Bits Bucket for November 23, 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.
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Name:Ben Jones
Location:Northern Arizona, United States
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From the Denver Post:
Suit accuses Denver officials of violating Occupy protesters’ rights
“Supporters of Occupy Denver filed a lawsuit in federal court Tuesday accusing city officials of violating protesters’ free-speech rights.
The suit contends the city has selectively enforced various municipal ordinances against the protest as a way to shut down the movement.
“The Denver Police Department has . . . begun to use various municipal ordinances in order to harass the protesters and their supporters in ways which violate the First Amendment rights of the plaintiffs in this matter,” the lawsuit states.
Denver City Attorney Doug Friednash, in an e-mailed statement, denied the allegations.
“Denver has worked diligently and done an excellent job of striking the appropriate balance between protecting individual’s First Amendment rights and ensuring the public’s health and safety,” Friednash wrote.
The lawsuit was filed by Denver attorneys David Lane and Kenneth Padilla, both known for frequently taking on Denver police in court.
To build its case, the lawsuit cites incidents of police ticketing drivers who stop briefly to provide supplies or who honk in support. It also says police are wrongly closing Civic Center and ticketing protesters who place small items on the sidewalk.
Among the seven Occupy Denver members and sympathizers named as plaintiffs in the lawsuit, two claim to have been ticketed after honking in support of the movement, while another says he was given a $130 ticket for impeding traffic when he stopped to give a knit cap to a protester. At least one is among those arrested during the movement’s clashes with police.”
My buddy is a city attorney and he said he is really busy, but that most people in his office support OWS one way or another.
Here in Tucson, the leisurely post-event cleanup of our largest bicycling event isn’t comparing favorably with the hurried cleanup that the occupiers had to do when they were forced out of the same city park.
My brother lives in Davis, CA (former UC student). He works in a place where college students frequent…I’d be interested what he has to say about the pepper spraying story (and what students are saying)…
Are we really this brain dead in America?
http://www.mercurynews.com/saratoga/ci_19385037
Another sign, along with Denver cops ticketing people who honk in support of OWS, that we are becoming a police state.
It won’t be long until the words “Your papers, please” is part of our everyday vernacular.
Unless you’re an illegal immigrant.
Once the CorporoFascists have taken over completely the illegals will have papers.
“It won’t be long until the words “Your papers, please” is part of our everyday vernacular.”
Where have you been for the last 20 years?
Remember how soon after 9/11 the PATRIOT act was passed? That thing had already been written by Viet Dinh and was sitting in a desk drawer waiting for what a Project For The New American Century policy paper termed “a Pearl Harbor event” to be pulled out, dusted off, and enacted into law with little debate.
The only candidate running for president in 2012 that opposes the PATRIOT act is Ron Paul.
Occupy protesters decry Obama’s ’silence’ on arrests
http://content.usatoday.com/communities/theoval/post/2011/11/occupy-protesters-decry-obamas-silence-on-arrests/1?csp=34news
Now we know why those protesters heckled President Obama yesterday in New Hampshire.
After the president’s speech, one of the hecklers handed Obama a note criticizing his “silence” over the arrest of “over 4,000 peaceful protestors” at Occupy Wall Street-type movements across the country.
Thanks to Associated Press photographer Charles Dharapak, we can read the entire note:
“Mr. President: Over 4000 peaceful protesters have been arrested. While bankers continue to destroy the American economy. You must stop the assault on our 1st amendment rights. Your silence sends a message that police brutality is acceptable. Banks got bailed out. We got sold out.”
A group of protesters began yelling at Obama about those arrests at the start of his speech in Manchester, N.H. The president’s backers began countering with chants of “fired up, ready to go!” and “Obama! Obama!”
Just a little tyranny in the spray
http://www.telegram.com/article/20111123/COLUMN44/111239827
…Glenn Greenwald, author and a former constitutional and civil rights litigator, for example, likened the UC-Davis incident to others in past, to include the recent tactics employed by police officers in New York and other states to roust members of the Occupy Wall Street protest.
“Despite all the rights of free speech and assembly flamboyantly guaranteed by the U.S. Constitution, the reality is that punishing the exercise of those rights with police force and state violence has been the reflexive response in America for quite some time,” he wrote in a piece titled “The roots of the UC-Davis pepper spraying.”
Mr. Greenwald went to on to say: “Implanting fear of authorities in the heart of the citizenry is a far more effective means of tyranny than overtly denying rights. That’s exactly what incidents like this are intended to achieve.”
I wonder if OWS will have its “Kent State” moment? It certainly has come close in Oakland already.
the reality is that punishing the exercise of those rights with police force and state violence
Militarized-Police-Tool$
Target: peon di$obedience
I wonder if OWS will have its “Kent State” moment? It certainly has come close in Oakland already.
Hang on, they’re trying.
WRT the Kent State moment, there are a lot of little-Hitler keyboard commandos who love fascist police violence and want nothing less than a repeat of the Chicago 1968 police riot.
Some forgot and some never knew that the cities were literally on fire in the 60s as a result of (the lack of) civil rights and the Vietnam war.
FOUR DEAD IN OHIO
Crosby Stills Nash and Young
Kent State Massacre Montage
They’re banning this product because its ingredients can be used to make meth? Shouldn’t that pretty much wipe out cough medicine?
Shouldn’t that pretty much wipe out cough medicine?
Have you tried buying effective medicine lately?
You can only buy one package a day, and to do that you must provide ID and get entered into a federal database.
And it hasn’t put a dent into the availability of meth.
Funny how prohibitions have a variety of unintended consequences!
It’s easier to buy meth than it is to buy cold medicine.
It’s easier to buy meth than it is to buy cold medicine.
Yep, that’s the irony of it all. I was blown away that I couldn’t buy cold medicine AND allergy medicine at the same time. I was trying to save myself the hassle of having to deal with the pharmacist in the future for allergy medicine, but no, clearly if I want to batch up my purchases (into *two* boxes, mind you), then I must be a criminal and can’t do so.
I’m with Sammy on this one. F the folks that continue to support these policies and vote for the folks who enact and support them.
I don’t know what the answer is, but I hate tweakers.
Pension funds may be used to repair Tappan Zee Bridge
http://www.democratandchronicle.com/article/20111123/NEWS01/111230329/Pension-funds-may-used-repair-Tappan-Zee-Bridge?
The TZ is a cash cow. Where is the money they’ve been collecting on it for the past 30 years?
Dubai?
Spent?
Can any of these PTB guys stand having money just laying about?
If it’s theirs, then yeah.
Actually Muggy this is a great idea if the pension funds are also responsible for any cost over runs……then it will get done on time and within budget..i hope.
——–
who proposed taking $1 billion to $2 billion from a group of public and private pension funds and investing it in construction projects.
“Cuomo said pursuing non-traditional ways of paying for the Tappan Zee span and other projects would be necessary to avoid future deficits.”
Ie. paying in cash would create deficits. Borrowing money while Cuomo runs for President would not. And if lenders are wary of default, having the state borrow from its own pension funds would solve the problem until pension shortfalls devastate public services.
I wonder if the unions will be offered even earlier retirement in exchange for not objecting. This sort of crap happens in New York every time someone considers running for President. Elsewhere too? I wonder what can of worms Perry is covering up in Texas.
Auditors scour foreclosure cases for flaws
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:20 p.m. Tuesday, Nov. 22, 2011
About 1.3 million homeowners nationwide have received notification since Nov. 1 that they are eligible for a free review of their foreclosure cases as federally approved auditors comb through files for flaws.
Another 3 million homeowners are expected to get letters by the end of the year in an effort to comply with a federal order that could compensate borrowers who were financially harmed by defects in their foreclosures.
Auditors are looking for such problems as robo-signing, inaccurate fee charges and foreclosures that occurred while a homeowner was working on a loan modification. If a flaw is identified, it has to have caused a financial hardship for the homeowner for the owner to be eligible for compensation.
http://www.palmbeachpost.com/money/foreclosures/auditors-scour-foreclosure-cases-for-flaws-1989099.html
Help me understand:
When I log on to my county’s auction site, I see all of the auctions in my area, and banks are the winning bidder. Why? Supwiddat?
Doesn’t that mean that no one bid on them, so the bank ended up with them?
I’m licensed in Ca., and your answer is correct, In Colorado. The amt shown is the loan balance, and the bank now owns it as an REO. In Ca (and I assume elsewhere) when a bidder (other than the banks gets an auction house) they show the loan balance as paid,but in reality they probably got a 25% discount. They are hidding data points from the flip buyer.
“Supwiddat?”
Maybe Willy Sutton had the answer.
I’m thinking that if banks buys a house at a price then they at the same time set the price for all the comps that they own, so there is an incentive for the bank to put a floor price on the house. If the floor price isn’t met by another bidder then the bank will end up being the highest bidder.
This is done all the time at Sothebys and other high-end auction houses. A watch company, for example, will want to establish a high price for one of their watches so they will put the watch up for auction and then buy it back at the highest bid. And it is this is the bid - their own bid - that sets the price for the watch and also it sets the price for all the comparable watches that they own.
Price equals Value. When there are no fundamentals to establish the value then price is what is used to determine the value.
It varies state to state, but here at least, the trustee sale is the legal act of taking the house from the previous owner. The auction setting is confusing. The opening bid amount in a foreclosure is set by the lender. The lender isn’t there, so the auctioneer does that. I’ve even seen the auctioneer then put in additional higher bids for the lender. Once I even saw the second lien holder out bid the first lien holder, when neither was present. The auctioneer was handling both sides through cell phones. Second liens are wiped out in these sales, so the second lien holder was attempting to salvage what it had in the property.
I used to think that the opening bid had to be the amount owed. This isn’t the case in AZ because now I see houses being auctioned for less that what’s owed the party forcing the sale. So investors have gotten involved. I posted some about the auctions I attended on the courthouse in Maricopa County (Phoenix area). There were dozens of people bidding on as many as 4 houses at a time. It was a bit of a circus atmosphere.
Because the house is still owned by the borrower, technically these bidders haven’t had access to the inside of the house. There is also the possibility that liens exist that wouldn’t be wiped out, like a tax lien.
But back to the original question, when the lender is the high bidder, they simply foreclosed. If the house is occupied, they can now start the eviction.
“Once I even saw the second lien holder out bid the first lien holder, when neither was present. The auctioneer was handling both sides through cell phones.”
So in other words, bank fraud is perfectly legal in a real estate auction setting?
Why in the heck are they still doing this at the courthouse steps? Put this crap on EBay and call it a day. The lender can bid just like everyone else and we can get some transparency into the process. Right now it’s very much “rigged” in the favor of the banks and the professionals. Why not get the smaller guys in there?
Oh, and, another thing.. When a house is sold at auction it should be an “automatic” wiping of all liens from the time of auction backwards. This is a huge problem (the unsellable house) and it does nothing to help price discovery or speed at which the home becomes an asset to the community again.
EXACTLY Overtaxed.
Does the long painful road to the bottom seem contrived to you? It does me. The question is why.
“Put this crap on EBay and call it a day…Right now it’s very much “rigged” in the favor of the banks and the professionals. Why not get the smaller guys in there?”
Agree. What’s happening here in Cambridge, MA is the developers get in grab whatever single family comes up at reasonable price and turns them into yet more condos, keeping the prices high as ever. A small single family went into foreclosure 2010. I hoped someone could have a chance at getting a decently priced place. Developer got it. He paid $279,000 (a steal in Cambridge); turned it into two “condos” and is now trying to sell one at $529,900 and the other for $499,000.
This thread has been very educational and interesting on auctions, sales venues (EBay), and REO’s. Thank you Ben, and all the posters. Man, is this frustrating.
Muggy- Thanks for initiating the topic.
“So in other words, bank fraud is perfectly legal in a real estate auction setting?”
How is bidding by cell phone bank fraud?
My thought exactly, polly; there is absolutely nothing wrong with the banks bidding via cell-phone.
And others seem to imply that the system is rigged simply because the banks tend to win the houses at auction. There is nothing wrong with that either—it simply makes sense.
The lender (1st mortgage) has no incentive to bid less than the amount that they are owed; it costs them NOTHING to bid the exact amount owed on the first mortgage, because they are essentially paying it to themselves.
The only reason for a bank to bid less than the owed amount is if they really don’t want to take the property on as a REO.
And Overtaxed: the foreclosure _does_ wipe away all other junior liens. The only liens that get special treatment are tax liens.
“Agree. What’s happening here in Cambridge, MA is the developers get in grab whatever single family comes up at reasonable price and turns them into yet more condos, keeping the prices high as ever. A small single family went into foreclosure 2010. I hoped someone could have a chance at getting a decently priced place. Developer got it. He paid $279,000 (a steal in Cambridge); turned it into two “condos” and is now trying to sell one at $529,900 and the other for $499,000.”
Remove Fannie and Freddie mortgages from the scene, and this chit would be history. The federal government is the enabler.
There is lots good in this thread to read. My understanding of the process is this:
1. Home goes to auction;
2. Lender sets the “credit bid” (minimum amount that they are willing to take in order to forego taking the collateral);
3. At that point, the auction can either be cancelled before it starts, there can be a cure to the default, the home can be sold to a third party, or there is no bidder above the credit bid and it goes to the bank as REO (ie. the bank is the winning bidder).
One very important reason for the credit bid is to determine the value of the home for debt forgiveness income and guarantee chasing.
If the debt on a property is $200k, and the bank sets the credit bid of $150k and it goes back to the bank, the bank has determined the value of the collateral to be $150k. The MOST they could pursue the guarantor on the loan for at that point is $50k (plus costs, legal, etc.). If there is a debt forgiveness situation, this sets debt forgiveness at $50 as well.
If the credit bid is $160k, then the applicable numbers are $40k.
If the mortgage balance is $200K and the credit bid is $150K, but the bank eventually sells the house for just $100K, the FB is on the hook for $100 K, assuming it’s a recourse loan.
Also, when a bank “buys” a house on the courthouse steps they’re just transferring money from one pocket to another. They have to pay the usual transfer fees to the county of course.
Realtors Are Liars®
This should be a discussion topic at every Thanksgiving dinner table in America.
Unquestionably.
However, with the number of realtors out there, odds are pretty good that one will be sitting at the table, or is good friends with someone sitting at the table.
Ahhhh, family harmony.
The eurozone debt crisis seems a little grimmer by the day. Does anyone have a clue how this resolves and where the damage lands?
Nov. 23, 2011, 10:06 a.m. EST
Debt crisis now at German doorstep
Belgian, French yields jump on Dexia bailout worries
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — An auction of German government bonds technically failed Wednesday, underlining fears that Europe’s long-running sovereign debt crisis now threatens the core of the euro zone.
The sale of 6 billion euros ($8.1 billion) of 10-year government bonds, known as bunds, attracted bids totaling just €3.889 billion. The Bundesbank, which conducts auctions on behalf of the Germany’s federal debt agency, accepted €3.644 billion in bids.
That left the central bank to pick up the slack, retaining €2.356 billion of the supply, or 39% of the total amount on offer.
Granted, it hasn’t been uncommon for German debt auctions to fall short as safe-haven demand has driven German yields to record lows in recent months. Six of the last eight bund auctions have required the Bundesbank to pick up some slack, noted strategists at RBC Capital Markets.
However, total bids in Thursday’s sale exceeded the amount sold to bidders just 1.07 times, the lowest ratio since 1999, according to RBC. Also, the amount retained by the Bundesbank was much higher than the euro-era average of 20%, analysts said.
“It was awful,” said Nick Stamenkovic, fixed-income economist at RIA Capital in Edinburgh. “It just shows that investors are not only shying away from [peripheral] euro-zone bonds,” but are turning away from the euro zone in general.
The IMF has introduced new liquidity lines to help euro-zone countries under pressure to shed their liquidity worries and “break the chains of contagion.”
The results were enough to spook investors, sending the euro skidding to a six-week low below $1.3400. The euro (EURUSD -1.02%) traded at $1.3381 in recent action, down 0.9% from Tuesday.
…
Unrepayable loans were made in order to provide “tulip bulbs” to the bond market. Someone has to lose money. Lender, borrower, or public treasury.
How that money loss is allocated is the question I think. Obviously the big players don’t want to lose money. They’ve been screaming bloody murder for a long time now. And the countries and politicians believe it. The borrowers will probably lose. And the taxpayers will probably lose.
How is the loss going to be distributed - through inflation? Austerity? Debt burdens placed on great grandchildren? Other? Actually making the lenders themselves pay (crazy talk, I know)?
“How that money loss is allocated is the question I think.”
Credit bubble collapse bagholder identification process will continue…
“Credit bubble collapse bagholder identification process will continue…”
Identification process may continue but if the IMF is getting in on this, I think we know who the bagholders are, PB.
I’ve been wondering if/when something like this would happen. An interesting way to go about looking at an issue is to ask “what is an extreme case that no one else is talking about?”. At the beginning of the year, it was questioning Germany’s ability [or willingness] to stand behind the euro. The auction raises the possibility that the bond market is starting to get worried.
Many on this blog used the same method to figure out that RE was in deep doodoo long before the peak; we were also predictably dismissed by the MSM, who said it was “inconceivable” that RE prices would fall.
“Inconceivable!” - Vizzini
“You keep using that word. I do not think it means what you think it means.” - Inigo Montoya
So, one of my concerns about buying a house were the slowly sinking values and thus the possibility of having to bring money to the table if I wanted to sell. GEG noted yesterday that after a certain amount of time, one pays off a certain amount of principal. If the house value drop is greater than the amount of principal I’ve paid off, I’ll have to pay. Otherwise not.
I came up with a concrete example:
So, lets say I’ve got the following:
Loan: 200,000 USD
Interest rate: 4.5%
30 year loan.
After 5 years, I have paid:
Principal: 17,684
Interest: 43,118
If I were to sell at this point, I still owe:
Principal: 182,315
Interest: 121,695
Let’s say I get 180,000 from the next buyer. What do I have to pay the bank at this point? Usually, they’re not going to come after me for any interest, correct? I can just pay the bank 2315 plus the 180K and I’m done with the house, right? Are there mortgages for which this does not hold true?
================================
PS: These values were generated with the Excel "cumipmt" for interest calculations and "cumipmt" functions for principle (the only trick to these functions is that the interest rate needs to be in decimal form - 4.5% = .045 - and it needs to be divided by 12. And a 30 year mortgage, paid monthly, has 360 payment periods). Very useful functions.You have to bring $2315 + closing costs to the table.
If you pay off ANY loan early — in this case, by selling the house — you don’t owe interest on the loan. This is the entire reason people add a little extra $$ onto their mortgage payment every month, or make an extra payment every year: that’s compounded interest you don’t have to pay. Any mortgage calculator (bankrate dot com has a few) has a function for extra $$ if you want to compare.
Neuromance,
If you are not aware that you stop paying interest on a loan once you pay off the amount loaned to you, you are not prepared to buy anything using a loan. You need to do a lot more research and reading before you even consider it.
And I am not trying to be mean or anything, but it should just be instictive for you. You shouldn’t even have to think about it. Interest is what you pay for the use of someone else’s money over time.
No, if you want to pay it off early, there could be a clause in the mortgage that provides for a penalty for early pay off. That is a tiny bit like having to pay interest for a time beyond when you have the cash, but it really isn’t. It is just the lender trying to keep you from paying off the loan. Remember, to a lender, a loan is an asset. An asset that is earning them money.
Again, interest is what you pay for the use of someone else’s money over time.
Unless you are in Canada.
What’s different in Canada? Pre-payment penalties?
I have to agree with Polly here. If you don’t know even this basic fact about loans of any kind, you need to stop and reassess.
But at least the OP is asking the question, in all fairness.
It is important to note that there are some mortgages with prepayment penalities; from my understanding typically these are offered to higer-risk mortgage applicants that may be able to obtain a much lower rate in the near future. I think the large majority here are in the US, the OP may be from another country where fixed rate, no prepayment penalty mortgages are not the norm.
The OP may have also been asking because they’re confused that after paying for five years - one-sixth of the loan period, that they’d paid down less than a tenth of the loan amount. This is indeed correct; as I posted a few weeks ago I think all mortgages should include a full amortization table, requiring buyer initials at every 12-month period. This would help people understand that after paying 15 years on a 30-year fixed note that they’d still owe more than 2/3 of the borrowed amount.
The OP was smart enough to make their own amortization table in Excel. That is more than 95% of borrowers ever do, so nice work there.
I was more concerned with penalties. I recall hearing about mortgages which had penalties for being paid off earlier. Thiere is a risk in mortgages that they will be paid off early.
It all depends on the terms of the loans. If the lender is expecting an income stream and that is built into the agreement, and I have signed the agreement, then there may be some consequence for early repayment. That is what I was getting at.
Typically (again, my understanding) the penalty is some percentage of the original loan amount; and sometimes has a sunset provision. I’ve heard 2-3% as a typical prepayment penalty, and a sunset provision of any where between 3 and 5 years is the norm in the US. In exchage for a prepayment penalty there should be a small reduction in the charged rate.
But I’m not that up to speed on these things as some other posters.
It all comes down to reading the loan documents. I strongly recommend getting a great lawyer, the lowest advertised rate is rarely the least expensive.
The penalty is almost always in the form of a prepayment penalty. And yes, those usually sunset after a certain time frame or are at least reduced. I would never buy something using a loan with a prepayment penalty. It’s actually fairly uncommon these days unless you’re high risk. And yes, if you’re really concerned, hire a lawyer, but if you have decent reading comprehension I’m sure you can find the section about a prepayment penalty in the loan documents. It is usually addressed even if there is no prepayment penalty. For example, it will specifically say “there is no penalty for paying this loan off early”.
NEVER take on a loan with early payment penalties.
“The penalty is almost always in the form of a prepayment penalty.”
This why you want a conforming loan.
First thing I did with my mortgage was prepay six months in advance, and then make monthly payments always keeping the six month buffer…just in case.
Oxide, Polly - thanks for the information. I actually was aware of how loans and interest work. In fact, I calculated the total interest for the 200,000 dollar 30 year loan at 4.5%, which I listed above. I also figured out how much principal and interest were paid back in years 1 through 5, and how much was due in years 6 through 30. My apologies for causing any confusion or concern.
My questions were with typical scenarios. Oxide mentioned closing costs. Data point. I was also wondering about typical prepayment penalties or any other typical costs associated with this scenario.
Sorry for the confusion, neuro. When you listed the interest owed, it sounded as if you thought that had to be paid back.
If you’re selling in a buyer’s market, a common trick is for the buyer to demand the seller pay closing costs as a condition of sale.
Thanks for the observations, all. The core issue was how to determine what my liability would be in a declining market, if I wished to sell in say, five years.
The formula looks like:
(my liability) = (next buyer purchase price) - ( (principal not paid off) + (closing costs) + (pre-payment penalties) )
Good to know.
Yesterday, I noted the failure of the supercommittee to reach a deal. Polly then asked, ‘What failure? The cuts Congress voted on will be instituted.”
As much as I try to avoid getting head-faked by the politicians and media, sometimes it happens. Congress did vote on a debt reduction package. Defense cuts, letting the Bush tax cuts expire. BUT - they needed some political cover. Hence the theater with the supercommittee. It was brilliant political cover. And Obama is threatening to veto any attempts to roll back the debt reduction package. And none of it goes into effect till 2013, after the inevitable stimulus and the election.
Just wanted to reiterate and add to Polly’s astute observation.
Three words: Spineless *Corrupt* Thugs.
I’m thinking of starting a Facebook page for “Americans for Simpson/Bowles” and start a campaign of Americans printing and mailing on a weekly basis the 60+ page report to their representatives (House and Senate), over and over again.
Bury them in paper, and give the US Mail a bit of revenue.
It’s the most sane plan we have, and everyone is ignoring it.
I am for EVERY provision of the Simpson-Bowles plan.
Being that Simpson-Bowles was a presidential commission, their final plan was presented to The One. What did he do with it? Did he even acknowledge he received it?
Simpson-Bowles needed the support of 14 committee members for a final report to be issued. It only had the support of 11. If it had made the changes necessary to get the support of at least 14 members, its recommendations might have been worthy of consideration.
That’s a good point. Under the rules which established the commission, it never made a recommendation to Congress or the president. So Mr. Simpson and Mr. Bowles have made their recommendations, but the commission never produced any.
Since a viable plan would most likely inflict more than a fair amount of pain quite broadly, having broad support is probably a good idea versus only support of a minority or slim majority. Whether that was the reason for needing a supermajority to move the report forward, I don’t know.
If one wants to implement such a plan without creating a large of amount of political instability, broad buy-in upfront would seem to be essential. Given our current political leadership, I’m not sure that’s possible with any plan much less with some that have been contemplated.
So let me get this straight: The ‘backup plan’ was the real plan all along, and the Supercommittee was just political Grand Kabuki to entertain the sheeple?
Could be — could well be…(especially if Polly is sharing her insights!)…
Government’s role in housing finance a difficult balance
http://www.washingtonpost.com/business/economy/governments-role-in-housing-finance-a-difficult-balance/2011/11/21/gIQAQ4BZjN_story.html
“It’s difficult to have any significant pullback without potentially damaging the U.S. economy,” said David Stevens, Obama’s former FHA commissioner and now the president of the Mortgage Bankers Association.”
What amazes me, and what these folks don’t seem to get, is that lower house prices will leave more money for people to buy other things.
This is like supporting food prices, and saying, “If food prices stay low, it will damage the US economy.” Ditto with supporting energy prices.
No - lower house prices may harm certain components of the FIRE sector, those whose income is based on the price of the house. But it will give people more money for other necessities and discretionary purchases.
Imagine - a heterogeneous economy in which people have more disposable income. That would be just terrible.
What are you, some kinda damn commie? That money rightfully belongs to Wall St!
“It’s difficult to have any significant pullback without potentially damaging the U.S. economy,” said David Stevens, Obama’s former FHA commissioner and now the president of the Mortgage Bankers Association.”
There will be damage regardless of what’s done. Some of it’s a matter of where the damage would occur. But more importantly, what we’re doing with housing needs to be sustainable. The status quo in housing is not sustainable indefinitely. The economy that supported housing in the past no longer exists.
“gobble gobble” goes the Turkey’$
America’s Choice 2012 / Congress at work. [Get lil' Opie!]
What Congress has done to fix the economy (Hint: Nothing)
By Charles Riley @CNNMoney November 23, 2011
List of failure: Congress is not helping the economy
NEW YORK (CNNMoney) — The 112th Congress is not doing much to help the economy.
The super committee failed. Lawmakers failed to “go big” on a debt reduction package. Congress failed to preserve the country’s AAA debt rating. The list goes on: Congress couldn’t pass a real budget. The government almost shut down on more than one occasion. Lawmakers pushed the nation perilously close to default.
And that’s just the negative stuff Congress has actually done. By way of inaction, they have also failed.
The besieged housing market has even further to fall before home prices really hit rock bottom — a triple dip.
What has Congress done to help? Not much.
Congress has, to their credit, approved free trade agreements with Colombia, South Korea and Panama that have been in the works for years. And a bill designed to reform the nation’s twisted patent system became law in September.
Krugman (D) and Feldstein (R) were on PBS again last night. Krugman reiterated the “do nothing” approach ie let Bush tax cuts expire, to balancing the budget. Feldstein said that letting the Bush tax cuts expire would decrease the deficit but crash the economy.
I highly doubt the earnings from dividends, interest or capital gains is being invested in textile mills in North Carolina or automobile maufacturing plants in Michigan. Nor do I see it funneling its way to the general economy. I don’t buy this for one minute that the expration of the Bush tax cuts will hurt the broad economy.
It just shows how out of touch Congress is, as well as the kulaks that support and vote for them.
Lawmakers failed to “go big”
TALKING POINT alert: The phrase “go big” is Republican code for cutting Social Security and Medicare. We’ll see it here soon from GEG, no doubt.
“Expert” Maya McGuiness was on PBS** on Monday, and repeated several times that the committee needed to “go big” and “fix the problem” and “move ahead on tax reform and entitlement reform.”
Maya works for a non-partisan group (new american foundation, seems even-handed), but beware, she was the Social Security advisor for the McCain campaign. Also, note that “reform” is code for “favor the rich.”
pbs.org/newshour/bb/politics/july-dec11/supercommittee_11-21.html
The more information that comes out about the MF Global failure, the more disturbed I am by it. This is a FINE example of why broker-dealers should not be allowed to trade on their own accounts.
The fact that segregated accounts were not segregated at all is simply outrageous. And now it appears that while the CME will contribute $550M to lessen the blow to account holds, they still will only get 75% of their account value back.
Un-freakin-believable. Mind-blowing. Confidence-shaking. On the non-futures side, SIPC exists to cover brokerage accounts specifically against this sort of thing. But SIPC specifically does not cover futures or currency contracts.
I didn’t quite realize that there is essentially zero protection for cash and other securities held in a futures account; I actually have a futures account myself, and think it is time to move that money someplace safer.
I did try to do due-diligence back when I opened the account, and knew of the SIPC limitations, and also saw the CME’s claim that no account holder had ever lost a penny. That didn’t quite address my concerns, but it lessened them to the extent that I went ahead and accepted the risk as the cost of doing business. I figured that the odds were good that I would not have losses even if my broker failed—that the segregated account would simply be transferred to a different broker, as has happened many times in the past.
Now the cost looks too high, at least to me.
…and this is what they want to invest SS in.
Feel better now?
Deputies say a man tried to kill the occupants of a trailer by repeatedly driving a front-end loading forklift into it.
According to the Orange County Sheriff’s Office, John Miller intentionally drove the forklift into the mobile home he owns on West Ponkan Road, knowing people were inside.
The incident took place around 3:30 p.m. Tuesday.
According to the Sheriff’s Office report, the woman pleaded with Miller to stop and told him someone else was inside, but he still proceeded to ram into the home a second time.
“He started plowing into the trailer while my sister, my two brothers, my son and my sister-in-law were inside,” the tenant said.
The tenant said Miller then began chasing her around the yard with the forklift while she was on the phone with 911.
Miller was arrested on attempted murder charges and taken to the Orange County Jail. Miller was trying to evict her for unpaid rent.The Banks should hire Miller and get the FB out.THE RULES CANNOT CHANGE,IF U CANT PAY U MUST LEAVE…
Self ownage. Always the best.
It’s amazing how Iceland is upgraded on a day the EU/Germany is burning. They resisted a complete bank bailout. Did CDS on Iceland banks pay out after default?
The Greek people should hurry up and quit the Euro so they can default. After that, I could afford to vacation there!
From Bloomberg:
Iceland’s Outlook Revised to Stable by S&P
Q
By Vivek Shankar - Nov 23, 2011
VERY interesting…..
Good find.
Germany’s Auction ‘Disaster’ Stirs Crisis Concern
By Paul Dobson - Nov 23, 2011 12:11 PM ET
Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region’s debt crisis is driving away investors.
“This auction is nothing short of a disaster for Germany,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said by e-mail. “If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”
http://www.bloomberg.com/news/2011-11-23/germany-fails-to-receive-bids-for-35-of-10-year-bunds-offered-at-auction.html
ot, excuse me.
We are nursing my Volvo until we can meet Tesla 1/2 way. They get an affordable model on the road, and we have the dough. I found an interview with Tesla’s CEO which I found fascinating.
He also talks about space and his objectives there -his co Space X.
http://www.marketwatch.com/video/asset/elon-musk-ill-put-a-man-on-mars-in-10-years/CCF1FC62-BB0D-4561-938C-DF0DEFAD15BA#!CCF1FC62-BB0D-4561-938C-DF0DEFAD15BA
Yo, Sammy…
Anti-Government Paul Reaps Biggest GOP Haul
From Federal Workers
http://tinyurl.com/6mvdfw9
“It isn’t unusual for ideology to drive donations to presidential campaigns, said Sheila Krumholz, executive director of the Center for Responsive Politics in Washington.”
“People might be giving for things completely unrelated to their economic interests, or even counter to their economic interests,” she said in a Nov. 9 phone interview. “Presidential donors are far more ideologically motivated than donors giving to congressional candidates.”
I don’t find this surprising at all. There are more than a few federal workers that are oblivious to the impact some of these proposals would have on them. For example, I was talking to a coworker in another office regarding proposals that would increase the share of worker contributions to their pension. He said that a number of his coworkers thought that in paying more in, they would get more out. In reality under those proposals, they would pay more in and get no more out, maybe less.
That’s not to say one should make all decisions based on how it impacts one personally, but one shouldn’t be oblivious to it either.
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