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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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I posted this last night and checked it B4 I satrt out on what should be a really sh#tty Friday. Well thanks to Muggy I am starting this really sh#tty Friday with a smile.
Comment by Muggy
2011-11-17 19:55:57
“The three- to four-year estimate I have for the U.S. is just not going to apply (in Florida). It’s going to be much longer,”
“Great news since I am an invincible super hero that will live… to infinity and beyond!”
Longer recovery forecast for Florida
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 8:08 p.m. Thursday, Nov. 17, 2011
With 24.5 percent of the nation’s foreclosures, Florida remained in the lead this week for housing woe - an unenviable position it will hold long after other regions of the country recover, economists said Thursday.
A Mortgage Bankers Association report on home loan delinquencies and foreclosures during the third quarter of this year found a dip in the percentage of late loans nationally, leading some analysts to predict an overall economic lift within the next three to four years.
But with Florida’s large inventory of seriously delinquent loans and foreclosures - 18.8 percent of all mortgages - they hesitated to predict a get-well timeline for the Sunshine State.
“The three- to four-year estimate I have for the U.S. is just not going to apply (in Florida). It’s going to be much longer,” said Mike Fratantoni, the association’s vice president of research and economics.
http://www.palmbeachpost.com/money/real-estate/longer-recovery-forecast-for-florida-1976929.html -
I would predict that Florida will clear way before, say NY, and that NY will clear way before DC.
See ya there Muggy!
I’m going to 2nd that prediction, Blue Skye.
I’ve realized no matter what town (with the exception of inner Syracuse) I look at the prices /sq foot of all but the most spectacular homes are the same no matter what the commute time to jobs are, no matter how the school districts rate, no matter how badly their job were hit or at risk by/of layoffs, no matter what the median income of that town is and incomes to vary widely.
That signals to me that prices are not in sync with income but are in sync w/available credit. With a quarter of the country’s acknowledged foreclosures (vs our local shadow stuff) there’s more pressure in Florida than in NY to shake out the status quo.
That signals to me that prices are not in sync with income but are in sync w/available credit.
Nicely stated.
Yes, and my blood and sweat stained cash are no match for easy credit.
I think it was you Carl, who said you’d live in the rented fringe for the rest of your life before competing with fool’s credit.
Probably…it’s hard to remember sometimes. The trailer park felt strange at first, but no regrets so far. I’d rather stay here than be a slave to the banksters. When I can pay cash for something better, then we’ll see. For now it’s impossible for me to pay cash for anything better in Boulder.
For now it’s impossible for me to pay cash for anything better in Boulder.
How about Greeley?
Don’t know, I haven’t shopped there.
Doesn’t matter, though, it’s too far from work. That’s another thing, I’ll only buy if it’s closer to work or the coolest thing I’ve ever seen.
When I lived in the midwest, there was a surprising number of trailer parks just outside the farthest of the suburban towns. Outside the suburban towns, the trailer parks were mixed in with farms, and mixed in with packed bubble housing.
It was always fun to drive past and see Tyvek rowhomes not a mile from a trailer park. And the trailer parks looked like far more inviting places to live.
Yeah, that’s kind of what led to this. We were looking at rental homes on the other side of the fence. More room for our stuff, but nothing spectacular. The usual 1500-2500 sq. ft. subdivision homes except in Boulder they go for about 400k in that location. By far the best deal we could find was a rent of $1500/mo. The view out of the bedroom was of the trailer park over the backyard fence (which was only a few feet from the back door). I started thinking…”throwing away” 1500/mo rent or just pay 40k cash for a decent doublewide and $200/mo lot rent (special deal, market rate is $500/mo). Less room for stuff, but that’s a pretty good ROI on the 40k. Especially considering I got a 4k discount thanks to Obama and will probably get most of the 40k back when it’s time to sell.
Admittedly, I do not know much about trailer parks, but from what I have heard, and seen when I have driven through them on the rare occasion, they are illegal alien meccas.
Which, I forgot to add, usually equates to gangbanger central. No thanks.
It’s different here. No way I’d live around gangsters, on either side of the fence.
So, what inning is it? Per MSNBC, it is the half-way point of the foreclosure boom, which will go on for four more years.
http://bottomline.msnbc.msn.com/_news/2011/11/17/8859967-foreclosure-crisis-only-about-halfway-over
“The delinquency rate –- the number of borrowers who have fallen behind on their payments — fell in the third quarter to the lowest level in nearly three years. For all loans, the rate fell to 7.99 percent from 8.44 percent in the second quarter. That’s down from 9.13 percent a year ago and the lowest level since the fourth quarter of 2008.”
That still seems a little high to me. That isn’t the share of borrowers who will be delinquent at any point. It is the share delinquent at present.
I believe it is the top of the third inning. The Greek default (that cannot be called a default) is the first line drive.
Where is Neal when you need some popcorn? He must have bought a house long ago.
Don’t call it a default — it’s just a haircut.
Doom and Gloom: Research Firm Says 65% Chance of Banking Crisis by Thanksgiving
Posted 11/15/2011 7:06 PM from Kapitall in Investing, Investing Ideas, Banking and Loans, Stocks
(Written by Alexander Crawford. Institutional data sourced from Fidelity.)
Think Tank Exclusive Analysis just released a grim set of predictions in which they believe there is a 65% chance of a banking crisis between November 23-26 that involves a Greek default and Euro exit, as well as a run on the Italian banking system. At this point, they only attribute 25% likelihood to Europe “muddling though” and 10% to actually resolving the crisis.
The predictions come from a scenario modeling exercise in which they tested various assumptions on the future of the European debt crisis.
The Worst, and Most Likely, Case
Under their most likely outcome (via CNBC), the governments of Greece and Portugal will both soon collapse because of inability to handle the debt crisis. Germany will become opposed to handing out more funds to the EFSF and parliament will actually reduce the money available to the fund.
As a result, China and the other BRICs will signal that they won’t support the bailout fund. The US and the UK will refuse to provide funding via the IMF. The EFSF will then turn to the ECB to print the necessary bailout money, which they’ll refuse to do. This failure will cause European banks to refuse the 50% haircut on Greek debt. The IMF and ECB will suspend payments to Greece.
Between November 18-22, French sovereign debt will be downgraded to AA, causing the interbank lending market to freeze. Depositors in Spain and Italy will create bank runs in fear of banking crises in their own countries, causing “a collapse of the interbank credit market as banks know that most of their counterparts are at risk.” At which point Greece defaults.
Between November 23-26, Greece will leave the euro “to print money and rescue its banking sector. The new currency falls quickly and depositors lose out as their investments are converted into the new local currency.” (via CNBC)
“The government default on the sovereign debt and the banks default on their foreign debt, which causes a banking crisis across Europe. Italian bond yields rise and exceed 7 percent and the country faces bank runs, in face of which the government freezes deposits and defaults on the sovereign debt”.
…
Is this eurobreakup by Thanksgiving scenario unduly pessimistic, or am I just an eternal optimist?
Good rule of thumb to always remember:
A closely-watched pot (almost) never boils over (unless it is subjected to an unsustainable pressure-temperature combination for an extended period: PV = nRT still applies).
The Financial Times
November 18, 2011 7:54 pm
Investors move to price in euro split
By Richard Milne and David Oakley
The eurozone infection this week moved decisively from the periphery of the continent to its core.
Many investors are no longer just fretting about the possibility of a default here or there. They are now starting to worry about the chances of the euro itself breaking up. Bond markets may be putting as high a probability as 25 per cent on a split, according to Citi analysts.
The dramatic ratcheting up in the seriousness of the crisis could be seen in the eurozone’s triple A countries. France and Austria both saw their spreads over 10-year German Bunds reach records for the euro-era and in Paris’s case top 200 basis points, a level Italy was at just four months ago.
The Netherlands and Finland, previously classed as in the same safe category as Germany, saw their premiums over Berlin rise to their highest levels excepting a few weeks following the collapse of Lehman Brothers.
Government bond investors, a conservative bunch used only to dealing with interest rate risk, are now having to consider default possibilities for every eurozone country save for Germany. “Everything outside Germany trades as a credit,” says Nick Gartside of JPMorgan Asset Management.
Worryingly, however, even Germany is showing some slight signs of being caught up in the burgeoning contagion. Its bond yields tend to move in the opposite direction of Italy’s, a sign of Berlin’s haven status. But, according to Evolution Securities, that has been less true recently.
Between mid-June and the end of August, German yields moved in the opposing direction on 86 per cent of days. But since the start of September that has dropped to 69 per cent.
“Things will only change in the bond markets when Germany is truly contaminated. There are small signs that this could be beginning,” says one large French investor.
…
The Greek default (that cannot be called a default) is the first line drive.
Fair ball? Or foul ball? Did it get out of the infield or did the pitcher make an amazing catch?
Come on, man. Details for all the baseball fans!
You can’t know what inning it is unless you define when the game started and what the end of the game looks like.
A simple chartist viwe shows on big leg down and a stall/weak rise in response. Poised for second leg down. I believe there will be a series of stairsteps. Describe the end of the game? LOL.
The word from economists is that housing won’t bottom out until 2015. Not recovery, bottoming out. This is part of an excellent (as always) story on PBS Tuesday about the Fannie and Freddie bonuses.
————-
NICK TIMIRAOS (WSJ): And so, historically, Fannie and Freddie have always had a relatively large share of the market, certainly not as large as today. But the fact that you have federal agencies, Fannie and Freddie, all accounting for nine in 10 new mortgages today is really a reflection that nobody else is out there making loans on the kind of terms that would be enough to sustain a housing recovery.
Without Fannie and Freddie, the Federal Housing Administration in the market, we wouldn’t be seeing nearly the depressed level of sales that we had. It would be much, much worse. And so this is one of the challenges here. Congress likes to go on and on about the bonuses. And, certainly, there is a lot of unfairness here.
Both of the executives conceded that today. But Congress still has not decided what to do with Fannie Mae and Freddie Mac. And so you have this regulator DeMarco who’s really in a tough position, because Congress and the White House won’t tell him what to do. They won’t show him, here’s where we’re going to go, here’s what’s going to happen with Fannie and Freddie.
Instead, he just has to kind of stay in this holding pattern, running these companies, trying to prevent them from losing more money. And you end up with situations that are very awkward, like this one…
…JOSH BOAK (Politico): Well, like Nick said, these companies are really in a holding pattern.
And what a lot of people are telling me is, we don’t expect any progress in terms of meaningful reforms. We don’t expect the housing market to bottom out until 2015. And a lot of these decisions are really going to be made after the 2012 election.
So we have got at least another year of this kind of dialogue and conversation and heated debate in D.C.
————-
So there it is… Fannie and Freddie control the market because banks aren’t securitizing anything on their own. Housing won’t bottom until 2015. Fannie and Freddie are being blamed for everything, but they can’t do much for another year.
And yet, there they are with the “modifications” again, with no details on what they will modify to.
Did the article mention longstanding plans to disconnect the zombie GSEs’ feeding tubes?
Sen. Corker Introduces GSE ‘Wind Down’ Bill
Wednesday, November 9, 2011
By Brian Collins
Sen. Bob Corker, R-Tenn., Wednesday introduced legislation that would reduce Fannie Mae and Freddie Mac’s share of the mortgage market by “at least 10%” per year.
The bill also calls for a reduction in the credit guarantee the GSEs provide MBS investors to 90%. This 10% haircut on timely payment of interest and principal on their mortgage-backed securities would go into effect six months after enactment of the Corker bill.
“We are no closer to transitioning Fannie Mae and Freddie Mac off government life support than the day the firms were taken under direct government control in 2008,” Sen. Corker said.
The Tennessee senator wants his bill to be a “marker,” starting the legislative process to gradually reduce the GSEs’ footprint over a 10-year period.
…
I admit I couldn’t read this entirely. I stopped at the BS that sales would be worse if GSE’s weren’t propping up the market. Let prices fall to affordable levels and we will see a return of sales. Right now we’re only feeding the how-much-a-month-don’t-care-about-debt crowd.
Without Fannie and Freddie, the Federal Housing Administration in the market, we wouldn’t be seeing nearly the depressed level of sales that we had. It would be much, much worse.
I call BS on that one. Just a few steps away from the Arizona Slim Ranch is a foreclosed house. It’s being offered by Freddie for $98k.
IMHO, that’s at least $30k to high. Place has been a rental for many years, and it needs w-o-r-k. What’s more, it’s near one of Tucson’s busiest north-south streets.
Methinks that F&F are playing the wishing price game with a lot of properties. And the public isn’t playing along.
I didn’t know Rio wrote for the Herald !
Occupy can strike the tents – it made its point
Occupy Wall Street has already won, whether they and their Dewey Square cousins lose their encampments or nor.
Detractors can ridicule the “dirty hippies” and the “barnyard” smells, though Dewey Square smells quite fine to me. They can make hay about crack deals and Xanax busts and who did or didn’t burst into the Boylston Street Burger King screaming Saturday night.
Those are just distractions, see, which detractors hope keep you so worked up that you won’t see the big picture. That is: The system’s been rigged for 30 years in favor of the wealthy at the expense of you in the middle class. You’re the ones working longer hours for lower wages but paying higher and higher taxes so both Democrats and Republicans can get campaign money and do big favors for big banks, big corporations, big insurance, big unions and big utilities (remember the power outages).
http://www.bostonherald.com/news/columnists/view/2011_1117occupy_can_strike_the_tents__it_made_its_point/srvc=home&position=0
Should banking exist as a service industry, or is America better served by bankers and other buccaneer financiers whose primary objective is to rape the customers in any way that is borderline legal (i.e. which can be defended against the currently weak rule of law in the financial system)?
I personally believe that reestablishing a rule of law in the financial sector and restoring banking as a client-oriented service industry rather than a rapacious parasitical behemoth would go far towards satisfying OWS protestors.
Insight: The Wall Street disconnect
NEW YORK | Fri Nov 18, 2011 8:40am EST
(Reuters) - It was a telling moment at the height of the Occupy Wall Street protests.
John Paulson, the hedge-fund trader who famously made billions betting on the collapse of the housing market, was threatened by the demonstrators with a march on his Upper East Side home in New York last month. Paulson responded by putting out a press release that described his $28 billion, 120-person fund as an exemplar of the American Dream: “Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City.”
Other captains of finance like to portray themselves as humble entrepreneurs. One owner of a multi-billion-dollar hedge fund grumbled in the midst of the financial crisis that he has to worry not only about making trading decisions but also about “all the hassles that come with running a small business.”
With U.S. cities moving this week to crack down on Occupy Wall Street encampments - including the one in New York’s Zuccotti Park - the staying power of the movement is in question. Whatever its future, it’s clear that so far, the Occupiers haven’t changed many minds on Wall Street over blame for the country’s hard times. The cognitive disconnect between the protesters and the captains of finance is alive and well.
David Mooney, chief executive officer of Alliant Credit Union in Chicago, one of the nation’s larger credit unions, used to work at a one of Wall Street’s top banks, JPMorgan Chase. There’s a vast cultural gap between Wall Street and his new world, he says: Old friends from the Street, he says, now jokingly refer to him as a “socialist.” A credit union is supposed to be run in the interests of all members, he says, while commercial bankers tend to see consumers as customers who can be “exploited” by layering on more fees.
Says Mooney: “I don’t say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization.”
…
“I don’t say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization.”
And exploiting the banking organizations for executive pay is the primary purpose of those who run it, so the shareholders don’t even make out on the deal.
Wither the eurozone?
18 November 2011 Last updated at 08:21 ET
Stephanie Flanders
Economics editor
Germany, the ECB and the markets: Time to choose
Is the crisis in the eurozone the international equivalent of a bank run - an irrational market panic? Or is there something more fundamental going on - a moment of truth for countries that have borrowed too much, for too long?
This is the basic question now hanging over European policymakers, as they try to forge a common response to the market mayhem of the past few weeks. The problem, as I discussed on the Today programme this morning, is that Germany’s answer is different from most of the others.
Like most politicians on the Continent, Angela Merkel thinks markets are irrational creatures. But in this case, the German Chancellor thinks investor pressure on countries like Spain and Italy - even France - is at least partly justified.
That is why she keeps saying that countries are masters of their own fate. They just need to try harder.
Put it another way: it might be contagion that we’re seeing, but if the disease is spreading, that only makes it more important, in Germany’s view, for governments to take their medicine.
Increasingly, other policymakers - inside and outside of the eurozone - take a different view. They look at rising government borrowing costs - bond yields - for the likes of France and, especially, the Netherlands and Austria (whose economies, if anything, are stronger than Germany’s ) and they see a market panic, which has less and less to do with the economic fundamentals.
Of course, even a panic can be rational. If you think the very existence of the eurozone is now in question, then the funding pressure we are seeing across Europe - not just governments but also, as the Wall Street Journal and the FT report today, banks and major companies - is entirely rational. It is also prudent.
…
Would now be a good time to buy the dip in stock prices?
Market Outlook: That Cat Looks Dead After All
November 18, 2011
There was plenty of debate at the beginning of this month over October’s outrageous stock market rally, and whether it marked the reinvigoration of the cyclical bull market of 2009-2011 or was, in classical Wall Street parlance, merely a “dead cat bounce” following the August-September debacle in risk assets.
After shaking off the whiplash from watching stock markets post steep monthly losses followed by a double digit monthly gain, we came down on the side of the dead cat. Although the U.S. economy has shown some pleasantly surprising strength of late, credit markets have clearly been signalling that:
* Europe is in serious trouble and poses severe risks to both the global financial system and the world economy.
* China may be in serious trouble, which poses risks to its trading partners (especially net exporters to China), industrial commodity prices, and the world economy.
* Longer-term expectations for the U.S. (its economy and stock markets) have gotten well ahead of themselves.
…
no christmas rally ? but radio stations are playing christmas music already
Do ECB bond purchases flow straight to Wall Street?
Schönen dank.
US Stock Futures Rally as ECB Purchases Bonds – QQQ, SIRI, MSFT, MU
Posted on November 18, 2011 by Brian Callom
US stock futures indicated a higher opening on Friday, accompanied by hopes Europe’s leaders and the European Central Bank were planning to improve measures to stem the debt crisis hitting the region.
Futures for the S&P 500 index gainjed 0.3% to 1,218.20, whereas those for the Dow Jones Industrial Average rose 0.2% to 11,763.
…
Are any mansions selling at auction near where you live?
HOMES
NOVEMBER 18, 2011
High-End Hits the Auction Block
Long associated with desperate sellers and foreclosed homes, auctions are now selling mansions and luxury estates.
By CANDACE JACKSON
Our estates which are really just other people’s dream homes sit and sit. However we’ve had several gigantic 6000 sq foot+ homes go up in the past year.
I’m sure many HBB posters recall that Calabasas was where Countrywide was headquartered.
Calabasas, Calif.
Last Friday, about 60 people gathered at a 10,300-square-foot French Chateau-style home in a gated community of this wealthy suburb of Los Angeles. Nibbling on fruit salad and croissants, the visitors meandered through the home’s large kitchen, checked out the view of the rolling hills or peeked into the movie theater with stadium seating while it played “Pretty in Pink.”
They had all gathered to see this seven-bedroom, seven-bath mansion, which was rented by singer Britney Spears between roughly 2008 and 2010, sell to the highest bidder. The home had previously been on the market for as much as $10.8 million; bidding would start at $4.5 million.
Does it really mean anything to say “The Razor is a $45 million dollar home” if no buyer will touch it at that price? Why couldn’t the lazy WSJ reporter have bothered to look up the current listing and learn that The Razor is now a $32 million dollar luxury home?
…
As the housing slump drags on, the carrying costs of waiting out the market have become onerous, even for the wealthiest. A seller who put a home on the market in 2009 hoping that a turnaround was on the horizon may now be realizing that it could take several years or more for the market to rebound. Taxes on a $10 million or $20 million home can run into the hundreds of thousands of dollars a year, in addition to staffing, landscaping and other upkeep. The ultra high-end of the market is particularly vulnerable: As of September, houses priced at $10 million and above declined nearly 9.5% in value from last year, according to Zillow, the online housing tracker, compared to a 4.4% decline overall.
“Eventually, even the people who have unlimited means will throw in the towel at some point,” said George Graham, the CEO of Concierge Auctions.
Some brokers warn that when a well-known mansion or estate fails to sell at auction, it can become tarnished, making it harder to sell in the future. “If you have all that hype and then it doesn’t sell, then you’ve got egg on your face,” said Jeffrey Hyland, president of Beverly Hills-based real-estate firm Hilton & Hyland.
Bob Hurwitz, a longtime Southern California broker who recently tried unsuccessfully to auction off a $45 million sculptural-style home in La Jolla known as “the Razor,” said he’s concluded the process doesn’t benefit sellers, who assume all the risk by paying marketing fees up front. (Fees can range anywhere from a couple thousand dollars to upwards of $150,000 for ultra high-end homes.) He said auctions can also turn off potential buyers who don’t want to pay an additional 8% to 12% in premiums after the sale, which can amount to a million dollars or more for an expensive home. “It just doesn’t make sense,” he said. Laura Brady, of Concierge Auctions, said most buyers are aware that all real-estate transactions involve fees, and the premiums are included in auction-sale prices, “just like real estate agent’s fees” are in a traditional sale.
…
rented by singer Britney Spears between roughly 2008 and 2010
She actually did something right???
Perhaps “The Razor” is actually just a $19,388,000 home, or even $1,200,000 or less? Isn’t the MLS listing price generally higher than market value? Otherwise, the home would not languish on the market, unsold for month after month.
For Sale (MLS-listed)
$19,388,000
9826 La Jolla Farms Way La Jolla, CA 92037
Beds: 4
Baths: 7
Sq. Ft.: 11,000
$/Sq. Ft.: $1,763
Lot Size: 0.77 Acres
Property Type: Residential, Detached
Style: Contemporary
Stories: 4
View: Mountains/Hills, Ocean, Panoramic, Other (See Remarks)
Year Built: 2007
Community: La Jolla
County: San Diego
MLS#: 110032833
Source: SANDICOR
Status: Active
Active
This listing is for sale and the sellers are accepting offers.
more info
On Redfin: 165 days
This “one of a kind” architectural masterpiece in La Jolla, CA. is a unique trophy property designed by one of Architectural Digests top 100 designers, Wallace A. Cunningham. Set behind gates & constructed from white polished concrete & floor-to-ceiling glass this magnum opus surpasses the boundaries of ordinary living & commands amazing uninterrupted views of the ocean, open sky & natural landscape. Resting high above Torrey Pines State Reserve, this 11,000 sq. ft. trophy showcases:SEE SUPP. FOR AMENITIES!This 11,000 sq. ft. trophy showcases 4 beds/6 baths, theater, black tiled Infinity pool, 2- level guest house, 8 car garage & features private access to Blacks Beach. Close proximity to world class amenities:only 15 minutes from the international airport. Next to Del Mar Thoroughbred race track and it borders to famous Torrey Pine Preserve & golf course. Impeccable design, unparalleled quality & paramount location make this home a true piece of art.
————————————————————————-
Property History for 9826 La Jolla Farms Way
Date Event Price Appreciation Source
Sep 06, 2011 Relisted (Active) – – SANDICOR #110032833
Sep 03, 2011 Delisted (Expired) – – SANDICOR #110032833
Jun 06, 2011 Listed (Active) $19,388,000 – SANDICOR #110032833
Apr 22, 2011 Price Changed $19,388,000 – TheMLS #08-277145
Feb 12, 2010 Price Changed $25,000,000 – TheMLS #08-277145
Jun 23, 2009 Price Changed $28,500,000 – TheMLS #08-277145
Aug 30, 2008 Price Changed $32,000,000 – TheMLS #08-277145
May 03, 2008 Listed $39,000,000 – TheMLS #08-277145
Jun 19, 1998 Sold (Public Records) $1,200,000 5.5%/yr Public Records
Jun 13, 1988 Sold (Public Records) $700,000 – Public Records
A trophy house. Sitting on the shelf gathering dust. Let’s turn it into an attraction, like Hearst Castle.
I’m sure many HBB posters recall that Calabasas was where Countrywide was headquartered.”
Sure its down the road from where I work. Countrywide bid up all the prime office space around here back in the day
Ca had many of the biggest mortgage subprime lenders. Most of the new jobs were related to Home selling. all gone
all gone
Gone from the marque $ignage at Angel’s MLB $tadium as well.
Now it’s Der Wienerschnitzel & Vita-Water.
Recall that the coastal mansions in Newport, Rhode Island became too expensive for their owners to maintain. So, if they couldn’t maintain ‘em, how would things be different nowadays?
I guess it might not be too bad if you could snap up a “$45,000,000 mansion” in La Jolla for, say, $1,200,000 (the 1998 price)…
Here’s a topic: for all the cries of “socialism,” is income redistribution by the government now merely replicating, or even exacerbating, the inequalities in the rest of the society?
Consider Exhibit A: as those in Congress debate tax cuts for the rich, and slashing food stamps for the poor and retirement benefits for younger generations in the middle class, it also votes to increase the maximum value of FHA mortgages from $625,500 to $730,000.
Here’s a topic: for all the cries of “socialism,” is income redistribution by the government now merely replicating, or even exacerbating, the inequalities in the rest of the society?
My country went “Socialist”, Blew Trillions on Banks and all I got was this Chinese-made T-Shirt
My country went “Socialist”, Blew Trillions on Banks and all I got was this Chinese-made T-Shirt
“Hurry! Hurry! Hurry! or this whole $ucker could go down!”
“Heheeheeeeheeehee…”
You all who want socialism. Let’s see you first redistribute all your wealth to people who have less than you. Then let’s discuss the merits of socialism.
Oh I get it, so when the nice people in the middle class give away their money, the selfish rich will say, see, it doesn’t work. (while they keep their own millions and employ the former middle class as semi-slaves.) F it.
De facto U.S. federal economic policy:
“Socialism” for large banks and corporations; austerity for households and small firms.
Households are not even allowed to be austere. Remember yesterday’s article about the woman who tried to save up a few pennies but the report painted her as “depriving” the economy?
The “economy” does not run on savings. It runs on borrowing. Debt provides the income stream to the “economy” which sits above us.
So far, the banksters are not putting guns to peoples’ heads and forcing them to spend money (not considering bazookas in the pocket).
I’d hate to see what that reporter would write about me.
Somehow I don’t think socialism is the right word for concentrationg wealth in the large banks. Some other word might apply better.
“Socialism” means something different than socialism w/o parentheses.
Like “Reform”?
I think OWS is just the harbinger of things to come. The eveolving trend in Income inequality just cannot continue in its current form. It is pretty much how the capitalist model plays out. Its useful shelf life in our country is limited. What will it evolve into? Socialism? Probably not. The other alternative, in my view, is fascism. And that seems to be the path in which we are heading. Crony-capitalism, into which our system has beligerantly evolved, usually evolves into one of the two. From what I’ve read, at least.
“It is pretty much how the capitalist model plays out.”
What was to set our system apart was it’s foundation of the rule of law and that of/by/for the people stuff. It is the rule of law that has failed us, through capture of the legislators and their regulators by the monied power centers.
Weekend topic
If you are 50+ years old should you take out a 30 year mortgage?
Or just say screw it and rent until you can do the oil city plan ?
15 year mortgage?
15 year fixed 1000 more a month
Estimated Monthly Payment
Price:Down payment:% ($97,800)
30 Year Fixed:3.869% $1,838 /mo
15 Year Fixed 3.222% $2,744 /mo
5/1 ARM: 2.719% $1,591 /mo .
How much is the rent that payment would be replacing?
2200 per month
RENT RENT RENT RENT
Here’s why:
1. Your $1838 does not include full PITI,so your howmuchamonth is about the same rent v. buy. Not worth the closing costs and hassle to buy.
2. You’re in CA. Horrible state to tie yourself down to. Nonstop disasters of every kind from fires/mudslides/quakes to insane firefighter pensions to La Reconquesta. IMO all Californians should have an escape plan.
3. Prices in CA have more to fall. Even if you don’t go underwater, you’re in danger of losing that down payment.
4: Biggest Reason: Do you really have almost $100K in cash? Dude, that’s almost enough to go Oil City tomorrow. You can buy a livable house on a few acres in a heartbeat, and still have a cash cushion. Depending on your income stream, even with your high rent, you could probably put another $50-60K away in a few years and go Oil City with even more cushion.
5. Other things to consider: Do you have pensions or a good 401K coming? If so, you can do Oil City sooner. You’ll only have to sustain yourself for 10-15 years, and then live as a comfy retiree. But remember you’ll need a real cushion for medical or cars if things go south on you.
6. This is assuming you truly want to do the Oil City Plan. For example, I joke about it, but I know that I have 20 years of good-pay job left in me, and I don’t want to give it up just to pick a few apples. Honestly, the money is more valuable. (and my area is full of you-pick farms which is almost as good as growing your own.)
“RENT RENT RENT RENT”
There is some threshold level of purchase price at which owning is better than renting, but the chances are slim you will be able to buy a home at this level if you are located in a desirable location anywhere near the coast.
IMO, no! No 30 year mortgage for a 50 year old! 15 years ok. But you would have to do that right away. Ask yourself if you really want to pay mortgage when you start being eligible for full social security (age 67). So after 52 you would then consider at most a ten year mortgage.
Shuck it all then and pay with cash. You know very well there are good deals on houses in Tucson (I would say Phoenix, but Tucson has much cleaner air and if you aim toward southeast of Tucson, such as Vail, you would have an average of eight to ten degrees cooler weather than in Phoenix all year.
I work with a 70-something guy who bought a huge house in the Atlanta area near the top of the bubble. He’s paying $4,000 per month PITI. I “pity” him for the PITI. But anyone over 67 should not have ever put themselves in a position to pay any mortgage after age 67.
Freudian slip. I accidently set my screen name to my search key. Not a bad screen name, IMO.
“See ya there Muggy!”
I always suggest this, but: “How does the bubble changed your medium-to-long-term plans?”
Is it somehow surprising that the U.S. birth rate drops along with the economy?
The Financial Times
November 18, 2011 6:57 pm
US birth rate falls 3 per cent
By Anna Fifield in Washington
The US birth rate fell by 3 per cent last year, the third consecutive decline, as economic worries led women to delay having babies.
With 4m births in 2010, the rate now stands at 66.2 births for every 1,000 women aged between 15 and 44, its lowest level since 1987, the Centers for Disease Control and Prevention reported.
Analysts suggested it was the recession that was causing the decline, as the economy faltered and would-be parents contemplated the cost of having children.
“There is research that shows that there is a link between the economy and births,” said Brady Hamilton of the National Center for Health Statistics.
Indeed, the trend in the birth rate closely follows the economic ups and downs of recent years. The number of births hit a record high of 4.3m in 2007, just before the financial crisis struck, tipping both the US economy and the birth rate into decline.
This mirrored patterns during the Great Depression and the late 1970s, particularly 1976, when the birth rate also dropped sharply.
“In the ‘70s we have inflation, high gas prices and feminism – women were wanting to move into careers and didn’t want to stop working to have children,” said Carl Haub, a demographer at the Population Reference Bureau. “But these things have all happened. Now we only have one thing going on: the economy.”
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What is more worrisome: The inability of the Supercommittee to agree on a deficit reduction plan, or the unresolved eurozone debt crisis?
For instance, in case no agreement is reached, isn’t there a pretty good time the automatic cut provisions will be overridden? Changing the rules in the middle of the game is SOP for this Congress.
The Financial Times
Last updated: November 18, 2011 11:33 pm
US ‘supercommittee’ hits tax impasse
By Robin Harding in Washington and Michael Mackenzie in New York
US CapitolReuters
Talks on cutting the US deficit hovered close to failure on Friday but low expectations meant that there was little sign of a market backlash.
The deficit “supercommittee” is expected to continue negotiating through the weekend but aides were increasingly pessimistic because of a gulf between the Republican and Democratic positions on tax revenues.
A committee of six Democrats and six Republicans from both houses of Congress must agree on $1,200bn of deficit reduction by the middle of next week or else trigger an automatic “sequester” that will make cuts of that size to defence and other spending from 2013.
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It’s a farce from so many angles.
Who isn’t dispensing free foreclosure advice these days? Even the Mormons are in on the act now.
The foreclosure next door: saving your neighborhood
Published: Monday, Oct. 31, 2011 8:30 p.m. MDT
By Michael De Groote, Deseret News
It is easy to spot.
The grass is crispy brown. Backyard weeds peek over the top of a 6-foot-tall fence. The trees are dead and swarming with insects. Fading notices are duct taped to the broken garage door and to the front door. Old newspapers and a sack of phonebooks sit on the sagging porch. It is the foreclosure next door — a symbol of pain and sadness and a harbinger of property values dropping.
Gaynell Instefjord has seen it all. For more than a dozen years the associate broker at Coldwell Banker Residential Brokerage in Sandy, Utah has worked selling foreclosed houses for several bank clients. In the best of circumstances, she says, it is a long process.
But it isn’t the best of circumstances right now. In Utah, where Instefjord works, foreclosures totaled 6,567 during the third quarter, ranking the state in 6th place for the most filings. Foreclosures fell 39 percent from the previous year. Nationwide, foreclosure filings fell 38 percent to 214,855 in September.
This means that few people don’t have a foreclosed or abandoned home in their neighborhood. There are things that neighbors can do, however, to preserve property values and maybe even get the home sold.
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