Bits Bucket for February 2, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Another round of save the poor homeowners from losing their homes to foreclosures, and , with a little more money, we can save their homes and allow them to live there until the value of their homes go up.
I don’t think that the value of the homes will go up, until the unemployment rate goes down to 4%, which might allowed the workers to get more income in their pockets.
The real problem lies, in my mind, in that there are two many ways for the public to spend their money on things that are not necessities.
If you can enjoy your money by buying things you can never save money , and if money is not saved, the investment money comes from the government, and that money comes from the tax payer.
By the way, it was true that during the Big Depression that you could buy a home for a year’s income in San Francisco.
It might be true now, due to the enflux of millionaires in that area.
Paradox of Thrift. One person’s spending it another person’s income.
It is possible for one individual to slow their spending without effecting thier income. It is impossible for every individual to slow their spending, without effecting their income.
You suggest everyone slow their spending to save money. It is fundamentally impossible.
Ahh, but you are wrong. You can target the spending you reduce at entities you determine should not exist, for instance credit card companies. Pay off your credit card. Don’t use it. Credit card companies shrink. A leech is squeezed. A few people at the CC company suffer, but your disposable income again goes up after the cards are paid off. Net effect is positive IMHO. Instead of paying CC interest, you buy groceries and clothes from your local stores.
But, to have the extra money to pay off the credit cards, first you have to slow spending to stop using the cards, then you have to further slow spending to have extra money to begin paying off the credit card.
This is possible for one person.
However, if we attempt to do it as an economy as a whole, we have issues.
When one individual slows thier income, they are slowing someone elses income. If that person is also attempting to slow their spending, then they not only have to stop going into debt, start paying back, and reducing spending even further for their falling income.
If everyone that has debt slows their spending to begin paying back the debt, the economy as a whole slows.
The only way the debt can be paid back is if people with money continue to spend it, evan as their incomes slow, therby ending up with less money.
Total money always equals total debt. For total debt to shrink, total money has to shrink. This can only happen if the people with money spend it, allowing it to make its way into the hands of the people with debt, allowing the debt to be repaid, destroying both the money and the debt.
Relax Darrell. This airplane is just running out of fuel. We’ll set her down as gently as possible in a field of beans. Bankers and numbers runners are pretty well screwed, but the rest of us will be just fine. What we really need are the goods. There’s plenty of capacity to make goods. There’s plenty of folks able to make goods. In fact, there’s plenty of surplus goods already made looking for a home.
If your bank account and your debts are cancelled out on the same day, most will be better off. After that, it’s very easy to do things the old fashioned way, like people have been doing for many thousands of years, until just recently. Don’t panic over the fate of the bankers. If you are one, learn a useful trade.
“Relax Darrell. This airplane is just running out of fuel. We’ll set her down as gently as possible in a field of beans. Bankers and numbers runners are pretty well screwed, but the rest of us will be just fine.”
“…everyone slow their spending to save money.”
That’s about a plausible in the real world economy as all the gas molecules in a room suddenly racing to one side and causing the wall to break down. Left to their own devices, people interact in a manner such that one man’s saving is another man’s discount. Money generally gets spent by somebody.
Of course, government intervention, such as market distorting housing policy that results in a ginormous bubble, or a Fed War on Savers that results in everyone being too underwater to spend any more money, can cause a serious disruption in the normal, atomistic flow of expenditures through a competitive, free-market economy.
Proposed weekend topic: What will are the implications (economic, political or otherwise) of the latest homeowner bailout initiative?
Re-fi from 2006 “historically low” interest rates to 2012 “historically lower” interest rates will do nothing but re-confirm the bubble price of the house, for the benefit of the bankster beancounter books.
It could serve to strengthen the monopoly of the GSEs.
A money losing monopoly, who’d a thunk.
You’ll get the bill Al.
Nah. I’m waiting for the CMHC black hole.
All black holes are local, eh?
None whatsoever. It will never pass.
After casting about on the internet for information, my reading of the latest WH household-level housing bailout proposal is:
1) It will have a similar effect on the Republican primaries to that of throwing a scrap of fresh red meat into a gladiator pit full of lions.
2) It will run into a buzz-saw of Congressional Republican opposition.
3) Given the success of past household-level bailouts, whatever passes through the likely gauntlet of election-year Republican opposition will have little, if any, impact on the housing situation. Why would the Republicans want to give Obama any victory in this area at all during an election year, given what a hot-button issue housing has become?
4) On noting the inability of politicians to do much on the housing front during an election year, you can guess the Fed will feel compelled to try out some of the tricks and traps outlined in their White Paper.
Isn’t this proposal just a policy change for the operation of Fannie/Freddie/FHA that doesn’t need Congressional approval? I thought that was the point. The president is doing all he can without Congress.
Congress could block it, but they would have to overcome a veto to do it.
“The president is doing all he can without Congress.”
Jackie Robinson played to a tough crowd as well.
The “Get lil’ Opie” signed pledge is still there but appears they used invisible ink when they all signed it.
(Course he wasn’t a non-Hawaiian, and instead of Occidental college, he went to this school just down the street: Pasadena Junior College. That probably is what helped him him to succeed in the long run)
Previously in America:
Robinson pursued potential major league interest. The Boston Red Sox held a tryout at Fenway Park for Robinson and other black players on April 16. The tryout, however, was a farce chiefly designed to assuage the desegregationist sensibilities of powerful Boston City Councilman Isadore Muchnick. Even with the stands limited to management, Robinson was subjected to racial epithets. Robinson left the tryout humiliated, and more than fourteen years later, in July 1959, the Red Sox became the last major league team to integrate its roster.
The President is doing all he can without the mandate of the people. Voters mandated that he be restrained in 2010.
“Voters mandated that he be restrained in 2010″
Ha, quite the deception in words & ideas there mate.
About what? Like continue $pending 4 Trillion$ US Gov’t monie$ on foreign War$ x2 +”Nation Building”,… that mandate?
Somebody needs restraining.
http://www.reuters.com/article/2010/09/28/us-usa-democrats-offshore-idUSTRE68R40I20100928
No doubt Turkey. I must admit that although the headline of the bill is very “feel good” I have no idea of the details.
“deception in words & ideas there mate”
If so, unintentional. The thought behind my comment was that enough voters were pissed off about a variety of things that they elected some radical opposition in Congress in 2010. Comments here predicted gridlock, for better or worse, which is pretty much what we’ve had. If the President does work arounds, he may think the ends justifies the means. You may think so too. I think it bastardizes.
While the wars are one of my personal hot buttons, I don’t think that was what was most in the minds of the Tea Party voters. I think there were some big programs sponsored by the White House that got rammed through Congress although unpopular with the general population, and that the 2010 vote was a backlash. Ironically, one of these was a Bush initiative (in my imagination anyway).
It concerns me that by all appearances, the President is working more and more outside the legal framework, as was the trend of the previous administration. Where this leads should concern us all.
“that enough voters were pissed off about a variety of things that they elected some radical opposition in Congress in 2010″
True enough, so, the voters had no opportunity to change the US Senate, you know the Big Sister to the House? The one that’s the final wi$dom filter to nut hou$e.
Eyes stand by the POV that Trillion$ spent on a “evil” National Healthcare $ystem, in America, is a better fishing day than any day $pent to$$ing bomb$ at Sovereign Nations. But Hey, “Bidne$$ is Bidne$$” but the Repubicans, like Mon$anto Inc. et. al., ain’t gonna get Hwy50’s repeat vote or purchases ’till they quit actin’ and speakin’ with a forked tongue.
“is a better fishing day than any day $pent to$$ing bomb$”
Just so you know something about me, I made myself know to the President in the early ’70s as a conscientious objector, for which my student deferment was revoked and I was called up in the draft. I packed away my hunting rifle and fishing tackle, kissed my sweet bride goodbye and showed up for my obligatory 5 year jail sentence. I didn’t get jailed, but that’s another thing.
If you took my comments in that light, maybe the conversation would shift a tad. I find the relentless turn of every comment here into party politics very difficult.
Correction
A group with big money was po’d and increased there donations. They were mad that someone else was controlling the puppet. Thus they got their puppets elected by stirring the pot with the take over and re direction of the Tea Party along with other forms of propaganda.
Dear Skye
Really, Nixon vs lil’ Opie, and the question is restraint over GOv’t monie$ being allocated to an AMERICAN health $ystem?
forest. trees. see.
“I thought that was the point.”
I’m sure you understand the vagaries of political gesture better than most of us do.
Apologies. Looks like this one does need Congress. Not sure what aspect of the program exactly is outside the powers that they already have. Perhaps it is because it allows the GSEs to refinance loans that they are not already on the hook for. I’m not sure of the mechanics of this one. Haven’t been following it all that closely.
I expect it will do about as much as the other programs like this which is very little. Remember, the banks have been telling people that they have to be 3 months behind before they can get any help and the programs the administration has been pushing require that you be up to date and not have been behind recently.
Remember, the banks have been telling people that they have to be 3 months behind before they can get any help and the programs the administration has been pushing require that you be up to date and not have been behind recently.
Okay, class, remember what we said about time and payment status: Only one payment status can exist at any given time. You can’t be up to date and three months behind.
“Only one payment status can exist at any given time. You can’t be up to date and three months behind.”
Quite the conundrum! Decisions, decisions….
“You can’t be up to date and three months behind.”
Au contraire. If you need proof someone is three months behind, check their payment history. If you need proof they are current, check the carrying value of the loan. Ta Da!
This article seems to contradict Polly’s point about no need for Congressional involvement in the latest housing bailout proposal. But perhaps she was referring to another housing bailout? There have been so many, it’s very hard to keep them all straight.
REAL ESTATE
FEBRUARY 2, 2012
Mortgage Plan Draws Republican Opposition
By NICK TIMIRAOS and LAURA MECKLER
President Barack Obama, in announcing a program to help struggling homeowners refinance their mortgages, is betting this plan will fare better than his administration’s earlier efforts to fix the housing market.
He also may be betting that it’s good politics, setting up a contrast with Republicans over government’s role in helping Americans who, in Mr. Obama’s words, “play by the rules,” but still face challenges in the tough economy.
The White House proposal unveiled Wednesday faces many pitfalls that have hobbled previous housing-rescue efforts, as well as a big new hurdle: It will require Congress to act. Many congressional Republicans reacted with skepticism or opposition to the plan.
House Speaker John Boehner (R., Ohio) questioned why this program would work when others have failed.
“One more time? One more time? How many times have we done this?” he asked reporters. “I don’t know why anyone would think that this next idea is going to work.” He added that the previous programs have led to a delay in “the clearing of the market,” or letting housing prices hit bottom by allowing foreclosures to happen more rapidly.
…
“By the way, it was true that during the Big Depression that you could buy a home for a year’s income in San Francisco.
It might be true now, due to the enflux of millionaires in that area.”
Ever since the country was settled to the point of having a housing market, there has always been a percentage of the income distribution who could afford to buy a home for a year’s income. The interesting question seems to be how that percentage changes through time, whether in SF or elsewhere.
My hunch: Increased wealth concentration now as well as in the late-1920s implies a reduced share of Americans could afford to buy a home with a year’s income compared to during flusher times.
I’d rather have a conversation on geographic concentration of wealth rather than the percentages of wealth concentration, per se. I think the rise of the former has skewed public/private decision making rather significantly.
“By the way, it was true that during the Big Depression that you could buy a home for a year’s income in San Francisco.”
Before or after all taxes, SS, medicare etc?
“By the way, it was true that during the Big Depression that you could buy a home for a year’s income in San Francisco.”
Who’s income?
Also, for how long a term was a typical house loan? I seem to recall reading something on here about how loans were a much shorter term back in those days (maybe 5 years?), with a balloon payment due at the end.
Yes, with 50% down.
House prices were much cheaper. The availability of financing has done nothing but make them more expensive, buying more house than one needs, etc. Downpayments mitigate that risk.
I think it’s clear what strategy “Affodable Housing Initiatives” should implement.
No Medicare back then, and no Social Security for most of it.
Facebooker’s will be spending a few of thier billions in the next couple of months.
“By the way, it was true that during the Big Depression that you could buy a home for a year’s income in San Francisco.”
Chris Hodenfield
More than most towns, the real estate market in Greenwich closely follows the fortunes of Wall Street. It’s not just the matter of the annual bonuses, which, when they’re big, tend to be a reason for rejoicing in realty offices, not to mention the Bentley dealership. But as in stock trading, even a serious downturn stokes the fires among the profit-takers.
In the housing scene, the profit-takers would be the bargain hunters. Even in the cold days of 2008–2009, when home sales had flatlined, they were out shopping. And today, with sales rising again, the buying sector is not shy of the ol’ low-ball offer. As Susan Calabrese of Coldwell Banker recalls: “Someone said to me the other day, there’s got to be a deal here. And if there’s not a deal, then there’s no deal.’”
Even some of the largest of the recent sales went at interesting reductions. Mel Gibson’s seventy-five-acre estate with a Tudor mansion went for $24 million, a far piece from the 2007 asking price of $39.5. Leona Helmsley’s mansion finally went for $35 million, down from the original price of $125 million.
The numbers on these huge sales do not compare to the fire-sale prices of the 1930s Depression or the inflation-whipped economy of the early-1970s when the great houses here couldn’t be given away.
http://www.mofflymedia.com/Moffly-Publications/Greenwich-Magazine/April-2011/Market-Report/ - 43k
“Leona Helmsley’s mansion finally went for $35 million, down from the original price of $125 million.”
Taxes are for the little people, but multi-million dollar real estate haircuts are for the big people.
went for $35 million, down from the original price of $125 million.
They forgot to bake cookies during the open house.
“Leona Helmsley’s mansion finally went for $35 million, down from the original price of $125 million.”
Wasn’t $125M the asking price? When did she buy it and what did she pay for it? She might not have taken a haircut at all.
Remember that half the workers in this country make less than $500 (some here argue $600) a week. And the stat from Bloomberg two weeks ago that only 7% of those laid off since 2008 have regained their former incomes.
Welcome to the recoveryless recovery.
…and it ain’t the first one.
Do you have the link for this story? I’ve searched Google and Bloomberg’s own page but can’t find it. Thanks.
Try.searching.my.comments.on.HBB.about.2.weeks.ago
No.HBB.on.work.computers.stuck.using.defective.phone
LOL.Thanks.goon.
It’s becoming almost impossible to find ANYTHING on Google these days due the daily data blizzard of news.
Google REALLY needs to separate the news form it’s general search results.
But I can vouch for having sen those number on other places besides Bloomberg.
I was typing something into Google today and the whole page did a 360 on me.
Most curious…
Does this mean the bankers might not get their profits for the year, the Christmas bonus?
“AMR’s plan, if approved by the bankruptcy court, would place its pensions with the federal Pension Benefit Guaranty Corp., an agency funded by premiums levied on employers that sponsor pensions. The PBGC, which says it will fight the move, estimates that AMR’s pensions have obligations of $18.5 billion, compared with the $8.3 billion currently in the plans’ assets.”
So, as more dump their pensions on PBGC, their obligations go up and income goes down?
How’s that working out?
” The PBGC covers about 1.5 million workers in failed pension plans, but has a $23 billion funding shortfall itself.”
Well, if another $10B shortfall is transferred to them, that should make it better? Yeah?
Head of PBGC was on Nightly Business Report last night:
“GOTBAUM: I think it`s important to say it slightly differently.
We know that American has to reorganize and succeed as a business. But we want to make sure that it needs to take the actions that it`s proposing to take. There are plenty of airlines that have restructured without terminating their pension plans.
For example, Delta kept two out of its three plans, Northwest kept all four of its plans, Continental kept all four of its plans. So what we think is important is that American succeed, but that it`s not just terminate its plans because it`s convenient. I don`t think you cut pensions for 130,000 people just because it`s convenient. “
www dot nb dot com/economy/jobs/american-airlines-to-cut-jobs-terminate-pension-plans-20120201
=============
The italics on convenient were not in the transcript, but they were in Gotbaum’s voice when I watched. The PBGC is making no secret that they are fed up with airlines pretending to go BK just to pass pensions off on the taxpayer.
I suspect the real crime took place 30 years ago. Now they are just trying to get rid of the corpse.
From Wikipedia:
“Tax Reform Act of 1986
By enacting 26 U.S.C. § 469 (relating to limitations on deductions for passive activity losses and limitations on passive activity credits) to remove many tax shelters, especially for real estate investments, the Tax Reform Act of 1986 significantly decreased the value of many such investments which had been held more for their tax-advantaged status than for their inherent profitability. This contributed to the end of the real estate boom of the early-to-mid-1980s and facilitated the Savings and Loan crisis.[4] Prior to 1986, much real estate investment was done by passive investors. It was common for syndicates of investors to pool their resources in order to invest in property, commercial or residential. They would then hire management companies to run the operation. TRA 86 reduced the value of these investments by limiting the extent to which losses associated with them could be deducted from the investor’s gross income. This, in turn, encouraged the holders of loss-generating properties to try to unload them, which contributed further to the problem of sinking real estate values.[citation needed]
[edit] Moral Hazard
The deregulation of S&Ls in 1980 gave them many of the capabilities of banks, without the same regulations as banks. Savings and loan associations could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, state-chartered thrifts rushed to become federally chartered, because of the advantages associated with a federal charter. In response, states such as California and Texas changed their regulations to be similar to federal regulations.[citation needed]
More important, however, was the moral hazard of insuring already troubled institutions with public dollars. In the view of a savings and loan president or manager, the trend line was fatal over the long haul; thus, to get liquid, the institution had to take on riskier assets, particularly land. When the real estate market crashed, the S&Ls went with it. By insuring the risk, the government guaranteed that desperate S&L owners and managers would engage in ever more risky investments, knowing that if they were successful, the institution would be saved, and if unsuccessful, their depositors would still be bailed out.”
You got something against strip malls?
“You got something against strip malls?”
The blight of the urban landscape? Naw, why should I? That would be un-American! We all know that aesthetically pleasing design is just damn social-comminism!
The PBGC is making no secret that they are fed up with airlines pretending to go BK just to pass pensions off on the taxpayer.
Good for the PBGC. It’s about time they got fed up in a public way.
If AMR is successful after bankruptcy, the PBGC may give the pensions back.
The PBGC will not run out of money, they can always just lower the max amount paid to beneficiaries.
BTW- they changed the law a few years ago. AMR
will have to pay $1,500 per pensioner every year for 3 years after bankruptcy ($600 million).
“Well, if another $10B shortfall is transferred to them, that should make it better? Yeah?”
Why not? Most people think if the coffee is bad, making it stronger make it tastes better.
I flew American over the Christmas holidays. Although the flight attendants and pilots were first-rate, I was shocked at the shoddy condition of the planes.
I hadn’t seen such crummy looking aircraft since I flew on TWA back in 2000. Recall that TWA went under not long after that.
Scary thought: Mightn’t the plane look similarly “crummy” under the hood during lean times?
I’ll defer to our resident jet fixer on that one. (Paging XGSfixer…)
Part of American’s “problem” is that they (along with Southwest)still do (did) major maintenance “in house”, instead of farming major inspections out to shops overseas or by the use of non-union, “independently contracted” “MRO”/Part 145 repair shops.
Big dirty secret: If you work for a Part 145 “Repair Station”, you don’t have to be a licensed FAA mechanic…..in fact, you can hire guys from Jiffy Lube, or illegals from south of the border, and have them turn wrenches on airplanes, as long as they are “supervised” by licensed mechanic.
This is why you always hear about Southwest and American getting dinged by the FAA for missing stuff on inspections. They are the only guys still doing their own inspections.
Of course, nobody at a MRO / Part 145 repair station (many owned by overseas interests, or Private Equity companies) would EVER cut corners to get the manpower needed to fulfill their contractural commitments.
Even back in 2009, there were jobs for licensed mechanics. For $15/hour, and guys willing to “work overtime” (meaning 60-70 hour weeks for months on end). These very same companies are now the ones complaining about “shortages of skilled aviation workers”, and using the promise of “hundreds of good paying jobs” to get the state and local rubes to spend public money to train their workforce. One man’s “incentive” is another’s “corporate welfare”.
The short version: The airline ticket has been turned into a commodity, and the airlines get no “premium” for the time the airline ticket saves, compared to driving the same trip. Thanks to deregulation, the “barrier for entry” into the airline business is very low. New companies typically start out with low overhead, contracted out support, low seniority, low paid (and low experience) pilots, and brand new airplanes on leases. The legacy carriers compete by screwing their employees. The system depends on a labor rate of $15/hour, or thereabouts.
If they can get trained, experienced people to work for $15/hour, things are great. If they can’t get experienced help, the regs are “gray” enough to allow them to hire inexperienced and/or untrained people to do the work that needs done.
IOW, the current airline business is what you get when you let the “free market” work, with “minimal interference” from the regulators.
From my personal observations, it seems like the Air cargo guys are hiring most of the inexperienced newbie mechs, so you won’t hear much about their screw ups, because only newbie pilots will get killed in the accidents.
Hmm i had a package dissapear a few years back….bought on ebay..got my money back..fed ex couldnt find it…i wonder Xgs??
So, you are saying the plane is maintained and repaired by the lowest bidder, who then cuts costs to ensure a nice profit even after they have underbid everyone else?
Got to love unregulated capitalism.
So, you are saying the plane is maintained and repaired by the lowest bidder, who then cuts costs to ensure a nice profit even after they have underbid everyone else?
Alaska maintenance folks were pencil whipping their scheduled lubrication until a failed tail elevator jack screw led to the plane crashing into the Pacific ocean, IIRC. A commuter airline, Colgan Air, was outed for paying their flight crews so poorly that they resorted to community rooming similar to migrant farm workers. Capitalism is a wonderful thing, but it has its flaws.
“I hadn’t seen such crummy looking aircraft since I flew on TWA back in 2000. Recall that TWA went under not long after that.”
TWA didn’t go under. They were purchased by American in 2001 (announced before 9-11 but absorbed after). I was able to get one of my American flights rebooked on TWA soon after 9-11 on account of American greatly increasing some connection times due to flight cuts. I don’t recall the condition of the TWA planes being particularly better or worse than those of American or other airlines at the time.
Really
“We know that American has to reorganize and succeed as a business”
Why? Why does it need to succeed as a business. Let it go under. You can justify saving manufacturing, but not an airline. The pieces will get bought up and others will fill the void very quickly.
That’s how monopolies are made.
In addition to getting DeMarco to sign on, won’t it be hard to motivate a whole mountainside’s worth of Republican ‘big boulders’ to sign on to the latest principle write-down proposal during an election year?
January 31, 2012, 9:56 AM
Will the White House Move the ‘Boulder’ on Principal Write-Downs?
Economist Jared Bernstein says that a federal regulator has been “a big boulder in the path to principal reduction.”
Bloomberg News
By Alan Zibel
The aversion of the government-controlled mortgage companies Fannie Mae and Freddie Mac, and their regulator, to writing down the loan balances of homeowners has frustrated advocates of a more aggressive response to the housing crisis.
Democratic lawmakers in Congress have prodded the regulator, the Federal Housing Finance Agency, to carry out principal write-downs. Some have even called on President Barack Obama to remove the agency’s acting director, Edward DeMarco, if he doesn’t do more to aid the ailing housing market.
Now the Obama administration is raising the stakes on the issue. The administration on Friday said it would triple payments to the mortgage industry in an effort to encourage more loan forgiveness. And it challenged the FHFA to allow these same incentives for Fannie and Freddie.
To supporters of principal write-downs, this is a deal worth taking. In a blog post, Jared Bernstein, who was previously Vice President Joe Biden’s top economic adviser, says that Mr. DeMarco has been “a big boulder in the path to principal reduction.”
Mr. Bernstein writes:
Critics, however, aren’t so thrilled. Sen Bob Corker (R., Tenn.) said Monday that he would introduce legislation to ban the government from using taxpayer money to pay for principal write-downs. “The idea that federal tax dollars would be used to reduce the principal on some outstanding mortgages and perhaps even bailout investment properties and beach houses is terrible public policy,” Mr. Corker said. It means “that people who acted responsibly in Tennessee will be paying for the bad behavior of lenders and borrowers in places where reckless housing practices were most prevalent, something I find to be irresponsible.”
…
Now the Obama administration is raising the stakes on the issue. The administration on Friday said it would triple payments to the mortgage industry in an effort to encourage more loan forgiveness.
Behind the scenes, I can visualize the mortgage industry acting like the hit man for a very ticked off loan shark: “Give us three times the payments, or your kid gets it!”
Weren’t the original payments something really exciting like $2000 to subsidize the paperwork? How does $6000 make them excited to write down the principle? Besides, the banks don’t own the loans. They are administering them. If their contract doesn’t allow them to reduce principle without getting sued by the trustee of the trust that issued the bonds, how will this change things? Are people defaulting because they are $6000 under water?
Silver lining to the latest WH housing proposal: It defines housing as an election-year issue. This will force the GOP candidates to lay their cards on the table, and at least some semblance of a discussion on what the various candidates propose on housing will likely ensue.
And when CNN the article says, “saving the average family $3,000 a year,” shouldn’t it read “saving the average wealthy homeowner family $3,000 a year”? Or is there some other soon-to-be-announced plan to put another $3,000 a year into the pockets of poor renter families, such as all those who were foreclosed over the past four years and hence no longer can afford to live in homes they own?
February 1st, 2012
01:25 PM ET
Boehner knocks Obama’s new housing proposal
Posted by: CNN White House Producer Alexander Mooney
Washington (CNN) – House Speaker John Boehner is expressing skepticism about President Obama’s latest plan to lift the country’s housing market, suggesting government programs designed to help mortgage holders have long proven ineffective.
“We’ve done this at least four times where there’s some new government program to help homeowners who have trouble with their mortgages,” Boehner told reporters on Capitol Hill Wednesday. “None of these programs have worked and I don’t know why anyone would think that this next idea’s going to work and all they’ve done is delay the clearing of the market. “
The comments came shortly before the president unveiled a new proposal that the administration says would allow millions of homeowners to refinance their mortgages at a lower rate, saving the average family $3,000 a year.
Specifically, the president is calling on Congress to pass legislation mandating banks allow homeowners to refinance even if their current home value has fallen below what they owe on their mortgage. Currently, most banks do not permit so-called underwater homeowners to refinance, even if there is a history of good credit and timely payments.
The cost of the president’s new proposal is expected to be between $5-$10 billion according to administration estimates. It will be paid for by exacting a fee on the nation’s largest financial institutions – likely a nonstarter with Congressional Republicans who have rejected previous attempts to levy fees on the big banks.
Instead of a new government program, Boehner echoed the sentiment of other Republicans, including presidential frontrunner Mitt Romney, that it is more beneficial in the long run to allow the foreclosure process to run its course.
“The sooner the market clears and we understand where the prices really are will be the most important thing we can do in order to improve home values around the country,” Boehner said.
…
big meanie scrooge mcGrinch!
The administration will quickly realize they’re leaving the majority of the population out of this deal so they’ll expand it to include a $3,000 rebate to every renter who’s current on his/her payments and hasn’t had a late payment in the last six months. Late on your rent payments ‘cuz you’re on the edge financially? No rebate for you.
Makes about a much sense as helping only those who are current on their mortgage. Are there any grown-ups in this administration?
Makes about a much sense as helping only those who are current on their mortgage.
Depends on your goal, I guess.
I would argue that rewarding good behavior would be a good policy. But you’re right - that wouldn’t actively help those that need help.
I would argue that a policy that subsidizes good behavior in homeowners, only, is discriminatory and distortionary.
Also regressive, as the average homeowner is wealthier than the average non-homeowner (which includes homeless people).
“…they’ll expand it to include a $3,000 rebate to every renter who’s current on his/her payments and hasn’t had a late payment in the last six months…”
I’m looking forward to buying a new violin bow when my Responsible Renter’s Reward payment comes through later this year.
Sorry, renters were already “rewarded” with the $8K tax credit “incentive” to buy a house that was $50K overpriced.
More money in our pockets to go to Applebees or buy crap from China!
Here here here thats me….ill get my LL to sign it asap……that how we kepp him from raising it too much…on time and in full..
Boner isn’t right about much be he’s right about that.
Spot on!
“We’ve done this at least four times where there’s some new government program to help homeowners who have trouble with their mortgages,” Boehner told reporters on Capitol Hill Wednesday. “None of these programs have worked and I don’t know why anyone would think that this next idea’s going to work and all they’ve done is delay the clearing of the market. “
Call the Star — this is news: I find myself agreeing with Boehner.
I find myself agreeing with Boehner.
Me too. Totally.
But it’s still sad to see that Obama needs a Boehner to point him in the right direction on housing.
Wow. A rare moment of lucidity from a Congresscritter. Frankly, I’m shocked to hear this basic fact from either party, as they’re both in thrall to the FIRE sector.
I wonder why he’s deciding to accept this facet of reality now. Is it becoming politically unavoidable or politically opportune at this point?
It’s the first time since his election that he’s had anything useful to say. But Boner is a bought and paid for useless turd… just like the rest of them.
Here is a California Democrat perspective on the housing situation, which reminds me why I am not a California Democrat (nor any other type of Democrat, for that matter).
Obama should take cue from California’s congressional Demos on housing crisis
Bythomas d. elias
Posted: 01/31/2012 06:31:33 PM PST
Updated: 01/31/2012 10:31:33 PM PST
Pinpointing the prime cause of California’s slow recovery from recession is easy: Too little has been done about the crisis in housing construction, values and foreclosures.
While only one in 579 homes nationally is “under water,” with resale value deflated below the balance of its mortgage loan, that figure is one in every 211 here. In some California counties, the scene is exponentially worse: Fully 51 percent of mortgages in San Joaquin County were upside down in that manner in the third quarter of last year. The crisis may be worse in a few other places, like Nevada and Arizona, but it is plenty bad here and precious little has been done to fix it.
The result is that construction jobs are not yet coming back and housing-related businesses from carpeting to air conditioning, tile installing to swimming pools all still suffer. So do other firms that depend on them, including everything from newspapers, whose advertising from such companies has tanked, to truckers who now haul far less than in pre-housing-bust days.
In summing up the situation, Nancy Pelosi, the San Francisco Democrat and former speaker of the House, said, “Our economy is never going to be fully well until something is done about foreclosures.”
That’s why it’s refreshing to see both Gov. Jerry Brown and most of the Democrats in California’s congressional delegation at last begin putting significant political pressure on President Obama to do something about
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this.
Of course, Obama pledged he would do plenty about it when he won office three years ago and took over George W. Bush’s historical half-trillion-dollar bailout of many banks and the country’s biggest mortgage lenders, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., better known as Fannie Mae and Freddie Mac. Or simply Fannie and Freddie in the lexicon of many politicians.
The trouble is that Fannie and Freddie have done little or nothing to ease things for homeowners, failing to provide much of a motive for under-water borrowers to stay in their homes and keep making loan payments. This despite the fact that together they took about $169 billion in bailout money intended to help homeowners get back on their feet.
But Obama has left Edward DeMarco in charge of the Federal Housing Finance Authority as acting director, even though, in Brown’s words, he has “ignored” the California foreclosure crisis by “failing to exercise … full authority over residential mortgages underwritten by Fannie Mae and Freddie Mac,” both of which were seized by the government in 2008 as mortgage losses mounted.
Agreeing with Brown, 27 Democratic California representatives in late January formally requested a housing-focused meeting with Obama. Their language was heated: “We have concluded that efforts both by the government and the private sector have not addressed (the) foreclosure crisis with sufficient urgency.” Obama pledged once again in his State of the Union speech to do something. Just not much, and what he does plan could be stymied by Republicans in Congress, unlike actions by the Housing Finance Authority, which can often act on its own.
The California Democrats griped that they’ve already met with Obama underlings like Treasury Secretary Timothy Geithner, HUD Secretary Shaun Donovan and DeMarco, with nothing to show for it.
…
What?! Only one house in 579 is under water? That’s less than 0.2 percent. In Cali the article says it’s one in 211, yet in at least one county it’s better than one in two (51%).
Jeez, they can’t even do simple math any more.
I figured that he was lying with statistics and that he was lumping all houses in together instead of just houses with mortgages to make the numbers look better.
Less than half of homes in the U.S. don’t have a mortgage. The numbers are still WAAAYYY off.
Let’s see. 100 million households. 60% “own” so 60 million homeowners. 60% have mortgages, so 36 million mortgages.
Total household mortgage debt = $9.9T. $275K per on average,l so it passes th “smell test”.
1 in 579 with mortgages under water = 62K underwater houses. The Bernank says $700B total underwater = Each house that is under water is on average, $11 million dollars under water. Okay, we have a fail of the smell test.
Let’s go back to the 60 million houses. 1 in 579 = 104K underwater = $6.7 million underwater each.
100 million households. 1 in 579 underwater = 173K underwater households = $4 million under water each.
300 million individuals in the country, 1 in 579 = 518K. $700B underwater each = still over $1 million per.
Shall we flip it around?
Average mortgage is $250K. Let’s say the people that are underwater owe $500K while thise not underwater owe nothing. Now, let’s say house prices fell 30%, so the average person uner water is $150K underwater.
$700B underwater / $150K per = minimum 4.7 million households underwater.
Of houses with mortgages (36 million) this is 1 in 7 or 8.
Of the 60 million owners with or without mortgage this is 1 in 12 or 13.
Of the 100 million households, this is 1 in 20-25.
Yeah, 1 in 579 households under water? I don’t think so. Not unless there are a few hundred thousand houses, each $100 million or more under water.
LOL Nice, D.
Is the latest WH household-level housing bailout proposal nothing more than an election-year political gambit? I would think Republicans could attack it on the grounds that it does nothing for all the millions(?) of foreclosed former-homeowner households who are now renters.
Obama Doesn’t Name Names in Starting Campaign Against Romney
By Julianna Goldman - Feb 1, 2012 9:01 PM PT
President Barack Obama doesn’t utter Mitt Romney’s name in speeches and public remarks. He just uses the Republican front-runner’s words.
“It is wrong for anyone to suggest that the only option for struggling responsible homeowners is to sit and wait for the housing market to hit bottom,” Obama said yesterday in Falls Church, Virginia, announcing his latest housing proposal.
That “anyone” is the former Massachusetts governor, who last year told a newspaper in Nevada, the state with the highest foreclosure rate, that he wouldn’t intervene in the housing market.
“Let it run its course and hit the bottom,” Romney said in an interview published Oct. 17 by the Las Vegas Review- Journal.
As he seeks a second term, Obama shares the advantage afforded incumbents including former Presidents Bill Clinton and George W. Bush, allowing him to pursue his re-election while trying to avoid overt campaigning against an opponent.
“You don’t want to use the president in a way that makes he and Romney seem on the same plane because it’s one of the advantages of running as president,” said Matthew Dowd, former strategist for Bush’s 2004 re-election campaign and now a Bloomberg contributor.
At the same time, by using official events and policy speeches to attack Romney, Obama runs the risk of ceding the presidential high ground too early.
…
Define “struggling responsible homeowners.”
= political slogan
February 1st, 2012
07:59 AM ET
POTUS talks about homeowners today
Posted by: CNN Senior White House Producer Emily Schultze
President Obama will speak in Falls Church, Virginia on the economy. He’ll be speaking at the James Lee Community Center and he’ll touch on parts of his new housing plan. In Tuesday’s briefing, White House Press Secretary wouldn’t get ahead of the president’s remarks but said Mr. Obama would talk about his proposal “to make universal the potential for homeowners who are responsible and making their mortgage payments to be able to refinance their loans and save on average I believe $3,000 annually.”
———————————————————————————-
[Comment to CNN article]:
Jim
Woohooooo more freebies, I love Obama. I owe more on my car than it is worth, will we get a bailout on that? Who cares, Bankers, I mean tax payers are going to pick up my tab for my mortgage and my student loans. I will never vote for anybody but a democrat, it is like Christmas, woohoooooooooooo. Obama 2012.
February 1, 2012 at 12:00 pm |
Are you saying those who have been taking care of their responsibilities, especially in these current times, don’t deserve a reward for doing so?
I don’t see “freebie” anywhere in that statement nor concept.
LOLOL! So now the government (meaning we taxpayers) should reward those who fulfill their contractual obligations.
File this proposal in the “Pandering” folder.
This would be OK with the 99%:
Like getting deadbeat fathers who take their kids off of welfare until HS graduation local college scholarships
Again, where does it say we’re paying for it?
Was there a stealth political announcement yesterday that made all flavors of Megabank, Inc stock rally? I’m puzzling over how the news that a bank tax would be used to fund the latest Obama housing bailout led to higher share prices.
Feb. 1, 2012, 4:13 p.m. EST
Mortgage-servicing settlement to be done in ‘days’
By Alan Zibel
WASHINGTON -(MarketWatch)- U.S. Housing and Urban Development Secretary Shaun Donovan said Wednesday that a potential national settlement of alleged foreclosure abuses is likely to be made final “in the coming days,” after more than a year of talks.
Speaking to reporters at a White House briefing, Donovan said that “we are making good progress” on the settlement. “It will be finalized, I would expect, in the coming days,” he said.
Donovan and other officials have said that a settlement is close for several months, but have been repeatedly frustrated by new hurdles. The Obama administration has been pushing for a 50-state deal, but its efforts have run into opposition from liberal groups that have warned that the proposed settlement is inadequate.
One former opponent of the deal, New York Attorney General Eric Schneiderman, said last week that one of his main concerns about the deal is likely to be resolved after state and federal officials formed a joint task force to examine the packaging of shaky loans into mortgage-backed securities before the 2008 financial crisis.
Last month, Donovan told an audience of U.S. mayors that the that the settlement would benefit about one million families with cuts in the amount they owe on their home loans.
Earlier this week, The Wall Street Journal reported that state attorneys general have until Friday to join the potential national settlement of alleged foreclosure abuses. Negotiators have been trying to work out an agreement with the federal government, states and five major banks.
Government officials are aiming for a deal valued at $25 billion in loan write-downs and other homeowner compensation with Ally Financial Inc., Bank of America Corp. (BAC +0.41%), Citigroup Inc. (C +0.44%), J.P. Morgan Chase & Co. (JPM +0.32%) and Wells Fargo & Co. (WFC +0.23%).
All the king’s horses and all the king’s men…
Feb. 1, 2012, 4:29 p.m. EST · CORRECTED
Obama pressures Congress to take up refi
Sketches out his plan
By Greg Robb, MarketWatch
A previous version of the story incorrectly stated that the acting director of the Federal Housing Finance Agency was appointed by President George W. Bush.
WASHINGTON (MarketWatch) — President Barack Obama on Wednesday urged Congress to act on his plan to give homeowners a chance to refinance at historically low interest rates and released details of his proposal.
Obama rejected arguments that only time would heal the housing market. Data released Tuesday showed house prices have dropped by nearly a third from their peak. See story on house prices.
“It is wrong for anybody to suggest that the only option for struggling, responsible homeowners is to sit and wait for the housing market to hit bottom,” Obama said in a speech in a Washington, D.C., suburb.
…
“Obama pressures Congress to take up refi”
Not that I care much, but this headline seems to contradict Polly’s assertion higher up in the bits bucket that Obama is preparing to do an end run around Congress in his latest homeowner bailout proposal.
Up the thread, polly corrected herself. Looks like this plan is going to need Congressional approval.
And Slim adds, we know how likely that will be.
Republicans will stop it for good reason, but will take the political hit from the president. Which is the point, I guess.
So while they duke it out, maybe the market will in fact clear..who knows.
When dollars are freely exchangeable with gold, aren’t we already effectively on a gold standard? What advantage would there be to minting gold coins and forcing everyone to use them by fiat (unless you were a gold bug sitting on a large horde of physical, of course)? After all, they aren’t making any more gold these days, but they are making more people who need coinage to facilitate household-level trade (e.g., to buy groceries).
Feb. 2, 2012, 12:00 a.m. EST
Getting back to the gold standard
Commentary: Jim Grant says gold, not paper currency, is the future
By Brett Arends, MarketWatch
NEW YORK (MarketWatch) — Jim Grant’s rise to power may be delayed.
The legendary Wall Street writer, publisher of Grant’s Interest Rate Observer, has been mentioned by two of the rivals for the Republican presidential nomination. Newt Gingrich said if elected president, he’d name Grant to help run a commission looking at a possible return to the gold standard. And Ron Paul said, if elected president, he’d go all-in and name Grant — one of Wall Street’s best-known gold bugs — as the new chairman of the Federal Reserve.
As Paul wants to abolish the Fed, it would doubtless be a temporary post. But Grant says he found the offer — which came out of the blue — very flattering.
Alas, both men are trailing in the race to front-runner Mitt Romney. “Unfortunately, I haven’t heard from Mr. Romney yet,” joked Grant when I called on him in his offices down on Wall Street. “I’m sitting by the phone, I’m ready.”
…
My dollars are also freely exchangeable with yogurt. Are we on the yogurt standard?
Gold is not money. In fact, there is only about 1 ounce of gold per person on the planet today, that has ever been mined and made available to people, not counting the gold that’s been lost in shipwrecks, lost tombs and civilizational collapses. 1 ounce of coinage metal per person, is nowhere near enough to function as a viable currency. And that assumes that all the gold now (regardless where it is and how it’s used) will be put to use as coinage. In reality, 20% at best could be put to such a use. So now we’re talking about 6 grams of gold per person on Earth.
Gold was long ago replaced as a currency, and for a good reason: In a high-energy, information-dense set of societies, fiat currency works much, much better. If that high energy thing goes away, or the information density does, then you might bring back gold and silver as currency, but you’re going to have much, much bigger problems in your life than the form of currency you use. Problems like starvation and mayhem and diseases. Little things like that. The gold nuts are nuts for that reason; in order for gold to become a currency again, civilization will have to COLLAPSE.
Gold is not money. In fact, there is only about 1 ounce of gold per person on the planet today, that has ever been mined and made available to people, not counting the gold that’s been lost in shipwrecks, lost tombs and civilizational collapses. 1 ounce of coinage metal per person, is nowhere near enough to function as a viable currency.
I fail to see how this backs your assertion that “Gold is not money”. The scarcity of an object does not make it ‘not money’.
It’s sad to see you think rolling back the clock 40 years (when US currency was still redeemable for gold) would lead to starvation and mayhem.
Worthless gold…. worthless worthless gold.
“(when US currency was still redeemable for gold)”
It’s still redeemable for gold today; unfortunately, it’s redeemable for (1-35/1763)*100% = -98% as much gold
now as it was forty years ago.
Gold is not money since it’s not used as money. Fiat currency that is largely rendered into paper and electronic signals: THOSE are money. I was just using the example of gold’s useless scarcity to show how it CAN’T be used as money, even if you wanted to use as such. You may as well say plutonium can be used as money, while ignoring the same sort of hard physical facts about its same useless scarcity.
Gold became a commodity like any other industrial metal, and the gold nuts never accepted that. Well, they don’t need to accept it, since it’s a hard physical fact of the world: Gold is not used as money. We also don’t hunt and gather for our food anymore. We also don’t hurl stones at witches or poke needles into dolls. The world advances and old ways stop being used.
My dollars are also freely exchangeable with yogurt. Are we on the yogurt standard?
Gold is money and yogurt is not because yogurt goes bad, would look horrible around my neck and because we say “good as gold” and not “good as yogurt”.
Sorry — I pretty much repeated your post before reading it.
Some HBB posters ought to think about taking a basic college money and banking course before weighing in. It’s not really much fun to knock down nonsensical comments.
Gold is not money and yogurt is also not money. Neither are used as money to effect economic transactions. You want to know what is, Rio? FIAT CURRENCY.
If gold is money then I should be able to use it directly for economic transactions virtually anywhere in the world, certainly anywhere in the First World where money is best assured to exist and be honored. But in 99.9% of shops and other businesses there, gold is not accepted as money to effect exchange. So you know what I call something that can’t be used for money in 99.9% of cases? “NOT MONEY”.
Gold is not money and yogurt is also not money. Neither are used as money to effect economic transactions. You want to know what is, Rio? FIAT CURRENCY.
No, I think gold is money too because every year for the past 11 years, gold has given gold-owners more money. And you can take that to the bank easier than a bunch of multi-paragraph explanations of why gold is not money. Who cares if it takes a one step trip to a middle-man to trade gold for paper money? If I had Brazilian Reals in Ballknockers Arkansas it would take much longer to trade them for dollars than it takes to trade gold for dollars, but Reals are still money even if they do have pictures of fish and turtles on them.
You write like an Austrian economist. Yet you are 100 percent socialist. If my fists were like Niven’s puppeteers, my fists would be “looking at each other” and going nuts.
“Are we on the yogurt standard?”
No. Yogurt is perishable, and hence does not qualify as money, which is durable.
I find it funny how people hear “gold standard” and assume that only gold may be used to conduct transactions. Have none of these people ever heard of a “Silver Dollar”? It’s beyond perplexing that someone can take some bit of fact about the amount of gold in existence, then wholly accept an unbalanced position some “guy” has spouted about civilization collapsing if we return to the gold standard. All while they have probably handled silver dollars in their own possession, and probably paid for something with it in their own life. It’s unfathomable. I wonder if they have ever heard the term , “spare a copper good sir?” lol.
Silver is also not money, but you can bring in old silver coinage and use it for FACE VALUE. That’s still done, BTW. You can still find silver in your change in the USA. It’s very rare but does happen. And I suppose that you can take an old U.S. gold coin that used to be legal tender and also use it for face value. A banker would be glad to take your gold coin off your hands for face value. Knowledgeable clerks in stores would, too.
But all that is moot. The issue is that metals aren’t money. Not anymore. Our information-dense, industrial societies matured and put all that away in favor of a superior invention: Regulated fiat currency. And economic expansion and stability increased remarkably. And nobody’s going to give up on such a currency, since every time someone tries, they just end up on another fiat currency, NOT on a metal-based form of one.
‘a superior invention: Regulated fiat currency’
Regulated like the Federal Reserve lending many trillions without government knowledge?
‘economic expansion and stability increased remarkably’
Yeah, just pick us a paper and read how stable everything is. And note that the economies in the states with the biggest housing bubbles have the highest unemployment.
‘nobody’s going to give up on such a currency, since every time someone tries, they just end up on another fiat currency’
Like Mexico; twice. Yeah, we can cycle through the pesos, nuevo, and nuevo nuevo, but somehow that justifies the inherent problems of allowing govts to print what they want?
You’re missing the point entirely. A standard of any sort restricts a central bank from printing as much as they want. And now we are seeing insane amounts of money creation. When asked about the trillions of loans, Bernanke said they hadn’t “printed” it. Are we to believe that the Fed has trillions in reserve? If so where did they get those reserves?
Put your “money” where your mouth is. If you are right you can make millions betting against these fools you ridicule. After all, these policies you advocate have many implications:
‘Ben Bernanke defended the Federal Reserve’s decision to hold interest rates at record-low levels for the next three years, during a contentious hearing before federal lawmakers. Rep. Diane Black, R-Tenn., said the Fed wasn’t showing enough concern about the impact low interest rates were having on people who keep their money in conservative investments, such as savings accounts and CDs. The interest on those investments hasn’t kept pace with inflation.”
“A few questions touched on transcripts released last month that showed the Fed was slow to recognize the severity of the housing crisis in 2006. Bernanke said the Fed had learned a lot of lessons since then. ‘While I can never promise that we will not have another financial crisis, I think we have made a lot of progress in how we monitor financial situations,’ he told the lawmakers.”
http://finance.yahoo.com/news/bernanke-defends-fed-policies-against-172851695.html
The Super Pac that’s been working to get Mitt Romney the GOP nomination raised $30 million last year, and 10 percent of it came from just three guys who run hedge funds in New York City.
Paul Singer, Robert Mercer and Julian Robertson each donated $1 million to the Super Pac Restore Our Future, which can raise and spend unlimited amounts of money in support of Romney. They are the top donors to the group; two other wealthy donors, John Paulson and Edward Conard, were already reported to have given $1 million each as well.
The Super Pac is the ideal body of influence for these benefactors. When candidates raise money for their campaigns, the most cash they can take from a supporter is $2,500 (for the primary election and then for a general election, or $5,000 total). But because those rules don’t apply to Super Pacs, created in the aftermath of the Citizens United Supreme Court decision, they can solicit giant donations from rich people.
http://abcnews.go.com/Politics/OTUS/romneys-super-pac-hedge-fund-mavens-play/story?id=15493050
“…and 10 percent of it came from just three guys who run hedge funds in New York City.”
Nobody can knock Mitt for financial inefficiency!
That 10% may prove to be a smart investment.
This is outrageous!
Connecticut cannibal suspect to appear in court
Oh, I thought it said Cannabis. $1 million bond seemed a little high for a stoner. But it`s probably a little low for an ax murdering
eyeball appetizer main course brain eater. I shudder to think what dessert could have been.
Published February 01, 2012
FoxNews.com
A Connecticut man accused of hacking a homeless man to death and eating part of his brain was due to be arraigned Wednesday on a murder charge, the Connecticut Post reported.
Tyree Lincoln Smith, 35, is accused of killing Angel “Tun Tun” Gonzalez with an ax last December and removing the man’s eyeballs and part of his brain.
Smith, of Ansonia, is said to have consumed the dismembered organs in a local cemetery at the site of his cousin’s grave.
Smith was arrested last month in Lynn Haven, Fla., where he was held on $1 million bond, until police escorted him back to Bridgeport on Tuesday. He is being represented by a public defender.
http://www.foxnews.com/us/2012/02/01/connecticut-cannibal-suspect-to-appear-in-court/ - 66k
Gonzalez’s mutilated body was found inside a vacant apartment in Bridgeport, Conn.
Little known fact: during the 1980s and 90s, national funding for outpatient mental health clinics was cut in half. THOUSANDS of clinics were closed nationwide.
Did we all suddenly become more mentally healthy? Of course not. All that happened was an increase in the jail population.
And the homeless population.
Which we certainly see here in Tucson. The homeless mentally ill are quite prevalent around Downtown.
“Homeless” seems to be a euphemism for “hobo” or “bum.”
Saw one cross the busiest road in the state against a red light yesterday, carrying his bedding and backpack. We all stopped and waited…geeze he could have gotten killed.
I think a lot of them could have a place to sleep or even a permanent residence, but don’t want to be around other people or obey any rules. I really don’t know where they sleep at night but our town is full of nonprofits that knock themselves out to provide services for them.
In places like where you live,that is what it means.
In the more dense urban areas, it really does mean homeless and most often mentally ill.
http://market-ticker.org/akcs-www?post=201420
Crony capitalism and the DoJ.
“it is probably not an isolated incident.”
Ya think…
Dirtiest. DOJ. EVER.
BTW, Rep Diane Block has proposed legislation HR 3842, restraining the DOJ from interfering with states’ rights and local governments, as has happened in such places as Arizona, Alabama, Georgia and now little old East Haven, Connecticut, where the Mayor and police department is being punished for trying to protect their community from turd world criminals. I’m proud to say my rep has co-sponsored this legislation.
And, at 9:00am, Darryl Issa and his committee are going to have grilled “Nation of Cowards” Holder for breakfast on C-Span.
The dept of “just us”, Holder protecting “his people”.
In terms of corruption, FBI/DoJ ranks right down there with Wall Street and CONgresscritters IMO.
Dirtier than the Bush White House directly ordering the DOJ and the FBI to ignore their own calls for increased investigation into mortgage industry fraud during his admin?
Excellent point, turkey lurkey!
Again, the William K. Black interview on Moyers comes in handy:
At 10:05 in the interview, Black says, after 9/11, Justice Department transfers 500 white collar specialists in the FBI to terrorism, but Bush admin refused to replace the 500 white collar specialists. Today there are 1/5 as many FBI agents who were working the S&L crisis, on a situation that is at least 100 times worse than the S&L crisis.
Other interesting tidbits and times in the clip:
1:55 - 2:30: What is fraud and does it exist in the current financial crisis
2:30 - 3:50: Accuses CEOs of fraud:
5:20 - Accuses Indymac of producing as many losses as entire savings and loan debacle
8:30 - 8:53 - Financial system during housing bubble became Ponzi scheme
http://www.youtube.com/watch?v=Rz1b__MdtHY
This is what happens when all the wealth get’s concentrated. Gov officials get easier and easier to buy off. This occurs because there are fewer jobs that offer a path to riches and because the elite have so much more cash. People lose faith in the system and the system eventually crashes.
Next up effective tax rate of 5% for the elite and only if they want to pay.
Never ends ….
The Texas Permanent School Fund is fed up with fund of hedge funds fees.
The $25 billion endowment’s already modest return from its $2.42 billion in hedge fund investments were eliminated by fees—leaving the fund with a loss. While the Texas Permanent fund invests just 16% of its assets in absolute-return and private equity funds, those funds account for a whopping 68% of its costs.
“The sector that should have enhanced our funding for schools actually detracted from it,” Holland Timmins, chief investment officer, said. “We had a positive return in the asset class, modestly, but it got eaten alive by the fees.”
http://www.finalternatives.com/node/19419
“The sector that should have enhanced our funding for schools actually detracted from it,”
I’m shocked, I tell you, SHOCKED!
Welcome to the extractive economy. It’s all about the fees. Fees is one reason there’s a shadow inventory held off the market. The fluffers, er, uh, I mean “servicers” gotta get those fees. And that’s what the whole eurozone disaster is all about. Fees. Each fresh round of rescue plans brings more fees.
We’re getting fee-ed to death.
“ProFEESional’s” and they’re quite clever as well. Did eyes mention $mart too? Ethical?
(They gots it all eyes tell ya, the complete package of wholesomene$$)
If they just invested w/ Vanguard, they would be ahead of the game and have a positive return…..
I hope you’re serious.
It is pretty standard for hedge fund fees to be 2% of amount invested AND 20% of any profits. In a “fund of funds” you could expect an additional fee for picking the funds.
Oh, it is these amounts (the 2%/20%) that are only taxed to the managers of the hedge fund at 15% as “carried interest” that pretends they are investments of the investment advisors rather than compensation for doing the investing.
Isn’t the 2% considered ordinary income?
Oh, it is these amounts (the 2%/20%) that are only taxed to the managers of the hedge fund at 15% as “carried interest” that pretends they are investments of the investment advisors rather than compensation for doing the investing.”
really ? how clever is this what they learn at ivy league schools? how to game the system
Welcome to the world of the poor folks, who have to pay fees on top of fees.
The good news is the fee extractors are and will be fighting each other to get their hands on the remaining scraps.
Oh, and I wanna thank Hillary Clinton and the Blister Sistahs for bringing the “Arab Spring” to Egypt, thereby making it possible for the populace to freely murder each other during soccer games and such. Heckuva job, Hillary! You go, girl. Oh, that’s right, you’re going, aintcha?
1. Do you think a republican administration would have handled the Arab Spring much differently? (I don’t think our response would have been much different. It seemed like the right choice to make, even though it’s still a gamble.)
2. Do you really want to be on the other side of this? …with the US possibly supplying intelligence, crowd control gear, and UAV support to suppress a popular rebellion against Mubarak?
Palmy, our own revolution and fight for independence was pretty ugly as well. I think our departure from the old norm of supporting middle east dictators is a step in the right direction. Now we just gotta finish the job and tell the Saudi ruling family it’s time to step down.
Palmy, our own revolution and fight for independence was pretty ugly as well.
ISTR reading that tarring and feathering British sympathizers was quite common during the Revolutionary War.
And, if you’ve ever traveled in Canada and talked to people, you’ll learn that more than a few of them had bailed out of the 13 Colonies and headed north after the Revolution started. The fledgling USA was not a nice place to be if you favored the Tory point of view.
“The fledgling USA was not a nice place to be if you favored the Tory point of view.”
Understandable.
“Do you really want to be on the other side of this? …with the US possibly supplying intelligence, crowd control gear, and UAV support to suppress a popular rebellion against Mubarak?”
Are you fukkin’ serious? Why does it always have to be one side or the other with people? WTH is the matter with you? How about no involvement at all, huh? How about we mind our own beezwax here at home and clean things up here instead of rooting around in Middle East hellholes?
Are you fukkin’ serious? … WTH is the matter with you?
Our involvement was already pretty minimal. I don’t think we did much more than make some public statements that we supported democratic reform, and that the government should show restraint when dealing with protest. However, you seem to imply that Hillary and company made this all possible, which doesn’t seem very accurate. I also don’t think anyone else would have handled this much differently.
“Our involvement was already pretty minimal.”
ROTFLMAO!
Not even gonna comment.
In other news, the UN has backed down from its demands to Syria. Wonder why? (Can you say Russia and China?)
There’s way more to all this stuff than meets the eye.
Hillary laid an egg. Big time. Probably why she’s not going to be staying on as Secretary of State.
Hillary laid an egg. Big time. Probably why she’s not going to be staying on as Secretary of State.
She’s been quite clear about her intention to be a one-term cabinet secretary for quite some time.
1. Do you think a republican administration would have handled the Arab Spring much differently?
Domino’$ + Contagion’$ = repubican Bidne$$ talk/$peak
2. Do you really want to be on the other side of this? …with the US possibly supplying intelligence, crowd control gear, and UAV support to suppress a popular rebellion against Mubarak?
Demographics and resource depletion will lead to a collapse in Egypt no matter what. The US had plenty of wealth to spread between a small population so everyone was happy. This is not the case in Egypt. I predict Egypt will become a failed state in the not too distant future.
You should go to an English football match and wear the wrong teams jersey in the wrong section.
Back when I was a young pup at the University of Michigan, I attended the Ohio State game at Michigan Stadium twice.
During my freshman year, I was sitting in the student section with my women’s dorm-mates. And who should come into our section but an adult male…
…Ohio State fan.
Well, you’d think that this guy was walking into the lionesses’ den, but you’d be wrong. Ohio State beat us that year, and I’ll be fair and say that, during that game, Ohio State had the better team. It was Rick Leach’s first year as Michigan’s quarterback, and it showed. He truly wasn’t ready for prime time.
But I digress.
At the end of the game, quite a few of us extended our hands…
…and shook hands with the Ohio State fan.
One time I saw a guy wearing the wrong jersey get group pummeled at an LA raider game in LA.
One time I went to a college basketball game in Oakland next door to an ongoing Raider football game against a team wearing red. I was wearing blue for my basketball team. Walking through the Raider crowd, they’d eyeball me, see the blue, look mean, and then confused when they remembered their opponent that day was wearing red.
Those funny little Raider fans…….
“Walking through the Raider crowd, they’d eyeball me, see the blue, look mean, and then confused when they remembered their opponent that day was wearing red.”
Maybe you were in the Bloods section.
Yesterday someone questioned why the stock market was doing so well. My guess three reasons:
*Cash paying next to nothing
*Corporate profits economic value added (EVA) margins the best they have been in years - according to new article in CFO magazine
*Most important: market is forward looking - betting that Obama is out door in January.
“Most important: market is forward looking - betting that Obama is out door in January”
I wonder. Sure looks like Obama has the same devil on his shoulder that Bush did. Sure looks like the guy likely to run against him does too. If by some twist of fate we got a real reactionary in the Office, do you think that the wealth transfer from taxpayers to Big Business would get a boost?
I suspect the “market” is looking for never ending waves of money to be thrown at the top of the pyramid.
“…never ending waves of money to be thrown…”
I suspect you nailed it.
“Oh, beeyooteeful for spacious skies
For constant waves of green”
For purple mountains majesty
For endless waves of green
Throwing waves of money at a pyramid that has a crumbling base will not fix the situation. Build all you want on the top the thing is coming down.
betting that Obama is out door in January.
Out the door of his inauguration day limo?
Good morning HBB. I’m a long-time lurker that is most grateful to Ben and the numerous critical thinking posters for helping me avoid the housing trap. I’ve always rented but considered buying back in 2006. Fortunately, what I learned from you all confirmed my own suspicions and I ignored the realtors siren song.
I’m now facing a different challenge and would like to tap your expertise. The house I’ve been renting for a couple of years just received a notice of default. I’ve talked to the landlord who is very underwater on the property and he is hoping to negotiate better terms with the bank, though he acknowledges that foreclosure is a possibility. I’m expecting that it will take another 2-3 years before I’m ready to buy and would like to negotiate a lease for that period. Any thoughts on what terms need to be in the lease to ensure it survives foreclosure?
My understanding of the rules here in California is that as long as the bank takes the property back at foreclosure rather than selling it to a private party that the lease remains in force. As a secondary issue, are there any clever ways to reduce the rent I pay once the property passes to the bank–that don’t jeopardize the lease term? Any suggestions from HBB brain trust? Or course, I’ll run this by the local legal aid folks before taking action. Many thanks for your insights!
If you don’t mind waiting for the hammer to fall:
Finish this lease, don’t sign another one, exchange keeping the house in shape in leiu of rent, wait for the foreclosure to go through the system.
Benefits: oodles of cash in your pocket
Cons: You always have to be ready to move, and make sure to check the rental market for something to grab in a hurry. (get the move estimates done ahead of time)
You are responsible for -anything- that breaks.
Neighbors constantly want to know if you are going to put an offer on the house.
Not knowing -when- the ride is over. If you prepare enough in advance (garage sales over, mover picked etc) that helps you sleep at night.
Possible con: next rental needing to see 3 months of prior payments. be 100% honest with your new LL and they should understand why (you are FAR from alone here). Make sure you have an awesome Credit score, that would help a lot.
Talk to the LL, keep a good relationship with you and he won’t evict you. You could get quite a few months/years out of it.
I’d approach the bank directly. Tell them that unless they are willing to offer a five year lease with an out for you after three, you’ll hit the road.
They’ll be left with a vacant house liable to be vandalized, and no income until they can sell it. Play ball and they get rent payments with the possiblity of selling later when the foreclosure overhang is smaller.
Bank of America won’t even bother returning
his call.
What makes you think the local legal aid society is going to talk to you. If you will be ready to buy in about 3 years, you probably make too much money to qualify for their help.
Assuming you are correct that an actual foreclosure will leave the lease in place (are you sure about that?), the only thing you can do is try to get your landlord to agree to some giant payment that he would have to make if he decided to do a short sale rather than let the house go into foreclosure. What makes you think he would agree to such a thing? He doesn’t have to.
You could write the lease with your landlord so that if it becomes bank owned your rent goes down. He doesn’t have any reason to agree to that either, though it doesn’t cost him much. Might make the bank even angrier at him. And there is a decent chance it wouldn’t hold up if the bank challenged it.
You need your own lawyer, but you are angling for a bunch of things that benefit only you. Hard to negotiate when that is what you want. You don’t have anything to offer the other side.
IANAL, but isn’t the only requirement that the lease be “reasonable”. If your rent is $1300, $800 could very well be reasonable for a long term. Plus having a lease doesn’t mean you wouldn’t get cash for keys. Maybe take the owner out for a nice steak dinner to discuss - if he’s going to lose the house anyways, he won’t have anything to lose by giving you a good deal.
FYI: I went through the same thing on the other side of the country. In my case, it was best to just move out and find something else rather than deal with the situation. Good luck.
IANAL?
And whether the lease is reasonable or whether reasonable is all the lease has to be is entirely dependent on local rules.
However, I can assure you that there is someone out there that has a large interest in making sure that all the foreclosed on rental houses in an area don’t get turned into $400 or even $800 a month flop houses for years once they are foreclosed on. Someone will find a way to kill it.
IANAL = I am not a lawyer
“IANAL = I am not a lawyer”
So wouldn’t that mean you’re NOT anal?
Legal aid is a joke.
I once asked then for representation against a man who had threatened to kill my son and me.
After three hours in their waiting room, the woman attorney literally laughed in my face. Her assistant told me that they only helped people who didn’t speak English and who had “rent problems.”
+1 post-1960 America! PC rules! And I don’t mean personal computer!
Why can’t he do this: stop paying rent to the landlord. Create a trust account at the bank, deposit the rent payment there. If the landlord sues, show the judge the notice of default and the payments to the trust account. Act stupid, argue something like landlord cannot perform his side of the lease agreement, the rent really belongs to the bank, you’re covering your bases. Worst case scenario he probably stays in the house and pays the money out of the trust directly to the landlord (bring the checkbook to court.)
Best case scenario he gets free rent as the bank will never collect.
Because the landlord is fulfilling his side of the lease. The renter is using the property. Unless you consider the occassional receipt of a letter to make the property unusable, there is no non-performance on the part of the owner until he no longer owns the property.
You would lose that case in court so quickly, your head would spin.
Your landlord is rather kind to tell you his financial situation. He is giving you the information you need to be prepared for a change in the situation. Your rent is probably too high now, as posession of the house is unstable, but I’d suggest you not punish him for being generous with you. Might be a prudent thing to see if your deposit money is actually in an escrow account….
I knew I could count on the HBB for a vigorous discussion of the options. Just a bit more info for clarification—my intent has always been to pay the landlord our currently negotiated (market rate) throughout the period of default. He’s tried a short-sale and is too far underwater to make that feasible. He doesn’t want to live here himself, so it’s either I rent it or he rents it to someone else. I’ve consistently paid on time, manage to do small repairs on my own, and have a good relationship with him–he’s a fan of the guacamole I mix up for our discussions.
Even though it substantially reduces my negotiating power, I’m pretty adverse to moving. My leverage with the landlord is rooted in his reluctance to lose a month or two of rent in a turnover to another renter, and the risk of having to reduce the rent since he cannot guarantee the duration of the lease beyond month to month. I’ll do some more research to see if there are any mechanisms to reduce what I pay the bank (assuming the house gets foreclosed upon) that don’t result in giving the bank the right to break the lease. I’ll also follow-up on the suggestion of an escrow account for my deposit (good idea, Blue Skye).
Thanks to each of you for your input.
Oh, and in case anyone else is in a similar situation. Here’s some info from Nolo. Consider it a starting point as you’d want professional advice before relying on this.
Time to clear out the junk, yard and ebay sales back up all info on your hard drives…I just bought a 16GB usb drive for 17.99 at Staples. (32GB is 39.99)
tenants will have at least 90 days to relocate.
Realtors Are Liars®
Santorum 2012!
PeanutHead For President!
Well I agree Cahtuh is eligible for re-election.
Red, White and Blue Chips Archives
Feb. 1, 2012, 6:37 p.m. EST
Job-cuts jump 28%, clobbering retail, Midwest
January witnessed a 28% jump in job cuts. So finds outplacement firm Challenger, Gray and Christmas. CEO John Challenger talks to John Wordock about what sectors did the most cutting and what part of the country suffered the most. Listen to Red, White and Blue Chips.
Check it out: The candidate who suggested letting the housing market bottom out has a commanding Republican caucus lead in the nation’s most underwater state! Perhaps Nevada voters know something folks inside the Beltway don’t know?
Feb 02, 2012
Poll: Romney has 20-point lead in Nevada
By Catalina Camia, USA TODAY
Updated 10m ago
By Ethan Miller, Getty Images
Mitt Romney has a commanding lead in a Nevada poll, outpacing Newt Gingrich by 20 percentage points.
The former Massachusetts governor is “headed for a blowout victory,” writes the Las Vegas Review-Journal about the poll it commissioned with a CBS affiliate.
Romney has 45% support from Republicans who plan to participate in Saturday’s caucuses, the first test for the GOP candidates in the Western states. Gingrich has 25% support, followed by Rick Santorum at 11% and Ron Paul with 9%.
…
Like its neighbor-to-the-east, Utah, Nevada has a sizable Mormon population. Same holds true for Arizona in Maricopa County, which is where Phoenix is.
The nexus is the community of Gilbert. Gee, isn’t that the district of the councilman Morman whose wife and daughter both had been arrested for numerous sexual hedonism with the same partner, under the age of consent?
This really shows the power of money.
i have been a renter for 6 years, in the area where i live Sherman Oaks Ca 91401,rents for a 1500 sq ft house are 2k amonth.i have finally found a house i want to buy, it is 400 k, w/ my 80k down, monthly nut will be 2k.There is a serial flipper in my n-hood,he has also submitted a bid for 400k, i know this because i am allowing the listing agent to rep me on this purchase.The flippers formula is this he puts 75k in the house and flips it for a profit margin of between 10k-20k per house.low profit margin,but from what i hear about this guy is he has millions of dollars to invest and with intrest rates so low and the stock mkt being the stock mkt this formula works for him,and will keep me renting…i am angry,at the low intrest rates that are driving these people to compete against buyers who just want to plant some tulips…
Why should his $400K bid beat your $400K bid?
Because the realtor can expect repeat business from the flipper.
Polly-
True, but I would use the complain to the Ca DRE and local board (SRAR), and file a complaint against their license a-hole approach. Also, primary purchases are suppose to be in front of investor/flipper ones in Ca. Dual Agencies suck, big time. (Agents play dirty, and so should you!)
I like parts of Sherman Oaks. I grew up around there. I wish I could afford that area. Lucky you. We’re stuck out in Thousand Oaks, as it turns into west Van Nuys. Way too many illegals these days. Tagging, gangs, etc…
(Agents play dirty, and so should you!)
Hey look, someone left their “ethic$” jump-rope in the playground. Finder$ keeper$
I’m licensed (career in REIT & Development firms). Yeah, I was in SR*R. What a freak show of creepy people, imho. I did residential after my last deveopment/mgmt position.
B.I.N.G.O.
sold in 04
I was just thinking, what I would do to put some human contact into the game. Knock on the door and introduce yourself as a primary buyer (one of the offers), who just wanted to say, you and your family really want the home, will keep it lovely, and appreciate their upgrades. Sellers like the “pass it on” connection to the buyer. We fell for it, and we’re not country pumpkins ourselves. It may not be a higher price thing at that point, they might like the primary home buyer angle. Just thinking….
I knock on doors a lot and meet neighbors. We looking ourselves. The “chit” you find out is amazing. I heard one Pit Bull owner neighbor story, that made us pass on a home. My discovery was our only warning.
“We” looking s/b “We’re” looking…
I feel for you, sold in 04. Prices in So Ca are still insane, and the inventory is being rigged (few homes for sale).
“Prices in So Ca are still insane, and the inventory is being rigged (few homes for sale).”
That summarizes the situation well…
I was just thinking, what I would do to put some human contact into the game. Knock on the door and introduce yourself as a primary buyer (one of the offers), who just wanted to say, you and your family really want the home, will keep it lovely, and appreciate their upgrades. Sellers like the “pass it on” connection to the buyer.
Our next plan of attack exactly - though we are working on a flyer that has pictures of the kids and the dog and highlights our public school teacher status.
Is it too creepy to target homes in the neighborhood we want that were sold 05-07 and are now 200K less (per comps)? Not sure how I feel about that strategy.
Is it too creepy to target homes in the neighborhood we want that were sold 05-07 and are now 200K less (per comps)? Not sure how I feel about that strategy.
I don’t think so. But, then again, I’m not looking in those nabes.
letters and dogs, good god are you going feed the squirrels too?
letters and dogs, good god are you going feed the squirrels too?
Feeding squirrels. Now that’s a blast from the HBB past. Might as well mention Joshua trees while we’re at it.
Feeding squirrels.
Don’t get the squirrel reference, sorry.
Old meme from back around the days when I went by “Seattle Renter” on here.
It’s a reference to a story during the height of the bubble where a couple sold their house and in the sales contract made the buyers agree to keep feeding their “pet” squirrels.
Somebody here probably has a link to the original story, or you can probably google it….
In 2005-2006, competition was so fierce that homeowners could pick which of the many bidders would buy the house.
So, to get a leg up on other bidders, Joe Buyer would write a letter to the owner, often with family pictures (+ dog), exhorting how Joe would lovingly take care of precious home and even “feed the squirrels,” if Joe were lucky enough to be chosen to buy it. Sometimes the most drippingly sweet letter was enough to clinch a deal.
That’s why we’re laughing. Is housing so tight in SF that you have to write a squirrel food letter to overcome multiple bids? (to be fair, I’ve seen a lot of moderate flipping in DC too.)
Wow. I’m starting to feel old. That feeding the squirrels bit was here for years…
Basically at the height of the frenzy circa 2005 sellers were making competing prospective buyers include in the sales contract terms like they were obligated to feed the family of squirrels in the tree in the backyard. And other such nonsense.
Starting Monday February 13, I am about to rent a studio two miles from RB King Harbor $1100. Let home moaners keep moaning!
Why should his $400K bid beat your $400K bid?
If he has all cash and no contingencies, and can close immediately, then the regular guy who needs a loan is SOL.
sfrenter
We’re all cash, and to some sellers, it’s all the same in the end. Lisiting Agents in sold in 04’s area (SFV-So Ca) are known for not showing all the offers, if they play dirty).
Heck, I hate kissing arse or begging myself, but this market has few regular sale inventory. Redfin has an exclude all SS’s box,and that’s how we search. Few pick-ins.
I can’t take much more of this. I prayed to the housing God, as opposed to the chocolate God, for our home to show up. I hate this rigged overpriced So Ca market.
And one more flip that’s 100% tiled floors…Grrr!
Btw, most escrow officers still like 3-4 weeks. I was told too much liability to rush.
sfrenter,
Your plan is smart. Teachers, Kids, Dog… OMG, they’ll love you for their legacy.
We’re all cash, and to some sellers, it’s all the same in the end
Unless the seller already bought another house or for some other financial reason needs the sale to close in less than 30-45 days
We’re all cash, and to some sellers, it’s all the same in the end.
When I sold my house back in 2008 I had two offers the day it listed - one all cash, the other financed, but with 20% down. I took the cash deal (both were full asking).
Why? Because I knew there was one less party to the transaction with the cash deal. No chance of bank balking or backing out of providing financing to the buyers.
drumminj
Thanks for that post. We’re cash and we get mixed vibes.
It could be hyperbole to drain our cash & close egos. I’ll use your post as a serious data point.
When I think of what we’re paying (way too much) and the home we’re buying (eventually-when we find it) the two realities make no sense. The market is truly fooked up.
I am about to close on a short sale. The bank was only entertaining cash offers. I couldn’t compete with cheap debt from the GSEs. There is a fringe market, property that cannot be financed, in this case because there is no plumbing. Not a big deal, the fixtures are there, but one needs cash to make the deal go.
I’m only paying $14/ft2. You guys going after $400K or $800K houses have bigger motives than me!
“…I’m only paying $14/ft2….”
Skye– when this deal goes through, it will be the biggest success story in HBB history. You’re soooo close. Please let us know when you take possession? (Need an excuse to crack a bottle of Veuve Clicot….:-)
“There is a fringe market, property that cannot be financed, in this case because there is no plumbing. Not a big deal, the fixtures are there, but one needs cash to make the deal go.”
Brilliant strategy! I wish you the best of luck at getting your deal through…
i am angry,at the low interest rates that are driving these people to compete against buyers who just want to plant some tulips…
I am seeing this pattern here in SF, now that we are actively in the rental and home-buying search circuit.
The comps show houses that were bought in the last year for about 400K currently back on the market for 500K or more, with “upgrades, remodeled”, etc.
To make it worse, there is no decent inventory whatsoever under 600K. Geez, who woulda thunk that half a million bucks wouldn’t be enough…
To make it worse, there is no decent inventory whatsoever under 600K. Geez, who woulda thunk that half a million bucks wouldn’t be enough…
same here acually 500K gets a nice home but I want one for 400K
they may still go a bit lower ? rents = mortgages plus taxes, etc, around here, in Phoenix mortgaes are much lower than rents juding by Zillows numbers.
If costal CA follows phoenix ( doudt it ) then it has farther to fall
What happens to prices when rates go up? They are at historical lows, ya know.
“when rates go up”
And this will beeeee…. when, exactly? And how much rent will be thrown away in the meatime?
Your thermodynamics are correct but you’ve forgotten your kinetics.
Cactus, there is no need to buy then. Renting dips cheaper. I am heading back to the South Bay after I enjoy One week of unpaid vacation in Tampa and Sarasota.
There is a serial flipper in my n-hood”
more than one in that hood
so the flipper will sell it for 485k after he’s done
I see the same thing in 93021 all day long except they make a bit more than 10-20K
flippers pay cash that’s why they get the deals, also they buy as is.
who buys from the flippers is what I want to know?
Hi cactus.
(We’re in the same area.)
New Target Center planned for WLV. Breaking ground soon.
Does it matter whom Donald Trump endorses?
In the short run, a nod from Donald Trump might give Mitt Romney or Newt Gingrich a little boost in Nevada. But in the long run? A Trump endorsement could turn off some voters, polls show.
By Peter Grier, Staff writer / February 2, 2012
…
Donald Trump intends to endorse Mitt Romney
By KASIE HUNT and BETH FOUHY
First published 34 minutes ago
Updated 32 minutes ago
LAS VEGAS - Donald Trump planned to endorse Mitt Romney’s bid for the Republican presidential nomination Thursday, three Republican officials told The Associated Press.
…
I get the whole “least worst option” thing, but given the hypocritical/Freddie status of Gingrich and the “he’s not anything like the rest of us” status of Romney, I don’t understand how either of these two could be nominated….Of course, if either one were to defeat BO, it will prove for me that voters are hypocrites. History will repeat and the same people complaining today will turn into cheerleaders for the same policies.
Just what America needs: An over-the-top disgustingly-wealthy corrupt con man endorsing another ridiculously-mega rich professional lying con man. Maybe Sir Allen Stanford will endorse Obama.
The honorable Mr Corzine already did. As a matter fact Corzine is an Obama bundler.
Trump strikes me as a much, much less polished Romney. They strike me as being from the same ideological school.
Heard Romney quoted on the radio tonight making psychophantic remarks about Trump being more successful than Mitt. Trump did not govern a state or save an Olympics from bankruptcy, but presumably he made more money than Mitt, which apparently amounts to greater success according to 1%er criteria for measuring success.
Just back from Seattle on a business trip and the wife
and I went shopping downtown when we had a half a day of free time.
We were appalled at the number of dark windows, for lease signs, and buildings that were totally empty. One five story, fairly new brick office building down near Pike street was empty. Store fronts locked, vacancy signs everywhere. It really hit home how bad the economy is and where we’re headed.
Hmm…I’ll be up there tomorrow and next week. I’ll have to check that out. Portland must be operating on…*cough*…a whole new paradigm. Seems like biz as usual here, and I’m the busiest I’ve been in 1.5 years. It does seem like there is quite a bit of polarity materializing between the haves and have nots though.
Who you gonna believe? The news or yer lyin’ eyes?
The central coast of CA looks the same. For lease signs on every corner and lots of vacant commercial space.
The central coast of CA looks the same. For lease signs on every corner and lots of vacant commercial space.
A major employer on the central coast is forty employees, and if they announce that they’re folding the city council convenes an emergency “holy chit!”meeting, and then they raise the hotel and restaurant taxes even more. There’s no reason for a 3/2 ranch to fetch $400k plus when the median household income is $50k and falling.
The market is booming(?)
But where are the buyers?
Inventory is looming,
Realtors Are Liars.
This reminds me: Time to get my monthly hair cut. I’m not planning to get a Greek haircut, though…too expensive!
Feb. 2, 2012, 3:46 a.m. EST
Central banks may face Greek haircut losses
By Tom Fairless
FRANKFURT — European officials are preparing to involve public-sector creditors, including national central banks, in a haircut on Greece’s sovereign debt because planned losses by private creditors won’t be sufficient for the country to escape its debt crisis, German newspaper Handelsblatt reports Thursday, citing high-ranking European Union diplomats.
An “official sector involvement” is currently being prepared in Brussels, in which national central banks would participate in a voluntary haircut alongside the European Central Bank, the newspaper reports. Euro-zone governments could also help by reducing the interest rate that Greece pays for its bailout loans from the current level of 4.5%, the newspaper reports.
A Greek haircut would be more problematic for national central banks than for the ECB, with some central banks likely to take losses and need recapitalization by the state, Handelsblatt reports. The ECB could withstand a haircut without taking large writedowns because it bought the bonds far below face value, the newspaper reports.
The ECB holds Greek debt with a face value of about EUR55 billion, while Germany’s Bundesbank and Luxembourg’s central bank also own a large amount of Greek bonds, including some purchased before the outbreak of the debt crisis, Handelsblatt reports, citing people in Brussels. Some euro-zone central banks have hardly invested in Greece, however.
Euro-zone governments hope that central banks will voluntarily agree to take a haircut on their Greek bonds, to avoid states having to increase the size of Greece’s second rescue package, the newspaper reports.
The Eurogroup of euro-zone finance ministers now expects Greece to need between EUR145 billion and EUR150 billion for the second rescue fund, rather than the previously agreed EUR130 billion, the newspaper reports.
That increase is due not only to a recession in Greece and delays in implementing reforms, but also to a higher-than-expected sum needed to recapitalize Greek banks, the newspaper said. The planned EUR30 billion to recapitalize Greek banks won’t be sufficient, the newspaper reports, citing sources in Brussels.
Germany, Finland, the Netherlands and Estonia are all concerned about the latest increase in the size of the rescue fund, the newspaper reports.
So it seems to me, maintaining price stability is the key to maintaining confidence in a currency. Japan has a 2:1 debt to gdp ratio, and they’ve got light deflation and price stability.
As long as the atomic components - the people - in an economy continue seeing price stability, how could a debt to gdp ratio of 10:1 damage that?
Would it be possible to have a 10:1 debt to gdp ratio and still maintain price stability?
In Japan, the atomic components dutifully keep buying government debt and maintain faith in the currency thus maintaining price stability. External factors are the exchange rate and for a country selling debt abroad, confidence of the bond buyers.
I could see the risk for a death spiral starting if the economy was utterly dependent on vast debt to finance it. If internal or external buyers stopped buying, interest rates would go up, reducing the ability to raise money, reducing spending, thus slowing the economy reducing money to invest in the debt and yet higher interest rates and so on.
But - if the central bank just started printing money to buy debt from the government (quantitative easing) - is there any kind of limit to its ability to buy debt? The Eamonn Fingleton article on Japan in the NYT really got me thinking. I saw das Kroogie’s response but it was halfhearted and didn’t really disagree with Fingleton’s observations.
I’m surprised that you use the word “Japan” and refer to people as “atomic components” in the same sentence.
DOH! I meant “atomic” as “indivisible” or “most basic”, not.. well… doh.
I know, and I personally was not offended…it was just…odd :-).
IMO, there a couple more important numbers.
1) Totat debt / GDP.
http://www.comstockfunds.com/default.aspx?act=newsletter.aspx&category=SpecialReport&newsletterid=1504&AspxAutoDetectCookieSupport=1
In this case, Japan is no worse that many other nations.
* That article includes “financial sector debt”, which is pretty much double counting bank deposit debt… which is why the Fed excludes finaicial sector debt from its “total” column. However, if the artilce is adding it to everyone, the ratios should still be reasonible.
If most of the debt is owed to your own people, then they have the money. You could, hypothetically, tax it away, or better, convince them to spend it. Either way, if you can get your people with money to not have it and your people with debt to have it, the debt is repayable.
Which bring me to:
2)Another one I find interesting is this:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html
Total foreign held debt. Notice we’re at $14.7T with abotu $15T GDP is closing in on 100%. Japan, with $2.7T but $5.5T GDP is closer to 50%.
This is the amount of your debt that is out of your control. It is owed to foreigners whom you can’t tax, nor use deductions within a tax code to convince them to spend.
With an aggressive tax code and tariffs, it is hypothetically possible to unwind all but 1x our GDP of debt even without a positive trade balance.
Japan could repay all but 1/2 its GDP even without a positive trade balance.
Exclusive to the HBB!!!
X-GSfixr’s Review of the new Hollywood epic (small “e”), “Red Tails”
Note: SPOILER ALERT!
A review of the movie by a aviation professional, and amateur aviation historian. Opinions expressed are my own, and not those of the HBB or any of it’s affiliates.
For starters, never use a movie that has a “Based on a True Story” disclaimer as a historical reference……..
MOVIE: Movie opens with an 8th Air Force (based in England) bombing mission, not a 15th Air Force (based in/around Foggia, Italy) mission. Supposedly, the Germans lure away the undisciplined Americans with a decoy squadron, then massacre the helpless B-17s.
FACT: Fighters of both the 8th and 15th flew “close escort” throughout the period they were escorting bombers. The trouble is, “close escort” was found to be a losing proposition. Better to send out our fighters to hunt German fighters before they could organize into the 50-100+ strong formations that had the firepower to do real damage/break up a “Combat Box” of B-17s/B-24s.
Occasionally, due to weather/timing/navigation errors by the bombers or the fighters/whatever, the “close escort” failed or were late to rendevous with the bombers. German Radar Intercept controllers could see this, and tried to vector fighters onto unescorted bombers. If 50-100 German fighters managed to form up unmolested, and intercepted a formation of unescorted bombers, it almost always turned out ugly.
MOVIE: Early in the movie, the pilot’s are constantly bitching about being “stuck with worn-out P-40s”….implying that the racist Air Force leaders were giving them junk airplanes
FACT: The P-40 was the front-line fighter for ALL of the squadrons flying single engine fighters operating in the Mediterranian Theater until late 1943.
The 15th Air Force was formed/organized in the spring of 1944 for strategic bombing. At that time (March-April-May 1944), ALL of the fighter groups that were assigned to the 15th began converting to the P-51, from P-40s and P-47s.
The 332nd Fighter Group (our heroes) began converting in June 1944. please note that the 3 of the 332nd Group’s 4 squadrons had just arrived that spring, and hadn’t been in combat yet.
Basically, the 8th Air Force got priority over everyone, because they were up against the most numerous/skilled/best equipped Germans, and the HAD to gain air supremacy before OVERLORD could be attempted.
In the 15th Air Force, the other groups did get priority……mainly because they had been in combat for at least a year, and then only received P-51s a month or two earlier, at the most. And the 332nd got P-51s a long time before a lot of squadrons in the Pacific got them.
MOVIE: Pilot strafes train, engine blows up and derails, train derails and blows up…..
FACT: Check YouTube for the gun camera footage. Steam locos didn’t blow up and derail. When hit by .50 cal bullets, it typically put a bunch of holes in the boiler, steam escapes, the train stops. Subsequent strafing of the stopped train might cause an explosion, if the train was carrying artillery rounds, or V-1 warheads.
MOVIE: Our heroes make several strafing passes on a German airfield.
FACT: Nobody made more than one pass over a German airfield, if they were smart. German airfields were typically covered with several hundred anti-aircraft guns, and P-51s were not known to tolerate hits from ground fire very well.
Our guys soon learned that the best way to strafe a German airfield was to organize in a “line abreast” formation 15-20 miles out, dive to low level to gain speed, cross the airfield in line abreast at 50-100 feet AGL shooting at targets directly in front of you, then stay low for a couple of miles before pulling up. AND ONLY MAKE ONE PASS.
MOVIE: Big formation of ME-262 jets engage our heroes.
FACT: For various reasons, a ME-262 mission usually involved only a few airplanes, sometimes as many as 8-10.
MOVIE: ME-262s “dogfight” with P-51s
FACT: The German pilots used their speed to avoid combat with the escorts. P-51s typically had to have a big altitude advantage to pick up speed in a dive, or the German jet had to have damage or engine failure to intercept one.
Most ME-262s were shot down when trying to take off and land. Which wouldn’t have been a problem for them, if we had stuck to only doing “close escort” of the bombers.
MOVIE: Hero goes head to head with a ME-262, like old time Gunslingers. Hero is wounded in the “shootout”
FACT: 800-900mph closing speed. Primitive gunsights. ME-262 armed with four 30mm cannon, capable of downing a B-17 or B-24 with one or two hits. Do the math. The reality, if such a showdown had ever occured, would have most likely ended with our hero’s airplane either being blown apart with a single hit, or a round penetrating the armored windscreen of the P-51, and decapitating/blowing apart the pilot in his seat.
THE SHORT VERSION: This movie really made my head hurt. At least it didn’t have a “shirtless stud-muffin guys, playing volleyball” scene in it.
A deceased relative of mine was a squadron leader in the 303rd bomber group. They pounded the Germans relentlessly. Flight casualties were high.
Here’s a Fingleton article dealing with trade deficits and manufacturing and Japan. He’s sort of responding to Krugman.
In incurring deficits, the United States has been going ever deeper into debt to other nations. In earning surpluses, Japan by contrast has been acquiring ever larger assets abroad, not least in the United States. This is ultimately a matter of national security: debtor nations increasingly must defer to creditor nations. Even if this is not fully appreciated in the West, it has been central to Japanese policy thinking since at least as far back as the 1870s. It was also well understood by President John Kennedy, who said the two things he feared most were nuclear war and trade deficits.
http://www.fingleton.net/a-reply-to-paul-krugman-2/
As time goes along, it becomes obvious that MF Global made 1.2 billion dollars “disappear without trace” (or recourse).
So, the solution to our deficits is obvious.
Transfer those accounts to MF Global.
BRILLIANT!
Seconded!
As time goes along, it becomes obvious that MF Global made 1.2 billion dollars “disappear without trace” (or recourse).
So, the solution to our deficits is obvious.
Transfer those accounts to MF Global
Or transfer them to ME and I’ll take care of it.
MF Global made money go away.
The deficit is debt. The popposite of money. I’d have to assume that fransferring our Debt to MF Global would simply result it it doubling.
Daycare for the kiddos… going… up…again.
Just like health insurance.
BTW, you’ll be interested to know that I just heard back from my health insurance company. Recall that I sent them a rate hike rejection notice.
In their form letter, they said that they are “researching this matter and will correspond with you shortly with our findings.” I hope that they provide a more thoughtful response to the Arizona Department of Insurance. Yup, I reported my insurance company to my state’s insurance department.
And if you’re also being hit with a series of rapid rate increases like I am, you should make a report of your own. Here’s a handy guide to state insurance commissioners and their contact info:
http://www.naic.org/state_web_map.htm
I appreciate that Slim, but I was on a waitlist for a year to get my kids in, and they have a waitlist now.
Slim,
All I can advise you is to keep on them–four to five rounds in if necessary. Appeal everything. Ask for a patient advocate (RN,) keep complaining and cc’ing the copies of all your letters to the media. Eventually they will capitulate (slightly,) just to shut you up. But really, we need a nationwide coalition of disgruntled policy holders to put the fear of the gods into them. Count me in. I’m at dvsntt and I’m at bnis period net, and I’ll be glad to help anyway I can.
Report from the “White Devil Weekend Update”……
“Tom Brady and Eli Manning will be tossing around a strange, leathery looking brown thing this weekend………and no, we’re not talking about Madonna’s c##ch…..”
BWHAHAHAHAHAHAAHAHAHAHAHAHAHAHAHAHAHAHA!
couch?
u = o
Hah!
So I still want to know…..
How much is National Association of Realtors paying Bill McBride and “Jim the Realtor”?
Either one of you slithering bitches care to man up and answer?
Why is it that when it comes to housing prices, normally sensible economists frequently babble like idiots?
November 1, 2011
Stabilization of Housing Is Nothing More Than Price Supports
By Steve Selinger
There is consensus among economists that tampering with prices is not an efficient way to run an economy. Price controls that keep the price below what individuals are voluntarily agreeable to contract for, eg., rent control, are widely recognized to be inefficient in that such price controls encourage too much consumption of the subject product, and discourage too little production of the subject commodity. On the flip side, price controls that keep the price above what individuals are willing to pay, eg, price supports for sugar, are widely thought to be an inefficient subsidy through which consumers subsidize producers of sugar.
Economists as ideologically different as Milton Friedman and Paul Samuelson could agree on the mistake of tinkering with the price of wages via the minimum wage. Although Friedman was of course against the minimum wage laws, Samuelson also remarked that there is nothing positive about minimum wage laws as they merely keep someone who wanted to work for two dollars per hour from being able to legally perform such work.
It is thus surprising to find such an accomplished, and normally sensible, economist as Martin Feldstein consistently arguing for the “stabilization” of real estate prices. In a series of articles, “The Problem is Still Falling House Prices”, “How to Shore Up America’s Housing Market”, “How to Save an ‘Underwater’ Mortgage”, and most recently in the New York Times (October 12) “How to Stop the Drop in Home Values”, Feldstein has argued for stabilizing, ie, subsidizing, housing prices to help the economy.
It is surprising that President Reagan’s former chief economist would advocate such a large government intervention in the form of price supports. Perhaps not as surprising, his fellow Harvard professor and former Obama Administration official, Lawrence Summers also wrote about “How to stabilize the housing market” (Washington Post, October 24). Unfortunately, neither Feldstein nor Summers has focused on the question of whether basic economic analysis supports this stabilization/subsidy of the housing market.
Wikipedia (under “price supports”) offers a concise outline of the classical economists’ demonstration that price supports are inefficient; the interested reader should work through the analysis. The basic analysis shows that the total cost to consumers of propping up prices beyond the equilibrium level (which must include the cost to the government of the price supports) exceeds the gain to producers from the price supports; this inefficiency is known as the “dead weight triangle loss.” This is standard economic analysis accepted by virtually all economists and is the reason that price supports are widely thought of as so inefficient. Feldstein’s and Summers’ first year economic students are no doubt taught this.
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It is gonna be a hoot when the China-driven gold bubble collapses along with their property bubble.
Gordon G. Chang, Contributor
I write primarily on China, Asia, and nuclear proliferation.
+ Follow on Forbes
1/29/2012 @ 4:46PM |229,208 views
Why Are the Chinese Buying Record Quantities of Gold?
English: Gold bars created by Agnico-Eagle
This month, the Hong Kong Census and Statistics Department reported that China imported 102,779 kilograms of gold from Hong Kong in November, an increase from October’s 86,299 kilograms. Beijing does not release gold trade figures, so for this and other reasons the Hong Kong numbers are considered the best indication of China’s gold imports.
Analysts believe China bought as much as 490 tons of gold in 2011, double the estimated 245 tons in 2010. “The thing that’s caught people’s minds is the massive increase in Chinese buying,” remarked Ross Norman of Sharps Pixley, a London gold brokerage, this month.
So who in China is buying all this gold?
The People’s Bank of China, the central bank, has been hinting that it is purchasing. “No asset is safe now,” said the PBOC’s Zhang Jianhua at the end of last month. “The only choice to hedge risks is to hold hard currency—gold.” He also said it was smart strategy to buy on market dips. Analysts naturally jumped on his comment as proof that China, the world’s fifth-largest holder of the metal, is in the market for more.
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