Bits Bucket for January 22, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
June 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
I think Jack McCabe is honest and John Tuccillo, Chief Economist for the Florida Association of Realtors is not. I would multiply his numbers x 2.
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 11:21 a.m. Friday, Jan. 20, 2012
A third year of surging home sales in Palm Beach County has buoyed hopes of a market turnaround as 2011 ended with a 24 percent hike in purchases.
“When you can pick up a property for 30 cents on the dollar, it’s a good investment,” Turla said.
All-cash sales accounted for 31 percent of home purchases nationally in December, up from 29 percent in 2010.
Investors played a substantial role in December sales nationwide, buying 21 percent of homes sold, about the same as December 2010.
One looming cloud on the real estate horizon is the shadow inventory of foreclosures destined to hit the market after a long slog through the courts. In Palm Beach County, about 34,820 foreclosure cases are pending. Statewide, there’s an estimated backlog of 260,815 cases.
With only 5.9 months’ worth of single-family home inventory in Palm Beach County - the lowest since 2006 - Realtor Sherry Lee hopes to see some of that shadow inventory soon. Lee, whose Lee Property Sales is based in West Palm Beach, said clients are shocked at today’s paltry selection.
26 COMMENTS
There are currently;
1. 150,000 REO homes held by banks.
2. 371,000 open foreclosure files in Florida’s courts.
3. 530,000 mortgages that are 90 days or more in default. About half of these (265,000) have not made a mortgage payment in two years or more.
I have confirmed data above with John Tuccillo, Chief Economist for the Florida Association of Realtors.
That’s over one million troubleed properties in the State of Florida.
Prices will continue to drop as distressed properties are sold.
Jack McCabe
4:31 AM, 1/22/2012
http://www.palmbeachpost.com/money/real-estate/palm-beach-county-home-sales-up-24-percent-2114057.html - 84k -
“When you can pick up a property for 30 cents on the dollar, it’s a good investment,” Turla said.
It still depends on local incomes.
And how much that dollar was inflated (in terms of house price) in preceding years.
It’s more like $1.30 on the dollar as opposed to the $3.00 on the dollar it was in 2006.
Thanks, Jack - for digging up this information and confirming the facts. That proves that with all the available inventory coming online, people are selling a crazy low prices and now is the time to buy. Don’t take my word for it, ask any other professional realtor who does this kind of thing for a living. They are generally tuned in to the market and when they say buy, you say how much. Jack’s research proves that there are sellers eager to give you a great buy and the time to buy is now!
area realtor
10:57 AM, 1/22/2012
And the design was sooo faaaboulous !!
Proposed over-55 community for gays faces foreclosure
The dream to build New England’s first over-55 community for gays and lesbians near Fenway Park is in jeopardy.
Stonewall Miner LLC faces a foreclosure auction on February 3 on two properties in the Fenway where the 53-unit development was planned, according to a legal notice. Stonewall Miner is a joint effort between Boston-based Abbott Development and Stonewall Communities, a nonprofit organization whose mission is to build senior housing for gays and lesbians.
http://www.bizjournals.com/boston/real_estate/2012/01/proposed-over-55-community-for-gays.html
I’m straighter than an arrow, but I doubt if you’d ever see posts of 55 and over paraplegic retirement communities or over 55 atheist communities.
Why are LBGT people still a big deal? My supervisor is gay. He is very professional and well liked. His partner works in the same office area, also a nice guy. I worked with several gays and lesbians who have been obvious the last ten years. If you work in any big corporation in any big city, you will certainly have colleagues or even a boss who is L/B/ or G.
I discovered something: They do not bite.
If you don’t like people for their lifestyles, there are few areas in the world for the likes of you. But they tend to be in places like Somalia, Afghanistan, Sudan, - you know, all the theocracies that chop your head off for crossing the street on a “holy day” or something.
Calm Down, I am in no way homophobic. It was meant to be humorous (failed ). BTW my homosexual ex-housemate was over for dinner last night….
I don’t really see the humor. However, I would like to live in a community that excludes “gays”, and other, so-called minorities.
I used to be able to do that, but the government agents tell me that its “illegal” because it is exclusionary, and therefore discriminates on one basis or another, which used to be called freedom of choice and freedom of association, but is now “discriminatory”. Well, of course, it is, that’s what choosing means.
So, given that excluding “gays” is considered “illegal”, why would you consider excluding “straights” as acceptable?? Why would those same government agents not be cracking down on this discriminatory practice?? Oh, yea, I get it. It’s because “minorities” can do whatever they want and it’s okay.
I just don’t understand this insane moral relativism.
Dio:
Its exactly the same as me wanting 10,000 black people sued by the RIAA for illegally downloading and stealing music. to make up for past racial injustice.
Ebay CL napster limewire all have looked the other way when it came to minorities. how come there have been NO high profile case in involving a black person?
I really think that OHbaHma being the worst president we have ever had his legacy will be the elimination of political correctness and years down the road he will be held in high esteem for doing this…of course unintentionally
How could Obama be the worst? He did not change any of the Bush programs and spending that put us in a Depression.
I could care less where someone parks in a storm.
I just don’t want to hear about it.
+1. While the thought of two dudes getting it on makes me want to hurl, it’s their own damned business as long as both are consenting adults.
‘it’s their own damned business’
And along those lines, remember when ‘conservatives’ used to loudly say, ‘I may not agree with what you say but I’ll fight for your right to say it’? Contrast that with how the talk radio guys lay into the occupy protesters.
Back when I was a young pup in the military, I had words with a particularly obnoxious peace protester. An older NCO stepped in to defuse the situation, and said quietly, “That’s what it’s all about, protecting his right to call us fascists.” That stuck with me. Today both the peace maggot and the NCO would probably have a file opened on them.
But you just thought about it. You can have LBG friends without thinking of what they do in their private lives. Unless you are obsessed about what people do in their bedrooms at night. Somehow when discussing a work-related issue with my colleagues, I never imagine them doing things based on their lifestyles.
I discovered something: They do not bite ??
Not according to Rick Santorum……
That likely helps explain why Rick so appeals to the Republitard base.
My guess is that for gay / lesbians of that age who grew up in the 1950s or 1960s before alternative lifestyle went mainstream might still feel a bit out of the norm and like to keep to their own kind. Whereas as you see the younger gay and lesibians very much assimilated. Just the other day the teenage boy cashier at the grocery store (he looked like a high school kid) was wearing finger nail polish, make-up, and earrings. Could have been in a band or for some other reason but he seemed feminine acting. I guessed he was gay.
Also there isn’t any discrimination, as “breeders” are welcome to move in. I think the trick is that generally the geriatric set tends to be, you know… older and less tolerant and I suspect less welcome in most 55+ communities.
More info from the article:
53-unit development… where one- and two-bedroom condominiums were expected to be priced from $400,000 to $700,000.
The building in question looks like an old school building and/or project housing. Even if they opened it up to all lifestyles, they weren’t going to find 53 parties willing to pay $400-$700K for a retirement home near Fenway, and I guess gays would want to live in a warmer place during retirement as much as anyone else.
Besides, why scrunch into a condo? A gay retirement couple would do wonders with a run-down Oil City-type farmette. They’d have the place up to snuff — complete with production scale market garden — in no time. [/obligatory stereotype]
Off-topic thought for the day. What is going to happen to the planet’s human population over the next millennium? Will it rise asymptotically to some level with just slight variations above and below it over time? Or will it overshoot to the upside significantly and then come crashing down (a bubble) due to war, famine or pestilence or a combination of them? Have we already overshot to the upside?
In a hundred years all of us reading this today will be dead.
If you’re an Obama Zombie or McCain Mutant reading this, you’re already among the undead.
The long-term trend seems to be: Find a way off this spinning, wobbling planet!, “… the game is afoot, dear Watson!”
With the 1 child policy keeping fertility rates in China under 2.2(ZPG rate) for the last 20+ years, thier largest population group is 35-45. 30 years from now, the population of China will have stopped growing and will begin shrinking quickly.
Even if they were to begin moving away from 1-child policy, the number of 0-15 year olds is 2/3rds what it was 30 years ago. For the first time, more that 50% of China’s population is urban, with much higher % than that of the youth. There will be echo busts for a long time to come.
India’s fertility rate has fallen from 6 to below 2.7 over the past 50 years. Yes, 2.7 is still above ZPG, but it continues to move in the right direction.
The remaining high fertility rate countries are mostly in Africa, where there is also a very high death rate putting a lid on population growth.
My belief is that North Amrica and Europe will continue to have a below ZPG birth rate. Aisa is near ZPG with China below and India only slighly above, and both continuing to move down, Within a couple decades, Asia will join the negative ZPG rate.
This will leave only South America and Africa as the high fertility, continuing to increase population sources. With populations so much lower than NA, Eu, As, I think we’ll see falling global population within my life-time.
The falling population will be based on improving life-style and falling fertility rates, not based on limits on our ability to feed the global population.
I agree. Further I think falling populations are not a bad thing. The Malthusian curse will affect the parts of the world where poor people breed like rabbits. Disease and poverty will drive their populations back down.
Frankly, the U.S. population is too high. California’s population should be half as much as its current population, IMO. The damage to the resources is too much.
There was a report not too long ago that the number of people over 65 in China will grow above 400 million by 2050. Gulp!
HBB word $unday puzzle:
“The damage to the resources is too much.”
Bill remove the word “the” & Insert the word: “MY!”, just before the word; resources, … see the change in POV?
(Some people in America seem to have over-populated themselve$ as well Bill)
I did one better. I removed “the” and replaced it with “Hwy50Ina49Dodge.” There. That works fine.
California’s population should be half as much as its current population, IMO. The damage to the resources is too much.
California has 12% of the U.S. population and 33% of the U.S. welfare caseload, IIRC.
That would be an amazing statistic if it is true. What’s interesting is that many Americans think of California as a rich state. I’ve seen statistics that show that its poverty rate and high school dropout rate are both are higher than the national average.
That would be an amazing statistic if it is true.
“State’s safety net difficult to rank”
http://tinyurl.com/7294crn
There are two California’s…You can read about it here;
Two Californias - Victor Davis Hanson - National Review Onlinewww.nationalreview.com/articles/…/
Dec 15, 2010 – Victor Davis Hanson writes on NRO: The last three weeks I have traveled about, taking the pulse of the more forgotten areas of central …
“California has 12% of the U.S. population and 33% of the U.S. welfare caseload, IIRC.”
This seems a stark contrast to the state of California back in 2006, when housing was making everybody rich.
100% true article Dave. Thanks for the post. I miss my native California only because I was born there. I miss it for what it was and what it no longer is.
If I had to be poor, I’d much rather do it in a L.A. than Boston.
I am in the camp that says demographic trends are the best predictor of human sustainability but I’m also a firm believer in the relentless exponential pace of technology to alter natural patterns of development. At the core of my thinking is that the speed which our technology advances will out strip our genetic ability to adapt to such radical changes in our environment over the next 50 to 70 years. Parallel with the explosion of new chemicals, drugs, bio-engineered foods and exotic materials made from nanometer sized particles we are also introducing radical changes to the social framework by replacing traditional parent-child-ancestor framework with a society more dependent on the state. I’ll make one specific prediction: Science will eventually eradicate the belief in god by genetically altering the brains of future generations so as to remove this defect.
I predict a major war if it comes to that.
I bet you look good in your Captain Obvious custume.
You think? Awww shucks.
LOL. Just busting on you, Carl. No offense I hope.
Science will eventually eradicate the belief in god by genetically altering the brains of future generations so as to remove this defect.
I predict a major war if it comes to that.
Good idea for a sci-fi movie. Or a ‘Left Behind’-style book series.
Says the retarded cousin of Captain Obvious.
I think people are altering their own minds in regard to the belief or non-belief of any God or Goddess. The percentage of people who have no religion in America has been increasing significantly over the years in the last stronghold of Christian puritanism - America. Reality is sinking in.
“Fifteen percent of respondents said they had no religion, an increase from 14.2 percent in 2001 and 8.2 percent in 1990, according to the American Religious Identification Survey.” This study was in either 2008 or 2009
http://www.foxnews.com/story/0,2933,506849,00.html
I predict the percentage of Americans without religion will grow from fifteen percent to more than 20% by 2020. When the percentage is above 30% the Libertarian Party will be one of the two largest political parties while the Republican Party will be relegated to third party status.
Assuming the existence of a genetic trait which predisposes one to religious belief, an evolutionary advantage results for the mental phenotype which fosters belief in a God that supports procreation of large families, including the Catholic and Mormon Gods. Adherents have a higher fecundity than the average household in the human population, increasing the share of the next generation’s gene pool which harbors the trait. Religious laws requiring clean living may further support the effect, by reducing the pre-reproduction mortality rate. Under this scenario, Darwin’s theory of evolution predicts a growing population share over time of believers in a procreation God, and a commensurate dwindling share of atheists.
I disagree, religion is an artifact of human civilization. Darwin glimpsed at the mechanism of genetic evolution though the effects of natural selection but he never proposed “growing population share over time of believers in a procreation God, and a commensurate dwindling share of atheists”. Link please.
Technology in and of itself has no opinion on the issue of human belief systems. Religion is a integral function of primitive societies beginning about 15,000 years ago about the same time seasonal agriculture started to displace nomadic hunting. In my evolved thinking, technology is the master and bio lifeforms are the tools. The ultimate question is what does technology want?
“I disagree, religion is an artifact of human civilization.”
You can feel free to disagree, but your post completely failed to address my argument, which was based on the fundamental details of Darwin’s theory of evolution.
Not that there is anything wrong with completely changing the subject in a blog post or anything…it’s just that you start off by suggesting you were going to refute my argument. Whether or not religion is an artifact of human civilization does not have implications for whether there is a genetic marker for belief in God.
I suggest a casual reading of the history of the Catholic church, where nonbelievers (aka “heretics”) were summarily burned at the stake, bolsters the possibility that there may be a genetic marker for religious belief, as those who did not possess it were systematically eradicated from the Western European population during the Middle Ages.
“Link please.”
Sorry to say, but there is no link. I was merely applying a little something I learned while tutoring my 14-year-old son in his freshman HS biology class.
Ask your son how well that theory worked for the followers of Jim Jones. Then extrapolate.
You are forgetting that people from the high breeding zones are currently migrating, as rapidly as possible, to the more stable zones for “economic security”. What do you think will happen when huge numbers of them take over the regions you think are stable?
Europe, a Christian region for well over 1000 years is rapidly becoming Muslim, and yes, they like to have big families to increase the supply.
I believe Islam fits the description of religions that meet the assumptions of my argument. Hence if they are increasing in numbers more rapidly than average, that would tend to support my argument as well.
The part which was pure conjecture was the bit about whether there is a genetic marker for a tendency to believe in God-based religions which favor large families. Not sure this is plausible…will ask some geneticists I know and get back to you.
I have some updates on the real estate investment travails of a co-worker (really co-workers, but the decisions were all his, not hers). I’m going to put it in a sub-post so others can add their own stories here under a top post.
OK. Basic background. Co-workers. Long time married couple. She has been working for the government for 33 years. Had a private sector job before that, but women lawyers got treated like cr-p back then so she ended up in our group. She is under the old retirement system, so she will get 2% per year of service when she retires (cuts off at 40 years so you can’t get more than 80%). Doesn’t pay into social security (the money that would have gone to SS, gets paid into the retirement plan, so take home is no higher) and doesn’t have enough quarters in private sector work to qualify for anything there. I think he is in the new retirement system so is in social security and will only get 1% for each year of service (also maxes out at 40) and he hasn’t been working for the government for that long so has many fewer years of service. He had other private sector jobs.
They have a nice enough house in a great suburban neighborhood. Not sure exactly when they bought it. Early or mid 80’s maybe?
Anyway, they have two investment properties. The first was purchased about 10 years ago in the Boston area (student housing). Two bedroom condo. Child lived there with various roommates until she moved to another city for medical residence. The student tenants are self-sustaining (when one group finishes they pass it on to friends) and the rent generally covers the costs, but they have to go up to take care of the switchover every year. They have a realtor they work with up there who has told them that she won’t list it because “there is no market” for that student area right now. Yeah, right. When I suggest that there is always a market for everything at the right price, they bring up the fact that it is covering its costs. So, I think it must be underwater, though possibly not by too much.
The real big one is near here in NoVa. They paid $400K for a one bedroom condo in Vienna, NOT walking distance to the metro. It is currently about $100K underwater. Rent is not covering costs, but they won’t bring $100K to the table so they are losing money every month.
Here is the kicker. She wants to retire soon. Pension will be about 68% of current salary (we haven’t had a raise in a while). He will probably also retire, but I have no idea what sort of pension he’ll be picking up (maybe 15% of current salary?). He probably could also take reduced social security. And he wants to look for another job.
They just refinanced their house to get back a few hundred dollars a month so that covering the monthly losses on the second investment property won’t be so tight on a lower income. New 30 year mortgage.
He lectured me about the magic of leverage and how it makes for such wonderful investment returns when I expressed doubts about the second investment property back when I had just found this blog. I said that the leverage only worked if the investment went up. I got lectured for not being brave enough.
Geez, I’m struggling at age 55 (yesterday was anniversary)
to Not have such “inve$tment” concern$, in fact the only thing eyes hoping to “leverage” in “retirement” is the time eyes take sampling my homemade gourmet crackers, mmmmm (Hwy opens a bottle of Zin…) all Muir like: knapsack / journal / writing implement + x1 loaf of bread, x1 quart of black tea & honey … yep there goes Hwy up and over the back fence … smilin’!
(’course nowadays, there’s all those cool bling gadget$ to fidget with in case one encounters bad weather or missed step, ouch!)
yesterday was anniversary
Hey, Happy Bday Hwy!
Hope this year is a Doozie, Hwy. Congrats.
Double nickels on your dime, Hwy? Better start looking for rest areas.
Hwy, Happy Birthday! I am doing a mental cartwheel in your honor! Best wishes to you for a wonderful year.
“He lectured me about the magic of leverage and how it makes for such wonderful investment returns ….. I said that the leverage only worked if the investment went up.”
The magic of leverage works on the way down as well, and it makes for such wonderful investment loss.
….oh yeah, and you may not only lose 100% of your down payment very quickly but you may be on the hook for the whole amount you were leveraging whether the property is still worth it or not.
He lectured me about the magic of leverage and how it makes for such wonderful investment returns when I expressed doubts about the second investment property back when I had just found this blog. I said that the leverage only worked if the investment went up. I got lectured for not being brave enough.
Inflation is an amazing thing for the credit worthy if done right, but deflation of leveraged assets is nasty business even with interest rates near zero.
Captain Obvious here reporting in with my observations:
Inflation does wonders for government tax revenues in that NOMINAL incomes from wages (if not ACTUAL incomes from wages) rise and NOMINAL incomes from investments (if not ACTUAL incomes from investments) rise and this results in an ever rising stream of ACTUAL tax revenue going into government coffers that can be used to finance lots of spending.
But, alas, today you don’t see much of this ever rising tax revenue stream because of this darned deflation thingy.
The problem is that all inflation is not the same.
Inflation increases tax revenue and GDP when
1. People can bargain for higher pay - Not possible with globilization.
2. People can send a spouse to work- Done that
3. People can and will spend savings - Done that
4. People can borrow - Done that
Now we are at the point where all the PTB can do is shift spending from wants, services, manufactured goods to needs ie food and fuel and medical.
There is less bang for the printed buck. Until that money ciruclates and increases confidence people won’t borrow or invest. They will sit on the meager cash that they have hopping they can ride out the storm. Most of the rest of the othries,including those who benefited from the outsourcing of jobs here in the US, are already in this spot. Most people work for food and shelter and have little for anything else. Increase food and fuel inflation and watch demand for manufactured goods plummet. Watch unemployment rise. Watch civil discource disappear. Watch riots and crime become the norm.
Technology has created a world where we can produce far more than we need with fewer and fewer workers. This is the thing governments haven’t grasped . In the long run either gov will create jobs or an environment where it is cheaper to use people vs technology and outsourcing (ie no payroll tax and ntional health care) and redistribute the wealth or our abillity to manufacture will collapse as factories fall into disrepair and technology infrastructure crumbles with the problems of rising global poverty. Walmart will collapse due to theft by customers and employees, their supply chain won’t work as well as roads and telecommunications become less reliable, we will return to small stalls with owners protecting their goods with a 44.
Well given that they have pensions (or has some here would note the promise pensions) that’s a plus. Wonder if they have spent money as fast as they make it on other things.
Tell of woe from my relatives. In 2005 bought a big $1 million house in suburban Washington DC. Husband and wife probably made combined $100K per year. He did construction. He told me at the time that in 3 - 5 years the property would be worth 2 - 3 million. I did very well and did not laugh in his face or ask how he knew there was both oil and uranium on the land.
Shortly after buying this house they bought a building lot in central Virginia for $50K. And a house in another suburan Washington, DC town for $450,000. Both the houses are in ex-burbs. No way you could commute to DC. You could only commute to maybe to Reston, VA or western Fairfax, County and it would be a killer commmute. About 2006 the high paying construction work dries up. They eventually sell the $1 million house and break even! Even cover the commission. Some school teacher with an inheritance buys the house and the deal closes a few days before Lehaman and financial meltdown.
The $450K house is now worth about $200K. The building lot is for sale for $15K (along with many others.) They recently declared bankruptcy. My advice to them the past few years was to sell the $450K house. Even a year ago they might have been able to get out without too much damage. They put 10% down, I think. But prices have really deteroiated more the past 6 months. I recently declined another request for them to “borrow” money. If I don’t see the money I have loaned them that’s fine. That’s how I loan money. I consider it gone forever. If any ever comes back that’s a windfall.
Husband and wife are both in their early 50s. Both now working retail for under $10 per hour. They drive about 30 miles to their jobs. Husband works nights. During the day he working on his new career as a real estate agent.
I tell them try to sell the house. A miracle might happen again. Or abandon it and get an apartment closer to town where you will have much lower expenses than a $1500 per month house payment plus taxes and utilites. And might get better paying jobs. But they’re going to try to hang on a bit more. Things will better in the spring.
While it sounds like a tale of whoa? woe?, I think of it more as a great adventure. Just think, years from now, when they are reminiscing on their past lives on the porch of the nursing home, they’ll be able to tell their buddies, that yes, they used to live in a million dollar house.
I can’t ever say that. I don’t have any tall tales to tell when I can no longer work, and have no money to ‘retire’.
It makes me wish i had had bigger dreams and acted foolishly. I, too, could tell stories of past ventures gone awry.
“It makes me wish i had had bigger dreams and acted foolishly.”
I suppose I did have big dreams and definitely acted foolishly at points in my life. It didn’t make me rich, but if I live to the age when I have grandkids, I will have some great stories to tell. Perhaps I had better get busy writing them down in case I go senile before I have a chance to share my stories.
Sounds like your friends better start hoping and praying that the Fed’s housing price reflation program works “better than expected” so they can recover from that $100K underwater position on investment property number 2.
EDITORIAL | EDWARD L. GLAESER
Fed’s housing ideas won’t fix market
January 13, 2012|By Edward L. Glaeser
WE SHOULDN’T count on the housing market to carry America back into economic uplands.
Last week, Federal Reserve Chairman Ben Bernanke sent a white paper to Congress outlining possible reforms to current housing policies. The paper proposes converting bank-owned properties into rental units and reducing borrowing costs for owners who are at risk of default. Some experimentation along these lines makes sense, but attempts to rejigger the market only go so far — and the barriers to success are high.
…
It sounds to me like Ben Bernanke and his FOMC colleagues are doing all they can behind the scenes to make wannabe Trumps, such as your colleague and her husband, whole on their underwater real estate investments. And never mind about that other White Paper released a year-or-so ago that proposed winding down the GSEs; stepped up GSE involvement is a centerpiece of the Fed’s plan.
It isn’t “the housing market” which would benefit from the Fed’s proposed reflation program, but rather housing market participants, including homeowners and those who work in the Real Estate Industrial Complex. My question is, who gets to pick up the tab for this Fed-proposed redistribution program to make homeowners and REIC workers better off?
And so far as the supposed “free fall” in the housing market, I am completely missing it. Home prices in our area have never fully adjusted levels which area households can actually afford to buy. The popular California saying from a few years back, “We couldn’t afford to buy the home we live in,” is still applicable. The Fed is trying to snatch defeat away from the jaws of victory in the GSEs’ longstanding effort to provide affordable housing to the masses.
Fed pushes for government action to help revive housing
Ideas include big roles for Freddie, Fannie
By Patrice Hill
The Washington Times
Wednesday, January 18, 2012
**FILE** Newly built luxury townhomes are offered for sale Jan. 10, 2012, in Woodland Hills, Calif. (Associated Press)
Top Federal Reserve officials are prodding the White House and Congress to take more aggressive action to stop the free-fall in the housing market, warning that the U.S. economy will remain sluggish and vulnerable and will not fully recover until housing returns to better health.
Having failed to revive the housing market from its deep slump by driving interest rates to record lows and taking the unprecedented step of buying up many of the country’s mortgages, Fed officials have concluded that vigorous action by the executive branch is needed to overcome legal and institutional obstacles to a recovery.
In speeches and staff studies issued since the beginning of the year, the Fed has been urging such ambitious steps as setting up low-cost, streamlined mortgage-refinancing programs for millions of creditworthy borrowers, regardless of whether they have equity in their homes or previous backing from the federal government.
To blunt the impact of an expected deluge of foreclosed properties hitting the housing market and further depressing housing prices this year and next, the Fed says, the government should take advantage of a budding renaissance in the rental-housing market to create programs for investors to easily purchase and rent out thousands of foreclosed properties now owned by banks and the government.
While such steps have been debated in housing circles for months, the Fed’s push for action is touching off controversy in part because most of its recommendations involve using Fannie Mae and Freddie Mac, the giant mortgage agencies taken over by the government in 2008, to carry out the housing assistance programs.
Republican legislators are particularly piqued because the proposals would cause further losses at the agencies over and above the $165 billion already paid out by taxpayers, at least in the short term, at a time when Congress has been single-mindedly focused on limiting the taxpayer bailout of the mortgage giants.
Nevertheless, Fed Chairman Ben S. Bernanke quietly forwarded a staff paper at the beginning of the year offering a dozen or so ideas for jump-starting the housing market, saying he gets many requests from legislators for advice on housing.
“Continued weakness in the housing market poses a significant barrier to a more vigorous economic recovery,” said the paper, which noted that the 33 percent drop in housing prices on average since 2006 has eviscerated the main source of wealth for middle-class households while leaving millions of homeowners “underwater” with loans worth more than their houses.
Even the most diligent borrowers, unable to move or refinance when faced with joblessness or other adversities, are thrown into a dilemma that makes them more prone to default in the future, the Fed argued.
…
“The Fed is trying to snatch defeat away from the jaws of victory in the GSEs’ longstanding effort to provide affordable housing to the masses.”
Our prosperity is based on debt. Now, there are those who claim that US debt is somehow different from the debt of other countries who print their own currency. While other countries can print themselves into an inflationary spiral, the US can just print its way into prosperity.
I think the US ability to sustain debt is very high, but it has a limit. I understand the government is the largest buyer in the economy. But really, how much economic benefit does the society gain from every extra dollar of government debt?
One could perhaps create a graph and I suspect it would look like a bell curve (Y axis = dollars of activity generated per dollar of government spending; X axis = dollars of total debt).
Which straw (dollar) breaks the camel’s back?
Polly,
Your colleagues are nothing more than deluded, self-entitled boomers.
They’re creeps.
They just refinanced their house to get back a few hundred dollars a month so that covering the monthly losses on the second investment property won’t be so tight on a lower income. New 30 year mortgage.’
future short sale
Not a chance. They didn’t take out any money for any of the investment properties. I think they bought the house back when interest rates were astronomical. It was easily worth 4 times what they paid at the peak. Now is probably worth about 3 times. Close in DC suburbs are not going back to 80’s pricing and while they may have refied a few times, not taking money out means there is zero chance of a short sale.
I know for a fact that they put almost nothing down for the NoVa condo because it has two mortgages. Why do two mortgages if you are putting down a substantial down payment?
1975, in their late 20’s, my in-laws bought a house for $55K on the extreme north edge of Phoenix metro.
1992 in their mid-40s, kids out of the house, they sold for a $50K profit and bought in an upscale neighborhood on the south-east edge of town on a man-made lake. New mortgage, $175K.
2000, Quest bought the baby bell US West, whom MIL had worked for long-term. They were dumping the pension program and MIL took a large cash buy-out in exchange for early retirement at 52.
2002 they sold the lake front place and bought in a 50+, gated golf community. New mortgage $240K.
2003 MIL decides to become a flipper. Cash-out refi the house to $250K and take out $23K 2nd. She flipped a couple places, but with labor costs, she just broke even.
2007 now 59 and 61, they refi to $243,500 30-year mortgage.
2008 FIL, who had been selling large trucks, sees income fall through the floor. He went from selling dozens of truxks a year, making $100k+ comissions a year in 2006-2007, to scrambling for maintenance contracts and making maybe $10K in 2008-2010. Said the only reason he was bothering to go to the office was healthcare.
2011, at 65, retired.
House that would have sold for $550K at peak of the bubble, is worth about $300k today. Assuming 10% seller closing costs, they might be able to walk away with $20-30K.
So, now, they are both retired, living off 2 SS checks, savings, andwhatever hey have from her buy out. They have a huge mortgage, huge energy bills, huge HOA fees… They frequently talk of trying to sell and move into something cheaper, but so far, no movement.
This is less a tail of “income properties” than one of living it up in their 40s and 50s instead of getting ready for retirement.
I can only imagine how bad it will be for my generation. We never had pensions, so won’t get buy-outs. We won’t get 50 years of home price appreciation to splurge with. We’re going to be expected to pay a much higher % of our income to support the previous generation.
If my in-laws are any hint of the finaicial situation of the “rich” Boomers, we’re in for a real problem dealing with Boomer retirement.
The best retirement plan is a paid-off house. That becomes clearer each day.
Paid off house = imputed income.
No need to earn extra money in order to make a house payment.
Not needing to earn extra money means one gets to enjoy a lower tax bracket - not a lower standard of living, a lower tax bracket.
Paid off house = imputed income.
Will government tax this in the future ? never say never
“The best retirement plan is a paid-off house.”
Doesn’t that depend on whether real estate is going up or down? Or on other possible uses of your savings?
Suppose you had $1m in retirement assets circa 2006, all of which you invested in buying a house which subsequently declined in value by, say, 30%. They you would be looking at a $300,000 investment loss and no money with which to buy food.
Your statement sounds like something a Realtor™ would say, and makes no sense out of context.
Your statement sounds like something a Realtor™ would say
C’mon, you’re better than this. No realtor or bank wants you to pay off your house. They want repeat business.
“I can only imagine how bad it will be for my generation”
I am starting to freak a little bit. I am early 50s have quite a bit in retirement and other savings from years of work and frugal living. I can see it being all taxed away. I am very tempted to buy a nice place cash and stop saving any more money.
I feel this way more and more each day.
Very difficult politically to take peoples homes or raise RE taxes so much to force people out. But any other money people have is a prime target.
“I am very tempted to buy a nice place cash and stop saving any more money.”
What is stopping you? Go for it! The Fed has already announced its intentions to reflate the housing market, so you can count on the old saying that ‘Real Estate Always Goes Up’ becoming true again any day now.
Because it’s not easy to sell. So I could be stucco there for a long time. Not sure exactly were I would like to be stuccoed.
Why bother getting stuccoed if you are not already?
I suggest diversifying your portfolio into other inflation hedges and avoiding the DC real estate market like the plague.
What is this “inflation hedge” of which you speak, Kimo Sabe?
Serta has announced a new bedding product. A mattress with locking storage compartments, to make mattress stuffing more convenient.
I am very tempted to buy a nice place cash…
Hopefully in an area that has deflated close to ‘02 prices.
I should add that if you are in the DC area, wouldn’t it make sense to wait and see how Obama’s or a future Republican president’s proposed federal government perestroika pans out before gambling that DC housing prices will stay high forever?
Obama seeks power to merge federal agencies
By David Jackson, USA TODAY
Updated 2012-01-13 9:09 AM
President Obama plans to ask Congress today for greater authority to merge federal agencies as a way to shrink the government and save money, administration officials said today.
In remarks this morning, Obama will specifically ask to merge six different trade and commerce agencies that have overlapping programs.
…
I’m thinking 2016-18, to find out how many kicked cans are piled up at the end of the road.
I’m thinking 1996-98 prices, inflation corrected.
I’m thinking of waiting to see where the work is going to be.
I’m thinking 2016-18, when I’ll be back to 2002 income (inflation corrected, assuming no more layoffs)
I’m thinking I’m becoming a snowbird, because I’m getting tired of crappy winter weather.
I’m thinking somewhere north of 35 degrees North latitude, because I’m sick of 100 degree summers.
I’m thinking of telling everyone that I’m a Gay Christian Fundamentalist, just to see the smoke rolling out of people’s ears
CIBT, you’re forgetting that in inside-the-beltway parlance, a “cut” is actually just less of an increase than what was expected or wanted.
Market conditions, north of DC:
Prices are clearly way down from peak, and I think we’re starting to find a floor on the “lower” end. For example, I’ve been following a particular neighborhood where many of the houses are of the same 1950’s vinatge 3/2 rambler floor plan with full basement and 0.15 acre yard.
At mid-2006 peak, these houses sold for $350K-$400K. Several of these houses were priced in the $235K range went into contract quickly. Meanwhile, an identical house at $299K just sits there. While this is high compared to the rest of the country, it seems that people here have come to an unspoken agreement as to what they are willing to pay.
More of the same…
Booms then busts, expansions then contractions. War and then peace and then war and then peace…
Enemies become friends, friends become enemies. Some of the poor become rich and then later on they become poor once again.
The beat will go on.
(This was meant to be a response to Bill in Carolina’s post)
War and then peace and then war and then peace…
“The man who raises his fist first, is the man who has run out of ideas first.” H.G Wells
(page ripped from Cheney-Shrub modern book of “Diplomacy for idiots”)
I thought of W’s response of attacking Iraq and Afghanistan in response to a ragtag band of Saudi Arabian terrorists hijacking our planes and flying them into buildings as a failure of diplomacy and reason. But apparently the rest of America is fine with it.
I thought it was bad, too. But I remember the times. Do you?
The press and democrats were constantly bad-mouthing Bush for having “done nothing’>
“the country’s been attacked!!” “why hasn’t the president done something?” When will we respond to this attack???
the president is incompetent, he hasn’t done anything about the attack…..which led to
HOMELAND SECURITY (not!) and the “war on terror”.
You are either for us or against us. We will not let terror stand.
So, there you are.
Demands for the government to “do something” when a gang of radicals with ill intent came over to Amerika with welcoming passports in hand. no problemo. The Clinton Administration gave them a welcoming open door policy.
and……….crippled the FBI, CIA, etc, with court ordered restrictions on the use of intelligence gathering. It was a fiasco.
‘Enemies become friends, friends become enemies. Some of the poor become rich and then later on they become poor’
I’ve kinda subscribed to these ideas for a long time. That things go in cycles; that what seems permanent turns out to be temporary. But there are some ideas afoot that challenge this. For instance, when Wall Street and other banks around the world bet on the housing bubble and were wrong, they should have become a lot poorer. But the Federal Reserve created trillions of dollars and handed it out.
There are powerful interests that say this country is now in a war that will last generations. It is to be waged in every part of the world, including in the “homeland.” There are candidates running for president right now that talk about such things. We will never negotiate with ‘terrorists’. No personal liberty can stand in the way of the mission to keep us safe from this ‘threat’, a threat that will never end, we are told.
We have to have indefinite foreign occupations so as to ‘kill them over there so we don’t have to kill them here.’ Oh, and by the way, we can never, ever stop spending money on ‘defense’ and to suggest that we should is practically treason.
Imagine if we’d taken such a position after WWII. That we still hunted down enemy combatant “Huns and Japs”. That we still held Japanese Americans in internment camps. Or that we still sat on the brink of total war with Russia and China. It’s hard to contemplate drones today flying over Germany, “taking out” scurrying figures on video screens. But that’s exactly what we are being told to expect with this new war; that in 2075, armed with the newest technology, we will still zap our ‘enemies’ all over the globe.
I’m not an alarmist by nature. But I can hear what’s being said that I’ve never heard before. How we used to talk about deficits in billions and now it’s trillions. These same debts used to go up and down with the cycles, now they only go up.
Ben, what you say is spot on. The unfortunate reality, however, is that even in here, there is a very high sheep quotient that will continue to mindlessly vote the the status quo despite the ample evidence of the latter’s malgovernance, hostility toward fundamental rights and liberties (not to mention simple truths) and perpetuation of crony capitalism.
For instance, when Wall Street and other banks around the world bet on the housing bubble and were wrong, they should have become a lot poorer. But the Federal Reserve created trillions of dollars and handed it out.
I would ammend this sentence somewhat. The banks didn’t just bet on the housing bubble; they created it with their greed and hubris that focused on generating quick-buck mortgage originations that were doomed to fail, then passing off this toxic waste to “investers” and ultimately, thanks to the Fed - crony capitalism’s guardian angel - onto taxpayers. Yes, the banks and securities firms should’ve been allowed to go bust, but instead the Fed, Treasury, and the Republicrat Duopoly stepped in to shield them from the consequences of their greed and hubris, and forced taxpayers to make them whole. While the public reaction to this should have been outrage, the mental and moral debasement of our population was made clear when the sheeple dutifully sanctioned the biggest rip-off and swindle of taxpayers in U.S. history by electing pro-bailout Obama over pro-bailout McCain. Now they are voting for more of the same in 2012, while the elites desperately try to keep the Wall Street Ponzi going until after the election. People truly do get the government they deserve.
“mindlessly vote the the status quo despite the ample evidence of the latter’s malgovernance”
You need only to look to yesterday’s results in SC for that evidence.
“…ultimately, thanks to the Fed - crony capitalism’s guardian angel - onto taxpayers.”
Note the article I post below appeared several months before the GSEs collapsed into a pile of financial rubble.
Fannie Mae and Freddie Mac
End of illusions
A series of articles on the crisis gripping the world economy and global markets starts where it all began—with America’s deeply flawed system of housing finance
Jul 17th 2008 | from the print edition
THERE is a story about a science professor giving a public lecture on the solar system. An elderly lady interrupts to claim that, contrary to his assertions about gravity, the world travels through the universe on the back of a giant turtle. “But what supports the turtle?” retorts the professor. “You can’t trick me,” says the woman. “It’s turtles all the way down.”
The American financial system has started to look as logical as “turtles all the way down” this week. Only six months ago, politicians were counting on Fannie Mae and Freddie Mac, the country’s mortgage giants, to bolster the housing market by buying more mortgages. Now the rescuers themselves have needed rescuing.
…
“People truly do get the government they deserve.”
Not quite. The government is a reflection of the people. We are a corrupt people. It’s hardly shocking that we have a corrupt government.
Much talk these days about large government handouts to banks. Scant talk about large government handouts to the people. Both groups of donees are corrupt.
In defense of the “sheeple” they do get pizzed when they quit listening to Faux News and the rest of the MSM, and someone briefs them on how the banksters lobbied for systemic changes to make robbery “legal”, then became the only group who didn’t get handed a great big S##tbag, when TSHTF.
I ask them “Who are the only people who haven’t lost money/felt any pain in this debacle?”, and “Who enabled it?”
If you voted for Obama or McCain in ‘08, as 95% of the electorate did, then the answer to “Who enabled it?” is simple: you did.
Both Obama and McCain made no secret of their intention, on behalf of their bankster wirepullers and campaign contributers, to provide limitless bailouts to Wall Street while ensuring they would face no legal consequences or accountability for their swindles. Those who voted for Obama, McCain and the Republicrat Duopoly’s other Wall Street-owned candidates bent over and spread their cheeks for the Wall Street-Federal Reserve looting syndicate that continues to destroy the productive economy and replace it with a house of cards built on systemic fraud and avarice.
Its a good thing I didn’t vote then.
Unlike the Libertarians, I have zero faith that the upheaval caused by full implementation of their policies would be even survivable on a personal level, much less lead to anything like national prosperity.
In my view “Things really sucked, but then they got worse” does a pretty good job of summarizing things, no matter who gets to call the shots.
My definition of treason differs from theirs. History will show who’s right, but will I see it in my lifetime (I’m 49)?
Just beautiful and nicely said but I am afraid it is exactly what the ptb are preparing for to happen.
On another note how the hell did Newt get South Carolina? I knew that the people in the south married their cousins but are they dumb enough to vote for this power mongering idiot. It shows how low our standards have become.
‘how the hell did Newt get South Carolina’
This gets to the absurd party power over the primary/caucus system. A tiny fraction of potential voters actually vote in primaries. Most people don’t even vote. So these candidates are ‘chosen’ by a fraction of a fraction of the public.
I’ve mentioned before; ever notice there are no ‘get out the vote’ programs until after the nominees are chosen?
Here in AZ you have to register as a Republican by the end of January to vote in the February 28th primary. But we aren’t even seeing ads yet and I doubt very many people know about the deadline.
Why is it the MSM thinking is that it will all be over by now. Only 1.6% of the delegates have been elected. California doesn’t even get to vote until June!
“A tiny fraction of potential voters actually vote in primaries. Most people don’t even vote. So these candidates are ‘chosen’ by a fraction of a fraction of the public.”
Bingo! And along similar lines, notice how the MSM has stepped up to make a huge deal over the Iowa caucus vote recount that nudged ‘not-Romney candidate’ Santorum into the victory column by 34 votes, a victory margin of (34/29,805)*100% = 0.00114%? I personally find this effort to pull the wool over innumerate American voters’ eyes completely ludicrous. Only a complete moron would be convinced that this is a ‘huge upset.’
Santorum hails delayed Iowa victory as ‘huge upset’
NEW HAMPSHIRE
January 19, 2012|By the CNN Wire Staff
Iowa caucus count unresolved
Rick Santorum finished the Iowa Republican caucuses 34 votes ahead of Mitt Romney, but results from several precincts are missing and the full actual results may never be known, according to a final certified tally released Thursday by the Iowa GOP.
The new numbers show 29,839 votes for Santorum and 29,805 votes for Romney, according to the party.
The initial returns from Iowa gave Romney a razor-thin eight-vote margin of victory over Santorum, reinforcing the former Massachusetts governor’s frontrunner status and giving him a major momentum boost heading into the New Hampshire primaries.
…
34/29,805
Should have said 0.114% (Google math error); still not much to crow about — far below a statistically significant margin of victory, which would be on the order of
1.96*sqrt(n*p*(1-p)) = 169 votes,
where n = 29,839 and p = 29,839/(29,839+29,805), and assuming a 5% significance level.
“The men the American people admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.”-H. L. Mencken
“Every election is a sort of advance auction sale of stolen goods.”—-H.L. Mencken
“The notion that a radical is one who hates his country is naive and usually idiotic. He is, more likely, one who loves his country more than the rest of us, and is thus more disturbed than the rest of us when he sees it debauched. He is not a bad citizen turning to crime; he is a good citizen driven to despair.”— H.L. Mencken
“As democracy is perfected, the office of President represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.”—H.L. Mencken, The Baltimore Evening Sun, July 26, 1920
“Consider [the pedagogue] in his highest incarnation: the university professor. What is his function? Simply to pass on to fresh generations of numskulls a body of so-called knowledge that is fragmentary, unimportant, and, in large part, untrue. His whole professional activity is circumscribed by the prejudices, vanities and avarices of his university trustees, i.e., a committee of soap-boilers, nail manufacturers, bank-directors and politicians. The moment he offends these vermin he is undone. He cannot so much as think aloud without running a risk of having them fan his pantaloons.” (Note: Newt started his career as a university professor).
“…the men they detest most violently are those who try to tell them the truth.”
Ruh-roh…truth telling is my modus operandum.
S.C. has open primaries. All parties can vote. Maybe lots of Dems. voted for Newt because they thing he’s easier for Obama to beat than Romney?
Exit polls showed Christian conservatives overwhelmingly for Gingrich. I doubt those folks are Democrats.
Low IQs are well represented among the so-called Christian conservatives.
Stick with your instincts. Nothing goes on to infinity. Unsustainable paths will not perpetuate forever. This is just a larger distortion than any of us have ever experienced or even imagined.
But a “distortion” that doesn’t correct until I’m pushing up daisies means nothing to me.
“For instance, when Wall Street and other banks around the world bet on the housing bubble and were wrong, they should have become a lot poorer. But the Federal Reserve created trillions of dollars and handed it out.”
This brings to mind my all-time favorite interview about the policy failure of too-big-to-fail:
THE WEEKEND INTERVIEW
OCTOBER 18, 2008
Anna Schwartz
Bernanke Is Fighting the Last War
‘Everything works much better when wrong decisions are punished and good decisions make you rich.’
By BRIAN M. CARNEY
New York
On Aug. 9, 2007, central banks around the world first intervened to stanch what has become a massive credit crunch.
Since then, the Federal Reserve and the Treasury have taken a series of increasingly drastic emergency actions to get lending flowing again. The central bank has lent out hundreds of billions of dollars, accepted collateral that in the past it would never have touched, and opened direct lending to institutions that have never had that privilege. The Treasury has deployed billions more. And yet, “Nothing,” Anna Schwartz says, “seems to have quieted the fears of either the investors in the securities markets or the lenders and would-be borrowers in the credit market.”
The credit markets remain frozen, the stock market continues to get hammered, and deep recession now seems a certainty — if not a reality already.
Most people now living have never seen a credit crunch like the one we are currently enduring. Ms. Schwartz, 92 years old, is one of the exceptions. She’s not only old enough to remember the period from 1929 to 1933, she may know more about monetary history and banking than anyone alive. She co-authored, with Milton Friedman, “A Monetary History of the United States” (1963). It’s the definitive account of how misguided monetary policy turned the stock-market crash of 1929 into the Great Depression.
Since 1941, Ms. Schwartz has reported for work at the National Bureau of Economic Research in New York, where we met Thursday morning for an interview. She is currently using a wheelchair after a recent fall and laments her “many infirmities,” but those are all physical; her mind is as sharp as ever. She speaks with passion and just a hint of resignation about the current financial situation. And looking at how the authorities have handled it so far, she doesn’t like what she sees.
Federal Reserve Chairman Ben Bernanke has called the 888-page “Monetary History” “the leading and most persuasive explanation of the worst economic disaster in American history.” Ms. Schwartz thinks that our central bankers and our Treasury Department are getting it wrong again.
To understand why, one first has to understand the nature of the current “credit market disturbance,” as Ms. Schwartz delicately calls it. We now hear almost every day that banks will not lend to each other, or will do so only at punitive interest rates. Credit spreads — the difference between what it costs the government to borrow and what private-sector borrowers must pay — are at historic highs.
This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. “The Fed,” she argues, “has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”
So even though the Fed has flooded the credit markets with cash, spreads haven’t budged because banks don’t know who is still solvent and who is not. This uncertainty, says Ms. Schwartz, is “the basic problem in the credit market. Lending freezes up when lenders are uncertain that would-be borrowers have the resources to repay them. So to assume that the whole problem is inadequate liquidity bypasses the real issue.”
…
Are any politicians talking about a return to a system of American economic governance where the federal government (including the Federal Reserve Bank) limits its role in the economy to providing for a rule of law and favorable conditions to support a prosperous American economy, without getting into the inherently unfair and counterproductive business of using top-down financial engineering schemes to pick winners and losers? I’m holding out hope that America can return to sound principles of economic governance before we succumb to the fate of the former Soviet Union.
This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts.
By jove, I think Ms. Schwartz has finally discovered the flaw in her and Milton’s theory.
But her solution?
There is a fine line between trying to engineer a “soft landing” and “centrally planning the market”.
I think they crossed that line some time ago.
“We have to have indefinite foreign occupations so as to ‘kill them over there so we don’t have to kill them here.’ Oh, and by the way, we can never, ever stop spending money on ‘defense’ and to suggest that we should is practically treason.”
Eisenhower Farewell Address — Military Industrial Complex
Uploaded by ccvtee on Aug 20, 2007
BBC coverage of President Dwight Eisenhower’s Farewell Address, in which he warns the United States of America against the rise of the Military Industrial Complex.
“There are powerful interests that say this country is now in a war that will last generations…”
And George Orwell thought of it quite a long time ago and used it in his book “1984.”
Heartless pig hater!
Potbellied problem — Teacher must give up pet pig or move
By Frank Cerabino
Palm Beach Post Staff Writer
Posted: 6:40 p.m. Saturday, Jan. 21, 2012
Jennifer San Filippo has a pig living in her house.
Which is a problem, but maybe not the problem you might imagine.
San Filippo, a Lake Worth High School teacher, can’t imagine not having Yoda, an 80-something-pound Vietnamese potbellied pig, plopping down next to her in her Country Club Acres home in suburban Delray Beach.
“It’s like an old grumpy man living with you,” she said. “He reminds me of Walter Matthau.”
But Yoda’s spot in San Filippo’s living room is in jeopardy these days following an anonymous complaint to the county’s code enforcement office.
Her neighborhood of single-family homes and quarter-acre lots isn’t zoned for livestock, and she has until February 6 to evict Yoda or be subject to $1,000 daily fines.
“I got really depressed about it,” she said. “I haven’t thought of a Plan B.”
San Filippo wasn’t thinking about getting a pig three years ago as she browsed the Lake Worth Drive-In & Swap Shop.
“There was a man who had a piglet in his van. It was five days old and living in a box,” she said.
She felt sorry for the pig.
“I’m an animal lover,” she said. “I said, ‘How much is that pig?’ ”
Sixty dollars later, she had herself a kitten-sized piglet to bottle feed. The pig quickly fit in with her cats and dog, and made himself at home. And grew.
“I’m his mommy,” she said. “He’s not as cuddly as a dog, but he follows me around all day like a dog. I’ve been with him every day for three years.”
http://www.palmbeachpost.com/news/cerabino-potbellied-problem-teacher-must-give-up-pet-2116390.html - 95k
“It’s like an old grumpy man living with you,”
How could anyone on this blog possibly even relate to such a statement?
Jeff, I have a sort of serious question about this article. And I’m not saying it shouldn’t be posted. This is the bits bucket so anything goes. But why do you care? You read it. You posted the whole thing (or most of it). And you posted a link. You must care about this a lot. Why? People have been keeping and neighbors have been complaining about people keeping pot-bellied pigs for how long? 20 years? Longer?
I just don’t get why it captures your interest this much.
The real issue isn’t the pig. It’s about code enforcement and people who chose to live in HOAs, then flout the rules and expect exceptions to be made for them. There’s a lot of that about, so to me it’s perfectly fitting for the Bits bucket.
Now I think I’ll go enjoy some bacon.
“There was a man who had a piglet in his van. It was five days old and living in a box,”
You guys don’t see it? Let’s think.
“There was a man who had a piglet in his van. It was five days old and living in a box,”
A 5 day old piglet in a living in abox in a van driven by a man selling for $60. What are the chances??
Yeah, that’s the part of the story that got to me. I’d to hear that guy’s story. Where does he get the pigs? How much money does he make selling piglets out of the back of a van?
“I just don’t get why it captures your interest this much.”
The pig`s neighbor hasn`t made a mortgage payment in 3 years even after they put $100k in their pocket in 2007 and they get to stay. I side with the pig.
Location Address: 4901 JEFFERSON RD
Municipality: DELRAY BEACH
Sales Date Book/Page Price Sale Type Owner
Jan-2005 18047/0411 $255,000 WARRANTY DEED SA ELIMAR A &
Legal Description: COUNTRY CLUB ACRES 2ND ADD LT 54
Exemptions
Applicant/Owner
SA ELIMAR A &
Year 2012
Type: MTG
Date/Time: 1/24/2005 14:01:21
CFN: 20050042293
Book Type: O
Book/Page: 18047/437
Pages: 11
Consideration: $51,000.00
Party 1: SA ELIMAR A
SA EMILSON A
Party 2: WELLS FARGO BANK NA
Legal: COUNTRY CB ACRES 2 L54 L
Type: MTG
Date/Time: 1/24/2005 14:01:21
CFN: 20050042292
Book Type: O
Book/Page: 18047/413
Pages: 24
Consideration: $204,000.00
Party 1: SA ELIMAR A
SA EMILSON A
Party 2: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
LEHMAN BROTHERS BANK FSB
Legal: COUNTRY CB ACRES 2 L54 L
Type: MTG
Date/Time: 2/6/2007 09:56:17
CFN: 20070059064
Book Type: O
Book/Page: 21382/928
Pages: 6
Consideration: $100,000.00
Party 1: SA EMILSON A
SA ELIMAR A
Party 2: JPMORGAN CHASE BANK NA
Legal: COUNTRY CB ACRES 2 L54 L
Type: LP
Date/Time: 11/19/2010 09:32:48
CFN: 20100438604
Book Type: O
Book/Page: 24203/1104
Pages: 2
Consideration: $0.00
Party 1: AURORA LOAN SERVICES LLC
Party 2: SA ELIMAR A
SA EMILSON A
JPMORGAN CHASE BANK NATIONAL ASSOCIATION
DOE JOHN
DOE JANE
Legal: COUNTRY CB ACRES 2 L54 L
70 COMMENTS
SIGN THE PETITION TO KEEP YODA AT HOME!
http://www.change.org/petitions/sav...
Swine Society, Inc.
10:56 PM, 1/21/2012
You can never figure people out. You will only drive yourself crazy trying to figure people out. imho
I wonder, did they temporarily change the zoning for the Repub debates? I turned it on only to see RP with a number of pot bellied pigs.
Someone on at work had one (a pot bellied pig not a grump old man) they supposedly are wonderful pets. Pigs are supposed to be very intellingent and can trained as easily if not easier than dogs.
From pcmag dot com: Foxconn Clarifies, Apologizes for CEO’s Comparison of Workers to ‘Animals’
“Consumer electronics contracting giant Foxconn on Friday sought to clarify and apologize for statements by CEO Terry Gou at a Jan. 15 corporate meeting in which Gou reportedly compared the company’s workers to “animals.”
Foxconn, which assembles the iPhone and iPad for Apple and does similar work for dozens of top tech companies, has come under fire from human rights organizations and labor rights groups in recent years for a series of highly publicized workplace safety breakdowns and allegedly draconian labor practices at its mainland China factories.
Gou, also chairman of Foxconn’s Taiwan-based parent company Hon Hai Precision Industry, was reportedly entertaining Taipei Zoo director Chin Shih-chien onstage at an annual company meeting when he asked Chin “how animals should be managed” and instructed Hon Hai executives present to listen carefully to the zookeeper’s advice.
“Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache,” Gou said at the event, according to WantChina Times, which translated Gou’s remarks.”
“…to manage one million animals gives me a headache,”
(One can only wonder how his head would feel iffin’ he had to personally live on a peon-animal$ “managed” $alary!)
This oligarch will be castigated by his peers for being a bit too open about his, and their, view of the proles.
former CEO Terry Gou
A related article from the New York Times: How U.S. Lost Out on iPhone Work
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?hpw
Note to self: NEVER, EVER buy an Apple product.
Once again, the paradox…..Apple’s assertion about a shortage of “skilled Americans” is a lie. There is only a shortage of people who can/will work for $5/hour.
Housing, oil, food, taxes, you name it. They all want to pay their workers like Foxcomm, but they want to keep their current prices.
One wonders how long the US taxpayers will pay in blood and treasure to keep the “sea/air lanes open” while OPEC sells us $100/barrel oil, and the MNC benefit by exporting all of the middle class jobs.
Unless it is the destiny of the USA to become the “Global Blackwater”, kicking azz worldwide for the benefit of whoever throws enough money at Congress.
Western Civilization and the US of A……it was great while it lasted.
“Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. “
They will live in company dormitories and go to work a 12 hour shift on a biscuit and a cup of tea.
We just don’t have a committed workforce .
“That’s because nothing like Foxconn City exists in the United States.
The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.
Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes. “
The next round of innovation will be digital printing factories that eliminate the need for dormitories and cooks.
How U.S. Lost Out on iPhone Work
“Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,” the executive said.”
The same realization hit Dyson vacuum cleaners of the UK; they had no choice but to off-shore.
“The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. “
This is another piece of the puzzle. Not only are China’s workers willing to live in onsite dormitories, but the Chinese government underwrites costs. Here we have a strong contingent of free-marketers that want no government subsidy of new industries. The Chinese are not limited by that ideology and are out-competing us in the realm of policy.
Better off buying lottery tickets…
Agecroft Partners Predicts Hedge Fund Industry Trends for 2012
Pension Funds: Pension funds will be the largest contributor to growth in the hedge fund industry in 2012 as they continue to strive for enhanced risk-adjusted returns in order to decrease their massive unfunded liability. We are in the middle of a 10 year trend during which we will see an increase in the number of pension funds allocating to hedge funds along with an increase in the average percentage allocation.
http://news.yahoo.com/agecroft-partners-predicts-hedge-fund-industry-trends-2012-080648945.html
Hedge Fund Gains Too Often Leave Clients With Phantom Gain, Wall St. Vet Writes
Hedge-fund managers treat themselves to absolutely fabulous toys: Ken Griffin is fond of Ferraris; Steve Cohen is known for his Damien Hirst pickled shark and ice rink outfitted with its own Zamboni in a gabled cottage.
So where are the customers’ yachts?
“If all the money that’s ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good,” he writes.
And don’t forget the “thousand-year flood” of 2008, when the hedge-fund industry “lost more money than all the profits it had generated during the prior 10 years,” he writes. So much for the “absolute, uncorrelated returns” they promised: Investors would have done better by shoveling their money into T-bills, earning 2.3 percent
This involves a few simplifications. Some managers, for example, charge more than 2 and 20, some less. Yet the methodology does reveal a clear picture of the total profit hedge-fund investors received minus fees and the return they could have gotten by parking their money in Treasury bills.
From 1998 through 2010, these “real investor profits” totaled $70 billion, compared with fees of $379 billion, Lack estimates. Adding the fees back in, hedge fund managers salted away 84 percent of $449 billion in total profits, leaving 16 percent for their investors, he says.
And that’s not the worst of it, Lack says. HFRX index doesn’t account for factors such as “survivor bias,” meaning that only surviving hedge funds report returns (just as the victors write history, he says). Adjusting for those biases, the annual fees sink to $324 billion, while the real investor profits plunge to a negative $308 billion, he says.
Read more at the San Francisco Examiner: http://www.sfexaminer.com/entertainment/2012/01/hedge-fund-gains-too-often-leave-clients-phantom-gain-wall-st-vet-writes#ixzz1kCV8M2EK
Worked well for Kentucky, hope and a prayer…
Hedge fund with $100 million in Kentucky retirement funds fails
Arrowhawk Capital Partners of Darien, Conn., could not raise enough money from investors to succeed, said T.J. Carlson, KRS chief investment officer. KRS oversees $13 billion in retirement funds for state and local government employees.
KRS expects to get its $100 million back as Arrowhawk carefully unwinds its portfolio, Carlson said Thursday.
“That could change in the next few months, but as of right now, we do hope to get back the money we put in,” he said.
Arrowhawk did not return a call seeking comment.
Read more here: http://www.kentucky.com/2012/01/06/2017395/hedge-fund-with-100-million-in.html#storylink=cpy
As is in KY and every other state, when investments fall short of meeting obligations, taxpayers of that state, city, or federal gov by law pays any government worker pension shortfalls.
A couple of great finds, Hard Rain.
IMO these are the articles that need to be read and understood by older employees before attending retirement seminars where they will be promised ten-percent-plus returns on their retirement funds AFTER some very hefty fees are deducted.
Need to be read and understood but probably won’t be, at least this has been my experience.
http://www.aljazeera.com/news/americas/2012/01/2012121202915337525.html
In a world full of drones and sheep, where mediocrity is good enough for most, it is incredibly heartening to be reminded that we still have young people with dreams who are doing extraordinary things.
“…to be reminded that we still have young people with dreams who are doing extraordinary things.”
“Three cheers to youth!” Hip Hip hooray!
Now let’s take a moment to honor ALL those peons-drones & sheeple whose meaningle$$ daily job it is to design & manufacture those instrument$ of survival & electronic “bling” aka: a modern sailboat, communication satellites & gps navigation “tools”.
meh!…..The teenager, who turns 17 on September 20, has beaten the current record for being the youngest sailor to make an unassisted world tour by about eight months.
The current record holder is Australian Jessica Watson, who achieved it in May 2010, three days before she turned 17.
Unlike Watson, who circumnavigated non-stop, Dekker sailed from port-to-port, never spending more than three weeks at sea in a single journey.
http://market-ticker.org/akcs-www?post=200864
The gap-toothed, cousin-marryin’ inbred Jeds of South Carolina have voted, unsurprisingly, for the status quo in having yet another Washington insider and serial influence-peddler and hypocrite serve as their standard-bearer. More evidence, as if more were needed, of why the Republicrat Duopoly needs some real competition from a third party.
I’m having a little of a hard time with the official results after seeing RP speak to many packed houses and Newt canceling an appearance due to lack of interest. These sociopaths will do anything to maintain the status-quo, because their version is pretty sweet. The rest of us, not nearly as sweet.
I see a scenario where the serfs question the validity of the vote count at some point. When? Who knows?
‘Those who make peaceful revolution impossible will make violent revolution inevitable.’
John F. Kennedy, In a speech at the White House, 1962.
http://www.quotationspage.com/quote/24966.html
500 channels and SNAP go a long way as far as opiation.
NDAA Disclaimer: I am a loyal American and truly love and support our wise and generous leadership, including the Dear Leader himself whose skillful guidance, innate genius, dedication to ceaseless work on behalf of the people of this land make him not only a beacon of progress but also hope and change as the USA marches forward resolutely shoulder to shoulder on the road to progress, greater prosperity and happiness.
Diebold voting machines (Google who owns & operates the company) can ensure the desired outcome if needed.
I heard someone, maybe John Huntsman’s SC campaign manager, talking about the fine art of campaign appearances. He said if he expect 200 people, he would book a room for 150. Apparently, empty rooms are really bad form.
+1 Sammy….
George Will quote this morning;
Republicans across the country woke up this morning and said;
“Good God this guy could be at the top of the ticket”
I don’t get how the RNC thinks Newt could possibly appeal to female voters? My wife wants to hurl every time she hears his voice.
Didn’t she watch the interview when he cried?
He will cry more and start wearing pastel….
I doubt she caught that. She changes the channel the second she catches sight of him or hears a word out of his mouth.
I am completely and “udderly” (mooo!) disgusted. Gingrich is so arrogant in such an over the top manner, I can’t even imagine anyone would stomach him, let alone vote for him. I kind of agree with SV guy about fixed voting.
I dunno, maybe it’s some ploy to make Romney look good. If there’s one thing Gingrich does well, it’s that he makes Romney look almost desirable.
Gingrich is so arrogant in such an over the top manner…
Didn’t he stump for an embassy in Jerusalem?
Gingrich is so arrogant in such an over the top manner…
I think it’s a trait highly valued in American politics. It’s over for Romney though. The candidate carrying Goldman’s water and business as usual loses in the republican primary is something refreshing to see. The issues surrounding Romney’s taxes and the Bain did him in IMO. The working class stiff didn’t like Romney’s business as usual attitude so they went with the angry guy who will say or do anything to get elected.
Paul was the perfect candidate but never had a chance. This party loves wars so much that they are not going to let Paul be the nominee. Santorum has no appeal outside few evangelistas. By default, it’s Gingrich now.
Will Gingrich win in general? May be not but he has a shot. Once all the dirty laundry comes out we will be able to say one way or another whether he can win in general. One thing though, this guy will make general election interesting. He’s a sharp tongue man and will not be afraid to fight with MSM or anyone for that matter. Personally I never thought presidential debates make any difference but Obama met his match. Gingrich will lie, cheat and say anything and will come out as winner in the debates with Obama. Will the people watching the debates buy it? Time will tell.
My wife is at least 50% likely to vote Republican in the next election; but she talks about leaving the country if Newt is the candidate (LOLOLOLOL!!!).
“…over for Romney…”
Romney to Gingrich: Release Freddie Mac documents
By David Jackson, USA TODAY
Updated 20h 35m ago
By Win McNamee, Getty Images
It sounds like the Florida primary campaign has already started.
Stumping on the day of the South Carolina primary, Mitt Romney called on Gingrich today to release reports he wrote for the Freddie Mac mortgage lender.
“Speaker Gingrich worked for Fannie Mae and Freddie Mac,” Romney told reporters in Greenville. “By the way, didn’t he say he was going to release information about his relationship there? Let’s see what report he wrote for Fannie Mae and Freddie Mac, what the conclusions were and what the contract looked like. I thought he said he was going to do that. And let’s have him describe his relationships in Washington.”
…
I don’t really claim to understand the inner workings of the minds of the holier-than-thou folks who comprise the Republican base. But I have a hard time fathoming how somebody who carries as much marital baggage as Newt does can possibly meet their lofty standards of moral rectitude.
Poll-itics: Romney down, Gingrich up. Cheating on your wives pays off!
Posted on Friday, January 20, 2012, 12:35 pm by GottaLaff
I guess Newton Leroy Gingrich’s cheating and lying appeal to “family values” GOP voters. …
They hate mormon’s, intellectuals, athiests, muslims, women, blacks,mexicans, and secretly jews much more then they hate infidelity, political prostitution, war mongering etc.
http://www.bloomberg.com/news/2012-01-22/iran-military-conflict-would-harm-u-a-e-real-estate-market-jll-says.html
According to the UAE branch of the NAR, there’s never been a better time to buy real estate in the UAE!
I went to the local fun show with some friends yesterday. It’s a large show held at the Cow Palace near SF. The place was packed. Longtime attendees said it was by far the largest crowd they had ever seen. Thousands of people all exercising their 2nd amendment (while it lasts).
I picked up a nice new lead delivery system. ’Tis better to have and not need.
P.S. Go 49ers!
local fun show ??
What kind of show was it ?? Lots of ways to have fun SV guy…
“lead delivery” is a pretty good tipoff.
“fun show” = gun show.
“I picked up a nice new lead delivery system.”
What did you get an AK?
AR-15, 24” SS bull barrel, etc.
AR-15, 24” SS bull barrel, etc.
And threaded for a hush puppy?
El Senior Woodrow just paid me a visit. AR-15s…mmmmmm.
Are you more worried about a man who robs with a gun or a pen?
When you target practice have you considered using pictures of bankers, lawyers and politicians as targets?
The pen is mightier than the sword.
Your target idea is a good one although it’s probably illegal now due to some sub-section in the NDAA.
Even though that used to be considered harmless venting, it wouldn’t be wise or appropriate in today’s climate. Shooting at Zombie targets is still OK, though Obama supporters might take umbrage.
Why the large turnout, what with Parzdent Newt on the way?
I would say the scent of tyranny is in the air. Probably only a local thing though. You should be fine up there. Carry on.
I live in a county full of of Deadbeat pig hating Robo signed squatters
Help may be past due
Foreclosure-avoidance program aids some, but critics say it won’t stop state’s mortgage crisis
Written by Lily Leung noon, Jan. 21, 2012
Updated 8:12 p.m. , Jan. 20, 2012
A $2 billion state program that could save 100,000 homeowners from falling into foreclosure has provided relief to borrowers, but some critics wonder if the relief is too little, too late.
California, one of the hardest-hit states in the U.S., launched Keep Your Home California last year to help folks who’ve lost their jobs, seen their companies move away, or watched their home equities plummet from price-boom highs. The idea is to catch them up on mortgage payments, help them relocate after a short sale and cut their principal, by far the most controversial part of the program.
“Our goal is really simple: to help as many people as possible as quickly as possible,” said Evan Gerberding, spokeswoman for the California Housing Finance Agency, which runs the statewide program.
Those who pan the program say the assistance, funded by taxpayer dollars, isn’t enough to stem a crisis that shoved California into third place in foreclosure filings last year, with foreclosure-ridden Nevada and Arizona leading, based on recent numbers from Irvine-based data company RealtyTrac. The latest numbers from DataQuick show close to 9,500 homeowners in San Diego County alone were foreclosed upon from January to November 2011.
“It’s a good idea,” said SDSU real estate professor Michael Lea. “But the problem with the stock of distressed mortgages is that they’re way past being able to be helped.”
…
“relief to borrowers”
“funded by taxpayer dollars”
“It’s a good idea,”
Check out Bill Moyers show this week. Really rips into Obama’s economic team and has a great interview with Reagan’s former economic mentor David Stockman. Notice his comments on the crash of 07′. It’s was all a bluff to get congress to fork over 700 billion dollars.
http://billmoyers.com/segment/david-stockman-on-crony-capitalism/
Does anyone remember? I am going by my memory here.
I am suspending my election campaign so that I can be in DC in this time of crisis - John McLame
I urge my fellow colleagues to vote for this bi-partisanship bill to save America’s future - Barack “hope you won’t get indefinitely detained” Obama
Barack “hope you won’t get indefinitely detained” Obama
I _finally_ just figured out what Obama’s slogan was:
“Hope and Chains”
Everyone just heard what they wanted to hear.
“Mr. Chambers! Don’t get on that ship! The rest of the book, “To Serve Man”, it’s… it’s a cookbook! “
Moyers is one of the few who tries to get at the truth. The right demonizes PBS most without ever watching his shows.
“The right demonizes…”
They specialize in straw man demonization…
Moyers is one of the few who tries to get at the truth.
Moyers avoids the elephant in the room questions: “Who are the super rich as a cohort?” or “Why are we exhausting our prosperity in the middle-east?” or “Will the American republic survive without a middle-class?”
The third rail is just too lethal despite freedom of speech.
This weekend Bill Moyers returns to television with Moyers & Company. In his first show, Bill explores how Washington made the rich richer at the expense of the middle class. On Friday, the premiere episode of Moyers & Company, Bill’s guests – Jacob Hacker and Paul Pierson, authors of Winner-Take-All Politics: How Washington Made the Rich Richer — And Turned Its Back on the Middle Class, argue that America’s vast inequality is no accident, but in fact has been politically engineered.
How in a nation as rich as America can the economy simply stop working for people at large, while super-serving those at the very top? Through exhaustive research and analysis, the political scientists Hacker and Pierson — whom Bill regards as the “Sherlock Holmes and Dr. Watson” of economics — detail important truths behind a 30-year economic assault against the middle class.
1. The elite are well known. Forbes publishes a list every year.
2. Your second question makes no sense. “Our prosperity” who are you talking about?
Wow - This is a must read and will be posted tomorrow.
http://archive.truthout.org/bill-moyers-money-fights-hard-and-it-fights-dirty64766
If the crash was a bluff to get congress to fork over money, then why did the crash continue long past TARP? The crash didn’t stop until the easing of FASB157 alowed them to lie, finally stopping the margin calls.
Note the date on this article: Three years back from the present. If anyone can post recent articles documenting the success of this program in comments to this one, I would appreciate it.
Obama offers mortgage relief; foreclosures plaguing county
$75 billion program is unveiled in bid to lift nation out of recession
The sale prices for houses in this Eastlake neighborhood in Chula Vista reflect the January median price for all resale houses in San Diego County. The house on the left is listed at about $330,000. (Nelvin C. Cepeda / Union-Tribune)
By Michael D. Fletcher and Renae Merle
2 a.m., Feb. 19, 2009
MESA, Ariz. — President Barack Obama unveiled a $75 billion foreclosure prevention program yesterday aimed at arresting one of the root causes of the nation’s economic spiral by helping as many as 9 million homeowners obtain more affordable mortgage terms.
The program, part of the Obama administration’s effort to jolt the nation out of its deepening recession, went beyond what some analysts had anticipated and was welcomed by many of the nation’s top lending institutions. But it also drew criticism from some housing experts and consumer advocates, who argued that it did not go far enough in addressing some critical aspects of the foreclosure crisis. Many key details of the plan will not be released until early next month.
Obama said the mortgage plan would help all those confronted with rapidly eroding home values by helping those in danger of losing their homes.
“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are ‘underwater’ or close to it,” Obama said.
The three main elements of the proposal include a program to refinance 4 million to 5 million homeowners with little equity in their home into cheaper mortgages; a $75 billion program to keep 3 million to 4 million homeowners out of foreclosure; and doubling the size of the government’s commitment to Fannie Mae and Freddie Mac to $400 billion.
It is the largest federal foreclosure prevention measure in decades, relying on a series of incentives to jump-start fledgling efforts to keep millions of distressed borrowers in their homes. It also is the first major government program aimed at homeowners who are still current on their loans and will require large banks that have received government bailout funds to abide by industry standards for loan modifications established by the Obama administration.
About one in 10 homeowners was delinquent on his or her mortgage late last year, and as many as 6 million homes could go into foreclosure during the next three years without this program, said Shaun Donovan, secretary of housing and urban development, adding, “We believe we can help a very large share of these.”
…
Once the RNC ends its “Romney vrs not-Romney” imbroglio, I expect the surviving candidate to start hammering Obama on his housing policies. My suggestion: Ignore any criticism which does not offer any hint of what the RNC candidate suggests would have worked better. Not all problems have readily available solutions.
Obama to Try Better Smoke and Mirrors to Address Housing Market Woes
Author: Yves Smith · January 19th, 2012
If I had Onion-level parody skills, I’d treat the latest story in The Hill on Team Obama’s latest housing headfake masquerading as an initiative by riffing on one of its planned new program. Call it HUMP, Homeowners Upward Mobility Program. In true Ministry of Truth style, mortgage borrowers facing foreclosure would be moved, discreetly, into tent cities that would do Potemkin proud, with names like “Country Club Lane” and “Lake Shore Drive” and painted facades in front of their tents and shanties. Local merchants would praise the new subdivision and the inhabitants would say how nice it was to now be living in a McMansion, even if it was only really a couple of inches deep.
But instead you get my normal shtick.
The Administration is so far from having a plan that it is only talking about having a plan: “White House signals more aggressive stance to protect homeowners.” It’s a little late to be talking about doing something in January of an election year, particularly when you’ve spent over a year ( (SIC) starting in November 2010 with the coverup known as the Foreclosure Task Force, which dovetailed nicely with the administration basically taking over the attorney general “settlement” talks, but letting Iowa AG Tom Miller get a lot of media profile so as to disguise who was running the show.
…
VRBOs.
I am day dreaming again of working 8 months in Phoenix and vacationing (working from vacation home) 4 months (summer) in Flagstaff starting in a few years.
I like the VRBO web site. Current monthly price on a 3 bedroom / 2 Bath clean and nifty furnished cabin (furnished down to the spices) is $2,995.
Let’s figure $12,000 per year “vacationing” and working when I feel like it. Mountain biking mostly in the 70 degree temperatures while Phoenix bakes at 115 in the day and 95 at night. Twenty years of that and maybe permanently live there in the high country. With dwindling population of people who could afford second homes, I think it’s a better deal than owning, as the prices of rural vacation homes comes down. Moreover, I could get the freedom to move to different locations and find which one I like.
I want to follow the comfortable climate all year. That is part of the reason to get financially independent.
{ pop! dream over }
If we had “real” money I would like your idea.
We don’t.
Renting for $2995 a month for a 3/2 in Flagstaff is insane. For “twenty years of that???” You could buy something for under $100K and pay it off in five years.. for HALF that monthly rent.
Yes yes, I know I’m going to draw howls that I’m acting like a “realtor”
but does nobody run numbers any more?
$100,000 does not get you into a decent neighborhood in Flagstaff. $250,000 or so gives you enough space away from your neighbors so that you won’t hear their stereos and they won’t hear yours.
$450,000 gets you into the gated community of Forest Highlands.
Oops sorry. In previous posts you said that you lived with your sister, or you have very few posessions and can move at the drop of a hat, or that you live in an extended stay hotel, all in the name of extreme frugality. I didn’t realize that you had suddenly gone all dainty and wanted space and peace and quiet and spices and stuff.
I guess I could always live in a pup tent in Flagstaff from June to September if I must always be frugal.
I lived among section 8 people for decades because I rent two places for my career. I think at some point in my life I deserve to be among decent people. That requires more money.
Well, don’t feel bad. I’ve lived among Section 8s for a decade myself so I can’t blame you for wanting something nice. But $450K is a lot to pay. Even in expensive DC — you know, with all the fat cat defense contractors at all — $450K will get you some very nice housing. Who has that kind of income or savings in Flagstaff?
My mobility and frugality is only for my career, which depends on a lot of airline travel. In a few years I will downsize my income/career and not travel so much. That way I would be able to buy my house in cash in a good part of the hot Arizona desert city and spend a few months of the year in the high country.
Instead of paying for two places all year round like I’m doing now (two rentals), I will pay property taxes for one and pay four months rent for the place to get away from the searing heat. Capiche?
when I lived in Phoniex I used to visit Flagstaff and Mnt Lemon often. It was so nice to see green and get out of the heat.
I just stayed at inn suites in Flagstaff. Mnt lemon I could stay at the windmill inn and just drive up for the day.
Bill have you thought about NM ? sort of desert and mountains at the same time. I don’t know how expensive it is these days though ?
Has America made any progress on the issue of fairness between those who exercised financial prudence in buying (or renting) homes they could afford versus those who bought homes they could not afford, presuming that others would help pay for them if necessary? I’m also wondering where Romney and the surviving handful of not-Romney Republican candidates stand on this issue.
Note that I am posting another three-year-old U-T article here, in this case an editorial. Has America progressed whatsoever on its thinking about fairness in the housing market?
Union-Tribune
U-T Editorial: The sole downside of default
Responsible borrowers get the tab for saving delinquents’ homes
2 a.m., Jan. 11, 2009
As foreclosures hit the multimillion mark, Washington sought to keep owners on the verge of or in foreclosure in their homes, often pressing lenders to modify home loans so payments are affordable.
In the first half of 2008, a government survey notes, 53 percent of homeowners with modified loans defaulted again.
That’s worrisome. The moral duty to repay this debt already sagged below house prices. Now the legal duty sags, too.
The Federal Housing Administration advertises on YouTube and Facebook a $300 billion program to assume bad mortgages and replace them with FHA-insured, 30-year, fixed-rate mortgages.
The Federal National Mortgage Association, better known as Fannie Mae and insurer of much of this debt, streamlines modifying loans to limit monthly payments to 38 percent of borrowers’ gross income. Fannie is also testing if it can speed up “short loans” – selling houses ahead of foreclosure for less than is owed – by pre-approving how much of the lender’s loss on the initial loan it will cover.
Citigroup, bailed out by the feds, agrees to pending federal legislation long anathema to banks: letting judges reduce what owners in bankruptcy owe on home loans signed before the law is enacted.
As a last resort, Web sites tout ways owners can walk away from a house because it’s worth less than they owe, even though they can afford the payments.
And the consequences to owners who simply default? After four years or, in some circumstances, two, Fannie will insure another mortgage if defaulters have “repaired” their credit.
Efforts to stop foreclosures go beyond paperwork. The Association of Community Organizations for Reform Now plans three weeks of “events” to “stop the foreclosure machinery” by urging people to move back into homes they lost or stick tight in homes they will lose.
They may quickly learn that the law is not on their side, and for good reason: Lenders who lend for a mystery profit can fast go out of business.
Who pays for this massive, unprecedented, after-the-fact, affordable-housing program for millions who willingly if gullibly took on debt they can’t repay? Federal taxpayers, including millions of homeowners who borrowed what they could afford.
…
The only fairness is you keep what you earned and are not forced by gunpoint to give to anyone else.
This program sounds benevolent to those who suffered job loss through no fault of their own. But isn’t there a risk this program will tempt homeowners with jobs they really hate, but hang on to so they can keep making the mortgage payment, to ditch their jobs in order to qualify for the forbearance?
Fannie Mae and Freddie Mac revise policies on mortgage forbearance
On loans they own or have securitized, Fannie and Freddie are directing servicers to suspend or reduce monthly payments when a borrower can show a job loss.
By Kenneth R. Harney
January 22, 2012
Reporting from Washington—
If you have lost a job and are in danger of falling behind on mortgage payments, here’s some potentially important news: The two largest players in mortgages, Fannie Mae and Freddie Mac, are revising their policies on forbearance when unemployment interferes with the ability to stay current on a home loan.
Forbearance means that a lender or mortgage servicing company will either suspend — cut to zero — or reduce required monthly payments for a specific period of time. On loans they own or have securitized, Fannie and Freddie are now directing servicers to forbear when a borrower can show a job loss.
Unlike the companies’ earlier rules, servicers can grant half a year of reduced or suspended payments without getting permission in advance. If unemployment continues beyond six months, and if the servicer believes additional forbearance for up to another six months would be appropriate, it can ask Fannie or Freddie for approval to do so. During any unemployment forbearance period under the rule revision, borrowers will not be subject to foreclosure, even if they had fallen behind on payments before the forbearance began.
Fannie Mae’s policy becomes mandatory for all loan servicers March 1. Freddie Mac’s policy takes effect Feb. 1. Though no estimates were available on how many borrowers could be assisted under the new guidelines, the numbers are likely to be substantial at a time when the national unemployment rate is at 8.5%.
Forbearance, it should be noted, does not mean a forgiveness or reduction of the principal balance on the mortgage. Think of it instead as a timeout. Whatever amounts go uncollected during the forbearance period must eventually be repaid.
Say, for instance, that you owe $2,000 a month on your loan. Suddenly you lose your job and that payment becomes impossible. An unemployment forbearance agreement might allow you to pay nothing on the mortgage while you search for a new job. Or if your spouse still has a job and you can afford it, your monthly payment might be cut to $1,000.
If your job search ultimately took four months, you’d owe $4,000 on the partial reduction plan or $8,000 on the suspension plan at the end of the forbearance period. You’d be expected to resume your regular $2,000 payments and work out an arrangement with your servicer to repay the deferred amounts in affordable increments. If this happened to be $500 extra a month, your repayment would take eight months on the reduction plan, 16 months on the suspension.
Not everybody owning a home with a Fannie or Freddie mortgage will be eligible for the expanded job-loss relief. To begin with, the house must be a principal residence, not a second home or investment property. Fannie’s guidance to servicers specifically rules out assistance when the home was financed with an FHA, VA or Rural Housing mortgage.
Most important, there must be a documented “financial hardship” caused by the employment loss, and there must be a reasonable chance that without forbearance the borrowers could sink into default and eventually lose the house.
…
this conveniently allows F&F to keep shadow inventory in the shadows too,right? Truly lipstick on a pig.
http://www.politico.com/politico44/
Obama sparred with Steve Jobs over outsourcing
By BYRON TAU | 1/21/12 2:38 PM EST The New York Times reports on a terse exchange that President Obama had with the late Steve Jobs last February over why Apple couldn’t produce its products in America:
But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
The fact that Obama had to even ask the question tells you all you need to know about the community organizer. Instead of making the US a more attractive place for industry Obama is still trying to diagnose the problem.
It was an awesome NYT article. Reading that exchange with Steve Jobs, as I have suspected for long, Obama proved once in all for that he’s not fit to be the head of any government. Head of the state may be, but definitely not the head of a government. There’s just nothing there with this this guy.
Our Entitlement president knows no other way to succeed other than by “playing the system”. He played the system his entire life and became President. Obama is no different than any other silver-spoon-in-mouth spawn.
That he thinks life’s challenges are solved with a wave of a magic wand isn’t surprising. When you have the federal government and U.S. courts as your father, such near-total naivete is expected.
Nearly everybody does that. There are only a tiny number of people who don’t play “the system”. To really not be in the system a person would have to do something like move to Alaska, live in a cabin with no electricity, and eat only the food that he hunted, or trapped, or whatever.
How is Obama like “silver-spoon-in-mouth spawn” ? He was born to mixed-race parents at a time when his parents’ marriage was illegal in a dozen states. Then he was abandoned by his father. You’re not making sense.
Obama’s question no more proves his unfitness for governance than Steve Jobs non-answer proves he was unfit to run Apple.
Obama probably had his own ideas about what the problems are. It does not indicate incompetence to ask what someone else’s thoughts are. Jobs cut off the discussion by essentially saying that nothing Obama can do will bring the jobs back.
Perhaps Jobs realized that talking with Obama was a colossal waste of time.
That Obama can do nothing to bring jobs back to the U.S. is a preposterous proposition. There’s plenty he could do - but he’s not willing to offend his voting bloc.
What could Obama do that would bring back jobs, but offend his voting bloc? Do you mean weaken union further, or maybe eliminate the minimum wage, OSHA, and so forth so that Foxconn will set up factories in this country?
Excellent article about Apple in the New York Times linked in above thread about Foxconn
So asking questions is a sign of ignorance. Seriously there are many things to bash Obama with this is rediculous. I suggest that his asking people outside his inner circle is a good thing. I wish he’d do it more in terms of economics and WS.
I believe one article suggested the IPHONE would cost 20% more, say 100 dollars.
There are plenty of things the US could do to get these jobs back
1. Do away with payroll tax and have a national health care plan. Bingo employing people in the US just got a lot cheaper. Tax elite and oil to make up the difference. Print money to make up the difference.
2. VAT tax narrows the gap.
3. Tariffs
So asking questions is a sign of ignorance. Seriously there are many things to bash Obama with this is rediculous. I suggest that his asking people outside his inner circle is a good thing
Don’t interfere when the young ‘uns are excitedly repeating the talking points they learned for the day. “This proves he doesn’t know anything! He had to ask a question! See? He’s a programmed robot! All he knows is community organizing! Those guys are always asking questions!”
Just relax and laugh. They’re only convincing themselves- and that’s clearly no major feat.
Why can’t that work come home? Mr. Obama asked.
That work _could_ come home—just as soon as we have a population so financially desperate for opportunity that they are willing to work like slaves for a few thousand dollars a year.
Obama knows full well why jobs are outsourced. Questions like “What does it take” and “why can’t that work come home” are rhetorical English metaphors.
The rough translation of Obama’s question was “If you gave up a few sheckels in profit, you could help the country that helped you. But instead, you’re a greedy profit-mongering slave-driving b*stard. Why do you hate America?”
And no, that’s not snark.
Joe Pa dead.
I bet it’s the “treatment” that killed him NOT the cancer itself.
One of the saddest stories in American football history…
Social media sets off firestorm of false reports Saturday that Joe Paterno died
By Paul Farhi, Sunday, January 22, 3:25 AM
Reports of Joe Paterno’s death turned out to be greatly exaggerated Saturday night. But unlike Mark Twain’s famous declaration that he was still alive 115 years ago, the erroneous accounts about the former Penn State football coach’s demise traveled far and wide within minutes, whipped into a firestorm by social media.
The false reports began Saturday evening, when Onward State, a student-run Web site affiliated with Penn State, apparently was the first to report that Paterno, 85, had died. The site said it based its report on an e-mail sent to the school’s football players.
The student report was picked up by a local Top 40 radio station, WBHV (94.5 FM), which added the detail that Paterno had died with his family by his side, according to the Poynter Institute, a journalism-education organization that itself tweeted the inaccurate report.
Within minutes of Onward’s story, the news appeared on CBS Sports’s Web site, followed by the Huffington Post and Deadspin. Journalists began tweeting it, too, including Anderson Cooper of CNN and Howard Kurtz, the former media columnist for The Washington Post and host of a Sunday morning CNN program. Both Cooper and Kurtz later corrected themselves.
But Paterno, who was seriously ill with lung cancer, hadn’t died. He died Sunday morning.
…
Video
Listen to previously unpublished excerpts from Joe Paterno’s final interview with The Washington Post’s Sally Jenkins. (Jan. 22)
I have no dog in this fight — hardly even watch college football. But from this side of the continent, it looks like the Penn State administrators reacted to the scandal with ignominious cowardice in their treatment of Paterno. For shame.
I dunno. Paterno made a Faustian bargain in order to keep winning after he learned of Sandusky’s unusual and difficult proclivities.
Paterno initimated he was a timid fellow who didn’t know how to handle the situation. However, had Sandusky started failing in his on-field duties, I have little doubt Paterno would have quickly relieved him of his duties.
The government tried controlling inflation during the Nixon years. How’d that work out for them?
A Quartet of Fed Chairmen Body Slam Ben Bernanke
Politics / Central Banks Jan 20, 2012 - 07:37 AM
By: Fred_Sheehan
This P.R. release barely needs comment. For the purported “transparency,” see “Presidential Rivals: Drop the “One Percent.” Trumpet the “Negative Four Percent.”" “Presidential Rivals” quoted from a strategy session at which the FOMC [Fed Open Market Committee] gathered a consensus to not tell a soul outside the temple that it would officially adopt a policy to create inflation (i.e., “Inflation Targeting”). The Federal Reserve does not command the authority for this “transparent” maneuver.
Previous Federal Reserve Chairmen were dead set against the idea of any inflation. Back in those days (Before Bernanke), “stable prices” meant no inflation. (That every Fed chairman quoted below failed, and some failed terribly, to accomplish this mandate, should be seen as a warning of what will happen now that the Fed is determined to create inflation.)
…
Back in those days (Before Bernanke), “stable prices” meant no inflation.
Intentional inflation is theft.
What if some inflation is required to keep money circulating rather than hoarded and out of circulation?
The threat of inflation does incite people to go into debt, in the hopes of paying the debt off in lower-value dollars.
No doubt, an intentional policy tool. A win-win situation in a central banker’s mind as they want to keep lending alive and also a method to reduce the value of existing debt.
Previous Federal Reserve Chairmen were dead set against the idea of any inflation.
According to the quotes provided, the former Fed Chairmen were opposed to inflation targeting, not necessarily opposed to any and all inflation.
I’m curious whether Dudley’s “forecast” is predicated on the adoption of the Fed’s proposed taxpayer-financed, GSE-executed housing price reflation program? And does the Fed leadership plan to “go it alone” whether or not the CIC and the Congress adopt the Fed’s housing market reflation proposals?
I note that although so far, the Fed has been off by a wide margin on almost everything they have predicted about housing, even a stopped clock is right twice a day.
JANUARY 6, 2012, 10:37 A.M. ET
Fed’s Dudley: Could See Turnaround In Housing In Year Or Two
By Anusha Shrivastava
Of DOW JONES NEWSWIRES
ISELIN, N.J. (Dow Jones)–The U.S. housing market is still under distress but there could be a turnaround “in a year or two” if the labor markets continue to improve, said a top Federal Reserve official Friday.
“Homes no longer look overvalued,” said Federal Reserve Bank of New York President William Dudley, noting that challenges include the declines in the housing market that have taken place and the fact that the unemployment level is still high.
On Friday the government reported that the economy added 200,000 jobs last month, and the unemployment rate is now 8.5%, from 8.6%.
Other problems in the housing market are the tough underwriting standards in force these days as well as the downward bias on home appraisals.
“The needle has swung too far,” Dudley said, noting the appraisal process has become “too restrictive.”
Dudley is a permanent voting member of the monetary policy setting Federal Open Market Committee.
His comments came during a question and answer session following a speech he delivered at the New Jersey Bankers Association Economic Forum in Iselin, N.J.
If this debate is playing out at the top levels of the U.S. government, I sure am missing it. Perhaps if only I had watched more of the Republican candidate debates, I would be better informed on the various candidates’ positions on housing policy.
Sound Economy with Jon Talton
December 28, 2011 at 10:30 AM
Looking back: Fannie and Freddie frauds
Posted by Jon Talton
Continuing the look at events readers say will have consequences beyond 2011. Ann Crickmer of Seattle writes, “Finally making available the “trail of evidence” that charges that Fan and Fred were ‘at the heart of the housing bubble.’ In an effort to meet HUD MANDATES to serve “credit-impaired” borrowers they degraded their underwriting standards. The WSJ review of the SEC investigation notes ‘Expanded Approval’ of very high-risk loans and that they hid this risk from investors. I keep asking who was head of HUD to impose this mandate, and which congressmen sheparded it through Congress. Please. Before the next election we need to know.”
The problem is that Fannie Mae and Freddie Mac didn’t cause the bubble or the financial collapse. Joe Nocera of the New York Times performs a good takedown of this Big Lie. The Atlantic’s David Min provides further facts.
The housing bubble and financial collapse were cooked up on Wall Street, greased by easy Fed money, outlandish profits and deregulation of the banking industry. As I’ve written before, Fannie and Freddie were late to the subprime game and got into it because they were losing profits and market share to the likes of Countrywide and Washington Mutual. It might be a pleasing morality play to imagine this calamity was brought on by poor people, mostly minorities, getting mortgages they didn’t deserve. But it just isn’t so.
Which isn’t to say Fannie and Freddie aren’t a problem. They worked the political system expertly, as shown by the $1.6 million Freddie paid former House Speaker and Republican presidential candidate Newt Gingrich as a “historian.” They arguably helped distort the economy to an over-depedence on housing. But, as Nocera writes:
To have that debate, though, we need a clear understanding of what role the government’s affordable-housing goals did — and did not — play in the crisis. And that is impossible as long as the Big Lie holds sway.
We’ve had a (very) quiet inquiry into the causes of the financial crisis:
The Financial Crisis Inquiry Committee
A new stimulus: Have Wall Street bail out Main Street
By Allan Sloan, senior editor-at-large January 18, 2012: 5:00 AM ET
A mass mortgage refi solution is getting support from both sides of the political aisle. And it wouldn’t cost taxpayers a dime.
FORTUNE — Main Street taxpayers have bailed out Wall Street. Now it’s time for Wall Street to return the favor by footing the bill to help millions of honorable Main Street borrowers pay lower interest rates on their mortgages, something that should have happened years ago. Wall Street giving back to Main Street — imagine that!
We’re not talking about anything risky to taxpayers, or a magic fix for the housing market. We’re talking about picking some low-hanging fruit by doing one simple thing: helping borrowers who are current on their payments refinance high-interest mortgages on which taxpayers are already at risk. That would help taxpayers as well as borrowers, because lower monthly payments would stimulate the economy, support housing prices, and reduce future defaults.
I’m talking about providing a cheap, streamlined, and simple way to refinance fixed-rate mortgages backed by Fannie Mae and Freddie Mac, which own about half the nation’s mortgages and are now effectively owned by the federal government. Fannie and Freddie creditors were bailed out in 2008 when Uncle Sam put the firms into conservatorship to avoid their having to file for bankruptcy; as we’ll soon see, those creditors, consisting primarily of big financial institutions, would bear the cost of helping homeowners.
Mass Fannie and Freddie mortgage refis could provide billions of dollars of economic stimulus, and support the prices of homes, many Americans’ biggest single asset. All while costing taxpayers nothing.
….
This should worry democrats the most. Conventional wisdom is republican voters are too uninspired to vote for any candidate. Turnout so far has surpassed 2008 and 2000.
South Carolina scores record primary turnout
Open primary, uncontested election for the Democrats. 2000 and 2008 had competition in both parties.
Florida is closed. It will be a better indicator.
Better yet will be the later primaries where the issue is no longer in doubt.
You would have to look at 1996 for a Democratic incumbent and open Republican race. Comparing that far back would be skewed by population growth and natural growth in the electorate.
I question the politically-favored notion of mass public assistance to homeowners who gambled all their wealth on housing and lost big time, implemented through overriding of private contracts. It is a sad situation, but welcome to a free-market economy, where households have to make personal financial decisions and take responsibility for the consequences, whether good or bad.
If stimulus is the goal, why not just have the Fed print up a bundle of money and distribute it evenly across all American households? Why should public assistance be tied to home ownership, creating a regressive reverse-Robin Hood reward to wealthy homeowners? Wouldn’t this effectively serve to reward those who made poor financial decisions, and punish lower-income Americans, disproportionately represented in the rentership class, who made the smart financial decision to not purchase houses they could not afford?
I’m guessing that 107% of MSM screeds to support public assistance based on home ownership as a qualification are penned by homeowners who would stand to personally gain from housing price reflation.
I see no discussion of the downside of sticking private investors with the tab for these top-down wealth transfers to home owners, which is to reduce the likelihood the private mortgage lending market will ever recover and the failed GSE-based system will wither away.
Allan Sloan
Time to consider mass mortgage refinancings
The mass-refi idea is so intriguing that the nation’s leading bond investor, Pimco’s Bill Gross, supports it, although it would cost his investors money. His reasoning: It’s good for the country. “I put on my public hat, as opposed to my Pimco hat,” he told me. “There’s a big part of me that supports the 99 instead of the one.”
Despite Congress being bitterly divided, Sen. Johnny Isakson (R-Ga.), a staunch conservative, has joined liberal Sen. Barbara Boxer (D-Calif.) in pushing for simplified, cheaper refis. “It’s a win-win,” Isakson says. “A no-brainer,” Boxer says.
The Federal Reserve, which had been promoting mass refis quietly behind the scenes, is now doing it openly and loudly. Bill Dudley, head of the New York Fed, says the lack of refinancing is hurting the Fed’s efforts to stimulate the economy. (Dudley also is pushing other, more aggressive ideas, but I’m not going there — I’m sticking with Fannie-Freddie mass refis.)
If mass refis are so obvious and wonderful, why haven’t they happened? After spending a lot of time studying the situation and talking with various players, I’ve concluded that the problems are inertia, fear, the complicated paperwork required — and a whispering campaign from institutions that would be big losers from mass refis.
Homeowners, as I’ve said, are the winners. The losers would be holders of mortgage-backed securities that hold the mortgages that would be refinanced. Because the mortgages pay above-market interest rates, these securities trade at a premium price: Call it 107 percent of face value.
…
When the left and right gets together, nothing good will come out of it.
“Left” and “Right” are the two wings on the Republicrat duopoly’s bird of prey.
The refi’[s would let the current debt holders off the hook, and put the US taxpayer on the hook.
Bad, bad, bad idea.
Because the mortgages pay above-market interest rates, these securities trade at a premium price:
A guy I work with invests in these through a fund? that specializes in finding mortgages that are unlikely to default but are stuck paying higher than market rates. He should probably consider selling ?
“There’s a big part of me that supports the 99 instead of the one.”
OWS has changed the way we think and talk.
Based on news that a new global recession is already underway, is it safe to assume the stock market can only go up from its current level?
Or will there be a point of unpleasant adjustment of mass perceptions from denial to panic that sparks another market meltdown which even too-big-to-fail buyers of last resort are unable to contain?
Howard Gold’s No-Nonsense Investing Archives
Jan. 20, 2012, 12:01 a.m. EST
Shilling says new global recession is here
Commentary: Europe leads downturn, U.S. poised for milder decline
By Howard Gold
NEW YORK (MarketWatch) — For most economists, the main question is whether we will have a new recession. For Gary Shilling, the only question is how big.
Unlike many gloom and doomsters, Shilling is a genial sort who likes cracking jokes and keeps bees as a hobby. But when it comes to economics he’s dead serious: He’s been consistently gloomier than the economic fraternity and consistently right over the past few years.
…
San DIego’s home prices continue to fall, though at a slower rate than at the peak rate of decline. I note that Japanese home prices have fallen for over two decades since their housing bubble popped, and so far as I know, still have not bottomed out, so I would not assume that a slower rate of decline indicates a bottom is at hand for San Diego. So far as I am aware, you still cannot buy any decent family-sized housing for anywhere near $300,000. If anyone has evidence to the contrary, please share.
Also worth noting: A 5.5 percent loss in value may not seem like much until you apply it to the price tag of a San Diego starter home. A decline of that magnitude in the price of a home that started the year at $500K would equal $27,500, nothing to sneeze at unless you happen to number among the 1%.
San Diego Home Sales Up, But Prices Still Fall
Tuesday, January 17, 2012
By Erik Anderson
Aired 1/17/12
Southern California home sales surged in December, when sales were higher than November but remained well below the historical average for December.
SAN DIEGO — December home sales numbers are a reflection of how the market performed all year. About a third of all sales involved foreclosures. Another 20 percent of transactions were short-sales, homes sold for less than was owed on the mortgage.
The overall sales numbers were higher than a year ago, but still more than 20 percent below the average number of transactions for the month. There was a small burst of sales activity in December, but not enough to boost the value of homes in the region.
San Diego has nearly 4 percent more sales when compared with December a year ago, but the average price was down almost 5.5 percent.
“Prices continue to be weak because of the weak job growth and the difficulties a lot of people have getting a loan to buy a home,” said Andrew LaPage of the real estate tracking firm DataQuick. “There’s still an emphasis in the market toward the lower cost distressed properties.”
The median San Diego home price fell just over 5 percent from December a year ago. The average price was $315,000. That’s down from $333,000 a year ago.
“We think there’s still a lot of people sitting tight, waiting for something to happen. Either a clear sign that prices have hit bottom. Or the opportunity to qualify for financing,” said LaPage.
Ravens gave it away. Wow.
The Ravens did a nice job of snatching defeat from the jaws of victory.
Add that game to many of the greats in NFL history.
“The Immaculate Reception”
“The drive”
“The catch”
“The drop” and “The shank”
My beloved Giants are in hand to hand combat with the 69′ers.
OK
We need to find a vacant foreclosed house somewhere deep in the shadows where the Ravens kicker and the 49ers punt returner can hang out for a while.
Wow what a war! Manning gets sacked and then sacked again. Yeah that punt return/leg touch won the Giants.
He and Brady are great QB’s and it’s going to be great game watching these two guys compete.
It was a GA democrat named Ben Jones that filed the complaint against Geingrich that led to his Congressional censure.
House Reprimands, Penalizes Speaker
By John E. Yang
Washington Post Staff Writer
Wednesday, January 22 1997; Page A01
“The House voted overwhelmingly yesterday to reprimand House Speaker Newt Gingrich (R-Ga.) and order him to pay an unprecedented $300,000 penalty, the first time in the House’s 208-year history it has disciplined a speaker for ethical wrongdoing.
The ethics case and its resolution leave Gingrich with little leeway for future personal controversies, House Republicans said. Exactly one month before yesterday’s vote, Gingrich admitted that he brought discredit to the House and broke its rules by failing to ensure that financing for two projects would not violate federal tax law and by giving the House ethics committee false information.
“Newt has done some things that have embarrassed House Republicans and embarrassed the House,” said Rep. Peter Hoekstra (R-Mich.). “If [the voters] see more of that, they will question our judgment.”
House Democrats are likely to continue to press other ethics charges against Gingrich and the Internal Revenue Service is looking into matters related to the case that came to an end yesterday.
The 395 to 28 vote closes a tumultuous chapter that began Sept. 7, 1994, when former representative Ben Jones (D-Ga.), then running against Gingrich, filed an ethics complaint against the then-GOP whip. The complaint took on greater significance when the Republicans took control of the House for the first time in four decades, propelling Gingrich into the speaker’s chair.”
Super rich: The Greed Game
A one hour video.
http://topdocumentaryfilms.com/super-rich-greed-game/
The December DataQuick numbers for San Diego County appeared in yesterday’s paper. The overall San Diego County “All Comined” (SFRs + condos, used and new) was doen from $335K to $310K from December 2010 to December 2011, but the zip-code-level details paint a far more interesting picture:
1) The majority of zip codes show NA (as in “not applicable”) for the year-on-year price change in NEW SINGLE-FAMILY/CONDO, reflecting that December 2011 sales were zero/null/nada for THE MAJORITY of San Diego County zip codes. There was a total of 318 new home sales last month for a county with 3 million residents, which I assume is not very many.
2) Used single-family resale home prices have shown a sizable year-on-year drop in most high end areas, in some cases at much higher rates of decline than the -7.5% rate of overall decline. I post the numbers below for those areas where the median SFR sold for over $1m in December 2010:
Area / Zip Code/ Dec Sales (’10/’11) / Median ‘10 / Median ‘11 / %Change
Coronado 92118 11 9 $1.45m $892.5K -38.4%
La Jolla 92037 25 24 $1.625m $1.28m -21.2%
Rancho Santa Fe 92067 10 9 $2.4775m $1.4m -43.5%
R.S.F. post office 92091 5 4 $2m $780K -61.0%
Del Mar 92014 9 16 $1.25 $1.35 +8.0%
Solano Beach 92075 15 10 $1.5185m $1.475m - 2.9%
Take home messages from the above:
a) Median sale prices are dropping must faster in high end areas than overall.
b) Among zip codes with December 2010 medians north of $1m, only Del Mar showed an increase.
c) It is not possible to tell to what extent the changes reflect own-price changes or differences over time in the quality of homes selling; for instance, perhaps the increase for Del Mar reflects that bigger homes are more salable as prices decline.
d) Missing from the list: Many other zip codes where median SFRs sold for over $1m just a few years ago (e.g. Carmel Valley 92130 has a current median of $868K).
e) Unless I overlooked some, as of December 2010, there were only five San Diego County zip codes with median SFR sale prices north of $1m, with a total of 68 homes sold in those for zip codes last month. For comparison, I checked the numbers of homes for sale with asking prices north of $1m in those for zip codes on Redfin dot com:
Coronado 92118 73
La Jolla 92037 154
Rancho Santa Fe 92067 184
Del Mar 92014 139
Solano Beach 92075 26
The total number of SFRs listed at prices north of $1m for these five high-end zip codes is currently 73 + 154 + 184 + 139 + 26 = 576, which would take 576/68 = 8.47 months to clear at the December 2011 rate of sales, which actually does not seem that bad compared to numbers seen in recent years. Perhaps rapidly declining high-end prices are actually stabilizing the high-end of the San Diego real estate market, by increasing the flow of transactions?
BTW, there are currently 1,112 homes listed in San Diego County overall at asking prices above $1m, out of 8,180 SFRs on the MLS overall, which means that one out of eight San Diego County sellers with single-family homes currently on the MLS is hoping to walk away with over $1m from the sale. This should provide plenty of selection for the few prospective buyers out there hoping to snap up a San Diego home at this price level.
Here is a bit more fascinating detail from the DataQuick December 2011 San Diego zip code report: SD County zip codes where the median sale price for a used single-family home has dropped below $300K. If you aren’t as picky about where you live as my wife is, there are plenty of relatively affordable locations to snap up a single family home. By contrast, I’m thinking the median SFR sale prices were north of $400K in pretty much every San Diego County zip code back in 2005. Unfortunately, I haven’t succeeded in digging up any old DataQuick charts to compare yet.
Here are the December 2011 sales figures for zip codes with median sale prices under $300K:
Location / ZIP code / No. of Used SFR Sales / Median Sale Price
City Heights 92105 16 $229,000
Encanto 92114 63 $226,500
Golden Hill 92102 15 $202,000
Logan Heights 92113 17 $160,000
Paradise Hills 92139 24 $245,000
Boulevard 92105 1 $200,000
Campo 91906 7 $113,000
Descanso 91916 1 $197,000
El Cajon East 92021 40 $285,000
La Mesa, Grossmont 91942 29 $297,000
Lemon Grove 91945 29 $239,000
Pine Valley 91962 3 $237,500
Rancho San Diego 91978 7 $260,000
Spring Valley 91977 51 $240,000
Borrego Springs 92004 11 $120,000
Escondido North 92026 47 $270,000
Escondido East 92027 37 $255,000
Fallbrook 92028 54 $290,000
Julian 92036 8 $280,500
Ramona 92065 53 $275,000
Vista West 92083 20 $242,500
Vista East 92084 39 $295,000
Oceanside North 92057 69 $265,000
Oceanside Central 92058 8 $261,000
Chula Vista South 91911 44 $243,000
Imperial Beach 91932 6 $247,500
National City 91950 12 $202,750
Nestor 92154 41 $259,500
San Ysidro 92173 7 $192,000
That’s quite a list, especially compared to the very short list where the median SFR sales price is still north of $1m — my fingers are worn out from so much typing! Who says you have to pay over $300,000 to buy a San Diego County starter home?
Poway knife catchers how much lower will it go ? This was a blue collar hood and the 7K candy was too much for many locals to resist.
http://www.zillow.com/homedetails/13234-Olive-Grove-Dr-Poway-CA-92064/16803044_zpid/
Transcripts show how far off Fed was on housing crisis
1:07 p.m. CST, January 12, 2012
Federal Reserve Chairman Ben Bernanke and other top officials of the U.S. central bank missed the nation’s oncoming housing crash, believing as late as December 2006 that the market was stabilizing, according to transcripts of policy meetings released on Thursday.
Policymakers were also far too sanguine about the potential threat housing posed to financial markets, the transcripts of the Fed’s 2006 policy meetings show.
The bursting of the housing bubble led to the deepest recession since the Great Depression and triggered a banking crisis that brought down Wall Street giants Lehman Brothers and Bear Stearns.
Yet just six months before the first cracks began to appear in the financial system, the U.S. central bank appeared largely unaware of the severity of the risks.
“We are unlikely to see growth being derailed by the housing market,” Bernanke said in March 2006, presiding over his first meeting as Fed chairman.
Later in the year, when home sales and prices had extended their drop, officials appeared to believe the worst was over.
“There are some encouraging signs that the demand for housing may be stabilizing, probably assisted by recent declines in mortgage rates,” Janet Yellen said at the central bank’s December 2006 meeting, when she was president of the San Francisco Fed. She is now the Fed’s vice chair.
“After a precipitous fall, home sales appear to have leveled off,” she said. “In addition, equity valuations for homebuilders have continued to rise in the past couple of months, suggesting that the outlook for these businesses may be improving.”
At that point, U.S. existing home sales had fallen about 10 percent from their peak in September 2005 and the beginning of a much steeper plunge. In the five-year slump that ensued, sales fell by more than half.
…
U.S. home prices seen stagnating this year
By Leah Schnurr
NEW YORK | Fri Jan 13, 2012 11:59am EST
(Reuters) - The five-year slide in U.S. home prices will end this year, followed by the start of a weak recovery in 2013, according to a Reuters poll that also showed economists split on whether the government would make new efforts to support the market.
A poll of 23 economists and analysts found a consensus for no change in the S&P/Case-Shiller home price index in 2012, compared with a median 0.3 percent decline that was forecast in the last poll in November.
Many say that a recovery in the housing market is a key requirement for any vigorous rebound in the world’s largest economy. The spectacular collapse in U.S. housing, which sent average prices plummeting by a third, was the trigger for the 2008-09 financial crisis and subsequent recession.
Transcripts released on Thursday of Federal Reserve policy meetings in 2006, the year before the crash, showed officials thought the market was stabilizing, even as late as December that year. Private sector economists did no better.
The meager 1.5 percent gain expected in 2013 will offer little comfort to the millions of Americans trapped in negative equity - owing more to their mortgage lender, and in some cases much more, than their houses are worth.
“I think we are seeing stabilization, but unfortunately it’s stability at the bottom,” said Lindsey Piegza, economist at FTN Financial, describing the grinding halt to several years of relentless price declines.
The average price of a U.S. home is currently around where it was nine years ago, and the most recent data, from October, showed price declines still accelerating.
The market is still under pressure from an excess of homes up for sale.
…
Now the MSM is advising Bernanke on monetary policy, perhaps in return for the Fed’s many helpful recent suggestions about how to reflate the housing bubble.
Hold the presses
As economy slowly revives, Federal Reserve should hold off on QE3
The Federal Reserve’s policymaking arm begins a meeting Tuesday that some economists expect to conclude with another round of monetary stimulus. (Reuters Photo / August 19, 2003)
January 23, 2012
It’s starting to look like Federal Reserve Chairman Ben Bernanke has done enough to shield the U.S. economy from Europe’s trouble and put it on the road to recovery.
Will he quit while he’s ahead? He should, but he might not.
The Fed’s policymaking arm begins a two-day meeting Tuesday that some economists expect to conclude with another dose of monetary stimulus.
For those keeping track, that would be “QE3″— the third time since the recession started at the end of 2007 that central bankers have resorted to printing money through the large-scale asset purchases known as “quantitative easing.”
Money isn’t free, and the biggest cost to printing more money, economically speaking, is that it tends to drive up prices. So far, inflation in the U.S. is tame. The latest government reports show consumer prices unchanged in December, and wholesale prices down a tick. Reports showing no inflation could give the Fed cover if it wants to roll the presses.
Don’t do it. The Fed should wait and see how 2012 unfolds before it takes a chance on reigniting inflation in the medium and long term. Holding off also will give the Fed an effective response if the fragile recovery gets hit with a shock.
…
THE SATURDAY ESSAY
JANUARY 21, 2012
The New American Divide
The ideal of an ‘American way of life’ is fading as the working class falls further away from institutions like marriage and religion and the upper class becomes more isolated. Charles Murray on what’s cleaving America, and why.
By CHARLES MURRAY
America is coming apart. For most of our nation’s history, whatever the inequality in wealth between the richest and poorest citizens, we maintained a cultural equality known nowhere else in the world—for whites, anyway. “The more opulent citizens take great care not to stand aloof from the people,” wrote Alexis de Tocqueville, the great chronicler of American democracy, in the 1830s. “On the contrary, they constantly keep on easy terms with the lower classes: They listen to them, they speak to them every day.”
Americans love to see themselves this way. But there’s a problem: It’s not true anymore, and it has been progressively less true since the 1960s.
People are starting to notice the great divide. The tea party sees the aloofness in a political elite that thinks it knows best and orders the rest of America to fall in line. The Occupy movement sees it in an economic elite that lives in mansions and flies on private jets. Each is right about an aspect of the problem, but that problem is more pervasive than either political or economic inequality. What we now face is a problem of cultural inequality.
When Americans used to brag about “the American way of life”—a phrase still in common use in 1960—they were talking about a civic culture that swept an extremely large proportion of Americans of all classes into its embrace. It was a culture encompassing shared experiences of daily life and shared assumptions about central American values involving marriage, honesty, hard work and religiosity.
…
INFORMATION AGE
JANUARY 22, 2012, 7:10 P.M. ET
Moore’s Law Trumps More Law
Copyright violators should be punished, but not by turning over the Web to Washington.
BY L. GORDON CROVITZ
Senate Majority Leader Harry Reid last week said he was putting off a vote on online piracy legislation “in light of recent events.” Those events were Silicon Valley proving that it can harness the power of the Web to protect itself against Washington—the clearest evidence yet of how technology moves so fast that regulations have no chance of keeping up.
…
Asian Stocks Swing Between Gains, Losses
By Jonathan Burgos - Jan 22, 2012 9:06 PM PT
Jan. 23 (Bloomberg) — Naomi Fink, head of Japan strategy at Jefferies Japan Ltd., talks about Japanese stocks, Bank of Japan monetary policy and her investment strategy. Fink speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)
Asian stocks swung between gains and losses as increasing home sales in the U.S. added to signs the world’s biggest economy is recovering, outweighing uncertainties over continuing debt negotiations in Greece.
Canon Inc. (7751), the Japanese camera maker that gets a third of its sales from Europe, fell 1 percent in Tokyo. Reliance Industries (RIL) Ltd., India’s biggest company by market value, sank 2.9 percent in Mumbai after earnings dropped for the first time in two years. Olympus Corp. (7733), the world’s No. 1 maker of endoscopes, jumped 8.2 percent after it was allowed to keep its stock market listing following an accounting fraud that cut the company’s market value by about $4 billion.
“The market could come under short-term pressure as it’s had a strong run this year,” said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages almost $100 billion. “Any weakness is a good buying opportunity given improving economic data out of the U.S. Greece can go hot and cold very quickly. Greece defaulting is still a possibility.”
…
test