Bits Bucket for November 14, 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
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
May 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Almost every song ever written. Make up your own tune.
How a Financial Pro Lost His House
By CARL RICHARDS | New York Times –
Wed, Nov 9, 2011 2:10 PM EST
I felt we could afford around $350,000. We called a real estate agent named Mitch, who had signs on all the bus stops: Talk to Mitch! He picked us up in a gold Jaguar, and suddenly we were looking at houses that listed at $500,000 or more.
It felt a little crazy to be shopping for houses that cost half a million dollars, but my income was growing rapidly. Everywhere I looked, people were being rewarded for buying as much house as they could possibly afford, and then some. There was this excitement in the air, almost like static. I started to think that if I didn’t buy a house right then, I would never be able to afford one.
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?
But prices just kept rising, and when people kept buying, that made it seem safer. I knew from my work as a financial adviser that following the crowd could be costly. But like everyone else, I felt safer in a crowd.
The market’s continued strength meant we could borrow even more. It was easy. In late 2004, a year after buying the house, we refinanced our mortgage with World Savings Bank, which later ended up in the hands of Wells Fargo, using one of the pick-a-payment loans that let you choose your own payment each month.
We picked the lowest possible payment, the one that added to our balance each month instead of subtracting from it. And we added a line of credit with Wells Fargo.
But in hindsight it is clear that we were spending more than we should have on things like recreational gear and family trips for ourselves and our four children.
It was extravagant, but it seemed modest compared to what some of our neighbors were doing. Our house was the smallest model in the neighborhood (though at 3,500 square feet it was hardly tiny), and we drove a Chevy and a VW. 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?
By then, housing prices in Las Vegas were falling quickly, and the bank had cut off our home equity line of credit. We quickly got rid of a car and stopped taking trips. I moved into a smaller workspace and cut back on my administrative and marketing costs. Even so, we found ourselves using credit cards as emergency stopgaps.
Then, the sickness set in. The pain would start in my stomach, and then I’d spend six hours vomiting. It happened once, then three months later it happened again, then one month later it happened yet again. Eventually, it was happening every couple of weeks. The doctors couldn’t find a physical cause.
Because I have a moral obligation, I said. You pay your debts.
He proceeded to explain that I didn’t have a moral obligation to the bank. I had a moral obligation to my family. I had a contractual obligation to the bank, along with a clear moral obligation to be honest in my dealings. What he was asking was this: Which is more important? Your contractual obligation to the bank or your obligation to your family to preserve your ability to make a living?
A bank representative came to the house and met with us. He was such a nice guy. Cori had treated it like an open house, and the place was spotless. The guy said he’d never met anyone more qualified for their short sale program.
Somehow, even in that horrid market, we sold the home for $531,000. That was in late August 2010. In exchange, the lender released us from both our first and second mortgages. Today, Zillow estimates the home’s value at $505,000.
http://finance.yahoo.com/news/financial-pro-lost-house-191003606.html - 195k
While reading this keep in mind that this guy is considered to be a financial pro.
From the article: “The expericence has changed just about how I do financial planning and the advice I give in public.”
After all of of the stupid things this guys says he did he still considers himself a financial planner, a pro. He’s even written a book.
Lol.
Experience keeps a dear school. But fools will learn in no other. –Ben Franklin.
“What he was asking was this: Which is more important? Your contractual obligation to the bank or your obligation to your family to preserve your ability to make a living? ”
Contracts are to opposite of morality. If we all dealt with each other on a strictly moral basis (what’s the right thing to do) we wouldn’t need contracts.
At least this person made the right move. You have no moral obligation to the bank, you have a contractual obligation and that’s it. If you’re dealing with a bank on the basis of “what’s right and what’s fair” you’re already the sucker in the room. Trust me, I’ve been on the inside, and I know, for a fact that bankers LAUGH at people who start their conversations with “we want to do the right thing”. Banks NEVER think about “the right thing” they think about “what’s the most profitable and legally defensible thing that I can do in this situation”. Neglect that fact and you will wind up burned by a bank, no doubt about it.
“we all dealt with each other on a strictly moral basis (what’s the right thing to do) we wouldn’t need contracts.”
False.
Even if we are both operating from a “strictly moral basis”, we might differ on what we think the “right thing to do” is in a given situation.
Contract law is all about agreeing on those expectations and outcomes up-front, so that we don’t have to discover down the road that we have differing opinions on what the right thing is.
“The extra borrowing power was important, because while my income was growing rapidly it wasn’t enough to support all our expenses. Around that time, I left Merrill Lynch to become an independent financial adviser, so it was easy enough to convince ourselves that we were borrowing to pay for the start-up costs.
There was some truth to that, but we were also borrowing against the house to finance our lifestyle.”
———-
Buying the house was not his mistake. His huge mistake was leaving a stable job while he still had commitments like that. His huger mistake was choosing an Option ARM — the lowest payment no less. Did he not even bother to run a simple amortization chart?
sure takes some cojones to write an article like that, for the whole world to see.
There is no bad publicity. He’ll attract clients that are facing a similar situation as he was facing a year ago and he now knows how to “solve”.
Why does it seem to me that the HBB crowd will continue to avoid him, even if he’s the last financial advisor on earth? Could it be because we know how to do our own homework and, from that, create our own financial plan?
There’s far more of “them” than there is of “us”.
Even the mattress is a better planner than this guy.
http://www.nytimes.com/2011/11/09/business/how-a-financial-pro-lost-his-house.html?pagewanted=all
Recall my story of the former coworker-turned life insurance agent. Only he didn’t call himself that.
Oh, yes, he was with New York Life all right, but he was selling in-VEST-ments. And doing financial planning.
But it quickly became clear that he didn’t know beans about finance. Other than what he’d heard in his NYL training sessions. He kept marveling at how much he’d learned from me. And I’m not a financial pro. Not by any stretch.
Long story short: Guy didn’t make a cent off me. I canceled that whole life insurance policy he sold me — and I got all my money back.
he came close, it sounds like.
Actually, I started having buyer’s remorse almost immediately after I signed the contract. That was back on August 16. By August 23, it had gotten to the point where I had called my attorney to make an appointment. I wanted to know what my legal rights of cancellation were.
Had the attorney’s appointment on August 25. He said that I certainly had the right to call the insurance company to say “Cancel this policy!” He warned that I might be out some or all the money I’d already paid.
So, I called the company, did the paperwork they sent, and notified the local office that I no longer wished to meet with my former coworker, the agent.
In time, I did get all of my money back.
less attorney fees and time
less attorney fees and time
The attorney charged me all of 50 bucks for a half hour of his time. Yup, that works out to 100 bucks an hour. Pretty pricey.
However, you can get more good info from this guy in a half hour than you can get from many people in an entire day. So, it was a well-spent half hour.
As for the rest of the time spent on this caper? Grrrrrr! Don’t get me started.
Moral: Getting into crummy deals is easy and quick. Getting out of them is just the opposite.
“The attorney charged me all of 50 bucks for a half hour of his time. Yup, that works out to 100 bucks an hour. Pretty pricey.”
Not where I live. 100 bucks an hour for an attorney is cheap, especially one who gives good advice and only charges for 1/2 hour.
“As for the rest of the time spent on this caper? Grrrrrr! Don’t get me started.”
From what I remember of this story it was the good heart that you have trying to help someone who you used to work with.
“Moral: Getting into crummy deals is easy and quick. Getting out of them is just the opposite.”
That`s what my attorney says, but he charges $300 an hour.
Anyone see Sixty Minutes last night? What an eye opener! I thought insider trading was forbidden to members of CONgress, silly me.
But I must say, I no longer have any problem with the banksters. I realize that these three branches of goobermint, at the top, are completely and solely responsible for the shape this country is in and I now understand why. These folks are exempt from the rule of law that they impose on the rest of us.
What a complete criminal joke the Federal government is. Beneath contempt.
Do you have children in the Armed Forces? Get ‘em out. It’s not worth it.
Do Congress folks caught in the act of insider trading serve prison time, or is that treatment reserved for insider traders who work on Wall Street?
November 13, 2011 7:06 PM
Congress: Trading stock on inside information?
Steve Kroft reports that members of Congress can legally trade stock based on non-public information from Capitol Hill.
Congress: Trading stock on inside information?Keeping Congress cleanWhat counts as “inside information”?(CBS News) Washington, D.C. is a town that runs on inside information - but should our elected officials be able to use that information to pad their own pockets? As Steve Kroft reports, members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it’s time for the law to change.
…
Was the “insider” information public? I didn’t see the show but from what I heard of it the accusations are something like Congressman writes bill about X industry. When a bill looks like it will pass, congressman makes a trade based on the bill’s provisions.
So my question is, were these bills public when the trades took place? If so, that’s not really insider info.
Maybe it has nothing to do with writing bills at all. For example, there’s a pending rule about credit risk retention. The rule has gone through public comment, but has since disappeared back into the black hole of government management. Will the rule be approved and codified? My investments in banks might benefit from knowing…
Meanwhile, in my section, we have restrictions on which companies we can invest in or buy stock in. Even on public information.
That was my question. Is the trade done before the decision is made? If the trade is done while legislation is in the black hole then there’s a problem. If the trade is done after the rule is approved/denied but the decision is buried on p.716 of a press release then it’s not insider knowledge.
GAG:
The person who works for Congress obviously knows more than the public does about the following:
1. Whether or not it’s going to pass.
2. Why those provisions were really written (i.e., what effect they will have, other than the excuse that is being given)
Members of Congress should not be allowed to make trades on stocks that are directly affected by legislation that is going on while they are in office.
Big V,
Read what I wrote again.
I said if the trade happened after a decision is made / bill is passed then I see nothing wrong with it. If the trade is made while deliberations are made in secret whole other story.
#2 is irrelevant. As long as the information is public then every investor has the same opportunity to analyze the potential ramifications of the legislation.
#2 is not irrelevant, GAG. If a congresscritter is being paid to pass a bill, and said critter goes out and tells his/her constituency that the bill is being passed for X reason, but it’s really passed for Y reason, then the critter has inside information. The critter knows more.
It is black-and-white conflict of interest for Congresspeople to buy/stell stock that is directly affected by legislation going on while they are in office.
Palmy don’t be silly. These people are smarter than we serfs and trading on information not available to us is, well a perk they deserve. In fact the more I think about it it’s your own fault for being lazy and not getting elected to office.
Shame on you Palmy.
Was that not well known? I’m sorry I would have mentioned it if I realized that it wasn’t general knowledge. Congress almost always exempts itself from having to obey rules like that. Also laws related to employment.
The executive branch is an entirely different matter. We were so nervous of violating gift rules (max $20 of value at a time, max $50 a year - meant to cover things if you were at a meeting in someone else’s offices and they served lunch instead of taking a break for everyone to get their own) that we would bring our own water to meetings at another location. Wouldn’t even look at the fruit and snacks. Eventually, we just told them that they had to come to our place and meet in our dingy conference rooms - easier that way. When I first started, I got called to a manager’s office for a “little talk” when it became known that a lot of us had been invited to a retirement party for one of our colleagues where drinks and possibly snacks would be served. I had been planning to attend and only have one soft drink (figured that couldn’t be worth $20), but ended up skipping it out of fear.
Trading on inside information isn’t even on the horizon. Not even close.
Congress is exempt from OSHA rules and the TSA and get free government healthcare.
Its because they are the new ruling class.
For those who believe in such things, the Sign of the Beast is not 666. It’s 535.
CONgress has completely abdicated its constitutional responsibilities and now their only objective is to enrich themselves to the maximum extent possible, at our expense.
Dictatorship will soon follow. Then revolution.
I think malfeasance grows during fat, prosperous times because people don’t want to upset the apple cart. So malefactors can engage in all kinds of shenanigans as long as the train keeps rolling.
Once the SHTF and the contraction begins, people start looking for problems with the system. And institutionalized corruption (a hedge fund manager just went to jail for 11 years for exactly this behavior) comes under scrutiny.
We wind up seeing how corruption has rotted the system. We wind up seeing how the politicians and corporations have sold us out.
Bravo to 60 Minutes and Rolling Stone. In prosperous times, the articles would have been shrugged off. But now, the electorate is looking to change things for the better.
“Once the SHTF and the contraction begins…”
Warren Buffett’s proverbial tide recedes.
This has been reported here many times.
But it’s always good to have a reminder. Truly we live in a corporate soviet world.
Marie Antoinette didn’t get it either.
Historical note: it’s written in the Constitution that memebers of Congress ARE exempt from the laws of the land. It was expected that politcal ill will among the members would be enough to correct any crimes committed by other members.
uh, what article and section would that provision be in?
The only one that comes to mind is lible/slander and they don’t have to pay postage. I don’t think the Founding Fathers addressed daytrading down in the Rayburn.
Do your own homework.
Google it.
Okay, turk, I did.
Not much leeway unless you’re in session or going to or from same. “Breach of the Peace” could mean pretty much anything worse than a parking ticket. But an interesting bit ‘o trivia.
Thanks!
Constitution of the United States of America,
Article 1. Section 6.
They shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place.
There ya go!
Turkey, as a general rule, the poster who makes the assertion carries the burden of providing evidence of the assertion, especially when asked.
ahansen, I believe the Speech and Debate clause is the one where a Congressperson can say anything on the Floor — for example, accuse another Congressperson of cheating on his wife, and not be charged with Libel or slander in an outside court.
As for Priviledged from Arrest, wouldn’t that just mean in a physical sense? The police can’t walk in and frogmarch somebody from the Floor. The Congressperson can still be arrested, but they have to wait until the guy gets home.
I went to an alumni networking event a few weeks ago. We mostly talked to each other, but there was a speaker too. He graduated in 1979, though he might have started with an earlier class.
The story seemed…dated to me. He told us about how he started out pre-med, but wasn’t really smart enough. Then he tried computers, but wasn’t really smart enough for that either. He implied that he had a few semesters of really bad grades, and may have been required to take a semester or two off before coming back to graduate. Then he marched right into the management training program at Proctor and Gamble. Did that for a few years. Then went to business school - Harvard. Did investment banking for a bit, including starting his own small firm. Decided that it wasn’t for him and wanted to have his own business. So he and his brother picked an industry that didn’t seem too hard to figure out (boxes) and wrote letters to a few hundred places to see if they would sell themselves. Found a likely prospect, but needed money. The company owners were willing to take back debt on part of it, but they needed $800K. So he started contacting the parents of old girlfriends and managed to come up with the money.
He and his brother have been running the company ever since, grown it quite a bit, had their down turns, etc. Nice guy, but not stunningly charismatic. Healthy sense of humor about himself, but I’m not sure he got how hard that path would be to walk today. Do any of you remember a world that forgiving? I don’t.
Well, that depends. Today he could just solicit parents of his old girlfriends and mount a campaign for CONgress, get elected and trade on insider information regarding pending legislation.
The eye-opening part of this is that a flunkie was still hired into “management training”?!? (i.e. fast track to deals on the 14th fairway) at P&G… and then graduated from Harvard business school. A “more forgiving” time is right!! If this guy had gradated 15 years later, his no-brain computer or call-center job would have been outsourced to India. He would be stocking flowerpots at Target, just be glad to have a job and hoping he never got sick.
Suspect the 3rd government agency Rick Perry wanted to get rid of was the SEC.
He later figured out it was the Department of Energy that he was supposed to say he wanted to eliminate.
“Do any of you remember a world that forgiving? I don’t.”
There hasn’t been such a world for anyone in the back end of the boom or after. We’ve been lucky to get a job working for the box company guy.
I will say he graduated a little late for the magical mystery tour he took. That was mostly over after the mid-1970s recession, and certainly over by the early 1980s recession aside from the computer industry in the 1990s and those who profited from the housing bubble in the 2000s.
I bet he was very good looking and a good BSer who dated and married well.
John Sculley’s success at PepsiCo was attributed by some to marrying the Chairman’s daughter. His departure to Apple occurred during the divorce.
P&G’s mgmt fast track program does not let in losers. Quite a few CEOs have come from that program.
“I bet he was very good looking and a good BSer who dated and married well. ”
+15. He was probably 6′2″ and slender as well. Such types are marked for “management” otherwise known as sales.
Don’t forget, they also must have Executive Hair.
Perry/Romney/Trump hair?
Is it just me or does Perry look like the villain in the movie. Mostly handsome, but the moment you see him in the movie you just know he’s the bad guy?
Not that tall by a long shot. He still has his hair and is in pretty good shape.
I didn’t get the impression that he had married until after the business was underway, but I can’t say for certain. No mention of any funding from in-laws at all.
Funny, the comment of being “slender,” like we all don’t have a choice.
That program took at least a dozen (possibly several) or more from my college graduating class. It wasn’t that big a deal. It was a good job, but 3rd or 4th choice for most. Even back then, most people wanted banks or management consultants. They took the ones who knew they couldn’t get those jobs. Or that really, really like toothpaste.
Polly,
I concur with that. When I graduated, a P&G management type job was the safety if you didn’t get into a good law school or struck out with banks/consultancies.
Oh, no wonder you’re so out of touch GAG. By the time I graduated, everyone was taking temporary jobs at first, even if they had done internships during school. Didn’t matter what school you went to, either.
Big V,
Everyone I knew had jobs lined up before graduation. And this wasn’t that long ago.
It does matter what school you went to. And it matters what you majored in too as well as grades. And for people from top schools with good grades in solid majors, the idea of working as a management trainee at P&G was a joke.
GEG:
I went to a “top school” and graduated summa cum laude with my degree in molecular biology. Don’t even try to get uppity, you old fool.
In the 70s, you could literally set up shop on the side of the road or the trunk of your car and prosper. I had my first business just like that. Moved from the car to an office in one year.
Today, you would be arrested.
I once bought speakers from a trunk entrepreneur. Turns out they were “pre-owned” and the previous owners wanted them back.
I had a friend that purchased some speakers from a customs auction. They sounded terrible until he found out that they were crammed full of cigarettes.
but I’m not sure he got how hard that path would be to walk today. Do any of you remember a world that forgiving? I don’t.”
I think its harder to get VC money now. Money form ex-Girl friends parents I think he just knew rich people.
Economy is not really growing and cash is tight mainly because the last great business flipping homes was a big bubble. so I imagine it is harder now.
Most of the ex-spouses and long-time companions in my immediate family are still friends of us all. Many of us were long-time neighbors and classmates who dated siblings, each others cousins, girl friends and boyfriends of same, etc. It gets complicated….
You share family dinners, holidays, ski trips, vacations, chores, babysitting, history long enough and you become part of an extended family. Just because it didn’t work out doesn’t mean you can’t all still be good friends.
And yes, there is a lot of cross investment and referral that goes on within the social network.
Are you sure they’re not just still being nice to you because they’re hoping for cash and favors?
“So he started contacting the parents of old girlfriends and managed to come up with the money.”
Now that’s a smooth operator.
It’s a short menu. Pay your mortgage or pack your bags.
What’s it gonna be?
as a renter I agree … do you think my nice decent great landlord would be nice to me if i skipped the rent a few months and took a trip to disney?
I got a hypothetical question for you all.
If you owed on a line of credit, and you informed your creditor that you’re having difficulty meeting the repayment schedule, and they told you to hold back payment for 90 days in order for you to qualify for a modified repayment schedule, what would be the first thing you did?
(I know precisely what I’d do and I’ll tell you after I see some input. Yes this is a test.)
Ask for legally enforceable description of what they are offering in writing - an offer from them that I can accept or reject or modify and send back to them as part of a negotiation.
Nothing without a written committment. Nothing. A bank is a business, not your grandmother.
Let me add that the bank will never give you that committment, so the demand is sort of irrelevant. The realistic answer is not to try to take the deal. You can figure out a way to keep paying or decide not to and take the consequenses with legal help or without, but the bank saying “do this for a while and then we will be able to help you” is a non-starter. It might have a slightly better chance of working than buying a megamillions ticket, but not by much.
“… what would be the first thing you did?’
I would tell everyone that would listen that I had been victimized and none of this could have possibly been my fault.
Breach a loan covenant and we promise to help you.
Remember, we at XYZ bank are your friends!
No, thanks.
Pull the remaining $$$ from the line of credit. Stop paying the mortgage. Live rent free.
Difficulty or impossibility? Is the house so seriously underwater that a foreclosure would markedly improve your balance sheet? Don’t believe whatever silver coated lies they tell you. If you don’t pay according to schedule, penalties and fees will snowball making your debts far worse before anybody looks to mod your loan. The question is: “Are you willing to get foreclosed on?” If you’re not, keep paying even it if it’s hard. If you are willing, only then should you find out how willing the bank is to foreclose upon you. But seriously consider letting the lender(s) foreclose. It’s probably the better option if it will trim 200k or more from your debt.
Refinance into WHAT? Dang, I keep asking that and the only person that answered was Pres Obama and his 6% –> 4% proposal.
NAR propaganda spew:
http://www.marketwatch.com/story/housing-must-be-a-national-priority-2011-11-13
Housing Must Be a National Priority
ANAHEIM, CA, Nov 13, 2011 (MARKETWIRE via COMTEX) — The struggling housing market needs to be a priority on the nation’s public policy agenda, because housing and homeownership issues affect all Americans. That was the message from speakers at the Legislative and Political Forum yesterday at the 2011 Realtors(R) Conference & Expo.
Realtors(R) at the National Association of Realtors(R) annual conference heard from Washington Post columnist Eugene Robinson and political media consultant Alex Castellanos, who both agreed the housing market is hurting and needs to be a top priority for the 2012 presidential candidates.
Oh goody. Another $500B bailout is surely on the way.
“…housing and homeownership issues affect all Americans.”
all merikans?
I hope this isn’t a re-post; I was tied up most of the weekend. I thought the money quotes was in the last paragraph…
http://www.washingtonpost.com/opinions/housing-woes-wont-yield-to-quick-fix/2011/11/11/gIQAsDCBJN_story.html
Housing woes won’t yield to quick fix
y Robert J. Samuelson, Published: November 13
We Americans think of ourselves as problem-solvers, but the housing collapse has so far eluded all solutions. Perhaps 10 million homes have gone into foreclosure since 2006; millions more will follow. From their peaks during the real-estate bubble, home prices are down 30 percent, new housing construction has dropped 75 percent and existing home sales are off almost 30 percent. Housing’s collapse is one reason the economic recovery is so weak. Construction remains depressed, as are the appliance and furniture sales spurred by home buying.
It may be that patience is the only cure. Home prices have to find bottom; only then will more buyers return. Almost all efforts to accelerate that process by stemming foreclosures have come up short of promises. The Obama administration originally hoped that its Home Affordable Modification Program — lowering some homeowners’ monthly mortgage payments — would help up to 4 million borrowers; at last count, the number was 850,000.
“Home prices have to find bottom; only then will more buyers return.”
When enough MSM pundits like Samuelson say this, the housing market will finally be able to find a bottom.
I totally agree, PB. But it sure is nice to have even one saying it!
Here was my favorite bit, from towards the end:
“Americans assume that all problems have “fixes.” But some don’t. History suggests that it will be hard to overcome the housing bust’s powerful undertow. Pent-up demand and attractive prices may be the only cure. ”
Imagine that: letting the markets that we _say_ we believe in actually work??
Housing is a symptom. Stagnant/falling wages and wealth transfer to the banksters and 1%ers is the disease. Absolutely nobody I know is expecting anything other than wage freezes, or pay cuts, and this assumes you are still working.
The fixes for the housing market are the equivalent of the “bandaid for the shotgun blast to the chest”.
“The fixes for the housing market are the equivalent of the ‘bandaid for the shotgun blast to the chest’.”
I’ve heard analogies like this here before. I think it’s more like the shot victim is in hospital, alive because he’s hooked up to a large, almost endless blood supply. Like a continuous transfusion from many donors indeed.
In short, I don’t think that the pres/govt/fed/banks are trying to cause a housing “recovery”. But with WPost reporters saying “the housing market is hurting and needs to be a top priority for the 2012 presidential candidates”, they may publicly state this as the desired goal. I think their real goal is to just keeping it from completely tanking until all the other economic factors in play run their course. Lessen the pain, but extend it. Not saying I like it, just saying that I really don’t think that anyone in power actually believes they can do much for the housing market at this point.
Until the debt markets are fixed, i.e. lenders are forced to retain repayment risk, housing will not find a bottom.
Why? Because, while they keep making bad loans, house prices will stay elevated. And the government will keep paying off the debt-owners.
But there is a continual downward pressure during this process because government is fighting natural financial forces and having problems with its own debt right now. Generating bad debt and having the governments assume it has led to massive sovereign debt loads.
If the government had little or no debt, the government could have continued to pay off bad loans for a very long time. Now, with the debt load being so high and sovereign debtors starting to show signs of stress, I think the time for this policy is limited.
Interesting - another “Government programs won’t help housing” article. What’s going on here I wonder. Usually, the FIRE sector does ad campaign pushes when they are trying to influence legislation. What’s behind these stories I wonder:
“Government programs are not going to solve the housing crisis. Instead, they will either delay efforts to establish a new housing finance system or benefit only a few select homebuyers. The only way that the housing market will recover is enabling buyers and sellers to have a clear idea about the number of homes that are likely to come on the market and letting it set prices based on demand. This is not a process that can be sped up by government intervention, no matter how well intentioned.”
http://blog.heritage.org/2011/11/14/first-time-homebuyers-tax-credit-shows-government-cant-fix-housing/
Fannie Mae taps $7.8 billion from Treasury, loss widens
By Margaret Chadbourn
WASHINGTON | Fri Nov 11, 2011
9:53am EST
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.
“There is certainly a lot of pre-2009 loans that we need to work through and that is certainly driving the credit losses you saw in this quarter and over the last several years,” Fannie Mae Chief Financial Officer Susan McFarland told Reuters.
She said the company was “working to reduce losses” on those legacy loans and “limit taxpayer exposure.”
http://www.reuters.com/article/2011/11/11/us-usa-housing-fanniemae-f-idUSTRE7AA44J20111111 - 94k
And, while we’re at it, thanks for the bonuses!
Yours truly, Susan
“Fannie Mae taps $7.8 billion from Treasury, loss widens”
I’m shocked…shocked!
http://www.youtube.com/watch?v=1yjHxcHTAW8
GEG, there’s your $50B bailout. Dribbled out, of course.
“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.”
This is the same type of accounting used by the govt to convince people the GM bailout is profitable.
Realtors and banksters bribing congressmen to get and keep buyers ever deeper in debt
http://www.washingtonpost.com/politics/congress-weighs-home-loan-limits/2011/11/09/gIQAdbvQ6M_story.html
The National Association of Realtors has been pushing hard for the extension and managed to gather 60 votes for an amendment that would accomplish it, sponsored by Sen. Johnny Isakson (R-Ga.).
The Realtors, perhaps not coincidentally, have been Isakson’s biggest benefactor, spending $604,000 last year on his reelection and a total of $1.3 million, including for his first run for office in 2004.
I was in the single-family housing business for 30 years before I came to Congress,” Isakson said. “I was proud to be a Realtor. I’m proud to have their support.”
Post your congressional corruption inclusive of all parties.
“I was in the single-family housing business for 30 years before I came to Congress,” Isakson said. “I was proud to be a Realtor. I’m proud to have their support.”
From
How a Financial Pro Lost His House
By CARL RICHARDS | New York Times –
Wed, Nov 9, 2011 2:10 PM EST
“I felt we could afford around $350,000. We called a real estate agent named Mitch, who had signs on all the bus stops: Talk to Mitch! He picked us up in a gold Jaguar, and suddenly we were looking at houses that listed at $500,000 or more.”
And where is my good HBB friend Congressmen Are Liars®?
Are you out there brother?
Meanwhile in Europe…
http://www.handelsblatt.com/unternehmen/banken/griechen-raeumen-ihre-konten-leer/5832764.html (its in German, I don’t think they have a translation)
Anyway, the Greeks are cleaning out their bank accounts due to:
1. Lack of money for personal expenses.
2. Fear of a bank holiday and return to the Greek Drachme.
So far it seems limited to Greece but soon a trickle can turn into a flood. Nothing shakes the foundations of Ponzi banking like a good old fashioned bank run. This could get interesting…
Got popcorn?
“1. Lack of money for personal expenses.”
A lot of that seems to be going around lately.
Reminds of the Move Your Money movement here in America.
The 99% are tired of their literal blood and treasure being used as literal and figurative cannon fodder.
#2 hits close to home for me. I saw this happen first hand in Mexico, where USD denominated accounts (AKA MexDollars) were unilaterally converted into pesos in the 1980’s at a very unfavorable exchange rate for the depositors.
Also, whenever there was fear of a peso devaluation, everyone would try to hoard gold or foreign currencies. It go so bad that during a brief period in the 80’s it was illegal to possess foreign currency in Mexico.
And I bet a ton of people bought STUFF with those pesos, anything from canned peas and AK-47’s to hoarded drugs to real estate.
European Stocks Decline as Italian Yields Rise; Banks Retreat
November 14, 2011, 7:54 AM EST
By Sarah Jones
Nov. 14 (Bloomberg) — European stocks dropped as Italy’s borrowing costs rose after the nation sold 3 billion euros ($4.1 billion) of bonds at the highest yield since 1997. Asian shares climbed and U.S. index futures fell.
Banks reversed earlier gains, led by Banco Bilbao Vizcaya Argentaria SA and UniCredit SpA, which both fell more than 2 percent. Hochtief AG plunged 9.6 percent after the construction company said the sale of its airport-operating business has been delayed.
The benchmark Stoxx Europe 600 Index dropped 1.1 percent to 238.24 at 12:29 p.m. in London as all 19 industry groups declined. The MSCI Asia Pacific Index rose 1.1 percent and Standard & Poor’s 500 Index futures expiring in December retreated 0.5 percent.
“With Italy now in the firing line, the indications are that the euro-zone crisis is reaching a critical phase as we wait to see how quickly and decisively politicians and the European Central Bank will act,” wrote Peter Sullivan, head of equity research at HSBC Holdings Plc in a report dated today.
…
How the GOP Became the Party of the Rich
The inside story of how the Republicans abandoned the poor and the middle class to pursue their relentless agenda of tax cuts for the wealthiest one percent
By Tim Dickinson
November 9, 2011 7:00 AM ET
The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation’s balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. “We’re going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share,” he thunders to a crowd in Georgia. Such tax loopholes, he adds, “sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that’s crazy.”
Preacherlike, the president draws the crowd into a call-and-response. “Do you think the millionaire ought to pay more in taxes than the bus driver,” he demands, “or less?”
The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: “MORE!”
The year was 1985. The president was Ronald Wilson Reagan.
…
The Republicans always were the party of the rich. They are less the party of the rich than they used to be, back when they were responsible. Now they are for less in taxes and more spending on select people.
Before the 1960s the Republicans were the party of snobs and the Democrats were the party of bigots. After the 1960s the Democrats became the party of snobs and the Republicans became the party of bigots.
The bigots are all for lower taxes if the spending cuts are sold as being for “those people” and the consequences can be deferred. Only after the bigots die off or realize they’ve been had will the Republicans be the party solely of the rich.
The Democrats are the party of union bosses and Solyndra types that get $500M for an obviously failing company.
Salaries of top union bosses:
UAW Boss, Bob King $173,000
Laborers International Boss Terence O’Sullivan: $618,000
AFL-CIO Boss Richard Trumka: $283,000
AFSCME Boss Gerald McEntee: $480,000
Yeppers, the Democrats are the party of the poor and middle class.
GEG:
There is a ridiculous amount of corruption in both parties, but it isn’t coming from unions. Unions ain’t got nothin’ on corporations that offshore their labor to communist China, et al. The way to reduce corporate corruption in our government is to put a cap on campaign contributions. The way to trick people into accepting never-ending corruption is to pretend that they only need to vote Republican.
Salaries of top union bosses:
UAW Boss, Bob King $173,000
By GOP standards he’s dirt poor. (maybe he’s lazy)
Why we shouldn’t be selling the right to live in America
A bill introduced last week would give wealthy foreigners the right to live in the US in exchange for a $500,000 home purchase. The proposal comes at the same time the nation is actively closing its doors to foreigners who aren’t wealthy. Is this what America is all about?
By Robert Reich, Guest blogger / October 25, 2011
…
Robert Reich. F*ck Robert Reich.
http://www.youtube.com/watch?v=IWZ5KQm12Lk
Never forgive.
Never forget.
Not sure about the context here, but if you read his writings, you’ll see that he’s one of the few who has the recipe for putting America back to work and back together again.
“A bill introduced last week would give wealthy foreigners the right to live in the US in exchange for a $500,000 home purchase.”
There it is for those who are slow in getting it: When cash is scarce those with the cash get to call the shots.
When cash is scarce those with the cash get to call the shots.
The wealthy ALWAYS get to call the shots.
If they don’t make the payments do we kick them out of the country as well as the house?
I would hope that a financed purchase would not count.
The whole proposal is dumb. They’ll sell some houses on the west coast to Chinese new rich who want a safe haven in case they get into trouble back at home. It will barely put a dent into the huge national surplus inventory.
Exactly. Then again if I were a rich ChiIndian, I would look Australia, Canada, etc.
Do babies born outside of China count in the one child policy?
Nope. Neither does the ones born in China if you have connections.
They don’t make payments. They have to buy outright.
How long before somebody figures out how to game THAT system? Either short term financing from home that gets repaid after a month when they “refi” and get a mortgage on their home. Or even better the house itself can be some piece of cr@p worth far less. Once you’ve done a few of these in the neighborhood, you can push the “comps” way up, mortgage the hilt out of them and the broker/facilitator leaves town with a bucketful of money, leaving behind some immigrants with 500k mortgages they have no chance of paying on houses worth far less than 500k.
Follow the money. Politicians make this change for the FIRE sector. FIRE sector diverts money back to the politicians. When a media outlet picks up the corruption, the congress critters put the back of their hands to the foreheads and say, “Oh noes! No one could seen that coming!”
Then, come November 2012, both parties blame the other for not reciting the Pledge Of Allegiance patriotically enough and beat the war drums against $Current_Villain.
Unless J6P sees through this nonsense and reboots Congress and demands accountability, we’re in for more of the same.
They are also required to pay US taxes on thier world wide income and live in the country for 6 months.
I predict 0 people will take us up on the offer.
I dunno, aren’t there stories of very rich Chinese businessmen who can’t handle the corruption and air pollution and comtaminated water — which they profited off of, by the way — anymore, and want to retire in the relatively clean and safe U S of A? For them a half-mil is nothing. They could buy a million dollar house with servants, hire a translator (child of a former grad student?) and basically do the global version of going Oil City.
No way rich Chinese will ever pay US taxes.
Very well, then they can live out their lives in the polluted cluster they helped create. I have no issue with that.
Wow, the wealthy land-owners in this country get to own immigration policy too. SHWEET!
How many U.S. homes are “in trouble”? The number is supposedly somewhere between 1.6 million and 10.3 million, depending on how you count.
November 11, 2011, 4:18 PM ET
How Many Homes Are in Trouble?
By Robbie Whelan
Call it what you will—the “shadow inventory,” the “distressed inventory,” the “foreclosure pipeline”—but if you ask five researchers how many houses or mortgages we should worry about, you’ll probably get at least five completely different answers. Given this, Developments examined these worrisome numbers and see how they stack up. Here’s a roundup of distress numbers, and how researchers arrived at them:
LPS Applied Analytics
Number: 4 million loans
…
Amherst Securities
Number: 8.2 million and 10.3 million loans
…
Barclays Capital
Number: About 3 million loans
…
CoreLogic
Number: 1.6 million homes
…
Capital Economics
Number: 4.3 million homes
…
Alan Mallach, a senior fellow at the Brookings Institution who has written about home prices, says there’s no consensus on the definition of the words “shadow inventory.”
“One thing I know we can measure fairly accurately is the number of properties where there has been a foreclosure filing but they’re still in the process, and haven’t yet come out the other end. What’s harder to quantify is how many properties could be foreclosed, but the banks have decided to punt,” he says. “I don’t think 30-day delinquencies are that significant. If you look back long before we had this crisis, 30-day delinquencies, there are always a lot of them.”
In the end, the question of how big a problem the housing market faces from distressed loans, or the shadow inventory, or whatever you care to call it, probably boils down to that real-estate adage: it’s all local. If your community has a high rate default or foreclosure, or even just a lot of vacant property, it’s a good bet that the pricing pain will continue for some time to come.
…
I think the answer is to add all the numbers up from each reporting source, so that’s 41.4 million.
I meant to say 31.4.
So that means we should add those up too. It’s 72.8.
Nov. 14, 2011, 12:01 a.m. EST
Scammers profit from housing market
Short sales, mortgage modifications used to rob lenders, homeowners
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Fraudsters find a way to scam lenders and homeowners out of money no matter how the housing market is faring, but in recent years they’ve shifted their tactics to profit from the market’s downturn.
Today, there’s less identity fraud and misrepresentation of income or employment to obtain a mortgage, mainly because stricter validation criteria when a borrower applies for a loan makes that strategy much less successful, said David Johnson, vice president of fraud and consortium solutions for CoreLogic, a provider of financial, property and consumer information.
But other types of fraud are replacing those scams. Some schemes target distressed homeowners who are looking for a way to save their home from foreclosure. Another tactic: Profiting off of short sales at the expense of the lender.
…
Hey FedCake,
Why buy a house today when you can buy later for 75% less?
Where do you expect this 75% drop in prices? I guarantee you such homes are not within 75 miles of a stable job.
And I guarantee you that prices will fall 75% peak, inflation adjusted, irrespective of location.
Hmmm, let’s look. Columbia is sort of halfway between Baltimore and DC.
http://www.zillow.com/homedetails/5380-Iron-Pen-Pl-Columbia-MD-21044/36995773_zpid/
1970 4/2 standard split level on 0.33 acre. Flop-housey, NO updates. Needs redecorating and work outside, but it’s probably got good bones.
Aug 1998: Sold $154K
Jul 2004: Sold $331K
Dec 2006: Peak Zestimate: $426K
Dec 2010: Zestimate: $296K
Nov 2011: Listed $332
This is a typical wishing price profile.
Drop 75% from peak = $106K
Drop 75% from now = $83K
I see neither of these as possible.
Now, if you mean houses will lose 75% of gains since, say 2000, i’ll believe you, because I’ve seen that already, especially in cosmetic fixer-uppers.
“Now, if you mean houses will lose 75% of gains since, say 2000, i’ll believe you, because I’ve seen that already, especially in cosmetic fixer-uppers.”
Well, with the example you chose, with the price now at 332K, and the pre-00’s price at 154K, the gain was 178K. 75% of that is 133K. So, if this house loses 75% of the gain since the end of the 90’s, that will put it right at $199K. That seems possible. For Columbia, with the job market being mostly stable, Federal government positions, this might even be a good deal.
For similar houses in the rest of the country, even after the drop, the price of the house went up 50K, meanwhile nobody got a raise, everybody got laid off, and nobody can count on stable employment anymore.
Oxide: Always check the crime maps too:
http://www.foxbaltimore.com/newsroom/features/fighting-back/crime_maps/howard_county.shtml
Oxide: Also, check the sex offender registry:
http://www.dpscs.state.md.us/sorSearch/
I’m kind of familiar with that area. I recall looking at the area next to Howard County Community College and there are quite a few sex offenders there. A lot of sex offenders in an area is a barometer in my experience.
75% below today’s prices? Perhaps in a few “select” neighborhoods where you wouldn’t even consider living. Otherwise, not a chance.
You’re in for a surprise too.
From today’s prices 75% does seem like a stretch, except maybe for select locales like Vegas or Riverside county.
“I guarantee you that prices will fall 75% peak, inflation adjusted, irrespective of location.”
Can I get that guarantee in writing?
In Austin, Texas, ain’t no sign of no 75% fall. Not even close.
All the more reason the declines will be deep in Austin.
Do interest rates have to go to 38% for this 75% drop to occur?
So tell me all you guys…… prices inflating 200-400% is perfectly normal but a 75% decline is unfathomable? Go LOOK at the price of resale housing. Don’t compare it to other bubble years. Select a date when prices weren’t distorted and make your own forecast. I’ll stand by my 75% decline from peak. You stand by yours.
In locales where there was 200-400% appreciation and prices haven’t already cratered, then sure, 75%. But in most of those places (say Vegas) prices have already dropped 50% or more. They probably won’t drop 75% from where they are right now.
http://www.vegasinc.com/news/2011/oct/25/sp-las-vegas-home-prices-dip-oct-1998-level/
According to this article, Vegas prices are back to 1998 level, which means most, if not all, of the bubble appreciation is gone.
Close to 75% has already happened in many parts of Phoenix. I’ve been looking at houses in the downtown area and they generally topped out around $300k and are now regularily selling for less than $100k. The best neighborhoods haven’t fallen that much yet, but I don’t see why they won’t before this is over.
I’d agree there’s very little chance Phoenix drops another 75% from here, but 75% from the peak has just about already happened.
“but 75% from the peak has just about already happened.”
Here in the central valley of Ca, most cities have dropped 60% or more from peak. Especially Stockton, Fresno and certain Sacramento suburbs such as Woodland, where I live. Davis with its university has fallen about 20% from the peak. It’s alot like Austin–people want to live there, for good reason, so the prices are sustained. In the other cities mentioned above, they could easily fall another 10% over the next couple of years. Then again, they may have hit bottom. Low to mid level homes priced right (around 1999 levels) sell very quickly. Those priced at 2002-and-later levels do not.
November 14, 2011 8:29 AM
50 arrests at Occupy Portland, Oakland warned
Police officers arrests a protester in the Occupy Portland encampment, Nov. 13, 2011, in, Portland, Ore. (AP)
(AP) PORTLAND, Oregon - Police drove hundreds of anti-Wall Street demonstrators from weeks-old encampments in Portland and arrested more than 50 of them, as authorities in Oakland, California, warned Occupy campers that a similar crackdown was coming.
…
Nothing like forcibly removing people from public space that they’ve occupied peacefully. Yeah, that’s the ticket. That’ll really shut down this movement.
Not.
They did it in Denver over the weekend.
Again?
I believe the answer is “yes”, although I haven’t been following as closely as I should.
The reason I said that was because it looks like Occupy wants to just keep coming back; Denver already did that once. I suspect that if all else fails, Occupy will resort to daytime protesting instead of camping out, or protest in 3-4 hour shifts. That would cut down on a lot of sanitation issues.
The Tea Baggers idea of a protest was to show up for a warm afternoon and then go back to a comfy hotel. You gotta say this for Occupy, they really do Occupy.
The teabaggers are fake, astroturf. She’s a Day Tripper! Sunday driver yeah!
They HATE government but have absolute 100% certainty in its ability to execute black and brown people. Every teabagger is a closet racist with a slave-driver, overseer, leather whip fetish.
I would like to know what exactly qualifies this space as “public”? If it’s public, then shouldn’t anybody be allowed to be there at any time? Homeless people have to sleep somewhere, right? Kinda weird that we all them “public” spaces, but then we allow the well-connected to make their own rules about who can be there, when, and why.
Here in Tucson, one of the gripes about kicking the Occupy Tucson people out of Armory Park is that the police don’t seem to have a problem with the homeless spending nights there. But a bunch of people protesting economic inequality and setting up a tent camp? Ohhhh noooo! Can’t have that!
The Occupiers are now in Veinte del Agosto Park, which is right in the heart of Downtown Tucson. I’ll be on a walk through that area this evening. Will be hollering “Solidarity!” at ‘em.
Donate a sign! I had occasion to walk through an Occupy recently, and they were woefully low on good signage. Hint: signs are a lot easier to see if are written on white posterboard and pasted to cardboard, rather than written on brown cardboard directly.
Rick Perry’s pitiful, sympathy-inducing, human moment (which probably finished off his campaign)
5:08 am November 10, 2011, by Kyle Wingfield
His presidential campaign surely hasn’t gone the way Rick Perry thought it would go when he made a late entry into the GOP nominating contest. It surely hasn’t gone the way his supporters, who donated some $17 million to his campaign in just seven weeks, thought it would go. The Texas governor almost immediately surged to the top of the polls, but a series of poor debate performances sent him on what has been a steady and unending slide.
Still, few moments during his decline could have felt as painful as the 45 seconds or so in which he drew a blank while trying to name the third federal agency he would abolish if elected president:
…
I thought the moment and everything he did afterward were pathetic.
He and most of the others are pathetic.
If eliminating three agencies were a deeply held belief he had turned into a detailed plan, he would have remembered all three.
Instead, it was a phony talking point created by a campaign consultant. He didn’t have a senior moment. He forgot his lines. Reagan, though older, always remembered is.
Why do we make people like this our leaders?
Did Perry have the benefit of a teleprompter?
Nope. Teleprompters are not allowed to anyone but Obama.
Then again, Perry doesn’t have the discipline to read from a teleprompter either.
In a debate? How would that work?
It reminds me of a Frasier episode where a guy calls in saying that he has index cards that he uses when he talks on the phone, since he locks up when talking on the phone. Frasier asks him how could that possibly work. You hear the sounds of index cards being shuffled and after a pregnant pause the caller, reading haltingly replies: Thank you Dr. Crane, you’ve been very helpful. Good bye.
“Teleprompters are not allowed to anyone but Obama.”
Yup! Republicans are forced to write talking points on their hands.
Why do we make people like this our leaders?
Because they have good hair?
Why do we make people like this our leaders?
We? got nothing to with “we” and everything to with finding front men for the 1%.
We need more actors as politician. They know how to act more natural on TV.
Real people suck on camera.
Real people are only good at saying what they really think.
Realtors Are Liars®
“Is the 2011 American National Family Income average effected by the (loss) of just x1 job of two? Can the Gov’t prevent it from rising more than 10% this year?”
“What effect does any of that have on Realtors Are Liars®?”
I’ll take my answer off-line.
From Phoenix,
Had a conversation last night poolside with a couple from Victoria. Stereotype equity locusts. They pulled $300K out of their Victoria house and today are going to buy three Phoenix houses @ $100K each. Smart folks! I thanked them for softening the collapse for us.
When you say something to people who are convinced, it just bounces off. The guy did hear me though when I said Canadians were personally indebted more than anyone….lol.
Jesus…just because those houses are cheap doesn’t mean they’re a good deal. Have fun absentee landlording, folks. Also, do you have a link for the Canadian indebtedness stat? I’d not heard that before?
Have fun absentee landlording, folks.
Tell me about it.
There’s a house up the street that was just vacated. Buncha hoodlum-y people lived there, and you should see the lowlifes that came around to help them move.
Good riddance to bad rubbish, I say. Neighborhood’s already better off without them.
The landlord for this property is in Texas, and I see that he/she has hired a cleaner-upper. The trash cans are already filled to overflowing, and it looks like one can is holding carpet padding.
I’ll bet that the whole house will need new carpet — and many other repairs and replacements. After all, the hoods didn’t look like they were treating the place kindly.
Methinks that this particular landlord may be having second thoughts about that Tucson property.
That sounds smart. When Canadian real estate collapses they will have a place to live.
Obama pisses off our #1 creditor: China main daily publication Xinhua has just released possibly the most scathing anti-America editorial via Liu Tian, to ever see the very public light of day. “For the United States, it should put its house in order before chiding others. Since the onset of U.S. subprime crisis in 2007, it was the country’s domestic economic problems that triggered a disastrous financial crisis that swept the world. Excessive spending for many years has added up debts. Meanwhile, traditional strong industries such as finance and auto were devastated by the crisis, pushing up unemployment. In face of such serious domestic problems which probably could trigger a new global economic tsunami, many U.S. politicians seemed only to care about how many votes they could get, without having a single thought about what kind of the global responsibilities the country should take. Thus it should come as no surprise that the angry “Occupy Wall Street” protesters are calling for an end to the political tricks in Washington.”
I love the posturing. China is utterly dependent on exports to the west as their impoverished working class could never afford the goods they manufacture.
It’s a sad codependent situation. China is loaded with dollars they no longer wish to hang onto. We need to borrow them to buy the junk they need to sell to us.
Of course, if we really got our house in order we would start making our own stuff, and that’s the last thing they want us to do.
Maybe they see the writing on the wall in Europe pretty clearly and know that with austerity setting in there, we are their only hope - unless they can get their impoverished majority to start buying ipods and stuff.
It would make me nervous too.
+1
We should have pissed them off long ago.
Silicon Valley job fair for people who want jobs in India
This weekend, Silicon Valley’s premier convention venue is hosting a job fair — for people who want to work in India:
A job fair at the San Jose Convention Center this weekend is focused on helping companies recruit Indian workers who may in the U.S. on a visa by informing them about the professional and economic opportunities back home.
Organizers also stressed that the job fair is also open to anyone who is interested in working in India.
Among the companies involved in the job fair are: Flipkart, an Indian online shopping company; consulting firm Accenture; and Amazon.com, which runs development centers in Indian cities.
Others include: McAfee, which is now part of Intel; SmartPlay Technologies, an Indian semiconductor firm; InfoTech Enterprises, an Indian engineering design firm; Indian manufacturing firm Jindal Steel & Power; Tata Motors; San Jose-based Synapse Design; and UST Global, an IT services firm.
http://boingboing.net/2011/11/12/silicon-valley-job-fair-for-pe.html
I sure hope these companies are getting some massive tax break. They are the job creators you know.
You do know they tax breaks for offshoring those jobs, right?
US citizens should fight back against the attempt to bring us down to the same level as Indian citizens. We should re-enact the tariff against manufactured goods imported from countries with governments that insist upon a low standard of living amongst their own workforce.
We should do that right now.
Are you some kinda dang hippie marxist socialist commie?!
Germany achieves with rules and regulations what it never could with bombs and bullets?
“The task of our generation now is to complete the economic and currency union in Europe and, step by step, create a political union,” Merkel said today in an hour-long speech to more than 1,000 CDU delegates. “It’s time for a breakthrough to a new Europe.” At the same time, she repeated her rejection of joint euro bonds.
http://www.bloomberg.com/news/2011-11-14/merkel-risks-eu-clash-over-political-union-push-to-end-europe-debt-crisis.html
That’s rich.
Hey Merkel, the EU is toast! The task of this generation is to ensure that no one ever forgets the destruction and misery caused by our parents’ foolish belief in the globalist lie. You can not have international trade without tariffs and restrictions. If the world wants to be united. If not, then it won’t. So get off your high horse and accept the fact that the banskters and multinational corporations will never, ever, ever achieve their goal of world domination.
You can install a prime minister in Greece, you can even do it in Italy, but you are still going to lose this war, you globalist bizniatch.
Do you know how many times I’ve heard the EU is toast?
Don’t bet on it. Really. Don’t. The EU represents the largest marketplace in the entire world. (approx 166 trillion anually compared the US at 16 trillion) There are MANY vested interests who will do whatever it takes to keep it that way.
Yup, and it’s toasted too.
A popular Hawaiian recording artist turned a top-security dinner of Pacific Rim leaders hosted by President Barack Obama into a subtle protest with a song in support of the “Occupy” movement.
Makana, who goes by one name, was enlisted to play a luau, or Hawaiian feast, Saturday night for leaders assembled in Obama’s birthplace Honolulu for an annual summit that is formulating plans for a Pacific free-trade pact.
But in the midst of the dinner on the resort strip Waikiki Beach, he pulled open his jacket to reveal a T-shirt that read “Occupy with Aloha,” using the Hawaiian word whose various meanings include love and peace. He then sang a marathon version of his new song “We Are The Many.”
news.yahoo.com/singer-crashes-obama-summit-occupy-song-212243354.html
While it’s not the same as Eartha Kitt’s visit to the Johnson White House, or, for that matter, The Guess Who performing the anti-American song “American Woman” during a White House concert while Nixon was President, I say good one, Makana!
Sort of undermines the constant posts, by those trying to undermine the movement, that OWS is pro Obama.
You seem to think that detractors care about facts.
Farmer Vanderwey to real estate developers who bought land at the top: “He who laughs last laughs best.”
The Wall Street Journal
ECONOMY
NOVEMBER 14, 2011
U.S. Farmers Reclaim Land From Developers
…
BY ROBBIE WHELAN
Five years into a brutal national housing downturn, raw land destined for residential development has fallen so far in value that thousands of acres across the country are being used again for agriculture.
During the fast-moving days of the housing boom, real-estate speculators in California, Arizona, Florida and other states paid top dollar to buy land from farmers and convert it from citrus groves and cotton fields to potential subdivisions.
Now, with crop prices soaring and housing in a deep slump, the economics of land investment have turned upside down.
…
The trend, if it continues, could represent a historic shift away from development in the far reaches of metropolitan areas. These properties had fueled much of the housing industry’s bubble last decade.
In September, the Vanderweys, an Arizona dairy farming family, paid $8 million for a 760 acre alfalfa and cotton field that had fallen into foreclosure in Buckeye, Ariz., about 30 miles west of Pheonix. That same parcel had been sold to real-estate speculators in 2005 for $40.8 imllion. The Vanderweys want to plant hey.
“These prices are becoming the new normal,” said Nick Vanderwey, one of four brothers who purchased the farmland. “Everything in this area is coming back into farmers’ hands.”
…
Of course what they don’t tell you is that even now land prices in farming areas make it uneconomical for farmers to purchase land and grow crops. Someone posted an article over the last month talking about the farm land bubble.
I have been waiting for this happen. I’m glad it’s happening in Arizona, but it needs to happen in California too.
I am delighted that it’s happening in Arizona!
I hope in happens in the east, where there’s, you know, rain.
“The Vanderweys want to plant hey.”
That will be a strange crop.
I guess hey is worth more than MBS these days?
Lots of farmers in Mendocino are planting “hey” too.
Oops, sorry alpha.
Grated minds and all that….
That kind of “hey” farming probably pencils out for whatever the land costs…
Hey, did you guys hear that Obama wants to start a new Free Trade Alliance, which will not include China? This is getting fun.
Will the Chinese stomp their feet, take their ball, run home to mommy, and tell on us?
Road to Nowhere
We cannot dig, build, or pave our way out of economic malaise.
http://reason.com/archives/2011/11/14/road-to-nowhere
Here is my question.
Given the technologic advances that allow a smaller and smaller # of people to produce all the product needed by a population, how can there not be a rising rate of unemployment.
If it used to take 50 people to produce all the goods needed by 100 employed people and now you only need 20. That means 30 are unemployed and consume fare less. Thus you only need to employ enough people to produce the goods needed by 70 people. That means you only need to employ 14 people, but now 36 people are unemployed and you only need to produce the goods needed by 64 people. etc etc. Of course you also have to factor in that as fewer are employed services and gov jobs will fall as well. The vicious cirle is created.
So how do you prevent the level of unemployment from rising to levels that create social unrest and overthrow gov.
1. You create artificial demand by lending money - Check we already did that and it worked for a while, but no more.
2. You create a welfare state, - Well we’ve been doing that to some extent by extending unemployment.
3. The gov creates demand or subsidizes services.
With option 2 you get an underclass with no skills that becomes dependent. Your infrastructure crumbles and everyone faces a decline in their standard of living.
At least with option 3 we improve the quality of life.
option 2 and 3 require taxing the elite. They require printing money.
Who has other solutions to this problem. Exporting to a fantasy rich country won’t cut it.
The Enron experience should be a reminder to those who feel that corporations can better manage public necessities.
My trashy, cat-owning renter neighbors have moved out under the cover of darkness! Ahhhh!!! Sweeeeeeet.
No adjacent neighbors. Check
Plenty of silence. Check
No more freaking cat. Check
So… to recap: I am basically the last giving living in a house on my block.
I am legend.
“the last giving living ”
I have no idea what that means.
It means that you are suffering from the syndrome of a person with no cat. Cats increase the intelligence of people who love them.
“Cats increase the intelligence of people who love them.”
I was starting to fall in love with you. All that science stuff… I was ready to leave my wife and family for you. And then… the cats.
*Sigh*
So heartbroken.
Muggy
I’m not a cat lover either. Especially when they belong to a neighbor and use your property to relieve themselves.
We’re looking into a Havanese or a Maltese. Good dog breeds for allergy/glaucoma issues. 20 lb fur ball. (males)
Where are you anyway?
Florida, Pinellas County, 2 blocks from the beach, zero crime and the only beach community zoned for A schools.
And it’s all mine! Lol…
Close to a liquor store, maybe?
Here is a summary
Across the street
Out of state owners
Reclusive retired guy (speedo/penny loafer guy)
House in probate
House in… foreclosure? someone mows the lawn
My side
Abandoned
Abandoned
Me
Just moved out
Very old lady/recluse
Behind me
Abandoned
Abandoned but maintained
Out of state owners
“My trashy, cat-owning renter neighbors have moved out under the cover of darkness! Ahhhh!!! Sweeeeeeet.”
Since you have all that room in the hood, maybe you can help out the prison cats.
Cats that broke into Glades prison need new homes, as prison prepares to close
By Jennifer Sorentrue Palm Beach Post Staff Writer
Posted: 6:01 p.m. Monday, Nov. 14, 2011
BELLE GLADE — Dozens of cats and kittens will soon be free from a life in prison.
Palm Beach County animal control officers are racing to remove as many as 80 cats from the state-run prison in Belle Glade, fearing they will be left without access to food and water when the facility closes its doors on Dec. 1.
The cats have taken up residence on the prison’s grounds, burrowing under fences and living around buildings. They have been fed by prisoners, despite rules that prohibit the practice, officials say.
“They are not supposed to feed them, but they do,” said Paula Bryant, a spokeswoman with the state’s Department of Correction.
The state announced it was planning to close the 1,000-inmate prison this year, and the Department of Corrections has slowly been moving prisoners to other facilities across the state. As of Monday, there were more cats than prisoners. Officials said there were just 69 inmates left.
http://www.palmbeachpost.com/news/cats-that-broke-into-glades-prison-need-new-1968618.html -
Here’s How A European Recession Would Spread To The US
James C. Cooper, The Fiscal Times | Nov. 14, 2011, 4:03 PM
James C. Cooper was the senior editor at BusinessWeek.
A key Eurozone output index fell to the lowest level in 28 months.
Spending in the Eurozone accounts for 41 percent of S&P 500 revenues.
Italy’s debt is 23 percent of all Eurozone sovereign debt.
So far, Europe’s chief problem has been its sovereign debt crisis, which Italy threatens to make evermore explosive. Now the Continent faces a new problem that will greatly complicate the first one.
Economists increasingly believe the 17-nation Eurozone is sliding into a recession that will only magnify the troubles of heavily indebted governments and heighten the risk that the U.S. and global economies may be dragged down with it.
…
Chance of 2012 U.S. recession tops 50 percent: Fed paper
People wait in line to enter a job fair in New York August 15, 2011. REUTERS/Shannon Stapleton
Mon Nov 14, 2011 5:51pm EST
(Reuters) - The European debt crisis is raising the odds of a U.S. recession, with economic contraction more likely than not by early 2012, according to research from the San Francisco Federal Reserve Bank.
While it is difficult to gauge the odds precisely, an analysis of leading U.S. economic indicators suggests a rising chance of a recession through the end of the year and into early next year, researchers at the regional Fed bank wrote on Monday. The risk of recession recedes after the second half of 2012, they found.
New governments in Greece and Italy, with fresh promises to tackle fiscal problems have in recent days, allayed investor concerns about a near-term sovereign debt default in the euro zone, but Europe’s debt crisis is far from resolved. The region is facing its worst hour since World War II, German Chancellor Angela Merkel said on Monday.
Although domestic threats to economic growth in the United States are limited, a shock from abroad could derail a fragile recovery.
The weak U.S. economy is more than usually vulnerable to turbulence beyond its borders, as the unexpectedly severe U.S. effects from Japan’s devastating earthquake in March demonstrates, the researchers said.
“A European sovereign debt default may well sink the United States back into recession,” wrote Travis Berge, Early Elias and Oscar Jorda in the latest San Francisco Fed Economic Letter. “However, if we navigate the storm through the second half of 2012, it appears that danger will recede rapidly in 2013.
…
Was this covered today?
Supreme Court Sets Historic Showdown For Health Law (Obamacare)
http://www.npr.org/blogs/health/2011/11/14/142314466/supreme-court-sets-historic-showdown-for-health-law
Republican Cain stumbles in Libya gaffe
By Mira Oberman (AFP) – 3 hours ago
CHICAGO — Republican White House hopeful Herman Cain stumbled badly in responding to a basic question on Libya, casting further doubt on his ability to revive an embattled campaign.
A five-minute video of Cain’s rambling response to a question posed by the Milwaukee Journal Sentinel’s editorial board soon rocketed across the blogosphere before being parsed by network television pundits.
“Okay, Libya,” Cain said before rolling his eyes up and pausing to gather his thoughts after being asked if he agreed or disagreed with Obama’s response to the Libyan uprising.
“President Obama supported the uprising. Correct? President Obama called for the removal of Kadhafi. Just want to make sure we’re talking about the same thing before I say, ‘yes, I agreed’ or ‘no, I didn’t agree,’” he said.
“I did not agree with the way he handled it for the following reason — no that’s a different one,” the flummoxed Republican contender continued, adding he’s “got all this stuff twirling around in my head.”
Cain’s inability to answer a direct and relatively simple foreign policy question stunned some pundits, who soon began debating whether it was a more serious gaffe than rival Rick Perry’s “oops” moment at a debate last week, when the Texas governor forgot the third federal department he wanted to shut down.
“Herman Cain-Libya answer might be worse than Rick Perry’s debate moment; Smaller stage but wow,” NBC political reporter Chuck Todd tweeted.
“So are we at the point where you can say, Herman Cain really Rick Perry’d that question,” tweeted Washington Post columnist Ezra Klein.
…
Always bear in mind:
A closely-watched pot never boils over.
Prepare For Europe Collapse Before New Year
by: James A. Kostohryz
November 11, 2011
It’s official: The European Financial Stability Facility (EFSF) plan announced at the EU summit on October 27th is essentially dead prior to arrival.
As a consequence, Angela Merkel and Nicolas Sarkozy appear to be betraying signs of throwing in the towel on the Euro project as it exists today. They appear to be actively contemplating ways to engineer an orderly breakup of the Euro.
As financial market participants gets wind of their intentions - albeit tentative - expect financial markets to accelerate the unfolding of events. The entire Euro edifice could collapse before the New Year.
…
Toast with orange marmalade.
Anger phase of the housing bubble stages of grief continues unabated.
Police dismantle Oakland camp, protesters on march
Occupy protesters evicted across U.S.
9:32pm EST 1 of 9. A demonstrator holds up his sign at City Hall plaza in Oakland, California November 14, 2011.
Credit: Reuters/Kim White
By Laird Harrison
OAKLAND, Calif | Mon Nov 14, 2011 10:13pm EST
OAKLAND, Calif (Reuters) - Police forcibly evicted protesters from an anti-Wall Street camp in downtown Oakland on Monday, setting the stage for a possible showdown with demonstrators who later marched in the street and vowed to dig in.
Throngs of protesters headed back to Frank Ogawa Plaza in the late afternoon, regrouping hours after officers in riot gear cleared the area, arresting 33 people and removing about 100 tents but avoiding clashes that marked a previous attempt to shut down the camp.
“This movement cannot end!” a speaker told the crowd as the march began outside a downtown library. Police largely stood back, at one point stopping cross-traffic for the marchers who authorities said could return to the plaza but not camp there.
Recent unrest surrounding the Oakland encampment has helped rally supporters of Occupy Wall Street nationwide, a movement launched in New York in September to protest against economic inequality and excesses of the financial system.
The move to clear out Ogawa Plaza, after nearly a month of indecision on how to handle the Oakland protests, came days after a fatal shooting near the encampment fueled renewed pressure on the city to close it down.
Acting Oakland Police Chief Howard Jordan said the shooting death of Kayode Ola Foster, 25, on Thursday left him no choice but to again dismantle the encampment.
“We had to take action. I tried to do it the next day (following the shooting) but I didn’t have the resources ready. I was going to go all in,” he said.
…
Big plans and little brains don’t mix.
Does Perry even know what the three branches of the federal government are?
November 14, 2011 10:34 PM
Perry previews plans to “uproot” federal government
By Rebecca Kaplan
Topics Campaign 2012
Republican presidential candidate Texas Gov. Rick Perry waits to speak at the Scott County Republican Party’s Ronald Reagan Dinner, Nov. 14, 2011, in Bettendorf, Iowa.
(Credit: AP Photo/Charlie Neibergall)
BETTENDORF, Iowa — Texas Gov. Rick Perry pledged to remake large swaths of the federal government as he previewed a government reform speech he is slated to deliver in Bettendorf on Tuesday.
“Tomorrow I’m going to unveil a plan to uproot all three branches of government and overhaul Washington. It touches every branch of government because they each have contributed to the demise of America,” Perry said.
Among his targets for change: lifetime federal judges “who arrogantly rewrite our laws from the bench,” the permanent bureaucracy of the executive branch which “thwarts the will of the American people to advance a big government agenda,” and a Congress that Perry says “is in Washington too much.”
The governor - whose verbal gaffes have caused him to drop in recent polls — told his audience of about 250 Scott County Republicans that he would “fight to end the IRS as you know it today.” The tax collection agency is a frequent target of his on the trail; he has called it the “taxpayer harassment agency” in Des Moines just two weeks ago.
…
“…Republican Party’s Ronald Reagan Dinner…”
Ronald Mommy? Reagan decided to take this country on a deficit spending trip from which there was no return, and he is revered like a savior to this day — such clarity of blindness.
Staring into the abyss
The euro crisis might wake Europe up. But more likely, argues Edward Carr, it will lead to compromise and decline
Nov 12th 2011 | from the print edition
WHEN BRITAIN ABANDONED the gold standard in 1931, it was not only forsaking a system for managing the currency but also acknowledging that it could no longer bear the mantle of empire. When America broke the dollar’s peg with gold in 1971, it ushered in a decline that continued until Paul Volcker re-established confidence in the currency in the early 1980s. As Joseph Schumpeter, the great Austrian economist, once wrote: “The monetary system of a people reflects everything that the nation wants, does, suffers, is.”
In the same way, the crisis that has engulfed the European Union (EU) is about much more than the euro. As government bonds, share prices and banks swoon and global recession knocks on the door, the first fear is of financial and economic collapse. But to understand what is happening to the currency you also need to look at what is happening to Europe.
The euro will not be safe until Europe answers some fundamental questions that it has run away from for many years. At their root is how its nations should respond to a world that is rapidly changing around them. What will it do as globalisation strips the West of the monopoly over the technologies that have made it rich, and an ageing Europe starts to look increasingly like the western peninsula of a resurgent Asia?
…
What will they do? They will stop allowing the corporatists to rule the world. Worried about your IP being ripped off by Asians? Don’t send your blueprints to China. Worried about the decline of the middle class? Don’t send your wages to China. Worried about bankers literally kicking your elected leaders out of office and taking over? Don’t pay your debts!
The new housing-relief plan
Underwater rescue
A plan to ease mortgage refinancing will have modest benefits, at best
Oct 29th 2011 | WASHINGTON, DC | from the print edition
..SOMETIMES the best stimulus is not the biggest, but the one that’s possible. While Barack Obama has been haranguing Congress, without success, to pass his $447 billion stimulus plan, a more modest effort paid off on October 24th when the Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac, the two big mortgage-finance companies, made it easier for borrowers to lower the rates they pay on their mortgages.
…
Critics question the programme’s potential to stimulate the economy, when the increased cashflow of borrowers will come at the expense of the investors who own the mortgages. But the owners are unlikely to reduce their spending by as much as the borrowers increase theirs, especially since Fannie, Freddie and the Federal Reserve are among the largest owners. Even so, the benefits will be modest. The FHFA reckons the number of beneficiaries could rise by about 1m. Assuming savings of $2,500 each, that makes just $2.5 billion in additional cash, barely noticeable in a $15 trillion economy. Nor will it do anything to stimulate house-buying.
Other steps will be necessary to rejuvenate housing. Federal Reserve officials have hinted in recent days that they may resume large-scale purchases of mortgage-backed securities, paid for with newly printed money. That would push mortgage rates down further. Meanwhile, states are trying to negotiate a settlement with banks over flawed mortgage servicing and foreclosure practices. A deal would compel banks to help underwater homeowners avoid foreclosure. Until then, every little bit helps.
MARKETS
NOVEMBER 15, 2011
Europe’s Economy Weakens, Adding to Fears
By BRIAN BLACKSTONE
FRANKFURT—Europe’s fragile economy showed deepening distress as industrial production dropped across the euro zone, dimming hopes the region’s leaders will be to resolve a debt crisis that German Chancellor Angela Merkel on Monday called Europe’s “most difficult hours since World War II.”
Italy was forced to pay its highest interest rate since the euro’s creation to sell five-year bonds—a sign of skepticism that new governments in Italy and Greece will be able to simultaneously boost economic growth and reduce high public-debt levels.
European stocks fell, as did the euro, amid concern that the euro bloc may slump into recession at the end of this year. Third-quarter gross domestic product figures due Tuesday for the euro zone, France and Germany, among others, are expected to show only slight growth.
Industrial production in the euro zone plunged 2% in September from August, the steepest slide since February 2009, according to the European Union’s statistics agency. The decline stretched from the weak periphery of Spain, Italy and Portugal to powerhouses such as Germany, France and the Netherlands. Compared with a year ago, output rose just 2.2%—the weakest gain in nearly two years. The data suggest “the euro-zone will soon fall back into another fairly deep recession,” said Ben May, economist at consultancy Capital Economics.
…
+1, V.
Thank you.