February 5, 2012

Bits Bucket for February 5, 2012

Post off-topic ideas, links, and Craigslist finds here.

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Comment by Roy G Biv
2012-02-05 01:24:42

Boy, I sure did miss “It’s Friday Desk Clearing Time …”

Comment by Montana
2012-02-05 08:07:08


Comment by scdave
2012-02-05 09:41:44

I think Ben is pretty busy…

Comment by Hard Rain
2012-02-05 05:35:58

Excuse me Truro, don’t you know that I am rich?

Mansion demolition order has Truro residents debating

TRURO - The largest single-family house in this singular sliver of Cape Cod is a sleek, glassy, contemporary concoction whose 8,333 square feet, spread and stacked on top of a dune, offer a $10 million view of the shimmering bay.

Construction ended only months ago, and the owner, a woman from Boca Raton, Fla., has not moved in. If the town has its way, she never will. In a recent decision that has delighted or dumbfounded residents, Truro officials have ordered the dream house demolished by mid-April.

The Klines received a building permit in May 2008 that approved the house as an “alteration’’ to a much smaller house elsewhere on the property. In May 2011, the state Appeals Court rejected the new residence as an alteration, and the Truro Zoning Board ordered the permit revoked.

“An entirely new building on a different location, which is also completely different in appearance and more than four times the size of its predecessor, cannot correctly be deemed an ‘alteration’ of the original,’’ the court ruled.


Comment by skroodle
2012-02-05 15:23:00

Remember folks, you cant just build any house now, only those approved by government bureaucrats*.

*Unless you live in Houston

Comment by ecofeco
2012-02-05 21:13:11

Wanna bet?

Even Houston has its restrictions. Unfortunately, they tend to restrict innovations like solar panels, food gardens and all things modern.

There is a reason for most building codes: health and safety.

Comment by Hard Rain
2012-02-05 06:21:11

I don’t care what year it was you don’t pay 385k for a Detroit condo…ever

Detroit— City Council President Charles Pugh is facing foreclosure on his mortgage and says he likely will abandon his $385,000 Brush Park condominium.

Pugh would like to keep the condo but needs a “substantial decrease” in the mortgage, spokeswoman Kirsten Ussery said.

“Absent that, yes, he is going to walk away,” she said.

Pugh paid $385,000 for the three-story, two-bedroom townhouse east of Woodward in 2005. But following a prolonged decline in housing values, a condo next door recently sold for $80,000, Ussery said.


Comment by Darrell_in_PHX
2012-02-05 08:36:42

So, walk.

I don’t see the problem. The contract gave the buyer two options: Pay or let the lender take it back. Pick one.

Comment by rms
2012-02-05 09:39:45

Pugh would like to keep the condo but needs a “substantial decrease” in the mortgage, spokeswoman Kirsten Ussery said.

Wow, $385k —> $80k, that’s no haircut, scalped? The NAR needs to chime in on this asset revaluation [hehe].

2012-02-05 09:50:57

You’d have to be actually ret@rded (not just borderline) to fork out $385K for anything in Detroit.

Even $38K is too much.

Hint: It’s called jobs.

Comment by goon squad
2012-02-05 06:43:12

Got a Newt Gingrich robo-call (on my f*ing cell phone!) yesterday from (855)275-6398 defending himself from negative advertising.

Sorry Newt, but I don’t watch TV (except for C-Span) and I’ll be caucusing for Ron Paul on Tuesday.

Comment by WT Economist
2012-02-05 06:49:07

In some ways it’s too bad that my vote from President doesn’t matter, because I don’t live in a swing state.

But Thank God I don’t have to see those political ads! I think little enough of those scumbags as it is.

Comment by palmetto
2012-02-05 07:10:30

“I’ll be caucusing for Ron Paul on Tuesday.”

I don’t know much about the process involved in caucusing, but I do know that here in Florida, my perception is that Ron Paul had a lot more support than the voting reflected. I believe our voting system is rigged. Perhaps Paul knows this and knows he has a better chance with caucuses. Would caucuses be more difficult to rig?

Comment by Sammy Schadenfreude
2012-02-05 07:22:24

Do some research into the Diebold voting machines, who owns them, and their agenda. And how easy Diebold machines are to hack/manipulate if they don’t produce the desired result.

Comment by palmetto
2012-02-05 07:29:32

I read about that a few years ago, during the reign of Bush the Younger. I’m not sure of this, but I seem to recall reading something about Jeb and involvement with Diebold.

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Comment by SV guy
2012-02-05 07:48:59

Are you guys insinuating that our voting system isn’t pure?

(Looks like yellow snow to me too)

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:13:38

That theory would certainly help explain the RNC’s predilection for candidates who are unelectable by fair polling.

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Comment by bill in Phoenix and Tampa
2012-02-05 08:35:39

To illustrate: Bob Dole, John McCain, both nominated by the bankers so that Clinton and Obama would certainly win.

Comment by Realtors Are Liars®
2012-02-05 07:52:09

“Ron Paul had a lot more support than the voting reflected”

Yes sir. The broad swath from the middle are willing to hold their nose one more time, overlook some slightly distasteful stench and vote for him. Nobody seems to notice.

The MSM have already been given their assignments…… first priority is to underreport and demagogue RP.

Comment by Hi-Z
2012-02-05 07:59:38

I voted for Romney by absentee Florida ballot. In my circle, I don’t see Paul voting support except for a few young single people. Many people talk positively about Ron Paul but vote differently.

Comment by bill in Phoenix and Tampa
2012-02-05 08:37:30

Thank you. By voting for Romney you voted for BushBama.

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Comment by Hi-Z
2012-02-05 08:42:49

You’re welcome. I respect your opinion too.

Comment by Bill in Carolina
2012-02-05 10:12:32

I thought the correct name was “Obamney.”

Comment by michael
2012-02-05 09:11:15

i know a ton of people that say “i would love to vote for ron paul…but he’s just electable”.


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Comment by bill in Phoenix and Tampa
2012-02-05 09:45:24

Those very same people think elections are horse races and you vote for someone you think will win. But they never get the payoff when their “horse” wins. Cycle repeats on every election. Idiots.

Comment by Sammy Schadenfreude
2012-02-05 10:46:16

Those same people have no right to complain about the status quo.

Comment by michael
2012-02-05 11:50:22

meant to say “not electable” but i see ya’ll knew what i meant to say.

Comment by Happy2bHeard
2012-02-05 12:24:25

Aside from the electability issue, a significant portion of the Republican base see foreign intervention as essential and will not vote for Ron Paul on those grounds. Another group see a greater role for the federal government in forcing their views on all of the states.

If libertarian views were held by a large percentage of the electorate, they would be mainstream.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 14:20:57

“…a significant portion of the Republican base see foreign intervention as essential…”

Sounds like they see eye-to-eye with Obama on that point.

Comment by ecofeco
2012-02-05 21:15:31

Are we talking about the same Obama who is bring the troops home?

Comment by jeff saturday
2012-02-05 08:15:40

“I don’t know much about the process involved in caucusing, but I do know that here in Florida, my perception is that Ron Paul had a lot more support than the voting reflected.”

I would have voted for Ron Paul, but being a registered Independent I was not allowed to vote in the primary.

Florida 2012 GOP primary election: Who can’t vote makes Florida’s primary powerful

1:55 PM, Jan 30, 2012

By most accounts, Florida is the most influential state to vote for the next five weeks.

One of the big reasons? We’re so big.

Florida has four million registered Republicans. That’s 17 times as many as New Hampshire.

Also, Florida’s racial and ethnic makeup is much closer to the whole country’s than any other early state.

But here’s a reason for Florida’s power you may not realize: Florida has a closed primary.

In our state, only registered Republicans will be able to cast a ballot Tuesday. Democrats and Independents will not have a say.

http://www.wtsp.com/news/local/morning/article/235305/25/Who-cant-vote-makes-Floridas-primary-powerful - 98k

Comment by goon squad
2012-02-05 15:16:16

Just got another Newt robo-call, inviting me to his rally at the Denver West Marriott tomorrow…

Comment by oxide
2012-02-05 07:21:04

“I believe our voting system is rigged.”

No. Even the vote-counting techniques of certain past dictators would not have won Florida for Ron Paul. ISTM that Ron Paul supporters simply do not realize that one vote, no matter how passionate, still counts as one vote.

Sounds instead like you’re feeling the bite of our campaign finance system.

Comment by palmetto
2012-02-05 07:32:04

“Even the vote-counting techniques of certain past dictators would not have won Florida for Ron Paul”

Sigh. Sometimes I wonder if I’m writing in another language. I said nothing about Paul WINNING Florida. I just felt the numbers should have reflected a better SHOWING!

Comment by oxide
2012-02-05 07:53:13

To paraphrase Adlai Stevenson: Ron Paul may have the thinking man’s vote, but he needs a majority.

Comment by talon
2012-02-05 08:05:50

And being perceived as an “intellectual” cost Stevenson the presidency twice, back when people were generally better educated than they are today. Any sign that a candidate might be genuinely thoughtful, complex, or intelligent seems to scare the voters.

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Comment by oxide
2012-02-05 13:08:51

The Kenyan elitist arugula-growing Harvard-Law editor did okay.

Comment by Carl Morris
2012-02-05 15:04:49

True. Perhaps intellectualism didn’t look so bad after W. It may have been a one-time shot, though.

Comment by Realtors Are Liars®
2012-02-05 07:54:27

Look what FreexNews and Sean “I’m not gay, honestly” Hannity did to RP in 2008 election.

Comment by goon squad
2012-02-05 08:59:24
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Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 15:38:24

“Ron Paul supporters chase Hannity”

Amazing! Why did they chase him?

And is there any truth to your suggestion that Hannity is gay?

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Comment by CarrieAnn
2012-02-05 07:34:26

I don’t think he really campaigned in Florida either. One newscast I watched seemed to infer he was just going to skip over that state like he didn’t think he had much of a stronghold there.

I remember a few weeks back Ron Paul said he could not see himself as President. Since then I’ve wondered if his real purpose is to educate people about the fractional reserve monetary system and our central bank. He’s almost like the lone Austrian voice that gets through to the masses. Perhaps that is his actual intention?

He certainly doesn’t react to coming in 2nd or 3rd like any other candidate.

Comment by bill in Phoenix and Tampa
2012-02-05 09:05:05

I kind of welcome Ron Paul speaking from the bully pulpit the next four years. If he loses the nomination, which I am 95% sure of, more of his Youtube predictions will come true and more people will be won over to Austrian economics. In the meantime, President Romneybama will mean another four good years for gold and stocks, due to monetary inflation.

Comment by Sammy Schadenfreude
2012-02-05 10:54:18

Bill my brother,

I’ve come to the sad yet inescapable conclusion that the sheeple cannot be educated or taught the folly of their ways. They can only LEARN the hard way. Like classic fools in a Greek tragedy, only when they reap the full consequences of their folly will hard-won wisdom began to sink in - although most will project blame onto convenient scapegoats or fall in line behind charlatans offering up simplistic and deeply flawed solutions.

WE THE PEOPLE are going to have to accept our individual and collective responsibility for how this is going to play out, and move from the Boomer “me me me” ethos to “we’re all in this together.”

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Comment by skroodle
2012-02-05 15:40:08

Never happen.

Comment by Liz Pendens
2012-02-05 08:09:00

One possible explanation could be that typical Ron Paul voters are not registered republicans so they are not allowed to vote in the primary. I forgot about this and went to vote for RP but was shunned away because I changed my affiliation to NPA after being so thoroughly disgusted during the last election.

Comment by goon squad
2012-02-05 09:26:15

I like being a registered Republican because it drains the campaign coffers of the corporatist clown-car candidates that I’ll never vote for. Yesterday I got campaign mail from both Romney and Gingrich, keep spending your money on this and on the TeeVee commercials I’ll never see. Also getting mail from Ron Paul, to whom I donated money six weeks ago.

Comment by polly
2012-02-05 08:04:08

Ron Paul is on “This Week” right now.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:17:53

Nation’s Housing
By Union-Tribune
12:01 a.m., Feb. 5, 2012

Do you fit any of these descriptions?

• You came through the housing bust and recession far more debt-averse than you were before.

• You’ve been reluctant to consider selling your house because you don’t believe you’ll get what it’s really worth.

• Buying a new home is out of the question, even with today’s low interest rates, because it’s so difficult to qualify for a mortgage.

• You’ve gradually come to the conclusion that it’s smarter to improve the house you already own — spend some money on making it more comfortable, more up to date — and just stay put for a while.

Whether you share them or not, sentiments like these are having profound effects on real estate markets across the country, fueling post-recession interest in remodeling. In fact, according to federal estimates, by late last year the annualized dollar value of expenditures on renovations outstripped expenditures on newly constructed single-family homes — a huge change from pre-recession years, when the ratio was sometimes 3-to-1 in favor of new construction.

Underscoring this trend: In late January, the National Association of Home Builders’ remodeling market index hit its highest level in five years. It’s not that remodeling is moving into boom territory, said David Crowe, chief economist of the association, but rather that for many consumers, fixing up their house now fits their sentiments — and their finances — far better than selling or buying.

Interviews with builders and remodelers in different parts of the country point to important changes in homeowner strategies. In Seattle, Joe McKinstry, president of Joseph McKinstry Construction Co., says inquiries about possible remodeling projects have nearly tripled in the past 12 months.

“I feel like people are starting to say, ‘Well, we’re not going to move anytime soon because, if we do, we’re going to get 30 percent less than the house is worth. Why don’t we do something in the kitchen or bathroom for our own enjoyment?’ ”

Comment by jeff saturday
2012-02-05 08:30:45

“• You came through the housing bust and recession far more debt-averse than you were before.”

I have a problem with the first one. This would suggest that the housing bust and recession are over. Well they are not over in my hood.

Comment by goon squad
2012-02-05 09:15:25

“you don’t believe you’ll get what it’s really worth”

This should say “you don’t believe yet what it’s really worth”

You got your $8,000 from Uncle Sugar and now you’re $25,000+ underwater, but at least you can paint the walls any color you want. Loosers!

Comment by scdave
2012-02-05 09:56:16

I would agree with this Pbear…I also think it will accelerate exponentially 3-5 years out when the housing market may be faced with historical long term mortgage rates vs. the 4% - rates that we see today… Nobody’s going to leave a 3.7% fixed rate thirty year mortgage to get a 6% + mortgage if they have a choice…Stay put, long term and fix the house they way you want it along the way…

IMO, Its going to be a great opportunity for multi-tasking contractors which just happens to be what I have been teaching my oldest son to do….

Comment by aNYCdj
2012-02-05 10:39:04

What’s wrong with that… if the new house is 30% less then its worth too?

we’re going to get 30 percent less than the house is worth

Comment by MightyMike
2012-02-05 11:09:40

“I feel like people are starting to say, ‘Well, we’re not going to move anytime soon because, if we do, we’re going to get 30 percent less than the house is worth. Why don’t we do something in the kitchen or bathroom for our own enjoyment?’ ”

This is the interesting part. Are people starting to realize that spending tens of thousands of dollars remodelling kitchens and bathrooms are for their own enjoyment? In other words, do they understand that these “upgrades” are not going to vastly increase the value of their houses and that they are, in fact, a form of consumption, not investment?

The next question is, do people really get a lot of enjoyment out of upgraded bathrooms and kitchens? Do they ever think of other ways to spend money for fun, like vacations? Or does the enjoyment come from keeping up with the Joneses?

I have a feeeling that some time in the next few years, Americans are going to start to realize that granite countertops and stainless steel appliances and so forth are luxuries that very people can actually afford. Even families that can afford will lose interest in spending their money in that way. It sounds trite, but the remodelling boom is probably another bubble waiting to burst.

Comment by scdave
2012-02-05 11:39:11

It sounds trite, but the remodelling boom is probably another bubble waiting to burst ??

I would disagree for the resons I stated above…Enjoy at home…Entertain at Home…

Nothing wrong with putting in a new kitchen if you use it and enjoy it…If your doing it to “keep up with the Jonses’s” as you suggest, then your doing it for the wrong reasons…

really get a lot of enjoyment out of upgraded bathrooms and kitchens?

I sure do…Less now the the previous twenty five years because the kids are grown and gone but I have enjoyed every bit of my very costly country kitchen…The next one that’s being planned right now will be much smaller but every bit as expensive…

Do they ever think of other ways to spend money for fun, like vacations ?

To each his own…I prefer something more tangible than a vacation but that’s just me…

Comment by aNYCdj
2012-02-05 14:24:40

Remodel? not when i grew up. My fathers idea was to install new plumbing and lighting fixtures and new handles, knobs on all the cabinets….new stove just get the best one from sears…but then my father had REAL carpenters build the cabinets and in wall units…why replace them with crap.

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Comment by MightyMike
2012-02-05 15:42:54


If the following conditions are true for you - 1) you don’t think that spending $30,000 to $50,000 or whatever on your kitchen is going to increase the value of your house by that amount, 2) you can really afford it, meaning that you’ve got enough socked away for retirement, and 3) you really will get enough enjoyment out of it, even after the rest of America loses interest in keeping their houses updated and moves on to cheaper hobbies - then you may be the sort of person will start these sorts of projects in the future.

What I’m saying is that there will be many fewer Americans joining you.

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Comment by cactus
2012-02-05 21:05:59

Hard to remodel if your home has no equity to extract to pay for it

Comment by skroodle
2012-02-05 15:43:00

Remodeling is also a lot less expensive now.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:26:06

Will housing come back after the Souper Bowl?

P.S. Methinks “The Donald” should consider changing his last name to Frump.

2/03/2012 @ 12:22PM
After Two Decades, Real Estate Returns To The Super Bowl

Football and housing. What do they have in common? Super Bowl XLVI, as it turns out. For the first time in 21 years, a residential real estate company will run a commercial during the big game. Century 21 Real Estate, an international realty powerhouse, is coughing up some serious cash to run a 30-second ad during the third quarter of this Sunday’s Super Bowl. It is the first time Century 21 has ever taken out a Super Bowl ad.

“In 2011 we [Century 21] celebrated our 40th anniversary. Prior to last year’s Super Bowl is when we decided we really wanted our full year celebration to culminate in something big and we view this as something big,” says Bev Thorne, chief marketing officer of Century 21. Though the company, owned by privately-held Realogy Corp., declines to disclose how much it spent on this marketing campaign, a 30-second spot during this year’s game is estimated to cost about $3.5 million — just for placement.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:29:15

Notes from the Real Estate Bowl
Written by John McNulty
Published: Friday, 03 February 2012 07:46

This article goes well with nachos!

Nachos, because on Super Bowl Weekend there are really good signs that the economy is improving and that the real estate game has bright prospects ahead, as do the Niners and the Raiders. We will just have to wait ’til next season.

Real estate sales season is on and it’s perking up. Realtors like me are hoping this is really in, the market correction.

Even the annual home sales doldrums of this past winter were more productive than those of the past couple of years. So we are rooting for more home-sale touchdown deals this year for our home buyers and sellers. We’d like to cast off the psychological shoulder pads and helmets from the rough play and short yardage plays of the past few seasons.

Here are some real estate bowl recollections and projections.

You can give real estate a close point spread this year. Sales will improve in the coming months while prices will improve more gradually.

Past season turmoil hit hard. Experienced Realtors learned to punt just to remain in the game. Deals that looked solid with powerful offensive lines and veteran game plays found closing the deal mystifyingly unsure in the final yards. Fumbles happened often in the last minutes without even a 2-minute warning. It seemed deals couldn’t convert to closed, even in overtime.

Our experience with the nowdefunct American Home Mortgage Company in 2007 is a tale Charlie Brown and Lucy know well. Here the purchase money to buy the house (at the corner where West Holmgren and East Holmgren meet) was delivered to the title company for a close in two-to-three days max! In real estate sales this prompts a touchdown call. The escrow officer calls the buyer’s agent about their mortgage money having come in. The agent is pleased to call the buyer who does one of those celebratory dances and then calls the moving company.

With this good news the escrow officer blows a whistle and raises both arms high.

“Close of escrow” is at hand. Is it time to celebrate? Reminder, this is 2007, the beginning of the financial meltdown period.

But the buyers are so ready! So many important events are now past us. We are done with house hunting, the offer and its acceptance. We are finished with the inspections, the disclosures having been read and accepted. Terms are now settled. We had sleepless nights warding off buyer’s remorse. The outrageously high stacks of loan documents are newly signed.

You cannot be more ready to own a house, except at that moment the game whistle was blown. The bubble burst. American Home Mortgage (suddenly having gone bankrupt! ) faxed the title company with a demand, “Return purchase money immediately.” The signed docs were voided, money returned to pay bankrupt company bonuses (no doubt), not a penny remained in the title to buy the house.

Lucy had just pulled the ball. The buyers were left on their backs like Charlie Brown with little star images over their eyes. Both the selling team and the buying team were in an empty escrow stadium and the cheerleaders had gone home. That was ‘07.

Whew, those days are behind us, fingers crossed! We’re ready for the Real Estate Bowl to begin. Just flip the coin, referee.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:31:56

Foreclosure To Rentals?
Fed pushes bulk property sales to investors
By Matt Pilon
Worcester Business Journal Staff Writer

What if Fannie Mae and Freddie Mac sold, in bulk, the more than 1,100 foreclosed Massachusetts properties they own to investors who promised to convert them to rental housing?

The Federal Reserve recently called on Congress to approve of such a program nationwide and encourage private lenders to participate. Action by Fannie and Freddie, the private, federally sponsored agencies that support the housing market, could have a significant impact because their “real estate-owned properties,” or REOs, account for about half of all REOs nationwide.

Housing experts think an REO rental program could help the Massachusetts market, but said there would be significant challenges to managing such a large-scale program.

“I think it’s a great idea, anything you can do to keep houses from being vacant, keep neighborhoods from being neglected I think is good,” said Timothy Warren, CEO of the Boston-based Warren Group.

No Slam Dunk

But there are reasons such a program has never been tried. Warren said it’s unclear if the properties’ owners would be willing to commit the resources necessary to manage a large portfolio of foreclosure rentals.

An REO program could be of particular significance to Central Massachusetts, which has a higher proportion of foreclosure-distressed communities than other areas of the state, though foreclosures declined in 2011.

Fannie and Freddie owned at least 242 foreclosed properties in the Worcester metropolitan area as of July, according to the Federal Housing Finance Administration.

North Brookfield, Winchendon, Fitchburg, Hardwick, Athol and Worcester all have more than 19 distressed housing units for every 1,000 units of housing, according to a November report by the Massachusetts Housing Partnership.

Timothy Davis, a research consultant for the partnership, said an REO rental program would have to overcome logistical challenges.

“One of the biggest challenges to converting these is the management,” Davis said.

Lenders would have to bring the properties up to a desirable condition to rent, and there is the question of exactly who would market and manage the properties. Additionally, he said, in more suburban and rural markets, there just may not be as much demand for rental units.

Comment by oxide
2012-02-05 13:14:20

I’ve been through a few short sale/foreclosure houses. They may cost $200K but need $50K to be legal and $100K to be livable.

Comment by Darrell_in_PHX
2012-02-05 08:32:08

“Money is your or other peoples’ debt that you buy it with.”

“This is a point which many posters here often push which seems more platitude than substance.

Why can’t there be money without debt? Money is a medium of exchange that we mutually agree on. It enables trade between two parties who lack the double-coincidence of wants. There are societies where debt is illegal which nonetheless have money to facilitate trade.

I can’t get past the point in your rant where you assert that ‘money is debt’ without a shard of justification to your argument.”

It is not a rant, it is an argument. Rants are filled with emotion, anger, etc.

An argument is a set of logical statements supporting a conclusion.

I will give you two examples to highlight the difference:

“Case in point: Do cigarettes or piggy-back rides qualify as “debt”? They do function as currency (aka money), though, in settings where greenbacks are scarce.”

OMG you F’n fool. I can’t believe how stupid you must be to think that the United States economy runs on cigaretes and piggy back rides.

Why don’t you go into the grocery store, fill up your cart with groceries, then go to the register and ask how many cigarettes and ponyback rides they want in exchage for the groceries. Then, let them try to explain to your dumb donkey why dollars are money, not cigarettes, piggyback rides, or even gold or silver.

I don’t know of a single store in the country that accepts anything but dollars. There are laws that companies can’t pay in anything but dollars.

In our economy, dollars are the only money, and dollars are most assuredly borrowed into existence.

If you don’t get this by know, then there is something seriously wrong with you. You need professional help above my ability to deliver.

NOW, that above is a rant. That is not what I’m doing here on this site. I do more like the below.

Let’s say for a moment that there are 2 types of money. Let’s say that people are openly exchanging drugs for sex with prostitutes. In this case, the drugs could be considered a medium of exchange. You go up to a hooker and ask how much for oral, and she says, a dime bag.

Oh, wait. A dime bag indicates $10 worth, so that means the real underlying unit of exchage is still dollars.

Okay, the pro says 2 rocks. Okay, drugs are now the medium of exchange and serve the purpose of money.

This barter currency then sits along side dollars in the realm of money.

Wealth (goods and services you buy) now overlap in the euler diagram with dollars (borrowed into existence and always offset by debt).

Now, let’s exampe trade imbalances. The barter currencies do not allow trade imbalances. If china was accepting cigarettes, piggy back rides, or crack rocks in exchage for Iphones, then there would be balanced trade and no problems.

If the “people with money” were collecting closets full of cigarettes, piggyback rides or drugs, no problems.

Unfortunatly, what China accepts in exchange for all those IPhones is the type of money that is borrowed into existence. What the people with money are accumulating is the type of money that is borrowed into existence.

So, where I used to say, those with debt can’t possibly repay it, unless those with money spend it…

Would it be better for me to say, those with debt can’t possibly pay it back, unless those with dedt-money convert that debt-money into barter/commodity-money, or start accepting barter/comoddity-money as repayment for the debt-money.

Come on, can’t you see how lame that is?

We have goods and services that are created from resources and labor. We have this other stuff that is an IOU that was created from debt.

To overlap their Euler diagrams, is totally unnecesasary in a post barter economies that has existed for hundreds of years.

The ONLY reason I can think of that people refuse to distinguish the hard-line between wealth (resoruces and labor) and money (borrowed into existence) is stuborn refusal to accept that gold and silver no longer serve as money.

Once upon a time, the hooker an the john, looking to exchange drugs for sex, would have said something like pounds or pence with silver or gold being the “unit” into which each converted the goods and services to establish equivilance. Now, they call it a dime bag, with debt/dollars the understood common unit of exchange.

It’s now the 2000s, with a global economy with 7 billion people, services make up a significant portion of the economy, and mass quantities of money move around the globe with push of a button. People need to stop living in the 1800s barter economy.

See the difference between a rant and an argument?

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:56:57

“Case in point: Do cigarettes or piggy-back rides qualify as “debt”? They do function as currency (aka money), though, in settings where greenbacks are scarce.”

OMG you F’n fool. I can’t believe how stupid you must be to think that the United States economy runs on cigaretes and piggy back rides.’

Thanks for another beautiful example of a rant, with a strawman mischaracterization of my point thrown in for good measure. I was merely illustrating there can be money without debt, in contradiction to your vapid assertion to the contrary. I said nothing about the U.S. economy running on cigaretes (SIC) and piggy back rides.

Comment by Darrell_in_PHX
2012-02-05 09:29:54

Sure, there can be… and there was a couple hundred years ago, and there is in prisons and such.

But, in the modern, global economy, it no longer IS.

And even if it was, there is also this debt/money stuff that lived along-side barter-money for 100s of years, before we quit using barter-money at all.

Once upon a time, there was only barter money. Then we created debt money. For hundreds of years, both existed side-by-side. Then we quit using barter money. Now, the only money is debt/money.

Thre is no where on earth where it is common practice for people to convert goods and services into barter currency when attempting to establish fair trade. They use the terms of their local fiat currency, which is the debt/money I am talking about.

So, you can continue to talk about the 1800s economy where trafe was done in trems of gold and beaver pelts. I’m more concerned with the modern economy built on dollars and other fiat currencies.

Gold is no longer money.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:50:23

Why bother?

Uncle! You win.


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Comment by Blue Skye
2012-02-05 11:17:30

““Money is your debt that you buy it with.”

Embrace it buddy.

Comment by SV guy
2012-02-05 11:16:47

“Gold is no longer money.”

You have a good analytical mind. Keep searching for the truth. You are only part way there imo.

This is a multi-tiered game. Also remember the criminal element.

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Comment by Pete
2012-02-05 21:22:59

“You have a good analytical mind. Keep searching for the truth. This is a multi-tiered game. Also remember the criminal element.”

This reads as if spoken by a criminal :-)

Comment by BetterRenter
2012-02-07 09:26:15

“Gold is no longer money.”

The gold nuts just can’t accept that. Gold, silver, platinum, copper: These all became commodities, not money, long ago. Money became fiat stuff under total control of each hosting government. Fiat currency is now so stable that the currency thereof of large nations can’t be crashed. The Soviet Union crashed, but the ruble carried on. Discounted, perhaps, but it remained in existence.

The supremacy of fiat currencies is not a statement of economics, so much as it is a statement of the supremacy of modern nation-states, in how their power persists despite economic crashes. Industrial, energetic, information-dense governments are now unkillable; hence, their currencies are now unkillable.

So… there is no point in even arguing with the gold nuts. They are NUTS, as advertised. They refuse to believe all the evidence that gold is not money. When you point out that in order for gold to return to being used as money, that a First World nation like the USA would have to totally collapse, and by that I mean war lords and scratch farming and slavery and big guys named Conan with swords, then the gold nuts merely grow silent. Gold nuts are worse than survivalists; at least survivalists admitted that society must collapse before their beloved future arrives. Gold nuts can’t admit that, since a social collapse scenario works against the fear-driven actions they want to create, those being: Lots and lots of common people exchanging their hard-earned wealth (via fiat currency, naturally) for piles of little, yellow-colored discs and bars that have no utility whatsoever.

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Comment by Liz Pendens
2012-02-05 14:36:27

A dime bag for intercourse? Why do I always miss out on all the great deals?

Comment by Darrell_in_PHX
2012-02-05 08:41:05

Yesterday there were several posts about debt destruction being bad.

I don’t get it. Why is debt destruction bad?

Comment by combotechie
2012-02-05 09:30:41

“I don’t get it. Why is debt destruction bad?”

It depends on whose debt is being destroyed, how it is being destroyed, and who is on the wrong end of the debt that is being destroyed.

If you owe me money and you don’t have to pay what you owe me then you win and I lose. Do some multiplication of this phenom and you get to see that with a lot of debt destruction of this type a lot of people get to win and a lot of people get to lose.

For example: AMR gets a win if it gets to cancel its promises of pensions. The employees of AMR, both active and retired - ESPECIALLY the retired - get to lose.

Comment by Darrell_in_PHX
2012-02-05 10:25:40

I still don’t get it. If I owe you, but the debt goes away… how are you harmed.

Do you call this “being owed” something differnt on your side than the word “debt” that I call it when I’m owe?

(hint: I’m trying to get those that say money is not other peoples’ debt to say the opposite side of the debt is money. When debt goes away, money goes away, meaning money is the other peoples’ debt. Debt destruction is money destruction because money is debt.

Unfortunatly, the argument has now become if debt/money is the only money.)

Comment by combotechie
2012-02-05 11:16:25

“I still don’t get it. If I owe you, but the debt goes away … how are you harmed.”

It all depends on how it goes away. If it goes away because you pay me then I’m not harmed at all. But if it goes away in some other way (i.e. bankruptcy) then I am screwed.

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Comment by jeff saturday
2012-02-05 08:46:58

Here is a dirtbag that`s probably in or close to the top 1%.

Polo club founder Goodman adopts his adult girlfriend

By Jason Schultz
Palm Beach Post Staff Writer
Posted: 4:39 p.m. Tuesday, Jan. 31, 2012

Polo club founder John Goodman has adopted his longtime adult girlfriend as his legal daughter in what plaintiff’s attorneys are calling an attempt to shield assets from a civil suit filed by the parents of a Wellington man killed in a car crash.

“The events which serve as the grounds for the relief sought by the Plaintiffs border on the surreal and take the Court into a legal twilight zone,” wrote Circuit Judge Glenn Kelley in an order granting attorneys for Lili and William Wilson the right to information concerning Goodman’s adoption.

The Wilsons are suing Goodman for wrongful death in connection with the Feb. 12, 2010 crash that killed 23-year-old Scott Patrick Wilson. According to Palm Beach County Sheriff’s reports, Goodman ran a stop sign on 120th Avenue on Feb. 12, 2010 and hit Wilson, who was driving west on Lake Worth Road. The civil trial is set for March 27.

“The Court cannot ignore reality or the practical impact of what Mr. Goodman has now done,” Kelley wrote. “The Defendant has effectively diverted a significant portion of the assets of the children’s trust to a person with whom he is intimately involved at a time when his personal assets are largely at risk in this case.”

In a deposition taken in the lawsuit last May, Hutchins told attorneys she started dating Goodman in 2009.

Tests taken several hours after the crash revealed Goodman had a blood alcohol level of more than twice the legal limit to drive in Florida. He faces a criminal trial on March 6 on charges of DUI manslaughter, vehicular homicide and leaving the scene of a crash and could face up to 30 years in prison.

http://www.palmbeachpost.com/news/polo-club-founder-goodman-adopts-his-adult-girlfriend-2138913.html - 77k -

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:58:44

I heard that in the news yesterday. Doesn’t it raise a potential issue of incest? Or is it OK to have conjugal relations with an adopted daughter, provided she is an adult and not your blood relative?

Comment by jeff saturday
2012-02-05 09:31:45

“Doesn’t it raise a potential issue of incest?”

One would think. IMHO some laws are just fu%k$d up. I don`t like the law that allows “homeowners” to retain their rights for years without paying their mortgage while collecting rent. Why there is not already a law or why there even needs to be one that does not allow congressmen, senators and their staff to profit from inside information is way beyond me. And now this, like I said some laws are just fu%k$d up.

by Jason Cohen |Feb 2 2012, 9:38 AM

A Florida judge called the action “surreal” and a step into a “legal twilight zone” in a recent related ruling. The purpose of the adoption, however, is likely rooted in practical financial matters. Because of her age, Hutchins can avoid the legal stipulation that does not allow beneficiaries to take from the fund until they are 35.

This does not seem likely to make her a popular stepmother, not that she can legally become one now.

Or can she? Florida statute 826.04, titled “Incest,” states that “whoever knowingly marries or has sexual intercourse with a person to whom he is related by lineal consanguinity … constitutes a felony of the third degree.”

But it appears the legal definition of “lineal consanguinty” only applies to blood. Wrote one Florida court [warning: graphic details if you click the link] in a 2009 underage sexual assault and incest case appeal:

[I]t is clear that the legal definition of incest is limited to persons who are related either by lineal consanguinity or collateral consanguinity. It does not extend to persons who are related by affinity or adoption, but not biologically by blood.

We are not alone in our conclusion. Numerous decisions rendered by courts in other states hold that incest does not encompass conduct between persons related only by adoption.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:51:21

So the new plan is to transfer wealth from GSE bondholders to homeowners who want to refi at lower rates? The WaPo editorial board apparently takes no issue with changing the rules of the game at half time.

However, I disagree with the assertion that the risk of a top-down change in the rules to entice mass refinancing is something the bond holders “assumed when they bought the paper.” The risk that some individual households will decide to pay off their mortgages before the term is up is intrinsic to mortgage-backed securities, and well-known to sophisticated investors. By contrast, the risk the rules of refinancing would change by decree is clearly distinct from individual prepayment risk, and falls into the “nobody could have seen it coming” category.

Perhaps the MBS investors will accept the losses handed to them without complaining very loudly?

The Post’s View
Halfway home
By Editorial Board, Published: February 4

PRESIDENT OBAMA’s latest plan for the distressed housing market is, in essence, an effort to stimulate more mortgage modifications — that is, to succeed where previous plans, by the president’s own admission, have fallen short.

Is there any reason to be optimistic this time? The president proposes government-backed refinancing for millions of additional “underwater” homeowners who are current on their mortgages, saving them an average of $3,000 a year in interest. This would apply to 11 million loans backed by Fannie Mae and Freddie Mac and, for the first time, 3.5 million mortgages currently backed by the private sector.

Even partisans should be able to agree on this reform.

The new loans for the latter would be insured by the Federal Housing Administration. The cost, at least $5 billion depending on participation rates, would be paid by banks, which would be charged fees, and by current holders of mortgage-backed securities, who would be bought out at face value rather than market rates.

Congress probably won’t, and shouldn’t, sign off on that part. Billed as a twofer that prevents foreclosures and stimulates consumer spending, the proposal actually just shifts money around — the proposed fee on banks would get passed on to customers — while adding risk to the FHA’s books. By focusing on those who have kept up their payments through the crisis, the president claims to reward “responsible” homeowners. You could argue that he is trying to make banks bail out borrowers who have shown they don’t need it.

Still, there are promising ideas in the package. As an alternative to taking lower interest payments in the form of reduced monthly payments, Mr. Obama’s plan would allow homeowners to convert the savings to equity. They’d pay the same amount as they do now, but their outstanding principal would decline more quickly. If Mr. Obama limited eligibility to loans already held by the government-sponsored enterprises Fannie Mae and Freddie Mac, there would be practically no additional risk to the government. As households build wealth, they become more confident about spending. Yes, that represents a transfer from Fannie and Freddie bondholders, but prepayment was a risk they assumed when they bought the paper. The administration can make these changes without congressional action.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 08:59:44

Standing by for Polly to jump in and correct me…

Comment by polly
2012-02-05 19:41:22

They can complain as loudly as they like. And they can lobby Congress and the administration to try to stop it. The only thing they can’t do it prevent it or get any money back in a court of law. They have no case at all. None.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 19:57:45

“They” being MBS investors who are getting handed a loss?

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Comment by aNYCdj
2012-02-05 20:52:57

I think what polly means is the MBS holders will get pre-paid 100% now and will lose the interest stream over then next xx years…

That will screw up their accounting (loss) since they made decisions based on that payout.

Comment by Professor Bear
2012-02-05 20:36:17

‘The only thing they can’t do it prevent it or get any money back in a court of law.”

I am very confused, because articles like the one below suggest that Congress needs to agree to the mortgage refi proposal. Perhaps this article describes a different program than the one to which Polly’s comment pertains?

JANUARY 25, 2012, 3:06 P.M. ET

UPDATE: Mortgage Bonds Lag Treasurys On Obama Refinance Plan

–MBS with higher coupons lag Treasury gain on refinancing worry

Analysts doubt Obama refinance plan can advance in Congress

–Far-reaching refinance plan could mean higher mortgage rates

(Updates pricing in 1st paragraph; adds Fed statement in 10th, prices in 11th.)

By Al Yoon

Mortgage-backed securities fell in price relative to benchmark Treasurys on Wednesday after President Barack Obama pushed ahead with plans for a far-reaching program to expand residential loan refinancing.

The move comes just a month after the expansion of a flagship refinancing program, and affirmed the nervous speculation of more policy moves that has kept investors in the $5 trillion agency mortgage-bond market for Fannie Mae, Freddie Mac and Ginnie Mae securities on edge for the past year.

While helping homeowners, faster refinancing hurts investors who are providing 90% of all home-loan funding through purchases of MBS. Many of those bonds trade at a premium because they offer relatively high interest payments, but they would be bought back at face value if homeowners repay the high-interest debt when they refinance.

Obama, in his State of the Union address, said he would send Congress a plan to give “responsible” homeowners the chance to save about $3,000 a year on their mortgages, with losses covered by a “small fee” on big financial institutions. The program is also meant to expand government refinancing options to borrowers whose loans are not backed by Fannie Mae and Freddie Mac, analysts said.

But unlike recent changes to the Home Affordable Refinance Program, the changes sought by Obama would likely require legislation analysts said would have little chance of passing in an election year.

Prices on Markit’s ABX indexes of non-agency subprime mortgage bonds were mixed, Whalen said. More refinancing could help the “non-agency” bond market because those securities trade well below face value.

While skeptical about Obama’s plan, Barclays noted such a program could cause a “significant disruption” of the mortgage market by adding yet another layer of uncertainty. Investors may begin to demand higher yields to compensate them for policy risk, raising mortgage rates, the firm said.

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Comment by polly
2012-02-05 21:45:59

Hmm…perhaps this would have been more clear if I said can’t prevent it from happening in a court of law and can’t get any money back in a court of law.

The courts won’t do anything about this. It makes no difference that the purchasers didn’t “foresee” the government making it possible for people who otherwise couldn’t have refinanced their loans to do a refinancing in this particular way. Pre-payment of mortgage loans is an inherent risk in any mortgage backed security. Always has been. Always will be.

You can argue the wisdom of the policy. But the legal issue is clear. There is NO case.

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Comment by Posers
2012-02-05 22:03:20

I guess it still doesn’t register that vigilantes don’t care much for the law. Nor do mobsters. What’s to stop the rise of a new breed of either?

Two wrongs don’t make it right, polly, but it sure makes it even. When the law offers no protection or solutions, and ethics are deemed a waste of time, what’s left?

Comment by Professor Bear
2012-02-05 23:09:35

So for clarification, the Congress does need to agree to the policy, but if they agree to it, then investors have no recourse in the court system to reclaim their lost interest stream?

Comment by mathguy
2012-02-06 01:47:47

Those poor bondholders. getting paid back 100% on what probably would have been a defaulting bond. Sucks SOOO bad to be them and to take all that long term risk, and get 100% paid back in a highly volatile down market where defaults are common. Yeah they are getting absolutely SHAFTED.

Comment by drumminj
2012-02-05 09:01:24

Don’t know how many folks saw PBear’s post the other day regarding the JoshuaTree Extension, but there’s a new version available (2.0.1):


Only a minor addition - a built-in timer to ensure you don’t post more frequently than 60s so that you don’t ever see Ben’s wonderful error page.

For most folks it won’t behave any differently.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:19:13

I owe you for the timer.

Comment by DaveBro in SonomaCo
2012-02-05 20:44:25

I did not know about this tool before. Thank you! It’s excellent.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:05:01

According to the NYTs, any politician who does not “do something” to help homeowners refi into lower rates is “coldhearted.”

Did somebody put a gun to these homeowners’ heads and force them to sign the mortgage contracts?

P.S. Wasn’t Groundhog Day just last week?

An Easier Path to Refinancing
Published: February 4, 2012

It is only a first step toward healing the economy’s biggest open wound, but President Obama’s new mortgage refinancing plan could provide considerable relief for millions of homeowners shackled to high interest rates. If Congress approves it — unlikely, with resistance already mounting from Republicans — the plan could also put money in pockets and cash registers at a time when that is desperately needed.

Interest rates are now at historically low levels, but banks refuse to let millions of homeowners refinance, because their credit is not stellar or because their homes are worth less than what they owe. High fees and intimidating red tape have kept many borrowers from even trying.

Last fall, the White House announced a plan to help as many as 11 million homeowners by relaxing refinancing rules for mortgages held by Fannie Mae or Freddie Mac, the government-sponsored companies. But neither has agreed to eliminate appraisal costs and other fees, or to ease the application process. The president’s new plan, announced last week, asks for legislation to require those changes.

The program demonstrates a clear contrast with Republicans, both in Congress and on the presidential campaign trail. Many, including Mitt Romney, want the government to do nothing to help homeowners on the verge of foreclosure. That should not stop the White House and other Democrats from vigorously making the case that there is an alternative to that coldhearted prescription, if lawmakers would just seize it.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:07:25

Could anyone who can find the story about Gingrinch claiming his Belfast trip was sponsored by Habitat for Humanity, not F&F, please post it?

Gingrich Ties to Fannie, Freddie Said to Extend to Speaker Days
February 05, 2012, 9:16 AM EST
By Eric Engleman

Feb 4 (Bloomberg) — Republican presidential candidate Newt Gingrich had ties to Freddie Mac and Fannie Mae during his time as speaker of the House from 1995 to 1999, adding to questions about the nature of his relationship with the home mortgage companies.

Gingrich, then a U.S. representative from Georgia, visited Ireland in 1998 on a trip that was partly sponsored by Freddie Mac and Fannie Mae, the New York Times reported today. Gingrich also helped thwart measures that would have boosted fees paid by the two mortgage companies, the newspaper reported.

Gingrich’s consulting work for Freddie Mac after he left Congress has emerged as a theme in the Republican presidential nomination campaign and drawn criticism from rivals. Freddie Mac and Fannie Mae have drawn about $153 billion in taxpayer aid since losses from risky mortgages caused them to be brought under U.S. conservatorship in September 2008.

Gingrich spokesman R.C. Hammond didn’t immediately respond to an e-mail requesting comment on his connections to Freddie Mac and Fannie Mae during his time in Congress. Douglas Duvall, a Freddie Mac spokesman, declined to comment. Andrew Wilson, spokesman for Fannie Mae, didn’t immediately respond to an e- mail seeking comment.

Belfast Visit

Gingrich visited a home-building project in Belfast, Northern Ireland, as part of a 1998 trip that was sponsored by Fannie Mae and Freddie Mac, the Times reported.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:25:21

Perhaps this helps clarify what actually happened?

U.S. Congressional Leaders to Help Construct Habitat for Humanity Home in Belfast

Belfast, Northern Ireland - August, 8 1998 - On Tuesday, Aug. 11 a delegation from the U.S. House of Representatives will join Habitat for Humanity Belfast in work on “The House That Congress Built/Belfast.” Led by Speaker of the House Newt Gingrich (R-Ga.) and Rep. Jerry Lewis (R-Calif.), the delegation will work alongside Catholic and Protestant volunteers and lay the foundation for a new Habitat home.

“The House That Congress Built/Belfast,” will be constructed in the Glencairn Estate on Forthriver Crescent in Belfast, one of several Habitat for Humanity homes to be built in that Protestant neighborhood. Located directly alongside “The Peace Line” that traditionally has separated Catholic and Protestant Belfast, its construction follows that of 11 other homes in the Catholic Iris Close section.

“The work of Habitat for Humanity in Belfast is solid and substantial proof that peace can be achieved in Northern Ireland,” said Gingrich. “These Habitat for Humanity homeowners, volunteers and staff are showing that it is indeed possible to overcome the differences that divide this province, and for the people to join together to create positive change in their community.”

“The House That Congress Built/Belfast” is sponsored by donations from Freddie Mac, Fannie Mae, the National Association of Realtors and the National Association of Home Builders, primary supporters of “The Houses that Congress Built.”
Initiated by Rep. Lewis, “The Houses That Congress Built” challenges members of the United States Congress to build Habitat for Humanity homes in the 435 Congressional districts. There are currently 375 House members actively committed to the program.

The delegation’s work on “The House That Congress Built/Belfast” will be complemented by meetings with Belfast Habitat homeowners. The members of Congress will hear stories of both Protestant and Catholic homeowners who are forging relationships for the first time. In addition to building with both Catholic and Protestant volunteers, Habitat for Humanity Belfast hopes eventually to construct an integrated project, and through it, model the goals of the recently approved Good Friday peace accord.

“It has been said,” explained Peter Farquharson, executive director of Habitat for Humanity Belfast, “that the poverty we face in Belfast and Northern Ireland is not just physical, but spiritual — the need for reconciliation. At Habitat for Humanity Belfast our mission is clear: to call the church into action, to build houses and rebuild community. We thank the members of the delegation for supporting us in this task.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:08:40

Obama Uses Housing as Foil to Romney’s ‘Hit Bottom’ Strategy
February 03, 2012, 9:55 AM EST
By Mike Dorning and Lorraine Woellert

(Adds decline in mortgage rates in seventh paragraph. For more on the 2012 elections, see ELECT.)

Feb. 2 (Bloomberg) — President Barack Obama is escalating the fight over how to revive the housing market, a sector of the economy that has dragged down growth for six years running, eroded consumer confidence and wiped out $7 trillion in American wealth.

Opponents said the president’s plan, announced yesterday, was as much about politics as the policy goal of easing access to refinancing for homeowners with negative equity. It helps the White House frame differences with Republican presidential candidates and with Congress, which for two straight years has rejected a bank tax that he said would be used to finance the program.

“This housing crisis struck right at the heart of what it means to be middle class in America: our homes,” Obama said in a speech in the Washington suburb of Falls Church, Virginia. “We need to do everything in our power to repair the damage and make responsible families whole.”

Paul J. Miller, a bank analyst at FBR Capital Markets in Arlington, Virginia, said that while it doesn’t “have a prayer in hell of passing,” the proposal may help Obama score political points. A bank tax is “bad public policy, but it’s populism at its highest,” he said.

Comment by Sammy Schadenfreude
2012-02-05 11:01:55

Obama/Romney (same guy) have a “hit bottom” strategy, all right, dictated by their bankster puppetmasters. Bend the taxapyers over again for limitless bailouts, gambling money, and bonuses. If you’re one of the dwindling number of taxpayers, guess whose bottom is in the Republicrat-Wall Street-Federal Reserve unholy trinity’s crosshairs? Limber up, you’re in for an extended ankle-grabbling session.

Comment by bill in Phoenix and Tampa
2012-02-05 09:12:07

Got no comment on this yesterday, perhaps due to late post. Bill Gross seemed to be an Obama backer a few years ago. Maybe someone can find a URL. The Pimco Bond King is for Ron Paul this year and is turning bullish on gold. Maybe Combotechie should take a look at the reasons Bill Gross gave. Links are within the link below.


Comment by Posers
2012-02-05 09:55:45

The Economist magazine had Obama on its cover seemingly a dozen times in 2008 and 2009. Extolling the virtues of Obama, hope and change, etc. I wonder if it still does.

I cancelled my subscription to The Economist in August 2009. I haven’t looked at it since. Its long-touted, smug “independent” stance became a colossal joke.

Comment by BetterRenter
2012-02-07 10:45:42

A lot of otherwise sensible people got on the Obandwagon in 2008. Wall Street (who is behind both major Prez candidates) has this system locked down so tight that only neutrinos can get through it. As for The Economist, I let my subscription lapse in the late 1990s when it became obvious that it was supporting the notion of corporate capitalism being the only option, which only turned into corporate socialism being the only government practice. And this was before the LTCM bailout and the repeal of Glass-Steagall. I knew something was going to happen at the upper economic echelons, but not the details.

Comment by cactus
2012-02-05 21:20:24

That’s right. The bond king endorses Ron Paul for president, apparently on the realization that very soon he will have to pay Tim Geithner for the privilege of holding hundreds of billions in US paper…


Comment by ecofeco
2012-02-05 21:23:34

Never forget that the 1%ers never back anything that doesn’t benefit them.

Comment by Professor Bear
2012-02-05 23:10:35

It’s only rational, no?

Comment by BetterRenter
2012-02-07 10:47:13

Economic myopia isn’t rational at all.

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Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:12:20

A Mortgage Tornado Warning, Unheeded
Gary Bogdon for The New York Times
After his own experience dealing with a mortgage mess, Nye Lavalle set out to learn all he could about the mortgage industry, traveling nationwide to dig into records. In 2003, he compiled a dossier of practices at Fannie Mae. In hindsight, the problems he found look like a blueprint of today’s foreclosure crisis.
Published: February 4, 2012

YEARS before the housing bust — before all those home loans turned sour and millions of Americans faced foreclosure — a wealthy businessman in Florida set out to blow the whistle on the mortgage game.

His name is Nye Lavalle, and he first came to attention not in finance but in sports and advertising. He turned heads in marketing circles by correctly predicting that Nascar and figure skating would draw huge followings in the 1990s.

But after losing a family home to foreclosure, under what he thought were fishy circumstances, Mr. Lavalle, founder of a consulting firm called the Sports Marketing Group, began a new life as a mortgage sleuth. In 2003, when home prices were flying high, he compiled a dossier of improprieties on one of the giants of the business, Fannie Mae.

In hindsight, what he found looks like a blueprint of today’s foreclosure crisis. Even then, Mr. Lavalle discovered, some loan-servicing companies that worked for Fannie Mae routinely filed false foreclosure documents, not unlike the fraudulent paperwork that has since made “robo-signing” a household term. Even then, he found, the nation’s electronic mortgage registry was playing fast and loose with the law — something that courts have belatedly recognized, too.

You might wonder why Mr. Lavalle didn’t speak up. But he did. For two years, he corresponded with Fannie executives and lawyers. Fannie later hired a Washington law firm to investigate his claims. In May 2006, that firm, using some of Mr. Lavalle’s research, issued a confidential, 147-page report corroborating many of his findings.

And there, apparently, is where it ended. There is little evidence that Fannie Mae’s management or board ever took serious action. Known internally as O.C.J. Case No. 5595, in reference to the company’s Office of Corporate Justice, this 2006 report suggests just how deep, and how far back, our mortgage and foreclosure problems really go.

“It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful,” said the report, a copy of which was obtained by The New York Times. “With his complaint, Mr. Lavalle has identified an issue that Fannie Mae needs to address promptly.”

What Fannie Mae knew about abusive foreclosure practices, and when it knew it, are crucial questions as Congress and the Obama administration weigh the future of the company and its cousin, Freddie Mac. These giants eventually blew themselves apart and, so far, they have cost taxpayers $150 billion. But before that, their size and reach — not only through their own businesses, but also through the vast amount of work they farm out to law firms and loan servicers — meant that Fannie and Freddie shaped the standards for the entire mortgage industry.

Almost all of the abuses that Mr. Lavalle began identifying in 2003 have since come to widespread attention. The revelations have roiled the mortgage industry and left Fannie, Freddie and big banks with potentially enormous legal liabilities. More worrying is that the kinds of problems that Mr. Lavalle flagged so long ago, and that Fannie apparently ignored, have evicted people from their homes through improper or fraudulent foreclosures.

Until a few weeks ago, Mr. Lavalle, 54, had never seen O.C.J. 5595. He had hoped to get a copy after helping Fannie’s lawyers, at Baker & Hostetler in Washington, complete it. He didn’t.

But after learning about its findings from a reporter for The Times, Mr. Lavalle said, “Fannie Mae, its directors, servicers and lawyers appeared to have an institutional policy of turning a willful blind eye to evidence of mortgage origination and servicing fraud.”

He went on: “When confronted directly with this evidence, Fannie not only failed to correct and remedy the abuses, it assisted in continuing the frauds via institutional practices that concealed fraudulent foreclosures.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:31:10

My impression about the inside-the-Beltway culture’s tolerance for fraud:

It is perfectly OK for it to continue indefinitely, provided it serves useful political ends, and any effort to expose it can be contained.

Comment by Posers
2012-02-05 10:13:32

Fraud? Who says there’s fraud inside the Beltway? You must be mistaken. The attorneys there say everything is fine because no laws were broken. Time for you to get over yourself, CIBT.

Besides, fraud doesn’t exist in Washington. The tens of thousands of laws on the books guarantee honorable behavior. And the thousands of additional laws added annually nationwide only serve to extend that guarantee.

In no way do endless, pointless and unreinforceable laws (because no one could possibly reinforce so many) prompt people to find ways to get around them.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:22:35



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Comment by Posers
2012-02-05 15:00:19

Well, yeah, that too. My bonehead error.

Comment by rms
2012-02-05 11:04:49

In the U.S. once you fail to satisfy any of your financial obligations your account is kicked over to the other side of the building where they adjust your interest rates to the legal maximum and tack on additional fees. When that fails to get you motivated your debt, along with all of your earthly vital information is sold-off to some debt collection agency in a light industrial complex on the bad side of town next to the freeway. The nightmare begins!

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 14:24:23

Makes you wonder why anyone would be foolish enough to willingly catch themselves a falling knife in the housing market…

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Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:17:53

If they say it is so, so it must be.

Why foreclosure investors are double-edged sword for economy

By Diana Olick, CNBC.com
Updated 23h 23m ago

The best and most expeditious way to clear the vast inventory of foreclosed properties weighing down today’s housing market is to get more investors in and sell them these properties at bulk discounts.

That’s what the Obama administration and Federal regulators are currently considering for the thousands of homes currently owned by Fannie Mae, Freddie Mac and the FHA.

While big private equity funds are still largely in a very tedious deal-making stage with banks or waiting on the sidelines for a government program, smaller individual investors are getting in. Nearly 23% of home purchases in December were by investors, according to a survey from Campbell/Inside Mortgage Finance. That is a slight increase from November, but the share has remained largely unchanged for the past year.

What has changed dramatically is how many of these investors are using all-cash … 74% according to the survey. The survey also found that “cash buyers are able to bid significantly lower — and successfully — on many properties because they offer a shorter and more reliable closing timeline.” That is precisely what mortgage servicers want.

“While investor bids may not be the first offers accepted, they often end up winning properties after other home buyers are eliminated because of mortgage approval or timeline problems,” according to the survey authors. “Appraisals below the contracted price are a common reason for mortgage denials. Most mortgage financing timelines are now in excess of 30 days.”

Comment by sleepless_near_seattle
2012-02-05 13:58:31

Or, just mark them to market and allow OWNER OCCUPIERS(!) to buy them. What a farce.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:21:43

D.C. Current | SATURDAY, FEBRUARY 4, 2012
Fannie Mae’s Fire Sale

Fannie Mae will soon start auctioning off foreclosed houses and pools of non-performing loans in bulk. How to buy a cut-rate rental property.

Fire sale! The Federal Housing Finance Agency has approved a big residential real-estate auction at Fannie Mae to help the mortgage giant unload its inventory of 122,616 foreclosed houses. For the first time, the regulators are permitting Fannie Mae to sell houses in bulk. The test sale also will include pools of non-performing loans.

Comment by measton
2012-02-05 10:06:17

I just love that they can put restrictions on your ability to sell a property that you purchase. We all know that the gov is manipulating the real estate market, but this is a front page admission. I wonder how many people buy these houses and then try to sell anyway. I’d be considering rent to own, ie you put 20% down and may a monthly payment for x years and then you can purchase the house.

My guess is that the large pool purchasers will get the cream and those other individuals will get the rotten milk.

Comment by Posers
2012-02-05 15:13:03

Desperate times call for desperate measures!

Especially if you’re a higher up within Fannie/Freddie.

The government knows taxes are going up a good deal next year, which will only further decimate the housing market. So, it’s doing what it can now to unload. F & F are in dire straits.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:47:14

None of the serial bottom callers ever discusses the extraordinary measures the Fed currently has in place to prop up housing, or the likelihood they will continue indefinitely. I personally still expect other factors to eventually put an end to temporary housing price support measures.

For a simple example, if the Fed’s rationale is that the housing price support is temporarily needed due to the crisis underway, then presumably the price supports will end roughly when the crisis is over. At that point, those who were enticed into buying by the lure of price support measures may discover future home price appreciation is “lower than expected.”

Another contingency: What will happen to home prices when interest rates eventually increase from current generation-low levels?

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 09:49:05

‘New normal’ for real estate arrives
By Jay Hummer/local columnist
MetroWest Daily News
Posted Feb 05, 2012 @ 12:08 AM

Homeowners in MetroWest, and throughout Massachusetts are beginning to adjust to the “new normal” — an industry buzz word used among real estate professionals to define the current state of the housing market.

Buoyed by historically low interest rates, renewed interest by investors and steady job growth, the number of real estate transactions and home prices in the Bay State remained virtually flat in 2011 compared to 2010, bringing what many experts and industry insiders consider modest stability to the market.

For the state, single-family year-over-year home sales declined just 1.8 percent, according to Multiple Listing Service Property Information Network (MLSPIN) data. Prices declined just .4 percent. The number of transactions involving condominiums declined 6.7 percent, but the sales price actually increased 2.7 percent. Multi-family prices also rose 3.9 percent, although transactions decreased 13.5 percent.

The story is actually a little bit better in MetroWest, though.

An examination of MLSPIN data for the communities of Ashland, Framingham, Holliston, Hopkinton, Natick, Sherborn, Southborough, Sudbury and Westborough showed home transactions for 2011 actually increased 1.3 percent compared to 2010, outpacing the rest of the state. Prices did not suffer a big setback either, and were down just over 1 percent.

It’s hard to get excited about descriptions like “flat” and “stable” when discussing real estate, especially when home values seemed to show no signs of slowing just five years ago. However, flat and stable represent the “new normal”, and it’s absolutely a positive trend.

I say this because stability is the first step toward a meaningful recovery. Stability means that home prices have hit the bottom, and from my perspective, barring an unexpected financial catastrophe, it appears that is the case.

Comment by Darrell_in_PHX
2012-02-05 09:48:06

I hear this argument that we need higher interest rates so that people can make a decent rate of return on their money.

Le’ts say for a moment that 8% is considered a decent rae of return.

$37T of debt in the USA. That is $3T a year in interest on the debt. 3/15 = 20% of GDP.

Total debt in 1980 was $4T and GDP was $2.5T. $4T * .08 = $320B. 320B/2500 = 13% of GDP.

In other words, before we can afford to pay a decent rate of return, about half the crrent debt needs to go away. That means that half the dollars need to go away.

Any attempt to raise interest rates at this time, with households already tapped out and unable to borrow more money into existence to pay the interest on their existing debt, would simply trigger cascade default where a large portion of the existing money supply ceased to exist.

There is simply too much debt/money in existence for peoples’ wages, at anything other than near 0% interest rates.

I keep hearing “I need somewhere to put my money”. No. What you need to do is SPEND your money so that people with debt can repay thier debt, destroying both the money and the debt.

Comment by Carl Morris
2012-02-05 15:25:15

I keep hearing “I need somewhere to put my money”. No. What you need to do is SPEND your money so that people with debt can repay thier debt, destroying both the money and the debt.

I think that people with money will spend it on things like real estate if prices fall to where they would naturally fall under these circumstances. So why are we trying so hard to prevent that again?

Comment by ecofeco
2012-02-05 21:26:22

I’d settle for a savings account that returns 1% over inflation.

Comment by mathguy
2012-02-06 01:56:55

I almost agree with you here Darrel, but instead of SPENDing your money… INVEST your money. Now some people might balk and call this SAVING, but really, it is just spending money on assets. I do agree with Darrel. Don’t let money sit idlely by in your checking acount where BofA can profit from it.. Instead, invest directly. Woo Hoo!!

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:03:26

State Real Estate Drop The Worst On Record

Connecticut has the worst performance in more than two decades; In Madison, fewer homes were sold, but median sale prices increased.

By Chris Dehnel
Email the author
9:33 am

Home sales in Connecticut dropped 13 percent in 2011, making it the worst on record, according to The Warren Group, the preeminent compiler of real estate statistics in New England.

Boston-based Warren began tracking real estate data in the Nutmeg State in 1987.

Sales of single-family homes in Connecticut dropped to 21,141 in 2011, down from 24,270 in 2010, according to Warren statistics. It marks the seventh straight year in which sales volume declined from the prior year.

December’s 1,714 single-family sales represented a nearly 8 percent year-over-year drop from 1,858 in December 2010. Fourth quarter numbers were also down 6.5 percent year-over-year - 4,961 single-family home sales compared to 5,306 in the fourth quarter of 2010. It was the slowest fourth quarter for single-family sales ever recorded by The Warren Group.

Sales in New Haven County dropped, but not as precipitously as the entire state. December sales were actually 2.5 percent higher than last December, but the median sale prices showed a 12.33 percent decrease when compared to last December. Overall sales in 2011 were down 11.74 percent when compared to 2010. In Madison, sales in December 2011 dropped 42.11 percent, to 11 units from 19 in December 2010. Year to date sales were down 16.5 percent. The December median sale price was up 73.58 percent, and the year to date median sale price was up 2.98 percent.

Still, sales volume beat the first quarter 2011, when there were 3,950 sales, according to Warren’s report.

December represented the fourth straight month that single-family sales decreased in Connecticut. In all of 2011, year-over-year sales volume only increased in January and August.

“The market in Connecticut is very slow. I think it’s fair to say we are bumping along the bottom and can only go up from here,” said Timothy M. Warren Jr., the chief executive officer of The Warren Group. “As the employment picture and consumer confidence improves, housing will slowly follow suit.”

The median price for Connecticut single-family homes sold in 2011 was $243,000, a 2.8 percent drop from $250,000 in 2010. The median price for single-family homes sold in December dropped nearly 9.5 percent to $220,000, down from $243,000 during the same month in 2010.

Comment by Posers
2012-02-05 15:09:09

The guy’s dreamin’. (Nothin’ but a dreamer - better put your head in your hands - oh no! Supertramp - where’s jeff?)

Wait until taxes go WAY UP in 2013 as estate tax exemption disappears, as more Obamacare taxes kick in, as AMT stays on the books and as fewer deductions are allowed
April 15, 2013.

Lots less cash flow means decreasing home prices.

Better bring out those bulldozers and commercial investors out FAST.

Comment by In Colorado
2012-02-05 16:34:25

“Wait until taxes go WAY UP in 2013 as estate tax exemption disappears”

Oooh, that’ll hurt Joe 6 Pack. Not.

Comment by ecofeco
2012-02-05 21:27:40


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Comment by Posers
2012-02-05 21:54:59

You need new prescription glasses. Your near-sightedness is growing worse.

Ever consider that those estates being taxed might mean less small business job formation in the coming years?

No. You simply assume that any inheritors of wealth will act like the trust fund babies you hang out with in Boulder.

Note that Joe-6 pack also won’t like fewer deductions on next year’s 1040, or higher taxes for Obamacare, both of which kick in January 1, 2013. Or the continuance of the AMT, which is not indexed.

BTW, I take it you plan to vote for Santorum. He’s the only one proposing anything in favor of home-based manufacturing.

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Comment by ahansen
2012-02-05 22:47:44

You might want to google “small business job engine myth,” for a more reasoned examination of some of your CoC-generated claims.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:19:10

Do any HBB posters have comments about Beantown home prices? Have they bottomed out, or is there another leg down to come? Is it some how different there in Beantown compared to the rest of the U.S. when it comes to home price declines?

I reiterate my point about the potentially ephemeral nature of extraordinary housing price support measures that are currently in effect. Serial bottom callers ignore this aspect of the housing situation at their peril.

Buying and selling, Markets
When it comes to prices, is this as good as it gets?
Posted by Scott Van Voorhis
February 1, 2012 06:31 AM

Sorry, but the great home price collapse is looking about as likely right now as a visit from the Great Pumpkin.

It’s hard not to come to that conclusion even with the latest Case-Shiller report.

The picture nationally is rockier than what analysts had predicted. Economists surveyed by Bloomberg had predicted a 3.3 percent drop in home prices nationally for November in the latest Case-Shiller report.

We wound up with a 3.7 percent drop and a 1.6 percent drop in Boston metro prices.

That puts housing values back at spring 2003 levels, or about an 18 percent decline locally, compared to as much as 30 percent nationally.

However, the numbers mask the unfortunate reality home buyers sooner or later find out about the Greater Boston market. The fact is, there really are no bargains out there, just homes, often in need of work, that are somewhat less inflated in price than they were five years ago.

Still, the bears were all over my post yesterday predicting price stability - gcbma brought up some good points.

Home prices in all three tiers are dropping YOY in Boston, according to today’s Case Shiller data. The middle and high tiers are dropping at a slightly faster rate than the previous reporting period, and the low tier (under $257K) is the only one slowing up its decline slightly.

I know people who have been trying to sell their (less than $400K) homes in mid-tier towns and (greater than $1M) homes in top-tier W towns and they’re all frustrated at having to reduce prices, agonizing over no offers, grumbling at having to consider and adjust reality to the only offers they’re getting (10-20% under asking, after 10% price drops). Don’t believe all the puffed-chest bullying and isolated tales that some of the bulls and Globe writers try to mock up here.

I’ll take a pass at responding to the silly jab about “bulls and Globe writers.” That said, gcbma raises a couple good points, though he misses the bigger picture here.

Some folks have clearly been waiting for the great home price cave in here in Greater Boston - defined here as within the I-495 belt - for years now.

But the great home price collapse hasn’t happened yet, and with every drop in the jobless rate, the chances of any significant collapse get more and more remote.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:33:59

Is anyone looking to buy a San Diego home in the $60m+ price range? It’s current list price is down by $15m from what it originally listed for in 2007. (Never mind that it sold for only $25m back in 2000. Or that it has been on the market for over four years already without selling.)

For Sale (MLS-listed)
929 Border Ave Del Mar, CA 92014
Beds: 9
Baths: 6
Sq. Ft.: 10,164
$/Sq. Ft.: $6,002
Lot Size: 5.5 Acres
Property Type: Residential, Detached
Style: Other
Stories: 2
View: Ocean, Panoramic
Year Built: 1937
Community: Del Mar Bluff
County: San Diego
MLS#: 071064797
Status: Active
This listing is for sale and the sellers are accepting offers.

On Redfin: 1635 days

Variance granted for room dimensions. Drastic price reduction! This is undeniably a once in a lifetime opportunity to own one of the most exclusive and unique properties in the United States! Do not miss this extremely rare & remarkable opportunity to make this acreage in the heart of Del Mar your own. A spectacular waterfront property of over 5.5 acres atop the bluffs of Del Mar lays a beautiful canvas to build your very own vision of paradise with over 396 ft of oceanfront and includes 3 APNs. Tucked away down a quiet drive just west of Highway 101 and secluded behind a private gate lays your ocean front oasis with over 396 feet of prime ocean front land. This 5.5+ acre property is perched on the bluffs overlooking the Pacific Ocean and is just across from the prestigious Del Mar Racetrack. Del Mar Village and the shops of Solana Beach are both a short walk away. Discover the perfection of living at the waters edge with the ocean as your front yard. A two-story home is standing on the property which allows for rebuilding your own two-story home. This property allows for two single family homes. There are so many unusual qualities about this property it truly must be seen to be fully appreciated. Includes 3 APNs 298-241-0600, 299-030-1400 & 298-241-07-00.

Property History for 929 Border Ave
Date Event Price Appreciation Source
Jan 28, 2010 Price Changed $61,000,000 – SANDICOR #071064797
Aug 15, 2007 Listed $76,000,000 – SANDICOR #071064797
Jul 07, 2000 Sold (Public Records)
This was part of a multi-property
Multi-Property Sale
A sale in which more than one property was purchased simultaneously, resulting in a purchase price that may not accurately reflect the property’s real value.
more info

sale. $25,000,000 – Public Records

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:53:27

I’m seeing the early signs of capitulation in North County San Diego.

Here is a home which is a very close comp to the one our landlords bought for $540,000 back in late 2004. Assuming the sale price is roughly in line with current market value, it looks like they are sitting on a loss of around ($379,900/$540,000-1)*100% = 29.6%. Given the possibility the home is selling for below list price, the loss could be larger.

This loss alone would be sufficient to fund about six years’ worth of money thrown away on rent at the rate we have payed over the past several years. Of course, there are other costs of ownership to consider, such as Payments, Interest, Taxes, Insurance, Mello-Roos, HOA dues, maintenance, etc etc etc.

Sale Pending (MLS-listed)
Listed at: $379,900
11312 Meadow Flower Pl San Diego, CA 92127
Beds: 4
Baths: 2.5
Sq. Ft.: 1,835
$/Sq. Ft.: $207
Lot Size: 7,623 Sq. Ft.
Property Type: Residential, Twinhome
Stories: 2
View: Mountains/Hills, Park-like
Year Built: 1985
Community: High Country West
County: San Diego
MLS#: 110067727
Status: Contingent
This means the sellers have accepted on an offer on the property, but success may still depend on passing a home inspection or the buyer’s financing approval. It may still be possible to tour these properties and submit a backup offer in case the current one falls through.
more info

On Redfin: 46 days

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 14:31:05

“Beds: 4
Baths: 2.5
Listed at: $379,900″

Back in 2005, there were no 4 br SFRs listed in our zip code available below $500K. One home similar to this one, located a few doors up the street from us, was where a sad tale played out of a 2005 home purchase north of $500K followed by a bitter divorce. The couple were newlyweds, and the mortgage payments left them so strapped for cash that they were unable to ever even afford a kitchen stove before the woman split. Sad…

Comment by cactus
2012-02-05 21:40:21

Thats pretty cheap for that area

I made almost the same offer on a similair home that sold for 600K in 2006 about 150 miles north of you

probably never hear back form the realtor or the bank

home is empty maybe it will rot

Comment by Professor Bear
2012-02-05 23:12:57

Good luck to you, and if this offer gets ignored, make another.

Eventually, you will make an offer that does not get ignored, and then you soon will have the house of your dreams.

You might want to hunt down Dude’s tale of lowball offer success (it was a few months back when he shared it…).

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 10:59:42

Obama, Bernanke Spotlight Housing as Path to U.S. Recovery
02.05.2012 by Staff

Both President Obama and Federal Reserve Chairman Ben Bernanke have come under fire for their respective responses to the economic crisis, including actions tied to or affecting the depressed housing market.

In recent days, both have spotlighted the vital role of housing in the overall economic picture. In doing so, they agree that a robust U.S. recovery is impossible without lifting residential sales, home prices and easing the foreclosure crisis substantially.

“Both residential sales and construction remain depressed,” Bernanke said in prepared testimony Thursday before the U.S. House Budget Committee. “A persistent excess supply of vacant homes, largely stemming from foreclosures, is keeping downward pressure on prices and limiting the demand for new construction.”

Bernanke’s reference to the housing market drew a statement of support from the National Association of Realtors (NAR).

“We fully support Chairman Bernanke’s comments that the lack of available and affordable mortgage financing, low home values and high foreclosure inventories are inhibiting a meaningful housing market recovery,” said NAR President Moe Veissi.

Comment by sleepless_near_seattle
2012-02-05 13:43:40

Maybe if they focused on the causes instead of the symptoms, we’d get somewhere.

Comment by ecofeco
2012-02-05 21:29:23

All politicians must take a vow of omerta before taking office.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 11:01:53

Monetary policy
Easier does it
Feb 3rd 2012, 18:34 by R.A. | WASHINGTON

WRITING on the surprisingly strong January jobs report, my colleague says:

Will the better tone to the jobs market deter the Federal Reserve from further monetary easing? Not yet. Ben Bernanke, the Federal Reserve chairman, acknowledged the moderately better tone to economic data yesterday, but the last official Fed statement and press conference strongly suggested the Fed is inclined to do more quantitative easing; we’d have to get more, and better, reports like this one to take that option off the table.

I agree that this report probably isn’t enough to change the Fed’s outlook. The jobs numbers beat expectations, but labour market improvement isn’t a surprise to anyone; the private sector has been adding nearly 200,000 jobs a month for the past six months. When the Fed met in late January it knew things were better than they’d been in a while, if not quite this good. The report certaintly shouldn’t deter the Fed from taking additional action. Even if the natural rate of unemployment has risen as high as 6.5%, the present unemployment rate of 8.3% implies quite a lot of labour market slack. Inflation has been falling in recent months, and the latest employment report shows that earnings growth has been muted, even as the pace of hiring has increased.

At the same time, I am a little concerned. The Fed’s latest economic projections—which, remember, assume that the FOMC is following an appropriate monetary policy—have a central tendency for the unemployment rate of 8.2% to 8.5% in 2012. It’s only February, and the figure is already at the low end of that range. Future inflation, as implied by 2-year breakevens, is up noticeably for the week, and rose above 2% on today’s good news.

If we were to take the Fed at its word when it says that its projections imply optimal monetary policy, then we’d have to conclude that absent a deterioration in the labour-market situation in February any new easing would be off. The FOMC might even find itself walking back some of its commitment to low rates through 2014.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 11:03:19

Plosser slams Fed’s 2014 low-rate forecast

Philadelphia Federal Reserve President Charles Plosser speaks at an Economics21 event in New York, March 25, 2011. REUTERS/Brendan McDermid

By Jonathan Spicer

GLADWYNE, Pennsylvania | Fri Feb 3, 2012 2:58pm EST

(Reuters) - A top Federal Reserve official sharply criticized the U.S. central bank’s decision last week to telegraph ultra low interest rates for nearly three more years, saying on Wednesday the move undermined confidence and caused confusion.

The Fed’s policy-setting committee, citing a bleak outlook for the fragile economic recovery, said last week it expected to keep rates “exceptionally low” at least through late 2014. The forecast, which was contingent on economic conditions, pushed the target date some 18 months later than a previous forecast, and it sparked a rally in stocks and bonds.

“Such statements are, in my mind, particularly problematic from a communications perspective,” Philadelphia Federal Reserve President Charles Plosser told a business audience. “Monetary policy should be contingent on the economic environment and not on the calendar.”

Comment by Sammy Schadenfreude
2012-02-05 11:08:19


Just when the Europeans start wringing their hands about Russia and China vetoing the condemnation of Syria’s escalating use of force in trying to quell a growing insurgency, Russia provides an unsubtle reminder that it has the EU snivelers by the cajones. Wonder when China, which is sitting on trillions in US dollar denominated holdings, is going to send a similar reminder?

Comment by aNYCdj
2012-02-05 14:45:38

Oh when they blockade taiwan and force them back to the mother country….what will our clueless president doooo?

when China,, is going to send a similar reminder?

Comment by In Colorado
2012-02-05 16:27:46

Why should we do anything?

Wonder when China, which is sitting on trillions in US dollar denominated holdings, is going to send a similar reminder?

And what would that be? “We’re not going to extend you any more credit to buy our crap and keep our factories humming? You’re gonna have to make your own crap from now on.” ?

Fat chance.

Comment by sleepless_near_seattle
2012-02-05 14:27:57

You know what today is folks! Just 6 hours from now, after the obstructionist that is the Super Bowl is in the rear view mirror, we can finally get back to this country’s true past time…selling each other houses! It’s what a recovery craves!

Comment by Sammy Schadenfreude
2012-02-05 15:13:42


Along with the NAR’s oft-promised Spring Miracle Revival in home sales (which even their fudged statistics can’t quite deliver), now we have yet another “Greek bailout talks falter” headline after relentlessly upbeat MSM assurances that a successful conclusion was “very, very near” and the rigged Ponzi markets rallied on HFT algo trading. More can-kicking to follow, with the Fed and IMF (US taxpayers funding 17% of the latter’s budget) continuing their stealth bailouts of the Eurotrash banksters to delay the financial reckoning day until Obama or Romney are safely installed in office for another four years.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 15:31:25

The good news: Stocks have the best start this year (2012) so far since 1987.

The bad news: In 1987, stocks had one of the worst ends to the year since 1929. But perhaps there is nothing to worry about now, as there was a crash in the long-term bond market in the first half of 1987. Presumably with the Fed planning to execute QE3, this can’t possibly happen again now.

Feb. 4, 2012, 12:00 a.m. EST
U.S. stocks follow win streak with focus on Europe
Cisco, Coca-Cola Disney, Visa, more on earnings docket
By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch) — Investors in U.S. stocks, which just wrapped up their best start of the year since 1987, are expected to shift their attention next week toward the ongoing euro-zone crisis and earnings reports from bellwethers Cisco Systems Inc. and Walt Disney Co., among others.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 15:43:00


Financial Services
Foreclosure Settlement Will Settle Nothing
By Shanthi Bharatwaj 02/04/12 - 06:54 AM EST
Stock quotes in this article: BAC, JPM, WFC, C

NEW YORK (TheStreet) — A foreclosure settlement between the banks and the 50 states Monday, if it does finally happen, will likely not have the positive outcomes that investors have been hoping for.

Details of the deal emerging from recent press reports suggests that the states, while requiring banks to address their foreclosure procedures and reduce principal on mortgages, might not grant them any real immunity from future mortgage litigation.

That offers little comfort to investors who have been hoping that the settlement will provide some much-desired certainty on the scale and scope of the mortgage litigation facing banks.

“I am still concerned that the deal may not be as broad-based, or cover as many issues, as companies would hope for,” KBW analyst Fred Cannon said. “A deal without Nevada or California would water down the settlement. And if MERS is up in the air, it is really difficult to have a meaningful settlement.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 19:00:22

Given all the campaign financing Romney has accepted from Megabank, Inc, is it a given that he would get the Megabanks and MERS off the hook from this suit? And how about Obama or Ron Paul? I would prefer to vote for the candidate who is most likely to allow justice run its course without interference from the WH.

New York sues 3 big banks over use of mortgage registry database
Bank of America, Wells Fargo and JPMorgan Chase are accused of undermining New York’s foreclosure process by filing false and misleading court actions using the Mortgage Electronic Registry System.

New York Atty. Gen. Eric Schneiderman says the Mortgage Electronic Registry System was used as “an end run around the property recording system.” (Mark Wilson, Getty Images)
February 03, 2012|By Alejandro Lazo, Los Angeles Times

Opening a new front against the American banking industry, New York sued three of the nation’s biggest mortgage servicers over their use of an electronic database that, according to the Empire State, has resulted in widespread deception and fraudulent foreclosure practices.

The suit alleges that employees of the three institutions — Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. — filed false and misleading actions in New York and federal courts using the controversial Mortgage Electronic Registry System, undermining the state’s foreclosure process and public records system.

The financial institutions first used MERS so they could quickly sell and resell mortgages, much like shares of companies, during the boom years without having to record each transaction at county offices.

But with the huge number of foreclosures since the housing market’s collapse, that system — which New York says is riddled with errors — has made it hard to track property transfers through public records.

The banks created the MERS system as an end run around the property recording system, to facilitate the rapid securitization and sale of mortgages,” New York Atty. Gen. Eric Schneiderman said in a statement Friday. “Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law.”

The banks all declined to comment Friday.

New York’s lawsuit also names Virginia-based MERSCorp Inc. and its subsidiary Mortgage Electronic Registration Systems Inc. The mortgage registry company, in a statement, said it would defend itself.

Federal and state courts around the country have repeatedly upheld the MERS business model and the validity of MERS as legal mortgagee and nominee for lenders,” the company said. “We refute the attorney general’s claims and will defend the case vigorously in court.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 19:10:37

Is it really desirable to force pension plans to fund cramdowns?

What about the pensioners whose retirement funds get reallocated to pay for FBs’ principle reductions? Tough luck for them for being retirees rather than underwater homeowners?

February 5, 2012 8:22 pm
Banks to take a hit on US home loans
By Shahien Nasiripour in Washington

Investors in US home mortgage securities will be forced to write down a “substantial” amount of principal – up to $40bn – for distressed borrowers as part of a national settlement against leading US banks to resolve allegations of widespread foreclosure abuses, the Obama administration has said.

The move would act as a “down payment” for future principal reduction initiatives that result from expected settlements between financial companies and the US government, said Shaun Donovan, US housing secretary, during a weekend conference call with reporters.

The Obama administration, which recently announced the formation of a new state and federal unit to investigate alleged frauds involving home loans and mortgage-backed securities, intends to use the threat of litigation against large US financial institutions to extract additional aid for struggling borrowers, Mr Donovan said.

“We believe not only that bringing state and federal powers gives us the ability to create real accountability at a scale that we have not seen to date, but also . . . there is the opportunity to get very large-scale relief, including serious principal reduction, for families that have been victims of the crisis,” Mr Donovan said.

The housing secretary’s remarks signal an escalation on the part of the Obama administration to secure lower monthly payments for troubled borrowers and reduced loan balances from banks accused of wrongdoing and investors in the mortgages those banks service – even if the investors are not the targets of government investigations.

Investors in the $1.1tn market have long feared such an outcome.

“The use of mortgage trust money [from pensions funds, unions and charities] to settle the investigation is tantamount to a bank bail-out,” said Chris Katopis, executive director of the Association of Mortgage Investors.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 19:23:24

Whatever comes out of this mortgage settlement deal, two things are for certain: (1) The outcome will be contentious; (2) FB’s will remain f’d.

Mortgage deal draws detractors from all sides

Published January 27, 2012 | FoxNews.com

In this Sept. 14, 2010 file photo, a house in Homestead, Fla. sits empty, for sale as a foreclosure home in a neighborhood where half of the houses were empty and up for foreclosure.

A draft settlement between states and mortgage companies that would let the nation’s biggest banks pay out billions to compensate for a raft of foreclosures has public interest groups across the political spectrum hopping mad over a deal they say was forged behind closed doors and is being strong-armed by the Obama administration.

The draft proposal, which was sent to state officials Monday for approval, is supposed to overhaul the mortgage industry and help homeowners. In it, the country’s five largest mortgage lenders offer to pay out as much as $25 billion to cover new terms for homeowners driven out by foreclosure. But people who lost their homes are unlikely to get them back or see much financial benefit from the deal.

Advocates and watchdogs on both sides of the political aisle are fighting the deal, although for very different reasons.

On the left, complaints about the agreement being pushed by the administration center on whether the federal government is letting the banks off the hook for a foreclosure crisis that critics say could’ve been avoided had the banks been more upstanding about their deals. However, President Obama’s supporters also credit him for his plans to launch an investigative unit on abusive lending to be led by the Justice Department, a move announced in the State of the Union Tuesday night and formally launched Friday.

The argument from the other side claims the administration is trying to fast track a deal that amounts to extortion of banks that followed federal government rules to expand access to loans.
Judicial Watch announced this week that it is suing the Department of Justice and the U.S. Department of Housing and Urban Development in an effort to get more information about the settlement offer and the audits that purport to prove the banks defrauded consumers.

“What’s going on here is there’s this really incredible pressure that’s being brought to bear on the banks,” said Tom Fitton, president of Judicial Watch. “All Americans deserve to know the full truth about the Obama administration’s effort extort $20 billion from the nation’s banking industry.”

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 19:39:10

Politicians are making a big deal about how this foreclosure settlement would help the “hardest hit homeowners.” But aren’t the hardest hit folks already beyond help, such as our friends who left town one weekend a couple of years ago, and upon their return, found a notification taped to their front door by Bank of America that their home would be sold at auction? How will this mortgage settlement help anyone who long ago lost their home, and accumulated principle payments on their mortgage?

Deal Is Closer for a U.S. Plan on Mortgage Relief

Published: February 5, 2012

With a deadline looming on Monday for state officials to sign onto a landmark multibillion-dollar settlement to address foreclosure abuses, the Obama administration is close to winning support from crucial states that would significantly expand the breadth of the deal.

The biggest remaining holdout, California, has returned to the negotiating table after a four-month absence, a change of heart that could increase the pot for mortgage relief nationwide to $25 billion from $19 billion.

Another important potential backer, Attorney General Eric T. Schneiderman of New York, has also signaled that he sees progress on provisions that prevented him from supporting it in the past.

The potential support from California and New York comes in exchange for tightening provisions of the settlement to preserve the right to investigate past misdeeds by the banks, and stepping up oversight to ensure that the financial institutions live up to the deal and distribute the money to the hardest-hit homeowners.

The settlement would require banks to provide billions of dollars in aid to homeowners who have lost their homes to foreclosure or who are still at risk, after years of failed attempts by the White House and other government officials to alter the behavior of the biggest banks.

The banks — led by the five biggest mortgage servicers, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial — want to settle an investigation into abuses set off in 2010 by evidence that they foreclosed on borrowers with only a cursory examination of the relevant documents, a practice known as robo-signing. Four million families have lost their homes to foreclosure since the beginning of 2007.

As recently as two weeks ago, with federal officials hoping to complete a deal that President Obama could cite in his State of the Union address, California’s attorney general, Kamala Harris, made it clear she was not on board, terming the proposal inadequate. But in the last few days, differences have narrowed in negotiations that one participant described as round the clock, with California officials in direct communication with bank representatives for the first time in months.

For the past 13 months we have been working for a resolution that brings real relief to the hardest-hit homeowners, is transparent about who benefits, and will ensure accountability,” Ms. Harris said in a statement. “We are closer now than we’ve been before but we’re not there yet.”

The settlement has been hamstrung by one delay after another over the last year. Winning California’s support now would represent a major win for the White House in this election year.

I am encouraged by the conversations we’ve had with many states in the last few days,” said Shaun Donovan, the secretary of housing and urban development. “This will be one of the most significant steps in the recovery of homeowners, neighborhoods and the broader housing market from the worst collapse since the Depression.”

Comment by Blue Skye
2012-02-05 21:08:27

“billions of dollars in aid to homeowners who have lost their homes”

Now they rent. Finally a subsidy for renters. Well, for some.

Comment by Professor Bear
2012-02-05 23:15:44

“…hardest hit folks…”

Wouldn’t an across-the-board tax credit for rental payments do a better job of reaching the hardest hit folks? Presumably, those who were hit hardest are now renters, including my friends with a Countrywide mortgage, whom I mentioned in the post above.

(Comments wont nest below this level)
Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 20:05:20

Got collapsed dry bulk shipping costs?

Tim Worstall, Contributor
2/01/2012 @ 12:40PM
The Baltic Dry Index and Goodhart’s Law

The Baltic Dry Index is stuttering along in the gutter. In the past it’s been a good guide to the level of international trade. So, if the index has crashed, does that mean international trade has tanked and the entire global economy is going to hell in a handcart?

Well, no, it doesn’t and the reason can be thought of as a minor corollary to Goodhart’s Law. Which is, as all good little monetarists know (for it’s the reason that certain forms of monetarism don’t work) as follows:

Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.

We can also see it as a corollary of the Lucas Critique.

The particular reason here is not quite the same as either of those two well known pieces of economics but close enough that it is analogous. The reason is actually this:

Further, the cost of moving a ship carrying 15-20 thousand TEUs is not much different than that of one carrying 1/10th as many. Once the ship is underway, the fueling cost of the larger ship is marginally higher than that of the smaller. Given the numbers of large ships contracted for and built over the course of the past two or three years, the over-supply of space-aboard-ship is high and is rising. Greed and stupidity have trumped economic wisdom.

Thus, where others are pointing to the weakness in the Baltic Dry Index… it has fallen 11,500 in 2008, to 4,500 in early 2010 to 800 presently!…. as evidence of economic weakness we suggest instead that it is a simple inverse index of stupidity and nothing more. Rather, we count the numbers of TEUs moving through the port facilities around the world as the true signal of economic strength or weakness, and those numbers are rising, not falling. The BFI was a fine index to watch fifteen years ago; it ain’t no more, unless you are trading shipping owner’s greed and stupidity.”

The BDI measures the price of shipping something, not the volume being shipped. Sure, with a static supply of shipping then an increase in the amount being shipped should lead to an increase in the prices of shipping something. But change the supply of shipping and that’s no longer necessarily true, is it?

Which is where we really are in Goodhart territory. If you looked only at the BDI then you would think that the volume of world trade has tanked. But that ain’t so: it’s the price of it that has, the volume is doing just fine.

Comment by Blue Skye
2012-02-05 21:22:40

Interesting insight PB, thank you.

Is there a “wet index”? Did GS ever offload their floating hoards of oil?

Comment by ecofeco
2012-02-05 21:36:09

What am I missing here?

The cost of everything is falling at the industrial level along with wages, yet corporations are making record profits without the end consumer being able to buy due to retail inflation being higher than wages and avg investment vehicle returning less the 5%.

Since we (and all of the 1st and 2nd world) live in a 75% consumer driven economy, WHERE THE HELL IS THE MONEY COMING FROM?

Comment by Blue Skye
2012-02-05 22:43:04

Z I R P. You can’t win if you don’t play.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 20:10:45

Baltic sea index slumps to 25-year low
Wed Feb 1, 2012 12:45pm EST

* Capesize earnings stays below operating cost level

* Main index falls below levels seen during 2008 turmoil

By Jonathan Saul

LONDON, Feb 1 (Reuters) - The Baltic Exchange’s main sea freight index, which tracks rates to ship dry commodities, fell to a more than 25-year low on Wednesday as a slump in cargo business and a mounting glut of vessels battered sentiment.

The overall index fell 18 points or 2.65 percent to 662 points, falling below the 663 point low hit on Dec. 5, 2008 during the financial crisis and its lowest since 1986.

“Despite the return of Chinese players from holidays, fixture activity has so far failed to recover,” RS Platou Markets analyst Frode Morkedal said.

“We note almost non-existent spot bookings in line with the past weeks, likely a result of a wait-and-see stance being adopted by charterers. Tonnage lists continue to expand, postponing any major recovery in rates.

The shipping sector in coming months is expected to face a supply glut and glum economic outlook, including concerns over Chinese demand for raw materials, which will pressure earnings.

Weather and other disruptions in Australia and Brazil last month together with slower restocking due to an earlier Lunar New Year holiday in China this year have hit cargo activity in recent weeks.

Comment by Cantankerous Intellectual Bomb Thrower©
2012-02-05 20:14:21

The U.S. housing market is far from the only slice of the global economy currently suffering from a massive supply glut.

Commodity Shipping Costs Slump to Lowest in Quarter Century on Vessel Glut
By Michelle Wiese Bockmann - Feb 1, 2012 10:16 AM PT

Commodity shipping costs slumped to the lowest in a quarter century as a glut of new carriers overwhelmed demand at a time of slowing global economic growth.

The Baltic Dry Index (BDIY), a measure of costs across four vessel sizes, retreated 2.6 percent to 662 points today, according to the London-based Baltic Exchange, which publishes rates across more than 50 maritime routes. The gauge fell 61 percent this year and is now at its lowest since August 1986. Rates for Capesizes, the largest iron ore and coal carriers, dropped 84 percent since mid-December.

The decline in rates is masking gains in world trade, with London-based Clarkson Plc, the world’s biggest shipbroker, predicting record cargoes of everything from iron ore to oil. The International Monetary Fund expects a third annual gain in world trade as economies recover from the worst global recession since World War II. About 90 percent of trade moves by sea, according to the Round Table of Shipping Associations.

“The biggest problem is that the fleet is continuing to expand like there’s no tomorrow,” said Sverre Svenning, director of research at Fearnley Consultants AS, a unit of Oslo- based shipbroker Astrup Fearnley. “We’ve seen that the imbalance between demand and supply has just kept increasing.”

The fleet of dry-bulk commodity carriers will expand 14 percent this year, compared with a 3 percent gain in seaborne volumes of minerals and grains, according to Clarkson. Yards delivered 146 dry-bulk carriers last month, an all-time high, Svenning said. The IMF cut its 2012 forecast for global economic growth on Jan. 24 to 3.3 percent from 4 percent.

Comment by cactus
2012-02-05 21:35:00

The fleet of dry-bulk commodity carriers will expand 14 percent this year”

these big ships are made in S. Korea

Comment by Professor Bear
2012-02-05 20:17:10

Losses of Japanese Electronic Firms Worsen
By Mariko Yasu and Naoko Fujimura - Feb 5, 2012 6:44 PM PT

Japan’s biggest makers of phones, televisions and chips say they’ll lose about $17 billion this year, about three-quarters of what Samsung Electronics Co. (005930) will spend on research to lengthen the lead over its competitors.

Sony Corp. (6758) more than doubled its annual loss forecast for the year ending March 31 as it announced a new chief executive officer, while Panasonic Corp. (6752) and Sharp Corp. predicted the worst losses in their histories. Their combined losses compare with the $22 billion that Samsung, Asia’s largest consumer- electronics company, said it will invest in capital expenditures.

Japanese companies hurt by a stronger yen, flooding that swamped Thailand factories and weaker demand for their TVs may not be able to regain ground lost to Samsung and Apple Inc. That’s prompting Sony and Panasonic to focus on sectors including medical devices, solar panels and rechargeable batteries in an effort to revive earnings.

“Japan’s consumer-electronics makers are in a total breakdown,” said Masamitsu Ohki, a fund manager at Stats Investment Management Co., a Tokyo-based hedge fund. “They need to compete with ideas, not technology.”

Comment by ecofeco
2012-02-05 21:38:16

I can’t speak for the rest, but Sony needs a complete and radical overhaul of its designs.

Comment by Professor Bear
2012-02-05 20:20:32

Greece is still sliding along the knife’s edge as I type…

Euro Declines as Greek Debt Stalemate Increases European Crisis Concern

By Masaki Kondo and Kristine Aquino - Feb 5, 2012 6:07 PM PT

The euro weakened against 12 of its 16 major counterparts before Greek leaders respond today to demands by international creditors on economic measures.

The 17-nation currency slid versus the dollar with France set to sell as much as 8.5 billion euros ($11 billion) of bills today. The dollar maintained a two-day gain versus the yen before St. Louis Federal Reserve President James Bullard speaks amid speculation the U.S. central bank will avoid easing monetary policy further. Australia’s currency retreated for the first time in five days after government data showed the nation’s retail sales unexpectedly declined.

The movement in euro is directly related to the concerns in the market that Greece may not get an agreement,” said Emma Lawson, a currency strategist at National Australia Bank Ltd. in Sydney. “There is some hesitation in the currency market” ahead of today’s response.

The euro fell 0.4 percent to $1.3111 as of 10:45 a.m. in Tokyo from the close in New York on Feb. 3. It lost 0.4 percent to 100.37 yen. The dollar was little changed at 76.55 yen after gaining 0.5 percent over the previous two trading days.

Greek political-party leaders must provide a first response to demands by the European Union, European Central Bank and International Monetary Fund on economic measures, including wage cuts, by 11 a.m. local time today, a spokesman for the biggest party, Pasok, told reporters in Athens.

Prime Minister Lucas Papademos struck a tentative deal with party leaders to extend spending cuts after euro-area finance chiefs told them an increase in the 130 billion-euro aid package wasn’t forthcoming.
‘Declaration of Bankruptcy’

If we determine that it’s all going wrong in Greece, then there won’t be a new program — and that means in March you’ll have a declaration of bankruptcy,” Luxembourg’s Jean-Claude Juncker, who chairs euro finance meetings, told Der Spiegel magazine in an interview published yesterday.

Comment by aNYCdj
2012-02-05 21:00:02

Some Cheerful news:


Maybe now we Americans will find the guts to fight a religious jihad ..aim at de mosques that’s where the evil is…

Comment by MrBubble
2012-02-05 22:30:52

Americans will get the guts to fight because Israel is threatened? How does that follow? Now, if the Straights of Hormuz are threatened, you may see some guts to fight as gas prices spike. Silly of course, but there you go.

Comment by rms
2012-02-05 22:42:26

Maybe now we Americans will find the guts to fight a religious jihad ..aim at de mosques that’s where the evil is…

Are you going to wear the uniform, DJ? Why should we give a hoot about dueling religious fanatics on the other side of the planet? Did you care about the Hutu v. Tutsi genocide?

Comment by ahansen
2012-02-05 23:04:52

America has plenty of it own religious nutcases calling for the annihilation of all Muslims and blowing up their mosques and homelands. Why do you buy into this cr@p?

Suddenly GS is your friend?

Comment by aNYCdj
2012-02-06 07:06:24

My view is we wasted 4000 american lives in iraq and afghan killed saddam really for nothing….because we were aiming at the wrong targets..

Comment by Professor Bear
2012-02-05 23:21:55

The Wall Street Journal
Shaky Profits Threaten U.S. Stock Rally
Margins Are Slipping as Cost Cutting Gets More Difficult at Already-Lean BY JONATHAN CHENG

One of the legs under the stock market’s rally is getting wobbly.

Even as U.S. stocks reach multiyear highs, some investors are questioning whether the recent strength will persist amid global economic uncertainty. One key concern: The corporate profits that have underpinned rising share prices are showing signs of flagging.

Since falling to its crisis lows in March 2009, the Dow Jones Industrial Average has rocketed 95% higher, thanks in part to a surge in corporate earnings that is now entering its fourth year. On Friday, the Dow hit its highest level since May 2008 after unemployment numbers that pointed …

Comment by Professor Bear
2012-02-05 23:26:04

Other than showing that parents of babies are chronically broke, what does the Huggies index show about inflationary pressure?

Huggies Price Cut Shows Why Bond Market Backs Bernanke QE3

By John Detrixhe and Cordell Eddings - Feb 5, 2012 6:29 PM PT

Ben S. Bernanke, chairman of the Federal Reserve, said that he’s considering another set of purchases. Photographer: Joshua Roberts/Bloomberg

Procter & Gamble Co.’s failure to raise the price of Cascade dishwashing soap shows why investors are buying Treasuries at the lowest yields in history, giving the Federal Reserve more scope to boost the economy.

The world’s largest consumer-products company rolled back prices after an 8 percent increase lost the firm 7 percentage points of market share. Kimberly-Clark Corp. (KMB) started offering coupons on Huggies after resistance to the diapers’ cost. Darden Restaurants Inc. (DRI) raised prices at less than the inflation rate as patrons order more of Olive Garden’s discounted stuffed rigatoni than it anticipated.

Low inflation has continued to boost demand for Treasuries, keeping rates low as President Barack Obama finances a $1.1 trillion budget deficit to boost an economy still growing at rates below the 20-year average. The Fed set an annual inflation target of 2 percent two weeks ago, and policy makers suggested they may conduct a third round of bond purchases under a policy known as quantitative easing.

“Any way you look at it, the Treasury market is still expecting rather benign inflation, and we will be in a low-rate environment for some time,” David Ader, head of U.S. government bond strategy at CRT Capital Group LLC in Stamford, Connecticut, said Feb. 1 in a telephone interview.

Comment by Professor Bear
2012-02-05 23:28:59

White House to push housing plan despite Republican opposition
By Vicki Needham and Peter Schroeder - 02/05/12 07:00 PM ET

The White House has recently promised major steps to boost the housing market and help struggling homeowners, but bruising fights with Congress loom over major pieces of the plan.

The housing market is widely seen in Washington as still struggling in the wake of the subprime mortgage crisis, and weighing down what would be a more robust economic recovery.

In recent days, the White House has made a concerted effort to address the housing sector, rolling out new plans to help homeowners avoid foreclosure and boost the housing sector.

But while the administration can nibble around the edges and implement changes, it needs Congress and regulators to get on board with any major initiatives, and this presents significant challenges.

President Obama is calling on Congress to pass legislation to establish a streamlined refinancing program that would be open to most borrowers, specifically those who don’t hold government-backed loans. The program would permit people who are current on their payments, especially those whose houses are “underwater,” to refinance their mortgages, allowing them to save up to $3,000 a year by taking advantage of lower rates.

By expanding eligibility, about 3.5 million additional borrowers can take advantage of the refinancing program, Housing Secretary Shaun Donovan said earlier this week.

The White House’s main argument is that economists recognize that a broad-scale refinancing effort “is one of the most important things that we can do not only for families and for the housing market but also for the economy more broadly.”

Here is an outline of the president plan.

However, the costs of that refinancing program — between $5 billion and $10 billion — are supposed to be covered by a new tax on the nation’s largest banks, which would need to be approved by Congress.

But with Republicans running the House, any new tax can be assumed to be dead on arrival on Capitol Hill.

House Financial Services Committee Chairman Spencer Bachus (R-Ala.), who would be charged with steering such a proposal to the House floor, dismissed Obama’s proposal as “not a serious plan to help the nation’s housing market.”

“It won’t pass Congress,” said one financial industry executive of the bank fee. “It’s deader than Julius Caesar.”

Despite the opposition, Donovan said at the White House earlier this week that “the very institutions that made many of these mortgages that caused much of the damage that we’re trying to repair ought to participate in helping to solve it, and we think the bank fee is a good source to do that.”

“If Congress believes that there are other ways that we should look at paying for this, I think we would be open to discussions — as the president has done in other situations, we are open to having a discussion with Congress about the best way to make sure the cost of this is covered,” he said.

Regardless of what Congress needs to pass, Donovan said the administration isn’t going to wait on lawmakers to move forward.

He said most of the president’s proposals — including an investigation into foreclosure and other mortgage abuses related to the housing and financial crises, transitioning foreclosed property into rental housing to help stabilize neighborhoods and boost housing prices, and implementing a new so-called homeowner “bill of rights” — can be done without lawmakers.

“Those are steps that we can take on our own,” he said.

“The steps that we’ve already taken to help Fannie Mae and Freddie Mac borrowers refinance, steps that we will take as part of this to help FHA borrowers refinance, the Homeowner Bill of Rights — and I could go on — all of these are steps that we can take and we are taking, because we can’t wait for Congress on these.”

Comment by Professor Bear
2012-02-05 23:32:12

Posted on Sun, Feb. 05, 2012 12:55 AM
Commentary: Federal Reserve deserves closer scrutiny
Glenn Garvin
The Miami Herald

Breaking news: When it came to the collapse of the bubble that touched off the 2008 meltdown of the U.S. economy, the Federal Reserve was a placid herd of clueless blockheads. Less than two years before the housing market turned kamikaze, Fed officials were gathering around conference rooms congratulating one another on what a genius job they were doing managing the economy.

“We are unlikely to see growth being derailed by the housing market,” Ben Bernanke assured the rest of the Open Market Committee, the Fed’s major policy-making group, adding that the nation could expect “a relatively soft landing in housing.” Not that anybody needed much convincing. “We just don’t see troubling signs yet of collateral damage [from housing prices] and we are not expecting much,” declared Timothy Geithner, then head of the Fed’s New York regional bank.

And Janet L. Yellen, boss at the Fed bank in San Francisco, was so pleased with the overall economic picture that she gushed to outgoing Fed chairman Alan Greenspan that “the situation you’re handing off to your successor is a lot like a tennis racket with a gigantic sweet spot.”

All these remarkably unperceptive remarks were made at Open Market Committee meetings in 2006. The reason they’re breaking news more than five years later is that the Fed has only just now made minutes of the meetings public. It’s not like they were lost or anything; the Fed always keeps records of its meetings secret for five years before letting anybody see them.

You might think that when the agency that controls the entire money supply of the United States — an agency that tosses trillions of dollars around like they were rolls of nickels — routinely engages in such pathological secrecy, there would be a public outcry, especially in a Washington press corps that likes to brag about its role as watchdog of American democracy.

Sadly, the truth is quite the opposite. When it comes to the Fed, the press plays more like one of those toy poodles that sits in your lap. Just last week, Washington Post columnist Dana Milbank, who regularly entertains readers with his astounding ability to insert his head further up the digestive tract of the inside-the-beltway establishment than anyone ever thought possible, reached new heights in a paean to the Fed. “Bernanke’s Fed has been a model of good government: apolitical, efficient, brutally effective — and transparent,” Milbank wrote.

Comment by Professor Bear
2012-02-05 23:47:33

Back in 2006, when some HBB posters were questioning the legality of financing automobiles off the principle balance on newly-originated home mortgages, FOMC members were having a laugh a minute over early warning signs the U.S. housing market was about to collapse. I suppose it could have seemed pretty funny to those who were too clueless to realize what they were witnessing.

Inside the Fed in 2006: A Coming Crisis, and Banter
U.S. Federal Reserve, via Reuters

A Federal Open Market Committee meeting on March 28, 2006.
Published: January 12, 2012

WASHINGTON — As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers.

The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”

But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.

We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments.

And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated, an opinion now held by a much smaller number of people.

Meanwhile, by the end of 2006, the economy already was shrinking by at least one important measure, total income. And by the end of the next year, the Fed had started its desperate struggle to prevent the collapse of the financial system and to avert the onset of what could have been the nation’s first full-fledged depression in about 70 years.

The transcripts of the 2006 meetings, released after a standard five-year delay, clearly show some of the nation’s pre-eminent economic minds did not fully understand the basic mechanics of the economy that they were charged with shepherding. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in economic forecasting models that turned out to be broken.

It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania. “You see an awareness that the housing market is starting to crumble, and you see a lack of awareness of the connection between the housing market and financial markets.”

It’s also embarrassing for economics,” he continued.

Comment by Professor Bear
2012-02-05 23:53:21

The old advice to watch out what you wish for seems to have bit the Fed in the back of the neck.

FT dot com
January 12, 2012 6:22 pm
Transcripts show Fed wanted housing slowdown
By Robin Harding in Washington

The US Federal Reserve fretted about a slowdown in housing in 2006, but never considered the possibility that it could cause a financial crisis, according to complete transcripts of that year’s meetings.

Almost every Fed policymaker concluded that weaker housing would cause a slowdown in consumption and investment, but expected that to offset strength elsewhere in the economy, leading to continued growth overall.

Housing is the crucial issue. To get a soft landing, we need some cooling in housing,” said Ben Bernanke, Fed chairman, in his summing up of the economic situation in March 2006. “I think we are unlikely to see growth being derailed by the housing market.”

The transcripts, released on Thursday, highlight the failure of the Fed – one matched by most other central banks, commentators and economists around the world – to spot dangers to the financial system from subprime mortgage lending. That complacency set the stage for the devastating crisis that began in the summer of 2007.

Throughout 2006, Fed officials were aware that a sharp slowdown in house building and sales was under way. “Even the Carolinas are starting to fold over, and the weakest area is California,” said Richard Fisher, Dallas Fed president, at the August meeting. “The big five builders and other homebuilders are reacting as you might expect. They are cutting staff.”

Indeed, a number of Fed officials saw the housing slowdown as welcome news that would help resolve a potential threat to the economy.

“As to housing, we are in fact, as all have noted, squeezing out of that sector the speculative excesses that developed with the low interest rates of recent years – and doing so is unavoidable if we want to correct the sector,” said Thomas Hoenig, then president of the Kansas City Fed, at the September 2006 meeting of the FOMC.

Fed officials made special efforts to talk to housebuilders, reflecting their fears about investment and consumption, but there is little evidence that they looked at where the credit to support the previous housing boom was coming from.

“Predatory lending is rearing its head at the lower end of the scale, and it’s something we have to continue to watch for. However, before I leave housing, let me just say that the bottom line is that overall mortgage credit quality is still very, very strong. We’re seeing predatory lending only in pockets of the market,” said Susan Bies, another governor, at the September meeting.

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