Bits Bucket for January 5, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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American spring! Go Ron Paul! He’s the only honest candidate, seems to me.
From Politico - EXCLUSIVE – PAUL RAISES $13 MILLION IN Q4:
“Ron Paul’s campaign raised $13 million in the last three months of the year. The impressive figure comes after he took in $8 million during the third quarter. The cash flow will allow the Texas congressman to compete through later primaries and caucuses. Because he has the most loyal donor base – the cause of liberty primarily motivates them, not access or perks – he should be able to continue raising substantial sums in the wake of his third-place finish in Tuesday’s Iowa caucuses.”
What are you, a commie or something? Why would we want to change the status-quo? Ron Paul is a kook anyway. Real money? Get out of here. Strict adherence to the Constitution? That’s like the posted speed limit, merely a suggestion. The leading minds of today have finally deciphered what the founding fathers’ meant when they wrote it. You can’t take the literal meaning of the actual words.
Romney 2012!
“You can’t take the literal meaning of the actual words.”
“Yellow cake… & um, coffee”
heheeheeeheeeheee
Obama needs another term to deliver the hope ‘n change he promised in ‘08. You know, how he was going to be such a change from Bush and all that….
I hate corporate media. Corporate media hates Ron Paul. Therefore I love Ron Paul
The enemy of my enemy and all that….
Hey SV,
Move to Montana!! -
Hey Robin,
I will (eventually).
honest, ell except for who wrote his newsletters.
Which, of course, he has had absolutely *nothing* to do with. Nope, he didn’t have the *slightest* influence over the content of those newsletters. They only had his name on them.
I am not as enthralled by Ron Paul as some people, but I see him as a possible agency for the beginning of change. Even if some of the ideas he has expressed in the past are repugnant, I would be satisfied if he started the process of destroying the power structure dominated by the republican and democrat parties. These parties have become so rotten and corrupted that they must be obliterated by any means. I can live with four years of Ron Paul if he initiates the process.
And I’m not so sure that I believe anything the news media says about him.
I think ther are legions of us that agree with you!
A very good summation of my view on the subject of Ron Paul.
As I told my b/f a few days ago, the most important thing the voters need to accomplish this year is to tell Washington (and Wall Street) that they have gone way too far and we are tired of their cr@p. Voting for him is probably one of the best ways to do it.
I am sincerely embarrassed by most of the republicans that are running running for president. If that is the best they can some up with, we are in some serious trouble. And this whole running on the religious platform really pisses me off. That needs to just stop. Period. I don’t think they would like it if a muslim candidate was doing it. LOL
I would not vote for Ron Paul, as I disagree with him on many (though not all) issues.
But I would LOVE for him to win the nomination because he is the only one who has the guts to speak truth to power - and a debate between RP and Obama would surely move things in a better direction. He is willing to say things most other politicians won’t even acknowledge.
So…you’re saying you want the Rs to fail, but you hope they’ll do it with RP? You’re just hoping he has some influence on Obama who you do intend to vote for?
I can see why Rs who want to win might tend to do the opposite of what people who don’t want them to win are hoping for.
“…he is the only one who has the guts to speak truth to power…”
For that reason, I would vote for him if he won the Republican nomination.
“None of us are perfect, but the republicans are crazy”.
Count was overcounted by 20..
State of Iowa didn’t run the caucus.
The republicans who want ALL electronic voting machines( easily hacked by all accounts) for general elections but not for their caucuses which they did HAND COUNTING.
Got to think there is something really ironic here.
You just convinced me. I’ll be caucusing for Santorum on February 7 instead.
He’s squirting up from behind!
That is not funny.
Well, one way or the other, the imagery of “that frothy mix of … that is the by-product of …” is epically funny!
He deserves every bit of scorn heaped on him.
One of the great lessons of all time is that satirists can be beheaded but you can’t quite silence the satire. It has great power.
Squirty, squirty, baby’s dirty!
It is funny. Very funny. I remember the columns when Savage was running the contest. He didn’t come up with it himself. He asked for suggestions from his readers. They were hysterical.
What it actually should be is irrelevant. Isn’t irrelevant, but should be.
The headline should have read:
Romney Squeezes Out Santorum.
Santorum doesn’t squirt, it seeps.
Once Rick Santorum is elected President I hope he brings back John Ashcroft as Attorney General.
Another fundy turd teed up for the swirly twirl. Watch (un)Sanitorum get the royal flush.
Attorney General?
He will put Ashcroft on the Supreme Court to weight out moral justice!
Which, of course, he has had absolutely *nothing* to do with. Nope, he didn’t have the *slightest* influence over the content of those newsletters. They only had his name on them.
I’m a RP fan, as you may have noticed, but his handling of the newsletter issue does not sit well with me. If something is going out under you’re name, you damned sure better be A-OK with it or else spike it - but either way, you are accountable. I do not believe RP or has ever been a racist, but I hold him 100% responsible and accountable for newsletter content that was going out in his name.
Ron Paul is perhaps the only Republican at the national level in the U.S. anyone under 55 should vote for.
He’ll take Medicare away from everyone, instead of enriching it for those 55 and over and eliminating it for those 54 and younger who would pay for those coming before.
At the state level you can’t vote for Democrats, either. Most NY public employees were promised a retirement at 62 after 30 years of work when they were hired, without an inflation adjustment. But Generation Greed cut deals with itself to cut it to 57 or 55 after 25 years of work.
Now, in addition to tax increases and service cuts, out Governor proposed new hires will have to pay more into the pensions (a cash pay cut) and retire at 65, later than Generation Greed was promised to begin with. But there can be no changes for existing workers and retirees — not to their wages, not to their health benefits, not to their contributions. That would be unfair.
But Generation Greed cut deals with itself to cut it to 57 or 55 after 25 years of work ??
So a whole generation of people are to blame for the NY union deals that were cut….Got it…Thanks…
Those union deals are but one example of the same trend.
He’ll take Medicare away from everyone? That’s a very bad idea. It’s been relentlessly documented that Medicare is much more efficient than private insurance.
Yours Truly got yet another rate increase notice* from the health “insurance” company. (I put that word in quotes deliberately, BTW.)
I’m not taking it lying down. Am about to send a Rate Hike Rejection Notice to the company. Which I will copy some of my elected representatives in on. I’m also going to be seeking some media publicity.
So, stay tuned. Arizona Slim is about to become a major thorn in the side of the insurance industry.
*This is the second rate increase in less than a year. And I’m not buying their higher health care costs argument. They’re being sued bigtime in California, and I think they’re finding that legal action to be rather expensive.
Why do you hate our free market capitalist system?
Let Freedom Ring!
another rate increase notice* from the health “insurance” company. …I’m not taking it lying down
Good for you taking that action and good luck. The rates up there are obscene. I feel bad telling these numbers but if it pisses more people off about US prices reading it, good.
Late 40’s male, monthly health Plus dental/mental/Acupuncture/homeopathic no deductible/low co-pay insurance I’m looking at the bill. $R 240.52 a month due Jan 13, 2012. That’s $130 US dollars a month. (dollar got a bit stronger lately) This is 1st world health/dental insurance. (mid-tier private USA type care.) This is in expensive Rio where overhead and medical equipment cost more than most US cities.
$130 a month private medical/dental insurance with an option of a “socialist” “free” urgent-care clinic up the street. If I dumped the private insurance and got really sick, the free clinic or public hospitals would take me for free. Clinic gets a B plus grade with the hospitals a C plus on trauma/urgent and a D on chronic stuff but you will get care.
And you guys live in the “exceptional” 1st world country?
Slim,
The one time I was facing having to buy private insurance, I realized that because I was a student (sometimes for as little as one or two credits per semester) I qualified for the student health plan. One of my friends considered (didn’t do it eventually) starting an MBA part time as the tuition plus health insurance was the same cost as private health insurance alone. You should check out what is required to get on the student health insurance for local schools and see if you can get a better overall rate by taking a class every once in a while toward an unneeded masters degree.
There are other options for group insurance. Can you get access to a group plan through an alumni group? Is there a professional association for photographers or web developers or small businesses that sponsors a group plan? I’d even check out the American Association of University Women. I’d recommend The Freelancer’s Union, but I think they only have health insurance in New York State. You should probably google them anyway.
Our company health plan rates went way up this year, too.
Acupuncture/homeopathic
Wow, quackery coverage. I’m impressed.
Under terms of the Affordable Care Act that go into effect this year, you might be due for a refund if those increased premiums aren’t going into care.
“If you are covered by an individual or small group policy, your insurer must spend 80 percent of the premiums it collects on medical care or activities that improve the quality of care. For those covered by large group policies, insurers must spend an even higher amount — 85 percent. Beginning in 2012, insurers who fail to meet this “medical loss ratio” must provide policyholders with a rebate instead of pocketing those excessive premiums.”
another rate increase notice* from the health “insurance” company. …I’m not taking it lying down
Slim,
Are you running for any public office? Let me know, I’ll donate to your campaign.
What is the official cutoff age for Generation Greed ? At what age do you officially qualify for membership in the Holy Generation ?
Not holy. Screwed.
Let’s see what the cutoff is for drastically higher and drastically lower senior benefits before determining the year.
There is no age of “generation greed.” It’s not “generation.” It’s about pushing for altruism and acting impoverished, only to grab what the suckers will give you out of guilt. Those are the more numerous greedy ones. But they don’t do as much damage as the few grifters such as Madoff
Ron Paul, yes, yes, the only “common sense” candidate! A former democrat who has seen enough of our corrupt system.
Glad the sensible HBBers are coming around. No peep from Oxide, Measton, Ecofeco, Excreter, Grizzly, Bubble-whatisname, no confirmation from Polly that she will vote for anyone other than a nanny stater.
Par for the course.
Like I have said before, I will continue contributing to Ron Paul for Pres, but change my registration to Libertarian Party and also contribute to Gary Johnson for Pres.
The point is to help deliver the message: Government is way too big and must be severely cut.
http://www.garyjohnson2012.com/issues/civil-liberties
If the Establishment GOP shuts out Ron Paul, I’ll go Libertarian as well (though I have some fundamental disagreements with some of their platform) so I can vote for Gary Johnson. My personal middle finger to the Republicrat duopoly.
ReaItors are what?
Below average height and above average weight?
Cretinous w@nkers?
Cretinous is a lovely word.
Not quite as much fun as defenestration, but easier to use in every day speech or writing.
Parasites? Maggots? Vultures? Flesh-eating zombies?
Kiss my LEASE loosers!
Desperate? Starving? Hoping? Wondering what went wrong?
Wondering what will happen next, wondering what they will do next?
It, it, it wasn’t supposed to turn out this way!
(But they’ll hang in there because it’ll all come back, you’ll see.)
Love the NAR; The NAR keeps hope alive.
The Fed keeps hope alive.
U.S. NEWS
JANUARY 5, 2012
Fed Urges Action on Housing
Bank Warns Congress That Tight Lending Standards Threaten Wider Economy
BY NICK TIMIRAOS AND ALAN ZIBEL
The Federal Reserve, in an unusual foray into housing policy, expressed alarm over the battered home market and called for more aggressive action from Congress and other policy makers.
Housing policy is outside the traditional purview of the central bank, but Fed Chairman Ben Bernanke and others are clearly worried that housing has stymied the effect of the bank’s low-interest-rate policies.
In a 26-page paper sent to top lawmakers on congressional banking committees, the Fed warned that tight mortgage- lending standards threaten to hold back the economy.
…
Love the Fed.
http://www.thefreemanonline.org/wp-content/uploads/2011/07/Helicopter-Ben.jpg
In a 26-page paper sent to top lawmakers on congressional banking committees, the Fed warned that tight mortgage- lending standards threaten to hold back the economy.
Does this mean that EZ and NINJA Loans are coming back?
Not only that, but it sounds like they are suggesting that Fannie and Freddie step up to support looser (or is it loser?
) lending standards.
Just one more hit of crack—that’s all I need on the way to rehab…
Yes, I actually know a guy who convinced his so-called friends who were driving him to rehab that this was a good idea. OMG.
“Just one more hit of crack—that’s all I need on the way to rehab…”
Isn’t it amazing how the hair-of-the-dog meme never ages?
In a downward income spiral?
Some of them may actually become underwater on their rental properties and be foreclosed upon.
Oh, the horror!!
$ignature pimp$ for x2 income$
http://www.bloomberg.com/news/2012-01-05/china-to-start-u-s-channel-as-state-media-takes-culture-abroad.html
Looks like America is getting yet another propanda TV channel.
Since the corporations seem to think that sending our jobs to China is somehow good for the nation, it only makes sense.
I heard China was cracking down on Western shows on their tv stations. something about “corrupting influence”
China runs a great propaganda show on shortwave radio.
Sammy, what’s wrong with being “pro-panda”? They’re just cute, defenseless animals caught in the middle of the struggle between the US and China. (Sorry, I couldn’t resist having fun with your typo).
From the Globe and Mail - TD predicts trouble for B.C. real estate, Toronto condos:
“British Columbia and Ontario could both face some real estate troubles over the next two years, though economists don’t foresee a bust in Canada’s housing market.
British Columbia is forecast to have it worse, said senior economist Jacques Marcil, and will likely see “a signifcant correction” this year. Indeed, he said in a report today, the Vancouver market likely peaked last year.
The report, which examined the country’s provincial economies, projects home resales in British Columbia will sink 3.7 per cent this year, while prices decline 3.5 per cent.
“The correction will extend into 2013, as unit resales fall a further 5 per cent while prices slip 4.4 per cent,” he said.
Just today, the Real Estate Board of Greater Vancouver reported that sales last year rose 5.9 per cent from 2010, though were 9.2 per cent below 2009 levels. The market is slowing. Sales in December alone were down12.7 per cent from the same month a year earlier. Prices were up by 7.6 per cent, though were down 1.5 per cent from their peak in June of last year.”
In a market where 70% of the price is based on assured appreciation (in other words a bubble) doesn’t the end of appreciation itself trigger the death spiral?
I think most loans are variable interest as well.
I think most loans are fixed for three years, then you renegotiate. Interest rates are still low.
Yes. At least that’s what happened here. This is their “July 2005″, when the market pivoted and began its downward course. Suddenly, any given property on the market was NOT “snapped up”, which indicates the beginning of the end. But we all know the rest of the story, don’t we?
http://www.reuters.com/article/2012/01/05/us-usa-fed-housing-idUSTRE8031SE20120105
The Federal Reserve wants to expand the role of Fannie & Freddie (let’s get more deadbeats into homes they can’t afford, while transferring the massive mortgage liabilities of the Fed’s Primary Dealers onto the public books).
Bailout concerns mounting for federal housing agency
By Les Christie @CNNMoney January 3, 2012: 4:48 PM ET
NEW YORK (CNNMoney) — Concerns are growing that the Federal Housing Administration will need to be bailed out by taxpayers.
The agency’s latest monthly outlook report revealed a spike in serious delinquencies for FHA-insured loans, posing a further threat to the agency’s already depleted cash reserves.
“It’s highly likely that the FHA will need a taxpayer bailout over the next three to five years,” said Joseph Gyourko, a real estate professor at the University of Pennsylvania’s Wharton School and author of a report entitled “Is FHA the Next Big Housing Bailout?.”
0:00 / 03:12 How Fannie Mae spruces up foreclosures
In early December, the House Financial Services Committee grilled Shaun Donovan, the Secretary of the U.S. Department of Housing Urban Development, over the possibility of a bailout. Donovan blamed FHA’s financial woes on loans made before 2009 and said that loans issued in recent years were experiencing a “dramatic decline in the rate of early payment default.” As a result of these healthier loans, he said the reserve fund would be able to return to the required 2% level in 2014.
Yet, Wharton’s Gyourko argues that the FHA has underestimated the risk of these more recent loans. Many of the new serious delinquencies were from loans issued in 2009 and 2010 and he projects there will be many more defaults to come.
Foreclosure free ride: 3 years, no payments
One reason is that many of the borrowers who took out FHA-backed mortgages during this time relied on the First-Time Homebuyer Tax Credit for down payments. A large percentage of these borrowers didn’t have enough cash for the small 3.5% down payment that FHA requires, let alone the money to make their ongoing mortgage payments, he said.
The FHA said that the vast majority of home buyers who claimed the tax credit used their own cash for down payments or borrowed from relatives and are therefore low risk.
http://money.cnn.com/2011/12/30/real_estate/federal_housing_bailout/index.htm - 68k -
As the Obama and McCain voters lower their heads and get back to their grazing.
eyes sense “a bridge to nowhere”:
contentment:
satisfaction, peace, content, ease, pleasure, COMFORT, happiness, fulfilment, gratification, serenity, equanimity, gladness, repletion, contentedness.
Antonyms:
discomfort, discontent, dissatisfaction, unhappiness, displeasure, uneasiness, discontentment
Quotations
“Poor and content is rich and rich enough” [William Shakespeare Othello]
“The FHA said that the vast majority of home buyers who claimed the tax credit used their own cash for down payments or borrowed from relatives and are therefore low risk.”
“… borrowed from relatives and are therefore low risk.”
These people display no restraint whatsoever on what they say.
Those who borrow are wealthier than those who do not.
3.5% downpayment is not low risk, regardless of whether it came from savings or relatives.
Concerns are growing that the Federal Housing Administration will need to be bailed out by taxpayers.
No one could have seen it coming.
Peppermint Patti: “Hey Chuck, special delivery just for you Chuck.”
Charlie Brown: “What?, a “special delivery” just for me, who’s it from Patti?”
Peppermint Patti: “Hwy50ina49Dodge”
Lucy: “Oh, that blockhead…”
Snoopy: [gives Lucy a big wet lick]
Think About Baseball? Michigan Kicker Brendan Gibbons Scores By Thinking About Brunettes:
Wednesday, January 4, 2012 12:09 pm / Written by: Karie Meltzer
Blondes might have more fun, but brunettes get all the glory. At least they do now in Ann Arbor.
In Tuesday night’s Sugar Bowl, Michigan kicker Brendan Gibbons delivered the winning kick in overtime to defeat Virginia Tech, 23-20. His clutch 37-yard field goal followed a 37-yard miss by the Hokies — who are known for great special teams play. Gibbons’ boot was a huge moment for Michigan fans, who have watched Wolverine kickers fail in big pressure situations for years.
So what made the difference in this critical moment? Well, let Gibbons explain:
“Every time we were struggling in kicking,” Gibbons told the media, “coach always tells me to think about girls on a beach or brunette girls. So that’s what we did.”
Coach Brady Hoke clearly did a great job helping his kicker win one for the team and helping oft-overlooked women get some love. So ladies, next time you reach for the bleach (and gentlemen, the next time you find yourself pursuing a golden-haired beauty) you might want to stop and ask yourself a question:
“What can brown do for you?”
You can follow Karie Meltzer, who has golden brown hair, on Twitter @karianna913
I am one step closer to intellectual bankruptcy for having read that.
Brain Bleach for Blonde’s, today’s special: .99 cents, comes with official NCAA logo!
“Every time we were struggling in kicking,” Gibbons told the media, “coach always tells me to think about girls on a beach or brunette girls.
It makes sense. Sometimes when I’m around a bunch of brunette Brazilian girls on the beach I have to think about place kicking.
LOL…
We feel your pain Rio.
BTW, Rio, I particularly _liked_ reason #12 on your list…
It made me want to visit…
That poor kid from Stanford could have used this advice.
From CNNMoney - Americans make up half of the world’s richest 1%:
NEW YORK (CNNMoney) — The United States holds a disproportionate amount of the world’s rich people.
It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That’s for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.)
So where do these lucky rich people live? As of 2005 — the most recent data available — about half of them, or 29 million lived in the United States, according to calculations by World Bank economist Branko Milanovic in his book The Haves and the Have-Nots.
Another four million live in Germany. The rest are mainly scattered throughout Europe, Latin America and a few Asian countries. Statistically speaking, none live in Africa, China or India despite those being some of the most populous areas of the world.
That’s great news. I just knew I was special. Go 1%, go 1%!
Let freedom ring.
That’s a feel good story for the upper middle class so they don’t feel they’re in the target zone.
Remember that I’m the age where most of our friends are at the peak of their career curve. Almost everyone we know makes this much or more. They’re comfortable but hardly rich. Heck some of my 2 income family friends cracked $100k twenty years ago working in the trade show industry/marketing. They lived in a very modest home and I remember they breathed a sigh of relief that they got it. My roommate in MA was making over $80k in the early 90s when she was in her late 20s. She married someone even smarter/more succesful than her. Again, when I go to their home I don’t think rich. It’s very much a middle class look. She drives a minivan. Their kids education is where you’ll notice their success. These were Boston area paychecks.
Thoreau said that it’s not what you make, it’s what you spend.
Thoreau said that it’s not what you make, it’s what you spend.
And Thoreau didn’t spread his genetics far and wide.
A man is rich in proportion to the number of things he can afford to let alone.
H D Thoreau
Statistically speaking
Ha!
Bill Russel [Celtic]: “Alls eyes knows about statistics is what my father taught me: “He knew a 6′ 7″ man found drowned in 4″ of gutter water”
“Alls eyes knows
is this supposed to be ebonics?
Uncle Remus
Isn’t it funny how the Disney Company still won’t sell “Song of the South” videos in the USA, allegedly because the movie is racist, yet they have Song of the South themed rides (Splash Mountain) at both Disneyland and the Magic Kingdom.
Does Disney sell Uncle Jemima’s Pure Mash Liquor?
According to this, I’ve become “rich” by losing my wife and having my children move out of the house.
We are the 1%!
From CNNMoney - Americans live in the most expensive nation in the world with the least amount of holidays and vacation time:
There. Fixed it.
Why do you hate our freedoms?
‘Cause it hurts to sit these days?
“Americans live in the most expensive nation in the world”
Not even close. Go to Singapore or Australia, or many parts of Europe.
The New American Dream: Rent, Don’t Buy
By STEVE YODER, The Fiscal Times
January 4, 2012
Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home. The effective homeownership rate, which excludes borrowers whose homes are underwater, stands at 62 percent, down from 69 percent in 2006, according to a 2010 report by the New York Federal Reserve.
Slideshow: 12 Markets Where It’s Better to Rent
As more people move from owning to renting, apartment vacancy rates have fallen fast, from 8 percent in 2009 to 5.6 percent in third quarter 2011. That’s pushed up rents in all markets by 2.5 percent, including apartments and single-family homes, to an average of $846 nationwide, according to Local Market Monitor, a home price forecaster. For a two-bedroom dwelling, the average rent was at $1,020 in June 2011.
Those trends are just the beginning, concludes a July report from investment bank Morgan Stanley: the United States is becoming a nation of renters and home ownership will keep falling. And that, say some experts, could be good for the country.
This dramatic change, triggered by the 2008 housing collapse, has shifted people’s views of home ownership. The number of those who consider a home a safe investment fell from 83 percent in 2003 to 66 percent this year, according to a survey by Fannie Mae and two other organizations. In another poll last April, commissioned by real estate data firms RealtyTrac and Trulia, 40 percent of renters questioned said they plan never to buy a home. Another reason—many baby boom retirees don’t want the burden of home repairs, rising property taxes and other responsibilities.
http://www.thefiscaltimes.com/Articles/2012/01/04/The-New-American-Dream-Rent-Dont-Buy.aspx - 149k -
“… the United States is becoming a nation of renters and home ownership will keep falling. And that, say some experts, could be good for the country.”
Words.
Not all that long ago we sheeple were fed a bunch words that said mass home ownership was considered good for the country.
“The number of those who consider a home a safe investment fell from 83 percent in 2003 to 66 percent this year, according to a survey by Fannie Mae and two other organizations.”
Gradual progress is underway!
home a safe investment ??
And there-in lies the problem…The concept that your home is an investment in that it will provide some future gains in dollars is the flaw in the thinking…
Here at the Arizona Slim Ranch, I think of my spread as a place to live. Nothing more. Nothing less. The notion of investment is far, far away from h’yar.
I do think of my home as a place to live AND and investment in this sense. It’s paid for and I’ve lived in it almost 4 years now rent-free and I will continue to do so for as long as I chose to therefore I’ve invested in a place to live “rent-free”. If and when I sell, I will probably at least get my money back (I hope) therefore all the “free” rent I’ve saved was a good investment.
So in that sense, even with a mortgage, is not a home a type of investment too?
No, it’s a savings account.
An investment is something that generates positive cash-flow.
Imputed rent is only “investment” in the minds of the deluded. (Our current and past Fed Chairmen have made that mistake so it seems to be pretty endemic!)
Oh, and before anyone goes full-ret@rd on me, our current tax-policy (unfairly) taxes dividends over capital gains.
As long as you fully understand that “retained earnings” are a form of income (only taxed less and fully reflected in the share price) then the above definition of “investment” is basically the same that Graham & Dodd would understand.
It still has to generate positive free cash-flow. Economic rent if you want to get all 19th-century about it.
People should think of housing as an investment*, and with any investment you need to evaluate it. Run the numbers. It’s only now that houses might be crappy investments that we’re supposed to think of them as shelter only.
PS FPSS, imputed rent should be the primary consideration when evaluating a primary-residence housing investment. After all, what is the material difference between generating cash flow and offsetting an expense (such as rent?) The potential for capital gains should be secondary, and a recent history of strong capital gains should be a red flag unless explained by local factors.
* Houses are quite similar to bonds. They have a coupon (imputed rent), a terminal face value (whatever you sell the place for) and are inversely interest rate sensitive.
If the imputed rent is not cheaper than the actual economic rent (after taxes, maintenance, depreciation, etc.) then there’s absolutely no free cash-flow.
I stand by my statement about investment.
I don’t care about the capital gains.
“effective homeownership…..excludes borrowers whose homes are underwater”
Interesting concept; you don’t actually own anything until you pay for it. Borrowers are renters…this is going to take a while to sink in.
Along the same lines, I suppose that a bank which owes more than it has assets is not a bank.
“…a bank which owes more than it has assets is…”
bankrupt.
“a bank which owes more than it has assets is not a bank”
Ever since the onset of fractional reserve lending, isn’t that the definition of a bank?
Interesting concept; you don’t actually own anything until you pay for it. Borrowers are renters…this is going to take a while to sink in.
Ooooooo, I missed that on the first glance; thanks for pointing it out, Blue!
Yeah, that’s a very interesting way to define the ownership rate. My guess is that most of the sheeple will not understand the concept. They’re homemoaners after all!
“Don’t dream it
Ra-ent it
Don’t dream it
Ra-ent it”
(apologies to Rocky Horror)
The New American Dream: Rent, Don’t Buy
Just as predicted on HBB: we are getting closer to the point where the “conventional wisdom” is don’t buy a house.
Does that mean it’s time for me to buy??
Slideshow: 12 Markets Where It’s Better to Rent
Oddly, neither NYC nor San Fran were on that list (as they always are). Maybe they left those cities off the list because its obvious that home prices in those places are still nutty….I dunno.
Filed under: mud-turtle-tail-wag
A deep-pocketed restaurateur shelled out nearly $750,000 for a tuna at Japan’s Tsukiji fish market on Thursday, smashing the record price for a single bluefin.
The 269-kilogramme (592-pound) fish — caught off the coast of Japan’s northern Aomori prefecture — stood at an eye-popping 56.49 million yen ($736,500) when the hammer came down in the first auction of the year.
Single tuna fetches record $736k at Japan auction:
AFP – 2 hrs 9 mins ago
Japan consumes three-quarters of the global catch of bluefin, a highly prized sushi ingredient known in Japan as “kuro maguro” (black tuna) and dubbed by sushi connoisseurs the “black diamond” because of its scarcity.
“You know, good things like this are appreciated in the whole world,” said 22-year-old male customer Hirotaka Higurashi when asked about the overfishing issue. “There is nothing we can do about it.”
Decades of overfishing have seen global tuna stocks crash, leading some Western nations to call for a ban on catching endangered Atlantic bluefin tuna.
Thursday’s winning bidder was Kiyoshi Kimura, president of the company that runs the popular Sushi-Zanmai chain.
At around 210,000 yen per kilogramme, a single slice of sushi could cost as much as 5,000 yen, but the firm plans to sell it at a more regular price of up to 418 yen, local media reported.
Absolute madness. Denial, in its most egregious, self-centered and greedy form.
And this is in a nation that has been in recession for what, 20 years? Where college grads work at convenience stores?
So they could sell it for $65 a slice, but will sell it for about $5.45 a slice.
Why?
+1
First thought that popped into my head when I read that!
There’s something missing like “premium parts” going to the top-end restaurants v/s “regular parts” which are headed for the retail market.
Typical journalism! No sense of logic or math to ask the most obvious followup questions.
Publicity.
His company just got a mention on a housing bubble blog.
His Google score must be astronomical by now.
Little known fact: Most of the oceans ARE overfished. Most of our fish now comes from fish farms. Most species in the wild will be extinct by 2050 if current harvesting level continue.
That’s only 40 years from now.
Environmentalist wacko crazy talk. Again, why do you hate our freedoms?
Soylent Green and Brawndo. It’s what future generations crave!
And if typical human behavior prevails, the current level of harvesting WILL continue until most wild fish species are extinct.
Over the previous thirty years advances in digital sonar technology and strong synthetic fibers, which allow for “miles-long” nets and deep long-line fishing have benefited the commercial fishing business in much the same manner as the database has enabled Walmart’s meteoric rise.
You people seem to be completely ignorant about the existence of fisheries management to protect wild stocks. Don’t take the environmental wackos’ word for it — educate yourselves before reciting their litany of environmental catastrophe!
“Most of the oceans ARE overfished. Most of our fish now comes from fish farms. Most species in the wild will be extinct by 2050 if current harvesting level continue.”
Care to provide a shard of evidence, or should we just take your word for it?
Fish Production from Aquaculture Rises While Marine Fish Stocks Continue to Decline
Matt Styslinger | May 03, 2011
Global fisheries production from fish caught in the wild and from aquaculture (fish farming) reached 145.1 million tons in 2009 (the most recent year with data), an all-time high. (See Figure 1.) This represents a 1.9-percent increase from 2008, slightly higher than the previous year’s 1.8-percent growth rate. Forecasts for 2010 suggested a growth of 1.3 percent to 147 million tons.
Both wild capture and aquaculture are practiced in marine and freshwater environments. (See Figure 2.) Wild capture output increased by 0.22 percent from 2008 to 2009 and accounted for roughly 60 percent of all fish production. Aquaculture output, in contrast, grew approximately 4.5 percent in 2009. Once a minor contributor to total fish harvest, aquaculture production increased some 50-fold to 52.6 million tons between the 1950s and 2008, and it is set to surpass output of wild fisheries within a few years.
…
“You know, good things like this are appreciated in the whole world,” said 22-year-old male customer Hirotaka Higurashi when asked about the overfishing issue. “There is nothing we can do about it.”
Nothing? Here’s a tip, Hirotaka: You can voluntarily stop eating overfished species.
It is kind of amazing how relatively small Japan consumes 3/4 of the world’s bluefin tuna.
any vegetarians on the board?
Taxes encourage bad behavior. I’m hit by AMT, so the only things that really remain 100% deductible for me is MTG interest. And, my tax bill is obscene (all W2 income) although this year (2012) taxes are going to be worse (I’m getting married).
So, the tax code encourages me to leverage up as much as possible on real estate (soon to include a boat) to reduce my tax burden. It also encourages me to remain single (2 high income earners in the same family, it’s going to cost us 5K+ a year to be married). What the heck is the matter with these people?
The behavior that’s encouraged by tax law is exactly the behavior that we want to stop? I realize that my situation is not typical, but, frankly, marriage should never be a burden for society, and, debt should not be encouraged. I have enough in various accounts to pay my mortgage way down and buy my new boat for cash. Will I do that? Of course not, I’ll leverage up; lending money with deductible interest at 4.5% when my muni bonds yield 5%+ (non-taxable) is a no brainier. But, at the same time, it’s not the behavior that the government “says” they want from the populace.
Being married (instead of living a monogamous life with the person you love) is a total tax disaster for us; my only consolation is that we’ve saved as much in the time that we’ve known each other in taxes that it pretty much pays for the wedding. But why should the government be in the business of discouraging marriage? Or subsidizing loans on boats? Makes absolutely no sense..
(soon to include a boat) = problem $olved
“Makes absolutely no sense..” = The Gov’t is fallible, It loves loverly taxpayer$ the most.
“The Gov’t is fallible, It loves loverly taxpayer$ the most. :-)”
I agree, but that’s no excuse for setting up a system like this. Just because they are incompetent doesn’t mean that they get off the hook for developing a system that directly discourages the activities that they promote all the time (saving money and getting married). The system is, in effect, pushing people like me and my fiance in exactly the other direction, borrow more (to reduce taxes) and stay single..
It’s there: America, love, marriage, wealth, death, … per$onal financial conundrum’$!
Check it out:
The Birth of the University
http://tinyurl.com/ygwaknm
Congratulations on getting married, and condolences on the tax situation, Overtaxed!
Another part of the nonsensical inadvertent gubmint social ‘engineering’ is the reward for having children, especially if they are being directly subsidized by welfare payments. So, our system DIScourages marriage and ENcourages childbearing by those who could otherwise not afford it. Nice.
I am pretty much in the same situation with my fiance. (Been together for 10+ years.) If we get married we will pay a lot more in taxes. However since one or both of us might be getting laid off early this year that might not matter. And if one of us still has a job, we will probably have to get married for health insurance. So we are just waiting to see what happens.
Thanks for sharing the interesting comment. So sensible. I can’t help but wonder how much that calculation affects the broader demographic. Would universal healthcare result in a lower percentage of people marrying?
i know a divorced couple with kids,who got back together and are still unmarried. i was guilting the husband , “come on doesn’t the mother of your children deserve decent healthcare?”
curiously, she wound up with a low paying job that gives the most astounding medical benefits.still not married. there must be a tax advantage if he is higher paid and gets to take the kids’ persaonal exemptions.
One word: incorporate
It’s how the 1% do it. The little known secret is that you don’t have to be a millionaire to do so and reap the special deductions.
There is nothing to be gained there if your source of income is all W2, as Overtaxed stated.
Yeah it doesn’t help any when the IRS gets its money first.
reap the special deductions
like what?
With respect to the house, you are looking at the wrong number. You are thinking about minimizing the taxes you will pay. You should be thinking about maximizing the amount of money you get to keep after the blended expenses/benefits you get by buying a home.
For once on the HBB, lets ignore renting except as it defines the monthly “return” on the house.
Option one: You buy as much house as you need and/or really want for cash (hey, I need the option since we are talking about taxes). You get no tax benefits that you can actually see on your tax form, but you get to live in the house for the cost of only the property taxes, insurance, and costs to maintain/heat/cool/etc. You lose the ablity to earn taxable returns on the money you spent, but you get the tax free return of not paying rent for a place to live (imputed rent). You also don’t pay a bank interest for the use of their money for 30 years.
Option two: You buy as much house as you need and/or really want with a large mortgage. You still get to live in the house with the imputed rent entirely untaxed. You still have your money, which presumably is invested, so you have to pay taxes on any current income. You have to pay a bank interest and principle (the insurance and other costs are the same as above) and you get to deduct the interest portion, which saves you 28%(that is still the AMT rate, isn’t it?) of the interest portion on your federal taxes and perhaps some more (lets assume another 5%) on state income taxes. So, the difference between this scenario and option one is that you pay lots of interest, get 33% of that interest “back” in tax savings and pay taxes on the investment income you make on cash you kept rather than use it to pay for the house.
Option three: You buy as much house as you can (or at least quite a bit more than you need and/or want) because you want to minimize your taxes. Again, you pay for a lot of it with a mortgage because you want to reduce your taxes. Your additional costs are the extra interest and property taxes and other costs (heat and cooling as well as maintaining) from buying the larger house. Your extra benefits are that you get back 33% of the costs of just the additional interest and property taxes. The rest of the additional costs you have to eat. You also get some extra benefit from having more space and functionality and perhaps beauty and status from having this home that is more expensive than the one you would have bought if you weren’t thinking so much about taxes, but your base case is the one you need and/or want, so the extra soft benefits should be minimal since - by defintion - you didn’t really want them. And you may end up spending a lot more on funiture, decor, etc. from keeping up with the neighbors.
I think that it is fairly obvious you keep a lot more of your money by buying the house you need/want for cash.
You are free to buy as much house as you like. And you can try to justify it in your head as a way to “save” money on taxes. But you would keep more of your money if you bought only what you wanted/needed using as small a mortgage as you can.
I agree with your analysis in principal, but, in practice, the numbers don’t really work out that way.
My mortgage is at 4.85%, my interest rate (when you take the tax advantage into account) is about 3.2%. IMHO, even without taking into account what “else” you could do with the money, borrowing at an effective 3.2% is always a good idea, because (again, IMHO) inflation is higher than the effective interest rate.
Now, take into account what else you can do with the money. Most of my assets are in several different types of funds, but, for this conversation, the easiest thing to talk about it muni bonds. I hold a few muni bond funds (PIA and BFK are some of my bigger holdings) that yield 4-7% on a tax free basis. So, I’m borrowing at 3.2% and lending at around 6% (blended). That makes borrowing as much as possible (and not paying down the mortgage) the most rational decision.
This government policy is causing people to make rational decisions that lead to “bad borrower behavior”, money is just too cheap for buying real estate, especially when you take the tax advantage into account.
If you have a risk free and tax free investment opportunity that yields substantially more than your borrowing costs, then go ahead and borrow (rather than pay cash) for the house you want or need. That is perfectly rational.
You are still behaving irrationally if you buy more house than you want or need just because a tax deduction lowers your borrowing cost to a place where you can invest it at a profit. You aren’t going to be investing that money in municiple bond funds. You are going to sink it in more house than you want, and that house will increase your other expenses as well.
If actually want or need the more expensive house, then you aren’t in option three of my analysis.
Didnt Elvis sing lets play house?
What the heck is the matter with these people?
(words & music by Arthur Gunter)
Oh, baby, baby, baby, baby baby.
Baby, baby baby, b-b-b-b-b-b baby baby, baby.
Baby baby baby
Come back, baby, I wanna play house with you.
Well, you may go to college,
You may go to school.
You may have a pink cadillac,
But don’t you be nobody’s fool.
Now baby,
Come back, baby gone.
Come back, baby gone.
Come back, baby,
I wanna play house with you.
Now listen and I’ll tell you baby
What I’m talking about.
Come on back to me, little girl,
So we can play some house.
Now baby,
Come back, baby gone.
Come back, baby gone.
Come back, baby,
I wanna play house with you.
Oh let’s play house, baby.
Now this is one thing, baby
That I want you to know.
Come on back and let’s play a little house,
And we can act like we did before.
Well, baby,
Come back, baby gone.
Come back, baby gone.
Come back, baby,
I wanna play house with you.
Yeah.
Now listen to me, baby
Try to understand.
I’d rather see you dead, little girl,
Than to be with another man.
Now baby,
Come back, baby gone.
Come back, baby gone.
Come back, baby, I wanna play house with you.
Oh, baby baby baby.
Baby baby baby b-b-b-b-b-b baby baby baby.
Baby baby baby.
Come back, baby, I wanna play house with you.
Now after reading this down below, consider how a Legal Federal/State bill is processed through the halls of our Gov’t, and then say England, and then say China…
A newspaper typo surrounding Baron Davis’ herniated disc causes all sorts of laughter:
By Kelly Dwyer / Yahoo Sports
Mike Persinger, executive sports editor of the Charlotte Observer, offered his explanation on the paper’s website on Wednesday afternoon:
Observer reporter Rick Bonnell wrote the preview box, and in it he wrote that Davis, a former Charlotte Hornet, is recovering from a “herniated disc” in his back. The box was edited by an experienced copy editor, the reporter’s first line of defense, and moved along in the production process as written.
The next stop was a final read by a second editor, another experienced employee who recognized that “herniated disc” doesn’t conform to the newspaper’s style for that type of injury, and that it should be “herniated disk.” That editor tried to type in the correction, but ended up with an unfortunate typo.
Doctor Ubennit!
“Hell no, I think broke it!”
Wasn’t it only a year ago when the hot topic of discussion was how to wind down the GSEs? This proposal should offer politicians the opportunity to throw a few rocks in the Fed’s direction.
Fed says expand Fannie, Freddie role to aid housing
By Mark Felsenthal and Margaret Chadbourn
WASHINGTON | Wed Jan 4, 2012 7:41pm EST
(Reuters) - The U.S. government-run mortgage finance firms Fannie Mae and Freddie Mac could play a bigger role in turning around the battered U.S. housing market, the Federal Reserve told Congress, a call that looks set to run into stiff political opposition.
The Fed, in a paper sent to lawmakers on Wednesday, outlined an array of steps that could be taken to help the housing sector, including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners.
The two companies, the biggest sources of U.S. mortgage funding, were seized by the government in 2008 when they were on the brink of collapse. They have been propped up by $169 billion in taxpayer aid since then, making them a target of many on Capitol Hill.
Even the Obama administration, in a trio of alternatives laid out early last year to reform the U.S. mortgage finance system, supported reducing the government’s role in housing finance.
“It comes at a time that Congress has become quite skeptical of Fannie and Freddie and their role, and seems to be looking for ways to diminish their long-run role in housing finance, not increase it,” said David Resler, chief economic adviser at Nomura Securities International.
…
OF course, we know we can take the advice of the FED for all their brilliant guidance and decision making the past 20 years. Bernanke is a joke, and intellectual wonk. No housing bubble. Housing won’t impact the broader economy. Fundamentals are driving housing.
Remember all the things this MORON pronounced over the years he has been in this club. ALL WRONG.
And, so, yes, we should listen to them when they want MORE government control and more control by the FED, even as he has illegally backstopped world-wide DEBT BETS by Brokerage houses and Banks with the “full faith and credit of the US Taxpayer.
He should be rubbed out. the whole lot of them.
Posted this yesterday (sorry for repeat.)
Headed to India for an epic trip.
Photography bag all packed. Flight this evening.
Check out my photo website (link above.) Might be able to update on the road but no promises are being made.
If not, see y’all all in February with plenty of tales about culinary adventures and derring-do!
Awesome!, have fun … be safe!
Sounds great. And don’t worry- there are plenty of Mconalds and KFCs there now, so you don’t have to eat the yucky local food.
Send us a postcard!
Enjoy your holiday Crazy Chef!
Travel well and safely, Puss. And try not to start an international incident?
I won’t.
So excited.
Enjoy yourself, pussycat. Make sure to obsessively follow the stockmarket and commodities prices while you are away. Never being out of touch with that information is what really makes life worth living.
Or so I’ve heard.
Safe trip! Don’t forget….. continually remind the natives how badly their economy and currency is going to be “burned to a crisp”!
They love it!
The currency (INR) doesn’t need any help from me. It’s already at its all-time low!
Yeah, yeah, ahansen/polly/alpha, you get to take the mickey out of me today. Easy target, sitting duck, and all that.
If I weren’t so excited, I’d fire up a few zingers your way too.
I think I’ll just practice a few Bollywood moves in my living room instead.
When my niece was two, her favorite youtube videos were Bollywood dance numbers. She got to watch two or three before books and bed.
Headed to India for an epic trip.
No kids in school?
No kids.
The Fed is still trying to figure out the best way to allocate Wall Street’s housing market gambling losses to the rest of America — presumably even those who did not buy a home at bubble-level prices.
Has the Fed even acknowledged yet that there was a housing bubble
Financial Services
Fed’s Housing Fix Means Everyone Loses
By Shanthi Bharatwaj 01/04/12 - 04:06 PM EST
NEW YORK (TheStreet) — The Federal Reserve Chairman Ben Bernanke on Wednesday proposed policies that would force a recovery in housing, but cautioned that there was no single solution to the housing market’s problems and that everyone from investors to taxpayers would need to feel the pain.
In a 26-page white paper, the Fed outlined ways to ease some of the pressures afflicting the housing market.
While some of the weakness was due to weak labor market conditions and poor demand, policies that would address the excess inventory of foreclosed homes, borrower access to mortgage credit and inefficient foreclosure procedures should be considered, the central bank said.
Still, while policy action in these areas could facilitate the recovery of the housing market, “economic losses will remain, and these losses must ultimately be allocated among homeowners, lenders, guarantors, investors, and taxpayers,” the Fed cautioned.
…
“Fed’s Housing Fix Means Everyone Loses.”
What a surprise.
The Fed and its Primary Deal accomplices were given a mandate by 95% of the electorate - the Obama Zombies & McCain Mutants - to loot at will. They’re going to grab all they can, while they can.
They seem stuck on the NAR-sponsored notion that there can be no U.S. economic recovery without a housing recovery. Never mind that the evidence of a nascent recovery already underway grows with each labor market data release.
It seems the economic recovery story is a smoke screen for helping Wall Street dump its housing market gambling losses on the unsuspecting American sheeple.
Treasuries Decline After Data Shows U.S. Employment Market Strengthening
By Susanne Walker - Jan 5, 2012 5:32 AM PT
Treasuries fell after reports showed the employment market strengthening, renewing optimism that the U.S. economic recovery will be sustained.
Thirty-year bonds rose earlier today for the first time in three days as an increase in borrowing costs in France and Hungary added to concern the region’s debt crisis is spreading.
The yield on the 10-year note rose 3 basis points, or 0.3 percentage point, to 2.01 percent at 8:30 a.m. in New York.
The ADP Employer Services report showed that companies added 325,000 jobs last month, compared with a forecast for 178,000 jobs in a Bloomberg News survey of 38 economists. Firms added 206,000 jobs in November.
…
Repeat after me,
“The economy drives housing, housing does NOT drive the economy”
“The economy drives housing, housing does NOT drive the economy”
“The economy drives housing, housing does NOT drive the economy”
Too many people have this statement reversed.
Too many people in high places accept commonly-held assumptions without questioning them.
Little secret not know by most urban dwellers.
Roosters cause the sun to come up.
known
In general everyone gained during the expansion (some more than others), now, in general, everyone gets to lose during the contraction (some more than others).
There is a message in the “some more than others part” of this statement for anyone who cares to pay attention.
Regardless of whether RP rises to the top in the 2012 election, America owes him a debt of gratitude for raising too-big-to-fail bailout policy as a national issue of concern.
Where do the Wall Street-funded Republicrat candidates stand on this issue?
January 5, 2012, 5:00 am
Ron Paul and the Banks
By SIMON JOHNSON
Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.”
We should take Ron Paul seriously. The Texas congressman had an impressive showing in the Iowa caucuses on Tuesday and his poll numbers elsewhere are resilient – he is running a strong third among Republicans nationally and is currently second in New Hampshire polling. He may well become the Republican candidate with populist momentum and energy in the weeks ahead.
Mr. Paul also has a clearly articulated view on the American banking system, laid out forcefully in his 2009 book, “End the Fed.” This book and its bottom-line recommendation that the United States should return to the gold standard – and abolish the Federal Reserve System – tend to be dismissed out of hand by many. That’s a mistake, because Mr. Paul makes many sensible and well-informed points.
But there is a curious disconnect between his diagnosis and his proposed cure, and this disconnect tells us a great deal about why this version of populism from the right is unlikely to make much progress in its current form.
There is much that is thoughtful in Mr. Paul’s book, including statements like this (on Page 18):
Mr. Paul is also broadly correct that the Federal Reserve has become, in part, a key mechanism through which large banks are rescued from their own folly, so that their management gets the upside when things go well and the realization of any downside risks is shoved onto other people.
If you don’t like this characterization of the American system, turn your attention to Europe and the euro zone – where the European Central Bank is busy propping up banks with “liquidity” (in the form of three-year loans), in part hoping that these financial institutions can, in turn, support the government bond market.
There are no Ron Paul-type populists in Europe – at least I have never come across a mainstream politician there wanting to abolish any central bank. But I predict that related views will pick up European adherents in the months ahead — for example, as people in Germany increasingly worry about the actions of the European Central Bank and want to go back to some version of their own Bundesbank, which was very careful about not creating inflation.
…
Hey PTB, it is getting obvious that at least 20% of us will support anything that is not you.
ouch!
That’s an observation. One you don’t hear expressed aloud, often.
Tough question from Mr Johnson:
probably the latter (18th century redux) but we would see spectacular failures, in the truest sense of the word.
Did the Republican candidate debates really cover these issues? Perhaps I should have tuned in.
one of the videos about RP showed “corporatism” as an ill of government.
right you are PB, these terms are not well defined.
$o, they’re neat, tidy, proper, & quite like. Much different than say, that $lippery Greece.
$wiss bank chief to respond over wife’s dollar trade:
By Silke Koltrowitz and Katie Reid / ZURICH | Wed Jan 4, 2012
(Reuters) - Switzerland’s central bank chief will break his silence on Thursday over a controversial currency trade made by his wife three weeks before he imposed a cap on the Swiss franc.
Swiss central bank rules, as well as those from the Bank of England and European Central Bank, put the onus on staff to refrain from unauthorized disclosures rather than on families to avoid trading. But officials said the spirit of guidelines demanded extra sensitivity.
“It may well be completely above board but nevertheless it leaves a bitter taste in the mouth,” said one central bank official, who declined to be named.
The SNB said Philipp Hildebrand, a former hedge fund manager and vice chairman of the Financial Stability Board (FSB), would make an announcement on Thursday.
The respected banker, credited with steering Switzerland’s banking system through the financial crisis, is expected to weather the storm, and won the backing of the government in a statement late on Wednesday.
“The Federal Council has no reason to question the validity of the audit findings and has expressed its full confidence in Mr. Hildebrand,” it said in a statement.
said on Tuesday it had fired an IT staffer for the leak of customer data, apologized for the “considerable unpleasantness” caused by its employee, who turned himself over to police on Sunday.
“The bank condemns the misuse of confidential bank data for political purposes in the strongest possible terms,” it said.
The data was leaked to the lawyer of Christoph Blocher, a political rival of Hildebrand.
Blocher has called for the central banker’s resignation over the losses racked up trying to stem the relentless rise of the Swiss franc as funds seeking a safe haven from the euro zone crisis poured in.
(Additional reporting by Caroline Copley, Catherine Bosley, Andrew Thompson and Katie Reid in Zurich, David Milliken and Laurence Fletcher in London; Writing by Kirstin Ridley; Editing by Andrew Callus)
One man’s loss is another man’s gain.
Fed Report Says Fannie, Freddie Losses May Aid Housing Recovery
BusinessWeek - 7 hours ago
By Lorraine Woellert Jan. 5 (Bloomberg) — A report from Federal Reserve Chairman Ben S. Bernanke called the weakness in the housing market a “significant barrier” to US economic health and said Fannie Mae and Freddie Mac might have to bear greater …
——————————————————————————-
Bloomberg
Bernanke Sends Congress Fed Study of Options to Lift Housing
January 05, 2012, 8:24 AM EST
By Craig Torres
Jan. 4 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke sent a staff study on the U.S. housing market to House and Senate committees today discussing policy options to help clear away one of the biggest drags on the economy.
“The challenge for policy makers is to find ways to help reconcile the existing size and mix of the housing stock and the current environment for housing finance,” according to the paper sent to members of the Senate Banking Committee and the House Financial Services Committee. “Fundamentally, such measures involve adapting the existing housing stock to the prevailing tight mortgage lending conditions.”
Bernanke, in a cover letter, said that “restoring the health of the housing market is a necessary part of a broader strategy for economic recovery.” The paper notes that home prices have fallen an average of about 33 percent from their 2006 peak, resulting in the loss of $7 trillion in household wealth that has weighed on consumption.
…
“adapting the existing housing stock to the prevailing tight mortgage lending conditions”
In a sane world this would mean dropping the prices until the market clears. But to a genius central banker and their puppet politicians, we just can’t have that.
Letter
Fannie Mae, Freddie Mac and the Financial Crisis
Published: January 3, 2012
To the Editor:
I found Joe Nocera’s attempt to minimize the role of Fannie Mae and Freddie Mac in the financial crisis unconvincing (“The Big Lie,” column, Dec. 24).
These two government-sponsored enterprises went broke and ended up being bailed out by taxpayers at cost of more than $170 billion — a cost that has never been repaid and continues to increase. By contrast, the private banks repaid their bailouts. Fannie and Freddie, not the banks, imposed the bigger burden on taxpayers.
That enormous burden is in no way alleviated if, as Mr. Nocera claims, Fannie and Freddie bought up risky subprime mortgages to maintain their market share, rather than to satisfy affordable-housing mandates. That simply underscores their shortsighted greed and complicity in the financial crisis.
Given their thin capitalization and what is effectively a taxpayer guarantee, Fannie and Freddie had no business dabbling in risky subprime loans in the first place.
HANS BADER
Senior Attorney
Competitive Enterprise Institute
Washington, Dec. 27, 2011
“By contrast, the private banks repaid their bailouts.”
Zero percent interest indefinately, the attempts to inflate the prices of overvalued assets, and allowing banks to hid losses, are all part of the bank bailouts.
So is the soaring federal debt, which has prevented the consumer-based economy from collapsing as the financial sector, businesses and households de-leverage.
Read “This Time Is Different.”
‘“By contrast, the private banks repaid their bailouts.”
Zero percent interest indefinitely,…’
Exactly! It helps immensely to be able to repay bailouts when you have access to zero-percent loans that you can lend out at ‘market rates’!
“HANS BADER
Senior Attorney
Competitive Enterprise Institute”
Also… they have ties to prominent [climate change]denier think tanks such as Cato, the Heartland Institute, and the Competitive Enterprise Institute, all of which are currently or formerly funded by Koch Industries and ExxonMobil.
polluterwatchdot com
___
I guess when they’re not denying climate change, they’re denying Wall Street culpability.
Missing from the Fed’s list of problems currently plaguing the U.S. housing market:
1) Prices that rose to unaffordable levels, from which they never fully recovered.
2) GSE complicity in blowing the bubble.
They seem determined to ride out the post-housing-bubble-collapse era without ever acknowledging there was a price bubble that led to the current malaise.
Jan. 4, 2012, 2:31 p.m. EST
Fed may push for more foreclosed rentals
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve may push supervisors to accept banks and the government-owned mortgage buyers renting out the homes they own, according to a paper issued by the central bank setting out ways to improve the housing market.
In a letter to the chairmen and ranking members of the House and Senate banking committees, Federal Reserve Chairman Ben Bernanke also said he would push banks and the big buyers of mortgages, Fannie Mae and Freddie Mac, to “find an appropriate balance between prudent lending and appropriate consumer protection, on the one hand, and not unduly restricting mortgage credit, on the other hand.”
The paper on “the U.S. housing market: current conditions and policy considerations” seeks to provide a framework for considering the issues and tradeoffs in housing, at a time when prices have dropped about 33% from their 2006 peak, wiping off some $7 trillion of household wealth and hurting consumption.
The Fed says there are three key forces, beyond the high rate of unemployment, that are hurting housing: a persistent excess supply of vacant homes on the market; a big downshift in the supply of mortgage credit; and the costs of an “often unwieldy and inefficient foreclosure process.”
The Fed said policies can be taken to reduce the inflow of new inventory, reduce barriers for creditworthy borrowers getting credit and limit the number of homeowners getting pushed into foreclosures.
…
Before the Fed gets too carried away with making helpful recommendations on how to fix the problems in the housing market, wouldn’t it make sense for them to first figure out what led to the problems at hand? For instance, before promulgating a vastly increased role for Fannie and Freddie, shouldn’t they first review the complicity of the GSEs in creating the housing bubble?
And perhaps the Fed could explain to America how they managed to completely miss the largest housing bubble in history as it expanded right under their noses. Imagine a weatherman who forecast sunny skies as a tornado was forming outside his window, offering recommendations on the design of a better storm warning system.
Green shoots sighted in the jobs market!
Stock futures pare pullback on data
ADP: Brisk payrolls growth
On the eve of the government’s December jobs report, payroll processor estimates private-sector employment expanded by 325,000 for the month, accelerating from a revised 204,000 for November. • First-time jobless claims fall to 372,000
“Green shoots sighted in the jobs market!”
The more you drive, the sooner you’ll need replacement tires.
Drive on America!
additionally:
The more you travel on the rails, the sooner you’ll need replacement wheels.
Rail on America!
“… private-sector employment expanded by 325,000 for the month …”
And that month was - what? - December?
Isn’t there some sort of holiday of some sort that is celebrated in December that might account for this expansion in employment?
Don’t get excited, the number hasn’t been “revised” yet. January is bound to look good vs the revised number. Buy stocks!
Jan. 5, 2012, 10:04 a.m. EST
December ISM services rises but misses forecast
By Steve Goldstein
WASHINGTON (MarketWatch) — The Institute for Supply Management’s services index rose in December to a reading of 52.6% from November’s 52.0%, a reading that nonetheless was below the 53.3% MarketWatch-compiled economist forecast. Of key subcomponents, production stayed at 56.2%, new orders edged up 0.2 points to 53.2% and employment rose 0.5 points to 49.4%. Any reading over 50% indicates expansion, and the services gauge has shown growth for 25 straight months, ISM said.
Green shoots in the Denver Post:
Medicaid clients in Colorado at “all-time historical high” in November
“Nearly 615,000 Coloradans were on Medicaid in November, by far a record high, officials said Wednesday, attributing the vast bulk of growth to economic hard times rather than recent eligibility expansions.
“We’ve had a mushrooming of clients,” Sue Birch, director of the state Department of Health Care Policy and Financing, told members of the legislature’s Joint Budget Committee.
… roughly 13 percent of all Coloradans are covered by state health-insurance programs.
Medicaid and other health programs consume about a third of the state’s $7 billion general-fund budget.”
More Lucky Duckies! And we supposedly have a below average UE rate and above average median HH income.
Do you have a problem with the word client?
OK true story today:
DJ friends older brother 60 on mental disability works p/t at staples, is scheduled for surgery in 2weeks to graft a vein in his leg and hopes to save it due to diabetes. then months of rehab all on the taxpayers dime…
Is this right when totally normal poor people who need some dental work to even get a job? missing teeth in a face to face service economy is not a quick way of getting employed.
What I think is wrong is that some people can get health care, while others are left out in the cold. I favor a single payer system that covers all Americans. In other words, everyone in. Nobody out.
As for the dental thing, I hear ya. I had to fire my dentist because she just got too expensive for my recession-flattened budget. When the stars align correctly, I can get dental hygiene care at the local community college, but they’re tough to get an appointment with.
Accounting Software: I’ve spent $54,300 for cleanings, dentistry and orthodontics over the last fourteen years for our family of four, all out of pocket.
That’s 54K most Lucky Duckies don’t spend on dentistry. For a LOT of folks dental work is an unobtainable luxury and they only see a dentist to get a bad tooth yanked out.
More accurately, I dropped $22k on my porcelain crowns ten years ago when my last round amalgam fillings went bad, and last year I dropped $9k for the kids orthodontic braces. That really means $23,300 for cleanings and a few composite resin fillings over fourteen years, which is roughly $1,660/year for family dental maintenance. Not excessive, IMHO.
Korean dentist scared the shit out of me with his referral to his Korean professor at UCLA, with an estimated charge of $40,000 for implants due to gum disease.
Friend of my wife recommended a state-of-the-art trained dentist who paid big $ to learn and acquire the LanApp laser gum procedure.
Fantastic results at less than 1
Jan. 5, 2012, 10:00 a.m. EST
30-year mortgage rate falls to 3.91%
By Ruth Mantell
WASHINGTON (MarketWatch) — The average rate on the 30-year fixed-rate mortgage fell to 3.91% in the week ended Jan. 5, matching a record low, compared with 3.95% in the prior week, Freddie Mac said Thursday. A year ago the rate was at 4.77%.
…
Nice to know our feckless leedher listens to a man who is putting a 150 year old company into bankruptcy….
http://www.whitehouse.gov/administration/advisory-boards/jobs-council/members/perez
Sorry to say, but Kodak cooked its goose a long time ago. Did you know that they were one of the early innovators in the digital camera market? But did they take that innovation and run with it? Nope.
The move from film to digital wasn’t one of those “no one saw it coming” things. It was well known. And smart companies planned for it and capitalized on it.
Take, for example, the Nikon cameras I have in my studio. I first started shooting with Nikons back in the late 1970s. Still have both film cameras and guess what? Their lenses work just fine — in manual mode — on my digital Nikon.
The F-mount is a thing of beauty!
There’s one thing that could change that backwards-compatibility though.
They are experimenting with curved sensors (no more chromatic aberration!)
The assumption of a flat sensor is based on film as well as current silicon technology.
If so, we’re all gonna get forced into re-purchase the lenses!
You could still use the F mount with the curved sensor, no?
I dont think so.
The lens itself would change.
No, lenses are designed to focus on a flat plane.
When you change where you need to focus, and now you are focusing different rays of light at different places, everything changes.
Interestingly, they are also experimenting with “cameras with interchangeable sensors”. Could this be a backwards-compatibility kinda move?
If so, they know what they are doing.
(Incidentally, I’m not doing anything “magical” about how I know about Nikon. I just follow the patents that Nikon files. It’s public information.)
What I am trying to say is that even if there is a new series of lenses with curved image plane, it can be made to fit in the F mount. Depending on the degree of curve it might make sense.
Anyway, I think most semiconductors are still planar and we are still a ways from shaping semiconductors in 3D in any discernable way that would show depth at typical sensor sizes. So while patents might have been filed for curved sensors, I think we are still a ways off from there.
What I am trying to say is that even if there is a new series of lenses with curved image plane, it can be made to fit in the F mount.
DOH!
You’re talking mount, I’m talking compatibility with past lenses, and the mount has nothing to do with it. Yes, you could definitely keep the mount the same. (There are issues but the engineers have maneuvred pretty masterfully between 1950’s till today.)
We concur.
Agreed on 3D being far away too. As for timelines, must talk to my sister sometime. She’s the expert not me.
I take a lot of hummingbird pictures and I was getting a lot of aberration, then I bought a Sigma 170-500mm with the APO glass and I rarely have that issue anymore. I am considering replacing some of my smaller lenses with the APO ones, since I can’t afford the expensive Canon ones. LOL
The move from film to digital wasn’t one of those “no one saw it coming” things. It was well known. And smart companies planned for it and capitalized on it.
A missed “strategic inflection point” as Andrew Grove of Intel fame would say; too comfortable in their previous success.
They lost a lot of market share to Fuji as well by ignoring the market and consumer.
I can remember hearing rave reviews about Fuji film back in the 1970s. If my memory’s correct, the ravers were my fellow high school photography students and at least one teacher.
Which means that Kodak was facing some serious film-based photography competition almost 40 years ago. And it didn’t respond to that competition either.
Methinks that complacency really did a number on Kodak.
Kodak followed a fairly losing strategy of basically getting crony governments to give them effective monopolies on the development of photographs.
You could buy any film but you had to get it processed on Kodak machines. Apparently, in the mid-80’s, it all came crashing down. Prices dropped 80+%, etc.
Dad (also keen photographer) said India was one. Some African countries too, if I remember right.
Kodak certainly milked its monopoly for all it was worth.
Kodak followed a fairly losing strategy of basically getting crony governments to give them effective monopolies on the development of photographs.
You could buy any film but you had to get it processed on Kodak machines. Apparently, in the mid-80’s, it all came crashing down. Prices dropped 80+%, etc.
Which just goes to show you that, in the long run, crony capitalism is a losing strategy.
Kodak is responsible for their demise.
Korean dentist scared the shit out of me with his referral to his Korean professor at UCLA, with an estimated charge of $40,000 for implants due to gum disease.
Friend of my Japanese wife recommended a state-of-the-art trained Taiwanese dentist who paid big $ to learn and acquire the LanApp laser gum procedure.
Fantastic results at less than 10% of the cost. Google it!
Conclusion; Not all Asians are the same! -
Antonio Perez was brought into Kodak to take it into the digital age. He came out of Hewlett-Packard were he was the #1 imaging honcho. Unfortunately for Kodak he was too little, too late.
In his defense HP’s Imaging business blossomed under his watch. That said, HP’s printing biz may soon be as obsolete as Kodachrome film. A part of me thinks that a lot of these so called “successful” execs were just lucky and were in the right place at the right time. Perez tried to start an inkjet business unit at Kodak, and it failed spectacularly. He biz model was going to be to undercut HP on ink price. What he failed to anticpate was that the inkjet printing market had moved from growth to maturity and there was no room for Kodak at the inn.
Cost me an arm and a leg to get concert photos pushed from 400 to 1600 or 1600 to3200. B&W.
Latest housing news from Tucson:
Pima County foreclosure notices fell 19% in 2011
And if you’re looking for a good deal on a run-down foreclosed house in a bad neighborhood, start shopping in Tucson. Because we have lots of them. Investors, take note.
Jan. 5, 2012, 10:27 a.m. EST
Europe stocks drop as banks sell off
By Polya Lesova, MarketWatch
LONDON (MarketWatch) — Fresh fears about the health of European banks prompted steep declines Thursday for stock markets across the Continent, with Italy and Spain among the worst hit.
The pan-European Stoxx 600 index (XX:SXXP -0.73%) dropped 0.5% to 248.3 in afternoon trading.
Banks posted especially steep losses, with the Stoxx 600 Banks index (XX:SX7P -2.77%) down 1.9% to 131.93.
A number of developments contributed to the declines that started Wednesday after Italy’s UniCredit SpA (IT:UCG -16.23%) priced a share sale at a 43% discount. Shares of UniCredit slumped 13% on Thursday after sinking nearly 15% in the previous session.
Italy’s FTSE MIB index (XX:FTSEMIB -3.30%) slumped 3.3% to 14,813, led lower by UniCredit. Other Italian banks also dropped, with Intesa Sanpaolo SpA (IT:ISP -6.78%) trading down 6.3% and Banco Popolare (IT:BP -9.82%) shedding 10%.
“The appetite for buying banks in the peripheral area remains very low,” said Steen Jakobsen, chief economist at Saxo Bank. “The market place is not a buyer of risk. The only buyer of risk is the European Central Bank.”
He added: “We have a system that is clogged up in terms of its [transmission] of credit,” at a time when both European banks and governments need to raise capital.
…
Dumb question of the day:
Why do central banks like to buy sh!tty assets?
Because they’re the only kind that’s available any more?
I was going for the opposite reason.
If you could hang on to your good assets, and unload the bad on a willing (eager?) buyer, why wouldn’t you do it?
+1.
It’s the easy way to get the taxpayer to eat the sh!t-sandwich.
Easy in the sense that there is less political backlash.
Like B of A did to us, moving bad to FDIC accounts.
Spot on. Is there any other politician out there besides Ron Paul who sees this as a problem and promises to do something about it?
Probably Gary Johnson (Libertarian Party candidate for POTUS).
Because we are a nation of turd polishers?
Hey, I saw that Mythbusters episode. We are not. I don’t think that many people have the patience to polish a turd.
Can someone explain to me what it means for the Central Bank to lose money? Does that force it to print more, or to shrink the money supply?
Can someone explain to me what it means for the Central Bank to lose money?
It means nothing to them; any gains or losses from their operations are passed along to the Treasury.
Does that force it to print more, or to shrink the money supply?
Neither. They can manufacture as many gains as they want/need to offset any losses, since they can create an unbounded (other than political limits) amount of money and buy real assets that produce real returns with it.
“It means nothing to them; any gains or losses from their operations are passed along to the Treasury.”
Through what mechanism?
Everyone relax…seeing Romney sitting next to McCain on the TV last night assured me the status quo will prevail.
I need a bankster 2012 bumper sticker that stays Obama/Romney 2012!
It’s GOOD to be the Banksta!
Wish me luck today, folks! I’m off to an interview in a couple of hours!
Fingers crossed…
Good luck!
Knock ‘em dead! Get the job too!
Not in that order. Get the job first!
Good luck!
Good luck, and I wish you a helping of great skill, too!
good luck!
Wish me luck today, folks! I’m off to an interview in a couple of hours!
Hope it went well. If not (and I recall your background correctly) we’re hiring like crazy still. Looking to add several hundred to our head count this year.
Good article on housing prices here from Bloomberg News:
http://www.bloomberg.com/news/2012-01-05/don-t-count-on-housing-market-to-lead-recovery-edward-glaeser.html
“History suggests that 2012 will see neither a big housing rebound nor a second crash. After the last housing collapse, which first bottomed out in April 1991, prices stayed almost perfectly flat for about six years. The Case-Shiller 10-city index was only 2.3 percent higher, in nominal terms, in April 1997 than it had been six years earlier, which meant that real prices had fallen by an additional 13 percent even after the first trough.”
Funny, but no one seemed to remember the “last price collapse” in 2005. Is it because it 1980s bubble and bust took place in fewer parts of the country? I sure remember it. Lots of my friends got screwed.
“Home sellers are often loath to take nominal losses, and that means they can sit on their property for years, keeping prices from dropping further in a market that otherwise offers enough inventory to prevent any major price upswing.”
So foreclosures aside, the price adjustment is limited to inflation, which takes a long time at the current pace. BTW I paid $209,000 for a rowhouse identical to one that had sold for $300,000 seven years earlier, at a time when inflation was higher.
“After the last housing collapse, which first bottomed out in April 1991, prices stayed almost perfectly flat for about six years.”
Not in California, where they didn’t bottom out until 1996 or so.
Ditto for NYC.
Since this bubble was so much larger than the one in the late-1980s, and since so much more govt intervention has been employed in a futile and costly attempt to reflate it, I guess we should expect the unraveling phase to extend over a much longer period than six years?
Long complex question but since it largely has no consequence for a long time, it can wait till February.
Pictures from past trips (Spain, Philippines, India) are in the link under my name.
More to come, of course!
“The Case-Shiller 10-city index was only 2.3 percent higher, in nominal terms, in April 1997 than it had been six years earlier, which meant that real prices had fallen by an additional 13 percent even after the first trough.”
How does an additional 13 percent real price decline equate to ’staying almost perfectly flat’?
Perfectly flat relative to the original mortgage balance. It is about the lenders getting paid after all.
If we are still in the Great Credit Expansion, then this is very relevant.
I’m not seeing credit expansion at the personal level. I’m not seeing credit expansion at the small business level. I’m not seeing credit expansion in manufacturing at any level.
If the Credit Expansion is alive and well, then it has metastasized to the nation level. In the later case, I cannot foresee a recovery in anything at the personal economic level, such as the personal housing market. Birth of something new, sure, but “recovery” like in the ’90s no.
Gross got it wrong on treasuries but it’s an interesting article
finance.yahoo.com/news/bill-gross-channels-woody-allen-.html
“Walk away, live it up? Absolutely!”, state sues foreclosure firm
by Kim Miller
Two companies with offices based in West Palm Beach are being sued by the attorney general for promising struggling homeowners they can stay in their homes for three years for free if they pay the firm $300-a-month for foreclosure defense-related services.
Florida Attorney General Pam Bondi obtained a temporary injunction and limited asset freeze against MGD Management and CRS Marketing, both of which have offices in West Palm Beach and Hollywood.
The lawsuit says hundreds of homeowners stopped paying their mortgages after promises that they could stay “rent free” in their homes for years. They were charged upfront fees of between $1,500 and $2,500 as well as the monthly $300 fee.
It is illegal in Florida for most companies to charge upfront fees for foreclosure rescue services or loan modification help.
“These companies preyed on Florida’s distressed homeowners who were already experiencing financial hardships,” Bondi said. “The laws that protect Floridians from deceptive practices and homeowners during the course of a residential foreclosure must be abided by, and I am pleased that the Court granted our motion to stop these companies from defrauding Floridians.”
Also named in the lawsuit is Mark Dalen, a West Palm Beach resident and owner of the two firms.
Dalen, 61, said today that there is another side to the story and that he hopes his companies won’t be prejudged before he can present his case.
“We’re a little shocked,” said Dalen, who was driving to meet his attorney when reached by The Post. “We’ve been helping so many people. I’m a good person and we do a lot of good things.”
According to the complaint, filed in Broward County court, print and radio advertising lured homeowners with statements such as “Stay in your home for FREE for Years!” and “Walk away, live it up? Absolutely.”
4 Responses to ““Walk away, live it up? Absolutely!”, state sues foreclosure firm”
1
laughable Says:
January 5th, 2012 at 12:52 pm
They “preyed” on distressed homeowners??? Did this company FORCE people to sign contracts with them? I think the advertisers on the Post are “preying” on us people dumb enough to still read this rag.
2
Get in the Game Says:
January 5th, 2012 at 12:58 pm
Luring Debtors with promises of FREE items?
Say it isn’t so?
So, you mean Debtors contacted this guy’s company because they thought, heard, read, had been told,… that they could stay for free?
Sad – just sad.
When is America going to purge itself of this get rich quick, jealous of your ‘rich’ neighbor, I want everything for free, and I want to work as little and easily as possible…attitude?
For America’s sake – I hope very, very soon!
3
JJ Says:
January 5th, 2012 at 1:05 pm
This is a BS report… The state sues for one reason only. Not to give it back to the homeowners that signed a contract voluntarily, but to keep the monies received from the suit for the state… It’s about greed. Obviously these people needed help, and the homeowners that never got a result should of read the contract they signed, and understood that the only guarantees in life are “death and taxes”. I won’t say good job Bondi because your office will now line it’s owns pockets as a result of this suit filed against the two companies.
4
Paul Says:
January 5th, 2012 at 1:13 pm
Are you guys SERIOUS??? Yes, I fault the company’s – but they only succedded because of the greed and lack of integrity of the homeowners.
SERIOUSLY – tell me on what planet and on what universe there is ANY type of plan that would allow you to take a mortgage of $500-1500 a month (estimate) and hire a company that says “stay in your home RENT FREE for up to 3 years for $300 a month…” Homeowners did this because they saw dollar signs – they saw the ability to pocket their mortgage money rather than paying their obligations – you all keep defending the fact that they ‘signed a contract with this company to help them….’ -REALLY?? They also signed a ocntract with the MORTGAGE COMPANY TO HELP THEM BUY THE HOME – where is THAT loyalty?
The homeowners are a part of the problem, and they should be penalized the amount of money that SHOULD have been paid to the mortgage company. We are all left holding the bag while these people pocket money that should be paying their obligations.
5
jeff saturday Says:
January 5th, 2012 at 2:09 pm
Why didn`t these people just listen to diver4life? He could have told them how to live free for 41 months at no charge. This firm was obviously taking advantage of their Deadbeatedness. Stealing from people who were just trying to get rich with their realestae investments and refis, how low can you get? I`ll tell ya if you can`t trust someone who is telling you how to screw someone, who can you trust. I think the millions of Deadbeats across the nation should band together and make sure that this kind of abuse of people who are simply trying to live rent free in their home for years never happens again.
In that case it’s not “free”. Still, $300 a month “rent” is a good deal.
6
jeff saturday Says:
January 5th, 2012 at 2:27 pm
Paul
“SERIOUSLY – tell me on what planet and on what universe there is ANY type of plan that would allow you to take a mortgage of $500-1500 a month (estimate) and hire a company that says “stay in your home RENT FREE for up to 3 years for $300 a month…”
This universe, this planet, this country, this state and this county. Here is one of many.
Tom Ice, founder of the Royal Palm Beach-based foreclosure defense firm Ice Legal,
http://blogs.palmbeachpost.com/realtime/2012/01/05/walk-away-live-it-up-absolutel-state-sues-foreclosure-firm/ -
Well Exeter, tattoo or no tattoo?
2017? Yikes!
Agent eyes no bottom soon for O.C. condos:
January 5th, 2012, by Jon Lansner / OC Register
Welcome, Veronica …
Us: How will the political discourse impact the industry in the coming election year?
Veronica: The partisan bickering and political games played a role in real estate in 2011. The market earlier in the year seemed to actually be getting much better and there seemed to be more confidence in the market. Buyers were actually engaging and I saw a small uptick in prices and lower times on market. Then came the credit downgrades, the threats of shut down, all affecting buyer confidence. I expect that to get worse as we enter the election year. A lot of players will sit on the sidelines to see what happens. I expect that to drive up leasing activity.
Us: What might go wrong in 2012? What keeps you up nights?
Veronica: In 2012 the big thing that could go wrong would be the failure to extend the mortgage debt relief act. There could be a mass sell off of properties under water. That would affect prices significantly. Just being able to move the properties I have in inventory in a more timely fashion worries me. I worry that my clients’ cash flow is affected.
Us: When will we be back to the peak of the good old days?
Veronica: I don’t think we will ever see what was considered “peak good old days.” Those days were created with lending conditions and fundamentals that hopefully won’t be repeated. I hope that we will start to see a healthier market sometime in the late 2000’s — maybe 2017.
Us: Any New Year’s resolutions, professionally speaking?
Veronica: Our plans are to focus on more realistic and achievable opportunities and give our clients more options. We have seen an increase in the demand for leasing services. We are going to try to more effectively service that side of the business for individual owners and look at it positively because it will affect our business longer term.
Us: What will be the surprise of 2012 that we’ll all be talking about this time next year?
Veronica: The lending business actually got easier. If there were more loan products, rates stay low and it became easier to qualify for loans with less down that would have a strong effect on the market … And that would be a welcome surprise!
Real estate agent Veronica Hicks of CondosEtc. follows that sometimes ignored slice of housing: the local condo market.
She’s our 17th guest for “Eyeball 2012!”
This series of interviews is our holiday gift to you, Lansner on Real Estate’s sixth annual collection of outlooks on local real estate conditions! Yes, two weeks of opinions on 2012; a new vision every morning into the first week of January.
I credit OWS for standing up for our Bill of Rights in the face of intimidation and arrest. Where is the Tea Party on this? Are not Freedom, Liberty and The Constitution their issues?? Just look at these headlines googling OWS-NDAA today:
-VIDEO: Scary Crackdown on NDAA Occupy Wall Street P…rotest
-NDAA Occupy DC protester arrests continue : Blogenius
-Occupy Wall Street Condemns the NDAA | The Dissenter
-NDAA Protest of Occupy Santa Cruz at 4AM - YouTube
-Occupy Portland D17 NDAA Protest ……- YouTube
-Occupy To Protest Schumer and Gillibrand Over NDAA
-President Obama Signs NDAA Into Law - RIP - OWS
-Occupy Tampa “arrested” for protesting NDAA: WMNF News
-Occupy….Protests Obama Signing the NDAA | MRCTV
As long as the Tea Party crowd gets their freeelectric scooters while their SS checks keep coming they won’t rock the boat as far as NDAA is concerned. Of course they will continue to complain about other people’s welfare.
Is the TEA party still an entity? I though they got absorbed by the Borg.
Fed Wants to Give Fannie-Freddie MORE Power!
Fox News
NY Post
Expanding the role of government-run mortgage finance firms Fannie Mae and Freddie Mac would help heal the battered housing market, the Federal Reserve told Congress, a call that looks certain to run into stiff political opposition.
The Fed, in a paper sent to Congress yesterday, outlined an array of steps that could be taken to help the US housing sector, including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners.
The two companies, the biggest sources of mortgage funding, were seized by the government in 2008 when they were on the brink of collapse. They have been propped up by $169 billion in taxpayer aid since then, making them a target of ire of Republican lawmakers.
Even the Obama administration, in a trio of alternatives laid out early last year to reform the mortgage finance system, supported reducing the government’s role in housing finance.
The Fed’s controversial recommendations included allowing Fannie Mae and Freddie Mac to refinance loans that they have not guaranteed.
Oh, this is going to end so badly!
Ultimate can-kicking exercise.
“Oh, this is going to end so badly!”
Details, please.
P.S. Safe travels to home and back (and we expect pictures!)…
including allowing Fannie and Freddie to provide cheaper mortgages to a broader pool of homeowners.”
free money. Most won’t get paid back by the borrowers but I think it will get paid back in the end by the rest of us
when and how is the big question ?
Looks like Target had disappointing sales in December:
http://www.denverpost.com/business/ci_19679621
“Strong grocery and beauty product sales offset weakness in electronics, movies, books and music, the company said. In addition, sales and traffic were stronger in the week before Christmas thanks to last-minute shopping.”
Sounds like people were choosing to buy food over toys.
The Ministry of Truth says food prices were up about 5% in 2011. My impression is more like 10%. In either case, “sales” are up in the food department because the prices are up.
I tried to get the solution that you use to keep bacteria from growing in a humidifier at Target. They have the humidifiers, but not the solution. Just don’t carry it at all.
Bed Bath & Beyond had the solution, but not the pads that go in the machine and should be replaced every few months (more often if you skip the stuff that kills the bacteria).
Sears put me on hold and never picked up the call.
I found the stuff I need on Amazon.
I love Amazon, 2nd day shipping for free, no taxes, lowest prices anywhere. Get Prime for free if you are clever.
Is there a way to buy stock in companies with the highest dividends, then hedge against the stock price dropping?
Options can allow you to hedge your investment, but they are not free.
I need to study this. (ORI) is almost 8% div.
http://finance.yahoo.com/news/low-bond-yields-help-push-202446784.html
like lambs to the slaughter.
You are the lamb going to the slaughter, or rather being forced there. You and me both. We are pushing money into the stock market, and will face pain when stock prices go down.
“Pension funds and other institutional investors, with mandates to show 7 percent to 8 percent returns, cannot meet their requirements with a large allocation to 10-year Treasurys and their sub-2 percent returns. As such, they’re being pushed into riskier assets.”
Which pension funds? Public employee pension funds. Who pays more and gets their services cut when they lose money? You and me.
Those who oversee them get lots of campaign contributions, from the financial industry and the public employee unions, two groups who pretend to be on different sides.
We are pushing money into the stock market, and will face pain when stock prices go down.
I am NOT pushing money into the stock market, but I’ve felt plenty of pain for years now watching it get pushed up without me.
Near-zero interest rates aimed at pushing investors out of bonds and into stocks appeared to gain some traction as 2011 drew to a close, raising hopes that investors are ready to take on more risk.
Take a swim with the sharks? No thanks!
Cleaning House: The Financial Crisis and the GSEs
By Edward Pinto Tuesday, December 20, 2011
Filed under: Economic Policy, Government & Politics
Disclosures contained in SEC complaints show the need for further investigation of Fannie and Freddie’s characterization of subprime loans.
Late last week, the Securities and Exchange Commission charged the former executives of Fannie Mae and Freddie Mac with systematically misleading shareholders by grossly underestimating the levels of subprime and Alt-A loans in their single-family loan guaranty portfolios. Current management of Fannie and Freddie have agreed to cooperate with the SEC and to accept their findings, but they are not admitting wrongdoing for misleading investors about their firms’ exposure to troubled mortgages.
I have used new information from the complaints to update the totals contained in my related paper Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study. Fannie and Freddie are now estimated to have had a combined $2 trillion in high-risk loans and securities, amounting to 42 percent of their total single-family mortgage guarantees and investments.
Fannie and Freddie entered into agreements accepting responsibility for misleading conduct discovered by the SEC, including:
1. As of June 30, 2008, Freddie had $244 billion in subprime loans, while investors were told it had only $6 billion in subprime exposure.
a. Freddie knew it was inadequately compensated for the risks it was taking. For example, it was taking on “subprime-like loans to help achieve [its] HUD goals” that were similar to private fixed-rate subprime, but the latter typically received “returns five to six times as great,” says the complaint.
b. Freddie had concerns about risk layering on loans with an LTV >90% and a FICO 90% and a FICO 90% and a FICO 90% and a FICO <680 one.)
2. As of June 30, 2008, Fannie had $641 billion in Alt-A loans (23 percent of its single-family loan guaranty portfolio), while investors were told it had less than half that amount ($306 billion, or 11 percent of its single-family loan guaranty portfolio).
3. The SEC complaint disclosed that Freddie had a coding system to track “subprime,” “other-wise subprime,” and “subprime-like” loans in its loan guaranty portfolio even as it denied having any significant subprime exposure.
These suits are important because they demonstrate that Fannie and Freddie “told the world their subprime exposure was substantially smaller than it really was … and mislead the market about the amount of risk on the companies’ books,” said Robert Khuzami, director of the SEC’s Enforcement Division.
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and who got a massive bonus for doing this? and who is not going to jail or being prosecuted? Freddie and Fannie aren’t people we need to prosecute the people who lied.
Home rentership is the new black.
Renter Nation Rages On As New Reality
Published: Thursday, 5 Jan 2012 | 12:52 PM ET
By: Diana Olick
CNBC Real Estate Reporter
Despite record low mortgage rates reported today and rising affordability in most U.S. housing markets, rent is the new reality for former home owners and new households alike.
Photo by: Simon Law
For some it is post-traumatic stress from the housing crash, for others it is the inability to get financing to buy a home. Either way, the rental market continues on its tear.
In the last quarter of 2011, the apartment sector saw its largest quarterly increase in occupied stock of the year, according to Reis, Inc.
The vacancy rate dropped to 5.2 percent, the lowest since 2001 and lower than the last cyclical drop in 2006.
This bucks the historical seasonal weakness typical of the colder months of the year. The fourth quarter also tends to be a weaker leasing period, according to Reis, given that most households make moving decisions in the second and third quarters.
This surge in occupancy pushed asking and effective rents up 0.4 and 0.5 percent respectively, which Reis calls the only disappointing figures for the sector, missing expectations. Reis blames that on slow economic growth and still high unemployment.
“Higher quality properties in the most desirable locations posted rent gains in excess of 5-10 percent, while class B/C properties, catering to lower income tenants, found it relatively more difficult to raise rents,” notes Victor Calanog, head of research at Reis.
Nowhere is that more evident than in the Washington, DC metro area where rents are way up across the city, and developers are rushing to erect new multi-family buildings and rehab old ones.
“Everybody wants to be in DC,” beams Richard Key, district manager for Camden Property Trust, one of the largest publicly traded multifamily REITs in the nation. “Whereas in other markets there are deals, when you get to DC area, all the REITs want to be here, and so we’re all competing for the same piece of land, and that’s driving the price up. That is really is a challenge for us.”
Key is convinced that there has been a fundamental shift in attitudes toward home ownership that will last for several more years. He is not concerned that the pendulum will swing back to buying, just as all that new rental stock hits the market around 2014. Camden has seen rents on its DC properties rise over 5 percent in just the past year.
“The nice part is we haven’t seen a drop in occupancies with that rent growth, and so the hope is that we’re able to maintain our historical occupancies and continue to see that five, six, gosh, seven percent is not out of the question in the next couple of years,” says Key.
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“Everybody wants to be in DC,”
Seems more likely that should say “Everybody needs to go to DC because that’s the only place with jobs”. How many people actually *want* to live there?
Horrible weather, lots of poor folks, bad schools, traffic…. sounds great.
Fabulous. House prices keep going up in DC while rents go up several percent a year too. All brought to you by your government colluding with the FIRE sector.
“Government of the highest bidder, by the highest bidder, for the highest bidder.”
I overheard the word “reaItor” in a discussion between two of my carpenters today. I stopped dead in my tracks and looked at them and said “reaItors are liars….. don’t trust them EVER”. They looked at me at said, “you’re right….. we were just talking about how reaItors are lowlife liars”.
Made my day.
You know, until just now it had never occurred to me that hearing somebody say “My Realtor said…” is very similar to hearing somebody say “My recruiter said…”.
Good point.
Dealing with either one will get you an RV park retirement. lol.
….. nine nine nine! lmao
The nightmare continues….
Fed Urges Action on Housing
Bank Warns Congress That Tight Lending Standards Threaten Wider Economy.
U.S. NEWS
JANUARY 5, 2012.
BY NICK TIMIRAOS AND ALAN ZIBEL
The Federal Reserve, in an unusual foray into housing policy, expressed alarm over the battered home market and called for more aggressive action from Congress and other policy makers.
Housing policy is outside the traditional purview of the central bank, but Fed Chairman Ben Bernanke and others are clearly worried that housing has stymied the effect of the bank’s low-interest-rate policies.
In a 26-page paper sent to top lawmakers on congressional banking committees, the Fed warned that tight mortgage- lending standards threaten to hold back the economy.
The Fed also signaled support for more aggressive use of Fannie Mae and …
http://online.wsj.com/itp - 165k
Cripes! I already own a house. Do they want me to buy a bigger one, as my kids get ready to move out?
My kids can’t afford one. For them to buy, cut the price!
WT
my mom informed me 2 more kids I went to HS with moved back home over the holidays, that makes 5 out of i think 40 SF Ranch houses on our street
Guess the only way we will own a house is when the parents ticker stops ticking….nice future
Maybe once America elects a new Fed chair, we will finally have someone in office who understands the need for housing to be affordably priced for our kids’ generation.
Oh wait…
The 26 Page REO Rental Proposal PDF
http://www.federalreserve.gov/publications/other-reports/files/housing-white-paper-20120104.pdf
This fed paper steers clear of the concept of affordable housing. Indeed, the current policy is to obfuscate economic reality by attempting to refinance families in homes that they currently can’t afford using taxpayer funded guarantees.
How about a continuity check? Let’s start with median household income and designate 30% toward shelter.
Based on the Fed’s behavior over the last 30 years, this seems to me that they’re telegraphing that housing prices are heading down in a big way.
Recall when Greenspan said his statements were intended to “signal risk to the current outlook(or forecast).
Alleged Scam May Mean Eviction For Renters
Realtors Concerned Over Possible Illegal Practice Going On In South Bay
POSTED: 7:27 pm PST January 5, 2012
UPDATED: 7:29 pm PST January 5, 2012
CHULA VISTA, Calif. — A possible housing scam may be putting hundreds of thousands of dollars in someone’s pockets while getting some people kicked out of their homes.
The Pacific Southwest Association of Realtors told 10News Thursday they’ve been tracking a group called the “Prudent Constituents Association.” The group accuses PCA of illegally taking over dozens of homes in Chula Vista, renting them out and then profiting from it.
“They’ll take off the lockboxes that are on [the homes], take all the signs down, they change the locks and they put up their own signs,” said realtor Steve Lemack.
Lemack said he was about to show a $650,000 home to a potential buyer when he noticed the changes. He returned later and found the home was rented to a family even though PCA doesn’t own it.
“They say they’re a nonprofit organization, but they’re not paying the taxes, they’re not paying the HOA. They’re here just to make money,” Lemack said.
According to the PSAR, the practice is not new but it is spreading in Chula Vista. The realtors allege PCA has found a loophole where they fraudulently file a “quit claim” document with the county, which effectively signs the property’s rights over to PCA. The realtors said the county doesn’t have the manpower to make sure PCA is in fact the real owner.
“It’s a problem with the system,” said Pacific Southwest Association of Realtors CEO Richard D’Asco
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Imagine that. Scumbag reaItors cryin’ foul.
ft dot com
January 6, 2012 12:49 am
Mortgage talks point to likely investor losses
By Shahien Nasiripour and Kara Scannell in Washington
Investors in US home mortgage bonds may have to swallow losses as part of a wide-ranging settlement being discussed between leading banks and the Obama administration to resolve allegations of foreclosure misdeeds, people familiar with the matter said.
Participants in the discussions cautioned that a final agreement remains weeks away and that the terms being discussed could change. However, they said it is likely banks would be able to reduce loan principal on mortgages owned by investors through mortgage-backed bonds.
As a result, the five largest US mortgage servicers – Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial – would avoid some of the cost of the potential $25bn settlement.
Distressed homeowners, who government officials claim were harmed by the banks’ allegedly deceptive practices, could see larger reductions in mortgage principal.
The settlement trades aid for troubled borrowers in exchange for an effective amnesty for banks that engaged in allegedly improper foreclosure practices, like seizing borrowers’ homes without proper documentation.
The Department of Housing and Urban Development, which is spearheading the mortgage settlement talks, declined to comment. Bank representatives either declined to comment or have said they refuse to publicly discuss ongoing regulatory matters.
Officials, led by federal agencies and a coalition of state attorneys-general, have said they want to use the settlement to penalise banks for allegedly illegal practices. That is why they have emphasised getting the banks to agree to reduce borrowers’ balances on loans the banks hold on their balance sheets.
Federal officials and state prosecutors have said they do not want to allow the banks to reduce loan principal on mortgages packaged into bonds. They say that doing so would penalise investors who were not responsible for allegedly wrongful mortgage practices.
In allowing banks to use investor-owned mortgages to fulfil their obligations to reduce targeted amounts of loan balances and monthly payments as part of the settlement, government officials run the risk of repeating the outcome of a 2008 deal with Bank of America.
In that settlement, the bank agreed to reduce borrowers’ payments by more than $8bn to resolve allegations of predatory lending practices by state attorneys-general.
Investors claim the bank passed the cost of the settlement on to them by modifying the mortgages they owned, instead of the loans held on the lender’s books. Bank of America has denied the accusation.
“It would be a pyrrhic victory to settle the mortgage crisis with the money of public institutions, pension funds and seniors,” said Chris Katopis, executive director of the Association of Mortgage Investors.
…
Jan 5, 2012 3:29pm
Fed Disagrees With GOP Candidates on Foreclosure Crisis
By Huma Khan
Mitt Romney has said the the government should let the foreclosure crisis run its course, but that would help the economy recover, according to a new report by the Federal Reserve that calls on policymakers to take action on the housing front.
“There is scope for policymakers to take action along three dimensions that could ease some of the pressures afflicting the housing market,” the Federal Reserve said in a report on the U.S. housing market.
This would involve measures such as “devising policies that could help facilitate the conversion of foreclosed properties to rental properties — or supporting a housing finance regime that is less restrictive than today’s, while steering clear of the lax standards that emerged during the last decade.”
The report warns that in the absence of such policies, the downward pressure on the housing market could be prolonged, essentially dragging down the economy.
The housing market remains dismal three years after it crashed. Currently, 12 million mortgages worth $700 billion are underwater. Since its peak in 2006, housing prices on average have fallen 33 percent, resulting in a loss of $7 trillion to U.S. households.
Yet, there has been little talk of the housing market or how to resolve the ongoing crisis on the campaign trail.
Romney has presented the most talked-about solution thus far: let them “hit the bottom.”
In an interview with the Las Vegas Review Journal in October, the frontrunner suggested to not “try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up, and let it turn around and come back up.”
At a debate in Nevada later, he added: “The idea of the federal government running around and saying, hey, we’re going to give you some money for trading in your old car, or we’re going to give you a few thousand bucks for buying a new house, or we’re going to keep banks from foreclosing if you can’t make your payments, these kind of actions on the part of government haven’t worked.”
…
Well, I agree with Romney on one thing. I hope Obama thinks for himself a little and gets away from those suggesting the opposite.
http://www.kesq.com/news/29641600/detail.html
Newest wrinkle.
Cathedral City, CA
Jan 5,2012- can’t find link but was on the local news tonight.
The Glory To God ministries built this huge church recently, didn’t pay the contractors, filed for Bankruptcy, and gets away with their preaching
‘do as I say, not as I do’ kind of stuff.
According to the news, the judge approved a bank paying a settlement with all the contractors not paid for over a year, and the money rolls in to the offerings.
Amazing. And they still get the TAX free status.
Unbelievable.
http://www.kesq.com/news/29641600/detail.html
Jan 5, 2012 tonight’s news. Can’t find the link for tonight’s show.
Judge ruled that a bank could pay off the many contractors who have not been paid for over a year who built the big church,
Glory to God Ministries in Cathedral City, CA.
The church filed Bankruptcy over a year ago when they didn’t pay the contractors.
And they still get to be a Tax free entity.
But the offerings keep rolling in at services.
Something is so wrong with this and so many situations.