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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Posted last night
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
“the Fed warned that tight mortgage- lending standards threaten to hold back the economy.”
You know, I think these people really believe that if you repeat something enough times it will just magically “become true”. Lending standards are NOT tight. They just aren’t “insane” anymore, no more lending 500K to a strawberry picker with a 10K/yr W2 income. Qualified borrowers are having very little/no trouble finding loans for all kinds of things (houses, cars, boats, RVs, etc) at historically the lowest interest rates in a generation.
Wake me up when interest rates are 18% and the banks will only lend 1X income on a house. That’s tight credit. This is just “normal”, banks are qualifying borrowers based on income and credit scores, and, also, banks are trying to keep people from killing themselves by making sure that assets they are lending against (house) is actually worth what the loan amount is for.
If this is “tight” credit, I’d like one of these folks to explain to me what “normal” credit and “loose” credit situations are.
I agree, Overtaxed. Underwriting standards are back in vogue. Thank God.
Has anyone had experience with short sale offers with BOA?
What’s the game with SS’s below market?
We saw a SS way below market (interior beauty but needs a yard put in) and they are trying to stop their foreclosure. They priced it $60K below market, and we’re wonder if they are looking for a pile of offers. We’re assuming our cash and offering above list will put our offer on top. The house only has a first, but with SS’s only closing 50% of the time, and taking up to 8 months, I don’t know if we should pursue it. (Shouldn’t just a 1st be shorter?)
Any feedback?
oops, sorry Ben.
“Lending standards are not tight.”
Lending standards are not tight if you don’t need to borrow money but they are very tight if you do.
This would not be true in an expanding economy (it certainly wasn’t true several years ago) but it is very true in a contracting one. Take a look at all the payday stores popping up everywhere if you need to see evidence of tight lending standards.
In a related note, Wiki says this about the credit cycle:
“When new borrowers cannot be found to purchase at inflated prices, a price collapse can occur in the market segment inflated by excessive debt, along with a dramatic reduction in liquidity in that market. This can then cause insolvency, bankruptcy, and foreclosure for those borrowers who came in late to that market. If widespread, this can then damage the solvency and profitability of the private banking system itself, resulting in a dramatic reduction of new lending as lenders attempt to protect their balance sheets from furthur losses. This in turn results in a contraction in the growth of the money supply, often referred to as a ‘credit squeeze’ or a ‘drying up of liquidity’.”
In my view this sums up quite well what we now see going on all around us.
I’m backing up a bit to clarify a word, to clarify the word “need”.
If one “needs” to borrow money then the bank will probably not loan him any. Payday stores are there for those who “need ” to borrow money.
If one “wants” to borrow money then that is a different story. Banks want to to loan money to borrowers who “want” to borrow (as opposed to “need” to borrow).
But in a contracting economy the want needs to be
(damn)
But in a contracting economy the reason to “want” to borrow has to be compelling, and in a contracting economy these reasons are hard to find.
I disagree Combo, I’ve had no trouble at all in the last 2 years borrowing money for things I want to buy (not need) at insanely low interest rates. Now, I’m sure I’m a bit of an exception (lots of the money I borrowed I could have used my own money instead, banks seem to love that), but, for my house, I certainly did not have the capital to “buy it outright” and had no difficulty at all getting a loan. In fact, I had several offers that started to compete among themselves with lower interest rates and lowered fees. I’ve got a good credit score, and all my income is W2, and (I think most importantly) I’ve got a low debt to income ratio.
However, all that said, that’s typically what we considered a “qualified buyer” just 10-15 years ago. If you had a 60 DTI, lots of 1099 income and a crappy credit score, you weren’t going to get a loan in 1998, and you’re not going to get a loan now. Is that “tight” credit, or is it just “normal”? I’d argue that the 2004-2008 was the exception, not the rule for “easy credit”. That was insane credit. What we have now is very, very cheap money that available to people who have traditional credit requirements (good credit score, solid employment/income, low debt to income, etc).
Overtaxed -
Let’s take a look at some of what you wrote:
“(lots of the money I borrowed, I could have used my own money instead, banks seem to love that.)
Banks seem to love that because you didn’t need to borrow. You could have use your own money instead which means you have the money.
Which gets to my point: Banks will loan to those who “want” to borrow but not those who “need” to borrow. You already had the money so you didn’t need to borrrow. Because you didn’t need to borrow the bank was happy to float you a loan.
We’ve had posts here several days ago that talked of how banks are suddenly yanking the credit lines for small businesses.
For whatever reason (maybe the bank decides the business has become too risky) it wants it’s money back. This hoses the small business because all of a sudden it becomes desperate for money.
Desperate for money translates to high interest rates. If the interest rates are high enough then the business will fail.
If one “needs” to borrow money then the bank will probably not loan him any. Payday stores are there for those who “need ” to borrow money.
Lately, it seems as if my business name is very similar to an outfit that offers loans. They sound like one of those consumer lenders like HFC was back in the day.
Any-hoo, you should listen in on some of the calls I get. Some very desperate people. And they’re not too happy to hear that Arizona Slim is not a lender.
Normal times are hard to define after a period of excess.
This goes to the heart of the problem with the FED and why it needs to be abolished. They have illegally injected themselves worldwide into the workings of financial markets to “play god” with the direction of the economy.
There so-called mission to MAINTAIN DOLLAR stability, has been a total failure, and the added goal of providing FULL employment (which is often a contrary goal) has failed, also.
They want to get the Trading Games going again. Mostly for their buddies at Goldman Suchs.
They need money flowing for skimming operations. Unless money continually flows across accounts, there is no way to skim off some for gambling and profit-taking.
People are becoming more frugal. Rates are ridiculously low, completely manipulated by the FED. They are a one-trick pony in a dog show.
Playing with lender of last resort to the world has not worked to get people back to massive borrowing and spending, so the games of old are dying out, as they should.
But, Bernanke and the boyz at the FED just can’t stand the fact that their manipulations aren’t working, as promised (in an election year), so they are desperate.
Now they need to meddle some more with mortgages and housing. What is their job? Keeping the dollar strong? Isn’t that it? Why are they meddling with housing?
If the country goes deeper in depression, then dollars will get stronger, by definition. Yet, Bernanke wants continual “inflation” to continually devalue the dollar to make you need to go get more dollars to keep you borrowing and working to keep you on a treadmill to nowhere. A true economic slave.
That is the real goal and mission of the FED.
Shut this guy up and STOP all the schemes. END THE FED.
A true economic slave.
A new form of slavery does seem to be the eventual goal.
‘They just aren’t “insane” anymore, no more lending 500K to a strawberry picker with a 10K/yr W2 income.’
It might be hard for FOMC members, who entirely missed the ginormous housing bubble that formed right under their proboscises, to objectively judge whether mortgage lending standards are tight or loose.
“They just aren’t “insane” anymore, no more lending 500K to a strawberry picker with a 10K/yr W2 income.”
The “insanity” of those times wasn’t all that insane for the lender (at least in the short-term) because in those times the lender didn’t have to hang onto the loan.
Now he does. And now that he has to hang onto the loan he also has to hang on to the risk of the loan.
And therin lies the main difference between then and now.
In addition, the risk for the lender really drops if the lender is annointed with the status of TBTF.
Combo,
I must’ve missed when the banks started hanging on to their own mortgages. There is only one lender around me that holds onto their loans and even that loan officer is quick to share that could change at any time. There is just too much pressure on their small bank when everyone else in the area is passing on risk to someone else.
Btw, there is usually a basket of potential buyers of our local mortgages. Some were sold on to other investment banks that I’m assuming woud do the securititzation. Everyone but that one small bank seemed to sell to BAC. Chase’s name came up often and sometimes Wells Fargo. Then there were those unknown names I always assumed were warehouse lenders.
“Now he does. And now that he has to hang onto the loan he also has to hang on to the risk of the loan. ”
You are going to need to prove that one, Combo. I don’t believe it. Most banks don’t have the capital to actually make and hold on to the loans, even with fractional reserve lending. They are still selling the loans. They are just being required to provide better loans for the securitization pools.
So, are they actually requiring down payments now? 20% down on a 150k house is still 30 grand. How many people have that kind of money layin’ around?
I can only surmise from the prices I see that down payments still must not be a thing, because some of these 150k houses are in really sketchy neighborhoods, and anybody with 30k in cash ready for a down payment wouldn’t want to live there.
I read you should have saved at least $1000 for every year old you are once you hit 30.
On what planet?
All this was inspired by the principle–which is quite true within itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.
—Adolf Hitler , Mein Kampf, vol. I, ch. X
I should have pointed out I believe he was referring to his own perverted ideology; even if he wasn’t aware of it. The use of the big lie has however been used through out the ages and hasn’t been retired yet.
housing has stymied the effect of the bank’s low-interest-rate policies.
well I’ve had my laugh for the day.
Greenspan’s easy-money policies CREATED the tech and housing bubbles, while Bernanke has transferred virtually unlimited liability from the banksters’ mortgage-related recklessness and fraud onto the taxpayers. Ron Paul is the ONLY candidate standing up to this massive swindle.
Yes, and just exactly where is OBAMA, the hopie changie candidate now president?? In the bankers pockets..
His black attorney general, appointed for his diversity and blackness has done NOTHING to chase down the fraud, but has spent time trying to create criminal acts with guns on the southern border, a plan that failed.
The ENTIRE executive branch is completely corrupt and isn’t enforcing the LAWS, but making up new rules and regulations as it goes along, selectively ‘enforcing’ the areas it chooses and stretching the meaning of any law it can find to mold amerika into a new facist state…..But don’t say anything bad about it.
you may be charged with a hate crime and detained for any reason at all. indefinitely.
We all know it will be Romney v Obama, Obama wins and nothing changes. More NDAA and other junk signed as they are all puppets.
Or the other way around.
Steep drop in Palm Beach County home repossessions continues
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 9:30 p.m. Thursday, Jan. 5, 2012
WEST PALM BEACH — Banks moved to repossess fewer than 12,200 Palm Beach County homes last year, the second consecutive annual decline in new filings and a 61 percent plunge from the peak of foreclosure woe in 2009.
According to a year-end foreclosure report released Thursday by the Palm Beach County Clerk of Courts, 2011 saw the fewest number of new filings since 2006, when 5,144 homes went into foreclosure.
“Lenders have been spending a lot of time making sure existing cases are proper rather than pushing new cases into the process,” said Jim Banford, founder and chief executive of the Real Estate Asset Disposition Corp., which has an office in West Palm Beach.
Banford’s company manages bank-repossessed homes, including fixing them up for resale. In December 2010, he said he had 1,500 homes to manage. Now he’s down to 500 - a reduction he attributes to the slowdown in court proceedings as banks regrouped from the robo-signing scandal.
He predicts an increase in new foreclosure filings as backlogged delinquent loans head to court.
“We meet folks who say they haven’t paid their mortgage for 12 to 18 months, and they’re not in foreclosure yet,” Banford said. “We have far too many folks in houses that cannot or will not pay for them.”
A September report from the Jacksonville-based company LPS Applied Analytics found that 56 percent of Florida homeowners in foreclosure have not made a mortgage payment in two years or more. In January 2010, just 19 percent of Florida’s foreclosures were 24 months or more delinquent.
http://www.palmbeachpost.com/money/foreclosures/steep-drop-in-palm-beach-county-home-repossessions-2083197.html - -
Exactly how is this a weekend topic? You want all of us to talk about Palm Beach County? This is NOT the bits bucket.
“Exactly how is this a weekend topic?”
It`s not, actually none of what I posted here was supposed to be. It was supposed to be in the bits bucket. I am sorry for my mistake and I thank you for the scolding.
Damn Jethro….. you always gettin’ red-assed. lol
….thank you sir, may I have another?
“….thank you sir, may I have another?”
If we are going that route it would have to be from Tiger’ Woods’ ex-wife Elin Nordegren who was accidentaly posted below. If the first accident on top about the Fed letter didn`t pass I may have been looking at a waterboarding.
“In 2000, 4,566 foreclosures were filed in Palm Beach County. That fell to 3,303 in 2005 before jacking up to 31,678 in 2009.”
Although this could be a topic. I would suggest that it was not just Palm Beach County that had foreclosures hit a wall in 2009 and drop from 31,678 to 12,200 a 61 percent plunge from the peak of foreclosure woe in 2009. If it was just Palm Beach County, I don`t think Ben`s blog would be so popular.
Tiger’ Woods’ ex-wife Elin Nordegren demolishes $12 million North Palm Beach house to build new home
By Bill DiPaolo
Palm Beach Post Staff Writer
Posted: 4:49 p.m. Thursday, Jan. 5, 2012
Bought a year ago for $12.3 million, the oceanfront mansion owned by the former wife of Tiger Woods has been demolished and she is building a new house on the lot in the exclusive Seminole Landing development near North Palm Beach.
“It was a beautiful place, incredible landscaping, fantastic ocean frontage,” said Realtor John True, who was at the house on Halloween for a charity event after work had begun.
“I heard that the original plan was to renovate. But once they started, I heard they decided to tear it down.”
Elin Nordegren is living in the San Remo condominiums, an oceanfront development in Juno Beach, while her new home is being built, according to local officials who asked not to be named.
Palm Beach County issued the demolition permit on Dec. 16 and it is active until June 17, records show.
The 17,000-square-foot house, built in 1932, was two stories, with eight bathrooms, an in-ground pool and an elevator.
http://www.palmbeachpost.com/news/tigers-ex-demolishes-12-million-north-palm-beach-2082712.html -
Woods’ ex-wife Elin Nordegren demolishes $12 million North Palm Beach house ??
Chump change……
Nothing like getting back at your ex-husband.
Built in 1932. The quality of the construction is probably much better than anything that will replace it.
But my guess is the lady thinks it’s “icky” and “out of date.”
Weekend topic: how long will Ron Paul keep campaigning? To Super Tuesday? All the way to the convention? Or will he go independent?
Squad predictions: Romney locks the nomination on Super Tuesday and goes on to lose 53 to 47 to Obama with less than 180 electoral votes.
Wild cards: Donald Trump and Sarah Palin.
RP is the only candidate that offers any possibility of real substantial change. The rest are status quo.
I see the Pharisees (Dobson and the rest of the religious fundamentalist extremists) are gathering at the temple in an attempt to distort the nomination process.
When with the GOP understand that these freaks weaken their party?
2 articles from CBS News:
Santorum raises polygamy in defending stand against gay marriage
“Santorum encouraged the debate with several audience members who attended his address at a college convention sponsored by New England College. The audience of about 200 people included several supporters of Santorum’s rival, libertarian Rep. Ron Paul of Texas. Some booed Santorum when he left the stage.”
Newt slams media for distorting his comments on food stamps
“Former House Speaker Newt Gingrich slammed the “elite” national media for distorting what he said about blacks and food stamps.
“You guys have distorted what I said,” Newt said on CBS’ “The Early Show” Friday, denying that he said blacks should be “satisfied with food stamps.”
Sarah Palin has a good thing going. I don’t think she is going to do anything to break it.
Donald Trump got slammed hard at the beginning of this cycle. He didn’t like it. He may talk about getting back in to get some free publicity, but he won’t actually do it.
There is the slightest possibility of a brokered convention if all the other candidates can somehow discredit Romney in the same way his superpac crushed Gingrich and nobody who is left comes to the forefront, but I don’t see either Palin or Trump being the beneficiary of that process.
As long as they don’t change their name$ or $hut their mouth$, they’ll benefit by de$ign from Americans paying their cable/satellite bill$.
“Show-me-the-monie$” is a cult mantra viru$, spreads about readily, via 1’s & 0’s
Wild cards: Donald Trump and Sarah Palin ??
Wow…As long as you are going to go out on a limb you may as well include Ralph Nader….
Are the GSEs gonna wind down, or wind up again? I can no longer keep score in a football game where the rules committee issues new rules from the sidelines during the course of play.
Wasn’t it excessively easy lending standards, which enabled unqualified buyers to purchase homes they could not possibly afford to buy, which led to housing bubble price valuations which still haunt some corners of the U.S. housing market today? I suspect the historically prudent lending standards to which the U.S. mortgage lending sector has reverted as of late only seem extreme compared to the dangerously loose standards which inflated the bubble and set the stage for the foreclosure crisis to follow. Looser lending standards, supported by ongoing taxpayer-funded GSE losses, would continue crowding out private mortgage lending activities.
I further wonder whether top policy makers are confounding a lack of desire or qualifications of many households to buy homes in the wake of the Great Recession and housing bubble collapse with the effect of tight lending standards. Given how many American households lost so much money by purchasing homes they couldn’t afford, I am skeptical many new takers will step up if subprime loans are offered once again.
Finally, I repudiate the REIC’s contention that a near-term housing market recovery is necessary for the rest of the U.S. economy to heal. Rather, the sectoral balance which is already underway needs to continue, and the housing market (and financial sector overall) need to be allowed to continue shrinking towards a lower share of U.S. economic production, as we still have an excess supply of housing left over from the bubble years to work through. The labor market is already showing signs of recovery without housing.
Builders Applaud Fed Report on Housing
January 5, 2012 - The National Association of Home Builders (NAHB) concurs with a finding by the Federal Reserve that excessively tight mortgage lending standards are hampering a housing and economic recovery.
“The Federal Reserve’s report to Congress confirms what we have been saying for some time: That extraordinarily tight credit conditions are preventing creditworthy borrowers from obtaining home loans and this is harming the housing market and the broader economy,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
Nielsen added that the lack of credit extends to housing construction loans as well, which is crippling the housing industry and preventing construction of new homes in markets that need and want them. “In scores of markets across the country that are exhibiting signs of job growth and where the inventory of new homes is nearly exhausted, builders should be hiring workers to break ground on new housing developments,” he said.
In its message to Congress, the Fed said that “restoring the health of the housing market is a necessary part of a broader strategy for economic recovery.”
…
“The labor market is already showing signs of recovery without housing.”
Jan. 6, 2012, 8:30 a.m. EST
U.S. economy created 200,000 jobs in December
By Jeffry Bartash
WASHINGTON (MarketWatch) - The U.S. economy gained 200,000 jobs in December and the unemployment rate fell to 8.5%, the Labor Department said Friday. Economists surveyed by MarketWatch had forecast the U.S. would add 150,000 jobs last month, with the jobless rate edging up to 8.7% from an initially reported 8.6% in November. Subtracting another decline in government jobs, the private sector boosted payrolls by 212,000. Average hourly earnings rose 0.2% last month to $23.24 and hours worked edged up to 34.4. Job gains for November and October were little changed. The U.S. created 1.64 million jobs in 2011.
I finally heard a media report (yes, it was NPR) this morning pointing out that better hiring numbers can lead to more people looking, thereby upping the labor force participation rate and raising the unemployment rate.
It was a little hesitant and the analyst really wanted to emphasize that this sort of increase would be temporary (really? it would? why? because they would all get discouraged again really quickly?), but it was at least mentioned.
Most mention of the discouraged worker not currently being counted that I have heard (it is mentioned in some newspaper articles and blogs) in ages.
Also not mentioned are the many boomers reaching 62 and taking early retirement, though I think plenty want to keep on working. Not sure how that affects the UE stats.
If you mean taking SS early, then it has no effect. If you are looking for work, then you are part of the workforce and can be considered unemployed. If you aren’t looking, you aren’t counted as unemployed.
Also not mentioned are the many boomers reaching 62 and taking early retirement, though I think plenty want to keep on working.
One of my unemployed acquaintances did that last year. He and his wife are living off of his SS.
And, wouldn’t you know it, the wife needs major surgery and they don’t have insurance. There was a concert fundraiser for them a few weeks ago.
Some would just a soon see her die off…I mean, she is part of “generation greed” right ??
Nice charts on this one, looks like it’s a mirage:
Latest Unemployment Numbers: Real Improvement or Statistical Mirage?
http://www.financialsense.com/contributors/michael-shedlock/2012/01/06/latest-unemployment-numbers-real-improvement-or-statistical-mirage
Meanwhile, criminal syndicates affiliated with Mexican drug cartels continue to make inroads into America, encouraged, perhaps, by the sheeplike, Third World tolerance for systemic fraud, corruption and criminality displayed by 95% of the electorate - Obama and McCain voters - during the ‘08 election.
http://www.borderlandbeat.com/2012/01/mexican-cartel-tactical-note-8.html
Teen Tortured, Dismembered, Beheaded by Trafficking Gang in Bethany, Oklahoma.
Oklahoma teen Carina Saunders was brutally murdered as a means to frighten another woman into cooperating with a human trafficking ring, police have reported.
The 19-year-old who graduated from Mustang High School just last year was tortured, dismembered and beheaded. Parts of her body were found stuffed in a duffel bag and dumped behind a grocery store on Oct. 13. She was identified by her distinct tattoos.
Jimmy Lee Massey, 33, has been arrested on first-degree murder charges. A 20-year-old woman, whose name has not been disclosed, came forward as a witness to report she had been kidnapped by Massey and forced to watch the brutal murder in Bethany, Oklahoma, reports The Daily Mail.
Massey was already being held in Oklahoma County jail on drug charges. He has admitted to investigators that he kidnapped the 20-year-old woman and forced her to watch as others tortured and killed Saunders. He also provided details about the crime.
Both women reportedly knew Massey separately, but there is no evidence that the two women knew each other.
Police Chief Phil Cole said: “Evidence in our investigation has led us to believe that she had been expected to provide certain things to this trafficking group and that she had not been performing to their satisfaction.”
“Meanwhile, criminal syndicates affiliated with Mexican drug cartels continue to make inroads into America, encouraged, perhaps, by…”
Fine$.’em.put.them.all.in.private.run.prisons.for.profit$.
See Sammy nothin’ to do with evil lil’ Opie, but you go girl!
200 Million People Use Illicit Drugs, Study Finds:
By Katie Moisse | ABC News Blogs – 5 hours ago
Roughly 200 million people worldwide use illicit drugs such as marijuana, amphetamines, cocaine and opioids each year, according to a new study. The figure represents about one in 20 people between the ages of 15 and 64.
Using a review of published studies, Australian researchers estimated that as many as 203 million people use marijuana, 56 million people use amphetamines including meth, 21 million people use cocaine and 21 million people use opioids like heroin. The use of all four drug classes was highest in developed countries.
What (if anything) is the difference between ECB purchases of euro zone govt debt and the Fed’s Operation Twist?
More importantly, what does extraordinary central bank intervention in government bond markets lead to?
Jan. 6, 2012, 9:13 a.m. EST
ECB buys Spanish, Italian bonds: report
FRANKFURT (MarketWatch) — The European Central Bank stepped into bond markets again on Friday to buy Spanish and Italian government debt after yields jumped ahead of expected auctions by both nations next week, The Wall Street Journal reported.
…
Here’s an actual suggestion: movie plots for a decade from now, either set at that time or looking back as the 2000s.
Here’s one: “Back to Vietnam.”
The head of the Chinese politburo calls the President of the United States. The Vietnamese have revolted and overthrown a Bejing-friendly puppet, and the Chinese want the interim regime overthrown. Send in U.S. special forces, he says, the they’ll allow the U.S. to skip a year of interest payments, with the resulting temporary tax breaks and spending helping to ensure the President’s re-election.
The rest could be a conventional war/action movie, until the final battle scene when the young hero/victim who joined the special forces because it was the only way to get a job and provide hope for his family, lies dying on the battlefield. A Vietnamese fighter takes the American flag from him and starts to rip it in half. Then he realizes it is two American flags stiched together on the outside, with another flag in the middle. He pulls out the Chinese flag, and roll the credits.
And as the credits roll the camera moves in for a close up of the flags and the audience gets to learn that all three of them were made in China.
What special forces?
What are you doing in this new year to deny the big banks your hard earned money?
Yesterday, I took the long route home from the Metro to walk past a the ATM that doesn’t charge for people with accounts at other banks to make a withdrawal (my bank would reimburse me for that charge, so the money is of no concern to me). The short route home takes me right past a BofA ATM, but I won’t use it anymore. I refuse to give them $3 just because it keeps my ears a little warmer. No more BofA ATMs.
While in graduate school from 2006 to 2008 and during subsequent periods of unemployment and underemployment I did the 0% balance transfer shuffle among CC’s to stay afloat.
Over the past 2 years I have closed 3 TARP bank CC accounts, also opening a new credit union CC account. Kept the Chase CC open for bureau reporting of perfect payment history but they collect no interest revenue from me.
If I finance a vehicle purchase in the next year (not sitting on piles of cash here like some of you HBB posters) it will be through the credit union and not a random TARP bank that the dealership finance office sends the loan to.
“it will be through the credit union and not a random TARP bank ”
ble$$ you my child
Thank you for helping kill the TBTF, meaning TOO BIG TO BAIL, Banksters.
I have friends that still bank with them. I ask them why? They know that the banksters have all robbed us through the FED, and yet they won’t close their accounts. Typically, they say it’s a convenient location, and what they do won’t make any difference anyways.
I reel from the statements, saying if every small customer would send back the credit cards and close their accounts, the PEOPLE could send a message to their masters at the FED….We’re done. No more bailouts.
Shut this bank down.. Now.
Most people don’t care and don’t want to be put out of their way opening up new accounts.
So, thank you, for at least making an effort to do the right thing and VOTE with your feet.. KILL the TBTF banks.
And remember, GOLDMAN was not a commerical bank until they got into trouble, then the were licensed as a bank to get FREE TARP money. They got approved overnight.
Walmart tried for years to get a banking operation to provide financial services to their customers and was DENIED. Consistently.
To the rest of you: If you are doing business with the crooks, then you should be ashamed of yourselves. The only way to stop these financial crimes is to put the squeeze on the Banksters.
Every little bit helps.
Oh, worth repeating definitely:
“So, thank you, for at least making an effort to do the right thing and VOTE with your feet.. KILL the TBTF banks.
And remember, GOLDMAN was not a commerical bank until they got into trouble, then the were licensed as a bank to get FREE TARP money. They got approved overnight.
Walmart tried for years to get a banking operation to provide financial services to their customers and was DENIED. Consistently.
To the rest of you: If you are doing business with the crooks, then you should be ashamed of yourselves. The only way to stop these financial crimes is to put the squeeze on the Banksters.
Every little bit helps.”
Boycott$ ‘em! … NO REPEAT cu$tomer$!
Eyes REPEAT:
Boycott$ ‘em! … NO REPEAT cu$tomer$!
Boycott$ ‘em! … NO REPEAT cu$tomer$!
Boycott$ ‘em! … NO REPEAT cu$tomer$!
Boycott$ ‘em! … NO REPEAT cu$tomer$!
Boycott$ ‘em! … NO REPEAT cu$tomer$!
I ran away from banks 20 years ago.
Weekend Topic: What is the trend in rental properties around the country?
LA Times reports vacancy rates under 5%, with a one bedroom above $1k and a two bedroom around $1.5k.
More foreclosures drop the price to purchase. Will that eventually lower rents? Will the huddled masses finally emerge from their parents’ basements replete with the incredible cash they saved during the Great Recession?
Will the foreclosure clearing accelerate and, if so, how will that affect property prices and rents?
Inquiring minds want to know! -
Any follow-up news to report on this story?
‘Inside Job’ prompts new look at conflict of interest policy
The University Senate is screening ‘Inside Job’ on Friday, and Provost Steele has said the administration is taking the film’s allegations very seriously.
By Shira Poliak
Spectator Staff Writer
Published April 13, 2011
Jasper L. Clyatt / Senior staff photographer
This is the first in a three-part series about the University’s disclosure policies. See also parts two and three.
When filmmaker Charles Ferguson asked Business School Dean R. Glenn Hubbard to discuss the roots of the 2008 economic crisis with him, Hubbard was happy to oblige.
Hubbard, the former chairman of President George W. Bush’s Council of Economic Advisers, sat down with Ferguson for an on-camera interview.
The conversation, portions of which appeared in Ferguson’s 2010 documentary “Inside Job,” started out calmly. But when the director asked Hubbard why his paid consulting arrangements with financial services companies were not disclosed on his curriculum vitae, Hubbard grew angry.
“This isn’t a deposition, sir … I was polite enough to give you my time,” he said. “You have three minutes. Give it your best shot.”
Hubbard did not want to talk about the fact that he is paid $250,000 per year to serve on the board of Metropolitan Life, one of the largest global insurance providers, and that he sat on the board of Capmark, a major commercial mortgage lender, until shortly before its bankruptcy in 2009.
“Inside Job,” which won Best Documentary at the Academy Awards in February, explores the causes of the economic meltdown and criticizes Hubbard and other leading economists for failing to forecast the economic collapse.
The film alleges that prominent academics are often paid to consult for companies, creating conflicts of interest. The movie claims that without knowing who is funding economists, the public cannot trust their research or policy recommendations.
Hubbard is not the only Columbia academic criticized in the film. “Inside Job” also features Business School professor Frederic Mishkin, who according to the Wall Street Journal was paid almost $135,000 by the Icelandic Chamber of Commerce in 2006 to author a report that praised the stability of Iceland’s economy and banking system—two years before they collapsed.
…
INET’s Interview with Charles Ferguson
“The Corruption in Academic Economics”
http://www.youtube.com/watch?v=FxtCn2GyqKc
I tried posting this awhile back, I don’t think it went through, might make a good topic:
“Inventories are at the lowest levels since 1963. And at current demand, months of inventory on the market are at six months, the lowest since 2006. In fact, home sales have been up considerably the past few months. Guess what happens in any market when supply goes down and demand goes up: prices go up.
Source: First Trust Portfolios, Data commentary.”
http://www.jamesaltucher.com/2012/01/my-last-death-threat-in-2011/
“Guess what happens in any market when supply goes down and demand goes up: prices go up.”
But isn’t it different when everyone realizes that millions of homes presently locked up in a huge shadow inventory represent future supply which will enter the market over the next decade or so?
For instance, the article posted below estimates South Florida’s shadow inventory was recently six times as large as currently available inventory. Surely this overhang is historically unprecedented?
Posted on Saturday, 10.15.11
REAL ESTATE
‘Shadow inventory’ of homes could topple real-estate recovery
A ‘shadow inventory’ of homes in foreclosure or held by banks could hobble recovery from the real estate meltdown.
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows — hidden neatly away on banks’ balance sheets, stalled in foreclosure court proceedings, or simply occupied by nonpaying owners as lenders wait months or years before taking action.
The housing market’s ballooning shadow inventory — buoyed by a yearlong foreclosure slowdown — stands as its most menacing problem, threatening to stifle recovery for several years.
And South Florida, with some 200,000 homes either already owned by lenders or headed for foreclosure, has one of the nation’s largest collections of unseen inventory. The number of shadow homes dwarfs the 30,000 or so that are listed on the active market. Even as prices have shown signs of stability this year, an impending wave of foreclosures threatens to keep real estate values deflated in South Florida and across the country.
“A lot of people don’t understand how much inventory is set to come online in the next 18 to 24 months,” said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach. “When you compare what the Realtors show is inventory to what’s out there, you realize we have a long way to go.”
…
The analysis
To estimate the size of shadow inventory, The Miami Herald determined the number of bank-owned homes by calculating the difference between the number of homes lenders have repossessed since 2007 and the number of homes they have sold to new owners over the same period of time.
The Herald also calculated the number of homes in the foreclosure pipeline—properties that have begun the process or are so far behind on payments that future foreclosure is virtually inevitable. The analysis did not include homes that are currently listed for sale.
Data from real estate research firm RealtyTrac, the U.S. Census Bureau, data firm Lender Processing Services and real estate trade group were used in the analysis.
I think you are right; this would make a good topic. All the evidence I can find suggests many more foreclosure homes are destined to hit the market before the housing bubble collapse is over.
Posted January 04, 2012
Bank Foreclosures to Surge in 2012: RealtyTrac
By Shanthi Bharatwaj
NEW YORK (TheStreet) — The pace of foreclosures slowed down significantly in 2011, but that trend was likely short-lived.
According to RealtyTrac, a new wave of foreclosures could be coming in 2012, if the recent spike in “default filings” is any indication.
A total of 3.6 million properties have been lost to foreclosure since the start of the recession in December 2007. In 2011, however, the pace of monthly repossessions slowed down and in fact hit a 44-month low in November at 56,124 according to data provided by RealtyTrac.
Overall, banks repossessed 25% fewer properties in 2011 compared to 2010. However, much of the slowdown was caused by “foreclosure processing delays” rather than a robust housing recovery, says Daren Blomquist, RealtyTrac’s director of marketing communications.
Controversy over “robo-signing”practices caused a flurry of investigations into banks foreclosure practices and have caused mortgage servicers to re-evaluate their procedures, leading to a slowdown in processing.
States where foreclosures are approved through a judicial process are seeing the longest delays. For instance, New York properties foreclosed in the third quarter took an average of 986 days to complete the foreclosure process.
“Those foreclosure processing delays mean much of the foreclosure activity that under normal circumstances would have occurred in 2011 is being deferred to 2012,” Blomquist said in an email, pointing to a rise in default filings, which start the foreclosure process.
The number of filings providing notice of default spiked 33% to 78,880 in August and have remained elevated since then.
“This new wave will not bring foreclosure numbers back to the levels we saw in 2010, but they will create a sort of double-peak pattern after the artificial trough in 2011,” according to Blomquist.
…
Jergler: Expect foreclosures to be story of 2012
January 03, 2012|By Don Jergler
If you were to sum up what’s expected for the Orange County real estate market in 2012, Daren Blomquist has one word for you: foreclosures.
That’s not too surprising, seeing that he’s with Irvine-based foreclosure tracking firm RealtyTrac, but Blomquist sees this as good news, eventually, for Orange County and the nation.
“What we’re seeing is this rising tide of new foreclosures that are starting up in Orange County, and it also applies nationwide,” he said. “If you look at notices of default in Orange County in the last few months, those are really, consistently going up.”
…
Bring it on and get it done. Cleansing is a wonderful thing.
I recommend Trader Joe’s Secrets of the Psyllium.
P.S. It’s more tolerable to mix it with juice than with just water, as in the YouTube video.
Here’s an article with local news video from the Dallas area that explains why things aren’t going to change anytime soon:
http://dfw.cbslocal.com/2012/01/06/foreclosures-down-but-homes-still-empty-across-dfw/
Housing recovery cannot occur without price discovery.
Guess what happens in any market where Deadbeats are allowed to live in their homes rent free for years and even collect rent on second and third houses that they are not paying the mortgage on while the PTB keep empty houses off the market: prices go up.
“Inventories are at the lowest levels since 1963″
Yes, essentially we are taking inventory in the showroom and ignoring the warehouse and everything that is in transit. We also are not talking about the surplus piling up at the suppliers.
What’s the trajectory of this thing?
Individual wages are flat or falling. The % of population working has been falling for half a decade. I think we are adding something like 2 million people per year to the could but are not working category. Per capita income is in a nosedive. Massive Federal transfers aren’t stopping this.
What is going to happen to the average house price isn’t depending just on where we are with income, but on where we are headed. It’s not a question of the realtor’s “inventory” at all.
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