Bits Bucket for December 19, 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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BUSINESS
China’s November home prices post worse performance this year
Taiwan News, Newspaper
2011-12-19 02:51 PM
Bloomberg
China’s home prices posted their worst performance this year with more than half of the 70 biggest cities monitored in November recording declines after the government reiterated plans to maintain property curbs.
New home prices dropped from the previous month in 49 of the cities monitored by the government, compared with 33 posting decreases in October, the national statistics bureau said in a statement on its website today. Only five cities had gains in home prices, according to the statement.
The government said in the past week it won’t back away from real-estate industry curbs that are damping home sales and pulling down prices. China intensified measures this year by raising down payment and mortgage requirements and also imposed home purchase restrictions in 40 cities.
“It’s more and more clear that home prices are falling around the country,” said Shen Jian-guang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. “It’s still the critical stage of China’s property curbs, so the government doesn’t want to send any signals of easing of those policies too early as it may reverse the trend.”
New home prices in China’s four major cities of Shanghai, Beijing, Shenzhen and Guangzhou each retreated 0.3 percent from October, the biggest monthly falls for these metropolitan areas this year, according to data from the statistics bureau.
The eastern port city of Ningbo and Shenyang in the north close to the North Korean border posted the biggest month-on- month declines of 0.6 percent, while Guiyang in the southwest rose 0.2 percent, the most among the 70 cities.
Further Declines
Today’s figures came after private data also showed further signs of cooling. China’s home prices fell for a third month in November, SouFun Holdings Ltd., the country’s biggest real estate website, said earlier this month based on its survey of 100 cities.
…
Got Precious™?
PRECIOUS-Gold weakens after Fitch downgrade warning
Mon Dec 19, 2011 2:18am EST
* Silver falls more than 3 percent
* Gold to drop in Q1, far from retesting record high -poll
* Coming up: U.S. NAHB housing market index, Dec; 1500 GMT
(Adds details; updates prices)
By Rujun Shen
SINGAPORE, Dec 19 (Reuters) - Gold prices fell nearly
1 percent on Monday, extending last week’s loss, which was the
biggest in nearly three months, as rating agency Fitch’s warning
on downgrading France kept investors on the edge about the
situation in Europe.
Fitch Ratings warned it may downgrade France and six other
euro zone nations as it believes a comprehensive solution to the
region’s debt crisis is “technically and politically beyond
reach”.
Asian shares fell and the dollar edged higher after news of
the death of North Korean leader Kim Jong-il fanned fears of
regional instability.
Though the gold market barely reacted to Kim’s death, it is
prone to moves in the currency market as well as equities. Gold
in recent months has been closely correlated to riskier assets,
as the funding squeeze forces investors to dump gold to cover
losses elsewhere.
The two-year-old euro zone debt crisis remains the
overarching concern in the market. The lack of a solution,
together with tightened liquidity, drove gold down more than 6
percent last week.
“In the short term we are seeing greater downside for gold,”
said Ong Yi Ling, an analyst at Phillip Futures, adding that
$1,550 would provide support in the near term.
“Gold is still taking cues from the development in Europe –
whether there will be more sovereign debt ratings downgrades.”
As financial markets enter the penultimate week of the year,
liquidity is expected to shrink, with investors closing their
books for the year, which may leave prices prone to wild swings.
Spot gold fell nearly 1 percent to $1,582.84 an
ounce, before recovering to $1,593.29 by 0703 GMT. U.S. gold
declined as much as 0.8 percent to $1,585.5, and traded
at $29.01.
Technical analysis suggested spot gold could fall to $1,417
over the next three months, said Reuters market analyst Wang
Tao.
…
Why buy gold today when you can buy later for 80% less?
“Gold in recent months has been closely correlated to riskier assets, as the funding squeeze forces investors to dump gold to cover losses elsewhere.”
(snort)
True money is being cashed in (interesting phrase, no, “cashed in”?) for useless, unbacked, fiat pieces of paper?
The only “true money” is considered a risky asset?
My, my, what is the world coming to?
But gold has more than doubled since you started (in about 2007) saying “cash is king” would beat it.
I made a mistake the other day. Gold has not broken its 5 year uptrend line. From a low of $1,575 it has bounced off its 5 year trend support level. Do you all know what that means? I don’t really.
http://www.kitco.com/charts/popup/au1825nyb.html
‘But gold has more than doubled since you started (in about 2007) saying “cash is king” would beat it.’
Something similar happens at the end of many bubbles: That is, prices rise ‘much more than expected’ beyond the point when many people notice there is a bubble underway.
Market participants who notice bubble formation can be divided into two camps:
1) Those cognizant of the danger wo get out of the market;
2) Those who try to capitalize on the parabolic price blowout, assuming they will be able to sell before the final collapse.
Sir Isaac Newton offers a spectacular historical example of category 2). He made lots of money during the South Sea Bubble and sold before it collapsed. But then during the dead cat bounce phase that followed, he bought some more, and subsequently lost his shirt on the second, final collapse.
Another example, which I heard first-hand, comes from the San Diego real estate bubble. A colleague at work could have bought a home when he came here in 2000. His dad, a Realtor™, advised him to wait, as prices had gone up by too much and were bound to fall back to normal levels soon. By the time I heard this story in 2005, prices had doubled again.
It’s called Deflation.
It’s called Deflation.
Where is this deflation? When I consider moving back to the USA it is not deflation that makes me take pause, it is inflation that I mostly see in things that I would need. Gold going from $250 to $1900 then to $1600 does not remind me of deflation. How would it?
Deflation in Gas and energy?
Cars?
Health Insurance?
Housing? (all costs considered)
Food?
Entertainment?
Hot dates?
Transportation?
Education?
deflation is impossible as long as you have a printing press.
“…deflation is
impossibleavoidable as long as…”Is that what you meant?
Even with the modification, I am not sure…didn’t the U.S. have a printing press during the 1930s? And if so, why did we have so much deflation?
And doesn’t Japan have a printing press?
“deflation is impossible as long as you have a printing press.”
Alan Greenspan: WE CAN ALWAYS PRINT MORE MONEY
http://www.youtube.com/watch?v=q6vi528gseA
Love that look of the other guest next to Greenspan!
My personal intrepretation is that the big plum in all this is the mountain of unrepayable debt. That is less visible than the price of consumption items, but I think it is larger by orders of magnitude. I also think that the big credit expansion is ending and defaults are already gaining momentum. The growth model of lending to create productive assets is over, and the slosh has been going into speculative purchase of existing assets.
In that perspective, I see the rise of consumer goods prices as a distraction of the underlying currents. The result of desperate efforts to lend prosperity and growth into being being diverted to non productive activities? I see consumption of everything you list falling relentlessly. Surplus capacity everywhere. The intersection of these winding roads looks to me downhill.
As for gold, I think it’s rise of late was in response to the percieved will of government’s to sink their citizens into further debt, without end. Perception is a fragile thing. Gold has not fallen much vs. $, but if the marching upward is stopped, that is symptomatic of the whole game.
“WE CAN ALWAYS PRINT MORE MONEY”
You have to love the candor of retired Federal Reserve chairmen!
Rio, over the last decade (2001-2010) the inflation rate in Brazil has averaged a bit above 5% a year, with a peak of 14% in 2003.
http://www.indexmundi.com/g/g.aspx?c=br&v=71
BTW, the same site shows the U.S. inflation rate over the same period to be about 2.5%.
I’m waiting for someone here to claim the U.S. numbers were fudged downward but at the same time the Brazilian numbers were fudged upward.
“Gold has not fallen much vs. $, but if the marching upward is stopped, that is symptomatic of the whole game.”
If I were a central banker with a printing press, I wouldn’t let gold fall too far vs. $, as that would discourage new investors. Rather I would sell enough to drive down the prices to a level that attracts new investment, then use my printing press money to buy more, luring in a new wave of suckers who believe ‘gold always goes up.’ Once the sucker wave that follows up prices gains sufficient power, the central bank can unload, driving the price low enough to lure in a new wave of dips who want to buy.
Do you see the potential here for creating an evergreen money tree off gold bugs, provided the price is never allowed to drop too far? (Fair disclaimer: I am merely describing a hypothetical financial engineering scheme; not suggesting the Fed or any other central bank would ever actually do this…)
LOL Prof. One thing is for sure, if you can keep the herd running one way this moment out of greed and the other way next out of fear, and so on, you can generate tremendous flows of interest on their debt, if you were the central banker.
I’m waiting for someone here to claim the U.S. numbers were fudged downward but at the same time the Brazilian numbers were fudged upward.
Do you think both of those have happened? I’m not sure I get your point. Is it “Why am I worried about US inflation when Brazil’s is worse?”
I wasn’t trying to be flippant. I was merely attempting to point out the bankruptcy of arguments to the effect that the Fed is bankrupt.
Where’s the deflatino
http://www.bloomberg.com/apps/quote?ticker=CRY:IND
plus home prices and real estate
office rents
advertising rates
technology
It’s all there for the eye to see.
When Europe and China crater is when the fun starts.
“deflation is impossible as long as you have a printing press.”
Once you “print the money” you have to be able to loan it to productive workers who will pay it back with interest.
Its the productive workers who will pay it back that is the problem.
Now the money sits in banks and gets used for commodity speculation. Nevertheless Banks are not near as profitable as they were a few years ago when they expanded to a oversized percentage of the S&P . Over 20% if I remember right.
Bomb Thrower: In the 1930’s, we were on the gold standard, so no, we did not have the printing press.
The Japanese deflation is a goofy situation, which was largely driven by their high savings rates. Look at how much INFLATION there was in Japan before the lost decade(s), when you compare their deflation to that prior inflation, it is frankly surprising that their deflation wasn’t MORE pronounced.
Their real estate bubble made ours look like a joke.
Watch what happens to Japan now that their population is declining, and they need to go to the outside world for their deficit spending…either they will have a recession/depression, or they will print, print, print.
In Mauldin’s book Endgame, he goes back over long periods of time with fiat currencies.
Long story short, when currencies were tied to precious metals, deflation was a common feature of recessions/depressions (like when it occurred in the 1930’s). Once fiat currencies were introduced (the ability to simply print more money), the rule became inflation, with notably few examples of deflation.
I believe as Chuck Schwab does, when he said at a conference…”the Fed is trying like hell to create inflation, eventually they will be successful.”
The Fed believes it can stop higher than desired inflation (as it has in the past).
The Fed has fewer tools available to stop deflation. As such, they are going to do whatever they can to avoid deflation.
You gonna fight the Fed and “Helicopter Ben”? Bernanke is at the helm until January 2014–lots of time to print.
And let’s not forget about silver in the 1930s that was in everyones till that did business
I think what the FED want’s is to stop deflation. The problem is they don’t have the right tool for our current situation. They can print money until the cows come home, but if people don’t borrow and banks don’t lend it won’t work.
The gov could do it if they borrowed and spent on creating jobs in the US. If they taxec oil and used the revenue to do away with the payroll tax. If they raised taxes on the elite and financial transactions and used the money to fund single payer health care.
ie spread the wealth, make employing people in the US less expensive and financial manipulation and oil more expensive. This will never happen as big oil and WS have all the money and control all the politicians so we will see a continued decline in the middle class of the US and Europe and across the globe and less consumption of manufactured goods and more unemployment. They can jack food and oil prices to the moon it won’t reduce unemployment or stimulate the economy. It will shift spending from manufactured wants and services to needs which employ far fewer people.
Alan Greenspan: WE CAN ALWAYS PRINT MORE MONEY
And he is correct. Note that he is merely saying that we are not at risk of default as long as our debts are denominated in the currency that we can print at will.
Now, monetizing the debt in that manner will of course destroy the value of the currency in the process; but we have zero risk of default.
They can print money until the cows come home, but if people don’t borrow and banks don’t lend it won’t work.
They could hand it out like candy, maybe by forgiving CC debt like nydj keeps asking. Fat chance of that happening. They’ll just keep buying treasuries on the open market.
I wasn’t arguing that they can create inflation, other than in needs/commodities.
Just agreeing with Greenspan that we have zero risk of defaulting on dollar-denominated debt.
Prime, how does inflation in needs/commodities NOT ultimately cause broader-based inflation throughout the economy?
The term “needs” is squishy. When people really can’t afford it, and their wages are not increasing (due to the glut of global labor supplies), it turns out that people “need” less than they used to “need”.
“Japan’s deflation is a goofy one…”
People make the mistake that Japan is a case in point for deflation in “everything”. This is grossly incorrect, I go to Japan every year for 3to 4 weeks. I can tell that - you just as In Colorado & Now Rio like to point out - there is inflation in essentials such as food (both prepared & raw), clothes, entertainment (CD cost equivalent of of $30 on average). Deflation is in the high “cost” items such as houses, apartments, land (land in crowded cities such as Tokyo). Note that these are not high value items (perceived as high in the 80s).
The crux of what Japan is facing now is that the boomer population is retiring and slowly dying. Their kids inherit their property. Most of it is paid off by years of cutting back by the older generation. Unfortunately the younger folk cannot go back to their extravagant ways because (1) very few of them have well paying jobs (2) the banks still have a lot of bad debt on their books (3) there are no more large savings that will buy new Japanese govt bonds. If Japan has to go to the international market - watch out for escalating interest rates.
Will anyone have time to say hyperinflation?
I have said this before, US will go the Japan route without the benefit of a population that sucked it up (still does). We have to get a major reduction (below the normal long term trends) in all the asset prices that shot up during the bubble.
After this “deflationary” scare I expect the inflation really picking up - in the range of 7% to 12% annually - in everything.
Shendi,
I think you are spot on with Japan. The paths for Japan are either a) massive inflation, or b) massive recession/depression. It is the only way to pay off their debts since they will be faced with rising interest costs due to needing to go to the outside world for debt. Mauldin calls them “a bug looking for a windshield”.
For the US, we have a ways to go before we go the Japan route…we still have a growing population, and are expected to have such a thing for a long time to come. And as of today, we already borrow from the outside world, so it is likely that our cost of borrowing will go up before we get to debt levels of Japan.
I share your view on inflation generally (that we’ll have inflation, not deflation), but I don’t think it’ll be 7-12% as the government reports it, but could likely be in the 4-6% range for quite a while.
If of course you want to measure inflation the way it was in the past, your 7-12% could be right on the money.
Rental
I get what you are saying. With 4-6% inflation the increases do not seem crippling, although everyone buying groceries and personal hygiene items feel the pain whenever they buy. Overall if one has a decent cash flow from a steady job/income, this increase can be weathered. As everyone here has pointed out: The poor have it hard now.
What happens with Japan in the next 5 years with regard to its debt (currently at almost 200% of GDP) will tell us something about how things could go in the US. I, for one, don’t believe, that Japan can whip up inflation like Zimbabwe - simply because the Japanese people cut back and make drastic adjustments if they have to - as they did after WWII.
The big question I have for Japan: where are the good paying jobs - for the general population with average skills - going to come from?
The big question I have for Japan: where are the good paying jobs - for the general population with average skills - going to come from?
I have that question for everybody. Right now it’s a mystery for everybody except those willing to work for just enough to avoid starvation.
“…lots of time to print.”
Printing is already done (QE1, QE2, Operation Twist, etc etc etc) but lots of the printing press money is hidden away under mattresses, awaiting asset price fire sales.
Funny how the pundits say it is the end of the gold boom when prices drop ten to fifteen percent. It was the end a few years ago too when gold dropped from $1200 to $1000 per ounce. Then after that went above $1700 per ounce. A one month change in prices is more often likely a buying opportunity than a crash. At some point there will be a real gold crash, but not until interest rates get hiked and not until Ron Paul spending cuts occur. They will, with or without Ron Paul elected.
Looking back at Kitco charts, gold price dropped 25% from $1,000 to $800 from December 2007 to December 2008. Maybe We could find Hbb archives from Combo saying in December 2008 “yep, we are in for deflation.” earlier this year gold was around $1900 and today just below $1600. Not near a twenty-five percent decrease.
Maybe instead of waiting for $1,200 per ounce I will start buying if it gets below $1400. Depends on my spreadsheet.
19 Dec, 2011, 03.48AM IST, ET Bureau
Multiple dangers ahead if gold price crashes
The world price of gold has crashed from over $1,800 per ounce to under $1,590 per ounce. This should sober the buying frenzy of both consumers and bullion speculators, who have driven up the gold price sharply over the last year.
They have argued that gold prices can only go up for several reasons: the Fed is pumping out billions which are being financialised into gold derivatives; gold is a hedge against inflation; uncertainty about the euro future will cause a mass switch to bullion. However, nothing can keep going up forever, which is why bubbles burst.
…
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I really don’t get the argument that it would be extremely dangerous if the gold price crashes. I have heard gold bugs point out over and over again that a very small share of households own gold. If that is the case, wouldn’t a gold price crash only be dangerous for a few individuals?
After all, what’s a price decline to a central bank to a printing press? I believe the term is buying opportunity.
I agree it won’t be dangerous at all for the very same reason you mention: a small percentage of people own gold. I would like there to be a thirty or forty percent price crash in gold so that I can justify adding more to my portfolio.
“I would like there to be a thirty or forty percent price crash in gold so that I can justify adding more to my portfolio.”
That’s what I term a ‘weak hands shakeout’ — bad for anyone who owns gold and suddenly finds themselves in a position where they need to sell in order to raise survival cash, good for anyone with money on the sideline who can buy the dip after a forty percent price decline.
One thing is for certain: No matter how low gold prices go, they will never go to $0.
Try not to catch yourself a falling knife buying gold while prices are collapsing.
Last Updated : 19 December 2011 at 11:05 IST
Asian gold buyers thrilled at price fall, UBS says buy Gold
Gold prices dropped more than 7% last week – the biggest weekly loss since September. Liquidity squeezed speculators and banks have been closing long positions and selling Gold this past week but global physical demand remains robust.
Bullion buying in much of Asia has picked up. Reuters reports that there has been a jump in buying in most Asian countries and that demand for gold in India, still the world’s top buyer, rose slightly for the first time in almost a week on Friday.
Bullion dealers in India told Reuters that the price drop “enthused buyers.”
“We saw huge physical demand from Thailand and Indonesia,” a Singapore based dealer told Reuters. Gold bar premiums were steady at $1.00 an ounce over spot prices in Singapore. Prices may edge up this week as supply reduces around Christmas holidays according to a dealer.
…
“Liquidity squeezed speculators and banks have been closing long positions and selling gold this past week …”
Interesting phrase “liquidity squeezed”.
My, whatever could it mean?
A bit short of CASH maybe?
Sir,
We don’t accept gold dust as payment.
Thanks again,
The Management
It clogs up the cash registers.
Get what you can get for your gold today because it’s going to be less tomorrow…. and the day after… and the day after that.
That’s the problem with borrowing to “invest”. Superior assets get sold to service the debt if anything “unexpected” happens. This ZIRP experiment has been one gigantic Siren song.
‘Superior assets get sold to service the debt if anything “unexpected” happens.’
How do you define ’superior’? For instance, was gold superior when its price was going up parabolically? And is it still superior now that its price is headed south? Is ’superiority’ an intrinsic property of the asset in question, or does it depend on which way prices are headed?
By “superior” I mean tangible, already produced, vs assets that are promises of later producing something tangible. The shepards pie I put in the freezer yesterday is superior to the promise of apple pie next week.
“The shepards pie I put in the freezer yesterday…”
If you leave it in there too long or if your power goes off, it will spoil, similar to a home that sits unsold and vacant for too long.
I suggest that shepards pie is more analogous to housing (an inferior, physically depreciating asset) than gold (never physically depreciates).
If you “owned” gold stored at MF Global, you’d be getting a lesson in vanishing.
“…you’d be getting a lesson in vanishing.”
Superior assets certainly aren’t immune to the risk of outright theft.
Superior assets certainly aren’t immune to the risk of outright theft.
See: “Charlie Brown and the kite eating tree”
1oz of gold = $1,569.00+
homemade kite = <$10.00
Time wa$ted out$ide looking for gold & unseen breezes, pricele$$!
I was talking Doom with a coworker, about how screwed the MF Global gold-holders were, shaking our heads..then he tells me he owns $12000 in silver that safe because it’s all “in a vault somewhere” i.e. paper PM. LOL
‘Bargain’ gold spurs buying in Dubai
Yellow metal down $111 in 1 week, but Dubai analyst says bull-run isn’t over – at least not yet
By Vicky Kapur
Published Sunday, December 18, 2011
Physical gold buying saw a significant upsurge last week after prices slumped in the wake of global concerns. “I was resigned to the fact that the physical buying in our market (Dubai and UAE in the wider sense) had finished for the year, and then came Thursday, 15th December. We saw excellent buying from customers which reminded us very strongly of the heydays in August/September,” Gerhard Schubert, Head of Precious Metals at Dubai-based Emirates NBD, said in his weekly precious metals report.
Spot gold prices closed last week at below $1,600 per ounce, down $111, or 6.5 per cent, in a week on a lack of more quantitative easing from the US Federal Reserve and the dash for cash as the European sovereign debt crisis drags on.
As expected, a number of analysts climbed out of the woodwork to call the end of the metal’s bull-run. Economist Dennis Gartman says he is out of gold, seeing “the beginnings of a real bear market, and the death of a bull.”
…
How is Dubai buying ANYTHING after they stiffed all their creditors?
Dubai is the world’s biggest mall. Buyers are most likely visitors.
Metals and Mining
Massacre on Gold Prices Continues (Update 1)
By Alix Steel 12/15/11 - 03:31 PM EST
NEW YORK (TheStreet ) — Gold prices were struggling to recover Thursday after a brutal selloff pushed gold through pivotal technical levels.
Gold for February delivery dropped $9.70 to settle at $1,577.20 an ounce at the Comex division of the New York Mercantile Exchange but was continuing lower in after hours trading. The gold price has traded as high as $1,596.50 and as low as $1,562.50 an ounce while the spot price was down $9, according to Kitco’s gold index.
…
Needs to drop to $1,200 per ounce before I start buying gold again. Bring it on. I foresee $2,500 per ounce at the minimum until the mainstream politicians throw in the towel and adopt Ron Paul’s spending cuts plan of $1trillion per year. $1,200 per ounce could be the opportunity of the decade.
I think $1,409 instead of $1,200.
Has LostInUtah been posting lately?
I haven’t seen her here in a while but I was wondering how she’s been doing too.
http://spotted-dog-ranch.blogspot.com/
Thank you Blue Skye
Hi, SF.
Or Yellow Cat Publishing/Desert Rats
Lost hasn’t posted here for about a year.
nor mikey… :-/
She’s doing fine.
Wait a minute — are YOU Lost in Utah?!
Realtors Are Liars®
Congress Are Whores®
In todays’s WSJ: House Members Received VIP Loans
“Four current members of the House of Representatives received loans through the controversial VIP program of Countrywide Financial Corp., according to the chairman of a congressional committee, raising new questions about possible efforts to curry political influence by the onetime mortgage giant whose troubles helped spark the 2008 financial meltdown.”
And from Politico: Darrell Issa: Four lawmakers got VIP loans
“Issa did not name the four members who received the loans in his letter to Ethics, but Rep. Edolphus Towns (D-N.Y.), the former chairman of Oversight and Government Reform, has acknowledged receiving two loans through the VIP program. Towns has stated that he was not aware of his inclusion in the program, known as “Friends of Angelo” within Countrywide. This is a reference to Angelo Mozilo, Countrywide’s former CEO.”
Lol, a bit late in reporting I’d say?
Wasn’t this disclosed and talked about here some YEARS ago?
Yes but now there will be a behindd closed doors investigation followed by a reported slap on the wrist. It’s what we’ve all been waiting for???????????????????????????
I just can’t get enough Michele Bachmann. She fostered 23 girls. Maybe I can marry one of them then I can call Michele Bachmann Mom.
The Real Cost of a Gourmet Kitchen
bloomibergi
“Despite tough economic times, people are upgrading their kitchens. The National Kitchen & Bath Assn. says kitchen remodeling sales volume is up 36 percent and prices are up 16 percent from a year ago….If you’re a gourmet cook you don’t need much storage because you’re preparing fresh food..”
Bloomberg Rankings examined the cost of upgrading a kitchen so that it’s suitable for a gourmet cook.”
slideshow follows
Stove: $14K
Sink and faucet: $1700
Fridge: $3000
Dishwasher: $1700
Goodies like cooler drawers and wine fridge: $3000
Chopping block $170
144″ granite/quartz countertop $3200
Knives: $500
Pots and hanging rack: $3000
Baking pans: $550
Food processing/mixers: $700
High end cleaners: $20
Cookbooks: $120K
Magazine subscriptions: $60
Smartphone apps: $25
——–
Total $35K
And this is an “upgrade” and assumes you already have cabinets and water/gas/e- to build on. Having done a lot of cooking by myself and some cooking with friends, about the only thing worth the money are the good pots, the 12 feet of counterspace, the food processor, and especially the sink and faucet. You spend a LOT more time on prep and cleanup than you do at the stove.
$35k is how many years of good eats at a restaurant 3x/week?
And I don’t have to spend the time to prepare?
I don’t have to buy the ingredients?
I don’t have to clean up?
I don’t eat wear and tear(depreciation) on kitchen?
Who are the morons spending $35k on grossly inflated appliances? Because that’s what is in your list. Appliances.
“$35k is how many years of good eats at a restaurant”
about one Ruth’s Chris (my favorite expensive restuarant) a week for 10 years.
now I go only once a year (my anniversary).
….. meh…. you can make a better steak at home. (much like the pizza you like so much)
This article is clearly aimed at CEO wives with throwaway dough. The rest of us can safely ignore it and plan to buy our kitchen wares at Targét.
A small price to pay for a trophy wife.
IKEA is now the go-to for kitchens.
I wonder how many people use their hard earned cash for these upgrades?
I love to cook - and cooking is no easier on a viking stove than a Kenmore.
This will look as goofy in a few years as they did back in the early 80s.
Exactly right Moman. These kitchens will look hideous before long.
And then they will come “back in” eventually.
The sweet rental that I found a couple of years back had an old avocado green stove. I rather liked it.
The LL offered to replace it, and said his wife told him he needed to replace it in order to rent the place. I told him I’d prefer the old stove to a new one; it still works great, and it adds a note of interest to the kitchen decor.
Win, win…
Avocado green, harvest gold…it was the brown fixtures in a 70s bathroom that I couldn’t take.
I agree except the fine restaurant food is high in sodium, bad for the heart.
Food cooked from scratch- as it should be in a fine dining restaurant- usually has less sodium than the processed foods one buys at cheaper restaurants and in the frozen/canned food sections of the grocery store.
Casual dining food is also chock full of calories, mostly from fat. You can eat better at home for far less. Of course, most people, especially the younger set, don’t know how to cook.
I know how to cook pretty well, and I use just enough fat (usually decadently delicious butter) to make my tastebuds happy without killing me.
“bad for the heart”
You should check out Dr. Esselstyn’s book “Prevent and Reverse Heart Disease.” Awesome read, and I have re-arranged my life as a result.
I’ve long suspected heart disease was reversible; good to know a doc has written a book in support of this idea.
I have a family member that has been a top chef in some of the better area restaurants and private clubs. He laughs when he sees the Williams Sinoma spreads. He says Carrie, good knives, good pots and pans is all you need. He didn’t mention counter space but if you’ve got a 2 cook household I find it’s a necessity for the sake of the marriage. LOL That being said I went in back in one of the best restaurants he worked in. The staff was on top of each other. There was very little space.
Being a frequent patron of CIA, what your friend says is true based on the conversations I’ve had with the CIA crowd.
There are trained chefs and then there are profligate spendthrifts pretending to be chefs.
The Brazilian apartment kitchen is old-school. In Brazil the kitchen was the maid’s territory and not considered part of the “noble areas” of the home. It is small and enclosed with one door to a hall and one door to the “service area” - a room to wash and hang clothes with a door to the little maids room and a little bathroom. The kitchen usually has about 6 feet of 21″ deep counter top space including the sink. The pots and pans are usually cheap 40 year old thin aluminum stuff with a “you’ve got to be kidding me” collection of mismatched cutlery. (because why spend money on stuff for the maid? they reason) In this environment the maids cook some of the best meals one can imagine and they seem to spend all day doing it.
The trend now is less maids and tearing down walls and making the kitchen open (called the American style kitchen) And the maid’s room is being turned into little offices or storage rooms. My kitchen is American style and impresses many Brazilians with my American made Bosch dishwasher and get this….a garbage disposal. My 18 feet of granite counter tops don’t do much for the Brazilians (except for my inclusion of electrical outlets) because even the maids have granite counter tops in Brazil.
Expensive tools do not make the artist, in any craft.
“Expensive tools do not make the artist, in any craft.”
Naw, but back in the Eno days of electronic music you need a half-mil in gear + a working knowledge of physics to make it all work.
And now we have Garage Band and Autotune on the iPhone.
Blue Skye / Skipper / exception:
http://tinyurl.com/7dthbp2
I’ll certainly agree with the exception, but I claim that having that kind of boat would not make me a sailor, much less a great one. Do those guys catch their dinner off of that rig???
Counterpoint, I won the college division marksmanship competition in my day with an obsolete Rangemaster, the simplist of low tech rifles.
“why spend money on stuff for the maid?”
Because you’re going to be eating the food that was prepared using stuff that you bought for the maid?
“why spend money on stuff for the maid?”…..Because you’re going to be eating the food that was prepared using stuff that you bought for the maid?
It’s a cultural thinking pattern thing. If you said that, many would just shake their heads and wonder why gringos think so strangely.
If the maid can’t make good food with cheap cookware, she gets fired and replaced with one who can.
A good cook can make good food on cheap cookware. It’s just a bit harder, and requires more attention to heat control.
Most hobbyist’s are about the equipment, the ones who actually DO the stuff don’t care about that, they just need what they need.
You see it a lot in photography, lots of the latest DSLR’s, me, I shoot film. The latest $5000 camera ain’t any better than my $200 one.
You see it a lot in photography, lots of the latest DSLR’s, me, I shoot film. The latest $5000 camera ain’t any better than my $200 one.
Very true. I’ve sold photos to people who couldn’t care less which camera I used. They just liked the photos.
And as for expensive cameras, got one. You don’t want to see the flubbed photos I’ve taken with it. The delete key is too merciful a death for them.
In short, it’s not the equipment. It’s the operator.
So true, Xiaoding. If you think cooking and photography is bad, try amateur sports. The guy with the new Ektelon raquet and matching racquet cover? No biggie. The old guy with the 1970’s small racquet who says, “oh I never bothered with the new stuff,” watch out.
My kitchen is American style and impresses many Brazilians with my American made Bosch dishwasher and get this….a garbage disposal.
LOL! We too had a garbage disposal unit in our sink in Mexico. Back in the 70’s and 80’s no one down there had a “triturador” (shredder) in their kitchen sink. From what I have seen lately (in photos) newer upper class Mexican homes have “American” style kitchens.
As a CPA with 20+ years tax experience I laugh at all the people that use expensive programs to do their taxes. All you need is a number two pencil and the forms from your local library.
TurboTax on-line. Easy to use, electronic transmittal, fast returns.
I love Turbo Tax. I used H&R block before, about four times. Two observations: I got a glimpse of the computer screen as the Torrance H&R guy in the tall bldg on Hawthorne blvd showed me some numbers. It looked like Turbo Tax. The other observation is that the Yo-Yo H&R guy made a mistake which forced me to overpay my taxes by nearly $8,000. Before I found out teo months later he sent me a letter announcing his retirement. I marched right back there and another associate verified her predecessor made the huge mistake. Another time in a Tucson H&R office they made me overpay by several hundred bucks.
So I do my stuff myself. H&R folks do not double check for mistakes. I triple check my own.
Yours truly will do his part to reduce the federal deficit in 2012 by paying far more taxes than any tax year, due to conversion of some of my tax deferred IRAs to Roth IRAs. It will be very worthwhile.
I usually just buy the base software (under $20), simply because:
It does all the arithmetic
It can sometimes (depending on your employer) download the W2 info.
I can print out multiple copies of the returns
It includes a free efile or two.
I also don’t have to re-write my name, address, etc. every year. It saves time.
We don’t have to figure out all the laws that pertain to our complicated tax situation, which includes self-employment income and W-2 income.
That’s what I always said until a few years ago. I gotta admit having last year’s numbers and data and this year’s W2(s) imported automatically is really nice. It’ll even direct deposit the refund into the same account as last year automatically if you want. Makes it almost painless.
One of my cousins is a chef. And, gasp, he doesn’t own a home with a fantasy kitchen. That’s because my cousin is a (horrors!) renter.
Professional chefs rarely cook much at home. It’s too much of a busman’s holiday.
You’ve described my cousin to a tee. He cooks at the office, so to speak.
They forgot 50 bucks more for an extra large pull out drawer to hold all the take out/delivery menus one invaribly finds in trendy yuppie kitchens.
That would be a hilarious “feature” to promote in the high end kitchens.
The wife and I upgraded our kitchen in the house we sold in 06
1. Purchased a router - 80? actually this doubled as a christmas gift for the wife.
2. Sink and faucet - a couple hundred
3. counter top - 150
4. plywood tyle and other 150.
wife - router… Awesome!
+
$ponge with logo: $9.75
microwave to sterilize sponge: $239.00
Here’s a segment of the 60 Minutes piece on foreclosures aired last night. We started talking about it in yesterday’s bits…
http://www.cbsnews.com/video/watch/?id=7392086n
A couple of things:
1. I honestly had no idea it was that bad in Cleveland.
2. It’s clear to me now that banks, municipalities, the fed, whoever, will conspire/collude as much as possible to do as much as they can. I don’t know what the result of this will be, but I get the feeling either way I won’t like it. Like Kunstler says, deflation or inflation, either way you’re broke.
3. My fraggin’ head is going to explode thinking about any government using taxpayer dollars to bulldoze homes. We’re well on our way to looking like a mentally ill society! Can you imagine what aliens observing us would think?
4. Seeing this piece on other places in America has me thinking that Florida might be one of the worst states for the hangover effect. Dumb money still makes its way down here. I need to get a teaching job in Oil CIty. Lol/not Lol.
“It’s clear to me now that banks, municipalities, the fed, whoever, will conspire/collude as much as possible to do as much as they can.”
If you mean to keep house and rent prices artificially high by any means so they can keep the banks and the banksters (who pay I mean bribe the politicians that run the world) balance sheets and bonuses healthy. That became clear to me about 6 - 8 months ago.
I just don`t like it when “homeowners” who made as bad a financial decission as an “average” person could ever possibly make in their lifetime call themselves victims. THEY`RE NOT! Many of them are lottery winners. I know it won`t work out for them in the end but unfotunately my kids did a lot of growing from 2003 - 2012 and I don`t think I will be alive for 150 years.
“If you mean to keep…”
You’re missing a huge piece, the municipalities need it too, and that guy specifically mentioned the “tax base.”
Everyone needs the crack.
” the municipalities need it too”
Yes they do, but they don`t have a printing press. Although they do have sewer bonds.
Jefferson County’s Bankruptcy Judge May Limit, Won’t Remove Sewer Receiver
By Steven Church
November 22, 2011 12:00 AM EST
Jefferson County, Alabama’s sewer debt needs to be cut by about $1 billion and the state must back repayment of the remaining bonds to keep sewer rates affordable, the receiver running the sewer system said in court today.
John S. Young Jr. was responding to questions from U.S. Bankruptcy Judge Thomas B. Bennett, who is holding a hearing in Birmingham to decide whether the county’s Chapter 9 filing limits Young’s power, including his ability to raise rates.
“I’ve never seen that kind of significant debt per customer,” Young said about the $3.1 billion in bonds that county officials authorized related to the system in 2002 and 2003.
In order to limit future rate increases to single digits, the system needs to reduce its debt by about $1 billion and Alabama would need to agree to treat the remaining debt as a “moral obligation” of the state. Earlier this year, Young proposed a 25 percent increase.
The two requirements Young mentioned were part of a tentative agreement among county officials and state officials, the receiver and bondholders. That agreement fell apart earlier this month, leading to the bankruptcy filing.
Young and sewer bondholders are in court in Birmingham trying to persuade Bennett to rule that he does not have authority under the bankruptcy code to limit the receiver’s power over the sewer system.
Bennett said at the start of the two-day hearing that he isn’t being asked to oust the receiver, who was appointed by a state court on behalf of bondholders owed $3 billion.
“No matter what happens today or tomorrow, I am not removing the receiver,” Bennett said. Limiting the receiver’s power still may give the county more influence over the sewer system and its ability to set rates.
http://mobile.bloomberg.com/news/2011-11-21/jefferson-county-sewers-become-bargaining-chip-in-bankruptcy - 26k
I don’t get the anger over the demolitions. Isn’t this just an example of the importance of jobs, as related to housing? There used to be a lot of jobs around areas like Detroit and Cleveland, and now there aren’t. (Why is a different argument). Therefore there are far more houses than needed in those areas, as can be seen by the fact that no one will buy them at almost any cost, because no one who wants or needs to live in them. So rather than let them become crack houses, they tear them down. I think this has been going on since time immemorial.
If they were tearing down houses in neighborhoods where people actually wanted to live, that would be a different story, and one worthy of anger.
My friend rents in Cleveland… a 1br. for his wife and newborn. They are barely making ends meet because of school debt. Here’s the best part: he’s an attorney for Baker working on the Madoff case.
Hey muggy ask him if he would like to return and cancel his law degree and license in exchange for paying off all his debt.
Sounds like a fair exchange to me.
“Isn’t this just an example of the importance of jobs, as related to housing?”
It’s a perfect example of broken window economics.
How so?
It’s hard to say what the real value of those homes might be, as authorities decided to bulldoze them rather than get them into the hands of private investors. An auction would have done nicely to figure out what they were really worth, but I am pretty sure the value exceeded -$7500 a piece (the cost of bulldozing 20,000 homes — see discussion under CarrieAnn’s post last night if you are sincerely interested rather than playing dumb).
I doubt you could reasonably fix up any of the houses for $7500 (unless you did all the work yourself and skirted permits) or less, so I disagree.
And I don’t see that you all had any reasonable discussion last night besides recommending that you sell them on Ebay. I tried to sell some computer parts on Ebay once. Nobody bid on them, ergo they were worthless and I threw them in the trash. It happens.
What if they had an auction, and nobody bid?
One guy in the article offers the reporter his house for $30. Sounds like no one wants them at any price. If they do, plenty are available, it seems. If the houses have no value, the broken windows theory doesn’t really apply.
“What if they had an auction, and nobody bid?”
Don`t tell anyone this but I was in a forest once and nobody knew I was there. A tree fell and It made a sound.
“What if they had an auction, and nobody bid?”
You can throw that straw man out there if you like, but the sad reality is that homes with positive value are getting destroyed by government fiat because of monopolistic institutions decisions. Nobody knows what those homes are actually worth, because nobody bothered to try to sell them in order to establish their market value.
“You can throw that straw man out there if you like, but the sad reality is that homes with positive value are getting destroyed ”
Tons of the same or similar houses are sitting on the market in Cleveland and Detroit at rock-bottom prices, with no buyers. At some point you have to admit these houses have no, or negative, value. So again I say the broken windows theory does not apply. Something of value is not being destroyed to ‘make work’. They’re being destroyed because it costs more in the long run to let them crumble slowly than to just knock them down now. These cities, with far fewer jobs available, need to shrink their footprint accordingly. It’s a rational economic decision.
If this starts happening in cities that aren’t shrinking, then it may be a broken window thing. But that has yet to occur, as far as I know.
I don’t get the anger over the demolitions. Isn’t this just an example of the importance of jobs, as related to housing?
Well, alpha, in “Thee OC!” many city councils approve tax-payer/citizen$ monies to purcha$e home$ for various $egments of $ociety, womens abuse $helter, $chizoids as roomies, etc, etc. They’ll issue forth decrees & pat themselves on the back with such $500,000+ “get $tucco” purchase$, really…Google it!
How is “anywhere” America different than say “anywhere else” outside America?
It takes a village to run a city!
Town of Paradise, CA
Butte County
Population in July 2009: 26,448. Population change since 2000: +0.2%
Males: 12,325 / (46.6%)
Females: 14,123 / (53.4%)
Median resident age: 46.6 years
California median age: 33.3 years
Town of Paradise Consumer Needs Survey Results: (interesting link/read)
TOWN HALL CLOSURE:
December 19, 2011 through January 2, 2012
_______________________________________________________________________
As a cost saving measure, Town Hall will be officially closed from December 19, 2011 through January 2, 2012. However because of the weekends and holidays, the closure will only affect seven (7) actual days that Town Hall is normally open to the public.
We are providing this announcement of the planned closure in advance for the benefit of of our general public, building community, real estate agents and title companies, so they can plan now for needed inspections, permits, escrow clearances, etc., around the closure period.
This closure does not affect the Town’s police, fire, public works road crews, or animal control/shelter operations. The closure only affects those services that citizens normally expect when they come to Town Hall. For example:
* Bus passes (Bus passes can be purchased at Chico and Oroville locations. Please call B-Line at (530)343-0221 for more information)
* Dog Licenses (Dog licenses can be purchased at Paradise Animal Shelter located at 925 American Way, Paradise (530)872-6275. Hours of operation are Thursday-Saturday 11:00 am to 3:00 pm)
* Building permits (General questions about building permits can be obtained online at www townofparadise com under “Development Services”)
* Septic permits, inspections, evaluations, Clearances to Record
* Planning and zoning questions (General questions about planning and zoning can be obtained at www townofparadise com under “Development Services ”
* Housing programs (Detailed information can be obtained at www townofparadise com under Development Services-Housing Programs)
* Business questions/assistance (Further information can be obtained under Development Servides-Business Services”)
* Public informaiton regarding Town Council agendas/activities can be obtained at www townofparadise com under Town Clerk agendas/minutes
* Recycling, yard waste, gargage collection questions
* Questions regarding parks
* Questions regarding water bills, water lines, etc. (www paradiseirrigation com)
Please note: If an emergency event should occur during this period, the Town Manager, as the Emergency Operations Director, will activate the EOC and residents will be advised on issues pertaining to the event and what steps are necessary to ensure their safety.
The entire “north.” east of the Mississippi, is an economic dead zone when it comes to manufacturing.
Post 2009 layoff, the squad took its masters degree west to greener pastures thus contributing to the brain drain.
Stick a fork in Cleveland, it’s done…
Seriously, what do they have left besides the Health-Care-Industrial-Complex, Progessive Insurance, Parker Hannifin, Eaton, and the rotting carcass of auto manufacturing?
Water. Great Lakes Brewing Company makes good use of it.
Seriously, what do they have left besides the Health-Care-Industrial-Complex, Progessive Insurance, Parker Hannifin, Eaton, and the rotting carcass of auto manufacturing?
Total control by public unions?
It has got to be worth something…
Turkey:
Well maybe after proposing this forever it just might make sense today.
we have millions in a manufacturing mindset who still are not computer savvy so why not offer businesses a tax deduction based on the number of full time employees with health insurance who DO NOT work m-f 9-5?
It is a dead zone right here in Long island city after 6 pm and all the free parking you could ask for…It like this all over America…..plus we use more then twice as much electricity at 4pm then at 4 AM…notice when the power normally fails.
Imaging hundreds of thousands of people in NYC going to work at 8pm instead of 8 am….seats and no cattle cars to work….no traffic jams driving.Weekends and holidays too..
Its just a crazy idea but frankly I hated the idea every morning being herded into subway car, to go to the paralegal jobs which i liked.
What you propose is sort of normal in Southern California. A lot of people work weird hours to avoid freeway traffic jams, working shifts that start at 3 AM or other weird hours.
Many years ago when I lived in San Diego I had to drive to LAX to catch a 5 AM flight. So here we were, my travelling companion and I, driving the the freeway between 2 and 3 AM. Not only were there plenty of cars on the road but as we passed business parks we could could see the parking lots full of cars and the lights on in the buildings. This was especially prevalent with light industry. It was a real eye opener for me as I had no idea this was so commonplace.
Alternative is always to rent, keeping a short lease. Then if you have to get another job, sometimes sixty miles away from your old job in the LA /Orange County / Inland empire region, you simply move to within a couple miles of your new job as soon as your lease by the old one expires.
DJ, how would you handle schools? Three shifts so kids are in school at the same time their parents are working? Letting workers with kids work the day shift?
With the first approach, I can see the teacher’s letter now: “Your daughter frequently falls asleep shortly after the 4AM lunch.” And the nearby neighbors might not like the outdoor recess at 2AM. The second approach would probably bring about a baby boom pretty quickly!
Bill that is the biggest reason most people work at Walmart…to eliminate child care expenses…
Well most students today NEED more schooling….if 60% cant pass the math test at target…they dont need to be home pestering the parents while they are sleeping.
I think a lot of money is wasted in school by union rules…whats wrong with 2 shifts at school? maybe not so much in flyover country …or maybe we should merge the schools with the libraries and keep them open at least 12-15 hrs a day
Colorado…..Maybe the west coast has better weather…but NYC has to be one of the hardest places to get a 3rd shift job and most businesses always cancel the 3rd shift first when business slows…
Why aren’t they suing the mortgage holders/banks for the demolition costs?
Probably because the approximately $5k it costs to demolish each house would quadruple if you included the court costs.
Muggy
Thank you for posting the 60 Minutes link on foreclosures.
I also watched the Meryl Streep segment. I like & respect that woman!
(We don’t have a TV.)
“Can you imagine what aliens observing us would think?”
Maybe.
“One in four houses will cost $25K to $30K to demolish…”
Certainly some investor could figure out how to sell those homes for more than $25K to $30K?
Oops — I forgot my negative signs!
“Certainly some investor could figure out how to sell those homes for more than -$30K to -$25K?”
Well, if you watched the link, the $25k reference was for houses with asbestos and other harmful substances, so yeah, they could remove the asbestos discovered making any necessary repairs themselves, burying it at the bottom of trashbins in the middle of the night, and simply let the stuff not needing repairs to remain in the house, perhaps covering it up or hoping a lazy inspector can’t identify it. Yay lung cancer for all involved!!
“Yay lung cancer for all involved!!”
Now there’s a broken window.
For evidence of how “mentally ill” the human race has become, watch a show called “Gold Rush” where heavy equipment belches black smoke all day while clear-cutting forests, destroying every living thing in the vicinity in order to process a few small vials of gold dust.
Bloomibergi headlines prove absurd
S&P Cut Proves Absurd as Investors Prefer U.S.
“Four months after Standard & Poor’s stripped the U.S. of its AAA credit rating and said the world’s biggest economy was no longer the safest of borrowers, dollar- denominated financial assets are doing nothing but appreciating.
Government bonds have returned 4.4 percent, the dollar has gained 8.6 percent relative to a basket of currencies, and the S&P 500 Index of stocks has rallied 1.7 percent since the U.S. was cut to AA+ from AAA on Aug. 5….
…with consumer confidence.. rising to a six-month high in December… Inflation was little changed in November and manufacturing expanded at the fastest pace in five months.. private employment rose 206,000 last month.
Not everyone agrees the U.S. is more creditworthy. Sixty- seven percent of 1,031 global investors in a Bloomberg Global Poll in September said S&P’s move was justified. ”
————-
A couple days ago there was a discussion whether laws of economics could be broken. Apparently so, since countries aren’t graded on fundamentals..they’re graded on a curve. If it weren’t for the better beer, the Davos crowd would still think they’re back in college.
Consumer confidence just means the payroll tax cut (thanks Barack!) provides enough money to pay the minimum on the CC bill. New jobs just means more low-quality minimum wage jobs, not a $50K job you can support a family on. Manufacturing means that there are finally sensible people in charge of GM (thanks Barack!)
Like I’ve said before, all we have to do is “suck less” than the competition.
When the world loses its confidence in the US as a “safe haven” is when things will get rather interesting.
Like I’ve said before, all we have to do is “suck less” than the competition.
Which is why I keep saying this:
Before long, the United States will be known as the comeback kid of countries. Not just because we suck less, but because we’re pretty good at crashing, burning, then picking ourselves up, dusting ourselves off, and carrying on. Call it the entrepreneurial drive, the American spirit, or what have you, but it’s in our DNA.
We’ve historically been good at that, but it required the capitalists to pay for their mistakes. We’re trying to skip that step this time. It doesn’t seem to be working for anybody but them so far.
We’re trying to skip that step this time. It doesn’t seem to be working for anybody but them so far.
Yeah, but there are those pesky occupations. And those people shouting rude slogans like “We are the 99%!”
The US is poised to boom, big time. Give it 15 years for the new inventions to come along. Were already a gas exporting nation, we just need to ramp up manufacturing. but, there’s no sense doing that right now, the new thing is not hear yet.
On the horizion..an artificial immune system. Computers in cells.
That’s why we should allow all companies to repatriate their foreign earning IF they spend it on Americans in America…no H1B, no stock buy backs or mergers…no executive bonuses unless the janitor and secretaries get the same percentage..
Spend it on American soil, bring back all your call centers, I know low pay but its an alternative to Wallymart
we have millions with a factory worker mentality who will gladly work overnight
———
we just need to ramp up manufacturing. but, there’s no sense doing that right now,
There Goes the Neighborhood
December 18, 2011 7:42 PM
(CBS News) Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year - and plan to demolish 20,000 more - rather than let the blight spread and render nearby homes worthless
Cuyahoga County ripped down 1,000 homes this year. And they have 20,000 more to go. That’ll cost about $150 million dollars. And all that’s keeping other neighborhoods from the same fate are those 11 million underwater homeowners like Linda Bizzelle who stubbornly refuse to walk away.
http://www.cbsnews.com/8301-18560_162-57344513/there-goes-the-neighborhood/ - 112k -
Creative Destruction in the Housing Market
By Morgan Housel
Motley Fool
Thu, Oct 6, 2011..
At a conference in Vancouver, Canada, last summer, a moderator asked apocalyptic analyst Doug Casey what the solution to our economic mess was. “Explosives,” he replied. It echoed a theme put forth by former Treasury Secretary Andrew Mellon during the Great Depression. “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate. … It will purge the rottenness out of the system,” Mellon famously said in 1931.
Casey wasn’t alone. In 2008, then-Treasury Secretary Hank Paulson phoned former Federal Reserve Chairman Alan Greenspan, seeking his input on ways to stabilize the economy. Greenspan “suggested that there was too much housing supply and that the only real way to really fix the problem would be for the government to buy up vacant homes and burn them,” according to the book Too Big to Fail.
http://news.yahoo.com/creative-destruction-housing-market-190921074.html - 216k
What are they going to do with the plots, which presumably still have service hookups? Sell it to financially qualified individual members of the public who promise to build a new home on the property which will fit in and contribute to the existing community?
(I didn’t think so either.)
It says in the article that the lots are often given to neighboring houses or used as community gardens.
Can I put my trailer on one? I promise to only burn trash on weekends. Also, I’ll have a car up on blocks, which is environmentally friendly…
“I’ll have a car up on blocks”
Makes a helluva planter!
911 what`s your emergency?
SOMEONE PARKED A DOUBLE WIDE IN MY GARDEN!
demolished more than 1,000 homes this year - and plan to demolish 20,000 more
But I thought they weren’t making any more land!!
[demolishing of homes, predicted here on HBB]
Demolishing of homes, done before. Texas in the 1980s and probably other areas as well.
A lot of comments on the CBS story. It looks like a lot of people are arriving to the same conclusions we’ve been ironing out here for years.
Good grief there’s another “realtors are Liars” out there?
“Good grief there’s another “realtors are Liars” out there?”
But your trademark is registered, right?
For hire the Lobbyist or the 99% (Please note it is a pdf)
How corporations pay more in Lobbyist than taxes.
http://publicampaign.org/sites/default/files/ReportTaxDodgerLobbyingDec6.pdf
Please they aren’t called lobbiests anymore.
They are called historians.
Hey Jethro….. How about a remake of “I want a new drug” by Huey Louis and The News….. something like…
I want a new house….. I want one thats free……
Want A New Drug lyrics
I want a free house
One that you can`t afford
One that`ll buy me a brand new car
Something nice I don`t want no Ford
I want a free house
With a gate and a pool
To foreclose it would cost too much
Send my kid to a real good school
One that won’t make me nervous
Wondering who to pay
One that`s overvalued
So the banksters let me stay
I want a free house
One that does what it should
One that says that a bankers bad
One that says that a victims good
I want a free house
One with no debt
One that won’t make me scrimp and save
One that paid for my new corvette
I want a free house
Where I don`t have to pay
So I can go to the clubs at night
Call in sick and then sleep all day
One that won’t make me nervous
Wondering what to do
One that tells the bank that I`m not ever paying you
I’m never paying you
omg lmao. Best evar!
Nice. Huey Lewis was underrated. I remember watching Back to the Future a couple of years ago with my son and “Back in Time” came on and I marveled at how good it sounded. I didn’t really appreciate them in the mid 80s because all I cared about was all-guitar-all-the-time bands at that point in my life.
I still remember the bikini girl walking away on the MTV video of Huey Lewis’s “This is It”
“This is It”
http://www.youtube.com/watch?v=AaTQAaJWW54 - 154k
Oops, i did not remember that she was wearing a one piece though. i did remember i liked watching her walk away at the end. thanks for the link. looked good on my droid YouTube .
IIRC correct Huey Lewis was one of the judges during the battle of the bands, the one with the megaphone telliing Marty that his band was “too loud”.
The Government vs Everyone. Gotta love the photo of Uncle Sam with a gun pointed at you.
http://takimag.com/article/the_government_v_everyone#axzz1gZ8jCFWJ
Yesterday I realized why US citizens will now be able to be denied due process. The warmongers in the Politburo (yes, you, Carl Levin and Joe Lieberman, and your enablers John McCain and Lindsay Graham) desperately want to start bombing Iran and “protect” Israel. And if you speak out against it, it’s the gulag for you.
I wonder how history will judge us?
Probably much as Rome has been judged, maybe even more harshly.
I had a conversation with my sis yesterday, in which I discussed some of my recent observations about the society/culture. How technology and civilized advances have been eaten away by financialization. This is how it goes, the descent into superstition. The mantra of “math and science!” degenerates into symbols as critical thinking skills fade, technologies become lost and language is reduced to baby talk. I heard some of this baby talk yesterday, spoken by a young, former anchor baby woman and her companion. This is the apex of her assimilation.
Pretty soon, we don’t have airplanes or flight anymore. Why? People get laid off and instead of maintenance crews, the Indian shaman mutters algorithmic incantations over the airplane. All you need is that shaman. When the plane crashes, it was because the gods did not bless it. Eventually, the gods have cursed all air flight. And people no longer fly.
Maybe it’s for the best.
Pretty soon, we don’t have airplanes or flight anymore.
I don’t buy it. I could easily see it going back to being only for rich people, though.
My thought as well. Tech will continue to advance, but only the managerial class will benefit from it.
But didn’t the ocean liners need income from the steerage passengers?
Can’t see filling up each 747 with rich people, and don’t the really rich own or rent private jets?
And speaking of Tech, I finally broke down and bought a Blue Ray player on Amazon ($60). I also bought the first two Harry Potter movies on Blue Ray at Sam’s Club ($13 for the pair).
The player has the upconverting feature that fakes DVD into HD output. We also have HP on DVD, and I played snippets from both to compare. The verdict: there wasn’t all that much difference IMHO. Both looked very crisp. If I saw any difference it was that contrast was little better on Blue Ray.
Ever heard of the Greek computer?
Can’t see filling up each 747 with rich people, and don’t the really rich own or rent private jets?
Yes, but why? I say it’s because they don’t want to fly commercial with…”them” (and deal with current security methods and waits, etc). Make flying back into a luxury experience where none of the “wrong” people are on the plane, and I bet many of them would go back to flying commercial if they could save significant money.
“The verdict: there wasn’t all that much difference IMHO. Both looked very crisp.”
My theory: Blu-ray was pushed out there in order to respond to the fact that CSS encryption had been broken.
I see you are very good student of history.
What’s surprising is that the Vedas, a 20,000 yo document, seems to tell of a great technological and scientific civilization that destroyed itself.
A more recent example is the Greek computer. It seems the ancient Greeks and Arabs had complex mechanical (machined gears, cogs and cams) computation devices.
Who knows how many times the human has screwed itself?
“Who knows how many times the human has screwed itself?”
BINGO! I’m sort of an ancient civ buff, and I believe that this planet has been peopled by human beings for far longer than “science” concedes. Wouldn’t surprise me if civilizations more advanced than ourselves existed on this planet way back in the mists of time and there have probably been advanced technologies we can’t even comprehend.
I was watching a PBS special one evening where it was said that the animal from which the camel and the llama are descended originally existed in North America (US land mass) and that some of these migrated (with the assistance of humans or human-like beings) over the land bridge down through Russia and Asia to North Africa, where it became the camel and some of these migrated, also with human assistance, down to South America, where it became the llama. And interestingly, both cultures accompanying these animals developed these pyramid type structures, writing, engineering, etc., but in different parts of the planet.
I got sort of a chill up my spine and thought “What if everything we think we know about ancient civ is wrong? What if the US land mass was in fact the “cradle of civilization” back in the mists of time? What if these “Native Americans” were in fact the original people of the planet, from which all other races are descended? You can almost see, in their features, how this might be so.
I once said as much to a friend who is part Cherokee. He smiled and said “We think so.”
I believe that this planet has been peopled by human beings for far longer than “science” concedes.
Even more than 4,500 years?
Wouldn’t surprise me if civilizations more advanced than ourselves existed on this planet way back in the mists of time and there have probably been advanced technologies we can’t even comprehend.
Until the Cylon rebellion began.
Kidding aside, wouldn’t they have left behind enduring landmarks like the Pyramids or The Great Wall? You’d think that something fancier than ancient arrowheads would have been found by now, maybe old circuit boards or something that would last a bazillion years in a landfill. Had they built a moonbase it would probably still be there, and visible from space and the satellites that map the moon’s surface.
“What if the US land mass was in fact the “cradle of civilization” back in the mists of time?”
Don’t the Mormons believe that the Garden of Eden was near Kansas City?
Don’t the Mormons believe that the Garden of Eden was near Kansas City?
So it wasn’t really the forbidden fruit … it was eating the forbidden ribs that got them kicked out. I’m sure at the time they both thought it was worth it.
Palmy, your comment reminds me of the end of Battlestar Galactica.
Seriously, the similarity of pyramidal forms, certain symbols such as the spiral, the (for want of a better term) ‘alien’ ancient art such as the Cyclades figures, which are similar to statues found in several vastly different civilizations…these things make me wonder too about our common ancestors.
“What if the US land mass was in fact the “cradle of civilization” back in the mists of time?”
Don’t the Mormons believe that the Garden of Eden was near Kansas City?
Yes. They also believe that on at least two occasions groups of people came from the old world to the new world. The latter groups being the ancestors of the modern Native Americans.
The latter groups being the ancestors of the modern Native Americans.
Poor Joseph Smith. Little did he know that a mere century or so later DNA tests would debunk his divinely revealed claim that Native Americans are descendents of the lost tribes of Israel.
“it was eating the forbidden ribs that got them kicked out.”
So that’s where Adam’s rib went to!
(ok sorry, that was bad)
““What if everything we think we know about ancient civ is wrong? What if the US land mass was in fact the “cradle of civilization” back in the mists of time? What if these “Native Americans” were in fact the original people of the planet, from which all other races are descended? You can almost see, in their features, how this might be so.”
Two thoughts on this.
One:
If you’re into this kind of stuff, read the Giants Trilogy by JP Hogan. It’s old school hard SF that deals with this subject in a novel way.
Two:
–That means…
–one tiny atom in my fingernail could be–
–Could be one little…
–tiny universe.
–Could l buy some pot from you?
I’m sure the PTB already have the history books for 2030 written.
Amazing post - you would think a democrat controlled senate and a democrat controlled white house had nothing to do with it.
Like it just happened while they were at lunch…
Are you really that blindly partisan?
Pardon me? Yes, indeed the democrat controlled senate and democrat controlled white house had EVERYTHING to do with it. I believe Carl Levin (D Tel Aviv) led the charge.
But, banana, what you have to realize is that this is a truly bi-partisan piece of legislation. Breathtakingly so. All this crap about Congressional gridlock is exactly that: C-R-A-P! These sickos can work together when they want to.
And here’s my point about “democraps”, or whatever they are: my “demo” Senator Bill Nelson’s office swore up and down they weren’t going to go for this, and that they stood with Rand Paul against it, and that Obama was going to veto it (he’ll be signing it with gusto, apparently): at least with the neopubs, you know they’re gonna screw ya, they tell you so and give it to you hard, no vaseline. The dems are in vaseline up to their elbows. They PRETEND to be all about the people while they’re carefully lubing your posterior and their fists and forearms.
So get over the dem/rep thing already. Total buncha bs.
Dems pretend to be all about the people, GOP pretends to be all about moral values but they both do the bidding of money. Money is being concentrated, and thus are gov is working more and more for big money and less and less for everyone else.
Dems pretend to be all about the people, GOP pretends to be all about moral values but they both do the bidding of money.
And there it is. And what’s amazing is how hard they can get the rest of us to cheer for our favorite team. And hate the other team. And by evening they’re back home barbequing with each other while we’re still getting in fistfights in stadium parking lots over the important principles that separate them.
“Dems pretend to be all about the people, GOP pretends to be all about moral values but they both do the bidding of money. Money is being concentrated, and thus are gov is working more and more for big money and less and less for everyone else.”
Wow, that was so perfectly and succinctly stated, measton.
And the follow-on thought that I have is that government working “less and less for everyone else” is readily apparent in all of the recent attempt to shred the Bill of Rights.
Turns out that authoritarian powers such as indefinite detention are quite useful against the masses, when required by monied interests.
Occupy Capitol Hill.
you would think a democrat controlled senate and a democrat controlled white house had nothing to do with it.
Because of filibuster abuse, no party controls the Senate anymore without 60 votes.
Example: Democrats tried to eliminate indefinite detention of US citizens by an amendment to the NDAA bill but failed in the Senate because they only had 54 votes. Only 2 Republicans voted to eliminate the provision allowing indefinite detention of US citizens. Only 2.
My other post hasn’t shown up yet, but you need to bear in mind it was a D who sponsored this bill. Along with McCain, you can always count on him, of course. Never saw a bad bill he couldn’t reach across the aisle for. For someone who can’t raise his arms even shoulder high, he sure likes to reach across that aisle.
Because of filibuster abuse, no party controls the Senate anymore without 60 votes.
So why didn’t the democrats filibusters the bill?
So why didn’t the democrat leadership - who control ALL the senate committees - let it even get in the BILL? Or why didn’t they strip it? That is what controlling the committees is ALL about (and where the real power in DC is).
Yep - dems control the senate and the white house but they were POWERLESS, powerless to do anything…
Please, get OVER it already. There’s only one Politburo with two factions. They put on a show, is all.
—Are you really that blindly partisan?—-
He raised an issue. You launched an insult. Point goes to him.
You sir, are a hater. I am reporting you to Abraham Foxman.
That cartoon is a powerful image of the times.
Indeed it is. A truly awesome piece of protest art, so to speak.
The market is booming(?)
But where are the buyers?
Inventory is looming
ReaItors Are Liars
(Hwy50 sitting outside @ Lindbergh Field)
peoples with $mart phones
chatter chatter chatter
peoples without smiles
scurry scurry scurry
cars buses taxi’s
scatter scatter scatter
traveling must be cheap
hurry hurry hurry
Highway, you just called attention to something I noticed when I flew from AZ to VT a couple of months ago. And that was how dreary and beaten down the people looked.
I mean, I’ve heard that this country is in a recession/depression/deep banana, but jeez louise, to go out and actually see the effect on the American people was striking to say the least.
Winter…high winds…cottonwoods sycamores with few leaves.
Coming someday Soon! $pring!
My brother travels frequently to Canada on business and he says that the difference is noticeable: Canadians are better off than we are.
My aunt and I noticed that a couple of years ago. We took a drive up to Quebec from her place in Waterbury, VT.
To put it mildly, northern VT looked like a tumbledown dump. This was true all the way up to the Canadian border.
Once we crossed into Quebec? Tidy farms and towns. Happy people. Roads in great condition, despite the climate being the same as Vermont’s.
Reason Foundation
free minds and free markets
Out of Control Policy Blog
There Is No Housing Price Stabilization
Anthony Randazzo
August 30, 2011, 1:48pm
A headline from August 31: “More Evidence That House Has Stabilized.”
This is not from the future, though news reports today citing a third straight month of growth in the Case-Shiller Index measuring housing values would suggest many are now writing stories for tomorrow with that headline. However, this headline is from August 31, 2010. Last year at this time, the Case-Shiller numbers came out and showed positive numbers for housing values and it some argued we’d reached the bottom. Even the Wall Street Journal ran a piece saying, “Home prices appear to be stabilizing…”
Unfortunately, nothing was further from the truth.
Today, a year later, we have a similar Case-Shiller report and are seeing similar talk about the stabilization of housing prices, on news that housing prices gained 1.1% from May to June 2011:
Bloomberg: “Home Prices in U.S. Showed Signs of Stabilizing”
TradingPoint: “U.S. home prices stabilizing”
ChattanoogaNews: “Local, national numbers reflect stabilizing housing market”
And again, unfortunately, nothing could be further from the truth.
The problem is that these sources are citing non-seasonally adjusted housing value numbers. Non-seasonally can a good metric to see what is happening in the housing market in real time (well, real time with a two month lag, but its all relative). However, it is not a good metric for gauging the overall trend of the housing market—at least going month to month. The reason is that we always see movement like this in the spring. Consider the below chart showing in gray the February to June period each of the past three years—you’ll note monthly non-seasonally adjusted numbers always tick up in this time, only to collapse the following months.
A much better predictive trend is the year-over-year measurement. Looking at the data from a year ago, we see not a 1.1% increase as from May to June, but a 4.7% decline from June 2010 to June 2011. There is also bad news in the seasonally adjusted data, which James Groth covered on this blog earlier today. An even more ominous statistic is the 9.6% fall in inflation adjusted housing prices from the second quarter of 2010 to the second quarter of 2011.
We all want to see the housing market recover, but we are going to have to accept a redefinition of what a stable and healthy housing market looks like. Falling housing prices in a way are good news since we’re still in the housing bubble and need prices to decline further before there will be sustained recovery. And we’re going to have to accept that housing is more a store of value (like a good savings account) than a great investment tool with high return on investment.
…
List prices might be stabilizing, but sale prices are not. “Comps” are still based on 2007 sales.
One house I posted here was listed for $289K. It was sold in July for $214K, which was a really good price for a quality house. Either somebody lowballed, or there was some monkey business going on behind the scenes.
I may try my hand at lowballing some offers late next year, as I feel like the San Diego market must be getting close to the capitulation stage at this point…
This holiday season buy your kids a slinky. On one end tape a little tag that reads “asking price” and on the other end tape a little tag reading “sale price”.
Push it down the tallest flight of stairs at your place, and teach them all about the backside of housing bubble.
Go Dog, GO! by PD Eastman
http://tinyurl.com/7j9byz7
How dare you borrow from Reason Magazine. You are upsetting the resident commies.
I used to read Reason for a well-rounded look at most topics. Then they started letting fourth graders write for it. Finally canceled my subscription when they took to calling someone whose rationale they did not like a “pizza face”. Klassy!
House prices will not stabilize until homes that were recently foreclosed make up a small percentage of the sales in the market.
Why?
Because those buying at foreclosure auctions go through the following analysis:
1. Look at what “market” sales prices were on the street of the distressed property (recent sales);
2. After factoring in estimated rehab costs, etc., make sure you are buying at a 15-25% discount to recent market;
3. Once they buy and fix up, they put on the market at LESS than the recent comps in order to maintain strong velocity–they are capital constrained, so they are moving through inventory as quickly as they can…they price the fixed-up foreclosures to MOVE…they want to turn the money 3-4 times per year if possible.
So, recent sale comps are undercut by new sales that were recent foreclosures.
Voila…the data show falling home prices, regardless of whether prices are reasonable relative to incomes (or any other metric for that matter).
Because of the way foreclosed homes are moving through the market, data will continue to show falling home prices until a relatively small percentage of home sales were recent foreclosures.
Then more normal supply/demand, price/income factors will come into play…
Reason Foundation
free minds and free markets
Out of Control Policy Blog
SEC Sues Fannie and Freddie Executives… Finally
Anthony Randazzo
December 16, 2011, 1:29pm
Like Ricky Martin’s 2010 truth of the year, the SEC has finally come around to doing what everyone knew they had to do, and filled suit against the former heads of Fannie Mae and Freddie Mac for lying to investors and leading the mortgage community into thinking they were stable institutions. It was as obvious as Livin’ La Vida Loca.
Anyone who looked closely act GSE activities at the time would have known they were lying. But millions trusted them, and as a result hundreds of millions more have been impacted by the GSEs contributing to the build up of toxic debt in the financial system and household balance sheets, which in turn exacerbated the financial crisis, which spilled over into Main Street and still haunts the economy to today. Perhaps, with the law suits against Fannie and Freddie justice will finally be served.
…
Now if they’d just bust some of the guys at JPMorgan or Goldman- whoops, that’s where the regulators’ jobs will be in a few years.
Better to use two soon-to-be-gone enterprises’ execs as whipping boys. There is more than one use for a bad bank, I guess.
That Kim Jung Ill dude always looked like he had an small ATV tire mounted on a bald head. Strange looking cat I must say.
I predict that North Korea is very close to collapse. As in, it’s only a matter of time before we see the Asian equivalent of the collapse of the Berlin Wall.
And South Korea will learn the same lesson that the former West Germany did. Which is the true cost of reunification. (Hint: It’s not cheap.)
A big difference too is that East Germany was relatively prosperous just before the Germanies were reunited. It was poor by western standards but well off by Iron curtain standards. A Russian guy I used to know told me he often vacationed in East Germany (when he lived in the USSR) because “it was clean, the food was good and there were fun things to do”
North Korea is simply dirt poor.
North Korea is simply dirt poor.
(eyes $ense radiation $ales oppoortunitie$)
Does Google translate Korean to language X___________________?
When China fears an exodus of refugees trying to enter their country, you’ve got to wonder how bad the situation really is!
And keep in mind that, when it comes to leaving North Korean, the exit to the north is fairly easy. Cross a river (there are two up that-away) or a mountain range, and you’re in China.
Getting into South Korea will be a bit of a challenge unless the border guards throw in the towel the way they did in Berlin back in ‘89.
Slim, I hope that’s how it ends. The division is artificial, just like it was for Germany, Vietnam, and much of the middle east.
A lot of Koreans have relatives on the other side of the 38th parallel.
slim, I agree with you. I think the dictatorship will fall and they will become another Asian Austrian economics place. Much to the chagrin of American “progressives.”
Much to the chagrin of American “progressives.”
You sir think funny.
Wow that’s some crystal ball.
Not sure how you take the current gov in South Korea and it’s central bank and the collapsing n. Korean gov to get there.
Some headlines
2008
South Korea announced a 14 trillion won stimulus package on Monday, and Australia is widely expected to deliver another interest rate cut Tuesday
March 2009
South Korea, Asia’s fourth-largest economy, approved an additional $20.7 billion (28.9 trillion won) to the national budget – with $13 billion intended to stem the nation’s economic decline and rising unemployment.
Sept 2011
SK government plans to cut its fiscal deficit next year as the European sovereign debt crisis underscored the need for global policy makers to control their borrowing.
Total spending will rise 5.5 percent to 326.1 trillion won ($273 billion), while tax revenue will gain 9.5 percent to 344.1 trillion won, the Ministry of Strategy and Finance said in its budget proposal for 2012 released today.
Sounds like they are funding a stimulus program via taxation.
REIC boosters are crowing over a Housing Market Index (home builder’s sentiment index) reading of 21 because it is “higher than expected” and represents an improvement over recent persistently dismal readings south of 20.
Never mind that any reading below 50 is indicative of negative home builder sentiment.
Dec. 19, 2011, 10:05 a.m. EST
Home builder confidence hits 19-mo. high
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Home builder confidence hit a 19-month high in December, though it still remains mired in weak territory, according to a key index released Monday.
The National Association of Home Builders/Wells Fargo housing market index rose to 21 in December from 19 in November, marking the third monthly rise in a row.
Economists polled by MarketWatch had anticipated a 20 reading. The index for November was downwardly revised from 20.
Gauges for present, the next six months and traffic all gained ground in December. Regionally, the South rose 4 points to 25, its best showing since March 2008, though the Northeast dipped a point to 15. The Midwest was unchanged at 24 and the West rose a point to 16.
The seasonally adjusted index, which correlates closely with single-family housing starts, is designed so that readings over 50 are considered “good,” which hasn’t been the case since April 2006.
…
Comment by Cantankerous Intellectual Bomb Thrower©
2011-12-18 12:48:22
Just how is it possible to know in advance that your monthly payments would double when your no doc, interest-only, payment-option ARM reset?
Ummm….. A little bit of 5th grade math?
Or is this a trick question?
No trick question, but you definitely got the point.
Surprised no one has commented on this yet…
———————-
To pay for payroll tax cut, Senate bill increases cost of new mortgages, refinancing
Washington Post - 17 December 2011
WASHINGTON — Who is paying for the two-month extension of the payroll tax cut working its way through Congress? The cost is being dropped in the laps of most people who buy homes or refinance beginning next year.
The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday. The White House said the fee increases would be phased in gradually.
President Obama said he was “very pleased” that the Senate voted to extend the payroll tax cut, averting a tax increase for millions of workers on January 1, 2012.
I think that financing SS with non payroll tax revenue is a bad idea. As people get used to the “tax holiday” which will become permanent the money will have to come from somewhere else, most likely from borrowing. I can see the tax holiday increasing, until the payroll tax is gone altogether.
At that point they can swoop in for the kill. Since no one will be amenable to restoring the payroll tax, SS will be “bye-bye”, in which case you’d better have kids (or a LOT of money saved) to live with when you get old.
Maybe, maybe not. There are twice as many baby boomers as there are Gen Xers. I think that most of this kabuki is just printing money and killing time until that hump goes out the other end of the boa constrictor.
LOL! Hopefully you’re right.
Ok I give up. It`s time to start living like everyone else. I think I`ll go car and truck shopping this afternoon, sure I can`t afford it but what the hell. I am sure I will make a lot more money next year than I ever have before in my whole life. Then a call to a Realtor to put a bid in on a house I can`t afford. You know what, I`m going to cancel my term life insurance and use that money to book a day this weekend to go skydiving. Why not, nothing bad could ever possibly happen to me. My kids will be fine, after all I`ll be making more money next year than I ever have before. What`s really great about my new plan is when (I mean if) something does go wrong, it won`t be my fault. It will be someones fault that shouldn`t have loaned me the money to buy our new car, truck and house or the person who allows me to cancel my term life policy or perhaps even the skydiving instructor who thought I knew what he meant when he said…. “pull the cord”.
Ok I give up.
once, eyes pulled over to a curb on a street eyes never been down before, (needed to fetch something from the back seat). Kinda inconvenient, took about 23 seconds…as eyes approached a intersection shortly afterward, a very elderly man blew through a red light in heavy $edan, and t-boned a young girl in jetta. Ain’t life something?!
It obviously wasn`t the elderly mans fault. He probably had something to fetch out of the back seat too. His problem was he couldn`t pull over because he had never been down that street before. Good thing you weren`t smart enough to reach into the back seat while you were driving, you might have been in an accident.
Which reminds me, have you ever been run off the road by someone who yanks the wheel at the last second (like they were in a chase seen in a gangster movie) to make a turn that they were about to miss? Like if they missed their turn they would be driving into a black hole and never seen again. Not realizing that they could go up one street or exit and turn around to make the same turn without endangering other people’s lives.
I only ask because it has happened to me. Twice!
Debussy: “Music is the space between the notes!”
(Unsourced variant: “Music is the silence between the notes.”)
(Actually, eyes of the opinion that driving is over-rated.)
Also - Don’t ferget to pull all the money out of your 401k and spend it!
Saving for something you want is for losers…
$aving for something you want is for loser$.
It seems you’re are 99.96% correct!
Balance………..Annual Percentage Rate*…….Annual Percentage Yield*
All balances……………..0.04%……………………………0.04%
Compound interest currently:
*The interest rate and associated Annual Percentage Yield (”APY”) are accurate as of 12/16/2011 12:00:00 AM, are established by City National Bank and may vary as often as daily. APY assumes no withdrawal of credited interest and no change in interest rate for a full year. Service fees may reduce account earnings. Stated APY is based on daily compounding.
Precisely the worst time to pull out of 401k. I know you are joking. But we are eleven years into the second American stock market depression, and the dollar cost averaging during these times is like a gold mine. These are the best times to dollar cost average into stock indices.
I’ll start dollar-cost-averaging in again when the market finally realizes that our economic condition is not a short-term thing that we can shake off in another six months or a year.
Aw c’mon! We Americans are “exceptional” and we’ll “bounce back” any day now.
Imagine if your original plans had been to retire now?
These are the best times to dollar cost average into stock indices.
because the stock market always goes up???
“because the stock market always goes up???”
Exactly.
Until it doesn’t.
Ok I give up.
This whole thing is a bummer yes but many people don’t realize how lucky they are. When my best friend died he wasn’t worried about his neighbor’s equity and when my other friend’s son lost his marbles, he wasn’t either.
OK, so what will you do to celebrate how lucky you are?
I’m planning an intentional adventure. It’s good for the spirit.
I am sure I will make a lot more money next year than I ever have before in my whole life.
I believe that at this point in time only CEOs and their cronies believe that. Everyone else is painfully aware that their income is not keeping pace with inflation.
And here I was all ready to go to the Chinese Disneyland…
http://www.thedailyeconomist.com/2011/12/chinese-disneyland-no-one-goes-to.html
———————————————
China’s Real Estate Bubble May Have Just Popped
Foreign Affairs | 12/18/2011 | Patrick Chovanec
The craze for vacant real estate is due in large part to a lack of attractive alternatives. Strict controls on capital outflows prevent most Chinese citizens from investing any real money abroad. Chinese bank deposits earn very low interest rates — lower, for the past year now, than the rate of consumer inflation. The public sees the country’s domestic stock exchanges, which have endured volatile ups and downs over the last few years, as little more than high-risk casinos. In contrast, real estate, which has not seen a sustained downturn since China first converted to private homeownership in the 1990s, has long looked like a sure bet.
…
Beijing’s response to the global financial crisis added jet fuel to the fire. To maintain GDP growth of nearly ten percent during a massive downturn in global demand, China’s leaders engineered a lending boom that expanded the country’s money supply by roughly two-thirds. Real estate was already the preferred place for the Chinese to stash cash; now, investors had that much more cash to stash. Prices rose accordingly: In many locations, the cost of prime new properties doubled in just two years.
FWIW, it hasn’t stopped Disney and its Chinese partners from starting construction on a real Disneyland in Shanghai. I find this surprising as from what I have read the Disneyland in Hong Kong has been a bit of a bust, as the locals (unlike the Japanese) aren’t all that into the Disney brand (The Tokyo Disney resort is very successful)
Only five shoplifting days left till Christmas
Three suburban West Palm family members accused of stealing from Macy’s
By Toni-Ann Miller Palm Beach Post Staff Writer
Posted: 11:43 a.m. Monday, Dec. 19, 2011
WELLINGTON — A 66-year-old woman was arrested Sunday afternoon, with two others, after police say they coordinated to steal clothing from a Macy’s department store.
Afaf Aramouni, Micheline Aramouni, and Raymond Aramouni, all of suburban West Palm Beach, were arrested on a charge of retail theft.
This morning, Palm Beach County Circuit Judge Peter Evans ordered the three each be held in lieu of a $1,000 bond.
Palm Beach County Sheriff’s deputies responded to Macy’s in the Wellington Green Mall around 7 p.m. Sunday.
Micheline Aramouni, 28, waited in the dressing room while Afaf Aramouni brought items to her to fill an empty shopping bag. Then Afaf Aramouni took the bag and handed it to 71-year-old Raymond Aramouni, who took it out of the store. The three repeated the ruse, before being apprehended by a Macy’s loss prevention officer.
Some of the stolen items included a Lacoste T-shirt, Ralph Lauren T-shirts and a pair of leggings. The items totaled $436.38.
Raymond Aramouni was later found in a different department wearing a Geoffrey Beene belt, over his own, with the price tag still on it. He also had a gold Ralph Lauren chain in his pocket. Those items totaled $117.50.
http://www.palmbeachpost.com/news/crime/three-suburban-west-palm-family-members-accused-of-2041029.html -
There’s really nothing good you can say. Lil’ Kim will most likely be succeeded by his favored (third?) son, Mini-Kim, and the policies will likely continue.
Yes, I know Mini-Kim was “educated in Switzerland”. I also know that three decades ago, we were supposed to believe that ex-KGB honcho and newly-designated Soviet premier Yuri Andropov was some sort of “reformer” because, to quote the pundits of the day, he liked jazz. (Big deal; so did Al Capone.)
I suspect Mini-Kim became the favorite precisely because he was the most like his father. Which means it’s unlikely that any changes will be made, short of a coup d’etat of some kind or other
Tanks for the North Korean real estate update.
And you spent time writing all of that?
You need a hobby buddy.
We all do.
Interesting
…..Ron Paul won just 3 percent of the votes in the Tea Party Patriots’ “tele-forum and straw poll” Sunday, a pretty poor showing for a guy routinely called “the godfather of the Tea Party.” The straw poll was not a little poll on a blog post: each candidate spent 10 minutes on a conference call answering questions, and then 23,000 Tea Partiers voted. Not only did Paul lose to Newt Gingrich, who got 31 percent, and Michele Bachmann, who got 28 percent — but he came in behind Mitt Romney, who earned 20 percent. Worse, 64 percent of the patriots said they were “unenthusiastic” about voting for Paul — only Jon Huntsman performed worse.
I suspect this says everything about who has taken the reigns and disseminates the information for the Tea Party. He got crushed by Mitt Romney father of Obama care. Wow
Well, we all know that Tea Party folk want the gov’t to keep its hand of their Medicare. It’s only “welfare” when you don’t benefit from it and someone else does.
Yep - I guess our only hope is…
4 more years…
More hope and more change…
More change you can believe in…
I wonder if we can get spending up to 200% of GDP…has a nice ring to it
Dude, just pointing out the hypocrisy. People always expect that someone else’s ox be gored, but not theirs. What does that have to do with Obama’s failed presidency?
My impression is that most _real_ Tea Party folks wanted nothing to do with the movement after if was so obviously co-opted by the Republican mainstream…
Bingo
“and then 23,000 Tea Partiers voted….”
Do you think that the PTB have the resources to have this many paid shills? LOL!
What is to be learned by the evolution of this thing, and the Occupy thing? It is interesting that at least for now, these grass roots pissed offs do not get Gitmo’d. For now.
Zillow CEO on housing market: ‘Not good’
CNNMoney | 12/19/2011 | CNN
To sum up this video:
30 percent of home owners “under water”. Home values will drop another 3-5 percent and stay at that level the next few years.
I see the “gold is in a bubble” crowd was out in force today. How about reporting on the biggest bubble in history, the US treasury market. 40 cents of every Dollar spend by the federal government is borrowed money or about 10% of GDP. Backed by nothing except empty promises, hot air and a printing press.
Once people figure it out the rush to own material possesions will set in. The beneficiaries will be real estate, PM, art, collectibles and dividend paying stocks. History has tought us that lesson many times before, ignore at your own risk.
“Backed by nothing except empty promises, hot air and a printing press.”
Backed by nothing, but from what I can tell my fiats are readily traded for almost anything that I want.
The prices of goods that I might want to buy seem to fluctuate MUCH more when priced in grams of gold than they do when priced in fiats. How could that be true if gold were simply a “hard” currency?
They are until they aren’t. Either by loss of confidence or via currency reform. Plenty examples in history for those willing to do some reading.
Sure there are plenty of historical examples of failed currencies: every one of them, in fact, other than the currencies that still exist today.
Seriously, though: why does the value of everything I buy fluctuate so much when priced in gold? Shouldn’t gold as a currency in theory provide better price stability relative to things you might buy with it? If not, why not?
It’s the debt Mike. We’ve already seen the rush to tangible assets. Us regular folks just cannot compete with easy credit to buy these things!
If you think the debt bubble lies mostly ahead, then you know what to do. If you think the debt bubble is getting extinguished, then you know what to do. It’s really confusing!
Or not. Get out of debt. Stay out of debt.
Enjoy life.
SKANEATELES, N.Y. — A central New York school district, fed up with sexy hip-grinding and pelvic thrusts on the dance floor, has cancelled its annual Snow Ball this winter.
Skaneateles (skin-ee-AT’-luhs) High School had tried several things to stop students from dancing in an overtly sexual style at school dances. Gym teachers taught the waltz, tango, and cha-cha. The district switched disc jockeys. The homecoming dance was moved to a larger space, the gymnasium, to give kids more room to spread out.
The Syracuse Post-Standard reports (http://bit.ly/tQMTKd ) that the grinding and inappropriate clothing continued. So the district axed the February Snow Ball.
http://online.wsj.com/article/AP6898352585a24c39a6d3c1c5e238dd02.html?
Btw, I posted this because one of the bigger pieces of my bubblesit is where to raise my children — and from what I hear from friends and parents and teachers all over the country is that the misbehavior (cursing out teachers, inappropriate clothing, incessant texting, etc.) is uniform throughout.JERRY! JERRY! JERRY!
This makes me feel much better about staying put.
Now, I just need to get a CWP to protect my family from the FL wildlife.
Oh Martha! It’s the decline of civilization! God help us Martha!
LOl.
You know where I stand on this — I think the Boomers are way over the top in doling out “zero tolerance” poilcies for things like weed. That being said, the millenials have lowered the bar a little.
So, it’s an unfortunate combination. A perfect storm. Kinda like all this bubble stuff.
So the district axed the February Snow Ball.
“…tried several things to stop students from dancing in an overtly sexual style at school dances”
Winter in NY?
Kids + automobiles + 1st lessons learnin’ the “Backseat Twister”
America, what a innovative populace.
Good grief trolling the Free $hit Army on HP is alot of work.
Question for the great minds here: I’m looking at water heater replacement options. Here’s what I’ve found so far:
1. Solar water heating makes the most sense if you’re in a place like AZ. And if you’re heating water for a family. For single folks, it seems to be a rather expensive way of going green while spending a lot of green. I guess that’s supposed to make you feel good about yourself, but I’m a bit too frugal for such things.
2. Instant-on heaters chomp a good bit of energy just to get the water heated up. It may not be in a tank, but it needs to get up to acceptable temperature quickly. That takes some gas. Or electricity. Or both.
As for your good old 40-gallon cylinder that’s full of heated water, that’s what’s left. Unless you’re into painting a barrel black, setting it out in the sun, and running a shower off it. Might be a bit cold at this time of the year, however.
Anyone care to recommend a replacement gas water heater brand?
I dunno about AZ. Do you heat via central a’la boiler or furnace? What is the heating season like?
AZ
You might want to search the net for home made solar.
It’s insane to waste that energy source in AZ.
I think there are people who make systems for next to nothing.
There are a few video’s on Youtube. Heck in the summer you could probably just run a naked pipe out in the yard and get hot water during the day and store it in an insulated tank. The tankless systems work better when the input source is warm as well. I have a friend you used a small watertank to store water prior to using the tankless system.
AZ,
I haven’t bought a gas water heater in a long time, so can’t comment on brands.
I will contribute that the standard water heater, what is it 40 gallons, is more than I would need for anything living alone. I have a 5 gal aboard and I have never run out of hot water showering or doing dishes. If you have three daughters taking 20 minute showers while doing hot cycle laundry, that is another story (don’t ask me how I know). My first mate has a 20 gal in her house and that is enough for a luxurious bath.
I only had electric power in Phoenix a water heater won’t need much power to heat it in summer in AZ if its in the garage
Brands? ask a local plummer or a bunch of them
I heat my water with a Paloma on-demand tankless water heater. It’s a tad persnickity and requires eccentric installation, but it paid for itself in the first year by cutting my propane use (hot water and cooking only,) from 700 gallons to <300. And on those rare occasions when a twenty minute shower followed by three houseguests all wanting to clean up is in order, it never runs out of hot water.
http://blogs.wsj.com/marketbeat/2011/12/19/bank-of-america-cracks-5-market-falls-further/?mod=yahoo_hs
Skank of America (the investing savants who bought up Countrywide) just breached the $5 barrier despite frantic attempts by the Usual Suspects to prop it up. Timmay and The Bernank will be getting frantic phone calls from Da Boyz demanding another wholesale transfer of non-performing loans onto the public books and another huge infusion of free printing-press liquidity. This just accelerated the schedule for QE III.
HBBers, got your popcorn ready for yet another oversized real estate bust caused by runaway hubris, bankster-government collusion, crony capitalism, and popular delusions?
http://www.bloomberg.com/news/2011-12-18/china-debts-dwarf-official-data-with-too-big-to-complete-alarms.html
A copy of Manhattan, complete with Rockefeller and Lincoln centers and what passes for the Hudson River, is under construction an hour’s train ride from Beijing. And like New York City in the 1970s, it may need a bailout.
Debt accumulated by companies financing local governments such as Tianjin, home to the New York lookalike project, is rising, a survey of Chinese-language bond prospectuses issued this year indicates. It also suggests the total owed by all such entities likely dwarfs the count by China’s national auditor and figures disclosed by banks.
Bloomberg News tallied the debt disclosed by all 231 local government financing companies that sold bonds, notes or commercial paper through Dec. 10 this year. The total amounted to 3.96 trillion yuan ($622 billion), mostly in bank loans, more than the current size of the European bailout fund.
There are 6,576 of such entities across China, according to a June count by the National Audit Office, which put their total debt at 4.97 trillion yuan. That means the 231 borrowers studied by Bloomberg have alone amassed more than three-quarters of the overall debt.
The fact so few of the companies have accumulated that much debt suggests a bigger problem, says Fraser Howie, the Singapore-based managing director of CLSA Asia-Pacific Markets who has written two books on China’s financial system.
“You should be more worried than you think,” he said of Bloomberg’s findings. “Certainly more worried than the banks will tell you.
“You know how this story ends — badly,” he said.
India: 1.1+ Billions
China: 1.34 Billions
U$: 314 Millions [and on the verge of total financial implo$ion + collap$e!]
Hurry, hurry, revoke your U$ citizenship & head for the exits, Now!
http://market-ticker.org/akcs-www?post=199397
Is this how liberty dies?
“We must be honest with ourselves: America is becoming a militarized-weaponized-police-tool state.”
“Homeless person put down that tree branch, or die!”
“Lady asleep at the wheel of a parked running car, wakeup now! and be instantly cognizant, or die!”
etc.
etc.
etc.
It sounds as though local Chinese governments made the same colossal error as myriad U.S. local governments did: Namely, assuming that “real estate always goes up.”
Dec. 19, 2011, 10:56 p.m. EST
China governments in hole as land sales plummet
Property market slowdown is chilling China’s local governments
By Zhu Yishi
BEIJING ( Caixin Online ) — The development-ready land market, long a reliable revenue source for local governments across China, has suddenly turned cold. And city halls are shivering.
Government-sponsored land auctions in cities nationwide have slowed dramatically in recent months, reflecting shrinking consumer demand and what one executive called a “winter mode” strategy among major developers. Nominal land values have fallen, and some auctions have been canceled due to a lack of bidders.
“The land market is basically deadlocked,” said Chen Xiaotian, president of China Real Estate Information Corp. (CIRC), a market research firm.
…
The FT dot com
Markets Insight
December 19, 2011 11:55 am
The ugly side of ultra-cheap money
By Bill Gross
Gresham’s law needs a corollary. Not only does “bad money drive out good,” but “cheap” money may as well. Ultra low, zero-bounded central bank policy rates might in fact de-lever instead of relever the financial system, creating contraction instead of expansion in the real economy. Just as Newtonian physics breaks down and Einsteinian concepts prevail at the speed of light, so too might easy money policies fail to stimulate at the zero bound.
Historically, central banks have comfortably relied on a model which dictates that lower and lower yields will stimulate aggregate demand and, in the case of financial markets, drive asset purchases outward on the risk spectrum as investors seek to maintain higher returns. Near zero policy rates and a series of “quantitative easings” have temporarily succeeded in keeping asset markets and real economies afloat in the US, Europe, and even Japan. Now, with policy rates at or approaching zero yields and QE facing political limits in almost all developed economies, it is appropriate to question not only the effectiveness of historical conceptual models but entertain the possibility that they may, counterintuitively, be hazardous to an economy’s health.
Importantly, Gresham’s corollary is not another name for “pushing on a string” or a “liquidity trap”. Both of these concepts depend significantly on perception of increasing risk in credit markets which in turn reduce the incentive of lenders to expand credit. Rates at the zero bound do something more. Zero-bound money – credit quality aside – creates no incentive to expand it. Will Rogers once fondly said in the Depression that he was more concerned about the return of his money than the return on his money. But from a system wide perspective, when the return on money becomes close to zero in nominal terms and substantially negative in real terms, then normal functionality may breakdown.
…
The FT dot com
December 19, 2011 6:27 pm
Hedge fund alarm bells are ringing over China
By Sam Jones
The eurozone’s political tarantella may still be roiling global markets but some of the world’s savviest investors are already turning their attention elsewhere.
It is not trips to Brussels or Frankfurt that analysts at large, secretive hedge funds are planning in the first few months of 2012, but data-gathering exercises in Shenzen and Guangzhou.
The past few weeks have seen China loom large in the nightmares of many hedge fund managers still smarting from a less-than glory-filled 2011. Concerns are rising for the global outlook over the increasingly negative economic signals emanating from the country.
As the Emerging Sovereign Group, a $1bn hedge fund backed by Julian Robertson and half owned by Carlyle, one of the world’s biggest private equity groups, told its clients in a recent note: “[we have a] gathering sense that the next act of this rolling global debt crisis may well play out in the East.”
Take the most obvious barometer. The Shanghai Composite has been locked into a steady downward trajectory since April that has seen it shed over 27 per cent of its value since then.
ESG sent a team for a two week “deep-dive research trip” to China in October, an investor told the Financial Times.
“Even though an aggressive stimulus program allowed China to sidestep a post-Lehman recession, rendering events there, for a time, secondary to developments in the US and Europe, the Chinese economy could soon take centre stage,” the firm said.
ESG is a voice to listen to: it is one of the few hedge funds that saw the eurozone crisis coming, and has made its clients a considerable sum as a result. Its flagship fund made 39.6 per cent in 2010 and is up a similar amount this year.
It is far from being alone.
“In China, both the official and the HSBC PMI [a reading on manufacturing activity] suffered significant losses in November,” Brevan Howard, the world’s second largest macro hedge fund, with assets of over $32bn under management, wrote to clients in its latest letter. “Worryingly, domestic demand was showing the bulk of the weakness according to both metrics.”
Brevan’s focus remains on the eurozone and US, but it has little doubt that growth in China is set to “moderate.”
But part of the problem many hedge funds face, even large traders like Brevan, is in reading the official data, which only gives a partial picture.
Few things, seemingly, cause greater alarm in Mayfair’s converted townhouses or Greenwich’s discreet office blocks than a lack of information. “Reading the economic pronouncements of the Chinese government is like kremlinology,” laments one UK-based hedge fund trader.
Faced with obscure communications, hedge funds such as GLG Partners are hiring their own analysts and intelligence gatherers on the mainland to stand outside factory gates, and, quite literally according to one GLG insider, “count the cars”.
The biggest worry most have of China is not just a manufacturing slowdown, however, but the popping of a massive credit bubble, finding accurate data on which is even more difficult.
The Bank of China’s new “total social financing” measure, which purports to cover the full gamut of credit extension, has, as ESG points out, increased by the equivalent of over 90 per cent of current GDP in the three years ending in 2011.
Now the measure is beginning to decrease, perhaps indicating the first signs of a crunch.
…