Bits Bucket for December 29, 2011
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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“A Staten Island, N.Y. man who owed $300,000 on his mortgage and hadn’t made a payment in two years, said his attorney used the robo-signing issue to fight his foreclosure”
“It looks like I’ll be in my home for some time to come,” said the homeowner
All you Deadbeats raise your glasses,
Robo signers saved your @sses.
Foreclosure free ride: 3 years, no payments
By Les Christie @CNNMoney
December 28, 2011: 10:04 AM ET
NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.
Among the tactics: Challenging the bank’s actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.
Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.
It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.
Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.
“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.
Ironically enough, the banks have given delinquent borrowers some of the ammunition they need to delay the foreclosure process. During the “robo-signing” scandal in 2010, it was revealed that bank employees signed paperwork attesting to facts they had no personal knowledge of. Now, borrowers are routinely challenging that paperwork.
A Staten Island, N.Y. man who owed $300,000 on his mortgage and hadn’t made a payment in two years, said his attorney used the robo-signing issue to fight his foreclosure.
In his case, the lender’s paperwork included many different papers signed by the same employee. The problem was that the signatures didn’t match. The judge dismissed the lender’s case against the borrower, although it can be re-filed.
“It looks like I’ll be in my home for some time to come,” said the homeowner, who asked to remain anonymous. He said he is currently not making any payments on his home.
http://money.cnn.com/2011/12/28/real_estate/foreclosure/index.htm -
Why does it take the banks so long to clear up simple ‘paperwork’ issues? I thought MERS was going to streamline everything, by avoiding all those pesky government regulations.
Got deregulation failure?
Is it deregulation failure or failure to enforce regulations in this case? Me thinks it’s the latter.
Lets get Eric Holder on it.
Failure to enforce which regulations?
‘Failure to enforce which regulations’
I’m sure there are many examples, but here’s one: when Fannie and Freddie couldn’t produce financial statements in 2005, these corporations should have been de-listed from the stock exchange and certainly should not have been allowed to continue to issue bonds at a triple A rating. This one enforcement action would have stopped the mortgage securitization disaster immediately.
Here’s another: when Bear Stearns failed to meet reporting requirements to the SEC in the weeks leading up to their market collapse, and put out blatantly false information to “investors” in two hedge funds built on mortgage-backed securities (60% subprime, not the 6% they stated in their prospectus), the regulators did nothing. The collapse of Bear Stearns cost U.S. taxpayers $29 billion up front, as the Fed, Treasury, and JP Morgan colluded to have JP Morgan cherry-pick the valuable pieces of Bear Stearns, like their headquarters building, for a song, while hiving off the toxic mortgages onto taxpayers. Naturally, no one ever went to jail, or ever will.
De-listing F&F would have ended MERS?
MERS is what is causing the problem described in this article- the apparent great difficulty the banks have in showing proof of ownership of the mortgages.
‘Ironically enough, the banks have given delinquent borrowers some of the ammunition they need to delay the foreclosure process’
It isn’t irony. The “robo-signing scandal” has given the loan servicers an excuse to manipulate inventory and get higher prices for their foreclosures than they otherwise would have. Notice that the FDIC selectively applies rules to shut down smaller banks every week, while turning a blind eye to the balance sheets of large banks, and DC hands out billions to keep them afloat. If these rules were applied evenly, they would all be forced to liquidate the foreclosures. This goes beyond regulatory failure into the realm of collusion.
See, we’re told this is all to help us. Look at how the media frames the issues; the “crisis” was caused by Lehman Brothers failing, not by a greed fueled bubble in housing prices. AIG can’t fail, you would all lose your jobs! Instead of being de-listed 6 years ago, the GSEs are to this day guaranteeing most home loans!
Moral hazard is a regulatory failure. Too big to fail is a regulatory failure. Allowing a government to perpetuate this system is a societal failure.
Moral hazard is a regulatory failure. Too big to fail is a regulatory failure. Allowing a government to perpetuate this system is a societal failure.
Truer words were never spoken, Ben. It is a testament to the moral and mental bankruptcy of our population that 95% of the electorate - the Obama Zombies & McCain Mutants - voted for the crony-capitalist status quo. The fish may rot from the head first, but when the population itself has that kind of sheeplike, Third World tolerance for systemic corruption and venality, it’s pretty much game over.
“Moral hazard is a regulatory failure. Too big to fail is a regulatory failure. Allowing a government to perpetuate this system is a societal failure.”
I agree. And it all started with Reagan, and the idea that government, in itself, was the problem. Now we see that those government regulations- against the mixing of consumer and investment banking, for example- served very important purposes, and served them well, for half a century.
Now we’re exactly where it was predicted we would be, if we deregulated the financial system: broke, and in thrall to the banksters.
“And it all started with Reagan,”
Oh, please. Back up a little bit, willya? Try Woodrow Wilson. Or even better, old “Honest” Abie, who graciously gave us the income tax so that bloody wars could be fought in the name of “freeing” people.
‘it all started with Reagan’
This guy’s been dead a long time. Some will say, ‘it all started with FDR’! At some point, we have to accept responsibility for our situation. The debate about more or less regulation is meaningless in a system that selectively enforces the law.
Regardless of who it started with, “it” continues to be perpetrated by the vegetables who election after election pull the lever for Wall Street appointed, MSM annointed Republicrat Tweedle Dees and Tweedle Dums, aka the status quo.
Sammy and Ben… you guys are on fire.
When a judge rejects a foreclosure filing because of forgery, why isn’t there an immediate criminal charge for forgery?
“The debate about more or less regulation is meaningless in a system that selectively enforces the law.”
It seems to me the 2 are intertwined.
When a judge rejects a foreclosure filing because of misinformation provided by the borrower on the mortgage application , why isn’t there an immediate criminal charge for bank fraud?
This guy’s been dead a long time.
I was responding to your point that earlier enforcement of government regulations could have forestalled the crisis. I was pointing out the origins of such regulatory failure. My point from the beginning was that MERS was the deregulatory failure in the article being discussed.
why isn’t there an immediate criminal charge for forgery?
I think that’s being used as a bargaining chip by the state AGs.
Try Woodrow Wilson. Or even better, old “Honest” Abie
Try Alexander Hamilton, and the other authors of the Federalist Papers.
All this is a sideshow.
The real game being played here is the US sticking it to China in order to maintain Pax Americana for the next 50 years. With the economy the way it is, it gives the USGovt plausible deniability in the whole scheme.
The key link in this drama is the Fed’s ability to maintain arbitrarily low rates of interest for arbitrarily long periods. Why can the Fed do that without tanking the dollar? Why is it impossible for anyone else, even the Euro, to play the same game? Because the Chinese will buy up any bonds the US sells them in order to keep their export machine (and thereby the economy, and thereby the regime) going.
The party that blinks first will lose global preeminence. Hint: the US won’t blink first.
The debate about more or less regulation is meaningless in a system that selectively enforces the law.
Oh, thanks for saying it so succinctly. This has been my thoughts as well. We have nothing but laws in this country, but either we don’t enforce them or selectively enforce them like you said.
Welcome to Banana Republic…..
“…and certainly should not have been allowed to continue to issue bonds at a triple A rating.”
But in hindsight, since the Treasury Secretary was readily willing to make good on federal guarantees of GSE debt which nobody was previously sure even existed, weren’t the AAA ratings apropos?
“This goes beyond regulatory failure into the realm of collusion.”
Isn’t collusion basically legal so long as it is executed at the top level of the federal government?
“Third World tolerance for systemic corruption and venality, it’s pretty much game over.”
Oblivion is far worse than tolerance in my book.
Woodrow Wilson and his ilk radically grew the size of government. FDR would not have been able to become dictator without WW and his gang.
Because the Chinese will buy up any bonds the US sells them in order to keep their export machine (and thereby the economy, and thereby the regime) going.
This isn’t entirely true.
As i understand it most of the gov debt is owned by the USA, ie we owe debt to ourselves.
The reason rates are low is that there is an oversupply of production and not enough demand, ie even with low rates business and people don’t want to invest and certainly don’t want to borrow to invest. Thus they are all storing their money in cash and treasuries of countries who they believe can pay them back. This is pretty much any country with a printing press. The countries that are seeing a rise in their bond rates are those who can’t print money ie spain, italy, greece. etc. Note Japan has a much bigger debt problem than these other countries and pays a lower rate. The US has a bigger debt to GDP than spain and pays a lower rate. This isn’t just about China buying our treasuries.
Nice, yensoy.
I was first drawn to this board when I wondered to Ben whether George Bush’s “Ownership Society” was actually a cynical and concerted plot to repudiate America’s trade imbalance with China.
Nothing has happened in the intervening six years to convince me otherwise.
” Comment by measton
2011-12-29 09:33:34
This isn’t entirely true.
As i understand it most of the gov debt is owned by the USA, ie we owe debt to ourselves.”
I’ve heard this argument before and someone correct me if I’m wrong, but isn’t the Federal Reserve the biggest buyer of US treasuries at this point? Using money they literally created out of thin air(nothing) - a process btw that I always thought was known as counterfeiting when undertaken by private parties.
Good thing the Federal Reserve is owned by the US government. Oh wait….
Boy, people are riding their hobby horses all over town. Much of what people are saying is right, and may have played a part in the RE bubble. But the actual failure that we’re talking about HERE is the bank’s deciding to not bother recording the mortgages and their assignments with the local governments where until recently those records were kept. Instead they simply proported to keep track of them in MERS, despite the fact that in many states foreclosure requires an actual recorded mortgage to be associated with the deed. “We’re banks, who are you going to listen to us or some deadbeat.”
That IS a real problem I agree, but what do you think of Ben’s point that it conveniently allows the banks to avoid having to dump all those foreclosed properties on the market, thus lowering property values even further?
I don’t mean to wax conspiratorial here, but is it possible that this was actually planned and accounted for as a way of shielding the banks(and their executive management) from having to take massive, immediate losses on foreclosures?
Maybe that’s why they turned a blind eye to the whole thing - they knew the ultimate benefits would outweigh the negatives?
Oops - forgot to close my italics…
Just meant for the word “conveniently” to be italicised.
According to wikipedia
Foreigners own 32% of US public debt with China owning 8%. Of course we own a lot of foreign debt too.
“…isn’t the Federal Reserve the biggest buyer of US treasuries at this point?”
Like incestuous marriages within royal families, this will not end well.
Bill in Phoenix and Tampa:
FDR would not have been able to become dictator without WW and his gang.
FDR, dictator! What!
you could I suppose argue that he was a dictator but there are no historical documents which make the link. (I don’t think there are) Do you just make this stuff up?
why do they still call them “homeowners”?
Several of my 20-something co-workers got their $8000 from Uncle Sugar and are now $20000+ underwater, but at least they can paint the walls any color they like
I thought the term was “homemoaners”?
Twenty-five years or so from now…there are going to be so many who regret not just walking away…all for the sake of the sacred credit score.
I don’t know my credit score and could not care less about it. I don’t need credit. I only use it for convenience and that is how it should be used.
“all for the sake of the sacred credit score.”
The true irony is that it will be seven more years down the road before they realize they should have walked away early on, and by that time their credit would have been fully-repaired if they had done the walkaway early on.
“I don’t know my credit score and could not care less about it.”
My sentiment precisely, bill.
I don’t know my credit score and could not care less about it. I don’t need credit.
That’s because you don’t serially lease luxury cars or big honking SUVs. You need good credit to get the “deals”.
For those folks a paid for car is a badge of shame. To them it means that you can’t afford a new car.
Not a big deal dollar-wise but auto insurance companies use the hamster-wheel credit score to determine rates. Because I don’t have a mortgage (mix of types of credit used affects score) I get to pay higher insurance premiums on my vehicle that was paid off early four years ago.
America isn’t a country, it’s a game.
PiC Belated thanks for your advice; which was the same advice we received from the city attorney at the same time. True that the free rent time helped average out the losses. I am grateful to have escaped the bubble no worse off for playing 6 houses later. Upon selling my first home, purchased in 1995, we knew we would not be owning in S. Cal ever again; and that much remains true.
Real estate “experts” opinions(turns out they were based on how to make a buck for themselves) really did suck, though. And it did cost real money, but I own my problems and they arose out of greed more than being gullible. Victim of my own devices; you are correct that others have fared much worse. Like my friend who quit paying in April 2011 but is on the block this month. He paid for longer only to be foreclosed upon quicker; victim to a faster foreclosure timeline. He paid double the going rent for one whole year longer than we did; now a few months free wont help his per month housing costs too much.
And the good news for him is that, unlike me, he did not lose his job as a classroom teacher (he works for a charter school). He just had to take a pay cut from $50.00 per hour to $20.00. He sure was gloating to be pulling the higher wage; sucks to go back at 40% of your wage.
I believe that the non-judicial states will come out of this quicker, thanks to their post-robo faster foreclosure scheduling. Our ex-condo is back on the market, not lingering in the shadows.
“I get to pay higher insurance premiums on my vehicle that was paid off early four years ago.”
Do all auto insurance companies do this? Ay yi yi! Could you sell your car and “vote” with your dollar?
Didn’t like how the cable company was charging and bundling programs, so we voted with our dollar and blew up our TV.
Didn’t like how the chicken industry was producing cheap, low-quality meat, so we voted with our dollar…
Didn’t like how Hollywood was producing crap for an expensive ticket, so we voted…
Didn’t like how the salaries for sports players and ticket prices went to the moon, so…
Etc. etc.
Some people see it as cutting off our noses to spite our faces, but reading a book from the library and a bike ride or walk around town can be more rewarding than trying to figure out if “Dick got down with Jane on Search for Tomorrow”, with apologies to Gil-Scott.
There are insurance companies that do not use credit score in issuing an automobile policy. I work for one so I am very certain of it.
Thanks for that reply! I’ll need to check on the wife’s car insurance. She did say that her rates had been lowered since we moved and she’s driving a lot less.
MrBubble-
No cable/subscription TV service? Check
No rubber chicken and high fructose corn poison? Check
Not subsidizing Hollywood but getting it for free from library? Check
Not paying to attend sports events that are just one big TV commercial that incidentally has a game occuring in its midst? Check
Not about to give up the squadmobile, we don’t have bicycle-friendly commuting weather (or drivers) in Colorado like the Bay Area does. And besides, I didn’t move here to spend weekends hanging around in Denver. For $40/year I get unlimited use of my rented “backyard” in Rocky Mountain National Park, not to mention thousands of acres of *free* and less crowded National Forests to camp, hike, mountain climb, ski, fish, and shoot guns in…
Not ready to buy the snow bike? Heh. Enjoy the parks. They are a great resource. My folks are rangers (seasonal) at YNP and I worked there for 6 months after college.
BTW — I wasn’t trying to “one up” you (or anyone) with my comment. Just trying to re-frame things. A lot of folks will lament the rising cost of X, when really they’d be better off just doing without X altogether, not as a hardship, but as a choice. When I hear, “Oh, you don’t have a car (i.e. car-less)”, I respond with, “No, I am car-free”.
However, when I need a car/truck, I just go rent one. I am not purporting to be a hero and the weather is pretty sweet down here in SLO (moved from the SF Bay recently) for biking. Haven’t seen a rainy season yet though and I’m working from home, so not doing tons of riding either. Packing on the pounds…
I try to frame every spending decision in terms of its economic opportunity cost. The money not spent on the things listed above, or on eating lunch out every day like my co-workers, is money reserved for *experiences* not things, and the money spent on *things* is to acquire things that enable/enhance experiences, i.e. skis, bicycles, camping and climbing gear.
Meanwhile the loan-owners get to paint the walls any color they like
“money reserved for *experiences* not things, and the money spent on *things* is to acquire things that enable/enhance experiences”
I like the sentiment. We camped for 5 days in Australia rather than staying in a hotel. All of the money not spent can go toward the next trip!
You can keep the climbing gear though. I’ll stay on the trail now!
What happened to LoanOwners?
“…This guy’s been dead a long time….”
The larger issue is that many of the people who supported the “long-dead” Ronald Reagan still blindly support the same ideology that inflicted him on us in the first place.
Until these voters do some critical self-analysis and truly grasp that their knee-jerk allegiance to the words “freedom” and “liberty” and “deregulation” (for banking interests, not the electorate,) is precisely what brought us to this place today, nothing will change.
This reason alone is enough to educe my support for Ron Paul in the primaries.
The larger issue is that many of the people who supported the “long-dead” Ronald Reagan still blindly support the same ideology that inflicted him on us in the first place.
Until these voters do some critical self-analysis and truly grasp that their knee-jerk allegiance to the words “freedom” and “liberty” and “deregulation” (for banking interests, not the electorate,) is precisely what brought us to this place today, nothing will change.
I grew up in a place where a high percentage of voters matching that description live. I occasionally stick my neck out and try to have a conversation with people who wish “those voters would do some critical self-analysis” about what it would take for that to actually occur, and it generally doesn’t go well. They’re not naturally the “self analyzing” type, so it’s not as simple of a thing as people wish it was.
Sweet Ahansen.
+1
I wonder if he’s paying his property taxes? That’s still has to be about a $9,000/yr nut.
In my opinion, the lenders have no one to blame but themselves. They failed to ensure that they have legal recourse.
It’s not the “lenders” that are being screwed. Remember the game?
you’ve obviously forgotten. the lenders “originated” the loans and off-loaded them as quickly as possible as AAA rated investment paper to your insurance company, pension plan and investment portfolio. It was FRAUD. Plain and Simple.
And the FEDERAL RESERVE aided and abetted this FRAUD by buying up all the bad loans left on bank balance sheets. The FED robbed the taxpayers to save the Banks.
That is what their job is. Forget about the Legislation. Primary goal: Keep the Banks making money, no matter what crimes they may be involved in.
It’s US that’s being screwed.
True Dat.
I also have a prediction to make for the upcoming year/election.
I predict that on the off chance that Rom Paul survives the downplay in the media and every effort byt the PTB to keep him off the ticket, and actually wins, that the Federal Reserve will raise interest rates just as his presidency takes effect.
I remember seeing an article where someone figured out that no sitting president has ever been re-elected when interest rates are high, or something to that effect. If someone has a link it would be greatly appreciated.
Anyway. I predict on the off chance that someone who openly advocates for auditing the Federal Reserve(Like RP) is elected, they will raise interest rates, bring the economy to a standstill/crash, and the people in their tragic shortsightedness will blame the sitting president for their woes rather than the legalized counterfeiting operation known as the Federal Reserve™®
Very convenient system they have worked out - our politicians are really just the political punching bags and goaltenders for the masses, with the real power resting in the hands of a band of counterfeiters, or as I like to call them the Federal Counterfeiting Bank#153;® (FCB?).
Am I missing something here?
You’re not missing a thing Brother.
The duopoly is owned 100% by the PTB. The duopoly will never represent us, thus my dark doubts of any change resulting from the polling place. Frankly I don’t see any change unless a united OWS/Tparty grassroots mass physically march on DC and Wall Street simultaneously. Nobody goes in, nobody goes out. Starve the mofo’s. We can’t match their the weaponry of their personal para-military police but we can outnumber them easily. It’s gonna take people, balls, risk and brains.
Jonesy and alot of you are far more optimistic. I’m not. We cannot endure another 4 years of duopoly. It’s been 30 long years now. I’m fed up.
Oh and keep in mind - I understand the standstill/crash would only be temporary. In fact, I think Volker-style central bank management is what this country needs the most right now, but it won’t change the fact that “howmuchamonth” crowd would feel immediate pain and blame it entirely on who ever happens to be in charge at the time. See: Jimmy Carter.
I proposed a solution to all this some time ago. It’s simple. Forget about the “Paperwork” issues and technicalities. If a mortgage was written on the property and the “owner” can’t produce a “SATISFACTION OF MORTGAGE”, filed on the local courthouse, then someone, somewhere is owed some money.
The so-called “owners” are usually admitting that they are refusing to make payments based on legal technicalities. And they been getting away with it.
SOLUTION: Mortgages are paid into “trust” to be settled by the Court when the Title to the mortgage payments is discovered. End of the free ride.
This will force the deadbeats out of the houses they are not paying for. They will NOT make the payments and the court will then issue a FORECLOSURE notice and force them to vacate the property.
Monies collected from any trust accrued could be used for property maintenance.
Additionally, the Court should back-charge them for ALL missed payments. This way, there will be a growing account for property management.
The impact to luxury store owners and car dealers will be substantial because all that “rent free money” will no longer be “disposable income”. But that is another story.
It is common when there are disputes for courts to collect monies and decide who gets the money when the dispute is settled.
Housing payments should be no different.
Diogenes
Excellent. Is legislation required?
To reduce future woes I would suggest that only downpayments of 10% be insured, and not by the government. To qualify for 10% down insurance the buyer would have to prove his need ie maximum income ratio. Your problems are that more than 90% of all USA mortgages are insured. And these are all held by large banks. TBTF !
I have also learned that the banks, as administrators of the mortgages, can receive insurance for their investors before foreclosure occurs. The hold up on short sales is being caused by the investor’s financial advisers on a one to one basis who after receiving 80 to 90% of their investment back are holding out for the balance to maintain their investors.
The big banks are benefiting in their race to delever from an average of about 35 while trying to get back down to about a 10. The delevering process is what is holding back the world economy - not the level of debt - but the failure of any big amount of that debt dramatically slows down the delevering process. If any big banks fail insurance will protect the bulk of the savers - only the 1% will be affected.
The biggest contributer to the delevering process is the savers who are more interested in safety of their funds rather than appreciation. Their 2% interest rates are fueling dramatic bank profits of over 100% on cost of capital and many banks are still playing with the high leverages which can return them up to 5000%. They are accruing their losses against these fantastic gains, which are not being recognized because of the “administrators” role, not only in housing but in credit cards, equipment loans, etc. Most big banks do see the writing on the wall though and are trying to delever. They are also trying to cover their bases by spreading their depositors who on the one hand help delever but on the other contribute significantly less to the overleverage profits. Most banks continue to follow the profitability model knowingly at risk while they profess a delever policy, and in fact can show progress thru their ratios. Yes, the regulators aren’t even watching this happen - but do recognize this ultra large game as their biggest current threat which has extended from 2007.
Legislation would be required. Actually legislation would be required in every state, DC, Puerto Rico, Guam, etc. And the creation of 50+ government agencies all staffed up with state employees. Plus instead of mortgage holders having to enforce their rights and pay for the legal representation needed to bring it forward, the states would have to pay for it in the form of additional civil prosecutors since no actual recipient of the funds would have been identified before bringing the case up.
Oh, and the legislation would get rid of rules that have their origins in nearly 1000 years of English law.
Polly
The saying “desperate times deserve desperate measures” has truth to it right now. Freebies are openly flaunting the law and are helping make almost zero interest rates a requirement to just keep the economy going. This isn’t fair to retirees who have saved all their lives.
From an economic perspective, Diogenes idea is excellent, but - not being a lawyer - I certainly am not aware of the legal administration that would be required. Could it not be done as a temporary measure by your federal government? What would be your suggestions?
If this process is allowed to take it’s course we could have a very long damper on housing - at any selling price.
For now though, I think F&F should be required to pay out insurance ONLY when the house has been sold and the loss realized.
Dio, Patrick,
Thanks to you both.
So, your solution is more government. And forcing states to abandon their right to determine their own property laws.
Thanks. Good to know that.
Dios Mio, Dio!
I was just thinking earlier today how much worse the domestic economy would be had not so many in foreclosure withheld mortgage payments in favor of having a normal Christmas.
Here’s a cartoon that someone here posted.
“The free money was great but avoiding the house payment is steady and reliable.”
The carton is just an image so you have to scroll down to find it.
http://mcaf.ee/638f1
Falling home values mean budget crunches for cities
By Brady Dennis, Published: December 25
The nation’s housing crisis is five years old, but for local governments across the country, the worst of the reckoning might only now be at hand.
Because of the time it often takes for property assessments to reflect falling home values, the bust that began in 2007 has just begun to ravage tax revenues in communities from coast to coast. The problem is unlikely to subside soon.
For instance, Baltimore collected $815 million in property taxes during the most recent fiscal year, according to Bill Voorhees, Baltimore’s director of revenue and tax analysis. Next year, the figure is predicted to shrink to $803.5 million. The following year, $773 million. The year after that, $735.7 million. The year after that, $729.4 million.
Only in 2016 do city officials anticipate tax revenues increasing again.
“I don’t see any quick fixes over the next four or five years, to be honest,” said Voorhees, noting that Baltimore already faces a budget deficit of more than $50 million next year. “Obviously, it means we have much lower revenues than we had in past. It’s creating gaps in our budget. . . . It’s a very large problem.”
http://www.washingtonpost.com/business/economy/falling-home-values-mean-budget-crunches-for-cities/2011/12/14/gIQAwWmtHP_story.html
Is this part of the downward spiral we keep hearing about here?
And what evidence is there that property values will be on the rise in 2016?
Yes this is called deflation.
Lower city budgets mean a drop in spending higher unemployment lower property prices a drop in gov spending higher unemployment lower property prices
round and round we go.
Consultant’s report. Based on made up numbers.
Poor babies! On three everyone….let’s weep for the City of Baltimore. One and-a two and-a three….
Waaaaaa!!!
A projected, just-over 10 percent revenue decline over four years is hardly what I would call a disaster. Perhaps the city elite ought to deal with a 50 percent revenue cut over four years instead.
I guess this will mean less political favor/BIL/insider padded government contracts.
Yeah, right.
Government extends waiver of anti-flipping law, allowing homes to be bought and then sold in 90 days
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 6:10 p.m. Wednesday, Dec. 28, 2011
Florida homebuyers will be able to purchase flipped properties with FHA loans through next year as federal officials try to speed the resale of foreclosed and abandoned homes.
The U.S. Department of Housing and Urban Development announced today that it was extending a 2010 waiver of its anti-flipping regulation, which was scheduled to end Saturday.
The rule forbids Federal Housing Administration-backed loans from being used to buy homes that have been owned by the seller for less than 90 days. It was put in place to thwart the kind of unscrupulous home flipping that drove up real estate prices during the boom and which is partly blamed for the market crash.
But with mounting foreclosures and a shadow inventory of 1.6 million not-yet-listed homes nationwide, federal officials said blocking the sale of flipped homes will hurt neighborhoods “struggling to overcome the possible effects of abandonment and blight.”
Realtors said today that the extension was expected and that it is a boon to homebuyers as well as investors looking for quick turnarounds on refurbished homes.
“Right now, we really can’t afford anything delaying or discouraging a qualified buyer willing to buy a home at fair market value,” said Realtor Shannon Brink of RE/MAX Prestige Realty in West Palm Beach.
HUD, recognizing the potential problems caused by flipping in 2003, enacted the 90-day rule.
Today, FHA loans, while mostly for first-time homebuyers, are the preferred method of financing.
“When other financing dried up and banks stopped lending, everyone started doing FHA deals,” Richardson said.
Since the original waiver went into effect in February 2010, FHA has insured nearly 42,000 mortgages nationwide worth more than $7 billion on homes resold within 90 days of the last purchase.
“It’s certainly an inducement to move real estate and reduce inventories,” he said about the waiver. “In a depressed market, everyone is looking for value and our homes are in pristine condition. Why wait 90 days before you can close on a home?”
http://www.palmbeachpost.com/money/real-estate/government-extends-waiver-of-anti-flipping-law-allowing-2063489.html -
Muggy have you been checking out some of the latest offerings in Skaneateles? More than a couple of them look like flips to me. 1900 built former farmhouses w/that just refinished look to them. Photos show them furnished but very little living items in the photos beyond furniture. I do have to admit the lower Skanny taxes are a tease.
“Muggy have you been checking out some of the latest offerings in Skaneateles?”
No, my wife’s family sold their house a year ago and we’ve put it behind us. Last summer when we were upstate, we didn’t even drive through or have lunch at Doug’s, sit at the park, etc.”
‘
If you listen quietly you can hear Combo snorting…
“ALBANY — A coalition of seven unions representing the majority of state workers are suing Gov. Andrew Cuomo’s administration in federal court over 2 percent health-insurance premium increases on retirees.
Coalition members filed separate complaints Wednesday in U.S. District Court in Albany, all of which allege it is illegal for the state to raise rates for members who are already retired.
These decisions were based on a promise and expectation of what their health insurance costs would be. Changing the rules after the fact is outright wrong.”
http://www.democratandchronicle.com/article/20111229/NEWS01/112290318/Unions-sue-premium-hikes?
N.J. public workers continue to retire at record rate
Published: Monday, June 06, 2011, 6:07 AM
TRENTON — For the second year in a row, public employees across New Jersey are retiring at a record rate, state figures show.
The steady rise in retirements comes amid economic uncertainty, with changes in pension and health benefits for public employees remaining at the top of the state’s political agenda. As a result, an increasing number of the more than 500,000 state and municipal employees are choosing to retire rather than risk having their benefits cut by legislators.
Overall, more than 20,000 public workers retired last year, a 60 percent increase over 2009 and the highest number in at least a decade, according to the state Department of the Treasury.
The unexpected surge may eventually force the state to pay more money into its troubled pension fund.
Susan Chew, 55, of Hammonton, a forensic scientist with the State Police, said she would join the ranks of those retiring if she could lock in her benefits as her husband did last year.
“There’s just too much uncertainty right now, so we’re stuck here,” said Chew, who will mark 25 years with the state in 18 months. At that time, she will be able to lock in her benefits.
But for now, she said, she and her husband have delayed plans to build a retirement home in Virginia until state lawmakers and Gov. Chris Christie work out an agreement.
“I know the state and the pension is in bad shape,” Chew said, “but we’ve contributed, and I don’t think it’s fair to go after us.” Her unit is about 60 scientists short because of attrition, she added.
While teachers led last year’s surge — nearly twice as many left as in many previous years — state workers and non-uniformed employees at the local level are leading this year’s increase, the figures show. If the trend continues, more than 13,000 of these state and local employees will retire in 2011, a 30 percent jump from last year.
Under all of the proposals that have been floated so far, public employees who have spent a prescribed amount of time on the job — generally 25 years — would not have their benefits cut upon retirement.
http://www.nj.com/news/index.ssf/2011/06/new_jerseys_public_workers_con.html - 104k -
If you want full bennies at 55 then prove each year you are “retired” No w2 no income from slef employment….
Susan Chew, 55, of Hammonton, a forensic scientist with the State Police, said she would join the ranks of those retiring if she could lock in her benefits as her husband did last year.
Bullcrap.
I love how the NY public unions are protected against reality hitting, especially how the public has to replace any losses in the pension funds should the market hit a bump. Who replaces our losses?
Did I just hear a pin drop?
> Who replaces our losses?
Inflation. i.e. debasement of the currency.
Poor babies! On three everyone…let’s weep for 55-year-old+ public retireees who will make tens of thousands more annually than you do - and do so for the next 20-40 years. One and-a two and-a three….
Waaaaaa!!!
A projected 2 percent health care insurance premium hike is much, much less than what today’s non-public workers are dealing with.
+1
When is a contract sacred and inviolate?
Only when the peons have to uphold their end.
This is yet another example of the “socialize the risks, privatize the gains” meme. Public workers think that everyone but they themselves ought to suffer losses. Costly taxpayer-funded bennies in addition to lucrative 20- to 30-year pensions are just, according to them.
Public workers do not think that. Only private employees think public workers should suffer.
Which is stupid. They should be demanding the same benefits and considerations for themselves.
But you can’t fix that kind of stupid.
And demanding will never equate to realizing.
It’s class warfare all over again, but on slimmer and slimmer strata.
(snort)
What gets me is many workers are deciding to retire now so as to “lock in” their retirement benifits. This is the wrong thing for workers to do because:
1. The money for their retirement is not there now and it probably will not be there later. Even though they may have been “promised” this money, no money means no money. It is what it is.
2. And because it is what it is the underfunding retirement problem will increase in severity as more and more employees choose to retire. This mad rush for the door is just the opposite of what a worker with a good, steady job should be thinking of doing.
Additionally: If he is good at his job (and he probably is since he has been working it for so many years) then his employment value should increase in proportion to the decrease in the number of fellow worker who are opting to retire.
Work still has to get done; the fewer the qualified workers available to do this work the greater the need (and hence the greater employment security) for the people who choose to remain on the job.
In this dismal employment environment a good job is a terrible thing to waste.
“In this dismal employment environment a good job is a terrible thing to waste.”
Likewise, good credentials, training and experience are terrible to waste.
Look at it this way. A buddy of mine was a worker (sic) for the City of Chicago. He was getting 10% of his pay deferred (or whatever they call it). With 30 years in he could retire with 80% of his pay.
So, for a 10% reduction in income he doesn’t even have to show up.
This works as long as there is money available to make it work.
Take away the money and it will stop working.
There’s a reason why taxes are so high in places like Chicago. Yesterday there was an article about $4 million houses in Aspen paying less than 10K in property taxes, about the same as a 400K house in some locales.
The taxpayer revolt is coming.
How many full time resident school children are there per unit of housing in Aspen? What about elderly who receive city services? How expensive is it to maintain their public transportation system?
There are things Chicago needs that Aspen doesn’t worry about.
FWIW, property taxes are LOW all over Colorado.
I’m also guessing that Aspen gets a big chunk of its revenue from sales and hotel taxes too.
But I can guarantee you one thing. The bennies and pay that city and county employees get here are WAY lower than in Chicago. My works for the city. In out little burg, only cops and firefighters get pensions, everyone else gets a 403b. So we don’t have librarians retiring in their 50’s with 80% of their salary for the rest of their lives.
They retire early because they see that the contract made when they started will NOT be honored by the company if they wait.
You have to be stupid to NOT try and lock it in.
“They retire early because they see that the contract made when they started will NOT be honored by the company if they wait.”
Which implies - what? - that the contract will be honored if they “lock it in”?
Keeping the job and stashing money away alleviates the worry of what others will do with promises made in the past.
Walking away from the job by retiring leaves one at the whim of whomever is at control of one’s retirement money. This has always been the case but the dangers of doing so now have not been as great to one’s financial well being since the Thirties. That’s because, as in the Thirties, the money to fund everyone’s retirement as promised is just not there.
Online merchants home in on drunken consumers
Stephanie Clifford
December 29, 2011 - 6:31AM.
After enjoying a few drinks, some people go dancing. Others order food. And for some, it’s time to shop online.
“I have my account linked to my phone, so it’s really easy,” said Tiffany Whitten, of Dayton, Ohio, whose most recent tipsy purchase made on her smartphone - a phone cover - arrived from Amazon much to her surprise. “I was drunk and I bought it, and I forgot about it, and it showed up in the mail, and I was really excited.”
Shopping under the influence has long benefited high-end specialty retailers — witness the wine-and-cheese parties that are a staple of galleries and boutiques. Now the popularity of internet sales has opened alcohol-induced purchases to the masses, including people like Whitten, who works in shipping and receiving and spent just $US5 on the cat-shaped phone cover.
http://www.brisbanetimes.com.au/technology/technology-news/online-merchants-home-in-on-drunken-consumers-20111229-1pdbh.html -
http://www.youtube.com/watch?v=bK-Dqj4fHmM
Fat, drunk & stupid is no way to go through life, Americans.
Who says?
What’s the second-to-the-last thing a redneck says? ‘Here, hold my beer.”
What’s THE last thing? “I’ve done this before.”
What about, “Buckle up, imma try sumpin’”?
I thought it was, “Hey mah, look at this!”
I thought that was the secret behind the Home Shopping Network!
I’ve got a good friend that I get a folding knife from every Christmas since 1997. Pretty cheap, actually: terrible blade, plastic handle, usually gets tossed around March every year.
A few years ago he admitted he was watching HSN a fateful night in October, perhaps 2:00AM, and he got a box of 120 folding knives for the low low price of $29.90 or somesuch.
I always thought there should be a breathalayzer add-in for firefox. Since I quit drinking about a year ago (for health reasons) my impulse purchases on the internet have significantly declined.
[Of course, my "purchases because I've saved $XXXX.YY because I haven't bought beer in a long time" have significantly increased.]
I think mega caffeine works better. Is it any mystery people felt so upbeat and confident up until the crash? triple shot espresso baby!
Excited by a phone cover! Shrieking, “Yippee! My phone cover arrived!”
Quick, someone, extend the joy. Let Tiffany Whitten know of the plastic storage box sale at Target. Tiffany. That’s her name-o.
Woman smuggles crate of booze up skirt in YouTube viral video hit
By Mirror.co.uk 28/12/2011
A shoplifter has become an internet sensation after being caught on CCTV smuggling a crate of Guinness up her skirt.
Scroll down to watch the video
The woman appears to browse the shelves before heading to the crates of Guinness and hiding one under her long skirt
http://www.mirror.co.uk/news/top-stories/2011/12/28/woman-smuggles-guinness-crate-up-skirt-in-youtube-viral-video-hit-115875-23665009/ - 107k -
Shoplifting losses this Christmas have been put at $18 billion, with the costs passed to the rest of us. These vermin should be flogged, and maybe branded on their second offense.
“These vermin should be flogged, and maybe branded on their second offense.”
Why do you hate the Constitution and the Bill of Rights so much?
My tolerance for scum, never high, has pretty much gone to zero. I’d love to see Singapore-style caning introduced as a REAL deterrent for thieves, especially the copper-stealing variety who are devastating our infrastructure.
“I’d love to see Singapore-style caning ”
Despite its violation of the Bill of Rights?
What about my rights, Alpha?
Allocate the canings based on the dollar value of the theft, start on Wall Street, Greenwich CT, the Upper East Side, the Hamptons, then work its way down to the thieving common rabble…
“What about my rights, Alpha?”
They’re contained in that Bill of Rights thingie, that you seem to want to ignore.
Stealing is not an individual right, idiot.
“Stealing is not an individual right, idiot.”
Only an idiot would not know the Bill of Rights (specifically the 8th Amendment) bans cruel and unusual punishment.
Are you self-medicating, Bill? Your posts are getting more and more demented.
Sure let’s bring back flogging
How about amputation of fingers for theft
How about stoning that’s a good one
We could brand people
or make them march through the street naked
Oh wait this is Saudi Arabia you want not hte US.
What if the person is stealing food for their hungry children? Do they get flogged?? What if the company fired the person and didn’t pay them for work done, or for overtime or something else and they steal to get even? Do they get a flogging. What about the teen ager pulling a prank. What level of evidence do we need to flog or abuse a US citizen? Is just the say so of the store clerk? Does the gov get to flog or shoot protesters?
“Despite its violation of the Bill of Rights?”
If we do enough of it, it would no longer be “unusual”.
And “cruel” is definitely highly subjective.
Measton, I doubt that woman was smuggling Guinness out of the store to give to her children. Although, it is rather nutritious.
As for the gubmint vs. protestors, they (the cops) pretty much get to do whatever they want. As we have seen recently.
My guess is he hates crooks and cheats, petty or grand. I think flogging and branding would be fine. But I also think public hangings would be good to back along with the electric chair. Years ago when there was less tolerance for crime there was less of it. Now you get all the BS liberal (re-branded to progressive) bleeding heart excuses for peoples’ crime. It shocked me reading the comments in the NYT about Rod Blagojevich’s sentence. So many posters thought the sentence was too harsh. During one of the Republican presidential debates ABC’s Brian Williams asked some question about capital punishment. Don’t recall the exact question. But typical of someone who: probably lives on the upper east side (a very safe neighborhood) probably has a company provided car to take him to and from work, problably makes much more than a $1M and and cane insulate himself and family from street crime. In other words typical limousine liberal.
“But I also think public hangings would be good to back along with the electric chair.”
Yikes. How about the “chair” for comments like these? How’s that grab ya?
“Years ago when there was less tolerance for crime there was less of it.”
Could we see the statistics/data on this assertion? Could it be that some things are now illegal that were not back in the “good old days”.
Years ago when there was less tolerance for crime there was less of it.
Where did you hear this popular but erroneous myth?
http://www.hrw.org/news/2009/04/09/prison-nation
Contrary to popular belief, the growing prison population has little or nothing to do with an increase in crime.
as of June 30, 2008, more than 2.3 million people were behind bars in this country — an increase of almost 20 percent just since 2000. This gives the United States an incarceration rate of 762 per 100,000 residents — the highest rate in the world, dwarfing those of other democracies like Great Britain (152 per 100,000), Canada (116), and Japan (63).
It wasn’t always like this. For much of the 20th century, the US incarceration rate remained fairly stable. It began to climb sharply in the late 1970s, as a result of policy changes like mandatory minimum sentencing and the widespread abolition of parole. In the 1980s and 1990s, the “war on drugs” and “three strikes” laws fueled further growth. More people were going to prison, and staying there for longer periods of time. By 2004, the incarcerated population was six times what it had been in 1972.
Contrary to popular belief, the growing prison population has little or nothing to do with an increase in crime. In fact, crime rates fell steadily between 1991 and 2006, eventually reaching levels not seen since the 1960s. Yet the incarceration rate increased by more than 50 percent in that same period. It’s clear, then, that political choice, not crime, has given the United States its massive prison and jail population.
I agree that the number of people locked up is ridiculous.
However, with more and more criminals locked up for longer times wouldn’t you expect the crime rate to go down ? The criminals are often repeat offenders and now they’re locked up.
Perhaps we’re not locking up the right people?
“Contrary to popular belief, the growing prison population has little or nothing to do with an increase in crime.”
Huh? Where is this “popular belief” that MORE people locked up results in MORE crime? Any half-wit (and presumably those who are smarter) would know that’s not true.
“In fact, crime rates fell steadily between 1991 and 2006, eventually reaching levels not seen since the 1960s. Yet the incarceration rate increased by more than 50 percent in that same period.”
More people in prison HAS INDEED led to less crime, at least according to FBI statistics.
“Where is this “popular belief” that MORE people locked up results in MORE crime?”
That’s not what is being averred. If you change laws to make things illegal and/or increase penalties for certain crimes, then the crime rate can go up to make it appear that there is more crime and prison rates can go up.
Interesting…. the law and order chain’em to the ground bizarro’s crawl out of the woodwork on this topic.
Wanna know what gives the bizzaro’s a change of heart? When they, their spouse, children, brother or sister is subjected to the heavy hand of the criminal justice system.
It’s coming for you bizarro’s. And your epiphany will follow soon after.
Deal….. Caning for thieves. Start at the top.
Outrage at petty theft while the country is being looted by monied interests and their collaborators in Congress seems ironic.
Exactly Blue.
+1000
WS get’s bailed out steals from the tax payer but the poor get cained. Brilliant
…as always.
Wow, the video is amazing. Quick!
You think that’s impressive? Someone I knew who worked retail long ago saw a woman get busted at their store; she was leaving with a _sewing_machine_ tucked between her legs!
Why buy a house today when you can buy later for 65% less?
Well cuz realtors would starve; you wouldn’t want that would ya?
Why not buy a house today with 0 down, default it and live rent free for 5 years at least?
I suspect any closings today will be well documented (no MERS) and you will get thrown out in 6 months.
I guess you have lost faith in Uncle Sam’s NAR-backed price support measures, then?
http://www.nytimes.com/2011/12/27/world/europe/greeks-reeling-from-health-care-cutbacks.html?_r=1
The austerity regimes imposed on Greece so banksters can get their money are starting to bite. Wait till those same brutal cutbacks hit what’s left of our social safety nets. The Free $hit Army will not react well.
It will be here (austerity) as surely as the sun will rise.
And it will all be to pay fractional reserve interest to the Red Shield Gang. The greatest scam the world has ever known. Well, maybe the second greatest as the “man in the sky” story would be first.
For anyone willing to seek the truth, do a search on the movie “Zeitgeist”. I would welcome a debate with the status quo supporters within our group.
“the Red Shield Gang. The greatest scam the world has ever known.”
I beg your pardon. “Scum” is spelled with a “u”, not an “a”.
“as surely as the sun will rise.”
But the sun doesn’t rise.
It will be here (austerity) as surely as the sun will rise.
I predict that Medicaid will be the first to go. I also think that it will be weaned away as opposed to vanishing overnight. Eligibility rules will become stricter and benefits will be cut back until it is declared as non functional and completely done away with.
I believe that Medicaid will go before foodstamps because the uninsured middle class has already demonstrated its willingness to tolerate no access to healthcare. The poor will join the middle class in “toughing it out”.
I don’t think it will be Medicaid in general that will go. Now, if you want to tell me that coverage for nursing home care will be eliminated from Medicaid, that is a distinct possibility.
Like I said, they will steadily strip away benefits while tightening eligibility. Eventually very few will qualify and even for them it will pay for next to nothing. When we get there it will be easy to kill off the remnant.
It’s all good, Obama’s gonna pay for her gas and mortgage:
http://www.youtube.com/watch?v=P36×8rTb3jI
http://www.youtube.com/watch?v=bavou_SEj1E
Ouch!
What’s a compassionate society to do?
YEs wait until the health care system collapses and we get a more virulent bird flue or a bioweopon or natural disaster. That will be funny. Wait until you get cancer but because the system has collapsed you can’t get the drugs you need even though you have insurance. That will teach them.
Didn’t you get the memo? Getting sick without health insurance is a character flaw
Not to mention a sure sign you are not chosen by god and therefore unworthy.
From Tickerguy: The Federal Reserve’s Covert Bailout of Europe
http://online.wsj.com/article/SB10001424052970204464404577118682763082876.html?mod=wsj_share_tweet
America’s central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.
The Fed is using what is termed a “temporary U.S. dollar liquidity swap arrangement” with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or “swaps” dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.
…
The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.
Actually, The Fed claimed it was not bailing Europe out in direct conversations with Senators at a closed-door meeting.
It’s convenient that Bernanke wasn’t under oath in recorded testimony when he made those comments isn’t it?
The reality of the so-called “bailout”, however, is small. We’re talking about $60 billion, more or less, which is tiny in the grand scheme of things.
This makes one wonder “why”? If it’s just year-end shenanigans, well then it is. But what if it’s a trial balloon — to see if Congress — or anyone else — calls Bernanke on it?
If so then we better pay attention eh?
The Fed is using what is termed a “capture the remaining wealth from this soon to be worthless piece of cotton and linen” with the European Central Bank (ECB).
Fixed it.
Wow.
Pax Federal Reserve.
Wow. Holy cow. So THIS was the end game.
“Surprisingly, its operation is largely unnoticed here.”
Has the Fed been openly publicizing its eurozone bailout? I’m surprised Rick Perry hasn’t openly accused them of collusion for this!
http://news.yahoo.com/china-wins-700-million-afghan-oil-gas-deal-165152900.html
How much money and blood did the US expend so China can exploit Afghanistan’s natural resources?
We spilled our blood so we could exploit the Afgannies.
Somebody alert the teleprompter in chief immediately.
He retired. Mission accomplished, don’t ya know.
It’s probably part of the deal so that the Chinese will continue bankrolling our deficits.
If China also takes over policing operations in Afghanistan, and if the new relationship reduces China’s natural resource demand from other sources, perhaps it’s all good, neh?
That’s what I was thinking. Let ‘em have that tar-baby.
Since the former Soviet Union and the U.S. have had plenty of Afghanistan involvement over the past three decades, it seems only fair that China should have a chance to join in the fun.
We’re saving Pakistan for them. But first, we’re poking that hornets nest.
Nothing like a country with 12th century attitudes and nukes right nest door to liven up your day!
So who will the fundamentalist Islamist hate more? The nominally Christian USA or the nominally atheist PRC?
So who will the fundamentalist Islamist hate more? The nominally Christian USA or the nominally atheist PRC?
Anyone who is different. The religion or lac of religion does not matter. They kill each other when we aren’t around. That’s the way fundamentalist states are. Ambitious people try to convince the population that htey are the true follower of God and then use that power to destroy rivals who they claim oppose God.
In that case I’m glad they are China’s neighbors and not ours. Now if we didn’t have to import oil from that part of the world to fuel the school bus sized vehicles we can’t seem to live without, they might even become a non issue for us.
i think China would eventually win in Afghanastan. They are willing to do things that we are not, like exterminating entire villages or regions.
It’s not like we’ve never done that. We’ve just been in “kinder, gentler” mode for a while. May not last forever.
Yeah, right. We have kinder and gentler killer drones -
Pay attention folks. The HBB is crawling with NAR PR thugs and paid hacks. You know who they are.
In the meantime…………
“FBI Charges Realtor Charged in $7 Million Mortgage Fraud Scheme”
http://www.fbi.gov/washingtondc/press-releases/2011/ashburn-realtor-charged-in-7-million-mortgage-fraud-scheme
Never trust a reaItor. EVER
“The HBB is crawling with NAR PR thugs and paid hacks. You know who they are.”
Not buying it.
The fact that someone has an opinion that differs from yours does not make them a paid hack.
PiC, feeding the trolls is counterproductive.
RAL has been here way too long to be considered a troll… An agitator, for sure, but not a troll.
I couldn’t care less if you “buy it”. And Bill calling someone a troll? lol. Aren’t you the same Bill that BJ told to piss off years ago?
“I couldn’t care less if you “buy it”.”
Glad we got that settled!
“Bill in LA” must be one of the Bill’s on the board. i hear the same voice. Just less bragging on the gains in emerging market mutual funds.
I was trying to find it online to offer a supporting link, but last night the local news did a story about a home in Camillus. It was taken over by the town for (if memory serves) about $38k in back taxes. It was then immediately autioned off for $2500. There are different areas of every town of course but city-data.com reports the mean prices in 2009 of detached houses as $103,437.
I don’t remember the winning bidder’s name being included in the news report. I also don’t think they mentioned how the general public can find out when these auctions are taking place.
So a $100k house for $2500. Hmmmmm….
Why buy a house today when you can buy later for 97.5% less?
Who is “you”? You’re ignoring a significant portion of CarrieAnn’s post.
The connected and few is who. Will these few find their way to the clink? Doubtful.
It’s a housing blog. Take your anti-union cause elsewhere.
???
Right, but wouldn’t part of closing be paying the back taxes in cash? So that’s more like a $40-$50k deal, right?
According to the post, the home was taken over by the town for the back taxes….meaning I assume that the town paid the tax bill before selling it for $2500.
The town paid the tax bill to itself? No. Not a chance.
I’m going with Muggy’s interpretation. Plus penalties and interest and maybe a few other violations.
When the city forecloses for back-taxes, doesn’t that wipe out their tax-lien?
Imagine if a bank foreclosured, and then still had a claim on the property after selling it to the next buyer. It makes no sense.
If a bank forecloses on a property, it will take whatever it can get for the foreclosed property as long as it covers their own balance sheet exposure and they can get any other lien holders to agree. So will a town.
The idea that the town actually sold it for that little is laughable. Yeah, some people may get a good deal by “knowing someone” but that price absurd unless the thing has burned to the ground and it is going to take a few $10K to clean up the lot for rebuilding. It is simply ridiculous. If anything that crooked was going on, someone would figure out a way to keep it out of the public records first.
That the town might have an accounting system that only allocates the amount over and above back taxes (and interest and penalties and fees) to the sale price is very believable. The people in the property tax office are responsible for collecting all taxes due. That is how they get to report their good results to the town manager/selectmen so they don’t get yelled at.
They have zero incentive to get anything over and above the back amount due to the town. All that money is going to either the mortgage holder or the former owner of the property. I’m surprised they got as much as $2500 over what was owed to them. The town won’t get to keep it.
“If a bank forecloses on a property, it will take whatever it can get for the foreclosed property as long as it covers their own balance sheet exposure and they can get any other lien holders to agree.”
If a bank forecloses on a property, any “other lien holders” do not have to agree; they are either maintained (if the lien is senior to the mortgage), or they are wiped out (if the lien is junior to the mortgage). The other interesting cases are IRS liens and property tax liens, both of which get different/special treatment.
What you are describing sounds more like a short-sale negotiation; that case, all lien-holders have to agree.
polly, am I missing something?
I don’t understand the question. The point is that a town doesn’t care about anyone else. Anyone else gets the leftovers. Mortgage holders sometimes care about the other mortgage holders even if they are subordinate, presumably because those other mortgage holders do have the right to at least slow things down. Once the town is doing things for tax purposes, I don’t think anyone else has the ability to interfere.
Whatever else is going on, it make no sense for the town to sell for less than its property tax lien unless the place is completely trashed. It also makes no sense for the town to sell for a heck of a lot more than the value of the property tax lien because it won’t get to keep any of that money. Sell it quick and screw over any other lien holders is just fine by the town.
Ah, re-reading what you wrote, I’m guessing that you meant:
“they can get any MORE SENIOR lien holders to agree.” Though generally a more senior lienholder will demand to be paid in full, since their lien survives the foreclosure by a more junior lien.
But I agree with your conclusion: the town does not get to keep the extra $2500 that was bid over-and-above the tax lien; those funds would go to the next-most-senior lienholder.
“Whatever else is going on, it make no sense for the town to sell for less than its property tax lien unless the place is completely trashed. It also makes no sense for the town to sell for a heck of a lot more than the value of the property tax lien because it won’t get to keep any of that money. Sell it quick and screw over any other lien holders is just fine by the town.”
Gotcha—I totally concur.
Ireland returns to its traditional export- its people.
Ireland faces new wave of emigration
BBCNews
Emigration is so widespread in County Galway that one of the Catholic cathedrals has started broadcasting its services live online, so Irish people can watch in Australia and the US.
Tuam Cathedral is not just showing live coverage of Sunday masses and Christmas services, but weddings and funerals too.
“It’s not just young people in their 20s who have had to emigrate, but also fathers who have had to go to England or other places to get work to support their families,” says Father Sean Cunningham.
It is estimated that 42,000 Irish people emigrated last year - almost 1% of the country’s population.
Probably the best 1%, too. The ones they can least afford to lose.
Maybe, maybe not. If they’re unemployed they might not be the best. We certainly don’t get Mexico’s best here in the USA.
Yes, we do. But it’s the MBA light bulb standard rule of 80/20. Twenty being the percentage of the arriving “best”.
And the bottom twenty being offenders in their own country.
haha interesting….
From MarketWatch: Living the good life — in Canada
Data shows our northern neighbor beats U.S. in life quality
“Canada will generate about $51,147 of gross domestic product on a per capita basis in 2011, compared with about $48,147 per capita in the United States.
By U.S. standards, income data, Canada, the land of no bank failures or housing debacles, is better off these days.
I would certainly argue, and plenty would disagree, that Canada’s quality of life has been higher than ours in the U.S. for some time. But that includes things such as public services, common courtesy, non-toxic politicians, and safer streets.”
Canada, Europe, Australia and New Zealand all seem to beat our “quality” of life.
But you have to live without Big Macs, bad music and 24/7 sports.
But you have to live without Big Macs, bad music and 24/7 sports.
You can get all that in those countries. You might not get the beloved NFL (along with Tim Tebow), MLB or the NBA, but they have other sports.
I know all about futball and karaoke.
We’ve got American exceptionalism all right… exceptional obesity, exceptional child poverty, exceptionally low rates of health insurance coverage, exceptionally high death penalty executions. What’s not to love?
exceptional obesity
Have you noticed that they are using morbidly obese people in TV ads? I saw a car commercial (it think it was Chevy or GMC) where Santa works at the car dealership. A fat black guy comes in to get his Christmas present. My first thought was: How sad to be fatter than Santa!
So we have come to accept that being young and tubby is “normal”. Another anecdote: I watched Miracle on 34th street the other day. The young janitor at Macy’s pokes fun at himself for being fat, as he claims he doesn’t need padding to play Santa. Yet by today’s standards he isn’t fat!
I noticed that, too. The kid was a little chubby-cheeked, but no one today would call him fat. What struck me was how apologetic he seemed about it– as though society was disappointed in him for his failings.
I grew up in a household that valued what was called “civic duty.” So did most of my friends. Whatever happened to that?
Was it a holdover of the the WW2 military influence (submission to authority and a strict enforcement of “conformity?”) Or were people just more socially interdependent back then before mass communications presented us with more options?
“‘So we have come to accept that being young and ‘tubby’ is normal.’”
Playing to the audience. If you need to sell products to a particular slice of humanity then you tailor your ads accordingly.
“Are you young and fat and unhappy? Take a good look at this guy, he’s young and fat and he’s VERY happy. Buy what he buys and you can be happy too.”
I’ve read average earnings in Canada also surpassed the US and EU over the past few years. I’d emigrate to Canada in a heartbeat.
You may get your chance …
http://www.calgaryherald.com/opinion/columnists/Simons+Americans+could+ease+Alberta+labour+shortage/5438370/story.html
My last housemate and another casual acquaintence escaped the horrid cold of Edmonton for the ‘Sunshine Coast.’ In general, I find the Canadians to be much more relaxed. Plus, they drive a good chunk of our economy, living in a border town. Probably half of the license plates at the mall on any given day are from BC.
Good luck trying to emigrate. The rest of the world isn’t as kind and easy as we are about moving in.
I suspect that per capita GDP stats alone do not define quality of life. I do like Canada for many reasons, but cost of living is not one of them. The level of personal debt in Canada is also pretty frightening, despite their supposed good behavior. The cost of housing makes our USA bubble look somewhat weak.
“per capita GDP stats alone do not define quality of life”
Agree. Not a contra-indicator, but not the whole picture either. According to the GDP, the most productive member of society is a terminal cancer patient who’s going through a lengthy divorce.
“But you have to live without Big Macs, bad music and 24/7 sports.”
You wish! There are McD and Hungry Jack (BK) joints all over the place in Oz. I think that it’s crazy to eat a Big Mac when you can have a steak and kidney pie, but hey. And the music is terrible and you’d better like cricket. My FIL knows EVERYTHING about the game and is not afraid to expound on that knowledge.
And there are lots of land whales in Perth. It seemed that there were even more than last year.
“But you have to live without Big Macs, bad music and 24/7 sports.”
They serve grilled cheese sandwiches at the Mickey D’s in Cranbrook, B.C.
Oh I know. Just a cliche and I know it.
Goon Squad
If it is truly better in Canada then why do all of us Canadians love visiting the USA? Often !
Florida, Vermont, Carolinas, California, Nevada, New York, Michigan etc, etc.
I even dream of purchasing a cottage in Florida next year.
I can never understand the excitement of being in NYC or LA - but it makes me feel good - and tired. Or walking along the Fort DeSoto beach in Florida.
Cuz its warmer in the winter?
Colorado
I love to ski as well. And another dream of mine is to do so at Vail.
But your right. Being able to lay on the beach for a two week winter break is a big deal for most Canadians.
Ireland is held up as how things will go for states practicing austerity. Well falling GNP and emigration and deflation are just the start.
I suggest you all check this article: Calgary - bright prospects of housing bubble?. We need deflation!
Get back to us once the current oil bubble collapses…
“The average house prices in Calgary grew from $176,305 in 2000 to $398,764 by year-end 2010 (an increase of 126 per cent) driven by immigration, population growth, and the vibrant oil and gas sector, says a report released by Re/Max.”
Note that average house prices are not being driven by an increasing average or median household income? Sounds like another credit bubble to me.
BTW, does Calgary get colder than 40-degrees-F in the winter?
Jane, awesome post on Rochester yesterday. I don’t even know what to say.
The only reason I keep bringing it up, is because I really enjoyed growing up there, and there were many things that I experienced, that I would like my children to experience. I understand that my love of Rochester, and my desire to return, is completely irrational. This is one of the reasons why Wilmington, DE is on my radar (it reminds me a lot of Rochester, but with a little more promise of a future).
I’ve lived in enough places to understand all of the nuances that make a place great, and Rochester is still far ahead of all the other places I’ve lived. Like sfrenter, or many others on this blog, I have strong preferences — Rochester is awesome, and in decline.
My friends and I used to hang out in abandoned buildings, smoke cigs, and bullshit about how we were going to start companies and save Rochester. Some of my friends have actually started businesses there, and built nice little, lives. It’s a “grass is greener” thing; they admire me for trying out NYC, Florida, Midwest, Deep South, etc., but I admire them for staying put, digging in, and making a go of it.
It’s no longer my realistic first choice (that would be Delaware), but it would be top three in a “win the lotto scenario.”
I felt the same thing about Fresno for years. But quality of life there has been declining for decades. The bright high school graduates go off to the University of California, Stanford, or Ivy colleges and never return to Fresno. It is a dead end, sad to say. UC Merced is a glimmer of hope to incubate high tech businesses in the valley, but that will take years. The most important thing California should do about the Valley is significantly improve the air quality there. It is almost toxic.
“The most important thing California should do about the Valley is significantly improve the air quality there. It is almost toxic.”
So…the government is the answer to this problem?
What, the free market won’t internalize environmental externalities without an economic driver? Whaaaaat???
That’s just crazy talk right there.
The free market and eliminating government is ALWAYS the right answer. In fact, I think we should eliminate those pesky traffic signals - just more government interference in the free market flow of vehicles….
I said California, not California government. Go to CATO.
Who is ‘California’, and why should I go to the Kochtopus for information?
Ditto, Jane. I spent my first year there when my father was in med school, and Madre still raves about the Corning Glass museum — though that’s about all she raves about. Thanks to your post, any remnant curiosity I had about the place has been assuaged. Well done!
How’s the degree coming along?
Ahansen, Sheesh, where are my manners? I bin reading and lurking between problem sets, and am delighted to see your increased presence!
The. MS. Is. Going. Slowly. Slogged through two courses out of nine so far. Then final project. It’s kicking my rear more than I had expected - and I’d Been Prepared Fer A Humblin’.
OTOH, am getting reimbursible grades, so there’s that. And I would never otherwise have learnt about how big stuff is designed and built. And how to tell if it’s done right. That is some powerful knowing, there.
I’m waiting - ever hopeful - for the EUREKA moment when the gears start synching up instead of grinding and jerking.
Thanks for your interest!
I REALLY apologize if this is a double post. Am on intercession. And after the back to back final and “team project” (aka become hostage to others’ schedules), I’m afraid I only have three brain cells left, and two of them are inhibitory.
Thanks for the query. I have bin reading and lurking between problem sets, and am delighted to see your increased presence!
The. MS. Is. Going. Slowly. Slogged through two courses out of nine so far. Then final project. It’s kicking my rear more than I had expected - and I’d prepared to Be Humbled.
OTOH, am getting reimbursible grades, so there’s that. And I would never otherwise have learnt about how big stuff is designed and built. And how to tell if it’s done right. That is some powerful knowing, there.
I’m waiting - ever hopeful - for the EUREKA moment when the gears start synching up instead of grinding and jerking.
Thanks for your interest!
Thanks, Muggy. I loved Rochester too. But you can’t fight the numbers. Up there, the old civic minded generations have lost control of the taxing and redistribution mechanism to the looters.
I just do not want to be in a place where my primary concern is my exit strategy. Yes, it’s EZ to buy a house, even at today’s inflated prices ($120K for a $70K place). BUT - how are you gonna get the h*ll out when you’re at one or two rungs above minimum wage?
I used to wander around downtown Rochester, taking B&W photos of the granite structures. Haunting in their deserted grandeur, even then. This was on Saturday afternoons.
Get rid of the fifth generation entitlement class and the illegal aliens, there to provide ‘optics’ for the bloated bureaucracy? I’m back. I’m praying that Medicaid crashes, burns, and that it becomes unprofitable to pop out them puppies.
“I used to wander around downtown Rochester, taking B&W photos of the granite structures. Haunting in their deserted grandeur, even then. This was on Saturday afternoons.”
Me too!
I have a massive collection from Roch, and some from Buffalo and Syracuse as well. That was one of my fav hobbies… me and my old Pentax K1000.
I haven’t scanned any of that stuff and for some reason, I don’t want to.
No Relief in Report on Housing
“But there were also signs that buyers were still nervous and lenders were being cautious about approving loans — the association said that a third of all contracts signed in November did not lead to closed sales.”
http://www.nytimes.com/2011/12/28/business/daily-stock-market-activity.html
Bachmann’s Iowa Campaign Chair Defects to Ron Paul Camp
Slate
Michele Bachmann’s Iowa campaign chair pulled something of a political shocker Wednesday evening, announcing that he was endorsing Ron Paul in the state’s first-in-the-nation nominating contest set for next week.
“Kent Sorenson personally told me he was offered a large sum of money to go to work for the Paul campaign,” Bachmann wrote. “Kent campaigned with us earlier this afternoon and went immediately afterward to a Ron Paul event and announced he is changing teams. Kent said to me yesterday that ‘everyone sells out in Iowa, why shouldn’t I,’ then he told me he would stay with our campaign. The Ron Paul campaign has to answer for its actions.”
http://slatest.slate.com/posts/2011/12/29/ken_sorenson_michele_bachman_campaign_chair_switches_support_to_ron_paul_in_iowa.html
Her bumbling, inarticulate spokes-robot was on C-SPAN’s Washington Journal spewing the warmongering, corporate kool-aid this morning.
Meanwhile, the NH Union Leader attacks RP…
Joseph W. McQuaid: Ron Paul is truly dangerous
“While his domestic libertarian views are quite attractive to some voters fed up with politics as usual, it is Paul’s position on issues of national security that are truly dangerous.
He has repeatedly said that U.S. aggression is responsible for 9-11 and other attacks on America from radical jihadists.
He has repeatedly said that we should allow Iran to continue to develop a nuclear weapon. This is from the same country whose leadership vows death to America, the “Satanic power,” and who wants Israel wiped from the map.
It is about time New Hampshire voters showed him the door.”
Think about it. Ron Paul is right. Our defense must return to the pre-Wilson theme of being defense. We cannot afford otherwise. More and more people are thinking about how much they paid in taxes over the years just for the world cop status. Particularly the now unemployed. They wish they had that money back now.
“world cop status” is also a “private security status”.
Lots of American capital is invested elsewhere. The implication for anyone who wants to simply nationalize this invested money so as to solve some of their own fiscal issues will be carefully thought over if he were to ponder the ramifications - such as an American battle fleet suddenly showing up off their shores.
There is some irony here: Those Amnericans who cannot get a jobs at home, because of jobs being shipped overseas, may get to join the military and help guard against confiscation by foreigners the very jobs that they might otherwise have had available to work for themselves.
It’s hard to believe the rest of the world doesn’t want corporate communist capitalism.
What’s wrong with them?!
Ron Paul supports OWS…
This is from the Weekly Standard no less!
“Republican presidential candidate Ron Paul praised the Occupy Wall Street movement, comparing it to the Tea Party movement. “In many ways, I identify with both groups,” Paul said. Both groups are fed up with problems in Washington and “the two-party-system,” Paul said while speaking at an insurance company in Des Moines.”
http://www.weeklystandard.com/blogs/ron-paul-praises-occupy-wall-street_614967.html
Yes there it is again, that reference to the two party system. This is one of the reasons Anarchist are getting behind Ron Paul. Just think of the havoc Paul could bring to Washington. Ripping out huge chunks of the system like HUD, DoE, Education, EPA etc. will totally wreck the existing system.
Occupy Ron Paul
http://www.youtube.com/watch?v=8Rv0Z5SNrF4&feature=player_embedded
Ancient Chinese curse:
“May you live in interesting times.”
Dec. 28, 2011, 3:53 p.m. EST
Look for 2012 to be the year of the dollar
Commentary: Currency wars favor the greenback
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) — At a meeting in London last month I listened with mild amusement as a senior sales executive discussed the rollout of a banking campaign to promote the rise of China’s renminbi as a global currency.
Advertising in the U.S. would make little sense, as Americans aren’t ready to believe in — much less prepare for — the inevitable day when the Chinese currency overtakes the U.S. dollar as a major reserve currency, ran the strategy, detailed by the executive with the requisite cultural dig.
It’s certainly just coincidence that the U.S. Dollar Index DXY +0.05% is up more than 4% since that meeting, while the China story line has degenerated into a series of ominous collapse scenarios for 2012, much like the Europe and emerging-markets stories.
Indeed, if the crises of the past several months have taught us anything, it’s that despite the allure of a new Asian currency champion, despite the potential for the European project to be saved, despite the weakness of the dollar and the gains in gold over the last decade, when large institutional investors truly get scared, they buy U.S. dollars.
…
Since underlying fundamentals for U.S. housing over the next few years clearly suck, it appears hedge funds are betting on their ability to capture unanticipated capital gains due to new housing market rescue programs which Uncle Sam will presumably announce in 2012.
This story points to the utter futility of federally-sponsored efforts to prop up the housing market, unless the objective is to funnel money to investors under the guise of programs to rescue homemoaners.
COMMERCIAL REAL ESTATE
DECEMBER 29, 2011
Big Funds Build Case for Housing
BY GREGORY ZUCKERMAN
Big money is starting to wager on housing.
Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.
Other investors seem to be making the same bet. Shares of home builders are up 30% since the end of the third quarter, as measured by the Dow Jones index tracking those shares, topping a nearly 10.5% gain for the Standard & Poor’s 500.
…
Weak job growth won’t cut it for a long-term U.S. housing recovery. I again submit that the hedge funds and real estate investors are betting on their abilities to capture the capital gains due to soon-to-be-announced new federal housing subsidies, only to dump their holdings before the next leg down. An actual long-term recovery in the housing market clearly is years away, but so long as you are sufficiently nimble to exit the burning theater first, who cares?
Dec. 29, 2011, 11:10 a.m. EST
Jobs in 2012: Growth, but recovery years away
“There’s some reason to be optimistic” about jobs in 2012, but don’t overdo it, says Wells Fargo senior economist Mark Vitner. “It will be a matter of years” before we see strong economic or job gains.
It took me all of twenty seconds on Google to find an MSM article with today’s date that supports my point.
Wouldn’t you just love to know how many “lawmakers” are among those investing in the hedge funds which are placing big bets on a near-term real estate recovery?
December 29, 2011 5:01 AM
Backtracking Lawmakers Expand U.S. Government Role in Mortgages
Dec. 29 (Bloomberg) — Washington lawmakers, who began 2011 with sweeping plans to shrink the U.S. government’s role in mortgage finance, are heading into 2012 after enacting policies that expand it.
An 11th-hour payroll tax cut extension signed into law last week would for the first time divert funds directly from Fannie Mae and Freddie Mac, the two mortgage-finance companies under U.S. conservatorship, to pay for general government expenses.
That move came after two others that also are expected to increase government involvement: Lawmakers allowed a tax break on private mortgage insurance to expire and raised loan limits for mortgages insured by the Federal Housing Administration. Advocates of private mortgage finance say they are concerned that using fees from Fannie Mae and Freddie Mac is setting a precedent that will keep the government in the mortgage business for a decade or more.
“The goal was, at the beginning of the year, how do we wind these down?” said Edward Pinto, a resident fellow at the American Enterprise Institute, a Washington-based research organization that favors limited government. “And at the end of the year we have further entrenched them and made it more difficult to wind them down, which is classic Washington.”
…
I’d give 1000 to know who was invested in Paulson’s Hedge Fund. My guess is you’d see a lot of familiar names.
So long as Uncle Sam stands ready and willing to continue funneling tax dollars into the zombie GSEs and the FHA, I see no reason why hedge funds and real estate investors shouldn’t be able to do “better than expected” in the face of dismal underlying U.S. housing market fundamentals.
And the great advantage for hedge funds and real estate investors is that once the housing recovery turns out “worse than expected,” they can easily dump their investments, once again leaving U.S. households which recently used federally-insured mortgages to purchase overpriced homes holding the bag.
The Wall Street Journal
AHEAD OF THE TAPE
DECEMBER 27, 2011
Cracked Foundation Threatens U.S. Housing Recovery
By DAVID REILLY
A house is only as good as its foundation.
The same is true of the housing market. Unfortunately, its foundation, the housing-finance system, still has big cracks in it. Until those are fixed, any hoped-for recovery may prove difficult to sustain.
Recent data, such as new-home starts and existing-home sales, have offered some glimmers of hope.
That isn’t to say housing won’t show signs of improvement. Recent data, such as new-home starts and existing-home sales, have offered some glimmers of hope. Tuesday’s release of the S&P/Case-Shiller index for October is likely to show further slippage of prices. But the rate of decline in the index, which tracks home prices in 20 metropolitan areas, is expected to continue slowing, to less than 3% year over year. That trend, some economists expect, presages prices finding a floor in 2012.
Meanwhile, mortgage rates hit a new low last week; Freddie Mac said the average for a 30-year fixed-rate loan was 3.91%. Such super-low rates and the resulting increased affordability of homes may spur more housing activity.
Still, the challenge of housing-finance overhaul remains a long-term headwind. As things now stand, housing finance remains almost completely dependent on government support via proxies like Fannie Mae and Freddie Mac.
That isn’t likely to change soon. Both Congress and the administration essentially punted in 2011 on hard decisions about the future of those firms and are likely to do so again in the coming presidential-election year.
[AOT]
Washington’s inaction is somewhat understandable, if disappointing. Any overhaul will force the government to decide if it wants a housing market where risk is taken by home buyers and private investors, or by the taxpayer. Any action also may threaten the existence of 30-year, fixed-rate mortgages with a prepay option and require a rethink of subsidies such as the deductibility for tax purposes of mortgage interest.
But the dithering isn’t only over big issues. Many small decisions about changes to housing-finance rules haven’t been finalized. Regulators, for example, have yet to give banks concrete guidance about how they will have to handle mortgages if they want to sell them to private investors.
Speaking at a conference earlier this month, J.P. Morgan Chase Chief Executive James Dimon lamented such a lack of progress saying it is “holding back the mortgage market.”
Continued delay means that any gains in housing may be built on shaky ground.
This is my belief, that once we reach a certan threshold of banks and hedgefunds of placing the consequences their bad bets on the US tax payer you will see a large leg down in stock market and housing.
It’s been an SOL year for gold mine investors…
The Wall Street Journal
MARKETS
DECEMBER 28, 2011
Gold Left Some Investors in the Dust
BY GREGORY ZUCKERMAN AND LIAM PLEVEN
Gold has been among the best investments in 2011.
Shares of gold miners? Among the worst.
Gold is up 12% this year but shares of gold miners have fallen almost 16%. Smaller gold miners are down almost 40%, based on the returns of leading exchange-traded funds tracking those stocks.
The surprising gulf has caused pain for some of the biggest names on Wall Street—including John Paulson, George Soros, David Einhorn, Seth Klarman and Thomas Kaplan—many of whom piled into gold shares over the past year, sometimes by shifting away from gold itself.
Bulls figured that gold miners had more upside …
A gold miner is someone who mines gold.
A gold mining company is a company that mines gold.
Is this article saying that gold miners are now issuing stock in themselves? Or have the rules of grammar arbitrarily changed again?
You mean the journalists failed English 101? That’s UNpossible!
And how are gold mining operations not making money with gold trading at such high numbers? If they can’t make money mining gold at $1600/troy oz, how did the make money when it only fetched $400?
If they can’t make money mining gold at $1600/troy oz, how did the make money when it only fetched $400?
Input costs were lower. What do you think is involved in the mining of gold? What materials are used?
Oil? Other metals and equipment that have gone up in cost due to the same inflation that’s driven gold prices higher, perhaps?
300% higher costs? I know inflation is higher than the Ministry of Truth’s cooked numbers, but 300%?
Miners also make big gambles. If the miners thought gold was going over $2,000 in a year or so, they may have invested heavily in exloiting less productive deposits. Those bets would look pretty bad right now.
“… they may have invested heavily in exploiting less productive deposits.”
Which brings to market gold that would not otherwise be brought to market.
More gold brought to market helps put pressure on prices.
And even though the price of gold may drop below production costs as long as it is cheaper to produce at a loss than it is to close the production facilities altogether the production facilities will remain open and production will continue on.
Also the term “hope” (which always springs eternal) needs to be added to the mix. And hope may end up being the most vital ingredient.
Most companies sell the future mined gold via gold futures (or in some cases, forwards.)
It’s a complicated market, and gold miners tend to be leveraged as well.
So there’s a valuation component coming from the underlying commodity but also what kinda futures they have already sold against future production, and what kinda leverage they have.
Also, you have to get down into fairly nitty-gritty details about individual mines, etc. since many of these are large conglomerates.
It’s not as easy as people are making it out to be.
A gold mining company is
a company that mines gold.a hole in teh ground with a liar at the top.
“…with a liar at the top.”
Walter E. Scott
From Wikipedia, the free encyclopedia
Death Valley Scotty
Born Walter E. Scott
September 20, 1872
Cynthiana, Kentucky
Died January 5, 1954
Death Valley, California
Resting place Scotty’s Castle grounds, Death Valley National Park
Walter Edward Perry Scott (September 20, 1872 – January 5, 1954, 81), also known as Death Valley Scotty, was a prospector, performer, and con man, who was made famous by his many scams involving gold mining and the iconic mansion in Death Valley, popularly known as Scotty’s Castle.
…
Scott unsuccessfully tried to start a gold mining operation. … he conned a wealthy New York businessman into backing a fictitious gold mining operation. For two years, he continuously informed his patron about the state of the mine, but he never shipped any ore. After his patron had invested more than $5000 in the mine, Scott boarded a train bound for New York with a bag supposedly containing more than $12,000 in gold dust. After he claimed that the bag had been stolen before he reached his destination, the newspapers eagerly picked up the story, starting Scott on a spree of self-promotion ventures. In 1904, he abandoned his previous patron in favor of Edward A. Shedd and Albert M. Johnson. They poured more than $4000 into his scam over a period of several months, before pulling out of the deal.
…
Throughout 1905 and 1906, Scott continued to attempt to con investors into backing his “mining” endeavors, and was largely successful, using many ruses to evade the investigators that his potential backers sent to check on the state of his mines. On March 11, 1906 a play about Scott opened in Seattle to a standing-room only, with Scott playing the leading role. When the play finished, Scott was arrested on assorted charges for his involvement in fooling investigators earlier that year. The charges were dismissed on a technicality, but the trial had made clear that Scott was a fraud. However, he refused to admit anything and somehow managed to keep Albert Johnson interested in his “mine”. Another investigator was sent, who reported back that the mine did not exist. Johnson refused to believe this, and the following year he visited the mine himself, but left without seeing the mine.
Around this time, Scott began fencing high-grade ore that he had stolen from mines in the area. As a front for his stolen-ore operation he leased a mine in the Humboldt Mountains. In 1912, he returned to Death Valley and announced that he had sold his mine for $12 million. After he made this claim, he was sued by his creditors for old debts, and ended up in jail.
…
I suppose gold investments come in handy when debt-ravaged sovereigns need to raise cash to provide a cushion of liquidity in a moment of crisis?
Gold Plunges 1.7% as Eurozone Worries Stress Investors
By Mike Obel | December 29, 2011 6:02 AM EST
Gold prices plunged 1.7 percent Thursday on a strengthening dollar, which was rising ahead of a crucial auction of Italian bonds and fresh worries about the health of Eurozone banks.
Rome must sell $11 billion in three- and 10-year bonds, and interest rates on the securities were rising ahead of the auction to more than the critical 7 percent level that signals a need for financial rescue.
“Ten-years have sold off ahead of the auction and this should help demand,” Alessandro Giansanti, a senior rates strategist at ING Groep NV in Amsterdam, told Bloomberg. But “the fact that the yield is still above 7 percent is an indication that the crisis is not solved for Italy.”
The possibility that the Eurozone sovereign debt crisis may be worsening were accentuated with news from the European Central Bank on Wednesday that lending to stressed Eurozone banks has boosted its balance sheets to more than $3.5 trillion.
…
The most striking aspect of the eurozone’s supposed “Lehman moment” is the apparent lack of impact from these developments on other parts of the global economy. For instance, it seems eurozone developments are barely noticed on this side of the pond.
By contrast, when the U.S. had its Fall 2008 “Lehman moment,” the global financial system suffered a heart attack and nearly died.
December 29, 2011, 10:18 AM ET
Gartman: Europe At Its Own ‘Lehman Moment’
By Steven Russolillo
The swooning euro represents the latest worry for investors ahead of the new year. Rumors of a euro zone sovereign nation getting downgraded and a disappointing Italian bond auction have been this week’s catalysts for the common currency dropping to its lowest level against the dollar since September 2010.
Famed investor Dennis Gartman, who publishes an eponymous investment newsletter, this morning lays out the dire situation plaguing Europe heading into 2012. The crutch of his argument is the European Central Bank’s ballooning balance sheet suggests banks aren’t willing to lend to anyone, which is never a good sign.
As we mentioned earlier, precious metals have taken the brunt of the selling. They sold off significantly yesterday and have continued trading lower today. For stocks, the Dow industrials dropped 140 points yesterday, the worst selloff in about two weeks. But Dow today has clawed back more than half of that decline and was recently up 78 points.
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Banks aren’t willing to lend to just anyone because the people who NEED to borrow NEED the money, and people who NEED money are not good credit risks.
People who ARE good credit risks are the people who DO NOT NEED to borrow. Banks would love to lend tho these people but they can’t because these people won’t borrow because, well, they don’t need the money.
“… precious metals have taken the brunt of the selling.”
That’s because people need money, people need cash. And since they can’t borrow money the have to get cash in some other way. This “some other way” is selling off what they own - in this case gold.
Now that the NAR has drastically revised downward its used home sales figures for the past several years, current home sales are looking pretty good by comparison!
R.A.L.
Dec. 29, 2011, 10:00 a.m. EST
Pending home sales jump 7.3% in November
By Jeffry Bartash
WASHINGTON (MarketWatch) - Pending home sales rose 7.3% in November to the highest level in 19 months, according to an industry trade group. The National Association of Realtors said its pending sales index rose to 100.1 in November from a revised 93.3 in October, and it’s now 5.9% above its year-ago level.
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The NAR doesn’t provide data in order to engage in dispassionate scientific discourse. They provide data in order to improve their bottom line. They are a sales organization, and as such, focused like lasers on cashflow and profit.
In this case, they provided flawed data in the past to make it look like there was no big drop in housing. Now, they’re providing data to make it look like there was a big drop and now there’s a big rebound!
Uh huh.
“Fool me once, shame on you. Fool me twice… fool don’t get fooled again.” Or something.
Goon,
I have no mortage just a couple credit cards. But have very very high credit so they tell me. If you have a couple cards keep asking them to increase your credit limit - maybe every six months or once a year. You don’t have to use it. Not having debt or mortgage does not keep you from a having high credit score.
Comment by goon squad
2011-12-29 10:30:38
Not a big deal dollar-wise but auto insurance companies use the hamster-wheel credit score to determine rates. Because I don’t have a mortgage (mix of types of credit used affects score) I get to pay higher insurance premiums on my vehicle that was paid off early four years ago.
America isn’t a country, it’s a game.
“America isn’t a country, it’s a game.”
And the best way to win the game is not to play.
The American Gamesters set up the rules and they will always win at the game because … well, they set up the rules - the rules are set up to be favorable to the Gamesters because it’s their game.
Sort of like Vegas: Go to Vegas and play their games and eventually you will turn over to them every dollar you own because this is the way the games are set up. You work to earn money and then you take the money to Vegas so as to leave it at the tables. What’s not to like?
That’s the Gamester’s game. The Bankster’s game, along with their buddies the Masters of Persuasion, is to persuade you to want something so badly that you will go deep into debt to get it and will spend years paying for whatever it is you wanted even if you no longer want it.
If American Gamesters can convince you to buy things that you desire (as opposed to things that you need) using money that you have not yet earned then they have you at a disadvantage when it comes time for you have to buy things that you need but do not have the money because the money you should have was previously spent on buying things that you desired.
Life’s not a lot of fun when the Gamsters have you at a disadvantage. The price of money - the interest rate - that you desperately need goes up if you are at a disadvantage. The things you need are not longer available to you when you are at a disadvantage. The wages you are willing to work for are low when you are at a disadvantage.
Simply, Debt is Slavery.
More oft chosen than not?
Except that debt is voluntary; slavery is not.
If paying a slight premium for car insurance is the price I need to pay for not having creadit cards (and crummy credit), then I guess I figure it’s a small price to pay.
Actually, slightly increased insurance is the only fallout I’ve seen so far from getting rid of my credit cards. And that only lasted twelve months before they adjusted back down.
I used to work in consumer lending so I know their game. Closed 3 TARP bank cards over the past 2 years and now have 1 credit union CC and 1 TARP bank CC, the latter kept only for length of time account open and perfect payment history.
Driving an almost 13 year old vehicle, my insurance rates are about as low as they can get. However, the auto insurance co specifically identified “lack of mortgage loan in credit file” as a factor in determining rates.
Haven’t bothered to shop around but likely will if I finance another vehicle in a few years…
Request for help -
Over the years I recall a quoatation regarding something about what a man knows and doesn’t know in relation to keeping his job.
Anyone recall this? I’ve been searching around the internet and can’t seem to find it.
Thanks.
a quoatation regarding something about what a man knows and doesn’t know in relation to keeping his job.
Upton Sinclair theorem:
It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
“It is difficult to get a man to understand something when his salary depends on his not understanding it.”
― Upton Sinclair
Don’t Risk Your Retirement in the Stock Market
Dec. 28, 2011
Many savers don’t realize the risk they’re taking in stocks, says Zvi Bodie, author of “Risk Less and Prosper” and finance professor at Boston University. Bodie tells Robert Powell that savers should focus on I-bonds and other low-risk investments.
So you found a house you really like huh? I see…..
You really like it alot huh? hmmm…
You’re thinking of offering $X huh? mmmkay.
Are you certain you can find a buyer for it tomorrow for the same price you’re paying today? Are you positive?
You can’t find a buyer tomorrow for the same price you’re paying today????
Then you’re overpaying.
Housing has never been a liquid asset. In other words, if you have to sell quickly (e.g. “tomorrow” in your example), you will likely have to sell at a discounted price.
About the only time it was nearly liquid was in the recent bubble—and I’m sure that we are in violent agreement that such a time is NOT the time to buy!
“violent agreement”
???
I saw The Girl With the Dragon Tattoo today. I guess that had some violent agreement in it, if that’s what you mean.
Prime,
Finding a buyer at the same price tomorrow and selling tomorrow isn’t quite the same but the point still holds for me.
Peace
‘In other words, if you have to sell quickly (e.g. “tomorrow” in your example), you will likely have to sell at a discounted price.’
Based on two past personal experiences, a home can be sold in the span of a week if appropriately priced. And it is far more pleasant to price a home to sell quickly if your mortgage is above water.
I submit that liquidity typically is a function of the seller’s net equity position.
Even if you could, there are those nasty transaction costs, often up to 10% for rehab, staging, and broker fees.
http://market-ticker.org/akcs-www?post=199823
A way to fix the fraudclosure mess: demand rule of law.
So gold is down to a 3 month low. Boo hoo hoo.
greek austerity (account from clinic - nytimesFiscal Crisis Takes Toll on Health of Greeks- 12/26)
They complain that bugs have been found in new syringes imported from China, sutures fall apart and generic drugs do not seem to do the job.
Aso, the deliberate complexity involved in enrolling for free/subsidized insurance is itself a method of reducing costs.
Click my name for the URL
By Jeremy Korzeniewski RSS feed
Posted Dec 27th 2011 3:59PM
12911
Comments166
First, let’s put some salient numbers on the table: 5.5 million versus 2.7 million and $67.14 per hour versus $33.77 per hour.
The first set of numbers belong to Germany, and represent the total number of vehicles built in 2010 and the average wage of an autoworker in that country. The second set of numbers are the equivalent figures from the United States. In other words, twice as many vehicles are built in Germany every year than in the U.S., and German autoworkers make double what their American counterparts earn.
Interestingly enough, all three major German automakers – the BMW, Daimler and Volkswagen groups – operate facilities in both their home market of Germany and in the U.S. And, just as intriguingly, the factory workers in the southern states of America who work for German automakers aren’t paid wages that even come close to matching those of their German counterparts.
Why the disparity? According to an article from Remappingdebate.org, it has to do with an ongoing “race to the bottom” when it comes to wages in the U.S. and a mutually beneficial working relationship between German automakers and IG Metall, the German equivalent to the United Auto Workers union in the States. In short, German automakers are paying Americans less because they can.
There’s an entire three-page article with commentary from industry insiders and other experts on the matter, and we suggest you read it for all the details on the great wage disparity that makes the U.S. a low-cost country for German automakers operating outside their home borders.
I have ended a three-month search for a violin to purchase. I am planning to upgrade from my adequate but low-end Russian-made special to something slightly better, and I have found the going quite tough. The instruments I have tried out have been priced between $8K and $32K, which sounds like an amazing bundle of money.
But considering that Stradivarius instruments typically sell for north of $1m these days, and other big name Italian makers’ instruments sell for north of $100K, the price range in which I am looking potentially represents a relative bargain. I decided tonight to buy a newly made (2011) instrument from a relatively unknown maker in Salt Lake City, rather than paying over twice the price for an older (pre-WWII) name-brand Italian instrument which doesn’t sound as good.
Part of the reason I decided against going for the high end stuff is that it occurred to me that I might be looking at the after-effects of the credit bubble implosion on the violin market. The dealers I have visited all seem to have plenty of high-end inventory, but one of them admitted at a point in our discussions that not many instruments have recently been selling for over $10K. I guess there are only so many banksters with ill-gotten bonuses who care to dabble in snapping up violins as collectibles.
Would love it if you’d link to a youtube performance once you’ve made friends with it….
And if you’ve not bought Yo-yo Ma’s “Goat Rodeo” album, do it.
How low can Treasury yields go before they reach a firm bottom?
Dec. 30, 2011, 1:12 a.m. EST
Bond mutual funds could defy gravity again in 2012
Looming debt sales, U.S. election to impact investor returns
By Rachel Koning Beals
CHICAGO (MarketWatch) — Market predictions are difficult in the best of times. Targeting bond fund prospects as Europe squirms to get out from under the weight of a debt crisis and the Federal Reserve waffles over additional economic stimulus is a formidable task.
Plus, 2012 is a U.S. election year, yet another speculative challenge for bond pickers.
Clearly, investors and fund managers are jittery and their wait-and-see stance looks to be mildly supportive for stretching the 2011 government bond rally into at least the early part of 2012.
“The economic toll for this uncertainty in Europe and the rest of the globe will become clearer over the next few quarters,” said Don Quigley, manager of Artio Total Return Bond Fund (BJBGX +0.07%) . “We see Europe moving into recession. U.S. Treasury rates should remain well behaved due to slow growth prospects.”
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Eat, drink and be merry today, for tomorrow we all will die.
FT dot com
December 29, 2011 7:40 pm
Now is the time to eat, drink and be merry
By Samuel Brittan
Have you had a good time this Christmas with plenty to eat and drink and expensive toys for the children? Do you look forward to similar festivities on New Year’s eve? Do you feel guilty about indulging yourself amid all the headlines about austerity? Well, don’t. Bear in mind the complaint of Alice: “Jam yesterday, jam tomorrow but never jam today.”
A single individual or family cannot, of course, be a substitute for a sensible economic policy; and you have no duty either to indulge or to save and scrimp for the sake of the national economy. But insofar as you are influenced by patriotic considerations, then do indulge. And if you feel guilty about indulging when other people are going without then use your surplus cash to help poor families to indulge as well. If you don’t know any such families, or cannot trust yourself to give without appearing condescending, then donate to a carefully chosen charity. In normal times a sound maxim is: “If you give a poor man a fish, it will help him for a day or two; if you give him a fishing rod you set him up for life.” But with the world hovering on the brink of a second recession or worse, there is something to be said for charities that actually dispense spending money fairly quickly.
This seemingly paradoxical argument was best stated by Bernard Mandeville, an early 18th century English physician of Dutch origin, in a parable entitled The Fable of the Bees in which he depicts the fate of a prosperous community in which all citizens take it into their heads to abandon luxurious living: