Bits Bucket for November 30, 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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Agustino Fontevecchia, Forbes Staff
Bringing You The Bull And Bear Case From The Markets Desk
11/29/2011 @ 4:32PM
‘Every Day Is Black Friday’ In Housing As Prices Tank, Case-Shiller Shows
Foreclosed homes continue to weigh on the market -
Housing markets remain deeply depressed, as the latest S&P/Case-Shiller Home Price Indices show. September data, released Tuesday, show that prices continue to drift lower, with three cities posting new index lows, as real estate markets remain unable to shrug off a massive inventory of foreclosed homes and a weak economy.
National home prices fell at an annual rate of 3.9% in the third quarter, as real estate markets tread even lower. The decline appears to be decelerating, as Q2 prices fell 5.8% on an annual basis while Q3 inched up sequentially 0.1%.
“Housing remains stuck in the proverbial mud,” explained Gluskin Sheff’s Dave Rosenberg. Despite the annual index appearing to decelerate its decline, both the 10- and 20-city composites fell more than expected. In September, the 10-city fell 3.3% while the 20-city was down 3.6% over the same month in 2010; 18 of the 20 cities surveyed registered negative annual rates in September.
Six of the 20 cities fell on a monthly basis, with Atlanta, Las Vegas, San Francisco, LA, Seattle, and Tampa down in September over August. Even more “disturbing,” as Case-Shiller Index Chairman David Blitzer put it, was the fact that three markets — Atlanta, Las Vegas, and Phoenix — posted “new crisis lows.”
“Over the last year home prices in most cities drifted lower. The plunging collapse of prices seen in 2007-2009 seems to be behind us,” explained Blitzer, who added “markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside. The problem continues to be the massive backlog in the foreclosure pipeline. According to RealtyTrac, new foreclosures jumped 7.4% in October on a monthly basis to 230,678, while the number of foreclosed homes sold tanked 25% to 75,243 in September from the prior month, according to the most recent data.
As Blitzer explained, the problem is the low levels of transactions. Fed Chairman Ben Bernanke has explained on numerous occasions that housing, along with employment, is among the most important prerequisites for any economic recovery. After a real estate bubble-induced financial crisis that brought the global economy to its knees, the Fed has done all it can to support housing prices, to no avail.
Interest rates have fallen to record lows, with 10-year Treasuries frequently trading below 2%. The Fed has engaged in two rounds of quantitative easing and is currently in the process of extending the maturity of its balance sheet, providing further support for housing markets by pushing long-term rates lower and allowing cheaper mortgage refinancing. The Fed is also currently reinvesting the proceeds of its agency securities portfolio into residential mortgage backed securities.
But, as Rosenberg said, prices remain depressed because in housing, “every day is Black Friday.” Major banks like JPMorgan Chase, Citi, and Bank of America still hold massive amounts of foreclosed and distressed properties on their balance sheets. Blitzer notes that “any chance for a sustained recovery will probably need a stronger economy,” but his comment begs the question, as the economic recovery is in part conditional on stronger housing markets. Analysts at Barclays put it more clearly, writing in a note “we expect prices to begin to stabilize as distressed sales gradually decline as a proportion of total sales, but this process will take some time.”
…
I’m expecting the other shoe to drop in the next 12 months. Rents have been trending upwards due to constained inventory - not a single other reason. Once the bank REO properties are open for legal occupancy, rents should start trending down as supply outstips demand, at least in my part of the country (southern states).
In Phoenix, there are still a lot of people who are shopping for great investment deals. How is an investment great when *one* month of vacancy would push the owner into a loss for the year. People I know are talking about an 8% yield, a yield only possible under the best case scenarios (100% occupancy without damages or repairs)
“People I now are talking about an 8% yield …”
There are folks running retirement seminars that are promising potential retirees ten-plus percent yields.
A “conservative” ten-plus percent yield at that.
A 10-plus percent yield? On a rental house? What are these retirement seminar promoters smoking and where can I get a puff?
Sheesh. A more realistic yield on any investment is down around 5%. Anything greater is pure, short-term gravy.
I guess my grouchy 50-something self won’t be invited to any retirement seminars. I’d be too apt to argue with the people doing the presentations.
Ask them to sign a contract guaranteeing a (say) 6-8% yield. They shouldn’t have a problem with that.
Put up, or shut up.
“I’d be too apt to argue with the people doing the presentations.”
That’s just what they need, Slim, a dose of reality.
“Once the bank REO properties are open for legal occupancy,…”
Is there a legally binding (and enforced) timing issue for how soon REO properties become ‘open for legal occupancy,’ or is the timing purely up the the discretion of lenders (and their government regulators)?
I use the term “legal occupancy” to differentiate between leaseholders, owners, and vagrants/squatters - people who have no legal right to be in the property. Only the banks and courts can determine the difference.
Based on what I’ve seen, the REO’s are going to need a lot fo fixing up, and nobody wants to go through the effort to fix up a rental, especially if rental prices go down each time you increase inventory by one house. Isn’t that why F&F were trying to offer programs for investers to buy REO’s to rent out? If it were profitable, F&F wouldn’t need to offer a program.
This whole idea smells like barney frank
When you are a property owner/landlord–all you do is renovate.
inserting new investors into this could be good,but i doubt that will happen.
Instead,the grifters will suck every dime out of the deal.
If real estate was ever an investment at all,it is long term.
the real value in any property is in how it serves the user.
There is on free lunch.
That being said,there is nothing save the straitjacket of the mortgage agreement,and the incredible banker stupidity-solvable by putting a few in jail,to stop the bank and underwater owners from coming to an agreement.
In many cases banks have already been “paid”
so,what stops a bank from a leaseback or rent to own?
cashflow and maintaince all in one.
I think the “infestors” are banking on future appreciation.
Here in Tucson, there are quite a number of such creatures.
And, in my little patch of Tucson, I’m noticing that quite a few of them (who purchased during the middle years of the previous decade) have given up on their appreciation dreams.
They’re walking away from their in-VEST-ments and letting them go back to the bank. Which means that there are a lot of empty houses just sitting there, mouldering away.
I thought Tucson was too dry to have a “mold problem”
I thought Tucson was too dry to have a “mold problem”
Actually, mold is a very big problem here. Especially in newer, more airtight houses.
“…new more airtight homes”
Same as around here. More “energy efficient”, but also more mold.
The one thing that aggravates me about houses in general, and newer houses in particular. If homes were designed to allow better airflow with the windows open. you might not need air conditioning as much. Remember “attic fans”?
Of course, with open windows at night, you might have bigger problems than airflow….the answer to this would be a two story house, with all the bedroom windows above ground level.
(Crime prevention = another hidden cost of crime. How much extra money is being spent by people for personal security?)
Actually in my opinion, new homes do this better than medium age homes, with medium being “‘50-80s’”. Older homes than that were built to be comforatable without A/C. Medium age homes were built for A/C only, with low ceilings, too few windows, and lots of walls restricting airflow. They are also now old enough to have failing insulation and air leaks due to age.
Newer homes with open concept, some higher ceilings, and decent windows faciliate air moving thoughout them.
And newer homes have bathroom fans mandated by code, which was not true of the middle aged homes, which prevent mold build up if ran appropriately. Newer homes should not be airtight, they should be air controlled, meaning the homeowner should have some control as to how air moves through them via the central air unit, opened windows, and bathroom venting fans.
That’s not true with leaky old homes or poorly designed middle aged homes.
As crime cannot be prevented only migitaged, I don’t think age of home has much impact there.
They’re walking away from their in-VEST-ments and letting them go back to the bank. Which means that there are a lot of empty houses just sitting there, mouldering away.
And the banks are flipping them over to the Fed - $2.3 trillion so far (disclosed, anyway) and rumors of another $545 billion to be added. Meaning they are now liabilities of the US taxpayer.
Thank you, Obama voters. Thank you, McCain voters.
I don’t recall the exact presentation, but it was something similar to this:
Buy a foreclosed house to rent out, requiring only 10% downpayment (100k house, 10k down).
Monthly mortgage = 500
Monthly HOA/Taxes = 500
Monthly rental income = 1200
I just made $2400 a year by only putting down 10k. Plus in 30 years I’ll own a house that someone else paid for. It’s like getting free money, just for leveraging something that the bank is only paying .015% APY.
(They never explain that just being empty two months a year yields a loss! Or just having to replace a furnace, or ……)
They also don’t explain all the joys of screening tenants before they move in, then dealing with them after they’re in your house or apartment. Especially when they’re tearing your property to shreds.
But here’s your HBB Librarian with a big, fat book recommendation: Landlording by Leigh Robinson.
This is an 8.5 x 11″ book of more than 400 pages. With lots of words on them. Read them all. Very slowly. And think while you read. Especially on the topic of whether you REALLY want to be a landlord.
$500 a month for HOA’s? Hell no. This is exactly why, investment property or not, I will never, ever, buy in a new development.
Aren’t most of the people on HBB renters? Show of hands…who here has torn a place to shreds?
Show of hands…who here has torn a place to shreds?
Me-e-e-e!
It was right after I graduated from college. I was part of a group of friends who summer subletted the second floor of a house in Ann Arbor.
Long story short: We didn’t take very good care of the place. ISTR having to pay part of the damages that we all incurred.
Aren’t most of the people on HBB renters? Show of hands…who here has torn a place to shreds?
My sister was briefly a landlord.
The tenants trashed their house. They fixed and sold it.
So I guess the people here are the only capable renters. I briefly rented my old house to two professional couples. Neither trashed the place.
But my bigger point is that we at the HBB bash the renting process as non-workable…while we rent. Broad brush.
I’m not talking about trashing the place. When the profit margin is $200/mo, any major repair could wipe out years of profits. The biggest one I see is vacancy. A LL wouldn’t negotiate on the rent in early September when I started looking, place is still vacant. They would have $2200 in the pocket today, instead held out for $50 a month over a 12 month lease.
Some people can come out ahead, many of us, espeically those banking on appreciation to make the calculations work, will be the next bag holders.
I was responding to AZ and CO’s comments, although it’s been on my mind awhile while reading the blog. Just don’t understand the “it’s better to rent…but no one should be a landlord” comments. If you see screening tenants as a burden or hurdle, yes, you probably shouldn’t be a landlord.
To your point, Moman, I’m astounded at how many “investors” buy properties with little regard to cash flow. I was eyeing a multiplex recently that is about 20% off peak. My numbers suggest it’s still about $100k too expensive given current gross income and expenses. My prediction is that in 2-3 years it will be back on the market…at a listing price higher than the recent one, proving that investors with quick trigger fingers still have no clue about what they’re doing.
However, D.C. area prices up 1.16 % MOM and 0.97% YOY. From its most recent low in March 2011, the index is up 5.97 percent.
In the greater D.C. area, buy now or be…
…priced out forever! (I always thought that would make a good epitaph.)
Pending Home Sales Surge 10.4% in October
Potential home buyers came out of the woodwork in October, signing contracts to buy existing homes at a higher-than expected pace.
Pending home sales jumped 10.4 percent compared to September, according to the National Association of Realtors, with the biggest gains in the Midwest, up 24 percent.
The Northeast also saw sizeable gains, as did the South. Only out West did buyers stay on the sidelines, with pending home sales there basically flat month to month.
“Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows, and there is a pent-up demand from buyers who normally would have entered the market in recent years,” said Realtor chief economist Lawrence Yun. “We hope this is indicates more buyers are taking advantage of the excellent affordability conditions.”
the missing link http://www.cnbc.com/id/45491971
“We hope this is indicates more buyers are taking advantage of the excellent affordability conditions said Realtor chief economist Lawrence Yun.”
This sock puppet should be restuffed and reprogrammed.
“Priced out Forever”
That would look awesome on my gravestone.
LOL.
Fed Chairman Ben Bernanke has explained on numerous occasions that housing, along with employment, is among the most important prerequisites for any economic recovery.
Methinks that Bernanke has two horses pulling a one-horse cart. Ideally, the cart should be pulled along by employment. Housing is one of the first passengers to benefit when the cart starts moving again.
The reason Finance, Insurance and Real Estate are lumped together in many analyses (opensecrets dot org for example) is because their business models are closely linked.
The Bernank has a bank-centric view of the economy. Which results in having a FIRE-centric view of the economy. He apparently equates the health of the economy with the health of banking which is helped by the health of housing.
In a heterogeneous economy, you wouldn’t have so much GDP clustered in banking and housing. One sector could stumble and not destabilize the economy as a whole. But in the debt-bubble-based economy we had, the core sector stalls and it harms the economy as a whole which had become less heterogeneous.
And I can’t help but suspect that the debt-bubble economy was a FIRE executive’s dream.
Home prices continue to fall; D.C. bucks trend
View Photo Gallery — How does your city stack up?: The Standard & Poor’s/Case-Shiller home price index offers a monthly assessment of how home prices are faring from city to city. In the most recent report, Washington, D.C. was one of just three cities to see an increase in prices.
By Brady Dennis, Published: November 29
The nation’s home prices fell slightly in September, according to data released Tuesday, another reminder that the housing market continues to tread water more than five years after it began to melt down.
The Standard & Poor’s Case-Shiller home-price index, which covers 20 major metropolitan regions, found that prices decreased 0.6 percent in September from the prior month after posting small gains over the summer and spring, and 3.6 percent from the same month a year ago. All but two of the cities saw an annual decline.
Real estate trends over the past 10 years in the D.C. metropolitan area.
Real estate trends over the past 10 years in the D.C. metropolitan area.
Metropolitian areas in the United States with the least expensive sales prices for single-family homes in the first quarter of 2011, according to a National Association of Realtors study.
Washington, however, bucked the trend, recording a 1 percent increase in housing prices over the previous year. Analysts attributed the uptick — second only to that in Detroit — to the relative strength of the Washington-area economy.
The steepest decline was in Atlanta, with a 5.9 percent drop during September and nearly a 10 percent fall from the previous year.
…
DC had its big drops from 2006-2009. It’s been wobbling in the same 5% for the past couple years. Most of the average is being kept up by NoVa, while MoCo is sticky on the way down, but on the way down. PG county was always a dump.
Just wait until government austerity measures kick in. This credit fueled, money printing mania can’t go on forever.
What, you think the Tea Party republicans have that much power? There’s certainly no other constituency pushing for it.
And in any event, a “cut” would really be nothing more than a decline in the rate of increase.
In D.C., BNOBPOF.
There is a difference in urban markets and sunshine state southern markets, where overbuilding is rampant. I hope the govt cuts back on both govt workers and spending, what that does to the DC market is anyone’s guess.
Little known fact: federal government contractor employees outnumber regular government employees.
The problem is PRIVATE contractors.
Little known fact: federal government contractor employees outnumber regular government employees.
And unlike Federal Employees contractors are easy to RIF.
Contractors = Future of the American workforce
Contractors = Future of the American workforce
I found out that I was replaced by a contractor at my old job. No insurance, no paid holidays, no paid vacations. And the contractor pays double SS tax.
I wonder what they’re paying him/her? So far in all my jobs the contractors have made significantly more money to make up for that.
“I wonder what they’re paying him/her?”
About $40/hr. Its a “contract to hire” position.
Yikes. Either you were overpaid, or they’ll get what they pay for, then :-).
Just wait until government austerity measures kick in. This credit fueled, money printing mania can’t go on forever.
The few FedGov employees I know don’t seem to be too worried about this, unlike their state/muni cousins.
Austerity in DC will be very slow to come. Many Fed workers and contractors have been here for long enough that they bought their house pre-bubble, can live on one income, and/or made a sizable enough pile. Even if one of them is riffed,* they can stay in their homes a few years before getting into financial trouble.
And those contractors tend to live in the mid-high end housing. I don’t think it will affect my price range.
———–
*reduction in force ie layoff.
Most of the “Fed/Government” employees I know are guys with 10-15 years seniority, in departments that have been understaffed for years.
Sorry, I should clarify. Even if austerity comes to DC, I don’t think that will affect house prices at all. People are well-established enough that they can keep up the payments just fine, or easily sell when they retire. We just don’t have — or won’t have — that many foreclosures. the current ones are usually trashed from a 2008 subprime blowup. Don’t expect to see a lot of selection.
Governments hiring so RE is up around Washington DC but according to this government has never been more broke
http://seekingalpha.com/article/310920-today-s-economy-is-the-antithesis-of-the-great-depression-invest-accordingly?source=yahoo
As financial markets continue to experience extreme volatility, many commentators are making new comparisons between the equity markets of today and those of the Great Depression. With those comparisons come predictions that equity markets will experience a crash in which they will lose as much as 90% of their current value. Based upon these predictions, readers are encouraged to exit equity markets and, instead, hold their capital in cash or sovereign debt instruments, which were safe havens during the Depression. While anything is possible, such comparisons and predictions don’t comport with differences between today’s economy and the economy of the Depression era.
At the time of the Great Depression, governments of the world weren’t burdened with the vast debt that burdens them today. Therefore, during the Depression, cash and sovereign debt were true safe havens. Cash and bonds were made even more attractive by the Federal Reserve, which reduced the supply of money in the economy by 25%. This resulted in a deflationary environment and lower interest rates. At that time, cash and bonds were great investments. You could put your cash under the mattress and, with each passing day, it became more valuable. Bonds were even better. You could buy a bond, collect interest until maturity and then be repaid in dollars worth more than the ones used to purchase the bonds in the first place.
Of course, such deflationary pressures have significant economic ramifications, not the least of which is the hoarding of cash. Capital, that should be invested in businesses and other productive economic activities, is instead held in cash or bonds. Therefore, in addition to the reduction in the money supply, there was an equally devastating reduction in the velocity of money in the economy during the Depression. And that is precisely what caused the Great Depression. Certainly, Milton Friedman explains it far better than I can ever do, but my crude illustration provides the more important points of his monetarist ideas.
Today, we live in an economy that represents the polar opposite of the Great Depression. When the Panic of 2008 occurred, our government was already saddled with unprecedented levels of debt. Yet, the government was forced to assume the debts of the largest financial institutions in order to avoid a complete collapse of our financial system. While politicians pass the blame for the crisis to Wall Street and Greedy Bankers, nothing could be further from the truth.
In reality, the problem was created by the monetary policy of the Federal Reserve and the fiscal and political policies of the Federal Government. By maintaining artificially low interest rates for decades, the Federal Reserve believed the business cycle had been eradicated and an environment, where everyone could buy anything they wanted on credit, had replaced it. Meanwhile, the Federal Government was busy adopting policies that only Karl Marx could endorse. They created agencies, like Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), to assure everyone could own a home they couldn’t afford and every student could study any subject they chose regardless of whether the investment, in their chosen field, could ever be justified by the market after they graduated.
Accordingly, since 2008, the debt the government incurred during the Panic has increased exponentially as the government is forced to make good on mortgages and student loans, which it guaranteed during the boom years. As a result, much of the private debt that existed in 2008 has been converted to public debt. In addition, the Federal Government continues to run a budget deficit of nearly 2 trillion dollars per year as it attempts to maintain the programs and promises it made to its citizens over the past 80 years. These factors have driven the public sector to a point where its debt is no longer sustainable.
The private sector, by comparison, has fared quite well since 2008. It has, of course, benefited from the transformation of private debt into public debt. Even more, most companies have taken additional steps to reduce costs and strengthen their balance sheets. This has lead to an increase in corporate profits despite an economy that refuses to produce new jobs. So, when we compare the relative strengths of the private and public sectors of today to those of the Great Depression, we see that the real risk today exists in the public sector while the risk during the Depression came from the private sector. For these reasons, today’s economy represents the perfect antithesis of the Great Depression.
While everyone is expecting equity markets to crash in a Depression-like manner, simple common sense dictates that based on the amount of debt held in the public sector, it is far more likely that any crash will occur in the currency and bond markets. In addition to the fundamental weakness of the public sector, the bond market is also extremely overbought and is in a bubble, which may prove to be the bubble of all bubbles. Such a combination of fundamental and technical weakness makes it highly likely that the demise of the currency and bond markets could occur just as quickly as the stock market crash of 1929 or the real estate meltdown of 2008. If that happens, all people seeking safety in Great Depression era investments will be devastated.
The probability of a crash, in bond and currency markets, becomes even more pronounced when we analyze how governments are dealing with the debt crisis. Instead of balancing their budgets through reductions in spending, they continue to spend far more than their revenues. In turn, central banks expand their balance sheet and purchase government bonds on the open market to finance the shortfall. Accordingly, the problems underlying the sovereign debt crisis are not getting better but are instead continuing to worsen.
History tells us that when nations are confronted with the amount of debt currently maintained by developed countries, they resolve the problem by monetizing the debt. While quantitative easing represents the first phase of monetization, eventually the Federal Reserve will simply buy bonds that the government will never repay. This is inevitable as there is no other way out of this crisis.
Everyone knows that massive debt monetization results in inflation. And the first sign of additional quantitative easing, or increasing inflation rates, may provide the catalyst for a mass exodus of investors from bond markets. Then again, it could be brought on by the collapse of the Eurozone, a default by any member thereof or some other debt ridden sovereign entity that hasn’t yet come to the attention of investors. While timing is always an issue, there can be no doubt that these markets will eventually come crashing down.
If the current economy represents the antithesis of the Great Depression, our investment strategy should also be 180 degrees different from a prudent Depression era strategy. Rather than investing in the public sector, which provided safety during the Depression, we should invest in the private sector. In short, anything related to the government should be avoided.
As inflation accelerates, everything denominated in dollars will increase in value including equities, real estate and commodities. And that is precisely where we should put our money. As for equities, we need to focus on large cap, blue chip stocks with international exposure, a pristine balance sheet and a business model that has no reliance on government contracts or spending. Adding a healthy dividend makes it all the better.
According to these criteria, I find the following stock appealing: Procter & Gamble (PG) 3.44% yield, Wal-Mart (WMT) 2.57 yield, Arch Coal (ACI) 3.05% yield, Apache (APA) 0.65% yield, Exxon (XOM) 2.47% yield, Caterpillar (CAT) 2.04% yield, John Deere (DE) 2.28% yield, Gold ETF (GLD), 3M (MMM) 2.83% dividend yield, Silver ETF (SLV), Abbott (ABT) 3.64% yield, Lab Corp (LH), Apple (AAPL), Cisco (CSCO) 1.34% yield, International Business Machine (IBM) 1.65% yield, Intel (INTC) 3.61% yield, Hewlett Packard (HPQ) 1.8% yield, Google (GOOG), AT&T (T) 6.13% yield, Verizon (VZ) 5.53% yield.
Disclosure: I am long APA, XOM, CAT, DE, GLD, MMM, ABT, AAPL, CSCO, IBM, INTC, GOOG.
Hmmmm. This is the first thing I’ve read that seriously makes me think I might be wrong being 90% out of the market and in “safe” investments.
cactus: Today, we live in an economy that represents the polar opposite of the Great Depression.
thanks for your article
Cactus
Good article. Reason for some thought. I am currently long on cash (80%), but have equities too, some real estate (paid for) etc.
I have been worrying about inflation but didnt think of the bond market possible collapse because of it. Makes sense.
If govs couldnt get their bonds sold at their manufactured rate there sure would be a lot of discounted bonds on the market to make up for the higher interest yields ! and pretty fast too.
I don’t see your collapse of cash though. That would take a very rapid inflation hike which such a large economy as the states would be able to thwart easily with wage and price controls. But inflation would still occur and that would devalue cash. I suppose it all depends on how old you are and the utility value of your cash over your remaining years.
I personally think the Gingrich candidacy deserves a closer look.
U.S. Foreclosure Fraud in a Nutshell, How Average Joe’s Home Was Stolen
Politics / US Housing Nov 28, 2011 - 02:11 AM
By: LewRockwell
Politics
Diamond Rated - Best Financial Markets Analysis Article
Bill Butler writes:
The untold story in the foreclosure crisis unfolding across America is that, following a foreclosure perpetrated by one of the October 2008 Bailout Banks (e.g. Bank of America, Citibank, JPMorgan, Wells Fargo) Fannie Mae or Freddie Mac suddenly appear as the record owner of Average Joe’s home. These federal government sponsored entities then go into local housing court and get a court order authorizing them to evict Joe. If Joe resists, these supposedly charitable institutions obtain a writ ordering the local sheriff to forcibly remove Joe from his home.
Newt Gingrich recently admitted to accepting $1.8 million from Freddie Mac ($25,0000 to $30,000 a month during one span of time) for advising this proto-fascist entity. Gingrich claims that he supports Fannie and Freddie because he believes the federal government “should have programs to help low income people acquire the ability to buy homes.” But Fannie and Freddie don’t do this and never have. When government “helps” someone by subsidizing the purchase of something (through easy credit or lower-than-market rates), it makes that something more expensive. Helping someone buy something that is overpriced because of your help is not help. Fannie/Freddie subsidies not only hurt the low income people they intend to help, they hurt everyone by subsidizing, and therefore distorting, the entire housing market. Fannie/Freddie’s charity has now taken a dark turn. Like their Depression-era New Deal predecessor the Regional Agricultural Credit Corp., Fannie/Freddie are now repossessing homes at an increasing and alarming rate.
Mr. Gingrich either does not understand economics – government subsidies make things more expensive, not less expensive, and therefore hurt their intended beneficiaries – or he is a vain, selfish, and cynical man with no interest in actually helping his neighbor.
…
Well hell…none of the candidates (including Obama and except Ron Paul) understand this.
Didn’t a one of them ever sit in a freshmen economics class?
Or have a conversation with someone who taught one?
(Glen Hubbard, Lawrence Summers, Ben Bernanke, Austin Goolsbee, Christina Romer, etc etc etc…)
Didn’t a one of them ever sit in a freshmen economics class?
Does anybody take any of this seriously at 18? I know I didn’t. I was just trying to get an acceptable grade with the bare minimum of effort. I’m just glad to have you guys to re-teach it to me for free now.
In his first book, Dreams from My Father, Obama did mention an economics class that he took while he was a student at Occidental University. But he didn’t major in econ.
poly con?
poly sci why try!
It doesn’t matter what Obama majored in. He, like his predecessor, let Goldman Sachs dictate his economic policies: enrich the .01% at the expense of the rest.
Shh! You are making Measton, Oxide, Alpha, Rio, and RealtorsAreliars upset because you support Ron Paul.
Your really are a pitiful foolish man. You’re still here pimping politicians that cannot possibly advance whatever cause your drum-beating.
Filed under: You Lie!
government subsidies make things more expensive, not less expensive
Evidence exhibit “A”: Thee Internet / avg. Joe / acce$$
FWIW, when I lived in Mexico corn tortillas were subsidized. There were also price controls. Basically, the government sold the tortilla dough (nixtamal) to the tortillerias at an artificially low price which would allow them to make a profit at the controlled price.
The tortillas were also enriched with some soy protein. The poor lived off of tortillas and beans. It wasn’t unusual for them to buy two kilos everyday (for about 25 US cents in the 70’s and 80’s IIRC).
The Mexican government also subsidizes snake antivenom drugs. If you should be so unlucky as to be bitten by a rattler in Guadalajara, the antivenom costs 100 bucks.
Not a bargain for a campesino, mind you, but the US price for the same drug is around $26,000.
the US price for the same drug is around $26,000.
“What did the Doc say Willie?”
“Doc says, you gonna die”
The CDC subsidizes antivenin and rabies vaccine here, too. It’s supplied at no charge to hospitals in the interest of public health. Nonetheless Ronald Reagan Medical Center still tried to charge me $1850 per injection for the five shot series.
By grace of providence I was about to be interviewed for a current events television program and had agreed to meet the news team at the hospital rather than at their studios. When the officious hospital administrator threatened to withhold the rabies injection until I wrote her a check, instead of threatening to run amuck among the wards biting unwary passersby, I was able to point down the corridor and say,
“See that camera crew waiting there at the end of the hall? The one with the pretty blonde lady and the seven-foot sound guy? They’re here to interview ME. How do you suppose your media relations department will react when I tell them you’re trying to extort me for rabies shot you get for free?”
First time in my life I can honestly say I was grateful to Fox News….
By grace of providence I was about to be interviewed for a current events television program and had agreed to meet the news team at the hospital rather than at their studios. When the officious hospital administrator threatened to withhold the rabies injection until I wrote her a check, instead of threatening to run amuck among the wards biting unwary passersby, I was able to point down the corridor and say, “See that camera crew waiting there at the end of the hall? The one with the pretty blonde lady and the seven-foot sound guy? They’re here to interview ME. How do you suppose your media relations department will react when I tell them you’re trying to extort me for rabies shot you get for free?”
Yay, ahansen! Way to stick it to ‘em!
Love that joke!
Yeah, the rabies vaccine was free. But someone has to pay that doctor/nurse to load the syringe, and inject it. Along with that fancy patient room, waiting room, and receptionist that makes you fill out all those forms, and copies your insurance card (assuming you have one). And we won’t even mention those $100 Band-Aids.
$1850/injection x 5 sounds about right to me. But then, I usually round up to the next thousand. Less administrative costs that way.
Anybody who thinks this is outrageous is obviously some kinda pinko commie shill for the Single payer/Socialist/God-less Obama voters.
Nonetheless Ronald Reagan Medical Center still tried to charge me $1850 per injection for the five shot series.
Gotta love our for profit healthcare system. The Ferengi would be proud.
btw, that was WITH insurance at a public health clinic….
Should have told them I was in the country illegally and no one would have batted an eye.
Electric rates in Denton, Texas = 17 plans, from 8.64 cents to 10.1 cents kilowatt/hour. (plus the time you waste reading the plans, sorting thru the fine print, interview friends/neighbors to find out about the “things they don’t tell you”, etc…….)
Electric rates in Socialist/regulated Kansas = 8.23 cents kilowatt/hour (as near as I can decipher, not including sales taxes)
Electric rates have gone up a lot since Gov Bush deregulated the industry.
Part of it goes to pay for the fancy new computer meters we are getting installed ($2.68/mnth for 10 years!) that eliminate the need for readers and the 18 billion dollar cost overrun on the Fossil Creek Nuclear Plant.
Comanche Peak?
Electric rates in Socialist/regulated Kansas = 8.23 cents kilowatt/hour
I pay even less than that!
Read that fine print. Most plans have a minimum usage to get the quoted rate. If you use less than 1000 KWH a month you get to pay at the grid retail price or about 20% higher. Also note the longer contracts are higher, not lower than the month-to-month rate.
http://www.powertochoose.org/
that’s the trouble, so much of the gop has internalized this feelgood baloney, and it doesn’t even work as promised. gah…
Exhibit B: Education costs.
Exhibit C: Medical care costs.
Evidence exhibit “D”: VA Hospital$
Yup.
“How Average Joe’s Home Was Stolen”
Spare me.
Spare me, too.
And spare me, too. Is this the old Average Joe or the new one? The old Average Joe did not buy something he couldn’t afford and didn’t take out multiple HELOCs, which he also couldn’t afford.
The old Average Joe did not buy something he couldn’t afford and didn’t take out multiple HELOCs, which he also couldn’t afford.
Statistically speaking the new average Joe does not do that either and it’s not even close. 33% own their home outright, 33% rent and most of the rest are more financially responsible than many on this blog give credit. Why?
Why?
Too much $tucco, the itch that must be $cratched!
(careful $uzanne, you mights hurt yerself…)
Rio, You are correct. I should have said he was the “Nonaverage Joe.”
‘Statistically speaking the new average Joe’
Why should we give the guy next door a break when he is likely, ‘racist, anti pro choice, personhood amendment sponsoring, global warming denying, big oil and gas and coal burning, warmongering, rapture-bunny slobbering Israel loving, 30% obese, when-fascism-comes-to-America-it-will-be-wrapped-in-the-flag-and-carrying-a-cross constituency’ as one poster put it?
I’ve known people in unions that were racists or Christian or drove SUVs. I’ve known environmentalist that were obese. I’ve meet people in foreclosure that simply didn’t/couldn’t pay their property taxes, and didn’t even have a loan. I’ve meet decent people who unquestioningly believe whatever the govt tells them.
Articles like this show oversimplification primarily serves those with an agenda. Those with an agenda are easily divided. Divide and conquer is what the PTB counts on so we never really challenge their power.
“Articles like this show oversimplification primarily serves those with an agenda. Those with an agenda are easily divided. Divide and conquer is what the PTB counts on so we never really challenge their power.”
QFT
redefining the debate as if there is only one red or blue solution is moronic and the goal of the PTB.
There you go again Ben. Upsetting the simplistic world view.
I don’t want to start a wee-ing contest here, but it seems that your exceptions are just that — exceptions. Sure there are people like those of whom you speak like fat environmentalists (guilty); however, someone who is anti-pro choice is, arguably, more likely to deny global warming, be pro-war, pro-death penalty, pro off-shore drilling, christian, etc. That these beliefs are like chocolate and peanut butter yet are totally antithetical with being “keepers of the garden” and the teachings of Jesus seems to be of minor importance.
In general, things like support of Israel ( to those outside of the chosen people — tough to separate the religion and the state on that one), pro-invasion of Iran, pro-offshore drilling, anti-environmentalism and obesity due to driving everywhere go hand in hand. Why is that (if you’ll allow that in general that is the case)? Is it the lack of understanding of how these issues are all so interconnected? Is it peer-pressure? The same goes for the other side too like those who got Prii to appear eco-friendly but commute 50 miles to work and live in a 5K sq ft house. Is it just an inability to think? Massive cognitive dissonance?
Like I said, I don’t want an argument. I am just stating a point of view, which could be totally wrong. Your comment just hit upon something that I’ve been pondering on for a while. No data again, just observations.
someone who is anti-pro choice is …
YMMV. Just for starters Catholic “anti pro choicers” (what a mouthful!) as a group have rather different outlooks than Protestant Fundy “anti-pro-choicers” on subjects such as death penalty, the environment, war, etc.
Fair enough point. Sometimes I get tunnel vision w.r.t. religion(s). The plumber who came over was wearing a stylized picture of Jesus made from words from the scripture and was talking about how he hits his kids to “get their attention” and that global warming isn’t real because “He” promised that “He” wouldn’t send more water to Earth to “teach us a lesson”.
It’s the schizophrenia of the NT words of the god of love on the shirt and the OT actions of the god of wrath that gets me. Not a good way to start my day. At least when my dad whacked me around, he didn’t make pitiful post-hoc rationalizations like “spare the rod, spoil the child”.
There you go again Ben. Upsetting the simplistic world view.
American Passbook $avings rate, Nov 30th 2011:
0.15%
Surely you thinks ees jest?:
Bank of America, N.A. Member FDIC.Equal Housing Lender
© 2011 Bank of America Corporation. All rights reserved.
Your monthly deposit of $1.00 for 1 years with an interest rate of 0.30% compounded Annually
with an initial starting balance of $100.00
Year Balance
1 $112.32
Final Savings Balance: $112.32
$1.00 per month / .25cents per week
Eyes could do better looking in x1 tennis court trash can.
Mr. Bubble,
I think the common denominator is relative literacy. Follow me here:
Catholicism liturgy was up until recently written and spoken in Latin– the rank and file had to take it on faith. Protestantism was very literally a protest about keeping The Word from the people, thus the Bible was printed and spoken in the common tongue. From those traditions come today’s predominant modern US religions.
Your examples are all of the belief in faith/emotion vs demonstrable science and the long-term thinking engendered by critical analysis.
Fannie and Freddie are the worst of all possible worlds: a corporate government agency.
Their ONLY reason for existence was a licesne to steal. Just ask Raines.
HUD and the FHA are just as bad.
Never forget that RE is a lot like dealing in used cars.
What a load of bull
Fannie Mae or Freddie Mac suddenly appear as the record owner of Average Joe’s home. These federal government sponsored entities then go into local housing court and get a court order authorizing them to evict Joe. If Joe resists, these supposedly charitable institutions obtain a writ ordering the local sheriff to forcibly remove Joe from his home.
“Suddenly appear as the record owner”?
Maybe suddenly as in suddenly after the “owner” took a massive “home improvement loan”?
“charitable institutions”?
Fannie/Freddie have been called various things, but I didn’t know they were like a soup kitchen in any form. Except that they are in a soup.
Mr. Gingrich either does not understand economics – government subsidies make things more expensive, not less expensive, and therefore hurt their intended beneficiaries – or he is a vain, selfish, and cynical man with no interest in actually helping his neighbor.
I think this pretty well describes him. Especially the vain and selfish part.
Recall that he brought divorce papers to his first wife while she was hospitalized for cancer treatment. And he cheated on wife #2 for years before marrying his mistress, wife #3.
Well … he is from the “family values” party.
And some of that party takes it seriously…see Cain issues. With Newt I don’t know if they’ve gotten numb to it over the years or if they like what he says so much that they can kind of ignore it.
Didn’t Newt have some sort of Monica Lewinsky type problem of his own years ago? Funny I haven’t heard much about that (yet).
“And some of that party takes it seriously”
I wonder why that is? Do you think maybe they demand it from others because they can’t muster the strength to apply it to their own lives?
Some are hypocrites, some aren’t. I think most would like a leader that represents the way they’d ideally like to see themselves, though. Seems like something you’d expect from human nature.
Carl…. You merely rephrased what I stated. They want to “see” themselves that way because they aren’t that way and want someone else to do it for them.
Did you miss my “some are, some aren’t” statement? You’re describing some of them, but not all of them.
Newt was sixteen when he started dating his high school teacher(wife #1).
I’d be curious to know what women see in him. Seems like the kind of guy you’d want to stay far away from. But then again serial killers in prison seem to fascinate some women, too.
Reaction formation or “there’s something about that guy I don’t like about myself”.
I’d be curious to know what women see in him.
I think it’s the name-dropping factor. As in, “Look at me! Newt Gingrich is interested in me! Aren’t I special?”
In short, these gals are pretty insecure and need the validation of being associated with someone famous. The fact that the famous person has a habit of using ‘em and losing ‘em doesn’t enter into the equation. At least not right away.
Newt seems to appeal to stupid mindless people, and the US of A is well stocked on those.
You’re forgetting the Tiffany factor.
“I’d be curious to know what women see in him. Seems like the kind of guy you’d want to stay far away from.”
‘Power is the greatest aphrodisiac.’ I don’t know the origin of that quote, but it’s a good one.
‘Power is the greatest aphrodisiac.’
-Henry Kissinger
A man even uglier than Newt.
…… and more corrupt whose lies are far more deceptive, devious and dangerous. heh…. ol Henry. He’s just a few short miles from me.
‘A man even uglier than Newt’
‘A matrix of closely tied university-based strategic studies ventures, the so-called Grand Strategy Programs (GSP), have cropped up on a number of elite campuses around the country, where they function to serve the national security warfare state…Ostensibly created to train an up-and-coming elite to see a global “big picture,” this grand strategy network has brought together scores of foreign policy wonks heavily invested - literally and figuratively - in an unending quest to maintain US global supremacy, a campaign which they increasingly refer to as the Long War.’
‘According to Gaddis, the original ideas shaping the program’s curriculum were drawn from the efforts of an earlier generation of strategic planners, such as Henry Kissinger’
‘US warfare doctrine in the post-9/11 era has returned to a focus on counterinsurgency…an increasingly sophisticated spectrum of intervention - of “nation building” and the “reconstruction” of other societies - is now included in COIN doctrine.’
‘That more robust notion of COIN has come to occupy a central place in the thinking of those semi-warrior intellectuals informing one another and an upcoming generation of their students. Sharing a broad consensus on America’s role in the world and imbued with a sense of American “exceptionalism,” the Long War intellectuals at the national warfare state universities have joined in preparation for permanent war.’
http://www.truth-out.org/how-private-warmongers-and-us-military-infiltrated-american-universities/1321396333
He likes families so much, he’s had three of them.
I had a near knock-down drag out fight with family over the Thanksgiving dinner table over this concept…they didn’t get it.
The subject was college tuition and government providing a college education for everyone who couldn’t afford it. I was the sole voice that said it was a terrible idea…I said to be careful what you wish for in terms of government subsidizing–as it would drive up the cost for everyone, and we would all end up paying more for education.
I was skewered…but held my ground…I was accused of sounding like an economist…which I am.
UPDATE 1-US Fed bought MBS to cover canceled deals with MF
Thu Nov 3, 2011 3:37pm EDT
Nov 3 (Reuters) - The U.S. Federal Reserve bought $950 million in mortgage-backed securities from other firms to replaced canceled transactions with bankrupt futures broker MF Global , the New York Fed said on Thursday.
The replacement purchases were part of $5.5 billion in net buying of mortgage-backed securities in the week ended Nov. 2.
The purchase program, conducted by the New York Fed for the U.S. central bank, is the latest measure announced on Sept. 21 to help the mortgage market and the overall economy.
MF Global filed for Chapter 11 bankruptcy on Monday as its shares plummeted in recent days on worries over its perceived risky bets on European sovereign debt. James Giddens was selected as its trustee to liquidate the business.
The New York Fed also stripped MF Global of its status as a primary dealer.
During this time, the New York Fed “took progressive and proportionate steps to manage its exposure to the firm and ensure the ongoing effective implementation of monetary policy through open market operations,” it said in a statement.
The New York Fed said it stopped doing new business with MF Global. It also required MF Global to post margin on $950 million worth of forward mortgage-backed securities transactions it had with the company.
The margin was intended to protect the Fed “against potential exposure to MF Global due to fluctuations in the market value of the positions.”
When MF Global could not post the margin, the New York Fed declared a default on these deals, canceled them and bought mortgage securities from other firms.
The cost of replacing the canceled deals with MF Global was $3.1 million, based on the net difference between the price of the original trades and the price of the replacement purchases, the New York Fed said.
“The margin posted by MF Global was sufficient to cover the replacement cost,” it said, so the Fed “did not suffer any loss as a result of the firm’s failure.”
Did MF global provide a single good or service? At all?
What are you ? Some kinda dang commie?!
It’s not their job to provide a good or service, but to maximize a return for the investors!
Don’t be gettin’ uppity, peasant!
Tom Wolfe’s Masters of the Universe, doing God’s work, no less
Yes, Oxide, they did perform an invaluable public service. MF Global finally exposed Corzine - limosine liberal NJ Senator and Guv’ner, former Goldman Sachs CEO, and on the short list of Obama Secretary of the Treasury - for the swindler that he is. People who invested with him deserved to get defrauded. MF Global will show those same bagholders that for the .01%, crime truly does pay.
The New York Fed [Goldenman$ucksInc.] said it stopped doing new business with MF Global.
The New York Fed [Goldenman$ucksInc.] also stripped MF Global of its status as a primary dealer.
Hank Paulson, Cheney-$hrub $hadow Legacy Treasury Secretary pitbull : (re: Lehman Bro$) “I loves you, I loves you not!, I loves you, I loves you not!”…skipping in circles, daisy petals falling all over Wall $t.
‘The U.S. Federal Reserve bought $950 million in mortgage-backed securities from other firms to replaced canceled transactions with bankrupt futures broker MF Global’
Here you go OWS. This is how these guys never lose.
Makin’ digital comma’s,… messy, noisy, hard, diffiCULT work.
(24/7 x3 $hifts)
Their throw-back motto: “We make money the old fashioned way, we earn$ it!”
Corporate communism. Thank god we live in a free country!
Crony capitalism at its most brazen.
Thank you, Obama voters. Thank you, McCain voters. Your willingess to bend over for the kleptocrats has been duly noted.
This is utterly amazing. Going in to bail out Wall Street gamblers no matter what the deal might be, all for the “good of the economy.”
How does this support the “dual mandate” of stable prices and maximum employment? Each of those hedgie jobs costs what, several million a year?
The people running these deals are wealthier than Croesus. Are these bailouts supposed to trickle down to the 15% of the workforce that is un/underemployed? Or is that not a factor at all, and this is just “friends helping friends”? Friends helping friends with Other People’s Money of course, God forbid they should reach into my own pocket.
You really need to get off your obsession with Bush-cheney.
OBAMA is in the Whitehouse. Tim Geithner is Treasury Secretary.
and yes, the same team continues at the FED, due to OBAMA re-appointing slimy Bernanke.
He could have charted a different course….i.e. CHANGE. All that change you heard about. Where?
OBAMA was supported by GOLDMANSUCHS and the Wallstreet gAng.
NOBODY under the OBAMA-appointed Attorney General has been investigated and brought to trial. NO ONE.
However, they did have their “FOOT ON THE NECK” of BP, and won’t prosecute Black Panthers, and chase after every legitimate business for graft.
YOUR man, OBAMA is helping the Wallstreet Fraud, while claiming to be for the little man……………..
where are the investigations?
Why isn’t the FED being called into account for UNCONSTITUTIONAL and ILLEGITIMATE use of the FED’s powers??
Look at the White HOuse. OBAMA is Wallstreet’s man in charge.
On the brighter side, Obama was recently mic-checked by Occupy protesters. It was at a campaign event in New Hampshire.
I predict that, in the coming months, quite a few politicians and other powerful people will get the mic-check treatment. And we’ll see a lot more Bank Transfer-type events.
Remember, this peasant uprising is only in the first inning. Got a long ballgame ahead of us, folks.
Take your pill, sweetie. You’re yelling at the choir again….
btw, re:
“…However, they did have their “FOOT ON THE NECK” of BP…”
Thank the heavens someone does. Read what Greg Palast has to say about BP’s generational machinations in his excellent new book “Vultures’ Picnic.”
“OBAMA is Wallstreet’s man in charge.”
Obama is little more than Wall-street’s Charlie McCarthy, IMHO.
In good company: Bernanke backs Tarullo on housing-targeted QE3
Nov 3, 2011 11:20 EDT
The Federal Reserve, which on Wednesday sharply downgraded its outlook for U.S. economic growth and employment, appears to be seriously considering another round of monetary easing. In what would represent a policy U-turn, any third round of quantitative easing or QE3 appears increasingly likely to be heavily tilted toward purchases of mortgage-backed securities.
The idea was recently floated rather surprisingly by Fed Governor Daniel Tarullo, who normally focuses on regulatory issues. Some analysts had speculated Tarullo might not have broad support, but Fed Chairman Ben Bernanke’s comments on the matter during his post-meeting press conference on Wednesday suggested otherwise:
Whether any such program would have the intended effect remains to be seen. The Fed already bought some $1.25 trillion of MBS as part of its first round of quantitative easing, to only modest effect. The central bank seems to be hoping that if its actions coincide with the government’s push for broader foreclosure relief, they may raise the chances of success. The U.S. housing slump has been ongoing now for over five years, with home values having fallen by about a third nationwide.
I am simply amazed that these “economists” and “sorcerers of money” think they can conjure whatever result they want by pulling levers and printing money. They really believe we are all little automatons that can be lead and pushed to do whatever they would like as they play games with money and interest rates.
Things like this work at the margin, when the overall economic activity amoung people is working in some kind of balanced between buying and spending. We are OVERSPENT. People are trying to DE-LEVERAGE and get DEBTS under control. WE are drowning in Debt.
They no longer want to BUY, bUY buy.
So print all the money you want, game the “system”. INTEREST rates are already set at ZERO. How low can you go? Oh, that’s right, there was a proposal to Charge us negative interest on excess money in our bank accounts to force us to spend…………….Mice in maze.
We are all just Lab rats of the FED.
The experiment has failed. We are traveling in different directions.
They need to re-assert control. They are desperate.
Pull the levers. Close doors and hatches. Open other doors. Will the rats go the way the FED wants? Make more money for Wallstreet traders. Big Bonuses this year. Game they “system”. Convert customer accounts. Rob the taxpayers. Keep the game going. Pull the levers. See Jane run. Run, Jane, run~!
They really believe we are all little automatons that can be lead and pushed to do whatever they would like
Well of course! That’s why we are referred to as “consumers” and not as “individuals”, “people” or even “citizens” in the MSM.
Maybe Cavil (Cylon organic model #1 IIRC) in Battlestar Galactica was right when he said “We don’t have souls, we’re machines”.
Once again, I must remind them the problem isn’t “housing”
It’s INCOMES. Of J6P, and the rest of the serfs.
Until that changes, nothing is going to be “fixed”…..not the housing market, not retail sales, not state or Federal budgets (since most of the tax load is being paid by taxpayers and not corporations). None of the “printed money” is getting out to Main Street. Nobody in the old paradigm industries are getting raises of any kind. Their incomes are frozen, but their costs are up (food, fuel, health care premiums, copays).
The turnips have been squeezed dry, and because of globalization, are in direct competition with every low-cost bidder in the world.
They have screwed the pooch, but will never admit it, because they might find themselves looking for work. There is nothing that is more useless than a bad politician or dumb economist.
Banks made billions on secret Federal Reserve loans
Bob Ivry, Bradley Keoun,Phil Kuntz, Bloomberg News
Tuesday, November 29, 2011
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required emergency loans of a combined $1.2 trillion on Dec. 5, 2008, their single neediest day.
Bankers didn’t mention that they took tens of billions of dollars at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market interest rates, Bloomberg Markets magazine reports in its January issue.
Saved by the 2007-2010 bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
While Fed officials say that almost all the loans were repaid without losses, details that emerge from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
…
that almost all the [MegaBankInc.] loans were repaid without losses
$tay focu$ed & on me$$age:
“Debbie-the-deadbeat-live$-Lavishly!”
Score:
Citizen-deadbeat-peon Evictions: 1,323,457+
$COTUS MegaBankInc. Revocation$: 0
“And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market interest rates”
It must be nice to be able to borrow at 0% and then charge CC customers up to 20%!
It must be nice to be able to borrow at 0% and then charge CC customers up to 20%!
Makes me feel like I’m in the wrong business!
You are.
Don’t foget to change your name to “Tony” or “Guido” when you start your new, er, “loan” business.
Don’t forget that TARP really amounted to $16 TRILLION to date.
BOHICA!!
Big banks got billions in secret aid
Documents reveal what Fed wasn’t telling
Nov. 29, 2011
…
“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” said Ohio Sen. Sherrod Brown, a Democrat. “This is an issue that can unite the tea party and Occupy Wall Street.”
A court battle
The size of the bailout came to light after the parent company of Bloomberg News won a court battle against the Fed and a group of banks called Clearing House Association.
Bankers didn’t disclose the extent of their borrowing. JPMorgan Chase’s total loans were almost twice its cash holdings, and its peak borrowing of $48 billion came more than a year after the program’s creation.
On Nov. 26, 2008, Bank of America’s then-CEO, Kenneth Lewis, wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say his bank owed the Fed $86 billion; its borrowing peaked at $91.4 billion in February 2009.
“Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses,” said William English, director of the Fed’s Division of Monetary Affairs. The Fed is headed by Chairman Ben Bernanke.
Initially, who borrowed and how much were kept from public view. The secrecy extended even to top aides of then-Treasury Secretary Henry Paulson.
The six biggest U.S. banks, which received $160 billion from the Treasury Department’s Troubled Asset Relief Program, borrowed as much as $460 billion from the Fed, measured by peak daily debt. Morgan Stanley was the top borrower with a peak of $107 billion on Sept. 29, 2009.
That was eight days after then-CEO John Mack said the firm was “in the strongest possible position.” A spokesman for the bank declined to comment.
With the help of the Fed’s secret loans, America’s largest financial firms got bigger during the crisis. Part of the boost came from a hidden subsidy — the Fed’s below-market interest rates.
The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show. Citigroup would have taken in the most: $1.8 billion.
Total assets held by the six biggest U.S. banks increased 39%, to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data.
Six banks holding so many assets is “un-American,” said Richard Fisher, president of the Federal Reserve Bank of Dallas. “All of these gargantuan institutions are too big to regulate. I’m in favor of breaking them up and slimming them down.”
That wasn’t the policy advocated by the White House. Treasury Secretary Timothy Geithner opposed an April 2010 proposal by Brown and Sen. Ted Kaufman of Delaware, also a Democrat, that would have forced the six banks to shrink.
The big six — JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group and Morgan Stanley — took 63% of the Fed’s emergency loans, as measured by peak daily borrowing, data show.
Combined, the six spent $29.4 million on lobbying in 2010, a 33% increase from 2006, OpenSecrets.org said. Lobbying by the American Bankers Association, a trade organization, increased about the same rate, OpenSecrets.org reported.
Lobbyists argued that bigger banks are more stable, better able to serve large companies and more competitive internationally, and breaking them up would cause “long-term damage to the U.S. economy,” according to a November 2009 letter to Congress from the Financial Services Forum, an advocacy group made up of the CEOs of 20 of the largest financial firms.
Kaufman countered that some banks are so big that their failure could trigger a chain reaction in the financial system. So-called too-big-to-fail banks have an advantage over smaller firms: Their borrowing costs are lower because lenders believe the government won’t let them go under. The perceived safety net lets bankers take greater risks because they enjoy profits while shifting losses to taxpayers.
…
“This is an issue that can unite the tea party and Occupy Wall Street.”
On economics yes. They can keep their racist, anti pro choice, personhood amendment sponsoring, global warming denying, big oil and gas and coal burning, warmongering, rapture-bunny slobbering Israel loving, 30% obese, when-fascism-comes-to-America-it-will-be-wrapped-in-the-flag-and-carrying-a-cross constituency, and we’ll take the rest of them
Most of the reps in congress standing up to fight the Fed on this and Section 1031 of the NDAA bill are associated with the Tea Party.
And I’ll stand shoulder to shoulder with the Tea Party but I’m skeptical of the TeaParty label wearing Congressional Whores. I’ll believe it when I see them responding to TeaParty pressure.
Only 2 Republicans voted for it. Paul and Kirk. Why?
Senate Rejects Amendment Banning Indefinite Detention
http://www.aclu.org/blog/tag/NDAA
Today, the Senate voted 37-61 to reject an important amendment to the National Defense Authorization Act (NDAA) that would have removed harmful provisions authorizing the U.S. military to pick up and imprison without charge or trial civilians, including American citizens, anywhere in the world. The amendment offered by Sen. Mark Udall (D-Colo.), would have replaced those provisions with a requirement for an orderly congressional review of detention power.
The Secretary of Defense, the Director of National Intelligence, the Director of the FBI and the head of the Justice Department’s National Security Division have all said that the indefinite detention provisions in the NDAA are harmful and counterproductive, and the White House has issued a veto threat over the provisions.
We’re disappointed that, despite robust opposition to the harmful detention legislation from virtually the entire national security leadership of the government, the Senate said ‘no’ to the Udall amendment and ‘yes’ to indefinite detention without charge or trial.
Civics pop quiz: How many provisions of the first ten amendments to the Constitution (quaintly known as the Bill of Rights) does this proposed law violate?
+20 to those who come up with the right answer. Yes this is an open-book quiz.
“Today, the Senate voted 37-61 to reject an important amendment to the National Defense Authorization Act (NDAA) that would have removed harmful provisions authorizing the U.S. military to pick up and imprison without charge or trial civilians, ”
See, now I have to figure this out:
Bill had a Provision which said: military CAN pick up people without charge.
Amendment removes Provision: so military CAN’T pick up people without charge.
Senate rejects Amendment which removed the Provisions: so military CAN pick up people without charge…
I could never make it as a lawyer.
only 30%? Hardly pegs the extreme-o-meter.
Allow me to tickle some brains. I know a lot of the regulars here aren’t fans of the high desert….but I love it.
Take a look at the sales price charts for this area…and talk me out of it.
Bullhead City, Arizona…..right across the river from Laughlin. One thing I can’t quite figure out is the range of prices in these neighborhoods. Some are unreasonably cheap, and others are 5 times the price of houses 3 doors down.
I remember when my wife’s dad moved their for his arthritic “bones” He loved it. Playing on the river or in the casinos appeals to lots of folks. Homes with boat docks, on the river, go for a mint.
but lots of other ‘hoods are trailers mixed in with houses which would explain lots of price discrepencies, not to mention the discrepencies that you would get for neighbors from gambling heads to river rats. to trailer trash. do your homework and you could do well if you like the area. Too hot for me!
One of my closest friends moved to Laughlin, Nev from NY back in the 1990’s. He said it was the hottest place on the planet.
It’s actually a tad hotter a few miles away in Needles.
I’ve spent a lot of time in Bullhead City. The winters are very mild and prices are down more than 50%. I did have a lighter explode in my truck when it was sitting in the sun one summer.
Needles, CA…….X-GSfixrs travel story du jour….
In 1968, Dad decided to take the family on vacation to California. Thought he would save money by renting a camping trailer, and tow it across the southwest with out non-air conditioned “Family Truckster”
Three full days, with kids 11 to 8, at 50 mph, with no air conditioning, on vinyl seats, in June…..(and not “little kids” either; I was 6 feet tall when I was 14. Brother was an inch shorter)
First night we stayed with relatives in Sunray, Texas (.the “End of the Earth” thinks Sunray is out in BFE). Next night, Gallup, NM, listening to couplers banging in the ATSF railyard all night.
Stopped in Needles on June 4 to “camp”. Spent the night in 40 degree temperatures, waiting for the winds to blow the camper trailer over.
Next morning, we made LA……the radio was filled with reports on the Kennedy assassination the previous night.
Next morning, we made LA……the radio was filled with reports on the Kennedy assassination the previous night.
I was in elementary school when that happened. My parents didn’t tell me and sent me off to school, where all my 3rd grade classmates were talking about it.
I’m not sure if it was regular or summer school.
I don’t think you were in summer school in November. Although maybe…
Robert Kennedy, not John F.
Assassinated in LA, June 5, 1968
Next morning, we made LA……the radio was filled with reports on the Kennedy assassination the previous night.
I was in sixth grade. My classmates and I were simply aghast. We didn’t remember JFK very well, but RFK? We admired him. Especially his ability to reach out to people who, shall we say, weren’t rich and powerful.
In Colorado
We must be in the same age group. I clearly remember that day, and the day MLK was shot. My teacher and parents were crying, kids were talking about it, I was told not to watch the news. I couldn’t sleep during those events. They shook my safe little world.
“I don’t think you were in summer school in November. Although maybe…”
IIRC, it was JFK who was shot in November. Bobby died on a June 6. Sorry for not being clear that I meant Bobby. I was a toddler when JFK was shot.
Bullhead City is what happens when a significant part of your population goes on meth. And doesn’t come back. Same is true of Kingman, AZ.
Hey Slim, my late SIL and late BIL lived in Kingman. I thought it was a cute little town. Thanks for the update, it’s been years.
Bullhead is where my other SIL gambles, IIRC.
Now I know the rest of the story! Two towns to avoid.
That’s one thing I don’t enjoy…..a disproportionate number of tweakers live in the high desert.
Can’t be any worse than the Owens Valley though.
How is supporting unsustainably high U.S. housing prices with unsustainably low-interest mortgage loans supposed to fix anything? If the goal is for housing to find a bottom, it is very hard to grasp how artificially suppressed interest rates will help achieve it.
Dealers See Fed Buying $545 Billion Mortgage Bonds in QE3
November 29, 2011, 4:59 AM EST
By Daniel Kruger and Cordell Eddings
(Updates 10-year yields in eighth paragraph.)
Nov. 28 (Bloomberg) — The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries.
Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the 10 firms that provided estimates.
While mortgage rates are already at about record lows, housing continues to constrain the economy, with the National Association of Realtors saying in Washington last week that the median price of U.S. existing homes dropped 4.7 percent in October from a year ago. Borrowers with a 30-year conventional mortgage would save $40 billion to $50 billion annually in aggregate if they could all refinance into a new loan with a 3.75 percent rate, according to JPMorgan Chase & Co.
“We need to see a bottom in home prices,” said Shyam Rajan, an interest-rate strategist in New York at Bank of America Corp., a primary dealer, in a Nov. 22 telephone interview. “These are not numbers that are going to get down your unemployment rate,” which has held at or above 9 percent every month except two since May 2009, he said.
…
“If the goal is for housing to find a bottom, it is very hard to grasp how artificially suppressed interest rates will help achieve it.”
I assume the goal is for housing to find a “higher bottom” than it would with higher interest rates.
Bingo. The Fed is trying to put a floor under housing market values to save banks and homedebtors’ bacon. In other words, they are trying to reallocate wealth towards homeowners and lenders, away from wherever Mr Market wants the wealth to go.
Arguably any economic policy that attempted to alleviate or lessen a bust could be considered ‘anti-market’.
Yes, and it’s even worse than that, all this is to save banks and debtors who lent or borrowed irresponsibly during just one decade. I wish we could start seeing some analysis on what this is doing to the rest of the economy and how short-sighted it is.
Absolutely, Cantankerous, alpha, and Proper, a great topic.
With 78M Baby Boomers in a captial/cash crunch, when this controlled collapse finally hits bottom, where will it put all this aged once affluent crowd? How about the young now, who will be a decade older?
As a Baby Boomer who was priced out for years, after selling and hoarding the dough, I can’t tell you how poor I think we’ll be.
Another lost decade is in front of us, and that’s just the start, imho.
A diverse growing job market feeds housing and values. This is a disaster.
The Bernank has a FIRE-centric view of the economy. What’s good for Wall Street is good for the economy (and if it isn’t screw ‘em, it’s good for Wall Street
The really outrageous thing about this is that it takes wealth from the up and coming - college grads who weren’t part of this mess - and from those of us disciplined or insightful enough not to mortgage our futures on high-flying schemes - and funnels it towards the financial sector and real estate sectors, the pillars of culpability and irresponsibility in this Great Recession.
Thank the politicians for that.
Neuromance
Very well stated and unfortunately true.
Eurozone turns to IMF to fight financial crisis
By Roddy Thomson (AFP) – 8 hours ago
BRUSSELS — Eurozone finance ministers turned to the IMF for more help to keep the eurozone together on Wednesday after missing their goal of boosting their own bailout fund to one trillion euros.
With fears rising that Italy will need a bailout after its borrowing costs soared to record heights, ministers were searching for ways to control the rapidly worsening crisis now threatening the entire world financial order.
One minister acknowledged explicitly that the EU’s EFSF rescue fund alone would not be able to carry all the problems.
“We are now looking at a true financial crisis — that is broad-based disruption in financial markets,” said Bank of France governor and a member of the European Central Bank governing council Christian Noyer in Singapore. “We are facing a financial crisis, not a monetary one.”
Ministers from the 17-nation eurozone gave their rescue fund, the 440-billion-euro European Financial Stability Facility (EFSF), new weapons as part of efforts to increase its firepower but they were unable to obtain their targeted total.
“We haven’t lowered our ambitions but the conditions have changed, so it will probably not be one trillion euros ($1.33 trillion) but less,” Luxembourg Premier Jean-Claude Juncker, head of the group of eurozone finance ministers, told reporters.
Asian markets mostly slipped on the news following two days of gains — Tokyo and Seoul each down about half a percentage point, with Hong Kong losing 1.92 percent and Shanghai giving up 3.0 percent.
The EFSF has helped Ireland and Portugal but is deemed too small to save Italy and Spain if the crisis brings these countries to their knees.
…
I walked past the IMF late’ish last night - about 8:30. They still had security guards posted on the outside doors. Not someone sitting behind a desk just inside a main entrance. People walking the sidewalk near small doors that are only used as exits.
A blast from the past about Geithner and the IMF. Especially disgusting is the fawning comment by our esteemed senator Lindsey Graham.
http://online.wsj.com/article/SB123194884833281695.html
“Bleak but not doomed”… sounds pretty encouraging to me
Asia Stocks to Watch
Nov. 30, 2011, 1:54 a.m. EST
China property stocks slip as bleak 2012 looms
By Chris Oliver, MarketWatch
HONG KONG (MarketWatch) — Mainland Chinese and Hong Kong property stocks traded mostly lower Wednesday after fresh doubts surfaced that real-estate prices in the region will be able to escape the global maelstrom in 2012.
The stocks’ slide coincided with a new report by Credit Suisse which forecast office rents in Hong Kong to drop by 25% next year and then stay flat in 2013.
The report, which summed up the view as “bleak but not doomed” in a subsection, was distributed to the media after the close of trading on Tuesday.
…
HIV/AIDS infections soaring in China general population: experts
English.news.cn 2011-11-30 16:26:51
…
Figures revealed Wednesday by the Chinese Center for Disease Control and Prevention (CDC) show that the number of HIV positive men in their 60s and above soared from 483 in 2005 to 3,031 in 2010, accounting for 8.9 percent of the total. In 2005, the group only took up 2.2 percent.
Chinese men 60 and above with AIDS also skyrocketed from 237 to 2,546, accounting for 11 percent of all AIDS cases, up 5.6 percentage points from 2005.
…
Viagra?
Lack of women. You figure it out.
Not sure that explains the rise in HIV in men who are over 60, who should have wives. The one-child policy is only kicking in for guys who are about 25-35 now. Unless, of course, the fogies all tried to trade in for newer models and found that there are fewer newer models.
There simply are not and have not been for decades, enough women.
I think the ratio is some ridiculous number like 20-1.
Don’t know how accurate this is:
China Demographics Profile 2011
Population
1,336,718,015 (July 2011 est.)
Age structure
0-14 years: 17.6% (male 126,634,384/female 108,463,142)
15-64 years: 73.6% (male 505,326,577/female 477,953,883)
65 years and over: 8.9% (male 56,823,028/female 61,517,001)
http://www.indexmundi.com/china/demographics_profile.html
I am betting used needles.
If I were to create a virus, and fear not, I have no plans to do so, an STD is what I’d want to create. Why? Because the urge to procreate is basic to human survival. Hence, it’s the perfect transmission mechanism.
“…….urge to procreate……”
That’s not what I’m hearing from ALL of my married buddies….
Maybe not procreate … but most young guys want to get laid on a regular basis. The mechanics are pretty much the same.
If that weren’t also true of most young women there would be a WHOLE lot more accusations of, and prosecutions for, rape.
“Hence, it’s the perfect transmission mechanism.”
A former irresistible girlfriend would be the ideal host to spread it far and wide, from rough-handed laborers up through the economic strata with deft and economy, and likely within a relatively short period too. Yeah, I was naive then.
Slim, the X-files had a better idea. They put their virus into batches of high-fructose corn syrup, which of course is in everything. So even the geeks got sick (or would have, if the intrepid Mulder and Scully didn’t stop the bad guys).
I did pro bono legal work for people with HIV in the 90’s. Now I had precious few older men as clients, and I never asked anyone how they were infected (irrelevant to my reaon for being there), but you do get a pretty good picture of a person’s life when you talk about what they want to say in a will or who gets a power of attorney or about funeral arrangements. At a guess, most of them got the virus sharing needles.
A plurality of my clients were women with children.
Euro crisis: Italy at risk of insolvency, European finance ministers warned
Mario Monti must tackle Italian tax evasion to avoid other eurozone economies being damaged, says report
Ian Traynor, Brussels
guardian.co.uk, Tuesday 29 November 2011 12.51 EST
Article history
Italian prime minister Mario Monti with German finance minister Wolfgang Schäuble at the EU Council building in Brussels on Tuesday. Photograph: Virginia Mayo/AP
European finance ministers were warned on Tuesday night that Italy’s liquidity crisis could leave the eurozone’s third biggest economy insolvent with devastating impact on the fate of the single currency and its big core economies, Germany and France.
Eurozone finance ministers met in Brussels in their latest attempt to plot a path out of the EU’s worst crisis. With Mario Monti, the new Italian prime minister and finance minister, reporting to the session on his austerity package aimed at saving Italy and shoring up the euro, a confidential report from the European commission and the European Central Bank said Monti would need to do more than already promised.
The report, obtained by the Guardian, said Monti had to go further in his promises to combat rampant tax evasion in Italy, which is estimated to amount to 20% of gross domestic product.
“The sovereign debt crisis has now moved from the periphery to Italy and other core euro area countries. Pressure on Italian sovereign bond yields is particularly acute, reflecting investors’ mounting concerns with the sustainability of Italy’s large public debt” – almost €2tn, (£1.7tn) – the report said.
“The risks of a full-blown sovereign liquidity crisis can increase rapidly in the absence of a determined policy response … Persistently high interest rates increase the risk of a self-fulfilling ‘run’ from Italy’s sovereign debt. A liquidity crisis could then turn into a solvency crisis, whose repercussions for other large euro area countries would be very acute given their exposure to the Italian economy.”
Italy on Tuesday easily raised €7.5bn on the bond markets, but at exorbitant rates above the 7% sustainability threshold.
…
Prime_Is_Contained - The Cray is a J932SE. It’s two cabinets, one is 6′ deep and the other is around 4′ deep. They hook together. It has 1024 megawords of memory, and 32 200mhz + 32 100mhz processors. Uses 3 dryer outlets worth of power. Only run it briefly. Currently it’s kernel panicing on boot, and I haven’t been able to figure out why. It’s been a long experience trying to get it running as there isn’t much information. Hard drives were destroyed as it came from a classified environment. I bought 4 from govt auction for $5200, and sold 3 of them. Kept the one. Bought in 2003 I think, and it’s taken me this long to get it running.
http://www.flickr.com/photos/ethanotoole/6170014854/
I have a collection of older smaller computers I bring out to some public events for fun. I guess my other valuable one is a IMSAI 8080. and a IIGS that Steve Wozniak signed for me.
Wow just wow. Are you in the hackers club too?
. I guess my other valuable one is a IMSAI 8080.
My first job was writing assembler code for the 8 bit intel 8085 (an 8080 with built interrupt handling hw).
So, what is your favorite fake assembler command?
I am very fond of DWIW (do what i want).
The “XFU” command (replace X with your first initial)
My code was rife with those.
Jump if Carry? I meant Jump if not carry!
I hearby nominate VA B for the “Most Badazz Toy” Award.
Makes me feel pretty sheepish about still having my Commodore 64.
Very, very cool. Thanks much for sharing, Va Beyatch!
Looks like some fun projects going on at the labs there…
Thanks! I came to the decision that the area I live in was boring. Housing was overpriced. So my options are to make the area better, or move. So I started with #1, but #2 isn’t off the table.
The hackerspace movement is all over the world. There is a good chance there is one near everyone on here.
I’m impressed with the number of geeks on here
The Cray is neat, but it’s too heavy. The thought of moving it puts fear in me. Also it’s been a struggle trying to get it to work.
My midnight bout of insomnia is about to end.
Good night and good luck!
Matthew Lynn’s London Eye
Nov. 30, 2011, 12:01 a.m. EST
IMF rescue of Italy will spark global uprising
Commentary: The euro zone dilemma is stubbornly the same
By Matthew Lynn
LONDON (MarketWatch) — Soviet Russia didn’t produce much of enduring value. No one drove its cars, or flew in its planes if they could possibly avoid it. But it did have a good line in cynical world-weary humor.
Among the many jokes that circulated in the country was one that went like this: Every philosophy is like looking for a black cat in a dark room; Marxist philosophy is like looking for a black cat in a dark room, but the cat isn’t there; Soviet philosophy is like looking for a black cat in a dark room, the cat isn’t there, but you keep shouting “I’ve found it! I’ve found it!”
The search for a solution to the euro zone crisis is starting to sound very similar — and might soon start to develop its own brand of morose gags. Every week we get another big search for a smart-sounding scheme to rescue the project. Every week, officials proclaim they have found it — when, of course, they haven’t really.
The latest wheeze? Getting the International Monetary Fund to bail out Italy.
Italian borrowing costs have now broken decisively through the 7% barrier. At an auction on Monday, the country had to pay 7.3% to get away a small bond issue of 567 million euros maturing in 2023. A year earlier it paid just 2.9% on bonds of similar duration. If my borrowing costs tripled in a year, I’d be broke. There is no reason to think that Italy — with one of the highest government debt-to-GDP ratios in the developed world — can survive either.
…
Let no printing press remain idle!
US House Democrats press for mortgage write-downs
WASHINGTON | Tue Nov 22, 2011 4:33pm EST
Nov 22 (Reuters) - More than 20 Democrats in the U.S. House of Representatives on Tuesday called on the regulator of Fannie Mae and Freddie Mac to help underwater borrowers by allowing their loan principal to be reduced.
“We strongly urge that you reconsider your refusal to allow principal reductions to achieve better-performing (loan) modifications and avoid the extreme losses of unnecessary foreclosures,” the 21 lawmakers wrote in a letter to the FHFA.
“The performance of the enterprises’ mortgage modifications leaves much to be desired for homeowners, for the housing market, and for taxpayers,” Representative Brad Miller, a Democrat and a member of the House Financial Services Committee, said in a statement. Miller, who has proposed legislation to reform housing finance, led the Democrats in writing the letter.
Some economists see principal reductions as central to cleaning up the housing mess and preventing foreclosures. Settlement talks between the government and some of the biggest mortgage servicers to clean up alleged foreclosure abuses include widespread principle reductions in their agreement.
http://www.reuters.com/article/2011/11/22/usa-housing-debt-idUSN1E7AL1L920111122 - 100k
“Fannie and Freddie are also concerned that writing down loan balances would create a moral hazard — the concept that rescue efforts breed further behavior that exacerbates the existing problem — prompting other borrowers to stop making timely loan payments.”
——–
Good. Only 20 Dems signed the letter, meaning it will go nowhere. You don’t want to open Pandora’s cramdown box.
‘Fannie Mae and Freddie Mac to help underwater borrowers ‘
It’s not the GSE’s money. They don’t have any money. The lawsuits would roll in.
‘prompting other borrowers to stop making timely loan payments’
I’ll say it again. Look at the percentage of defaults, and the percentage of those underwater. There are probably 4 or 5 underwater for everyone in default. If the FB down the street gets a reduction, the other 4 on the block will stop paying too.
It must have been at least five years back when some here were rumoring that “cramdowns are coming.” How many more times until the bubble is fully deflated will we have to read yet another article floating the lame duck cramdown proposal?
Just as with the “low interest automatic mortgage refis for everyone”, it ain’t gonna happen.
” If the FB down the street gets a reduction, the other 4 on the block will stop paying too.”
The Breakfast Club (1985) - Memorable quotes
“Hey, how come Andrew gets to get up? If he gets up, we’ll all get up, it’ll be anarchy.”
“Don’t mess with bull young man. You’ll get the horns.”
OX:
They could appease the public by offing cramdowns if you used the heloc to save a spouse or your kids life
Or if you were having triplets and you added some bedrooms to your 2 br house..
Fair enough…but no way for the vacations suv’s and botox
Fannie and Freddie worried about moral hazard?
Little late now, dontcha think?
The letter is irrelevant. As is anything else. Read the CEO and CFO bonus contracts look and you will be able to start the process of figuring out what they will do.
Typical pandering from Dem Congressional Whores.
Expect nothing less from them.
Cramdowns would completely destroy the private mortgage market and would result in 100% of mortgages being issued and guaranteed by the Gov’t. If you sign on the line to repay the 200k you borrowed, you pay it. Else go to bankruptcy and use exisiting legal mechanisms to reduce it. Period.
There aren’t enough bankruptcy judges. Not even close.
So, let’s see, they guy that outbid me in 2004 to buy a house for $30,000 more than what I considered fair value, gets to keep the house I wanted to buy, and yes, he gets it for the price I would have paid in 2004. He gets the $30,000 debt forgiven. Keeps the house at the price I was offering, and I am left looking at all the trashed houses that were left in the wake of the housing mania.
Thank you Barney Frank, Alan Greenspan, Chris Dodd, and all you other financial illiterates for making high housing prices a reality.
I have a better idea. Demand payment “as agreed” on the mortgage note. You know, the part that says, I don’t have any money now, but promise to pay all this back in the next couple or 30 years.
Keep the Government out of this, especially if it’s going to cost me money. I didn’t play the house-flipping game..
Don’t get your knickers in a knot. It ain’t gonna happen. It’s just posturing.
So, let’s see, they guy that outbid me in 2004 to buy a house for $30,000 more than what I considered fair value, gets to keep the house I wanted to buy, and yes, he gets it for the price I would have paid in 2004.
And this is the crux of my beef with current homedebtors whining and crying to the public to relax their mortgage contracts.
And what some of my HBB bro’s and sis’s don’t want to see or refuse to look at is the fact that these are the same people who crowded ALL of us out of the market for a decade and still are with their pissing and moaning. These people and reaItors are the retail end of a huge #@$%ing scam. I’m fed up with them. The rest of ya’s can sit around and belabor “issues” and parse small details that amount to nothing.
If you guys aren’t enraged at both ends of this debacle then you never will be.
“these are the same people who crowded ALL of us out of the market for a decade and still are with their pissing and moaning.”
Thank you.
RAL
Thank you from me, too.
The nonsense that prices have rolled back to 2003 is such BS in So Ca. Not in job corridors. I’m being told $400K is a cheap home by our buyer’s broker. The homes are worth $300K at best. Let our broker write the check for $400K, the sob.
Now I’m seeing pocket listings in the MLS after the listing office has cut a dual agency deal. (It lists showing sold at the same time.)
Corruption. Collusion. Criminals. - I agree RAL and Jeff.
You’re welcome. Please join the team.
And what some of my HBB bro’s and sis’s don’t want to see or refuse to look at is the fact that these are the same people who crowded ALL of us out of the market for a decade and still are with their pissing and moaning.
Why aren’t you laughing at them? You don’t really think they’re gonna get a cramdown, do you?
And remember, the reason the market isn’t flooded with those cheap repos you want to buy is because of the banks/lenders, who choose to sit on them, and not the deadbeats.
And in most markets prices have come down, drastically in some. Wanna cheap house? Move to Vegas or Phoenix. Want a cheap house in Boston or a decent nabe in LA? Ain’t gonna happen.
We’ve concentrated on the national and global aspects of the housing bubble — too many housing units in total, too high prices in total, too much monetization of ephemeral value in total.
On top of this, we may have a structural shift. Some of the housing units may simply be the wrong kind in the wrong places, and many lose value even once new construction picks up for other types of housing units in other places.
Personally, I think exurban McMansions in metro areas where the chief industry was growth itself are going to end up being worth little. They are too big for one non-rich family to pay the operating costs of, and too far from employment opportunities to be worth converting to multi-family. The are the equivalent of 900-square-foot working class cottages in older former industrial central cities such as Detroit.
Plus they will be far from grocery stores and other shopping facilities as the nearby businesses reach a customer-dearth tipping point and have to close their doors.
It will depend on the dole system. I could easily see those McMansions filled up with Section 8’s who live on welfare and therefore don’t need to have a job. As for shopping, there is always enough population to support at least one Wal-Mart.
“…who live on welfare and therefore don’t need to have a job.”
Hey Bill….
Is social security “welfare”?
Truth be told, it is. After a few years, just about everyone gets back what he/she paid in. After that, you’re on welfare.
This harks back to one of the main reasons why Social Security got started. It was a way of getting the old folks out of the work force so that the young people could have the jobs. Which means that the overall rate of unemployment has changed little since the Great Depression.
After a few years, just about everyone gets back what he/she paid in. After that, you’re on welfare.
YMMV. I will have contributed (with my employer’s match) over 400K to SS by the time I retire. Assuming a 0% return on investment it will take 11 years to get back what I put in (if I wait until I’m 70 to collect the maximum benefit). If the ROI is 3% (say Tbills) the the balance is 800K, which would take 22 years to eat through.
True–but when it started, the first recipients didn’t contribute near what they took out…all-in-all SS is the easy one to fix though…Medicare will be the tough one.
Point being is our ol’ friend Bill is a member of the FreeShitArmy who accuses others of…… being in the FreeShitArmy.
Isn’t that the standard Teabagger stand?
“Smaller gov’t now! … But keep your hands off my Medicare and Social Security”
You’re right. So the Tparty needs to put some more thought into their positions no differently that the FreeShitArmy elements in OWS.
You all have obviously missed some of my posts from the past, including the one that follows.
I’d love to do a PSA video that shows a team of landscape maintenance workers and their boss hard at work in front of a country club. An obviously rich retiree and his jewel-bedecked wife pull up in their golf cart and announce, “Good morning boys, it’s the second Wednesday of the month again. Hand over your 7.65 percent. And you, Mr. Boss, hand over another 7.65 percent for each of them plus 15.3 percent of your salary.” Everyone glumly pays up and then the couple drive off with the wife laughing and the guy airily saying, “See you same time next month.”
Maybe people would start to get it.
Bill, let’s not forget that in the 50-90’s, the rich retiree was handing over HIS 7.65% too. And he did it gladly, remembering that his grandmother had lived her last years in destituion.
“Some of the housing units may simply be the wrong kind in the wrong places,…”
Such as McMansion-sized family housing for geezers, or for young people with too little money to start a family or even to form a household?
Yup…
Cantankerous
You nailed the family formation issue. I just read a BIA (Building Industry Assoc.) aritcle about two master bdrms for multi-generational living and the downsizing continuing of new units.
I still believe one-story homes are going to fare better in countries with aging populations. I don’t think the demand is there yet. People tend to plan slowly on lifestyle changes. They fight it tooth and nail.
People tell us all the time we’re too young to be thinking about a one-story. We might be early adopters, but I think we’re just awake.
I know a couple of my mother’s friends bought a very nice two story home at age 62. Now they are 66 and the husbands backiOS so bad he can’t make it up the stairs any more.
They won’t sell because they would “lose” money on it.
“We might be early adopters, but I think we’re just awake.”
You’re smart to be thinking long-term. Otherwise, you are only forcing yourself to move and deal with the change/unheaval when you are older.
Thanks prime. But living in a mo to mo tenement trying to find our one-story toe tag home for cash has been hell.
Looking forward to having everything on one floor. Always had two-story homes. This will be cool. We want french doors in the master going out to the pool. (A poor man’s resort! LOL)
It will get interesting in 5-10 years, as boomers retire and are forced to downsize their living on fixed income. I could see a dual effect taking place here - one group of people (boomers) retiring and downsizing, selling into a market where there are no buyers. The other group, the young people, not wanting to own these albatross homes, buy newer, smaller, more energy efficient urban construction homes. I can’t even see the multi-family argument making much sense, as the quality of construction of many of those homes won’t support the infrasturcture needed to partition them.
I see a return of extended families. Boomers can’t sell the McMansion. Junior can’t afford to even rent a place to keep his brood (while the section 8 waiting list is decades long). So they stay under a single roof (the Mc Mansion)
I am actually seeing this begin to happen. One of the neighbors finished his 1500 sq foot basement. His son (a college grad who was going through extended unemployment) moved his family into said basement.
I can definately see the case for this type of multifamily, but not partitioning out the McMansion into three or four separate apartments, as seemed to be done quite often with older, quality built homes. Some McMansions could become multi-family homes for Hispanic immigrants, where this kind of arrangement is more socially acceptable.
Yeah, the trend towards extended families living together and grown-up kids staying at home may actually give those McMansions a raison d’etre.
And I still say they’d make decent one-room apartments, since all the bedrooms have their own bath. The gatehouse at the front of the subdivision can become the bus-stop shelter.
Raison d’être is a French phrase meaning “reason for existence.
Thanks alpha. Although I’ve been to France, I haven’t heard the phrase.
Thanks for the introduction.
de rien
Extended families are sort of a tradition on my father’s side.
Right now, my cousin Tom in VT is doing that very thing. He and his second wife have his 25-year-old son living with them. Also coming around for extended visits are his wife’s son and her first husband. Believe it or not, both husbands get along famously.
My Aunt Jean lives across the valley from the very congenial Tom household. They visit back and forth frequently. If Tom’s house wasn’t so full and Jean didn’t need so much space for her art work and library, she’d be living with Tom too.
It isn’t just the size, it’s the location, and the regulations.
Distant from jobs? The working members of the family may not be able to afford the commute.
Well located? The town may fight against partitioning to keep the neighborhood one-family. There will be some ugly fights on that one, particularly up here in the “egalitarian” Northeast where there are many more zoning rules to keep out the less well off.
It isn’t just snobbery. One family in a McMansion with 2 or 3 kids might pay enough property taxes to pay for the services it uses. Up that to 4 families with 8 or more kids and the town is losing money on every house. Unless you think the whole structure of public education is going to change.
I would consider a small McMansion right now if it were super cheap (relative to today’s prices) and in the right location. However, in 10-15 years when that might actually happen I probably won’t want it any more and I’ll be looking for a 1-story toe-tag home instead.
In 10-15 years, those McMansions may not exist.
A comment to the Economist article posted here a few days ago where it tried to make the argument that the US market was “undervalued” supports Moman’s theory:
“My father was in the post WWI US baby boom, and I was part of the largest cohort of the post WWII baby boom. He died in 2006 at 85, and many of his cohort have also passed away, leaving empty houses, long bought and paid for, and well maintained. My husband and I also have a house, and we also have my grandmother’s house which we will move to, putting the other two on the market. Unlike our parents, many “boomers” like us are not waiting in their houses until they grow old, but are downsizing now. If “boomers” don’t wait until retirement to sell their homes, aren’t there extra houses coming on the market formerly owned by seniors in addition to the foreclosures and downsizing? I don’t know how this is calculated, but it cannot be assumed that one generation will behave like the one that preceded it in kind of an orderly march.”
http://www.economist.com/node/21540231/comments?page=1
I know grown children who have been staying in their parents’ homes throughout the boom and of course are still there. They couldn’t manage on their own, for some reason, and then rents starting going way up.
In Detroit, a lot of the crumbling housing stock is what would now be called McMansions. The places were originally built to hold large families, and those families were pretty well off. They also were extended families, so all those rooms were needed.
A lot of boomers CAN’T retire.
A lot of Gen X & Y can’t afford new houses, or even used ones, so the boomers can’t sell.
Therefore, continuing high unemplyement and slow residential RE sales.
I’m in the “younger” cohort, and am currently amazed at what I see before my eyes. In the past 10 years most of them moved to the new suburbs in what could be called starter McMansions, drove gas guzzlers, and joined into the parade of life in 2005 (weekend Home Depot projects, etc). The about face in the past two years has been amazing. Every one of them, every one has mentioned downsizing or selling out and moving closer to town. Most surprising has been one friend who took it to the extreme in 2005, traded his Lincoln Navigator for a Ford Focus. The downsizing of the younger adults is real and happening. My sample size is around 25 adults. Hardly scientific. But extrapolate this to the larger population of 78 million, combine with media reports, and the data points pop out like stars in the dark Kansas sky. Small is the new big. There is no way this generation will be anything like the exisiting generations.
But extrapolate this to the larger population of 78 million, combine with media reports, and the data points pop out like stars in the dark Kansas sky. Small is the new big.
YMMV. My son tells me that for the majority of his HS classmates the dream vehicle is still a gas guzzling pickup truck and when I walk the dog at night it seems that every other driveway has at least one full sized pickup parked on it (many have two). And these aren’t “work” trucks. They are typically shiny, scratch free 4 door trucks. Most aren’t “new” anymore but they owners baby them.
That “dream” dies around here, when the first $75-80 fill up takes place.
Basically, working a day and a half at min wage (assuming you are working full time….a big assumption), to pay for a week’s worth of gas.
At some point, they wake up and start asking themselves “who owns who?”
“My son tells me that for the majority of his HS classmates the dream vehicle is still a gas guzzling pickup truck…”
Ha! This made me smile, and think about the fact that I already drive my dream-car: a POS old jetta diesel that gets great mileage, and no one would consider worth stealing or rummaging through for valuables.
“The downsizing of the younger adults is real and happening.”
Our 32 year old nanny lives in one room of her mother’s house with her three kids, so I see the downsizing every day. However, she spends $50 a week in gas ferrying her kids around. She gets a large Starbucks coffee every day and does not cook.
So yeah, it’s happening, but people still can’t put the pieces together.
The other day she ran out to grab a soda (exceedingly low-cost, high quality water in the fridge, of course), and she drove her mini-van.
It is a 1/5 mile, three minute walk.
There’s still a long way down from here and people are not going to like it.
The other day she ran out to grab a soda (exceedingly low-cost, high quality water in the fridge, of course), and she drove her mini-van.
Sounds like my next-door neighbors. They don’t leave their house, except in a car. I’ve often wondered what would happen if they were forced to walk or bicycle while the car(s) were broken down.
BTW, the nearest bus stop is a third of a mile away.
“I’ve often wondered what would happen if they were forced to walk or bicycle while the car(s) were broken down.”
Smelling the flowers?
Losing weight?
Reducing health risks? (unless you get run over)
Chatting with neighbors?
Not listening to either commercials, talk radio or the same stuff they’ve been listening to since high school?
Not having to drive to the gym and climb Jacob’s Ladder?
The world certainly wouldn’t end, that’s for sure.
A bunch of little towns in South Central Kansas and Oklahoma have some pretty awesome houses that were built on “oil boom” money in the 1910-1920 period, or thereabouts.
Now, they are 100 plus miles away from major job markets, and the jobs that are around won’t support the maintenance these places need. So they sell for cheap, if they sell at all.
Expect to see a repeat in North Dakota.
“The plunging collapse of prices seen in 2007 to 2009 seems to be behind us,”
As I said last week, house prices were crashing here in 2008 and then it stopped. Whatever happened in 2009 to make that happen, I wish it would stop and let the housing market correct.
Underwater mortgages ebb slightly
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:23 p.m. Tuesday, Nov. 29, 2011
Fewer Palm Beach County homeowners were awash in mortgage debt during the third quarter of this year as the percentage of underwater home loans dipped slightly.
But that doesn’t mean housing prices here are on the rise.
“They don’t have negative equity anymore because they don’t have the house anymore,” said Brad Hunter, chief economist at the Royal Palm Beach-based housing research firm MetroStudy. “It’s not necessarily a good sign that negative equity is down.”
Still, Hunter is optimistic that home prices are stabilizing and shouldn’t experience a significant drop, even as more discounted foreclosures are put on the market for resale.
David Blitzer, chairman of the Index Committee at S&P Indices, agreed.
“The plunging collapse of prices seen in 2007 to 2009 seems to be behind us,” said Blitzer, who also said that a sustained housing recovery needs a stronger economy.
“We just had a more pronounced bubble and a more pronounced decline as a result,” said Hunter about Florida’s third-place ranking
Underwater mortgages
Palm Beach County 40.7%
Florida 44%
U.S. 22%
Top states for negative equity:
Nevada 58%
Arizona 47%
Florida 44%
Michigan 35%
Georgia 30%
Source: CoreLogic quarter three report
http://www.palmbeachpost.com/money/foreclosures/underwater-mortgages-ebb-slightly-2002322.html -
Realtors Are Liars®
If they are liars then what is MarketWatch columnist Ruth Mantell?
All is well. Just another financial freeze-up, because no one knows who’s going down next.
Fed, global central banks move to boost financial system
MSNBC
The Federal Reserve said Wednesday that it joined some of the world’s major central banks in a coordinated action to inject liquidity into the global financial system.
Joining in the move were: the Fed, The Bank of Canada, the Bank of England, the Bank of Japan and the European Central Bank, the Fed said.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the Fed said in a statement.
Bullcrap. They’re still looting AND getting away with it.
Talking Heads
Once in a Lifetime (1984)
(very little pruning)
And you may find yourself renting a shotgun shack
And you may find yourself in another part of the world
And you may find yourself behind the wheel of a large automobile
And you may find yourself in a beautiful house, with a beautiful
wife
And you may ask yourself-Well…How did I get that loan?
Letting the days go by/let me refi one more time
Letting the days go by/water flowing underground
Into the blue again/after the money’s gone
Once in a lifetime/victims going underground.
And you may ask yourself
How do I work this?
And you may ask yourself
Where is that large automobile?
And you may tell yourself
This is not my beautiful house!
And you may tell yourself
My Lanlord is a a Deadbeat!
Same as it ever was…Same as it ever was…Same as it ever was…
Same as it ever was…Same as it ever was…Same as it ever was…
Letting the days go by/let the bankster hold me down
Letting the days go by/victims living free
Into the blue again/after the money’s gone
Once in a lifetime/where`s the next HAMP program?
Same as it ever was…Same as it ever was…Same as it ever was…
Same as it ever was…Same as it ever was…Same as it ever was…
Same as it ever was…Same as it ever was…
Equity dissolving…and Fannie removing
There is house at the bottom of the ocean
Carry the house at the bottom of the ocean
Remove the debt on the house at the bottom of the ocean!
Letting the days go by/let Bank of America hold me down
Letting the days go by/money flowing underground
Into the blue again/in the silent bailout
Under the rocks and stones/there is a bankster underground.
And you may ask yourself
What is that beautiful house?
And you may ask yourself
Why do they keep house prices artificially propped up?
And you may ask yourself
Am I right?…Am I wrong?
And you may tell yourself
MY GOD!…WHAT HAVE THEY DONE?
Letting the days go by/let the bankster hold me down
Letting the days go by/victims living underground
Into the blue again/is the silent Deadbeat
Under the rocks and stones/there are houses underground.
Same as it ever was…Same as it ever was…Same as it ever was…
Same as it ever was…Same as it ever was…Same as it ever was…
Same as it ever was…Same as it ever was…
Now we’re talking! I am not a huge Police fan, but I’ve had “When the World is Running Down” playing in my head for two years now. Not every day, of course.
Where have we heard this before?
http://finance.yahoo.com/news/ratings-firms-misread-signs-greek-124006000.html
‘In a stern pronouncement, Moody’s Investors Service this week warned of rising prospects for multiple defaults by countries in the euro zone and credit rating downgrades of nations across Europe…That rapid deterioration underscores how, critics say, the credit ratings agencies that judged Greece’s debt as investment grade for most of the last decade missed or badly misread signs of trouble. Moody’s held its rating steady even after Greece in 2004 admitted lying about its deficits to join the countries using the euro in 2001.’
BTW, who was instrumental in helping Greece hide the debt? Goldman Sachs. n a decade, they’ve gone from a sovereign nation to being run by an unelected GS banker who is in the process of selling off their resources and cutting their pensions.
Why hasn’t the revolution started in Greece?
Go to youtube and search for Greek riots. Prepare to be shocked.
Do they deserve a revolution? They borrowed and spent the money on themselves, mostly for early retirement not financed by tax evasion, didn’t they?
Perhaps it is the younger people not in on the deal but forced to pay for it who deserve a revolution. And not just in Greece.
They got the same deal we did: the rich got richer and everyone else got lip service, but thought it was gold.
Wait a min, why would there be a revolution?
The so-called victims in Greece are the large number of folks in some way or other eating at the government trough. The folks at the margin (young educated employed) were already cut out and didn’t really lose much. They would probably riot like it was any other day.
Now the fat cats in the government sector became slightly less fat, but they are still getting more than they deserve. Yeah they might be pissed, they might take to the streets etc, but they will not riot for fear of being fired and then they’ll really be screwed. Why take that risk?
The so-called victims in Greece are the large number of folks in some way or other eating at the government trough.
Since Greece doesn’t really have much of an economy, what else would the people do? It’s not like they have THAT big of an agricultural or tourism sector.
Greece is a very popular destination for Chinese tourist now.
‘the large number of folks in some way or other eating at the government trough’
Greece has some problems, but they can never pay what the govt borrowed. What is worrisome are the implications of a country being literally taken over by bankers so that bonds get paid, and a globalist EU can be perpetuated. These issues don’t benefit the Greek people.
Do you know how many people in the US take some form of govt employment or otherwise get a govt check? Is it OK if Goldman Sachs takes the White House, cuts entitlement programs, to ensure that bonds get paid?
“Is it OK if Goldman Sachs takes the White House, cuts entitlement programs, to ensure that bonds get paid?”
Well, it seems to be OK at the state and local level for public services to be gutted to ensure that bonds and pensions get paid.
‘it seems to be OK at the state and local level’
Two things; one, this is how our system works. People in states are given the power to decide how their govts operate. Residents in Massachusetts have a different kind of govt than Nevada. I prefer that kind of democracy to a one-size-fits-all arrangement.
Two, Goldman Sachs didn’t take the governors house in Wisconsin and start giving orders.
“Two, Goldman Sachs didn’t take the governors house in Wisconsin and start giving orders.”
Whoh, bad state to use as an example. *Somebody* sure took the governor’s house in Wisconsin and started giving orders, but it involved cutting pensions to pay for tax breaks instead of bond holders.
“Is it OK if Goldman Sachs takes the White House, cuts entitlement programs, to ensure that bonds get paid?”
well…it might actually work though.
I’ll try to unthink that thought.
Why hasn’t the revolution started in Greece?
You don’t really expect our corporate owned MSM to report it on the nightly news, do you?
On the Time magazine website last week, the covers shown had a picture of a rioter with more in the background with the headline “Revolution Redux”. This was the cover sold in Asia, Europe and the South Pacific. The U.S. cover? It had the headline “Why Anxiety if Good for You”. No mention of the riots that the rest of the world sees on the cover.
The covers are still there at the site. Take a look.
http://www.time.com/time/magazine/current
The covers are still there at the site.
wow
How come pending home sales in the West were left behind? I guess it could be a reflection of stubbornly high prices…
Nov. 30, 2011, 10:00 a.m. EST
Pending home sales rise 10.4% in October
By Ruth Mantell
WASHINGTON (MarketWatch) — Pending home sales rose 10.4% in October, hitting 93.3 on an index released Wednesday by the National Association of Realtors. “We hope this indicates more buyers are taking advantage of the excellent affordability conditions,” said Lawrence Yun, NAR’s chief economist, in a statement. An index reading of 100 is equal to the average level of contract activity during 2001. A sale is listed as pending when the contract has been signed but the transaction has not closed. Not all contracts lead to closings. By region, October pending home sales rose 24.1% in the Midwest, 17.7% in the Northeast and 8.6% in the South. In the West pending sales fell 0.3%. Nationally, pending sales are up 9.2% from last year.
Hey ReaItor,
Why are you telling the public to buy housing when prices are falling?
I gotsta eat!
I think the west is experiencing a gradual out flow of population which suppresses sales.
What this idiot fails to understand or doesn’t want to understand is that current affordability almost invariably means lesser affordability in the future. If you buy now, and hope to sell in 5 to 10 years, interest rates will most certainly not be at 50 year lows. What does that mean?
Simple. You will need to lower the selling price to accommodate a higher interest rate. Since you will have paid off little principal in that time frame, and will have to pay selling and closing costs………….you will make essentially nothing for “owning” a house.
You will have all the expense and NO gains.
We need interest rate stability. Not historically low rates. END THE FED. END the FED. And if you buy, buy for cash or not at all. Also…
Vote Ron Paul.
The press will be against him because the Corporately owned Media outlets are members of the FED club…ie. Club Fed.
Just because a sale is pending doesn’t mean that it will close escrow. I don’t know about the rest of you, but I’ve seen quite a few pending Tucson sales go blew-ie in the last few years.
Slim
You’re absolutely right. I just read an article that many (forgot the %) realturds are reporting contracts aren’t closing. Many of the pendings can’t get a loan. Even if FHA says a 580 a FICO, the lenders are coming back and asking for a 620+ and a higher down payment many times.
The amount of loops we’ve had to jump thru buying in the past need to be reinstated. Those FICO scores are so low, good luck renting with them, and you can buy with them?
News Flash from Tampa.
The past week or so, the friendly folks from “FLIP THIS HOUSE” have been running ads on the local radio stations looking for 20 people who want to learn the techniques used on the show.
Yes, that’s right, Tampa is now the perfect market for FLIPPING houses and they are going to come here to show us how it’s done.
I just cannot believe this.
The whole scam that got the bubble going, along with the help of FED cheap money loans is ready to “re-set”. Let’s all flip each other houses.
Oh MY GOD !!!!
I just can’t believe this is starting over again. O M G>>>>!!!!!
Maybe they are planning to flip homes in the Land o’ Lakes/Wesley Chapel area. It would probably work there, that area has nothing but retail shops dispersed around old trailers from the rednecks who lived there 15 years ago. There is also no industry around. But I smell a great opportunity, especially since prices are down about 50% from 2004. Wait a second…..
Talking Heads (mostly)
And you may ask yourself
What is that beautiful house?
And you may ask yourself
Why do they keep house prices artificially propped up?
And you may ask yourself
Am I right?…Am I wrong?
And you may tell yourself
MY GOD!…I just can’t believe this is starting over again!
Same as it ever was…Same as it ever was…
There is nothing wrong with flipping houses… except when amatuers try to do it.
So yes, there WERE to many amatuers doing this in the last 10 years.
Which, BTW, I’m glad to see the amatuers getting hosed and getting out.
Across the street from me is a house that was bought for $100k, renovated, and sold for twice what the renovator paid for it.
I guess you could call it a flip, but it was an awfully slow one. Renovator bought it in the spring of 2006, hired a guy to do the fixup work, and oh, did that guy do a great job. Place looked like a real showcase when it was done.
House was put on the market in August 2007 and sold for $205k in October of that year. Gal who bought it moved in during late November, and she had a boyfriend with her. He got fired — or moved out of his own accord — in late 2008.
I suspect that this house is owned by a trustafarian. When she moved in, she was the editor for an environmental org, and last I checked, that kind of job doesn’t pay the sort of salary that would support a $205k house.
I don’t talk to her very often, but I noticed that she’s become a lot friendlier in recent months. I think this may be because she’s recently become the development director for another enviro outfit, and I’m probably on her prospect list.
A realistic house flip is about 1-2 a year with a profit of ~20%. (YMMV)
…and it isn’t easy even when you know what you’re doing… which most folks don’t.
Also, you can’t flip a house you overpay for. That’s what people didn’t realize in 2005.
Actually renovating buildings, and/or owning them and being the landlord, is lots of work.
…and that as well.
Just review Hank Paulson’s deal when he became treasury secretary.
He was able to sell over 500 million in GS stock tax free because of this. The estimated tax benefit was 200 million for two years work.
This is the same as if the gov was paying him 100 million a year to be treasury secretary. Actually it’s worse because if they paid him 100 million he’d have to give 30% of it back. Why wasn’t there more of a protest on this wasteful government spending when it occurred?
Why wasn’t there more of a protest on this wasteful government spending when it occurred?
Because it happened during the Bush administration. Where no wasteful government spending EVER took place. That only started happening when a Democrat became President again.
For some of you just tuning and who still can’t make the connection, Wall St. runs this country and the federal government’s only purposes is be strip mined by the rich.
In other words, they are nothing less than traitors.
Monti will be priminister and finance chief. Panel will have no democratically elected members.
Maybe he should be congress and local government as well?
America [AA+] Day: # 116
“abandon $hip whilst ye can!”
“Smedley, hard to port, straight East to Iceland!,…scalawags, never desert a floating ve$$el.”
Private jobs surge 206,000 in November:
By JAN NORMAN / THE ORANGE COUNTY REGISTER
ADP President and CEO Carlos Rodriguez said, “This month’s jobs figures show positive growth in all major sectors of the economy and are in line with the recent drop in the national unemployment rate and weekly jobless claims. Despite fiscal uncertainties here and abroad, owners of small- and medium-sized businesses found ways to grow and hire in November.”
ADP also revised its October employment gain to 130,000, up 20,000 from the initial report.
November jobs were added by all sizes of companies and in all major sectors, Prakken said. Those gains include:
• Firms with fewer than 50 employees, +110,000
• Businesses with 50 to 499 employees, + 84,000
• Companies with 500 or more employees, +12,000
• Service companies, +178,000
• Goods producers, +28,000 with manufacturers contributing 7,000 of those jobs
• Construction, +16,000
• Financial services, +7,000
Add those number up and see if you can arrive at 130,000. LOL.
It’s a virtuous cycle perhaps. We send $10 Trillion or so overseas and a little trickles back to us. I am making some money right now on a big Saudi project, Ras Tanura. Paid for by the skyhigh gas prices brought to us by the FR and their bubble blowing.
Wow temp hiring is up before x-mas.
It’s an Xmas miracle.
I’ll call BS on the financial service sector #’s though, I know several people who work in the industry and everyone of them is fearing for their job after watching many a supposedly solid co worker get the tap on the shoulder.
I read a story (was it here?) about a mall store which hired bunches of people, but required them to wear store merchandise at work. Then they laid everybody off after a month, after the employees spent their store paychecks buying the store’s clothes. It’s a money-laundering scam.
More like money harvesting.
I disagree. In effect, the employees are using company money (paychecks) to buy company clothes. It’s almost a hidden stock buyback.
Only 12 million more to go!
12 million!
Well, that certainly would $olve Icelands former $it-u-a-$hun!
Oil jumps to $101 on int’l banking plan
By CHRIS KAHN The Associated Press
Posted: 11:01 a.m. Wednesday, Nov. 30, 2011
NEW YORK — The price of oil surged to $101 per barrel Wednesday, as the U.S. and other countries tried to make it easier for banks to lend money and keep the global economy growing.
The Federal Reserve said it will team up with the European Central Bank, the Bank of England and the central banks of Canada, Japan and Switzerland to increase the flow of dollars around the world. The coordinated move should be a shot in the arm for Europe, where a festering credit crisis has slowed the eurozone economy and threatened a recession.
Separately China reduced the level of cash its banks are required to keep on hand in an effort to boost lending and ramp up the world’s second-largest economy.
Stock markets soared while the dollar sank in morning trading. Major U.S. indexes were up more than 3.5 percent. The U.S. Dollar Index, which measures the dollar versus other currencies, dropped 1.1 percent.
Oil, which is priced in dollars, tends to rise as the dollar falls and makes crude cheaper for investors holding foreign currency. The price of benchmark crude rose $1.14 to $100.93 per barrel in New York. At one point it was as high as $101.75 a barrel. Brent crude, used to price many foreign kinds of crude, rose 35 cents to $110.21 per barrel in London.
Not denigrate your research skills Jeff, but oil is and has been for decades, articfially manipulated and bears no relation to anything in the real world.
I have no comment
http://www.8newsnow.com/story/16148647/breaking-news-witness-in-alleged-robo-signing-case-dies
I think this death needs to be investigated as a possible homicide.
Gee, what a co-inkydink.
I bet a robot did it.
Can’t get the post to go through but google Koch brothers and MF Global. Oh how I lover our capitalist system. No rules for those at the top, they get to keep all the winners, the rest get the loosers either through their fraudulently managed portfolio or as a tax payer.
None of my posts on these brothers seem to be going through, so I’ll spell it backwards
elgoog hcok brothers + FM labolg
The magic of the free market!
I wish had the same freedom those guys do.
Now that’s funny. Good thinking LAPD.
Is it possible that these yahoos in blue can really think they can limit the number of media outlets monitoring the ouster of the occupiers?
Have they forgotten that every occupier has a camera-equipped cell phone? That every TV station has a chopper with cameras equipped with long lenses? Have they forgotten that even the despots in Arab countries haven’t been able to stop videos of uprisings from going viral?
The more authorities try to control the press the more scrutiny they come under, and more they are distrusted by the public who pays their salaries, who gives them outrageous pensions and health care coverage.
BTW, I’m on the side of the cops. I think it’s long past time to kick the rascals out; they’ve done enough damage that we’re going to have to pay for. But I rail at these tactics of trying to control the press when something is going down, and almost everyone has been following the events from the beginning.
BTW, I’m on the side of the cops. I think it’s long past time to kick the rascals out; they’ve done enough damage that we’re going to have to pay for.
I like your position on stupid cops trying to control the press, but is not your stand on the protesters akin to being mad at them for trampling on some flowers while they are protesting against the looting of their country?
‘being mad at them for trampling on some flowers’
IMO, we should set aside our differences. For instance, I don’t agree with some of the OWS positions on foreclosures, but I’m not going to let that turn me against them.
Easier said than done when the MSM does everything in it’s power to divide and discredit populist movements.
Stop blaming the MSM for everything. The greatest problem in this country is the imbecility and passivity of the population. Yes, the corporatist MSM has done its share to dumb down and mislead the sheeple, but it is the moral and intellectual blankness of the latter that is really to blame.
Overall I’ve been pleasantly surprised by the reception I’ve gotten from hard-core partisans when I suggest agreeing to disagree on a few things but keeping an open mind about the other side, whether that’s the Tea Party or OWS due to the shared interests of the groups. I expected to have about a 10% success rate doing that, but overall I’d say about 50% of the people I’ve talked to were at least willing to have a civil conversation about it.
It’s still too bad it’s only 50%, but still better than I expected.
Let’s compare the damage caused by the protesters with the damage caused by wall street and their puppets and prostitutes in government.
Here in Tucson, the local Occupy called out the organizers of one of our area’s largest bicycling events.
Seems that two days after the event, the cleanup of the park formerly inhabited by the Occupiers was still underway. OTOH, the Occupiers had just two hours to bug out of this park.
And they cleaned it pretty darn well, if you ask me.
Funniest Occupy Wall Street Sign:
If They Enforced Bank Regulation Like They Do Park Rules, We Wouldn’t Be In This Mess In The First Place
http://thesecondalarm.com/2011/11/20/pank-regulation-vs-bank-regulation/
Plam Beach post
latest real estate news »
Underwater mortgages ebb slightly | Comments 2
Auditors scour foreclosure cases for flaws | Comments 17
Investment firm offers salvation to distressed homeowners, but some say they were misled | Comments 24
Ocwen praised for ‘bold’ mortgage modifications
Average foreclosure wait grows 10 percent in Florida | Comments 21
Interesting. We don’t even have real estate “news” in our local rag. Even in the Denver Post it’s not common to see real estate news except for the occasional story about median prices or foreclosure rates.
“Interesting. We don’t even have real estate “news” in our local rag.”
Likely upsets their advertising base, ‘da money.
There isn’t a whole lot real estate advertising. There is a very thin supplement on Saturdays, but that’s it.
The Narrative has changed…….
Republicans Make Rare Retreat on Payroll Tax Cuts–Why?
http://www.thenation.com/blog/164866/republicans-make-rare-retreat-payroll-tax-cuts
There was a time—up until last night—when Republicans would not support a payroll tax cut in order to goose the economy….
……The real reason Republicans opposed the payroll tax cut, one must conclude, is that Obama was for it—he made it one of the top items on his agenda in recent months. The longstanding motivation of Congressional Republicans has been to deny the president any victories on any issue, and during a summer where austerity and deficit reduction was paramount, and where the Tea Party existed in a pre-Occupy vacuum of citizen activism, the Republican rationales of “we can’t pay for this” had a bit more mileage with the press and public at large. (In fact, the August debt ceiling deal mandated an end to the payroll tax cut).
……the focus now is back on income inequality, thanks largely to the Occupy movement, and Democrats in the White House and in Congress have also taken on a much more aggressive and combative approach on the economy. This inside/outside game appears to have actually been effective–last night, Senate Minority Leader Mitch McConnell announced a rare retreat for his party, and said it would actually accept a payroll tax cut extension:
Republicans earlier this year dismissed an extension of the cut as a “sugar high” that would do little to create jobs, but Senate Minority Leader Mitch McConnell (R-Ky.) announced a shift in strategy on Tuesday, saying he would offer the GOP offset for extending the tax holiday.
“I think at the end of the day there’s a lot of sentiment in our conference, clearly a majority sentiment, for continuing the payroll tax relief that we enacted a year ago in these tough times,” McConnell said.
This is quite a turnaround—as recently as Sunday, Senator Jon Kyl of Arizona, the number two Republican in the Senate, was saying no to the payroll tax cut extension.
But the headwinds for Republicans have suddenly become much stronger. Again, the Occupy protests have, in many ways quantifiable and not, pushed the mainstream discussion towards a focus income inequality and the struggles of the 99 percent.
“The real reason Republicans opposed the payroll tax cut, one must conclude, is that Obama was for it”
Indeed. Getting rid of the payroll tax is a surefire way to scuttle social security, which the GOP would love to do.
They have only to look at Europe to see how it’s done.
Create a crisis ie defund it.
Then say we can’t pay for it.
You may have to appoint a banker as president after removing the elected president to make this fly.
The
longstandingcult/sign-the-pledge-mf motivation of Congressional Repubicans has been to deny thepresidentlil’ Opie any victories on any issueihho
OWS has changed the narrative……
Republicans Make Rare Retreat on Payroll Tax Cuts–Why?
http://www.thenation.com/blog/164866/republicans-make-rare-retreat-payroll-tax-cuts
……Alabama Sen. Jeff Sessions expressed frustration that the public is “not hearing what the Republicans are offering.”……it’s clear the dynamic in Washington is changing.
….There was a time—up until last night—when Republicans would not support a payroll tax cut in order to goose the economy….
……The real reason Republicans opposed the payroll tax cut, one must conclude, is that Obama was for it—he made it one of the top items on his agenda in recent months. The longstanding motivation of Congressional Republicans has been to deny the president any victories on any issue, and during a summer where austerity and deficit reduction was paramount, and where the Tea Party existed in a pre-Occupy vacuum of citizen activism, the Republican rationales of “we can’t pay for this” had a bit more mileage with the press and public at large. (In fact, the August debt ceiling deal mandated an end to the payroll tax cut).
……the focus now is back on income inequality, thanks largely to the Occupy movement, and Democrats in the White House and in Congress have also taken on a much more aggressive and combative approach on the economy. This inside/outside game appears to have actually been effective–last night, Senate Minority Leader Mitch McConnell announced a rare retreat for his party, and said it would actually accept a payroll tax cut extension:
Republicans earlier this year dismissed an extension of the cut as a “sugar high” that would do little to create jobs, but Senate Minority Leader Mitch McConnell (R-Ky.) announced a shift in strategy on Tuesday, saying he would offer the GOP offset for extending the tax holiday.
“I think at the end of the day there’s a lot of sentiment in our conference, clearly a majority sentiment, for continuing the payroll tax relief that we enacted a year ago in these tough times,” McConnell said.
This is quite a turnaround—as recently as Sunday, Senator Jon Kyl of Arizona, the number two Republican in the Senate, was saying no to the payroll tax cut extension.
But the headwinds for Republicans have suddenly become much stronger. Again, the Occupy protests have, in many ways quantifiable and not, pushed the mainstream discussion towards a focus income inequality and the struggles of the 99 percent.
But the headwinds for Republicans have suddenly become much stronger. Again, the Occupy protests have, in many ways quantifiable and not, pushed the mainstream discussion towards a focus income inequality and the struggles of the 99 percent.
Speaking as someone who has pedaled into many a strong headwind, it takes a lot more energy to make even the smallest forward progress. And that’s in a steady headwind. The gusty type is a whole ‘nother animal.
Timestamp test post.
They can’t have extended Bush tax cuts, and discontinue the payroll tax……assuming they want to be elected.
Me, I’d rather bite the bullet and pay an extra $1000 in taxes, if it means the 1%er have lost their last excuse to avoid getting theirs raised.
“Me, I’d rather bite the bullet and pay an extra $1000 in taxes, if it means the 1%er have lost their last excuse to avoid getting theirs raised.”
Exactly. This type of what John Nash would call “economically irrational behavior” (from his F.U. Buddy game), others might call “fairness”.
I’d personally like them to take the chapter out of the Simpson/Bowles report on Social Security, and turn it into law.
No more payroll tax cut, increase the ceiling on wages taxed more quickly than the current schedule, add some additional protections for low income folks to keep them out of poverty, add some protections for people who physically can’t work past 62, add some protections for people who live past 85 (and have more likely exhausted more of their other retirement savings), etc.
And make SS solvent for the next 75 years as well.
“The real reason Republicans opposed the payroll tax cut, one must conclude, is that Obama was for it.”
The Republicans have been consistent on this since Reagan. Cut progressive income taxes. Raise regressive taxes, including the payroll tax.
What Obama has done is match their irresponsibility. The Republicans would cut income taxes, and the Democrats would agree to payroll tax increases and spending cuts to prevent a federal government collapse. But if a federal government collapse is inevitable because of the Republicans, why should ordinary people pay taxes?
For 30 years, working people have paid extra payroll taxes, and the money just disapperaed. Now payroll taxes are being cut, and money is being borrowed instead — just like it was borrowed for the income tax cuts.
A politician’s primary jobs are:
a) Political theater.
b) Winning re-election.
Any other consequences are purely by accident.
Had a chat this morning regarding get-away cruise vacations during the winter with a dual income, no kids, guy. I mentioned that I was raising a family on one income, but it went right past him. He rattled-off a number of places he’d been to, but “being served” drinks, dinner, lunch etc., appeared to be the delight. Faux rich? Amazing.
They collect countries, and reminisce about great meals they’ve had. Yeah I’m impressed.
If I were ever on a cruise, I’d be so bored (and outspoken about it) that they’d probably throw me overboard.
Thanks everyone. We’ve never been impressed with going on a cruise either. You see so little of each country, and you’re right about the obsession about food. I’m far too adventurous and full of life for a cruise. No thanks. I’m happy to find soulmates on this topic.
Slim- LOL That was funny!
Read David Foster Wallace’s “A Supposedly Fun Thing I’ll Never Do Again” The title essay about cruises is classic.
We’ve never been impressed with going on a cruise either.
Have either of you been on one? If not you really don’t know what they are like. I’ve been on 2, one in my 20s, one in my 40s.
I like to think I keep an open mind, especially on “adventures” but cruises (even to Alaska) are one thing I have no interest in.
I have not been on one. From what I have read and that I don’t like crowds and being on “package tours” and being hawked to be the locals in every port, I don’t think that it’s something I’d be into.
“I get tired just thinking about all the things I don’t want to do. Like go to India or have my teeth cleaned”
I’ve been on one cruise…it was a blast.
It was a way that my extended family could get together where the older folks could be in comfort, but not be on top of each other 24/7 (the ships are large…).
Cruise = lots of food + norovirus + seasickness.
NO THANK YOU.
http://paul.house.gov/index.php?option=com_content&view=article&id=1931:statement-on-the-feds-continued-euro-bailout&catid=16:speeches&Itemid=1
Ron Paul’s statement on the Fed’s soon-to-be-failed bailout of Europe. All you sheep who voted for crony capitalism, get back to your grazing.
It’s been three years since stock market began its slide from 14K and the financial system began destabilizing.
Has there been any effort to stop Too Big To Fail? Based on my reading of the situation, TBTF has actually been encouraged.
Has there been any attempt to firewall bank deposits from their gambling operations? I keep thinking of BOFA moving derivatives to its insured deposit arm back in late October of this year.
Have lenders yet been forced to take on more repayment risk? This was the core of the financial crisis, lenders making bad loans. And you ask yourself, why would lenders make so many loans about which they didn’t care about being repaid? Answer that and you solve the debt-bubble.
Have there been any structural changes to stop the debt-bubble-based model which led to the current three-year-and-counting economic downturn?
All I can see that is money-printing, Wall Street executives becoming richer and more powerful, the Fed becoming more powerful. And more wealth being extracted from taxpayers.
Well, Dodd Frank is going to make it harder to be a smaller player due to the excessive regulation, so that their activities will ultimately be picked up by organizations that can afford to pay the attorneys and accountants to deal with the new regulations.
So, TBTF just gets bigger.
Bang up job there, Congress.
There has been no consequence to any architect of the financial crisis. In fact there have copious rewards. Financial executive or politician.
People do things to enrich themselves. Not corporations, people. Individuals. Corporations are merely logical constructs to facilitate these enriching activities.
I was just reading about how QE3 is now looking likely - http://www.bloomberg.com/news/2011-11-27/bond-dealers-see-fed-buying-545-billion-of-home-loan-debt-in-third-easing.html - wow.
This is going to continue until the individuals responsible for it incur some actual, real costs.
This is going to continue until the individuals responsible for it incur some actual, real costs.
You mean real as in jail or a noose. Just say it dude.
http://www.telegraph.co.uk/finance/financialcrisis/8926987/Fed-saves-Europes-banks-as-ECB-stands-pat.html
“No bankster left behind.”
JIT = “Just-in-Time!”
Seems the Global Financial Indu$trial Complex has adopted a likewi$e $trategy:
JIT / UFA = “Urgent Financial Aid”
JIT / SNFA = “$overeign Nation Financial Aid”
JIT / ISNFA = “In$olvent Nation Financial Aid”
Producing digital coma’$ = “hard work”
“Anything will fit a naked man.”
Irish Proverb
All I can see that is money-printing, Wall Street executives becoming richer and more powerful, the Fed becoming more powerful. And more wealth being extracted from taxpayers.
Don’t forget a US electorate that is as lobotomized as ever.
http://thinkprogress.org/special/2011/11/30/378565/moves-and-deputies-refuse-eviction/
Sheriff refuses to carry out bank’s orders to evict a 103-year-old woman. Surprised they didn’t send in the SWAT team.
http://tinyurl.com/dx8tbu
Danny Deng and his bride-to-be dreamed of their lives together as they walked through the showroom for a Shanghai housing project almost three months ago. Pooling his own and his parents’ savings, a loan from his boss and a 1.1 million yuan ($172,000) mortgage, he bought an apartment and secured his fiancee’s hand.
On Nov. 19, Deng faced off a ring of security guards three rows deep wearing camouflage and carrying shields as he joined more than 100 homeowners rallying in front of the development’s sales office. His transformation from newlywed to street protester came after China Vanke Co. (000002) slashed prices for future buyers at the Qinglinjing complex, erasing about 20 percent of the value of his three-bedroom unit overnight.
“If I’d paid for it all myself, the price cut wouldn’t bother me as much, but there’s a lifetime of my parent’s blood and sweat in it,” said Deng, a 30-year-old electrical systems salesman. “Developers’ profits are outrageous. The price they set when the housing market kept going up was far more than the real value.”
Deng’s anger underscores the dilemma facing China’s government as it tries to cool the property market. If policies such as increased down payment requirements don’t go far enough, it risks a housing bubble; if it pushes too hard, it may provoke the ire of a new generation of middle class “fang nu,” or housing slaves, in a reference to the lifetime’s work needed to pay off debts.
Reminds me of me back in 1990. I was 31. Wanted a house partly to show that I was stable and part of the community, partly because I was single, and partly because I got a promotion that year. Dumb move. House prices kept falling. The same builder cut the prices on the other houses 5% per year. I was not out protesting though. Not like the Chinese guy there in Shanghai. But the article is eerily reminding me of me. Housing bubble all over the world.
Danny Deng, new member of the Baritone Choir.
Are the Europeans getting our diluted worthless green rectangles as a bunch of digits with lots of zeros from a computer at the Federal Reserve and this will save the financial crisis in Europe. What am I missing?
Q+A: Why everyone cares about dollar liquidity swaps
http://www.reuters.com/article/2011/11/30/us-centralbanks-primer-idUSTRE7AT2XT20111130
From the article:
When the only tool you have is a hammer, every problem looks like a nail.
I can see the advertisement: “Hammer! Use it to: pound nails! Crack eggs! Dig holes! Resuscitate heart attack victims! Use it for anything you an imagine!”
Welfare for the banks, austerity for the masses…what is this world coming to?
Who’s more scared now, the bulls or the bears?
November 30, 2011, 7:42 PM
By Cody Willard
What a rally. Big 4% up day in the markets, and our tech longs/calls were juiced today. And I hate to be the bearer of bad thoughts, but earlier this week in the Marketwatch Revolution Investing which was just flagged as the top performing newsletter tracked by our own Peter Brimelow, I pointed out that “dislocating markets” aren’t necessarily a bullish thing. Just sayin’, as they say.
Anyway, here’s my thought as I head through town to buy some groceries to cook up a great meal at home tonight — I’ll admit I have no idea who’s more scared right now, the bulls or the bears. Apple didn’t really participate today, Google didn’t have oomph, FIO faded during the day and the financials like GS, JPM and BAC were steadily on fire all day upon the news that they’re getting a new welfare program to “help them out of this crisis“.
…
And that about sums it up.
Nov. 30, 2011, 8:13 p.m. EST
China’s official PMI survey shows contraction
By Michael Kitchen
LOS ANGELES (MarketWatch) — China’s manufacturing contracted slightly in October, according to a government-sponsored survey released Thursday. The China Federation of Logistics & Planning reported its manufacturing Purchasing Managers’ Index fell to 49.0, below the previous month’s 50.4 reading and less than the 50 level that separates contraction from expansion. The result missed a 49.7 forecast from a Dow Jones Newswires survey. A private-sector version of the manufacturing PMI was due out from HSBC later in the day.
Which Dow Stock Dropped 20% This Month?
Published: Wednesday, 30 Nov 2011 | 5:23 PM ET
By: Giovanny Moreano
Quantitative Analyst
The Dow Jones Industrial Average rallied 490 points or 4.24 percent Wednesday, posting its largest point and percent gain of the year. Today’s move helped the index finish the month in positive territory, up 0.76 percent.
But despite the huge rally, one stock finished the month with a 20 percent decline. The stock: Bank of America
…
Bye-bye, Citizen Cain.
Cain blasts critics for ‘character assassination’
By the CNN Wire Staff
updated 9:45 PM EST, Wed November 30, 2011
(CNN) — A defiant Herman Cain tried to turn the tables on his growing legion of critics and accusers Wedneday, blasting them for allegedly engaging in gutter politics and giving no indication of any immediate intent to abandon his embattled presidential campaign.
“They have been trying to do a character assassination on me,” Cain told an enthusiastic crowd in West Chester, Ohio. “They are attacking my character, my reputation and my name in order to try and bring me down.”
“I don’t believe that America is going to let that happen,” he declared.
His fund-raising took a hit, Cain acknowledged later Wednesday, after a woman said Monday she had engaged in a long-term affair with the former Godfather’s Pizza CEO.
“The day that this latest one (allegation) hit, fund-raising went way down,” Cain said. “But here’s the good news. As the week has gone on and this woman who has made these accusations is basically starting to contradict herself, our fundraising is going back up. It’s not to the level where it was but a lot of people are saying — you know what? They don’t believe it.”
Cain, who is dropping in Republican presidential polls, urged his audience to “know the facts” and “stay informed because … stupid people are running America.”
…
If he had so much faith in winning he could spend some of his own money. Of course what this really means is that his fellow 1%’ers have given up on him, even with his luscious (for them) 9-9-9 plan.
Those dang public sector workers are acting up again, across the pond.
Two million on strike in England
USA Today - 52 minutes ago
Police escort srtiking workers during a march in London. Two million British public sector workers went on strike over proposed changes to pensions.
November 27, 2011 8:01 PM
Hard Times Generation: Families living in cars
Scott Pelley brings “60 Minutes” cameras back to central Florida to document another form of family homelessness: kids and their parents forced to live in cars.
More than 16 million children are now living in poverty and, for many of them, a proper home is elusive. Some cash-strapped families stay with relatives; others move into motels or homeless shelters. But, as Scott Pelley reports, sometimes those options run out, leaving an even more desperate choice: living in their cars. 60 Minutes returns to Florida, home to one third of America’s homeless families, to find out what life is like for the epidemic’s youngest survivors.
…
SS
a) SS for All
b) SS for None
c) Reduced SS for All
d) Reduced SS for None
What’s it going to be Congressional Whores?
What’s it going to be Congre$$ional Whores?
$$ = Who’s your daddy?
a
Because when they have the same question for Medicare, it will need to be “c”, and they’ll want to throw the masses a bone.