Bits Bucket for December 22, 2011
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Realtors Are Liars®
This needs to be the top post on every bits thread. Do NOT be late posting this as you were yesterday…
FYI google search for “realtors are liars” returns 14,400 results, three of the first ten of which are HBB links
I admit I’ve been slacking in my truth-telling duties SquadLeader Goonman. I will exert more effort.
Realtors Are Liars®
So are bankers. Countywide/Bank of America find millions of dollars for out right fraud,deceitful loan practices and not “ONE CASE OF CRIMINAL FELONY CHARGES” were brought against
any bank official! Just pay up in money fees and all is forgave. This is how the top 1% are protected and take care of each other. The Dept. of Justice says when asked said, “intent is hard to prove in these cases.”
Merry Christmas to us all.
The Dept. of Justice says when asked said, “intent is hard to prove in these cases.”
Indeed, it is. When the peons are convicted of fraud, its usually because one of their cohorts ratted them out or they got sloppy. As should be clear by now, the 1% never rat on eachother (See Clintons, Bushes, Kennedys), and rarely get sloppy (See Madoff, Martha Stewart).
Are they really liars if they believe the tripe they spew?
The Shortest Day
And so the Shortest Day came and the year died
And everywhere down the centuries of the snow-white world
Came people singing, dancing,
To drive the dark away.
They lighted candles in the winter trees;
They hung their homes with evergreen;
They burned beseeching fires all night long
To keep the year alive.
And when the new year’s sunshine blazed awake
They shouted, revelling.
Through all the frosty ages you can hear them
Echoing behind us - listen!
All the long echoes, sing the same delight,
This Shortest Day,
As promise wakens in the sleeping land:
They carol, feast, give thanks,
And dearly love their friends,
And hope for peace.
And now so do we, here, now,
This year and every year.
WELCOME YULE!
Should have posted this earlier, but that work stuff got in the way.
Thank you, Polly. And may the REAL reason for the season bring cheer to all!
Shortest day? Actually the longest day if you are a penguin or kangaroo…
Congress Are Whores®
Filed under: Whores
In the Clarion Ledger, linked from Politico - Barbour to return to lobbying firm
“When Mississippi Gov. Haley Barbour leaves office Jan. 10, he’ll return to the lobbying firm he founded in 1991.
That’s according to a person with direct knowledge of the plan who spoke to The Associated Press on the condition of anonimity because Barbour’s plans were not yet public.
The person says Barbour will return next month to the BGR Group. It is a government affairs, strategic communications and investment banking firm. The person says Barbour’s new office is under construction in Washington, and newly hired people will work for him.
Barbour has recently worn BGR golf shirts at public events. He cannot seek a third term as governor.
Barbour told AP on Monday that he’ll give his first paid speech Jan. 11 in Miami, at an event sponsored by Barclays bank.”
“strategic communications”
Cha-ching.
+1 But at least he’s a job creator!
And bama is a commie.
Obama is going to pay for her gas and mortgage:
http://www.youtube.com/watch?v=P36×8rTb3jI
One of my favorite video clips…
I would love to see a follow-up video interview with this woman, and see how she is faring now that she doesn’t have to worry about putting gas in her car, and doesn’t have to worry about paying her mortgage.
Of course, now that I stop and think about that last bit, there are a LOT of people who are currently not worrying about paying their mortgages.
Politicians Are Feces®
WRT the brown stuff and to extend on an analogy in a post on another HBB thread, there is no short-term benefit/profit for polluters to pollute less, just like it’s easier to poop in the swimming pool than to get out of the pool. But when everyone does it, after a while the pool isn’t such a fun place to be anymore…
Please - and let me be absolutely clear on this point - when we say that Congress is made up of soulless cash whores we mean no disrespect whatsoever to actual whores.
–with apologies to Bill Maher
Filed under: Fascist Police State
On the Daily Beast, linked from Drudge - Local Cops Ready for War With Homeland Security-Funded Military Weapons
“Like Fargo, thousands of other local police departments nationwide have been amassing stockpiles of military-style equipment in the name of homeland security, aided by more than $34 billion in federal grants since the Sept. 11, 2001, terrorist attacks, a Daily Beast investigation conducted by the Center for Investigative Reporting has found.
The buying spree has transformed local police departments into small, army-like forces, and put intimidating equipment into the hands of civilian officers. And that is raising questions about whether the strategy has gone too far, creating a culture and capability that jeopardizes public safety and civil rights while creating an expensive false sense of security.
“The argument for up-armoring is always based on the least likely of terrorist scenarios,” says Mark Randol, a former terrorism expert at the Congressional Research Service, the nonpartisan research arm of Congress. “Anyone can get a gun and shoot up stuff. No amount of SWAT equipment can stop that.”
Local police bristle at the suggestion that they’ve become “militarized,” arguing the upgrade in firepower and other equipment is necessary to combat criminals with more lethal capabilities. They point to the 1997 Los Angeles-area bank robbers who pinned police for hours with assault weapons, the gun-wielding student who perpetrated the Virginia Tech massacre in 2007, and the terrorists who waged a bloody rampage in Mumbai, India, that left 164 people dead and 300 wounded in 2008.”
This is not part of the hope and change you wanted?
$34 billion in federal grants since the Sept. 11, 2001 terrorist attacks.
I don’t think state senator Obama was signing those federal contracts in 2002.
Obama didn’t join the Senate Gang until 2005, so for 2001 through 2004, you’d be correct.
Whoops there are those facts again. Sorry 2b
It was rather breath taking to watch the two parties put aside their partisan differences to support the recent liberty killing legislation. (To be fair to the Dems, only some of them support the new Fascist legislation, whereas the GOP is behind it 100%). That Obama will sign these bills into law is a clear sign the duolopoly does not serve the people.
Remember how quickly the PATRIOT Act was passed in 2001? Probably because it was already written, and only waiting for what a 1996 Project For The New American Century policy paper termed a Pearl Harbor event to be enacted.
And nevermind the republicans, Joe Lieberman is the biggest fascist in DC…
Obammy renewed the patriot act.
“I, Barack Obama, do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”
“I, Barack Obama (the non-Hawaiian) , do solemnly swear that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States,…residing over at the National Archives building.”
(You knows something eyes don’t Blue Skye? Eyes ask on accounts eyes taking Mr. Cole there next summer, provided the “World-as-we-knows-it!” still exists.)
The Village of Penn Yan was given a fine Victorian mansion in the will of one of the town matriarchs, with the stipulation that it be “preserved”. The mayor took a photo of it right before the dozers took it down to make way for fancy new village government digs. “Preserved it just so” he declared.
They told me if I vote for McCain, America will turn into a fascist police state.
They were right.
Long time no post, but I’ve been up all night following sinoplasty. The doctor promised me Natalie Portman’s nose, but from the looks of things I don’t think it is her current one.
Anyway, I’ve been meaning to share an update on my late ‘09 purchase of what I like to call my final resting place, I plan to die in this house. We bought it for 298K in Sep ‘09, put 50% down. At that time it appraised for 415K, was an REO, and we nearly had to take legal action against the seller’s agent because when she realized the bank accepted our low ball she figured she could instead pluck the cherry for a friend.
Well, we decided to refi the remaining 40% down from a 15 year fixed at 4.875% to a 10 year fixed at 3.25%. I have assets to pay it off but interest rate will surely rise sooner of later right, right? Anyhoo, the appraisal came back a few days ago, 285K, 30%+ in 2 years. Not unexpected on my part, but still a few percent under what I paid, so it is lost money to me.
I expect I’ll get some grief for this post, but if we can’t ‘tell it like it is’ then what good is the blog after all?
BTW, the daughter chose BYU over Berkely, partly since she saw stories about UC student taking 5-6 years to graduate due to restricted class schedules/budget cuts, and partly because I pointed her to the story about ‘naked guy’. She seems very happy with her choice, and my wallet is definitely happy with it.
Hey, if it’s your final resting place, the money is all lost to you.
Curious, what was it about the “naked guy”? Suicide isn’t contagious is it?
Nope, there was a kid a few years back who attended all for years of class in his birthday suit.
The suicide remark will make more sense if you read the article I just posted when it shows up.
No, he did not attend Berkeley for four years in his birthday suit. More than 1 day is too much, but it lasted less than a semester.
Also, this IS ancient history — naked guy was kicked out of Berkeley in 1992, i.e. possibly before your child was born.
IAT
Also, that “5-6 years to graduate due to restricted class schedules/budget cuts” is bogus. Here’s why students take 5-6 years to graduate:
1)Student registers for full load of courses.
2)Student blows off all 4 courses.
3)Three out of four faculty don’t care as long as the student does not bother them.
4)So student can do well in three classes even if they skip 2/3rds of the class sessions.
5)Student realizes one professor actually expects them to demonstrate knowledge.
6)Student drops the one class taught by professor who actually expects them to demonstrate knowledge.
7)Student is now behind schedule to graduate.
8)Student does not make up their missing class by taking extra classes because that only increases the chance they will run into a professor who actually expects them to demonstrate knowledge.
9)Student takes 5-6 years to graduate.
I have it on good authority that about 2/3rds of Berkeley students are following this plan. The 1/3rd who aren’t demonstrate one can graduate in 4 years.
IAT
“1)Student registers for full load of courses.
2)Student blows off all 4 courses.”
That’s their problem right there. When I was in school, a full class load was 5 classes. One of the classes was usually 4-credit calculus, science usually added 2 extra credits of lab on top, and a couple classes were 4 credits. It wasn’t unusual for a sci-eng to take 18-20 credits every semester. Schools generally require 120 total credit hours; I graduated with about 145. This is why I bristle when people call college a 5-year party, or say that degrees are useless pieces of paper.
(I tend to make exceptions for engineering. 5 years is not unreasonable, if you want good grades.)
The problem with class restrictions is that they can screw up a kid’s pre-reqs. If your Calc 2 class conflicts with your Phys 1 lab and you need both to take statics and mechanics, then yes, it’s very easy to go off schedule, or force the kid to fill a semester with easy electives which only packs the harder stuff into a later semester. It’s worse at smaller schools, where some classes are offered once every two years.
Interesting sentiments but, alas, I believe they harbor some mistakes:
1)One cannot equate “credit hours” across institutions. I know bureaucrats do it all the time. They are wrong. You may have taken 5 classes/18-20 credit hours a term and thought that was tough, but at some other places their 4 classes/credits a term could have totally wiped you out. Or vice versa. Credit-hours are a fiction, which can work internally but do not work cross-institutionally. And, sometimes, they don’t work internally, either.
2)Many small schools do not play with “credit hours,” they just say — take 4 courses (or whatever) a term, and fulfill these substantive requirements. These are usually private schools, so they don’t have clueless legislators micro-managing matters.
3)Any functional (as opposed to dysfunctional) set of departments will work to schedule classes so key ones do not conflict with each other. If they do conflict, well, the student should have spent more time checking on such issues instead of making their decision based on 20-year old incorrect rumors of who did and did not wear clothes to class.
IAT
Back when we had to stand in line to register, I would really sweat the prerequisites for CS. I was at state U, but there were just not that many offerings, and some sequences started only in Fall, so you could easily be SOL in freshman year if you couldn’t get in.
UC would never have been that limited back in the day, but maybe now - ?
I dunno, IAT. Yes, the credit hours varied, but the total number of classtime hours is pretty standard. If four classes is a full class load,* that’s fine. But at one place where i went to school, it was set up for 5 classes, yet plenty of kids took only four. (to be fair, they were eng.)
The pre-req squeeze is very real. Kids aren’t THAT dumb, thankyouverymuch. They are quite capable of looking at the class schedule book and circling the sections they needed so that they could get a spot in classes without conflicts. It may be easier now with the online systems, but back in the day, it was a nightmare.
———
*this is the case, i think, with the quarter system, which I never quite understood.
Credit hours, classtime hours, and so forth, can be equated, at least superficially. But, in order to figure out who had a tougher program one must consider actual content covered, in what depth, and with what expectations about how much students have to know. In fact, one could argue that if it takes 5 credits to cover what some other school covers in 4, then the people taking 5 credits are actually . . . not as knowledgeable (which is why they need more time to cover the same material). Seriously, when you can equate that across tens of thousands of faculty across thousands of institutions (or even inside one institution), then the issue you want to discuss can be discussed. ‘Til then, its just impossible to reach any conclusions.
As for the prereq squeeze, it is produced by the very problem I identified. The longer a student stays in the school, they higher they move in the queue for popular or necessary classes. If they dropped what later turns out to be a prereq for something they find they need (because it was taught by someone actually demanding they learn that term), well, you can see how this can create bottlenecks.
IAT
I went to school on a quarter system. Full time was 3 classes. You got one credit per class no matter what it was. Anthro 1 counted the same towards graduation as Organic Chemistry which required 8 hour labs every week on top of the classes. Nothing extra for labs. A lot of people who took Orgo tried to take only 2 classes that quarter (doable if you had rich parents or got AP credit for one semester of calculus).
Orgo during sophomore summer? Most of the (other) reprobates in the house took two courses while I had the full three. I definitely did not have as much fun, but one course that term really changed my intellectual life.
Yeah. Some did it sophomore summer, but that is a lot of indoors time to deal with during the summer. I had modern physics labs in the spring and it seemed like every one involved pulling down the shades. Very depressing.
One guy in my class was on the football team and did orgo in the fall. Not sure if he only took two classes or tried to manage three plus practices and travelling to games. One of the reasons I love ivy league football. You never know what is going to happen. What if the quarterback has a mid-term or a big paper due on Monday?
IAT you need to read a bit on the current state of the UC system before you spout about kids not graduating on time due to schedule curtailment. It’s real. The cuts to the budgets are real, the reduced number of sections of a given class each year are real, and the number of students not able to stay on a four year track are real.
My daughter is motivated to graduate in under 4 years, and the risk of being forced by budget cuts onto the 5 year plan figured into her decision to attend a university that is not so subject to the whims of the budget hatchet.
I can’t speak for the children of others.
I played my first year, but it was really a full year commitment and it was so much nicer on the beach at the Cape than at “two a days” my sophomore year!
Let’s just say, I don’t have to read about it in the papers.
IAT
“Suicide isn’t contagious is it?”
Speaking of ancient history, this film came out and aired on national television at the time when I was a student at NU. I recall it created quite a stir around campus.
Community Mental Health Journal
Volume 15, Number 1, 69-70, DOI: 10.1007/BF00754753
Film Reviews
College can be killing
Edward A. Mason
“No depression and No problems”, aka: “The Ostrich” model
Eyes remember clearly several fellow students whose goal was to proudly serve their parents hopes of a “$pecific” major choice, complete with outstanding grade & accumulative achievements.
(But really, they wanted to do something else entirely. However, at that tender age, saying that directly to their
financialloverly proud beaming parents was “problematic”)“problematic”
Kinda like telling your BYU-alum parent that you are so sure you don’t want to go there that you are not going to even bother to apply (my daughter’s strategy…).
I solved that issue by giving my daughter a choice. Go to one of the 3 BYU camp-ii or a top 10 school and I’ll pay, go anywhere else and I won’t.
Last I heard, “naked guy” died, but it was from an illness.
Schizophrenia followed by suicide — read the article I posted for details.
He was mentally ill, and killed himself in jail.
Well, eyes reckons he’s well past ever saying: “I just want my [meaningful] life back!” :-/
“…Raised in a family that refused to buy clothing with designer labels, he now argued that all clothes were a form of repression and that by not wearing them he was making people think about the coercive nature of convention. “Our purpose is to prove that people define normalcy in their own terms,”
No Logo / Naomi Klein
There’s a bad mood rising against the corporate brands. No Logo is the warning on the label.
In the last decade, No Logo has become a cultural manifesto for the critics of unfettered capitalism worldwide. As the world faces a second economic depression, No Logo’s analysis of our corporate and branded world is as timely and powerful as ever.
Equal parts cultural analysis, political manifesto, mall-rat memoir, and journalistic exposé, No Logo is the first book to put the new resistance into pop-historical and clear economic perspective. It tells a story of rebellion and self-determination in the face of our new branded world.
“No Logo has become a cultural manifesto for the critics of unfettered capitalism worldwide”
This takes me back to the 50s and 60s when my mother made my clothes. She tried to get me into sewing, to no avail. With the offshoring of the textile industry, clothes became so inexpensive that it was cheaper to buy ready made. That was long after I grew up and left the family abode.
I remember her asking me if I minded wearing the same dress to school 2 days in a row in first grade. I was startled. It didn’t occur to me at the time that it was unusual. I guess money was tight, but I didn’t notice.
Fast forward to the late 80s when my step children wanted designer clothes. I solved that problem by putting them on a clothing allowance. If they wanted to spend ooutrageous sums on designer clothes, they would not be able to buy much. The decisions were theirs and it eliminated any rancor.
Meh, so you’re a little underwater. From what I can tell, you’re still living within your means, this is your primary residence, you didn’t try to flip the house, your refinance was to lower your interest rate instead of cashing out for boats and boobs, and you’re not going to the local newspaper crying that the bank is a meanie and that should keep the house for free.
By HBB standards you’re doing pretty well.
And as I remember you were very happy w/the house itself. Described it as a “dreamhouse”, I believe. I’d pay a little more for a house I was in love with vs a simple box on a postage stamp lot across from a gas station which you might of snagged for less. You can afford it. It suits your finances, your needs…even wants. I hope your family is enjoying their holiday season all settled. I’d be very happy to be on the other side of the search myself.
Dream house indeed, 3000sqft. at 3200 ft. elevation only 45 minutes from work (by Cali standards that ain’t bad). We’ve made it dreamier by converting to wood burning heat with EPA rated fireplace, we also opened up the kitchen/family room into a single GREAT room. We did most of the upgrades ourselves and it turned out picture perfect.
I hope you find your spot as well CarrieAnn.
Your candor and willingness to share information are much appreciated.
Sounds like you guys are set for life, as you can afford the home and you love it. By way of contrast, long-term renters like us find ourselves wrestling with the prospect of never again owning a home of our own; what if we don’t get along with our next landlord as well as we do with the current ones?
The current (nominal) value of your house may turn out to be considerably lower than what it will be when you sell it. I certainly wouldn’t bother trying to predict the long-term market value of a home based on the situation at the end of the worst year on record for the U.S. residential construction industry.
I’ve got enough knowledge of my ancestral history to never make the assumption that I’m set for life.
I certainly wouldn’t bother trying to predict the long-term market value of a home based on the situation at the end of the worst year on record for the U.S. residential construction industry.
Oh bother / No bother,…sounds like dude has donated the moving boxes, and tossed the Moving Co. “Bidne$$” card.
(Hwy glances over at the framed 1961 Studebaker stock certificate)
(Cheerful Music playing):
End Of The Line (Traveling Wilburys)
(Well it’s alright)
Ridin’ around in the breeze.
If you live the life you please.
Doing the best you can.
As long as you lend a hand.
You can sit around and wait for the phone to ring.
Waiting for someone to tell you everything.
Sit around and wonder what tomorrow will bring.
Maybe a diamond ring.
(Well it’s alright)
Even if they say you’re wrong.
Sometimes you’ve gotta be strong.
As long as you’ve got someone to lay.
Every day is just one day.
Maybe somewhere down the road away.
You’ll think of me and wonder where I am these days.
Maybe somewhere down the road when someone plays,
Purple Haze.
(Well it’s alright)
Even when push comes to shove.
If you got someone to love.
Everything will work out fine.
We’re going to the end of the line.
Don’t have to be ashamed of the kind of car I drive.
I’m just glad to be here, happy to be alive.
It don’t matter if you’re by my side. I’m satisfied.
(Well it’s alright)
Even if you’re old and grey.
You still got something to say.
Remember to live and let live.
The best you can do is forgive.
Ridin’ around in the breeze.
If you live the life you please.
Even if the sun don’t shine.
We’re going to the end of the line!
Tell us more about the lying Realtor trick to pick the cherry. What did it do?
“it”
+1
Lying realtor took our counter counter offer to the bank, we didn’t hear back. Our long time realtor is an attack dog and finally got word back that it had been accepted.
From that point on we couldn’t get any motion out of the REO agent and lo and behold when our contract ‘close by’ date came she sent word that she was cancelling for non-performance on our part. We had performed 100% and in fact we were ready to close anytime. It was her items that were dragging. I would have chalked it up to 3% no being worth her while ($9K), but in a dead cold market that raised my suspicions. I talked to my new neighbor and he confirmed to me that she was showing it the whole time we were in escrow.
We straightened her out with a letter from our attorney that essentially stated that if we were unable to close due to her foot dragging that we would go find an equivalent property, pay market rates, and sue her for the difference plus legal fees.
We closed 10 days after mailing that letter.
“I’ve got enough knowledge of my ancestral history to never make the assumption that I’m set for life.”
Oooooo, that sounds like an interesting story. Do tell, dude!
“As long as you’ve got someone to lay”
I always thought it was, “somewhere to lay”. It probably is, but I like this better
Dude,
You mention elevation of 3200 ft. Is that a selling point in your neck of the woods? I’m at about 3000 elevation, 2/3 the way up a mountain with a great view of the valleys. I’ve never seen or heard anyone actually give specific elevation though when talking about a house, either buying or selling. People will mention mountain view or city/valley view or whatever. But never actual “this house sits at 3000 ft above water” type of hing.
Just curious, is that common in California or just something you mentioned?
Dude, nicely done on the house. We found our large pine box as well. I can tell you I don’t even care about the “market value”.
“You mention elevation of 3200 ft. Is that a selling point in your neck of the woods?”
It can be, in the central valley. In the winter there’s usually an inversion layer. Ground fog in the valley, 45-50 degrees all day long. The foothills sit above the fog layer, sunny and 10 degrees warmer.
“what if we don’t get along with our next landlord as well as we do with the current ones?”
Then you move when the lease is up. If you own, there is the risk of your neighbor selling to Mr. and Mrs. Nasty.
Dude is on the high desert in Palmcaster, I believe. It usually is clearer up there.
Regarding 3200ft., Palmdale address but we only ran the central air maybe 10 days last summer. The last rental we had on the 2500ft. elevation floor of the valley we ran the air every day for about 3 months. That equates to many hundreds of dollars saved each year.
It is also really cool to see the stars at night again like I could when growing up in Idahole.
heh… Idahole huh? Interesting… but but but everyone isn’t moving to Idaho?
“…the story about ‘naked guy’.”
So your daughter isn’t much interested in ancient history?
Andrew Martinez | b. 1972
The Naked Guy
Acey Harper/Time Life Pictures/Getty Images
Martinez on the Berkeley campus in 1992, during his unclothed heyday.
By JASON ZENGERLE
Published: December 31, 2006
Andrew Martinez wanted to be called the Militant Nudist, but the nickname never stuck. He was simply too gentle, too agreeable for it. In the summer of 1990, when he was 17 and had fallen under the nonconformist spell of Henry David Thoreau, Martinez took off his clothes in public for the first time. But before he did, he went door to door, fully clothed, in his hometown, Cupertino, Calif., to ask his neighbors if they would mind. Soon he was walking down Highway 9 wearing nothing but a backpack and a sign that read, “I was born naked and so were you.” He made it about a mile and a half before the police stopped him and asked him to put on some clothes, which he obligingly did.
Later, as a student at the University of California at Berkeley, Martinez came to be known by a moniker as straightforward and genial as he was: the Naked Guy. He ate his meals nude. He went to parties nude. He even attended class nude. Berkeley being Berkeley, few people took offense. It didn’t hurt that Martinez had bronze skin and a tall, muscular body (he played football in high school and was a member of the judo team in college). Still, he tried to be considerate of those who were discomfited by his nudity, carrying a bandanna or briefs to cover up when he felt the situation called for it and making sure to spread a sweatshirt on his chair before sitting down in class.
…
uh, it does get cold there…
shrinkage!
Just think warm thoughts of Barney Frank to reverse that condition
Not often much below 50 degrees F.
Unfortunately, not often much above 65 degrees F, either.
The Naked Guy must have had a very active metabolism.
He made it about a mile and a half before the police stopped him and asked him to put on some clothes
“Asked him”?,”The Poleece” asked?
Would.not.happen.today.in.
AmericaKansas“I was born naked and so were you.”
Think anyone at the Federal Re$erveInc. finds humor in such a “Belief $ystem?”
I remember Luis the Naked Guy with great fondness– had a chance to chat with him when I mistook him for an installation at the art museum. Turns out he was just visiting– as was I. Sweet, polite, articulate, committed, gorgeous.
Sorry to read about his sad demise. The world needs its gentle outliers.
Cupertino is right next door to me.
And we have some of the best weather too.
“10 year fixed at 3.25%”
“but interest rate will surely rise sooner of later right, right?”
“30%+ in 2 years.”
“Not unexpected on my part”
this logic does not compute. if rates rise expect more decline…as sure as the sun is going to come up in the morning.
“…if rates rise expect more decline…”
Yes, under the economist’s standard ceterus paribus (”other things are equal”) assumption. But other things seldom really are equal, especially as regards the link between interest rates and inflation. What happened in the late-1970s offers a good example: Home prices, gold prices and other real asset prices climbed higher along with interest rates in response to Fed-funded inflation.
We did some math on interest rates rising.
If rates rise by 2%, it is STILL cheaper to own than rent in infill Los Angeles…at today’s rents/values…and rents are rising.
Prices are not currently being kept high by low interest rates.
They are being kept low by continued foreclosures, and ultra-negative market psychology (at least in markets where it is cheaper to own than rent).
I know I’ll get flames for such blasphemy, but the more data I study, the more I believe this to be the case.
…and rents have a fixed section 8 minimum, thus the floor.
do you think the PTB is going to allow wage inflation?
ha.
Watch the demographic effect on the labor market cause said wage inflation.
Add on top of it the nice, hidden nature of inflation as a tax (and making it easier to payback debt), and you’ll see why the head of the NY Fed (Dudley) thinks the Fed should target HIGHER inflation than usual for a while (to make up for lagging inflation during the downturn).
There are plenty of doves at the Fed right now.
The Fed should target more and more expansion of credit to accomplish higher inflation.
They can’t get this done with personal consumption. 10 million out of work.
They can’t get this done with expansion of manufacturing capacity. Surplus capacity everywhere.
They can’t get this done with Green agendas. The alt-energy scams are getting a bad rep.
They can’t get this done in the housing market. Too much housing already.
Huge gaps have formed in the above between where we are and “expanison”.
Commodities hoarding seems to maybe have pased its peak. If the hoarders unload to cover margins or simply save their skins, look out below.
The only game left in town is expansion of Federal Debt. Still a momentum play, but getting strained.
Maybe the Fed’s best play now would be to fund Iran’s nuclear program.
My comment about rising interest rates has more to do with investment income, not home purchase. I have cash or near cash equivalents that I have chosen not to use to pay off the loan because I believe that rates will eventually rise. I do sometimes wonder if they will rise enough and soon enough to make my decision a smart one.
As for the ‘not unexpected’, the 30% drop in appraised price was no surprise, and I expect prices to continue to fall, though I see things like Section 8 subsidies in certain markets (mine included) as placing a lower threshold on market prices for decent properties.
I agree that significant hikes in interest rates will brake any traction in pricing, but only insofar as the federally controlled mortgage megaplex allows rates on home loans to track market rates. I could easily see a scenario where 10 year treasuries yield goes way higher than 30 year loans because it ‘helps the little people’. It will be just another ‘temporary’ measure by government in an apparent attempt to hit 20T national debt within the next 4 years.
“I have cash or near cash equivalents that I have chosen not to use to pay off the loan because I believe that rates will eventually rise. I do sometimes wonder if they will rise enough and soon enough to make my decision a smart one.”
That seems like a good strategy in principle.
Now for the downside: If history is any guide, particularly the period after the last time interest rates were at or near current levels (circa 1960), then it may be a decade or so before fixed-income investments offer attractive returns once again. And at that point, inflation may have kicked into gear, as well.
We’ll see I guess. I’ve become more and more pessimistic on my strategy as time has gone on since I’ve seen the Fed successfully play; “The dollar is the crappiest major currency on the planet, except for all the others.”
Dude,
Consider putting some of that money in REITs or other dividend paying equities…
There are some that have a LONG track record of paying dividends, and are low leverage, and today yield 5% or so…
The one that comes to mind is ticker symbol O.
I have no investment in O, as I tend to prefer REITs that have a bit more appreciation possibility, but if you are borrowing at something in the 3’s fixed, and invest the money at 5% (and rising), that’s not a bad little bit of arbitrage.
And if there is inflation, over time you’ll see the REIT dividend increase even more.
“I expect I’ll get some grief for this post, but if we can’t ‘tell it like it is’ then what good is the blog after all?”
dude, much appreciate you sharing your information. I don’t see any reason for you to get grief—though I think you might have gotten some back in ‘09 for the “too early” purchase.
But you got it at well below then-market value, at what you felt was a good long-term value, so if the nominal current market is closer to that, who cares? For a mere few thousand dollars of underwater-ness, you have had two years of enjoyment of the property.
I hope that it continues to serve you well. Even if it goes down a lot further in nominal value, you seem happy with your purchase, which is all that really matters.
Glad that you are enjoying it!
Thanks, I did get quite a bit of grief when I purchased, but mostly from the usual suspects, and I was following my rules for making a good purchase so it didn’t worry em at the time and it still doesn’t worry me.
You would only get grief on here if you paid the $415 that it appraised for in ‘09. Paying $298K and having it appraised now at $285K is not a big deal (especially since you have so much equity in it). I paid $240K in 2010 (appraisal was slightly higher than that) and I know it would probably appraise at or just below $240K now. It is what it is. I put 25% down so I don’t feel stress over it.
I wouldn’t stress about the appraisal. Look at the asset values every 5 years, not every 2. One clunky house in a part of town sells low because all the cabinets are ripped out and the appraisal community will ding everyone.
Appraisers today are going to be erring on the low side…
Most RE professionals look at the appraisals primarily for the comps and market data. Often times you’ll see comps in an appraisal that you’ll find are significantly inferior to the property in question, but won’t be significantly adjusted.
Garbage in, garbage out…
I’m getting weary of scams….
The average dropped below $3.60 a gallon on Friday following a slowdown in demand caused by recent milder temperatures and a production boost by oil-rich Mideast nations that belong to OPEC.
“The market is very volatile now,” said Jeff Clifford, the fifth-generation owner of Clifford Oil Co. in Lenox, founded in 1875 as a coal supplier. He serves about 3,000 oil and 2,000 propane customers in most of central and south Berkshire.
Noting that prices dropped 10 cents a gallon since Wednesday at the New York Mercantile Exchange, he recalled peak oil prices at $4.50 a gallon in 2008.
“Traditionally, prices have been driven by supply and demand,” he said, “but nowaways it’s speculators, hedge funds, institituons and banks betting on commodities.
“People with money have been driving up prices and cashing in at the expense of poor people who bear the brunt of it,” he maintained. “Š It’s the rampant speculation that has driven prices up.
Not that I have much sympathy for dumb-ass Denny…
For Denny Whitcomb of Lenox, oil is “too darn expensive.” He’s heating a “big old Victorian with no insulation” and is paying more than $5,000 per season.
“‘Traditionally, prices have been driven by supply and demand’, he said, ‘but nowaways it’s speculators, hedge funds, institutions and banks betting on commodities..”
In the long turn my bet goes with supply and demand.
If consumers do not have the money to continually pay up for prices then they won’t, which means the bets the speculators, hedge funds, etc are making aren’t against consumers but are against each other.
Ironic though, when the speculators lose money, it doesn’t come back to us who have been paying 2X for gas and food these past few years.
Hoarding the necessities of life was in other times considered a crime against humanity.
Now it’s considered a “regulation holiday” and “government not telling us how to run our business.”
Hoarding the necessities of life was in other times considered a crime against humanity.
Goldenman$ucksInc. & cohort$:
$torage! $torage! $torage!
If one can corner a market then one can make out bigtime IF the consumers of the market that is cornered can and will pay up for higher prices, and IF the supply of whatever it is that is cornered doesn’t increase.
But the longer a market is cornered and the higher the prices are driven the more time consumers have to adjust (meaning cut back on their consumption) and - just as importantly - the more time producers have adjust (meaning increase their production).
The trick for the market manipulator is to somehow spread the word that higher prices are here to stay so as he can sell out to investment sheeple at the highs.
Even better for the manipulator is to sell short against the market at the market tops out. Then he gets to shear the sheeple in two directions instead on just one.
Who is it?, Carlisle Group that wants to go public, to sell shares to investors?
How benovelent of them, instead of keeping all the big bucks to themselves they want to spread the wealth.
(snort)
carlisle is buying ou local water co…what are we in for?
“The trick for the market manipulator is to somehow spread the word that higher prices are here to stay so as he can sell out to investment sheeple at the highs.”
You see the gold bugs playing this game currently.
“carlisle is buying ou local water co…what are we in for?”
Third-world status. Soon they’ll come after you for trying to collect rainwater from your rooftop. That’s what these water companies do in other countries. But, hey, Regulation Holiday!! Job Creators!! Uncertainty!!
————
Speaking of regulation holidays:
PBS had a good feature on the EPA rules targeting mercury emmissions.
http://www.pbs.org/newshour/bb/environment/july-dec11/epa_12-21.html
They had the usual lobbyist on, b!tching and moaning about how much it would cost ratepayers and “job creators” and that it was government intervening in private business. Seriously, it’s like all these lobbyists have the same script no matter which industry they come from.
(never mind that the EPA did studies and conculded that retrofitting and operating the air-cleaners would create 10,000 permanent jobs.)
Memo to lobbyists: electricity is a necessity that people pretty much have to buy. In exchange for this guaranteed demand, you subject yourself to regulation. And because you are polluting the air that people have no choide but to breathe, you subject yourself to regulation. Greedy b*stards.
Memo to lobbyists: electricity is a necessity that people pretty much have to buy.
1. See compact flourescent light bulb package
2. See Solar panels
3. See LED and smaller TV
4. See more efficient appliances.
Electrical demand can and has been falling. As has gas consumption in the US.
“Soon they’ll come after you for trying to collect rainwater from your rooftop.”
In some places, this is already happening.
No joke.
Belinda Carlisle is buying my water company?
Oooooh you mean Carlyle Group? Phew.
I’m confused. We’re all supposed to drive the Chevy Volt which is run on electricity. But at the same we’re doing everything we can to impede the production of electricity. That makes sense.
GeG you must be ref to my state where the new party came in and immediately changed the rules on wind power increasing the set backs, shutting down 80% of the planned wind projects. Good point.
‘ “Soon they’ll come after you for trying to collect rainwater from your rooftop.”
In some places, this is already happening.
No joke. ‘
Colorado comes to mind right off the bat.
“If consumers do not have the money to continually pay up for prices then they won’t,”
More likely that they will cutback elsewhere to keep the house warm.
And prices will adjust to that new normal, so that people have to cut back permanently.
Not to worry. They can always eat more cake.
For a ROI of 5 years (at 0%) that is $25,000.
70% x $25,000 = $17,500
Insulate Attic: $2000
New Windows $12,000
New Furnace $3000
Add heat pump $500
Total: $17,500
That would probably cut his oil bills by at least 70%…
For Denny Whitcomb of Lenox, oil is “too darn expensive.” He’s heating a “big old Victorian with no insulation” and is paying more than $5,000 per season.
Take $1000 a year and throw it into insulation, perhaps? Espically in 2010 when the tax credit was something sick?
Nope. Just keep going on the road you’re on…
Italics off.
$5,000 would buy a lot of insulation, Denny.
Merry Christmas to you too Cantankerous Intellectual Bomb Thrower©
And Happy Solstice, too!
Wasn’t the solstice actually yesterday in your neck of the woods???
Oops. Should have put the poem here.
The Shortest Day
And so the Shortest Day came and the year died
And everywhere down the centuries of the snow-white world
Came people singing, dancing,
To drive the dark away.
They lighted candles in the winter trees;
They hung their homes with evergreen;
They burned beseeching fires all night long
To keep the year alive.
And when the new year’s sunshine blazed awake
They shouted, revelling.
Through all the frosty ages you can hear them
Echoing behind us - listen!
All the long echoes, sing the same delight,
This Shortest Day,
As promise wakens in the sleeping land:
They carol, feast, give thanks,
And dearly love their friends,
And hope for peace.
And now so do we, here, now,
This year and every year.
WELCOME YULE!
I was trying to remember if the blog had ever discussed the Club of Rome and its 1972 study The Limits to Growth If you believe this financial crash is about gaining a worldwide control, perhaps some of these scenarios are behind the central planning?
Wiki: “The Club of Rome is a global think tank that deals with a variety of international political issues. Founded in 1968 at Accademia dei Lincei in Rome, Italy, the CoR describes itself as “a group of world citizens, sharing a common concern for the future of humanity.” It consists of current and former Heads of State, UN bureaucrats, high-level politicians and government officials, diplomats, scientists, economists, and business leaders from around the globe.[1]”
From dieoff.org:
THE BASIC PESSIMIST MODEL
One end of the spectrum is defined by an ambitious study published in 1972 under the title The Limits to Growth. Based on a technique known as systems dynamics, developed by Professor Jay Forrester at MIT, a large-scale computer model was constructed to simulate likely future outcomes of the world economy. The most prominent feature of systems dynamics is the use of feedback loops to explain behavior. The feedback loop is a closed path that connects an action to its effect on the surrounding conditions which, in turn, can influence further action. As the examples presented subsequently in this chapter demonstrate, depending on how the relationships are described, a wide variety of complex behavior can be described by this technique. (See link for 3 very dark scenarios)
THE BASIC OPTIMIST MODEL
….”Is the portrait of the fate of the world economy painted by the Limits to Growth model an accurate one? Because Herman Kahn and his associates did not think so, they presented an alternative vision in a book titled The Next 200 Years: A Scenario for America and the World. 8 This vision is an optimistic one based in large part on the continuing evolution of a form of technological progress that serves to push back the natural limits until they are no longer limiting.”
http://dieoff.org/page25.htm
500 million to 1 billion could maybe be a sustainable population, not the 7+ billion eaters/sh*tters now inhabitng the globe…
Agreed, gs. The question is how does the world go from 7+ billion to around 1 billion. Who makes the decisions?
Mother Nature or an asteroid will decide that…
And I’m by no means an environmentalist, I’ll burn half a tank of gas just to go skiing for 6 hours. I just want a Prius to do it with less gas money
Possibly some pandemic for which there is no remedy except selection by immune system? Like the Spanish influenze, or the black plague.
I would really not want to see such a thing happen. But, where people will not regulate or restrain themselves, forces such as Mother Nature will.
Pandemic. Long overdue as well.
“And I’m by no means an environmentalist”
I am to some degree, and a happy recovered Republican. I’ll hug a tree for you, goon. LOL
I’m elated to see the PTB addressing the pharmaceutical prescription waste issue. We have enough cr*p in our water and soil.
Working to prevent Breast Cancer has woke my arse up. I see a lot of suffering.
War famine and disease
or a totalitarian gov like chinas that limits the # of children.
My bet is on the former with religion and nationalism playing a large roll in the purge.
My guess is this group has little sway.
Money is everything.
Money determines where we go from here.
‘In 1993, the Club published The First Global Revolution. According to this book, divided nations require common enemies to unite them, “either a real one or else one invented for the purpose.” Because of the sudden absence of traditional enemies, “new enemies must be identified.” “In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill….All these dangers are caused by human intervention, and it is only through changed attitudes and behavior that they can be overcome. The real enemy then, is humanity itself.’
http://en.wikipedia.org/wiki/Club_of_Rome
‘In searching for a new enemy to unite us, we came up with the idea that…the real enemy…is humanity itself’
Can I get paid a couple hundred thousand a year if I sit in a group like this and think up this stuff? Cuz I think I could do it. Actually, I could probably copy some things from Star Trek episodes and they’d never know.
I know. I mean it is kind of crazy what they (attempt to) herd us with, isn’t it? Us being the general public not the hbb readership. For those tuned into the man behind the curtain, it’s pretty obvious what’s going on. And yet I think it’s fair to say the masses’ behavior is still inherently shapable. The whole Edward Bernays model works really well. And it’s fantastic you mention Star Trek because isn’t Bernays/Freud what Gene Roddenberry was trying to tap? Right down to the Freudian id, ego and superego of Spock, Kirk and Bones?
All need is to know the “right” people Ben.
The “club” takes care of their own. No banker left behind, you know?
It’s easy to think stuff up. It’s hard to run the numbers to assess the plausibility of the stuff one thinks up. The six-figure salary is for the numbers-based analysis, not thinking stuff up (unless one works for Hollywood, where plausibility is always irrelevant).
IAT
“a group of world citizens, sharing a common concern for the future of humanity.”
2500+ Old throwback hippie, sits with turtles wagging their tails in the mud:
Twenty-nine
Do you think you can take over the universe and improve it?
I do not believe it can be done.
The universe is sacred.
You cannot improve it.
If you try to change it, you will ruin it.
If you try to hold it, you will lose it.
So sometimes things are ahead and sometimes they are behind;
Sometimes breathing is hard, sometimes it comes easily;
Sometimes there is strength and sometimes weakness;
Sometimes one is up and sometimes down.
Therefore the sage avoids extremes, excesses, and complacency.
Source: The Complete Tao Te Ching
Translated by Gia-fu Feng and Jane English, Vintage Books
“According to this book, divided nations require common enemies to unite them, “either a real one or else one invented for the purpose.””
I think Shakespeare’s Henry V talked about this too.
Instead of the predicted doom, you could have made an initial investment in the Vanguard 500 index fund in 1976 and not a penny more. Today that investment value would be about 30 times the original investment.
Gloom and doom is bad for your health, financially and physically.
Well, if they didn’t change the rules of ownership in the meantime and confiscate your account… yes.
you could have made an initial investment in the Vanguard 500 index fund in 1976 and not a penny more
And I guess those of us who are too young to have invested at that “perfect” time are just screwed, eh?
Sure, you can cherry-pick times to back up your position. It’s easy to say looking backwards, and not everyone was alive or of a legal age to invest at that point.
I never heard of a minimum age to invest in a mutual fund. Most Vanguard funds today require a minimum $3,000 for initial investment. I presume the requirement was lower back in 1976. I see many 20-somethings these days driving economy cars. Same in the 1970s.
There is nothing “gloom and doom” about acknowledging that humanity as a species is incapable of limiting its own population and limiting its ecological impact on the planet.
The single most important thing any one can do for the environment is to not breed. Which totally defies the Big Fat Lie capitalist model of infinite growth within a finite ecosystem.
WASP fertility went down a century ago. You must be speaking about some other peoples.
And for America, it was the most successful century ever.
Goes to show what fewer WASPs will do for you!
I was trying to remember if the blog had ever discussed the Club of Rome
Well, not exactly a discussion. Just one post.
Hey lavi, long time no see.
Into the valley of Debt
Rode the Three Hundred Million.
‘Forward, the Debt Brigade!’
Was there a man dismay’d ?
Not tho’ the taxpayer knew
Some one had blunder’d:
Theirs not to make reply,
Theirs not to reason why,
Theirs but to pay & die,
Into the valley of Debt
Rode the Three Hundred Million.
Bailouts to right of them,
Bailouts to left of them,
Printing press in front of them
Volley’d and thunder’d;
Millions of houses they would not sell,
Boldly they rode and well,
Into the jaws of Debt,
Into the mouth of Hell
Rode the Three Hundred Million .
When can their glory fade?
O the wild charge they made!
All the world wondered.
Honor the charge they made,
Honor the Debt Brigade,
Noble Three Hundred Million.
If only they’d died
in glorious vanity,
not sold themselves
to lives of slavery.
LOVED this one, jeff! It was LOL good.
Impressive!
I dedicate this link to those of you that defend the freedom of association.
“VIRGINIA BEACH, Va. — A Navy tradition caught up with the repeal of the military’s “don’t ask, don’t tell” rule Wednesday when two women sailors became the first to share the coveted “first kiss” on the pier after one of them returned from 80 days at sea.
Gaeta, 23, said afterward. “It’s nice to be able to be myself. It’s been a long time coming.”
http://www.tampabay.com/incoming/two-women-share-first-kiss-at-navy-ships-return/1207349
Muggy gay people are not cheap they will spend lots on their weddings
jobs man jobs think of the cash we could make off them.
Cue the Village People: In the Navy, In the Navy!
Cue Photgrapher AZ Slim…when will AZ legalize gay marriage..
Maybe Rick Perry can make a TV commercial about this to rally his “base”
They were careful to choose an attractive female couple for this. Therefore the base is already rallied, just perhaps not in the way you were thinking :-).
“They were careful to choose an attractive female couple for this.”
+1 Good point.
In other words, more and more, commerce does not happen unless credit happens.
U.S. exporters brace for cutbacks in European bank lending
The European Central Bank’s decision Wednesday to offer loan help to the region’s financial institutions was closely watched by U.S. companies, which have extensive ties to troubled European markets.
Boeing warned that European banks would cut lending to companies that buy planes. Pharmaceutical companies Pfizer and Bristol-Myers Squibb have said cash-strapped European governments that provide health care are cutting what they spend on drugs. And other U.S. exporters to the region, such as almond farmers, medical equipment manufacturers and car makers, must brace for the possibility that a European recession will depress their sales.
Ask yourself the following questions and see how the crisis might impact your life.
Worst-case scenarios: What would happen if Greece, Spain or Italy were to default? Deutsche Bank, RBS and other investment research firms have released reports detailing the domino effect of a collapse of a single country in the euro zone. Here’s the doomsday scenario..
“If there is a financial meltdown in Europe, the trouble at AIG and Lehman will seem like just a warm-up act for the real crisis,” said economist Ed Yardeni, president of Yardeni Research, formerly with the Federal Reserve.
http://www.washingtonpost.com/business/economy/us-exporters-brace-for-cutbacks-in-european-bank-lending/2011/12/21/gIQA3n8KAP_story.html
Not all credit is equal. Once upon a time people used to buy cars on 2-3 year loans. Now they lease them for up to 5 years (I have to remind myself of this when I see my peers driving to their jobs in Corporate America in much nicer wheels than I have).
At least in the old days Joe 6 Pack paid off the car, now he serially leases and carries a perpetual balance on his CC, one which, like the sovereign debt many nations have, he will never pay off.
Once upon a time, cars only lasted for 2-3 years.
They were built to fall apart right after your last payment.
Yes, they WERE engineered like that on purpose.
It’s called planned obsolescence. GE perfected it decades ago.
Someone once said that American is a nation of middle men.
That’s the goal anyway…make money without ever actually having to produce anything.
Hey now Carl, remember “Diamond$” are
a girlsKobe Bryant’s soon-to-b-ex-wifes new be$t friend!“I’m sorry” = 8 carat$ Wow!
Worst-case scenarios:
I have a different view on worst case scenarios than I had a few years ago. Back then I thought we were going to have another great depression. Now I can see that they will do anything in their power to keep the 0.01% in their positions. So either we will get more of the same and anything else that’s required to keep things as they are, or we go full Marie Antoinette. They are doing their best to rule out anything in between.
So with enough money printing and whatever other shenanigans they can come up with perhaps the top keeps spinning another decade or two with a wobble here and there. But when it goes down…
I find it amazing the wealthy can afford the best educations in the world, but never seem to pay attention to history.
What’s up with that?
Well to be fair, nobody else does either.
“Let’s hope it is the bottom rather than a plateau from which we’ll slip lower,”
or
Let’s hope it is the bottom rather than a plateau from which we’ll slip lower to a point where house and rent prices would become affordable for the average family.
Palm Beach County home sales increased in November
By Jeff Ostrowski Palm Beach Post Staff Writer
Posted: 12:23 p.m. Wednesday, Dec. 21, 2011
The bad news? Palm Beach County home prices are off a staggering 56 percent from their 2005 peak, and foreclosures are still piling up.
The good? Prices seem to be stabilizing, home sales are slowly accelerating and even some formerly pessimistic observers see better times ahead.
Many Realtors see the numbers as a sure sign of a recovery, though they acknowledge that home values will be slow to rise.
“Certainly we’re seeing the sales number ramp up,” said John Tuccillo, Florida Realtors’ chief economist. “Prices are going to be a little more sluggish because we’ve got so many distressed properties.”
Some observers remain reluctant to proclaim that the worst is over. University of Central Florida economist Sean Snaith pointed to double-digit unemployment as a strike against the housing market.
“Let’s hope it is the bottom rather than a plateau from which we’ll slip lower,” Snaith said. “I have to see a few months where prices have more or less stabilized before I feel comfortable calling a bottom.”
Palm Beach County’s glut of foreclosures and short sales is hurting home values, said Marion Grigsby, an agent at Illustrated Properties Real Estate in Jupiter and president of the Jupiter-Tequesta-Hobe Sound Association of Realtors.
“We have not yet hit bottom in prices yet,” Grigsby said. “I think we’ve probably got another year before prices start to make some good headway and start to turn around.”
http://www.palmbeachpost.com/money/real-estate/palm-beach-county-home-sales-increased-in-november-2045219.html - 85k
“New York State’s attorney general is investigating whether the Pearson Foundation, the nonprofit arm of one of the nation’s largest educational publishers, acted improperly to influence state education officials by paying for overseas trips and other perks.”
http://www.nytimes.com/2011/12/22/education/new-york-attorney-general-is-investigating-pearson-education.html?_r=1&ref=education
Maybe when all of the chit gets through the fan this time around someone can review what it means to be a non-profit entity.
For more information on non-profits in New York, read this.
http://www.r8ny.com/blog/larry_littlefield/non_profits_in_an_era_of_institutional_collapse.html
WT, thanks for the link. I read it all. What a shame.
Willowbrook and Geraldo…
“…what it means to be a non-profit entity?”
Why, to use what would be profits as more money for the board of directors, of course!
Duh.
Realtors say home sale estimates were exaggerated for past four years, blame FSBOs
by Jeff Ostrowski
The National Association of Realtors says it overestimated U.S. home sales by 718,000 units last year. From NAR’s release today:
The 2010 benchmark shows there were 4,190,000 existing-home sales last year, a 14.6 percent revision from the previously projected 4,908,000 sales. For the total period of 2007 through 2010, sales and inventory were downwardly revised by 14.3 percent. The revisions are expected to have a minor impact on future revisions to Gross Domestic Product.
“From a consumer’s perspective, only the local market information matters and there are no changes to local multiple listing service (MLS) data or local supply-and-demand balance, or to local home prices,” [NAR Chief Economist Lawrence] Yun explained.
A divergence developed over time between sales reported by MLSs and sales determined by a U.S. Census benchmark; the variance began in 2007. Reasons include growth in MLS coverage areas from which sales data is collected, and geographic population shifts. “It appears that about half of the revisions result solely from a decline in for-sale-by-owners (FSBOs), with more sellers turning to Realtors to market their homes when the market softened. The FSBO market was overwhelmed during the housing downturn, and since most FSBOs are not reported in MLSs, national estimates of existing-home sales began to diverge based on previous assumptions,” Yun said.
NAR consumer survey data in 2000 showed FSBOs accounted for a 16 percent market share, which fell to a record low 9 percent in 2010.
“In essence, Realtors began to capture a greater market share. In addition to a decline in FSBO transactions, more builders began marketing new properties through real estate brokers that weren’t completely filtered from the existing-home data,” Yun said. “Some property listings on more than one MLS, and issues related to house flipping, also contributed to the downward revisions.” The new independent benchmark was discussed with government agencies and outside housing market experts, and will allow for annual revisions in the future.
FSBOs haven’t really disappeared. Instead, do-it-yourself sellers have flocked to cut-rate brokerages that let homeowners put their properties in the MLS for a small fee. They’re technically represented by Realtors.
6 Responses
Get in the Game Says:
December 21st, 2011 at 2:14 pm
Jeff – figured enough prodding would actually have you guys/gals place the article.
Again, the ONLY -the O-N-L-Y reason they adjusted their numbers is because of an outside data group that called BS to them…
Otherwise, they would have kept on lying!
These tools are typical politicians – same ‘ole, same ‘ole.
Govt and RE traders using numbers for GDP – could you write a better, more ridiculous script!
But prior to 2007 the numbers were accurate? Uh-huh.
““Some property listings on more than one MLS, and issues related to house flipping, also contributed to the downward revisions.” ”
Excuses excuses. You mean they didn’t correct for double counting on MLS? Incompetent. Each property has its own unique address, and is presumably sited in a county which keeps records. Just look up all the country records. There’s, what, at most 3000 counties in the country? Even if you did it by hand, a half-dozen interns could complete the job in a month.
Wow - what do these states have in common?
Beside insane public unions and really insane taxes…
And where are these people going?
———————————–
Study: Illinois, NJ tie for most outbound migration
Chicago Tribune | Dec 21, 2011
An annual study of interstate moving trends by United Van Lines shows that Illinois and New Jersey tied for the states with the largest outbound migration this year.
Americans continue to migrate toward the South and West and away from parts of the Northeast and Midwest, according to United Van Lines, the nation’s largest moving company.
A lot of New Jersey folk migrate to Cary, North Carolina and the surrounding areas.
Illinois tax burden has been well below the U.S. average as a percent of personal income for years. That may have changed recently, but a 5 percent state income tax level is hardly the highest in the country.
New Jersey’s total tax burden as a share of its residents’ personal income was long at or below the U.S. average as well.
What these states have in common is that they paid for graft without raising taxes — by increasing debts, and not funding pensions for their employees. Those pensions were retroactively enhanced as well.
What the leaders of these states, both Democrats and Republicans, did, is similar to what federal politicians, mostly Republican but Democratic too, have done at the federal level. Enrich the seniors while handing out low taxes, all at the expense of a future the didn’t care about.
What do these states have in common? Generation Greed.
Americans continue to migrate toward the South
Keep diluting the South with Northerner’s, it’s good for
Americathe NHL.Don’t,…Stop…Don’t,…Stop…Don’t,…Stop…
Baby boomber retirements?
What do they have in common?
A long inbred political structure that is about enforcing the status quo and allowing the infrastructure to decay.
Probably one of the worst pieces of legislation for all of 2011 (and that is saying something). I do not know why the dems and obama love it some much…
—————–
Payroll tax-cut extension adds $17 a month to typical mortgage
Chicago Sun Times | 12/22/2012 | Alan Fram
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.
The legislation provides a two-month extension of a payroll tax cut and long-term unemployment benefits that would otherwise expire on Jan. 1. It would also delay for two months a cut in Medicare reimbursements for doctors that is scheduled to take effect on New Year’s Day. The House is expected to act on the bill early next week. Two more months of the Social Security tax cut amounts to a savings of about $165 for a worker making $50,000 a year.
They’re clearly buying time. My guess is that they are going for short term can kicking so they can portray the GOP as wanting to raise taxes on the working class. If they passed the 1 year extension now it would be forgotten on election day.
thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday.
What the…..there’s a FEDERAL fee on a loan made by someone in my state to someone else in the same state?
Really?
“Probably one of the worst pieces of legislation for all of 2011 (and that is saying something).”
Are you insane? The Constitution-shredding NDAA clearly takes this title by a _landslide_.
You are correct.
I was thinking spending/taxing types of legislations…
It’s good to see that there is some common ground on this blog.
+1000
+ 5 Zillion.
Notice that the House R’s don’t mention what else is in their miraculous one-year tax cut extension. They pay for it by hiking Medicare payments on seniors and threw in a free pass for the Keystone pipeline (which, by the way would be utilized quite profitably by the Koch brothers).
Dems would have been happy to pay for it by the surtax on millionaires, but that would hurt “small businesses.” ?? Even Joe the Plumber didn’t take home a cool million.
It is going to be a landslide in 2012 when even Hawaii has had enough…
——————
For Democrats in Hawaii, Unease in an Oasis
NY Times | 12/21/11 | ADAM NAGOURNEY
HONOLULU — Hawaii should be a happy outpost for the Democratic Party. It has a Democratic governor. Democrats overwhelmingly control the Legislature. It has Barack Obama in the White House and all the prestige that brings, most recently an Asia-Pacific economic summit meeting with the president as its host, packing this city’s streets, restaurants and hotels with international leaders.
Yet these are hardly happy days for Hawaii Democrats. The governor, Neil Abercrombie, is ending his first year under a storm of criticism; he referred to himself the other evening as “the most unpopular governor in America.” Mr. Obama’s struggles in Washington have cast a bit of a pall here.
And the Republican Party suddenly has a shot of picking up a United States Senate seat that has been in Democratic hands for more than 30 years, with the announcement by Linda Lingle, a Republican former governor, that she will seek the seat held by Senator Daniel K. Akaka, the retiring Democrat. A Republican victory here would be a serious embarrassment to Mr. Obama (though that could be the least of his problems on election night) and would make it that much more likely that Republicans take back the Senate.
I’m wondering if there might be a surprise announcement from Hillary one of these days. OTOH, I think she’s too busy unseating Middle Eastern dicktaters and making the area “safe” for demoncracy. Terror Square: heckuva job, Hill!
BTW, back when Hillary was a Senator during the reign of Little Caligula, I was watching some Senate proceeding regarding some piece of legislation or other designed to shred the Constitution in the name of Homeland Security and Power of the Executive. The camera cut to a shot of Hillary with a look of stunned fascination on her face. And then it seemed one of those cartoon bubbles appeared above her head with the caption “How do I get in on this?”
“And then it seemed one of those cartoon bubbles appeared above her head with the caption “How do I get in on this?”
Palmy is a mindreader. And he can do it over the TV. Wow. That is quite a skill. Will you do a seminar or something and post a link so all of us can learn?
Why are voters unhappy in Hawaii? Is it because the government is having to cut back programs during tough times? All they’ll get from the GOP is more of the same. Neither party can affect Hawaii’s tourism dependent economy.
2 things will happen for sure in 2012
1. Taxes will go up on “the rich”, ie anyone whoalready pays taxes to begin with.
2. Hawaii will elect both Obama and Dim to the Senate with 60%+.
Yes - Fannie and Freddie were at the very heart of the housing bubble.
And we are going to find out ALL about it in court.
Just say YES! (”Say Yes” strategy)
————————–
What Fannie and Freddie Knew
Wall Street Journal | 12/22/2011
Democrats have spent years arguing that private lenders created the housing boom and bust, and that Fannie Mae and Freddie Mac merely came along for the ride. This was always a politically convenient fiction, and now thanks to the unlikely source of the Securities and Exchange Commission we have a trail of evidence showing how the failed mortgage giants turbocharged the crisis.
That’s the story revealed Friday by the SEC’s civil lawsuits against six former Fannie and Freddie executives, including a pair of CEOs. The SEC says the companies defrauded investors because they “knew and approved of misleading statements” about Fan and Fred’s exposure to subprime loans, and it chronicles their push to expand the business.
The executives deny the charges, and we hope they don’t settle. The case deserves to play out in court, so Americans can see in detail how Fan and Fred were central to the bubble. The lawsuits themselves, combined with information admitted as true by Fan and Fred in civil nonprosecution agreements with the SEC, are certainly illuminating.
The Beltway story of the crisis claims that Congress’s affordable housing mandates had nothing to do with it. But the SEC’s lawsuit shows that Fannie degraded its underwriting standards to increase its market share in subprime loans. According to the SEC suit, for instance, in 2006 Fannie Mae adjusted its widely used automated underwriting system, “Desktop Underwriter.” Fannie did so as part of its “Say Yes” strategy to “provide more ‘approve’ messages . . . for larger volumes of loans with lower FICO [credit] scores and higher LTVs [loan-to-value] than previously permitted.”
My proposed new moniker:
“Desktop
UnderwriterUnderwater.”My favorite account of the role of Fannie Mae and Freddie Mac in the housing bubble and bust is Thomas Sowell’s, which I frequently recommend to people who are interested (most recently this past Tuesday!).
Thomas Sowell
May 11, 2009 12:00 A.M.
Housing Boom and Bust
The same discredited assumptions and the same disregard of repercussions.
EDITOR’S NOTE: The following is adapted from Thomas Sowell’s new book, The Housing Boom and Bust.
Let us go back to square one to consider the empirical consequences of policies in the housing market. Politicians in Washington set out to solve a national problem that did not exist — a nationwide shortage of “affordable housing” — and have now left us with a problem whose existence is as undeniable as it is painful. When the political crusade for affordable housing took off and built up steam during the 1990s, the share of their incomes that Americans were spending on housing in 1998 was 17 percent, compared to 30 percent in the early 1980s. Even during the housing boom of 2005, the median home took just 22 percent of the median American income.
What created the illusion of a nationwide problem was that, in particular localities around the country, housing prices had skyrocketed to the point where people had to pay half their income to buy a modest-sized home and often resorted to very risky ways of financing the purchase. In Tucson, for example, “roughly 60% of first-time home buyers make no down payment and instead now use 100% financing to get into the market,” according to the Wall Street Journal. Almost invariably, these locally extreme housing prices have been a result of local political crusades in the name of locally attractive slogans about the environment, open space, “smart growth,” or whatever other phrases had political resonance at the particular time and place.
Where housing markets have been more or less left alone — in places like Houston or Dallas, for example — housing did not take even half as big a share of family incomes as did comparable housing in places like the San Francisco Bay Area, where heavily hyped political crusades had led to severe restrictions on building. It was in precisely these extremely high housing-cost enclaves that the kind of people for whom the national housing crusade expressed much concern — minorities, low-income people and families with children — were forced out disproportionately.
Few things blind human beings to the actual consequences of what they are doing like a heady feeling of self-righteousness during a crusade to smite the wicked and rescue the downtrodden. Statistical studies about disparities between blacks and whites in mortgage loan approval rates might be said to have “jump-started” the housing crusades that began in the 1990s. Politicians and the media led this crusade, with many community activists following in their wake, much like scavengers, able to extract large sums of money from banks and other institutions by raising claims of discrimination, whose power to delay government approval of bank mergers and other business decisions made pay-offs to these activists the only prudent course for those accused.
Even where loudly proclaimed concern for the poor and minorities gave impetus to the drive for over-riding traditional mortgage lending standards, this is not to say that the poor and minorities were the sole beneficiaries or even the main beneficiaries. When you open the floodgates, you cannot tell the water where to go. Housing speculators — “flippers” — found the new and looser home mortgage rules a bonanza. So did many others. It is by no means clear that the poor or minorities came out ahead at all, after the housing boom turned to bust and many were left with mortgage payments they couldn’t meet on homes they couldn’t afford.
With rich rewards available — politically, ideologically, and financially — from the “affordable housing” crusade, there were ample incentives to keep this crusade going for years. Meanwhile, various special interests found ways to benefit themselves from all this, whether as home builders, real-estate investors, or others, and therefore added their voices in support of the open-ended goal of more home ownership through various ways of achieving, or seeming to achieve, affordable housing. Supporters of such policies and programs easily drowned out the voices of those economists and others who increasingly warned of the risky financial arrangements that were behind the statistics on the growing numbers of home buyers that were so triumphantly being paraded as fruits of the crusade for affordable housing and the stamping out of mortgage lending discrimination.
In short, this was a crusade that was feeding on its own successes by its own criteria, and was not likely to stop unless it got stopped.
…
Wouldn’t it be possible for Harris to use a FOIA request to get the information she needs from Fannie and Freddie? I believe Bloomberg used a similar approach to stop the Fed’s cover up of information regarding the size and disposition of bailouts.
Halah Touryalai, Forbes Staff
I stalk Wall Street. Stopping short of phone hacking, of course.
12/20/2011 @ 6:01PM
California AG Sues Fannie, Freddie For Mortgage And Foreclosure
Kamala Harris is a force to be reckoned with in the fight against the mortgage industry.
The California attorney general has filed a lawsuit against Fannie Mae and Freddie Mac over mortgage and foreclosure problems in her state.
The suit comes after Fannie and Freddie’s regulator, the Federal Housing Finance Agency, blocked Harris’s inquiry into the mortgages and foreclosed properties the government sponsored entities own in California.
In her suits, Harris says that Fannie and Freddie hold extensive information that is critical to her investigation. She notes that between 2007 and June 2011 over 768,000 homes have been foreclosed in California and says those foreclosed homes cause numerous problems in her state including criminal activity like prostitution and drug trafficking.
Fannie and Freddie play a central role in the mortgage and foreclosure issues in California, she says in her suit. As a result, Harris requested answers to questions she says are critical to protecting the health, safety and welfare of the state’s residents.
But instead of complying, Harris says in her complaint, Fannie and Freddie have failed and refused to provide any information her office requested.
…
Fannie and Freddie were technicaly private companies until 2009. FOIA only applied to government, IIRC.
Speaking of Fannie and Freddie, how can the homes these clowns own having “offering prices?” Shouldn’t they be liquidated at auction?
I think these monopolists are assuming they can sell for more at ARM’s length than at auction.
Wrong. Wall St. CDOs and other fraudulently rated securities bundled mortgages along with deregulation in the FIRE sectors were at the heart of the bubble.
Freddie and Fannie were just set up to the fall guys/scapegoats and deflect blame from Wall St. Not that they were blameless, but Wall St. was the prime perpetrator of this disaster.
Agree securitization, but fannie and freddie were not just set up to take the blame, they were set up to force a bunch of gambling losses onto the tax payer. One of many legs wall street used to privitize the gains and off load (onto investors)/ or socialize the losses. I’d love to see a who’s who in Paulson’s Hedge fund. I mean who was invested when the collapse occurred. My guess is you would see some very familiary names.
Don’t get me wrong, there plenty of greedy FBs out there as well, but they didn’t make those loans to themselves.
They’re, there are.
Long day.
“According to the SEC suit, for instance, in 2006 Fannie Mae adjusted its widely used automated underwriting system, ”
Wow. 2006. They really were the instigators of the bubble.
Oil prices and our staunch ally Saudi Arabia (today at Fox):
(interestingly, they seem not to object to “Zionism”, rather they embrace religious hatred)
Despite Saudi Arabia’s promises to clean up textbooks in the kingdom, recent editions continue to raise alarms in the West over jihadist language.
The recent editions were obtained by the Institute for Gulf Affairs in Washington, D.C., and the translations were first provided to Fox News.
“This is where terrorism starts, in the education system.” Ali Al-Ahmed, director of the Institute for Gulf Affairs, told Fox News. Al-Ahmed, a Saudi national, said the textbooks, made and paid for by the Saudi government, were smuggled out of the kingdom through confidential sources.
Should U.S. Cut Off Aid to Saudi Arabia?
All-Star panel weighs in
In a textbook for 10th-graders, printed for the 2010-2011 academic year, al-Ahmed said teenagers are taught barbaric practices. “They show students how to cut (the) hand and the feet of a thief,” he said. In another textbook, for ninth-graders, the students are taught the annihilation of the Jewish people is imperative. One text reads in part: “The hour (of judgment) will not come until the Muslims fight the Jews and kill them. … There is a Jew behind me come and kill him.”
Ahh, the religion of peace…
Yeah. Every time people start yelping about the near east, I’m reminded that in Israel, Arab Muslim bikini-wearing beach-going car-driving college educated mosque-attending ladies can be and are members of the elected parliament. I keep waiting to hear about the Jewish bikini-wearing beach-going car-driving college-educated synagogue-attending ladies in in the elected Saudi parliament.
Yes, that’s a bit of Snark, but probably honest snark.
Meanwhile I occasionally hear how Israel rejected the “Saudi Peace Plan” for Israel and the would-be-Palestinians. Weird that Saudi Arabia is still officially at war with Israel (armistice, not peace treaty in 1949), that it executed by beheading a woman this week for “sorcery”, and that it has no relations with Israel… but apparently Israel is wrong not to trust a Saudi plan for “Palestine”.
What I had now known prior to this article is that we give financial aid to Saudi Arabia. Hope we are getting our money’s worth.
Yeah. Every time people start yelping about the near east, I’m reminded that
Quick, figure out the word puzzle:
lio
evil, please do not post entire articles.
—evil, please do not post entire articles.—
OK. I very rarely post article content (just did a bunch though about foreclosure fraud), as I tend to comment, not quote. What’s the preference? Just a link? Snippets?
regards
-evil
What’s up Doc.
Doc, do you specialize or are you “just an old fashioned country doctor”?
Snippets are fine and a link is helpful so readers can check out the rest of what’s written. Thanks.
—-What’s up Doc.
Doc, do you specialize or are you “just an old fashioned country doctor”?
——
Ahhh, to be an old fashioned country doctor, sipping a mint julep and smelling the spores that keep away the Bertholds. But, then, even he wasn’t such an old fashioned country doctor.
Well snap my fingers and jump for joy…..
Should U.S. Cut Off Aid to Saudi Arabia?
That’s a rather old & tire$ome argument:
http://tinyurl.com/7ly6ld3
Squad solution to “Middle East Peace Process”
Evacuate Israel/Palestine then nuke it into glass thereby rendering uninhabitable for next million years.
Palestineans/Arabs move to Jordan, Egypt, et cetera.
Secular Jews move to New York, California, wherever. Non-secular Jewish religious nutjobs move to Texas. All Christian fundamentalist nutjobs evacuated from USA and moved to Texas. Rick Perry anointed Governor For Life and Texas secedes from USA to form new country with constitution based on the Rapture.
This is a win/win/win scenario, nobody loses, nobody dies.
Interesting proposal, Goon. I always admire creativity
I would note that what you propose, but with slightly different players, really is what Iran would have happen to the USA and to Israel, save for the part about evacuating people first.
That is at heart of Israel’s concerns about Iran.
Time will tell…
regards
-evil
Seriously, nuke it into glass so there’s nothing left to fight over. And let the muzzies keep Mecca if it gives them warm fuzzy feelings…
WRT the fundamentalists (of all stripes), could we please just have a country without them, with medicine, science (geology more than 6000 years ago), and a sane foreign policy?
Easy to make. Just pass a law that says you cannot benefit from any scientific invention if you deny the validity of science. So, no flu shots for fundamentalists, no vaccines, no anesthesia, no cell phone usage (okay, they win that one), no computer access (unless they can concoct their miracle computer that runs on rapturous energy).
Okay, great scenario. But, the numbers say it is not feasible. Rats. Now, where’s my six-figure bonus?
IAT
—eriously, nuke it into glass so there’s nothing left to fight over. And let the muzzies keep Mecca if it gives them warm fuzzy feelings…
WRT the fundamentalists (of all stripes), could we please just have a country without them, with medicine, science (geology more than 6000 years ago), and a sane foreign policy?—-
Seriously, we could start with the fundamentalists worshipping at the altar of global warming.
Seriously, that’s what “they” often want to do to “us”.
Weird how that works
“And let the muzzies keep Mecca.. ”
Doubt it. The Isra:elis are very serious about “never again.” If they see one of I:ran’s toys coming for them, their last living act will be to push the buttons on a few — pre-aimed — toys of their own.
And where did they learn this from?????? The Mosques The religious leaders
The sultans and the Kings didnt write this stuff…..
This is where terrorism starts, in the education system
The U.S. labor market recovery continues to gain strength, calling into question a Republican candidate strategy of blaming the economy on Obama. If Obama inherited a recession in progress from GWB and his first term is ending in recovery, then doesn’t that suggest the bad economy over the past four years was GWB’s fault? (Trying my best here to channel a politician’s straw man version of economic cause and effect…)
It is noteworthy that the second-term GWB recession started in December 2007, more than a full year before Obama took office.
Also noteworthy that GWB presided over two recessions during his eight years in the WH, one for each term.
U.S. Jobless Claims Fall to Lowest Since April 2008
By Timothy R. Homan - Dec 22, 2011 6:47 AM MT
Jobless Claims in U.S. Decrease to Lowest Since April 2008
The number of applications for unemployment benefits unexpectedly dropped last week to the lowest since April 2008, a sign that the U.S. labor market is strengthening heading into 2012.
Jobless claims fell by 4,000 to 364,000 in the week ended Dec. 17, Labor Department figures showed today in Washington. The median forecast of 45 economists surveyed by Bloomberg News projected an increase to 380,000.
A consistent slowdown in firings lays the foundation for an increase in employment that may bolster consumer spending, which accounts for about 70 percent of the world’s largest economy. At the same time, a possible recession in Europe and a political stalemate in Washington regarding a payroll tax cut are making some companies hesitant to boost hiring.
“Claims have been improving pretty rapidly,” said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut, who forecast jobless applications would fall to 365,000. “The labor market is gaining some momentum. The question about the first half of next year is how rapid growth is.”
…
then doesn’t that suggest the bad economy over the past four years was GWB’s fault? (Trying my best here to channel
a politician’s straw manHwy50’s version of economic cause and effect…)Cheney-$hrub $hadow Legacy Effect #3: “we gift taxes on the wealthie$ for 10 years, toss x2 $300.00 peon-citizen rebates, then start $pending $4 Trillion$ US tax monie$ on “Military Foreign Nation$ Building” in Iraq & Afghanistan, or do eyes have something backwards dick?”
“heheheeeheeheehee”
Lucy: “Hwy50, you’re such a BLOCKHEAD!“
9% UE.
156,000,000 workforce.
014,040,000 out of work.
Only 14 MILLION more to go!
And half the country is now either poor or near-poor
Could you please fix your name? It should be “lurkey” and not “lureky”
I’m wondering if that was deliberate.
My browser sometime wipes my name and I get in a hurry.
But hey, you say tomahtoe, I say tomaetoe.
But I will fix it.
Next post:
Halah Touryalai, Forbes Staff
I stalk Wall Street. Stopping short of phone hacking, of course.
12/13/2011 @ 3:38PM |3,389 views
Not Even A $19 Billion Settlement Will End The Mortgage Mess
Europe’s debt problems have taken the focus off of the debt problems here at home but news about a possible foreclosure deal is providing a reality check.
Remember robo-signing? It’s the practice where the nation’s biggest banks allegedly hired people with no formal job training to speed up the foreclosure process on homeowners. Sometimes those so-called robo-signers signed foreclosure affidavits without reviewing the documents resulting in unlawful foreclosures.
Well last year the nation’s 50 state attorney generals got real angry about the whole robo-signing phenomenon and launched a collaborative investigation against the likes of Bank of America, Ally Financial, JPMorgan Chase and Wells Fargo for their role in the whole thing.
Now over a year later it seems the AGs (or what’s left of them) are almost ready to bring their investigation to end with a $19 billion settlement with the banks. The Wall Street Journal is reporting that the banks and government officials are putting the final touches on the settlement which includes “the value of the principal write-downs, interest-rate reductions and other benefits to homeowners as well as cash penalties.”
If the deal is finalized it will be a major relief for banks that have been in desperate need of some certainty surrounding all such mortgage-related litigation costs. Many banks have no idea how much they’ll end up paying for all the legal battles they’re fighting and that’s been one reason investors are weary of their respective stock.
Unfortunately for bank executives and their investors this $19 billion settlement won’t be the end of the road on the foreclosure issue. Why? Two very big reasons: California and New York. Those states, among a couple others like Massachusetts, hit the brakes on what began as a 50-state effort for a national settlement with banks and pulled out of the talks.
…
on what began as a 50-state effort for a national settlement with banks
$pank u$!, go ahead, please…$pank u$!. We promise we won’t ever, never, do such a horrible deceitful thing like that again. Promise!. Really, we mean it, $pank u$, get it over with already, we want our lives back again. just be done with it already, Hurry! Hurry! Hurry! get er done! We can handle the pain!
OK, here’s the question of the day:
What, if anything, can the average person do (if they were so inclined) to help bring housing prices down?
Is the solution purely a political one? I mean, other than refusing to buy or lowballing for fun and psychological effect, can we personally do anything?
Call/write your congressperson asking for *exactly* what? Get rid of the mortgage interest deduction?
Whaddya y’all think?
Simple: buy smart or don’t buy at all.
But you might as well wish for high(er) IQs at Wal Mart.
So, everyone gathers around the Realtor-is-a-lair and the multiple offer$ go as thus:
Realtor-is-a-lair: “OK, we got an offer for $127,000, who offer next?”
Buyer dog #2: “$123,00″
Buyer dog #5: “$117,00″
Buyer dog #3: “$110,00″
Buyer dog #8: “$104,00″
Exeter dog #1: “73,500.12″
Suzanne dog: “$196,000″ + we’ll feed the squirrels!, Oh, we’re pre-qualified too!”
Realtor-is-a-lair: “whoa! whoa! wait a second, umm, somethings gone awry here, um let me have a word with the $eller, then we’ll regroup and start up again ok?, there’s cupcakes & kool-aid in the kitchen, be right back…”
Talk talk talk about how bad real estate is, how anyone who bought during the boom was stupid, how the fundamentals demand a 50% price correction, how this is certain the only question is when. Do this over and over and over and over, to anyone within earshot. Get this buzz going so loudly that even the deaf MSM becomes aware of it. In other words, break the illusion that all is well and this is just a blip.
If you do this incessantly, and if after this you still want to buy something, prices should be within reason. But, you may have to be willing to continue to take losses for awhile, because prices will probably over-correct and if you buy on the way down, it may continue going down even lower than fundamentals suggest.
IAT
IAT…. you understand. Welcome to my world.
Buy a bunch of houses yourself and auction them at 50% off just to kill the comps.
Today’s Houses: Craftsman edition:
House 1: Austere craftsman bungalow
1928 4/2 bungalow on a 0.2 acre wooded lot in the People’s Republic of Takoma Park (liberal heaven). Seems bigger on the inside, but maybe that’s because of the pix.
http://www.zillow.com/homedetails/608-Boston-Ave-Takoma-Park-MD-20912/37285105_zpid/
Jul 2033: Zestimate $369K
Sep 2011: Listed $460K
House 2: baby blue Bungalow
http://www.zillow.com/homedetails/7207-Willow-Ave-Takoma-Park-MD-20912/37285174_zpid/
1918 2/1.5 Bungalow in downtown Takoma Park, where the hippies hang out. Cutie patootie, but small. Nice yard. Gotta love the Alice in Wonderland color scheme. The attic… what’s with the ceiling? Is that holding up insulation?
Nov 2011: $545K No decrease from bubble pricing at all…
OMFG, I would move…
The only winning move is not to play.
Agree. I think they should send Dubya to that first house. There’s some brush that needs clearing.
1918 2/1.5 Bungalow in downtown Takoma Park, where the hippies hang out
Sqft: 1,319 …so, (-the Attic & the external patios) what do yea have besides a $29.99 folding table with an ugly chair in the “modern” kitchen?
Actually, it’s the “no-longer-hippies” on this street that are the real problem: Wall $t.
Oxy…. do you believe the reaItor(s) who listed those shacks are Iying?
I once saw an episode of Property Virgins where this very cute (gay) couple got all excited about buying a condo on the waterfront in Toronto — until they saw the $400K price tag and chose something further inside the city. Not for a second did the Realtor “lie” about the price. Not once did she think that $400K was too much to pay for one bedroom. Not for a moment did she stop to comprehend just how much money $400K was. Instead, she strolled down the sidewalk with her nose sniffing in the air, blissfully believing her own BS, telling the camera that the couple “were obviously not location buyers *sniff*.” It’s all the buyer’s fault, you see. They *thought* they were all hip, but they obviously didn’t have what it takes to be *sniff* a location buyer.
So, you see, the Re-al-TORs representing the Houses of the Day aren’t really lying, because they are not deliberately saying anything untrue. You’re not paying for the house, you’re paying for the right to say you own a vintage Craftsman bungalow in a hip desireable location, close to shopping and Metro.
Then you need to remind them.
Just in time for Christmas, a construction fence has gone up around one of that vanishing species in my neighborhood: the Little Ranch House. The bulldozer is parked in the driveway, ready to knock it all down. Buh-bye, Little Ranch House.
Odd time for a tear-down. But then I’ve also heard that contractors are busy with renovations. I guess people think the worst of the job cuts are over, and that they aren’t moving, so may as well fix the place up…
We learned way back last summer that the house was going to be a tear-down. Perhaps they consider the winter solstice an auspicious start date?
A large number of very nice 3000sqft mid century ranch styles are being demo’d here as well.
Very few people are remodeling or upgrading. (second floor, utilities, etc)
Clearing the lots and building McMansions. *sigh*
That’s twice the size of the truly Little ranch houses on my cul-de-sac. Do people really need THAT much more space that needs to be furnished, cleaned, heated and cooled?
I wouldn’t even call 1500 sq ft truly little. Truly little is the 3-bed/1.5 bath that barely fits three bedrooms, where a bedroom is 10×9. Usually about 1000 sq ft. Sample:
http://details.coolhouseplans.com/details.html?pid=chp-33574&FoundID=18&sid=chp2&ordercode=C101
If a one-story ranch is 3000 sq ft, that must be a big yard…
Where I live, anything less than 2000sqft is unfortunately located in bad neighborhoods.
I’ve seen plenty of classic houses of every era, but the smaller sqfts is almost always in the really poor ‘hoods.
Damn shame.
Bummer! 3000 sq foot ranch is exactly what I’d love to own.
Our future prosperity depends on China being successful,” he says. “This idea that China only does well at everyone else’s expense is nonsense.”
“By our he means GS and WS elite”
He argues that international trade is a win-win situation but concedes that the BRICs nations have primarily benefitted from the arrangement. These growth markets are demanding more and more of U.S. goods and China has shifted from a top exporter to one of the world’s major importers since the 2008 crisis.
“At the current rate of import growth, China is importing the equivalent of another Greece every four months…and within five years from today China will be a bigger importer than the U.S.,” O’Neill says. Furthermore, China may very well become Germany’s “number one single export market” by this time next year, O’Neill adds, a reality very few could have predicted a few years ago.
“”Most of what they import are natural resources, what will happen as building dies down and real estate bubble pops. Certainly US CEO’s aren’t investing company money in US manufacturing in anticipation of an export bonanza”
As developed economies scurry to catch up to the BRICs, China and other growing markets may have a big advantage over their peers.
“The financial crisis taught the Chinese they cannot depend on exports” to the U.S. and elsewhere “for their future prosperity,” O’Neill says.
Verdict pending.
Yep, ’cause making rich people even richer has been a boon to the middle class!
Oh wait…
So - does anyone have any more information on the credit risk retention proposals?
Some months ago, I believe oxide posted links to new regulations being considered to force lenders to retain some repayment risk. Last I’d heard, the rules were watered down from 20% to 5% with lots of pushback still going on.
Latest I could find was an update from a recent (Dec 7th) committee meeting, which says that they are still evaluating the feedback they got during the public comment period:
[...]
The proposal would also establish certain exemptions from the risk retention requirement, most notably, an exemption for securitizations backed entirely by “qualified residential mortgages” (QRMs). Consistent with the statutory provision, the definition of QRM includes underwriting and product features that historical loan performance data indicate result in a low risk of default.
The proposal was published in the Federal Register on April 29, 2011, and comments were due by June 10, 2011. However, the agencies extended the comment period until August 1, 2011, due to the complexity of the rulemaking and to allow parties more time to consider the impact of the proposal.
The proposal generated substantial interest and attracted thousands of comments on a number of key issues from loan originators, securitizers, consumers, and policy makers. Foremost among these was the role of risk retention, the QRM exemption, and the future role of Fannie Mae and Freddie Mac in the residential mortgage market. Most commenters on the QRM criteria expressed great concern that the QRM criteria were too stringent, particularly the 80 percent loan-to-value requirement for purchase money mortgages. Some commenters also focused on the fact that the proposal would not directly alter the current risk retention practices of Fannie Mae and Freddie Mac, under which they retain 100 percent of the credit risk on their sponsored securitizations in the form of a guarantee and opposed the difference in treatment from private securitizers. Other commenters favored it in recognition of the market liquidity Fannie Mae and Freddie Mac presently provide. The proposed menu of risk retention alternatives also attracted significant comment, supporting the overall approach but also raising numerous specific concerns on the part of securitizers as to whether the particular options would accommodate established structures for risk retention in differing types of securitization transactions.
The agencies are carefully evaluating all of the comments received and are now actively engaged in considering the many issues raised as we determine how best to proceed with the risk retention rulemaking.
Linky: http://insurancenewsnet.com/article.aspx?id=309143
Posted a reply with a snippet, and a 2nd reply with a link; neither came through, so I’ll wait a while before reposting…
I just checked regulations.gov, and as far as I know, public comments closed on August 1 and then the proposed rule disappeared back down the black hole of the regulator industries. They are probably addressing comments (they have to answer each one) and making changes.
http://www.regulations.gov/#!docketDetail;dct=FR%252BPR%252BN%252BO%252BSR%252BPS;rpp=10;po=0;D=HUD-2011-0056
Both the 20% and the 5% were in the original proposed rule: Give us 20% down or the bank has to retain 5%. As for watering it down, they may change those %, but I suspect that they will require some skin in the game.
And for some fun, here’s a snippet from the last posted comment, submitted under the wire by La Raza/NAACP:
http://www.regulations.gov/#!documentDetail;D=HUD-2011-0056-0273
“Often with unique borrower profiles, Hispanic borrowers are more likely to live in households that have multiple wage earners, additional co-borrowers, rely on cash income, and have a thin credit history or lack one entirely. The tools used by lenders to assess the creditworthiness and mortgage price fail to capture the complete picture of minority households…
The small risk created by a lower LTV can be accounted for through other credit enhancements, such as prepurchase counseling, insurance, and price. For example, research has shown that objective advice from an independent, trained housing counselor prior to purchase effectively reduces the likelihood of default….
[they go on to request manual underwriting...]
…Rather than risk unduly penalizing a segment of borrowers by eroding the market for their business, the authors should remove downpayment or LTV from the definition all together.”
————–
Hahahaha!!! Now, I’m known to have a lib streak, but if I were manually underwriting a loan, and saw that the “owner” had no credit history, lived on cash income, and scraped together the mortage payment from 4 families, I would reject that loan. Remember, that arrangement has to last for 30 YEARS.
Maybe they are counting on *ahem* fellow brethren to manually underwrite those loans with a wink and nod, and then sell it to another *ahem* fellow brethren within Fannie/Freddie, again with a wink and a nod.
As for reducing risk with “objective (?!?) prepurchase counseling,” sorry, I call BS. That looks like yet more winks and nods. They can sit in all the classes they want, but if the money ain’t there, it ain’t there.
Thanks for the info all. I don’t see any real structural changes to prevent a new house of cards from developing, until they change this most basic issue, the one which allowed all the bad loans to be generated in the first place.
The reason Congress can’t get anything done just occurred to me:
So both sides want to extend this “payroll tax cut”. But they are unable to do it. Why? Because instead of just voting on the payroll tax cut, the current rules allow bundling of a vast number of items together and then that bundle has to be voted on.
It allows for great horse trading when both parties are close together on things, and allows for opacity as many questionable items can get passed under the guise of the “Rainbows, Unicorns and Puppy Dogs Bill”.
But now - Congress makes Faustian bargains in good times, which we the people have to pay for in bad times.
Now there’s a word combo you don’t see much in the MSM these days: Disgraced (banker’s name)! Bravo Cape Cod Times for calling it like it is.
Disgraced Drumm defaults on mortgage
Disgraced Irish banker and former Chatham resident David Drumm and his wife have not made the last two mortgage payments on their $2 million Wellesley home, according to recent court documents filed by the trustee handling his bankruptcy claim in Boston.
Trustee Kathleen Dwyer, in Dec. 16 court documents filed with U.S. Bankruptcy Court in Boston, is seeking to sell the house quickly so Drumm’s creditors do not lose out on some of its worth as mortgage interest and penalties accumulate.
The Drumms no longer live in the home, according to November court filings. It does not disclose where they now live.
Drumm resigned from his position as chief executive of Anglo Irish Bank in December 2008, a month before the troubled institution was nationalized by the Irish government as it teetered on the brink of insolvency.
After Drumm’s departure from Anglo, the bank filed suit in Dublin, seeking to recoup millions in loans. Drumm filed a countersuit in Ireland. As the legal action headed toward trial, Drumm filed for bankruptcy protection in Boston in 2010. The filing halted the Irish court cases.
http://www.capecodonline.com/apps/pbcs.dll/article?AID=%2F20111222%2FBIZ%2F112220305
“Disgraced banker”— now that’s a phrase with a nice ring to it!
Now if only we could get to the point where society shortens that phrase to just “banker”.
Daniel Gross
“So why are housing starts rising? A look inside the data reveals the answer. Builders have learned their lesson. They aren’t foolishly building amenity-rich McMansions and Tudors with four-car garages to sell to highly indebted aspirational consumers. Rather, they’re building smaller, practical abodes that they plan to rent out. Indeed, recent housing data help flesh out a post-crisis cultural, societal and financial shift toward housing: less owning and more renting. Thanks to foreclosures, walking away and a general inability to get financing, the homeownership rate has fallen in the U.S. from 69 percent in the third quarter of 2006 to 66.3 percent in the third quarter of 2011. That translates into several million households that used to own homes that are now renting.”
Translation; standard of living is falling, and this is why the market went up 300 pts? I think the FED money has to go somewhere if not commodities why not the stock market ? It’s hot money borrowed at 0% and will switch in and out of the “next thing” causing all kinds of distortions.
“I think the FED money…”
Nah, this time it is ECB money. Same song, second verse.
Piffle. Technicalities….
The optimist in me tends to look on the bright side of things.
What a wonderful day to short the market. The EU sloshed another 500 billion of QE in the pig trough just in time for last minute shoppers around the world for a binge orgy of 9th inning purchasing. The housing market is at least 10 months from a bottom and my lease expires in 7 months. Dry your powder people, the realtors might be right soon that it’s a good time to buy. Even a broken clock is right twice a day.
“The housing market is at least 10 months from a bottom ”
Al, when did you turn into such an optimist?
Business is booming(?)
But where are the buyers?
Inventory is looming,
ReaItors Are Liars
Bedbug infestation at West Palm Beach apartments is nasty surprise for buyer, lawsuit says
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 11:14 a.m. Thursday, Dec. 22, 2011
WEST PALM BEACH — A Miami-based real estate investor is suing over a pesky problem at a recently purchased West Palm Beach apartment complex – bedbugs.
According to a lawyer who filed the Nov. 23 lawsuit in Palm Beach County Circuit Court, about 25 percent of the units at the Palo Verde apartments off Forest Hill Boulevard were infested with the blood-sucking parasites at the time of the January purchase.
Attorney Robert Stok, who is representing Palo Verde Investors, a subsidiary of the Aztec Group, Inc., said the units were badly overrun.
“The property manager said it looked like a war zone with blood spots everywhere,” said Stok, who added that the apartments have since been rendered bedbug free. “The exterminator said it was the worst infestation they’d ever seen.”
Palo Verde Investors purchased the note to the apartments for $11.25 million while the complex off Forest Hill Boulevard was going through a foreclosure, Stok said.
Built in 1973, it had extensive renovations completed in 2005 and 2006, according to a news release written after the acquisition. Investors expected “both higher occupancy and growth in rental income” from the 276-unit complex, the release says.
Instead, they were blindsided by bedbugs, according to the lawsuit filed against Nationwide Life Insurance Company.
Specific charges in the suit include fraudulent and negligent misrepresentation, breach of fiduciary duty, constructive fraud and violation of the Florida Deceptive and Unfair Trade Practices Act.
The complaint claims that Nationwide and its property manager knew about the bedbug infestation before the sale but hid it from Palo Verde Investors.
“We asked for maintenance records, and they didn’t supply anything that mentioned bedbugs,” Stok said.
Stok said it cost his client more than $63,000 to get rid of the bugs. One treatment, which was used at the apartments, is to heat rooms to up to 120-degrees.
“It’s very expensive,” Stok said. “We don’t want out of the sale, and we’re not trying to renegotiate the deal, but we want damages.”
There was also the added frustration of moving tenants into new apartments, the loss of rental income during treatment, and costs for painting and cleaning the units.
Bedbugs bite mostly at night, leaving itchy mosquito-like welts. Once mostly non-existent in the United States, they have reappeared because people are more mobile, international travel has increased and there is less knowledge about how to exterminate them, according to the Centers for Disease Control and Prevention.
They’re also easy to accidentally bring home. People can pick up the flat insects, which can grow to a quarter of an inch long as adults, from plane and movie theater seats and hotel beds.
“There was due diligence on our part but you can’t expect us to go through every apartment with a microscope and slides,” Stok said about inspecting the Palo Verde complex. “The tenants said it was a problem before. It’s not something that just happened overnight.”
http://www.palmbeachpost.com/money/real-estate/bedbug-infestation-at-west-palm-beach-apartments-is-2048093.html -
And we banned the best bedbug killer available … DDT
No the best bed bug killer is the neutron bomb, penetrates walls and floors beds you name it. It kills it’s food supply as well. Home Depot should be selling these things night and day.
Based on the quote below, if they’re relying on the good will and selflessness of bank executives to help ride out the debt crisis, well, in two word, “They’re fu€ked.”
Mr. King, the governor of the Bank of England, urged banks to meet stricter capital requirements by paying out less in bonuses or to shareholders in dividends instead of curbing lending to the real economy.
http://www.nytimes.com/2011/12/23/business/global/european-bank-official-mervyn-king-sees-darker-outlook.html
Mother asks her little girl….
Did you sick your finger in the icing on your birthday cake?
No Mommy.
Did you sick your finger in the icing on your birthday cake even a little bit?
No Mommy.
That`s good, I was afraid you wouldn`t like it.
Little girl says….
No I like it.
I’ve been watching the goings-on in North Korea, with the silly mythologification (word?) of Kim Jong IL. In saying these things to their society, it’s like they’re talking to small children. I thought, wow, what a developmentally-arrested society.
Then, I was listening to a radio show today. The host talked about some Texas politico and opining about how the person was going to vote on some controversial issue. The host said he asked the politico about the political ramifications, and the pol said, “I don’t worry about politics. I just do the right thing and let the chips fall where they may.” The host went on to say how he acted similarly.
I burst out laughing. I thought the same thing about this - “It’s like they think they’re talking to small children.”
“I burst out laughing. I thought the same thing about this - “It’s like they think they’re talking to small children.” ”
I want this economy fixed NOW. Now, now now!!!
So Ron Paul categorically rejected starting a 3rd party. He’s not serious.