I really resent this kind of rhetoric.
Definite loss for fiscal sanity.
But the math was not defeated. Public union contracts will bankrupt Ohio (along with many other states).
The consequences of this vote really means is that MASSIVE public union layoffs are a coming.
FYI – Obamacare in Ohio was defeated every bit as decisively as SB5 and that ought to be a pretty big clue on how “big” a victory this was for the progressives…
Public union contracts will bankrupt….The consequences of this vote really means is that MASSIVE public union layoffs are a coming.
If that’s true then the unions should start to act like UNIONS should act. They should not just be “unions” when their pay is rising. If unions face a real choice of 15% being laid off or taking a 15% pay cut they need to take their pay cut because, as a union, they should all be in it together. Otherwise they’re just “fair-weather” union members. No?
You really don’t understand how public unions operate.
They will give back nothing. Nothing.
If that means ALL of their less senior “brothers” get thrown under the bus - so be it.
If that means raising taxes to infinity - so be it.
If that means bankrupting the city/county/state - so be it.
Politicians have wasted FAR more money on politcal favor crony contracts and overcharges than unions can even dream of.
Politicians have wasted FAR more money on politcal favor crony contracts and overcharges than unions can even dream of.
So your logic is….
“So your logic is….”
You keep attacking only part of the problem and not the greatest part.
The trouble with “temporary” givebacks in union contracts, is that there is nothing temporary about them.
Likewise, union guys have found out that sacrificing the old guys pay/benefits, for promises of hiring new guys is all BS too.
Unions have found, like everyone else, that contracts don’t mean squat anymore. Too easy for management to “promise”, then forget about the promise when it suits them. Trading actual benefits for contractural “promises” is like taping a “kick me” sign to your butt.
“You really don’t understand how public unions operate.
They will give back nothing. Nothing. ”
I’m sorry. but you have no idea what you are talking about.
I live in Ohio…
My sister is a public school teacher… her union agreed to pay cuts earlier this year for next year with a freeze for the following 2 years.
My wife is on the faculty of an Ohio college. The union (a weak one) agreed to increase their retirement contributions from 10% of pay to 14% of pay over the next 5 years, a freeze on pay, and an increase in their healthcare costs
My best friend is a sheriff deputy… their union last year agreed to a 3 year pay freeze and (small) increases in their health care costs. I look for them to make much larger changes in healthcare costs when the contract expires in 2 years.
So you see, when it comes to unions in Ohio, you simply have no idea of what you are talking about.
Forgot to add this…. retirement calculations for public unions in Ohio are being reworked so that future retirees will not have as good a retirement as the current retirees have. And the cost of purchasing ’service credits” for work outside the pension system (other states, military(?)) are rising at the first of the year to be prohibited, so there goes another retirement feature. So there have been union give-backs in that arena as well
Forgot to add this…. retirement calculations for public unions in Ohio are being reworked so that future retirees will not have as good a retirement as the current retirees have.
Hmmmmm –
Where did I hear that before?
Oh yeah -
“If that means ALL of their less senior “brothers” get thrown under the bus - so be it.”
And the other minor “givebacks” you talk about - a drop in the bucket at what needs to be done to prevent Ohio from going bankrupt. (Hint - think public union pensions ALONE will bankrupt Ohio)
In Ohio, the 2 major state-wide public pensions funds (STRS for teachers, PERS for non-teachers, have projected pension funds going 20 years out. They do show a pending shortfall well into the future. As a result, employees and their employers are both being asked to increase their contributions to the funds by some 30-40% over the next 5 years or so. It only takes a modest change in the trajectory of a pension fund to swing it one way or another.
I’m not a big fan of union power, but public unions in Ohio are much weaker than they are in NY, Calif, Ill, NJ, etc. The state and its people are by nature, very fiscally conservatives.
The givebacks are not that small if you look at a 40% increase in retirement contributions. I would not classify them as minor, nor the pay cuts and 3-year pay freezes.
I’m sure that certain city and county pensions funds are at great risk, and that will be a big issue to watch. Cincinnati has layed off a number of police, fire, and other public workers already, and proposed additional cuts. The latest round of cuts is on hold as the unions discuss how much they are going to give up to save their coworkers jobs.
All of this (pay cuts, pay freezes, retirement and healthcare contribution increases, cuts in union levels and further negotiations leading to some trade-off between jobs and compenstation)…
all fly in the face of your assertion that public unions never give up anything, and will take until the state goes BK.
They also seem to contridict your implied view that you know how public unions work and others do not.
(as I said, I’m not that strong of a supporter of unions (and I worked in the auto industry for 9 years), but in places were public unions are not as strong as others, the reality can be very different from what you think.)
I know a lot more people in Ohio who work in private industry than I do who work in the public sector (education and healthcare are public, in my opinion). Nearly all of the public employees I know have a working spouse in the private sector. So you see, the public employees of Ohio are very well aware of what is happening to the private sector in Ohio and seem to be carefull to maintain a certain ‘compensation capability’ with private industry. Not sure exactly what that is, but there is a strong corrolation. As private sector pay in Ohio stagnates, public compensation also stagnates (but with a 2-year lag time due to contracts, etc).
I am a mid career IT guy, not in management. My compensation is probably better than the vast majority of public workers in Ohio, if my sampling is any indication of the overall state.
Forgot to add this…. retirement calculations for public unions in Ohio are being reworked so that future retirees will not have as good a retirement as the current retirees have.
Hmmmmm –
Where did I hear that before?
Oh yeah -
“If that means ALL of their less senior “brothers” get thrown under the bus - so be it.”
————-
would like to comment on this as well….
As I’ve said, I’ve been in IT for may years (wow, 26 years now). Five of those years my employeer completely eliminated 401k matching, and when they resumed they were often at lower levels. And of course, we’ve had a lost decade of returns on 401k savings.
So I think pretty much all workers, public or private, are getting thown under the bus comparred to our senior workers.
So you see, when it comes to unions in Ohio, you simply have no idea of what you are talking about.
Don’t confuse him with facts Cincy. Since there are a handful of public sector workers who get gold plated benefits it stands to reason that ALL public employees (union or not) are overpaid bums who rape the taxpayers and ALWAYS get what they want. At least that’s the way it works in Captain Banana’s fantasy world.
The reason issue 2 failed (stopping Senate Bill 5 from being implemented)….
…. is that the Unions in Ohio were acting relatively responsibly (pay cuts, pay freezes, increased retirement and healt-care costs) and the governor villified them for it!
Horsehockey. Teachers hid behind LEOs and Fire/EMT whom we public support. The teachers will have their chance to go it alone in a year or so. A bit of unpleasantness must first play out here in the buckeye state.
Teachers hid behind LEOs and Fire/EMT whom we public support.
Give me a break carlos4. Like LEOs and Fire/EMTs contribute more to society than teachers. You are a joke.
from cnn . com
“With 28% of precincts reporting, 62% of people voted for repealing the law, while 38% voted to keep it, according to the office of the Ohio Secretary of State.
Although the parts of the law that require public workers to contribute to their retirement and health care costs are popular with voters … the strong opposition to curtailing collective bargaining and seniority rights apparently is what seems to be carrying the day for the law’s opponents,” said Peter Brown, assistant director of the Quinnipiac University Polling Institute.”
—-
It’s not the public unions that will bankrupt the state. It’s the 20 years of industries sending jobs overseas that have already nearly bankrupted the state. The Rust belt has a revenue problem.* Rather than laying off the last of their employees, which will lead to even more economic hardship, Ohio should think about how to attract more business to their state. Hint: try an edumacated workforce and universal health care. Cheap housing, good soil, lots of water, easy road, access to waterways.
*Good god, I’m tired of that talking point, revenue problem vs. spending problem. If you’re laid off, you don’t say “my food bill is going to bankrupt me; I think I’ll starve.” You say “I need a job.” Congratulations, you have a revenue problem.
According to a frequent poster on HBB, I guess that means 62% of Ohio voters are goons and thugs. Had the squad not move out of Ohio in 2009 that would have been 62.0001%
I think it means that working people realize that public unions are the LAST organized voice for working people. Once crushed the corporate takeover will be complete. People may not agree with some aspects of public unions but they know that corporate America will F them every time and that it is corporate America that has taken all of the power and controls our gov.
measton,
But there IS a nascent public union growing in America– the OWS movement. It’s just not employment-based.
(Which is not to say that employees unions aren’t represented in its amorphous membership, simply that it’s ideological at this point, and not specific to one field of work. The anti-war protests of the 1960’s were another such public citizen’s union.)
And on another note, the Obamacare measure is not legally viable, because a state law cannot override a federal law. (unless the mandate is declared unconstitutional by the Supreme Court, which it hasn’t been yet.) The rumor is that Kasich got that on the ballot just to draw Tea partiers to vote against the unions. Besides, just wait until Ohio gets some HC exchanges, they’ll be begging to participate.
Another Court of Appeals says it is OK.
Health Law Survives Test in Court of Appeals
“A federal appeals court in Washington upheld the Obama administration’s health care law on Tuesday in a decision written by a prominent conservative jurist.”
http://www.nytimes.com/2011/11/09/health/policy/appeals-court-upholds-health-care-law.html?ref=policy
This particular case won’t be part of the appeal because of timing, but the arguments in the opinion will be used as a resource when the justices get it.
What? A whole post when you don’t call them “public union goons“? Come on, man, lay the g-word on us. We know you want to.
Every one of his posts has a goon in it. An entire squad, actually.
Oh SNAP!
SNAP? Supplemental Nutrition Assistance Program? Thanks for reminding us that food stamps are second only to union goons in destroying this country. Those Lucky Duckies are bleeding this country dry…
Voters turned down Obamacare by passing a bill forbidding mandatory insurance being forced on workers. Just to let you know all is not roses for the chosen one here in Ohio.
“Occupy” group may vacate tent cities, move into foreclosures
by Kim Miller
California’s “Occupy Oakland” group is considering a new initiative to take over empty buildings and homes, according to several news sources including the San Francisco Chronicle.
The proposal has been discussed for the past several days but was allegedly passed at a general assembly meeting last night and announced by the #OccupyOakland twitter account.
The plan is to encourage the occupation of bank-owned/foreclosed and abandoned properties across Oakland.
As the Chronicle reports, city officials are not very excited about the initiative.
http://blogs.palmbeachpost.com/realtime/2011/11/08/%E2%80%9Coccupy%E2%80%9D-group-may-vacate-tent-cities-move-into-foreclosures/ -
I say go for it.
This would further put a dent in California RE prices.
But it might encourage banks to move some of that hidden inventory.
Banks will move inventory after Obama’s re-election.
Yeah, I think it’s a brilliant move. “Don’t want us camping in the streets? Okay, we’ll just move into all those vacant properties that are being held off the market by the 1%ers. Since they don’t seem to have a use for them.”
Better yet would be to occupy the homes of the 1%ers with them still living in them, and not allow them to to leave. But let all the domestic help leave, so the pigmen would be forced to clean up after the dirty hippie anarchists.
If they moved into some of the vacant houses in this nabe, heck, I’d tote my tool bucket over to ‘em and help fix the places up.
If people who don’t ever make a mortgage payment are allowed to live rent free for an indefinite time in homes they don’t own, why shouldn’t Occupy Wall Street folks also be allowed to claim squatter’s rights?
I would love to see an “Occupy AARP.” That despicable organization of greedy oldsters, soon to be swelled by millions of feckless “me first” baby boomers, has used its bloc voting power to push through endless entitlements that condemn struggling younger workers and unborn taxpayers to permanant debt servitude.
The entrenched power structures need to be taken out.
You’ll be happy to know that my wife, at my frequent urging, let her AARP membership expire. I was never a member because I believe there is ALREADY too much wealth transfer from the younger to the older generation. SS tax rates, not to mention the ceiling, went up dramatically over my working career.
But let me ask, does “entrenched power structures” also include public employee unions?
Your obsession with “public employee unions” demonstrates that your motives isn’t removal of entrenched power structures.
Because it’s the public employee union goons and thugs that are destroying this country, not the 1%er pigmen’s economic rape of the working poor and the ever-shrinking middle class, right?
It ought to be clear, even to the blindest of blind that the poor are not the power brokers.
“at my frequent urging”
Where I’m from they call this behavior “nagging”.
soon to be swelled by millions of feckless “me first” baby boomers
Is there any group of people who aren’t “me first”?
Of course there is! My group!
Nice guys, maybe. Don’t they always finish last?
BWAHAHAHAHA… we elder lucky duckies, having been sucked dry by the Greatest Generation, now get to stick it to you, personally, Sammy. Just as you will eventually get your chance to stick it to the Millennials.
Living on SSI and MediCaid is such a hoot!
AARP offers group insurance and a relatively non-partisan voice in DC for those of us who don’t get WS bonuses at the end of the year. I find its lobbying efforts rather mild by comparison.
“California’s “Occupy Oakland” group is considering a new initiative to take over empty buildings and homes…”
A Realtor walks her clients into an OWS house,
“This is a lovely 3/2 in a great neighbourhood. There is a highschool just 5 blocks over, and many other amenities close by. As you may have noticed, this house comes with it’s own staff….”
LOL
From yesterday:
Martin: DC Metro is waiting for a surprise fall of around 20% after the super committee cuts funding to a lot of contracts.
Oxide: How long do you think it will take for house prices to fall due to these cuts?
Martin: 6 months.
I’m interested in 6 months because that is about my time frame. But 20% in 6 months is kinda steep, don’t you think? Also, I still think that the 20% will apply mostly to Northern Virginia. If you ask me, Northern Virginia needs to drop 50% to be even close to affordable.
Even now the inventory is rising. You’ll see many houses for sale in DC metro area. Say silver spring, gaithersburg, north potomac etc. NoVa will drop too significantly. I think a lot of Asians/Indians live in this area who are buying thinking RE will never drop in this area. These people have also caused a bubble in China and India as well. A lot has to do with Federal Govt. IT spending. It has been without any limits paying $185 minimum per hour. Once this pot dries up, the sentiment would turn negative and is turning negative even now.
A lot of the hot money crowd in China are fleeing the country with millions in ill-gotten loot from loans or embezzlement. Probably not enough to prop up our housing market, however.
Federal budget is up 90% in the last ten years and is now at $3.8 Trillion. The “super committee” is nibbling around the edges with $1.5 Trillion in cuts over ten years (0.15 Trillion per year, or about 4% of the current budget), mostly in the outlying years. Those later cuts will never happen. D.C. area house prices (MoCo and NoVA anyway) are safe from any kind of major correction.
Federal budget is up 90% in the last ten years and is now at $3.8 Trillion.
Fed spending up 90%? That’s too much. Something is way wrong. The only thing I can think of that changed the past 10 years is all the Wars. It seems our Government spends as much per person as Scandinavia but Scandinavia gets health-care, meaningful safety nets, rule of law for everyone and great pensions and what do we get for all this money spent? What did we get for 90% increased in spending??
See if this site makes any sense. It says that our military spending is actually WAY bigger than we are told.
http://www.warresisters.org/pages/piechart.htm
Total Outlays 2009 (Federal Funds): $2,650 billion
MILITARY: 54% and $1,449 billion
NON-MILITARY: 46% and $1,210 billion
Current military” includes Dept. of Defense ($653 billion), the military portion from other departments ($150 billion), and an additional $162 billion to supplement the Budget’s misleading and vast underestimate of only $38 billion for the “war on terror.” “Past military” represents veterans’ benefits plus 80% of the interest on the debt.*
These figures are from an analysis of detailed tables in the “Analytical Perspectives” book of the Budget of the United States Government, Fiscal Year 2009. The figures are federal funds, which do not include trust funds — such as Social Security — that are raised and spent separately from income taxes. What you pay (or don’t pay) by April 15, 2008, goes to the federal funds portion of the budget. The government practice of combining trust and federal funds began during the Vietnam War, thus making the human needs portion of the budget seem larger and the military portion smaller.
Nailed it Rio.
Just look at the growth of the Department of Homeland Security, DoD, CIA and War on Drugs since 2001. Insane.
Are we safer? No, but we now have the largest domestic prison population in the world.
Time to establish a two-war maximum.
Strongly recommend this book:
http://www.amazon.com/Top-Secret-America-American-Security/dp/0316182214
The top-secret world that the government created in response to the 9/11 terrorist attacks has become so enormous, so unwieldy, and so secretive that no one knows how much money it costs, how many people it employs or exactly how many agencies duplicate work being done elsewhere. The result is that the system put in place to keep the United States safe may be putting us in greater danger. In TOP SECRET AMERICA, award-winning reporters Dana Priest and William Arkin uncover the enormous size, shape, mission, and consequences of this invisible universe of over 1,300 government facilities in every state in America; nearly 2,000 outside companies used as contractors; and more than 850,000 people granted “Top Secret” security clearance.
Aren’t all the cuts are few years out? So, I don’t see any real change for next 5 years.
“…after the super committee cuts funding to a lot of contracts.”
Don’t count your chickens before they hatch.
Deficit-Cutting Super Committee Members Still Far From Compromise
Published November 09, 2011
WASHINGTON – Democrats and Republicans on a special deficit-cutting panel remain far apart despite new flexibility from Republicans on tax revenue increases.
Republicans offered a combination of new revenues and spending cuts that would cut the deficit by about $1.5 trillion over the coming decade. Even as they refused to acknowledge the specifics of the GOP offer, Democrats were quick to dismiss it.
“I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal,” said Sen. Patty Murray, D-Wash., the co-chair of the 12-member Super Committee. The GOP offer, however, puts the onus on Democrats to come up with a counter-proposal.
…
“I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal,”
…and you never will. Get over it and do the next best thing, instead of nothing because you’re waiting on perfection.
The no tax pledge of Grover doomed the committee from the start.
Fannie Mae taps $7.8 billion from Treasury, loss widens
http://www.reuters.com/article/2011/11/09/us-usa-housing-fanniemae-idUSTRE7A77F420111109
“Their regulator estimates that the bailout could reach about $193 billion through 2014….(Fannie/Freddie), along with the Federal Housing Administration, now back about nine out of 10 new home loans.”
(Reuters) - Fannie Mae, the biggest source of money for U.S. home loans, on Tuesday said it needed a further $7.8 billion in federal aid to stay afloat as a shaky housing market widened its third-quarter loss to $5.1 billion.
The government-controlled firm also attributed the deeper cash drain to losses on derivatives used to hedge its exposure to interest-rate swings and on expenses related to home loans made prior to the 2008 financial collapse. In the year-earlier quarter it had a loss of a $1.3 billion.
Fannie Mae has now drawn $112.6 billion in bailout funds from the Treasury Department since being seized by the government in 2008 as mortgage losses mounted, and it has returned $17.2 billion to taxpayers in the form of dividends.
Ouch.
Do you feel lucky? Well do you —-?
Is Las Vegas’ housing market ready to make a comeback?
http://money.cnn.com/2011/11/09/real_estate/vegas_housing_market/
Las Vegas has suffered through the housing bust like few others places and still has further to fall. But these days many real estate investors and home buyers are betting that it’s poised to stage a comeback.
Sin City’s metro area led the nation in mortgage defaults for 22 straight months through August and home prices plunged a whopping 60% from their 2006 peak, according to RealtyTrac. And prices still have further to fall. Financial analytics company, Fiserv, projects home prices in Las Vegas could fall another 16% by next June.
But to investors and home builders, there are enough positive signs to start betting on Vegas now.
Home sales, especially of bank repossessions, have picked up significantly. Nearly 36,000 homes have been sold so far this year through September 30, an 11% increase compared with the same period in 2010, according to Lawrence Yun, chief economist for the National Association of Realtors.
Not in the next 5 years. They first have to clean their previous mess before prices can even rise.
5? Try 20, and that includes inflation. There are a few industries out there and a natural resource or two, but not enough to support a large city.
Vegas has to be the poster child for the bubble.
“Do you feel lucky? Well do you —-?”
Mary-Chapin Carpenter
I Feel Lucky lyrics
Well I woke up this morning, stumbled out of my rack
I opened up the paper to the page in the back
It only took a minute for my finger to find
My daily dose of destiny under my sign
My eyes just about popped out of my head
You already own three houses, girl
Get back in bed
I feel lucky, I feel lucky
No Professor Doom’s gonna stand in my way
Mmmm I feel lucky today
Well I strolled down to the open house, and the Realtor`s name was Kirk
He showed me three more short sales so I called in sick to work
I bought me three more condos down at Elm Street and Lark
Then I crossed against the light, and made a beeline for the park
The sky began to thunder, the wind began to moan
I heard a voice above me saying, Girl don`t buy another home
But I feel lucky, I feel lucky
No tropical depression’s gonna steal my sun away
Mmmm I feel lucky today
Well, 11 houses later I`m collectin` rent on ten
I haven`t paid the mortgage since I couldn`t tell you when
My lawyer sends em` letters and he says everything is fine
He tells those G** D*** bankers Robo signing was a crime
I feel lucky, I feel lucky
No forged documents gonna stand in my way
Mmmm I feel lucky today
The moral of the story it is simple but it’s true
Hey the bankers they might lie, but the victims never do
I feel lucky, I feel lucky, yeah
Now do I take the cash to sell it
Or do I make the renter pay
Well I think I’ll flip a coin, cause I’m a winner either way
I feel lucky, I feel lucky, yeah
Hot dog, I feel lucky today
Do I feel lucky?
I think the odds are better facing Dirty Harry that making money on a Vegas house.
I spent a few good years making a living in LV, but never understood why someone would want to live there, or keeping an extra house there, when so many rooms are available.
Moodys downgrades all banks in India to negative. The whole banking system in India seems to be borrowing and loaning money to their RE bubble. RE prices in Mumbai and Delhi is more than NY city now. I think India is for a 50-60% correction in the coming years. If their Govt./central bank prints money to bail out their banks, they will get hit by hyperinflation and very high oil imports.
China on the other hand is also in the same boat. Ready to fall.
Australia and Canada will also fall with a big noise. All these idiots did no take ant lesson from US RE collapse.
Because it’s different in Chindia, Australia and Canada.
Any idea of what sort of event might be a trigger? Or does it even need a trigger?
http://www.bloomberg.com/news/2011-11-09/indian-banking-s-outlook-cut-to-negative-by-moody-s-on-loan-economic-risk.html
Collapse of the Euro next year is what I think will cause the dominos to fall in China/India.
Yep…
——————–
Hong Kong Home Sales Fall Over 50% in October
HONG Kong’s home sales fell for a 10th straight month, dropping by half in October from a year ago as buyers put off purchases.
The value of transactions last month declined 50 percent to HK$22.5 billion (US$2.9 billion), the city’s government said in a statement on its website yesterday. Sales of residential units shed 2.2 percent from September, it said.
http://www.shanghaidaily.com/article/?id=486448&type=Business
Will the Fed bail out the Chindia banks too?
Yeah. Maybe the US Banking Crime Syndicate will attempt to keep HK’s assets inflated.
What do you think Bernanke? I bet you think it’s a good idea. You #@$ing criminal moron.
“You #@$ing criminal moron.”
+azillion.
I will never forgive. I will never forget.
Gee, a whole globe of real estate debt slaves. Might have to have some governing body come in to clean the whole thing up.
I swear the New World Order people gain credence every day.
It’s easy to sell the solution when you are the one who created the problem.
See Rio’s post yesterday for the other side the China situation.
Miami housing market rebounds to outperform the nation
http://www.miamitodaynews.com/news/111110/story6.shtml
Despite suffering through one of the worst housing market crises, Miami’s residential market is now doing better than the rest of the nation.
“In comparison with the rest of the country, the coastal regions of our nation as well as the dessert are doing better on a percentage basis than many other interior markets,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realty. “We have a considerable number of international buyers and second-home buyers. Now, our prices today have rolled back about ten years.”
Besides Miami, regions like Southern California, Tucson and Las Vegas are seeing an increase in the number of units sold while places like the Midwest have taken a hit….
….(In Miami) “You’re getting a lot of Venezuelans, Canadians, Brazilians because they feel like there’s a bargain,” said Michael Pappas, president and CEO of The Keyes Co.
“We had a catastrophe: overbuilding and loose money,” he said. “We’re starting to see the light at the end of the tunnel.”
“Ron Shuffield, president of Esslinger-Wooten-Maxwell Realty”
Bwahahahaha! Someone dig up his classic bubble quote and post it here.
“You’re getting a lot of Venezuelans, Canadians, Brazilians because they feel like there’s a bargain,”
Yeah, what about all the Vencanzilians who participated in the bubble, and then abandoned their properties?
Hey, but great to see Miami going green with used house recycling.
“Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that “South Florida is working off of a totally new economic model than any of us have ever experienced in the past.”
“South Florida is working off of a totally new economic model than any of us have ever experienced in the past.”
Which by itself was 100% correct.
You’re getting a lot of Venezuelans, Canadians, Brazilians
I have a non realtor friend in Houston who says the same thing. He really believes that it’s different there.
But which Venezuelans, Canadians, Brazilians, Chinese, etc?
Probably their 1%ers, who have found out that their kickback/bribe/campaign contribution Dollar/Peso/Real/Yen/Yuan goes a lot farther in the USA than it does anywhere else.
Our regulatory and law enforcement agencies are geared to protect the bankster class from the wretched refuse.
The proof of this will be when fewer people cross the Rio Grande looking for work, and instead come with torches, pitchforks and guillotines, looking for their 1%ers who have decamped to the USA.
When that happens, expect the rail lines to Larado being clogged with shipments of M-1 Abrams MBTs and Bradley AFVs that will be parked track-to track from the Gulf Coast to San Diego.
We need more “Despot-Friendly” immigration policies.
If it’s their 1%ers, then there can’t be that many of them (a million tops??) and so they won’t make much of a dent.
Kinda like how every state is counting on the same pool of retirees to come save them.
You know that. I know that.
But the doofuses that watch MSM won’t know that.
Another thing that depresses me. Not that they don’t know/ask. They actively avoid informing themselves. They think the bank bailouts ended with TARP. They’ve never heard of the mess with MERS, or synthetic CDOs. The accidental/intentional undermining of our regulatory/law enforcement agencies. The lobbying/bribing/revolving doors with Congressional staffs.
Intentional sabotage of government, then using the failures of government as Exhibit “A” to reduce the size of government, and reduce regulation.
Credit Unions Signed 40,000 Members on Bank Transfer Day
(bloomibergi)
“Credit unions attracted more than 40,000 new account holders last week during the so-called Bank Transfer Day, according to a Washington-based trade group.
Member institutions reported about $80 million in new savings, or an average of about $2,000 per new account holder, the Credit Union National Association said today in a statement. That figure may also include new money from existing members, said Patrick Keefe, a spokesman for the group….”
“…Last week, CUNA said that at least 650,000 people joined credit unions since Sept. 29. That equals the new membership figure for all of last year, Keefe said. The lenders took in $4.5 billion in new savings accounts in the five weeks through early November, the group said. “
I totally support this movement but the big banks couldn’t give a rat’s behind about losing a customer with only 2000 bucks in the bank.
It’s the fees. They don’t need depositors when the can borrow all they need from the FedRes at near 0% interest.
someone posted an article here yesterday on banks wanting to shed deposits and thus adding fees designed to make those with deposits angry, even on some very large accounts.
Yup, it’s about the fees. A bank may not make much interest on a $2000 account, and it may not borrow/lend much using $2000 as a reserve, but it’s the low end where the profits come from. Someone with $100 in a checking account could easily rack of $200 in fees, in fact, far more likely, because $100 is easy to overdraw.
The way I understand it is that most of these checking accounts are about 2-300 bucks a year to run. I’m sure they have their fair share of blokes who run up the fees, but again, I don’t think Jaime D has lost any sleep over this.
Now take the fed money away…
How a Financial Pro Lost His Home:
http://www.msnbc.msn.com/id/45221933/ns/business-us_business/
“Like most financial stories, this one is personal. It starts with me getting into the financial services industry more or less by accident. I answered an ad in 1995 that I thought was for a job related to “security” (as in security guard) but was in fact related to “securities.” That’s how little I knew about the stock market. A few months later I found myself working a phone at a Fidelity Investments call center.” 0.o
In case anyone should ever forget the mania that got us here:
—————————-
At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s — younger than we were — waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?
One evening in 2006 comes to mind. My sister-in-law was thinking of moving to Las Vegas, and a real estate agent told me about an open house for a new Toll Brothers community. This wasn’t a come-by-for-cookies type of open house; it was held at a Las Vegas hotel ballroom. I arrived to find a line that led down a flight of stairs and out of the front door. Before I got to the front of the line, they stopped admitting people. Then people rushed the door, like it was a rock concert.
Cori and I and some of our friends had a lot of conversations comparing our spending habits to those around us. How can so-and-so afford a boat? How are people buying new trucks and four-wheelers and 5,000-square-foot homes? Do they know something we don’t know?
There it is. Last paragraph.
I think many of us in 2006 were asking the same questions if it caught our attention. Never entered my mind that liberating equity from houses was a big reason why things were so nifty.
Back in 2005, Californians HELOC’d the home for 125% of the fraudulent appraisal. And then…oh the TOYZ!
Some friends of ours ran into an old hs friend and found out they bought one of the homes we’d been interested in. They didn’t even have to put their current home on the market. They won’t till about 2 mos after they close on the new one because they want to do a lot of work before they move in. Not sure if this involves a bridge loan (which I’d be surprised the banks were still doing) or if they just plain had investments to tap.
They did get a fantastic drop of price from the original way overblown wishing price but they are still going to have to put about $75-$100k into the place to bring it up to par. Another once gorgeous place that’d been thoroughly neglected as the people aged. Greedy (or maybe just nostalgic) kids couldn’t even come over and properly clean up the place except for keeping the grass mowed. A few flowers and some trim work on the shrubs might have helped their bottom line.
Another possibility: the kids were overwhelmed by the prospect of what needed to be done to put the family homestead in better shape. I speak from experience on this. Children grow up and get busy lives of their own. Mom and Dad start slipping on the upkeep of the family home, and things slide downhill until, one day, it’s time to sell. By then the accumulation of 50+ years worth of stuff to be sorted and cleared takes priority over spiffing up the long-neglected house itself. Everyone is just relieved to unload it.
I’ll be dealing with this issue within the next five years.
My plan is to get the place cleared out (estate sale, here I come) then put on the market as-is. No expensive kitchen remodels, no new bathrooms. I’ll let the next owner handle those adventures.
Even with my brother going to my parents’ place practically every weekend plus vacations for 14 years it was still pretty run down when my mother died and we sold it. My father hated spending any money on anything (except liquor & fishing) and they were both paranoid about hiring anyone to help with work inside the house. It was definitely a fixer-upper when we sold it.
Slim, at least make sure the house is livable before you do that. Lots of folks (like yours truly) will turn up their nose at an “as is” house, because a) they don’t want to pay for the basics to make the house livable b) they need a house that they can move into after closing so that they aren’t paying double.
Slim, at least make sure the house is livable before you do that.
The house has good bones — I grew up in it. Heating/cooling, electrical, and plumbing are all sound. The cosmetic stuff, like hardwood floors needing sanding and refinishing and bathrooms and kitchen being small by modern standards, are things that I’d rather not get into. Let the next owner handle them.
A fair number of folks knew something was amiss. Change the details of that excerpt and we probably all have similar stories.
So, now this society wants to talk about the wealth gap? Where was this discussion in 1995? 2000? 2005? The gap was there. If housing prices didn’t crest in 2006-7 can you imagine the headlines we’d be reading today? They certainly would not include any talk of any wealth gap that’s for sure.
If housing prices didn’t crest in 2006-7 can you imagine the headlines we’d be reading today? They certainly would not include any talk of any wealth gap that’s for sure.
Because many Americans thought they had a chance…
For have-nots, housing crash is cruelest blow
http://www.bostonglobe.com/opinion/2011/11/07/for-have-nots-housing-crash-cruelest-blow/FKDUnMi5OCNk6bZyK1xUhP/story.html
A FUNNY THING happened over the past decade: As a country, we stopped providing real avenues for economic advancement, and then covered over this fact with a white-hot real estate market. As long as housing prices never fell, the real estate wealth masked a deeply dysfunctional economy.
The housing-driven recession has now laid this dysfunction bare. Housing was a flawed bridge for closing the gap between society’s haves and its have-nots, but it was also the best thing going. Now, the stagnant post crash housing market is exacerbating inequality, and fueling widespread unrest.
In 2005, a few wealthy Americans were concentrating their hold on the nation’s wealth, and average families were falling farther and farther behind the country’s elite. The economy was growing, but growth didn’t lead to widespread prosperity. Median family income, measured in real terms, grew by less than half a percentage point per year between 1997 and 2005.
Flat incomes meant families were essentially running in place. This is exactly the regressive development that now has crowds across the world marching in the streets. But if anybody was camping around South Station in 2005, they weren’t there to protest income inequality. The housing bubble kept everybody fat and happy.
Frothy home prices gave homeowners what they couldn’t get from their jobs — meaningful wealth accumulation.
No. Flat incomes meant families were LOSING ground due to inflation.
Every. Single. Year.
The housing-driven recession has now laid this dysfunction bare. Housing was a flawed bridge for closing the gap between society’s haves and its have-nots, but it was also the best thing going.
Ding, ding, ding! We have a winner!
“…..best thing going…..”
Especially since the 1%ers/banksters were profiting (in cash), while the wretched refuse had only crapshacks, and the propaganda that “real estate prices never go down”.
Follow. The. Money.
“Past decade” should be “past generation.” But at least we are seeing this in the MSM almost on a daily basis. The details of the screwing mechanism is now a hot topic.
Sunlight is the best disinfectant.
“Sunlight is the best disinfectant.”
But it takes a long time to work.
My question is always “WHY is it doing this?” Regarding anything I get involved with.
Once I started looking (while prices where skyrocketing and others were just jumping in - “real estate only goes up!” “Buy now or be priced out forever!”), I discovered the loan problems. I discovered the basic conflict of interest in the Realtor/NAR business model.
Fast forward several years. I’m still renting. I’ve seen two people have their finances devastated by their albatross homes. My finances are in better shape than they would have been had I followed the herd.
And the people who engineered this massive extraction of wealth from the public are wealthier than ever, and the politicians who enabled it are more entrenched and moneyed than ever.
I hope the US wakes up by November 2012.
ditto neuro - we were looking in so cal at that time and couldn’t figure out who could afford 600k crappy houses. Well they were getting them with ARMs when mortgage rates were at historic lows and were being promised they could always refinance - DUH!
We’re still renting also. Thank God for this website and others that were sounding warning signals.
Novermber is too late. You need to be making choices in the primaries.
haha, love this comment
He’s using that ” It was my own greed” to relate to millions of people. He’s a salesman trying to sell his book. Go sell crazy someplace else, we’re all stocked up here!
I’m still flabbergasted that a wretched place like Vegas (why do people want to live there?) had such a crazy bubble. I guess we lucked out here in that it never got that insane. From what I saw, we had about a peak of 40% over 1999 prices.
We borrowed 100 percent of the purchase price. In fact, I was told I could borrow even more if I wanted. I had perfect credit and a solid income that was growing. But even so, when the lender approved us at 100 percent, it was more than I had expected. I remember thinking something like “Wow. I guess if they’re willing to lend it to us it must be O.K.”
I sure hope his clients don’t read this.
Hate to break the news to this financial planner, but financial planning really isn’t THAT difficult. Yes, it does take some time to inventory what sort of assets and liabilities you have and how you use them, but it’s time well spent.
I’m DIY-ing my own financial plan right now. And, as I’m moving through the process, I’m really enjoying it.
It’s even easier when you don’t have much to begin with.
I was about to post a link to that story. Really remarkable. These quotes make me remember what that time was like:
“I should have known better. No matter how well things are going, borrowing 100 percent of the purchase price of a home is not a good idea. I shouldn’t have relied on someone else to make that calculation, let alone the guy who was making money putting me in the loan.”
“My sister-in-law was thinking of moving to Las Vegas, and a real estate agent told me about an open house for a new Toll Brothers community. This wasn’t a come-by-for-cookies type of open house; it was held at a Las Vegas hotel ballroom. I arrived to find a line that led down a flight of stairs and out of the front door. Before I got to the front of the line, they stopped admitting people. Then people rushed the door, like it was a rock concert.”
“I knew a builder of custom homes who urged me to buy one of his houses for close to $2 million. I told him there were at least a million reasons why I couldn’t do that. He looked at me like I just didn’t get it.”
I tell people that from 2003 to 2007, I saw more stupid than I’ve ever seen in my life.
Two things stand out from this Nytimes aritcle:
1. This guy is STILL a “financial advisor.”
2. Bumper sticker on old truck, “Honk if I’m paying your mortgage.”
I’m finding that most of the people who call themselves “financial advisors” are nothing more than salesmen/women. Like that former coworker-turned-insurance agent I met with a while back. Right after I bought that whole life insurance policy, the next step on the trail would be for us to do my financial plan.
Well, folks, I’m here to tell you that I knew a heckuva lot more about finance than that guy. And I’m not saying that to brag. I’m saying it because his lack of knowledge was so painfully obvious. Especially when he kept saying, “I’ve learned SO much from you!”
That may have been his way of paying a compliment so I would buy even more of the New York Life insurance products he was selling. We’ll never know.
Why not? Because I dropped that whole life policy like a hot rock. And got all my money back. That agent doesn’t speak to me now. For all I know, he may have washed out as a life insurance agent. A lot of them do.
What I noticed a couple of years ago is that we had more wealth managers and less wealth. The increase in managers, alas, did not produce a great diversity of opinion.
Reuters is running an article in which HSBC is whining about UK banking regulation and loanowners who are exercising the ultimate in “pick a payment” options:
“We’re seeing the effects of moral hazard, where even seriously delinquent customers simply cannot be foreclosed on by banks operating in the United States,” Finance Director Iain Mackay told journalists on a conference call.
Delinquencies on loans jumped in September.
“We believe we’re seeing people taking payment holidays from their mortgages recognizing that banks are unable to foreclose on them,” Mackay said.
(insert FPSS laugh here)
“We’re seeing the effects of moral hazard, where even seriously delinquent customers simply cannot be foreclosed on by banks operating in the United States,”
No, you’re seeing the effects of your self-deregulation into the legal and technical netherworld of MERS.
Deregulation at work.
De-regulation leads to oligarchy. If the society thinks that’s just, that’s fine.
People that are good at accruing wealth and power through politics and business are really good at it, as long as everyone agrees to their rules
However, the infantry is taken from the middle and lower classes. Having less and less of the wealth shared with their families, and more and more kept by the oligarchs, might make them less inclined to fight for the goals of the elites.
Yep. That and the “Mark to Fantasy” accounting, as long as a foreclosure is not completed.
Saw a new stat on “Naked Capitalism” today. The home ownership rate has dropped to 61%, if you subtract all of the houses currently in the foreclosure process. Wonder what the number would be if they included everything in foreclosure, and 2-3 months behind in payments.
The “bought more house than they can afford” meme is now hitting people who bought back in the 1990s.
From yesterday:
David Vitter and another politician were opposed to repayment risk retention provisions. Lack of repayment risk rentention is the core cause of this financial crisis. It’s why lenders made so many bad loans. Normally they care about being paid back, so they’re a bit more conservative in their lending.
Anyway, so I looked at opensecrets and found Vitter’s contribution profile.
http://www.opensecrets.org/politicians/industries.php?cycle=Career&cid=N00009659&type=I
If you look at the sector totals, you’ll see that the FIRE sector has contributed double what the other sectors have. And the graph looks like a giant middle finger. How appropriate.
Thank you for reading that long post yesterday, neuromance.
I know that the R senators were bought and paid for, but I didn’t realize they were so transparent about it.
I encourage folks to read both Levin’s statement and the Vitter/Johanns’s statement just to see the contrast in who had real numbers and used real critical thinking, who was whining and parroting.
Thank you for posting that regulations dot gov link. This site is quite valuable because of things like that.
To be fair, it’s both R’s and D’s who are bought and paid for. There are the occasional non-feckless and non-venal people on both sides but they are very, very few and far between. There are those politicians who happen to agree with me on a few issues, but I have no illusions about their character.
I was really stunned, though no one commented on it, how Virgina and Maryland talk about stimulating home building to improve their economy.
(It was on the blog a couple of days ago.) They have the policy of not levying taxes on new construction until it is occupied.
I guess if you have a lot of unemployed carpenters around, that sounds like a good idea, but c’mon! Somebody should notice how short-sighted that idea is.
To understand the idiocy, follow the money.
I think that’s been in place for quite a while. The developers would come in and promise all sorts of tax revenues, and while the county commissioners were salivating, the developers would find a way to give tax breaks or even pay for extending services.
But Montgomery Co didn’t let them have the Agricultural Preserve, thank goodness, and Virginia didn’t let them have the Civil War battlefields.
Here in Tucson, the people have spoken. Just elected a new mayor. Here’s the e-mail that I just sent to our mayor-elect:
The thing I would most like to see: For Tucson (and Arizona, for that matter) to move beyond its obsession with real estate development.
I agree with what [1999 mayoral candidate] Molly McKasson said in her recent Star interview: “How interesting, and how sad, that we should hit a point that having put all of our eggs into the basket of development, lo and behold we hit the wall.”
So, what alternatives do we have? How about building on our existing strengths in:
1. Water harvesting and conservation. And how handy it is that we have one of the world’s leading hydrology programs at the UA. And one of the world’s foremost water harvesting experts in Brad Lancaster. Not to mention the Watershed Management Group, which has the certification program in this field.
2. Solar energy. We could research it (Neal Armstrong has quite the program at the UA), produce equipment for it, and install it. Talk about a green jobs-creator.
3. Entertainment. We have a music scene that’s been compared to Austin right before Austin’s scene really took off in the 1980s.
4. Bicycling. We sure can bring them here for El Tour. And we also have quite a few events to keep the locals busy. I’d like to see more of a bike industry presence here.
Just some ideas to get the thought processes going…
It’s always refreshing to see forward-thinking people getting elected and that a critical mass has been reached to promote such practices (eg, alternative transportation, energy, water catchments, etc. Someday when the SHTF, the brodbased culture will be looking to models such as Tucson (and my town too - we are big on urban gardening also), and other smattered throughout the US as more of a survivability issue versus some fringe hippie utopian thought. You can play Farmville on Facebook; I’ll raise my own fruits, veggies and chickens for real on my 4,000sf lot, thank you.
Good for Tucson.
“You can play Farmville on Facebook; I’ll raise my own fruits, veggies and chickens for real on my 4,000sf lot, thank you.”
+ 1
As much as I love video games (cannot keep them in the house), I don’t get the whole idea of raising fake crops if you can just grow real ones.
Also, do you have a rat problem with your chickens? I’d like to raise them (and maybe a few rabbits) for food and eggs, but I don’t want to p.o. the neighbors… yet.
Regarding chickens, not rat problems, although I do take the food in every night so there is nothing left out for vermin. I did lose one to a raccoon a few nights ago, which was sad. I do have mce though, but chickens eat mice (I didn’t believe it either, but Google it), and I was told that mice and rats usualy don’t share the same space, as they both compete for the same food. I’ll take mice any day over rats.
Thanks for the info. I’ll have to suss out the neighbors first; they had complained of rats from a foreclosure (!) behind them.
Garden first, then chix.
Um, “Bicycling” AZSlim? How will I get my groceries without my eight-banger Yukon XL? How will I drive my kids to soccer practice?! The children!! What about the children??
Had the fullest load in the rear panniers that I have ever had (shopping hungry) the other day. VERY unstable. I am still bargaining for the trailer with my better half or at least a front rack and panniers! Three more months until I can bike with the boy too.
Trailer.
Do you have a shelf behind the back seat? When I was a bike commuter I bungie-corded a milk crate to the shelf behind the seat and bought away. That and a backpack was enough to last 10 days.
From the satellite pix, Tucson looks like a fairly small city, geographically. A kid can probably get almost anywhere on a bike within an hour. (I’d be a little scared in the DC area; too much artery traffic.)
If I’m shopping for plants in one-gallon containers, I’ve been known to bungie a milk crate to my back rack. For larger hauls, like plants in five-gallon containers, I use my trailer.
AZ — I think that you posted this before, but which trailer did you go with?
I went with a used BOB trailer on Craigslist. It was my summer weekend getaway and I put upwards of 500 miles on it June through August. Hopefully it will take me cross country in a year. The whole rig (including a 1990 Raleigh Sierra) cost me $400.
AZ — I think that you posted this before, but which trailer did you go with?
I’ve owned a Burley trailer (for hauling stuff, not kids) since 1990. Considering all the heavy stuff I’ve piled into it, I’m amazed it’s still around.
Thanks for the info. I looked at both of those a while back. There was a giant flatbed that caught my eye, but I can’t remember the brand. It’ll have to be two though, I fear: a kid hauler and a cargo hauler.
Funny, the Burley site has a golf club trailer. An old roommate used to lash his clubs to the bike and bike 15 miles to get in a round.
Italy is hitting the fan:
http://www.bloomberg.com/news/2011-11-09/italy-bond-attack-breaches-euro-s-defenses-as-region-s-contagion-worsens.html
Another day, another prospective bailout…
9 November 2011 Last updated at 11:49 ET
Italy borrowing costs hit record 7%
Italy’s cost of borrowing has touched a new record, a day after Prime Minister Silvio Berlusconi said he would resign once budget reforms were passed.
If Italy tried to borrow money today, payable in 10 years, it would have to pay an interest rate of more than 7%.
Investors fear that Italy could become the next victim of the debt crisis.
In a bid to calm markets, President Giorgio Napolitano said reforms would be passed and Mr Berlusconi would resign “within a few days”.
The 7% level is widely viewed as unsustainable and was the point at which Portugal, Greece and the Irish Republic were forced to seek a bailout.
This so-called yield on Italian government debt is the highest since the euro was founded in 1999. In comparison, Germany’s implied cost of borrowing for 10 years is 1.73%.
The BBC’s business editor Robert Peston said: “No-one wants to lend to a country when that country would use the loan to pay the interest on previous loans - that’s throwing good money after bad.”
…
Market Data
Last Updated at 14:29 ET
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Dow down 400!
Do we buy at the dips yet?
There has never been a better time for dips to buy.
NOVEMBER 9, 2011, 1:23 P.M. ET
Treasury Prices Slide After Tepid 10-Year Note Auction
By Cynthia Lin
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–Even amid all the euro-zone woes, U.S. 10-year government notes offering 2% wasn’t enough to draw enthusiastic buyers to the Treasury Department’s sale Wednesday afternoon.
The $24 billion benchmark auction sold at a yield of 2.03%, a bit above what the government expected to have to pay to get the notes distributed. Overall interest was light, with a bid-to-cover ratio of 2.64–the lowest since December 2009. Direct buyers scooped up 8.2% of the offering, below the 11.5% average over the last eight auctions, while indirect bidders got 41.6% of the sale, also a tad below the recent average.
Despite attempts earlier this week to bring prices down ahead of the sale, euro-zone-inspired crisis mode was back in full swing this morning, pushing investors back into the safety of U.S. government debt. Treasury prices climbed throughout early trading, which made same analysts a little less enthused about buyers showing up at the auction.
Initial optimism about Italian Prime Minister Silvio Berlusconi’s offer to step down quickly turned into one of the more panicked trading sessions Wednesday as Italy’s 10-year bond yields shot above 7% after LCH.Clearnet upped its margin call. That re-ignited fears about the euro-zone credit crisis and how Italy–as the region’s third biggest economy–could trigger a wide-ranging impact if its finances aren’t quickly put in order.
“Given the limited firepower of the EFSF, it’s clear to us that the debate has shifted from too big to fail to too big to bail,” says CRT Capital.
…
Don’t look now, but Greek and Italy are blowing up at the same time.
Nearly every asset class set for ‘miserably low’ returns
By John Hussman
November 8, 2011 8:55 am ET
The following is the weekly market commentary of John Hussman, president of the Hussman Trust, for the week of November 7. To read more of Mr. Hussman’s commentaries, please click here.
A quick note on Greece - as of Friday, the yield on 1-year Greek debt has soared to 212%, up from 144% a week ago, just after the grand “solution” to the crisis was announced. Over the past week, the price of 1-year Greek debt has plunged by 20%, to 38.4 (bid 35.81, ask 40.97 to be exact). Which begs the question - if everyone has agreed that Greek debt will only be written down by 50%, why is the 1-year note trading at just 38% of face value, with longer maturities trading below 30% of face? This sort of incongruence isn’t inspiring.
…
Mama mia!
Oil Prices Confirming ECRI Recession Call
November 9, 2011
As goes oil, so goes the economy. Today we posted an update as to why oil price spikes hurt even more when disposable incomes are already under pressure, as it acts as an additional tax on the consumer. Of course, this additional tax on a consumer that is already receiving more than 23% of his income from government transfers, real personal incomes on the decline and food and energy absorbing more than 22% of wages and salaries doesn’t bode well for increases in real consumption that supports healthy organic economic growth.
The reason that I bring this up is that yesterday we posted the CNBC interview with Lakshman Achuthan, who was reiterating his point that a recession is still coming despite the recent uptick in the GDP data. It is an embarrassing display for the commentators on CNBC, who just cannot, as Lakshman put it, “see the forest for the trees.” While the media focuses on what has already occurred, looking at reports such as GDP, Lakshman talks about the pervasive decline, a “contagion” in the forward-looking indicators. He states that the recent data upticks have done nothing to reverse the recessionary call that the ECRI has made due to what the leading indicators are telling them.
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Risk on!
Nov. 9, 2011, 3:02 p.m. EST
U.S. firms look vulnerable as Europe teeters
Tighter spending in top market will crimp American exports
By Christopher Hinton, MarketWatch
WASHINGTON (MarketWatch) — The European tide is washing out as the region struggles with one sovereign-debt crisis after another, leaving many U.S. businesses exposed to a continental recession.
Already the U.S. financial sector — which has lent billions of dollars to European banks now burdened with risky Greek, Italian and Spanish debt — has suffered tremendously. Last month, financial firm MF Global Holdings Ltd. (MFGLQ -14.75%) collapsed in part because of a huge bet on European bonds that turned sour.
Next to suffer could be companies that sell discretionary products such as mobile phones and personal computers, as well as consumer staples such as clothing along with cars. In the longer term, some of the more elective drug and health-care products could also be affected, analysts said.
“Europe is a major component to the U.S. economic engine and it is a concern,” said Howard Silverblatt, an analyst with S&P Indices. “A European recession won’t take us under; however, it has an impact that will move stocks.”
Companies in the benchmark S&P 500 Index (SPX -3.41%) rang up about $1.36 trillion in European sales last year, or roughly 29% of all overseas sales — making Europe the largest market for U.S. goods, according to S&P Indices.
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Yawn…
Last updated: November 9, 2011 7:18 pm
Market confidence in Italy collapses
By David Oakley, Robin Wigglesworth and Patrick Jenkins in London and Guy Dinmore in Rome
Italian Prime Minister Berlusconi holds League North Party leader Bossi’s hand during a finances vote
Italian bond yields on Wednesday saw their biggest one-day rise since the launch of the euro amid fears that investors had lost confidence in the world’s third-biggest debt market.
In a sharp worsening of the eurozone crisis, Italian 10-year bond yields rose nearly three-quarters of a point to 7.48 per cent – a level considered unsustainable by many economists.
The Italian bond sell-off, which sparked a fall in the euro, European equities and bank stocks, was triggered by a move by clearing houses to increase the cost of margin payments for trading the country’s bonds.
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The above excerpt is from the Financial Times.
Does anyone besides me take the impression we are enduring a protracted global financial panic of epic scale and indefinite duration?
US STOCKS-Wall St plunges as European debt plight worsens
Wed Nov 9, 2011 9:38pm GMT
* Spike in Italy’s borrowing costs feeds contagion fear
* Financials drag, Morgan Stanley and Goldman fall
* GM shares fall on disappointing outlook; blames Europe
* Indexes off: Dow 3.2 pct, S&P 3.7 pct, Nasdaq 3.9 pct
By Caroline Valetkevitch
NEW YORK, Nov 9 (Reuters) - U.S. stocks tumbled 3 percent on Wednesday in the market’s worst day since mid-August as a spike in Italian bond yields signaled the European debt crisis had worsened.
All 10 S&P sectors were down, but S&P financials .GSPF were the hardest hit on worries about European exposure, dropping 5.4 percent.
U.S. stock markets have grown more chaotic in response to rising volatility in European debt markets, and investors have trouble keeping up with a steady stream of headlines and pricing in how the crisis might play out.
“The market has turned into a derivative of what’s happening in Europe,” said Craig Hodges, president at Hodges Capital Management in Dallas, Texas.
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9 November 2011 Last updated at 03:03 ET
IMF chief warns of a ‘lost decade’ for global economy
Christine Lagarde: “The world runs the risk of a downward spiral of uncertainty”
The head of the International Monetary Fund, Christine Lagarde, has warned that the global economy is at risk of being plunged into a “lost decade”.
Ms Lagarde said the ongoing debt crisis in Europe has resulted in an uncertain outlook for the global economy.
The IMF chief added that whilst efforts to solve the crisis were heading in the right direction, more needed to be done to restore confidence.
Speaking in China, Ms Lagarde called upon Beijing to rebalance its economy.
“Our sense is that if we do not act boldly and if we do not act together, the economy around the world runs the risk of downward spiral of uncertainty, financial instability and potential collapse of global demand,” she said.
“We could run the risk of what some commentators are already calling the lost decade,” Ms Lagarde added.
Ms Lagarde’s comments come amid fears that the debt crisis in some peripheral countries may be spreading to some of the euro area’s biggest economies.
On Tuesday, Italy’s cost of borrowing hit the highest level since the euro was founded in 1999. The yield on Italian 10-year government bonds rose to 6.77%, raising concerns about its capacity to service its debts.
Many investors believe that Italy may have to bailed out just like Greece, the Irish Republic and Portugal.
The fear is that as the eurozone debt crisis spreads, it will have a big impact on the international economy.
At the same time, there have been concerns about a slowdown in the US as it struggles to boost growth and tackle stubbornly high rates of unemployment.
Ms Lagarde said the combination of these factors were a big threat to global growth.
“There are clearly clouds on the horizon,” she said. “Clouds on the horizon particularly in the advanced economies and particularly so in the European Union and the US.”
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Video Games will be to todays kids what Music records were to my generation.
The game went on sale last night and is considered the most anticipated video game release in history. Poised to eclipse sales figures of Activision’s earlier Black Ops title, Modern Warfare 3 is expected to sell 18 million copies by the holidays.
31-year-old Lomorin Sar, who had pre-ordered the game, was supposed to have one of the first copies when they hit stores at midnight on Tuesday. When he didn’t get it, he threatened to shoot the Best Buy employees in the parking lot as they left work and blow up the store. All things considered, Sar seems to have gotten off pretty easy with a misdemeanor summons for a mere disorderly conduct charge. His court date has yet to be released to the public.
At least Sar made an attempt at lawful behavior to obtain his copy, pre-paying the $60 and waiting in line at the store. In Paris, two separate groups of gamer bandits had no intention of playing by the rules when they held up delivery trucks carrying Modern Warfare 3 with tear gas and a handgun, respectively, and made off with a combined half-million dollars worth of loot.
Welcome to costco I love you
Forget Modern Warfare. I wish that I could put myself in stasis somehow and play Elder Scrolls V: Skyrim with no loss of family time, health, wages, etc.
They’re using modern warfare to obtain Modern Warfare. I’m sure the irony was lost on nobody.
Aw man, I remember when Mario Kart 64 came out. I may have threatened a few people to get a copy.
Blue shell, mother$%^&ker!
“Too Big To Fail == Too Dangerous To Exist”
In case you’re looking for a funny comment thread to join, here’s a story from Tucson’s leading fishwrap:
Tucson home prices finally edge up
First out of the starting gate is this comment:
“Hurrah! Soon we’ll be back to the good old days of flipping houses and ARM’s!”
Not to be outdone, we also have this comment board statistician:
“And the median home price is reflective exactly of: The homes that were sold. So if most of the homes sold were in the $300K range, and 1/4 of them were under $70K, that would make this figure pertinent. It’s relative to absolutely NOTHING!”
Here’s a fun story from Tucson’s leading fishwrap:
Tucson home prices finally edge up
Much comment merriment follows. Including this gem:
“Hurrah! Soon we’ll be back to the good old days of flipping houses and ARM’s!”
‘Scuse the double post, people.
lots of red meat here
http://www.nytimes.com/2011/11/09/business/how-a-financial-pro-lost-his-house.html
Nov. 9, 2011, 5:25 p.m. EST
Ala.’s Jefferson County to file bankruptcy: report
By Wallace Witkowski
SAN FRANCISCO (MarketWatch) — Alabama’s Jefferson County, which includes Birmingham, the state’s largest city, will file for bankruptcy, the Birmingham News reported in its online edition late Wednesday. The $4.1 billion bankruptcy would rank as the largest municipal-bankruptcy filing in U.S. history, edging out the largest-to-date 1994 filing by Orange County, Calif., which had $1.64 billion in investment losses. The Jefferson County Commission voted 4 to 1 in favor of the filing, according to the newspaper. The county is saddled with $3.14 billion in debt for the expansion and repair of its sewer system.
http://www.rollingstone.com/politics/news/looting-main-street-20100331
Looks like JP Morgan, which ripped off these hayseeds with corrupt financing deals, is going to be left holding the smelly end of the stick. Until Obama gives them another bailout, anyway.
JEFFERSON COUNTY’S MAJOR SEWER CREDITORS
JPMorgan Chase & Co.
Bank of America
Regions Bank
Lloyds Bank of Scotland
State Street Bank of Boston
Societe Generale of Paris
Bank of Nova Scotia in Canada
The Bank of New York Mellon
Financial Guaranty Insurance
Syncora Guarantee, Inc.
Source: Jefferson County
Note to X-GSfixr:
A few days ago you said you doubted that natural gas fracking was a factor in the Oklahoma earthquake. Evidence is building that there may be a link after all.
http://oilprice.com/Energy/Natural-Gas/U.S.-Government-Confirms-Link-Between-Earthquakes-and-Hydraulic-Fracturing.html
http://www.energydigital.com/global_mining/does-fracking-cause-earthquakes
As I mentioned the other day our local nuke plant at Glen Rose TX sits on top of a minor fault line and of course it’s surrounded by hundreds of well drilled in the last 5 years.
Drill baby drill.
Perhaps we are heading into the endgame when I read headlines like this from Ambrose Evans Pritchard:
America and China must crush Germany into submission
As we watch Italy’s 10-year bond yields near 7.5pc and threaten to detonate the explosive charge on €1.9 trillion of debt, it is time for the world to reimpose order.
You cannot allow the biggest bankruptcy in history to run its course – with calamitous domino implications – before all options have been exhausted.
One can only guess what is happening in the great global centres of power, but it would not surprise me if US President Barack Obama and China’s Hu Jintao start to intervene very soon, in unison and with massive diplomatic force.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013198/america-and-china-must-crush-germany-into-submission/
Now that even the WSJ editors are acknowledging that Cain is toast, is Newt due to be the next “not-Romney” RNC anointed?
Why Gingrich Could Win
Herman Cain’s prospects were good until this week brought accusatory testimony from a woman who showed up in person, with detail.
By DOROTHY RABINOWITZ
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That leaves Mitt Romney, and Messrs. Perry, Cain and Gingrich heading the list of competitors for Iowa. Mr. Cain’s prospects were good until this week brought accusatory testimony from another woman—one who showed up in person, with plenty of detail. Charges of lies, financial motives and conspiracies notwithstanding, it’s hard to see how Mr. Cain weathers this disaster. No outsider can know what actually did or did not happen. But all the snorting in the world about Gloria Allred, the accuser’s attorney, isn’t going to change the impact of this highly specific accusation.
Whoever his competitors are in Iowa and beyond, Mr. Gingrich faces a hard fight for the nomination. His greatest asset lies in his capacity to speak to Americans as he has done, with such potency, during the Republican debates. No candidate in the field comes close to his talent for connection. There’s no underestimating the importance of such a power in the presidential election ahead, or any other one.
His rise in the polls suggests that more and more Republicans are absorbing that fact, along with the possibility that Mr. Gingrich’s qualifications all ’round could well make him the most formidable contender for the contest with Barack Obama.
Ms. Rabinowitz is a member of the Journal’s editorial board.
That Herman sure has a way with the ladies!
November 9, 2011 9:43 PM
Herman Cain’s nickname for Pelosi: “Princess Nancy”
By Lucy Madison
Topics Campaign 2012
Republican presidential candidate businessman Herman Cain speaks during a Republican Presidential Debate at Oakland University in Auburn Hills, Mich., Wednesday, Nov. 9, 2011.
(Credit: AP Photo/Paul Sancya)
Updated: 11:39 p.m. ET
In a move that immediately had the Twitter-sphere reeling in apparent disbelief, Herman Cain on Wednesday coined a new nickname for House Minority Leader Nancy Pelosi: “Princess Nancy.”
Cain, speaking at CNBC’s Republican presidential debate in Michigan, was referencing a Republican health reform plan that stalled in committee because “Princess Nancy sent it” there.
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Ima repost my Original Housing Bubble Poem manana.
Nov. 10, 2011, 12:01 a.m. EST
Foreclosures jump 7% in October from September
Stockton, Calif., has highest rate of foreclosure filings
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Foreclosure activity rose 7% in October compared with September, a sign that lenders are picking up the pace after foreclosure processing problems caused delays, RealtyTrac said Thursday.
Last month, foreclosure filings were reported on 230,678 U.S. properties, according to RealtyTrac data. Filings include default notices, scheduled auctions and bank repossessions.
Activity is down 31% in October compared with a year ago.
“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” said James Saccacio, chief executive of RealtyTrac, in a news release.
“However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real-estate recovery.”
In October, after 22 months in a row as the city with the highest foreclosure rate, Las Vegas finally ceded that standing to Stockton, Calif., according to RealtyTrac’s ranking of metropolitan areas with populations of 200,000 or more.
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Asia Shares Tumble
Asia Markets Mostly Higher