Bits Bucket for March 12, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Hope I’m the only looser who can’t sleep.
I hope I’m not the only looser who can’t spell. (Just funnin’ ya — English spelling is a nightmare…)
Just remember: Boozers and losers goose loose choosers. This sentence illustrates the fact that English spelling is bat$h!t crazy. Remember that rule, and everything else will make sense.
“Remember that rule, and everything else will make sense.”
Know weigh!
Whey!
Bunch of loosers.
I am a tightener.
Yes, but the double o spelling of “loser” is reserved for use only in online reader comments on Denver Post articles about Occupy Wall Street: “occupy a job and a shower loosers!”
“Luxurious floating resort scheduled to open this month”
http://www.tampabay.com/news/business/tourism/luxurious-floating-resort-scheduled-to-open-this-month/1218842
That’s a guaranteed success right there.
From the article: “Open to members only”
Whats up with that? The article goes on to explain it was only $25 and is now $100 per year. In a similar manner, there is what the Japanese call a “love hotel” in my state (whirlpools in every room, supposedly romantic decor although to my male eyes it just looks dark and cluttered, soundproofed walls, no children allowed on premises, advertised as The Place for couples to visit to get it on, etc) that advertises heavily around valentines day (duh) and it also has a (cheap) membership requirement.
So does anyone in the biz or otherwise knowledgeable know why some places like to have annual memberships that would not obviously inherently require a membership?
If they charged $10K/yr like a country club there is obvious conspicuous consumption going on where the whole point is everyone knows everyone there is in the social class of big spenders (high expense column on the income statement, not necessarily large balance sheets, classic HELOC wannabe), but $100/year? Obviously its not to reduce the bill, both this place and my local “love hotel” charge several hundred per night, so annual up front money is not going to save much money on the daily rate…
My best guess is its some form of information gathering, like you’re not allowed to film your guests (or have security monitoring cams) in a “hotel” but in a private club its “OK”… or they are not allowed to run credit checks and criminal background checks at a “hotel” but at a “private club” they can. I assume since its unusual its probably designed to rip off the consumer, but I can’t figure out exactly how.
As you guess, being a ‘club’ often allows you to do things a business open to the public cannot.
BTW- Are you sure those love hotels aren’t just brothels? That’s what they sound like to me.
“Are you sure those love hotels aren’t just brothels?”
Hmmmm all the advertisements are all about romantic couples slipping away for a few romantic hours together… I donno if they care any more or less about the relationship status of the couples than any other hotel …
Another Austrian School economist against democracy- it hinders capitalism, dontchaknow.
Slate: What lies ahead for China politically?
[Peter] Schiff: I think there will ultimately be more freedom than there is today. Will China ever become a one man, one vote democracy? Hopefully not, for the sake of the Chinese. Doing so has certainly not served our interest. We enjoyed a lot more freedom and prosperity when we were less democratic. In the 19th century we were quite undemocratic in the way government ran, and we benefited from that lack of democracy. But as we became more democratic, we grew less free and therefore less prosperous. If they’re wise, the Chinese won’t follow that example. They’ll try to model their government after what America used to be, before we screwed it up.
http://www.slate.com/articles/news_and_politics/intelligence_squared/2012/03/why_peter_schiff_will_say_china_does_capitalism_better_than_america_at_the_march_13_slate_intelligence_squared_debate_in_new_york_city_.html
The Chinese already have the new model for the future: corporate communist capitalism.
A model we are striving toward as quickly as possible. It’s code name is: New World Order.
Don’t you feel sometimes like we’re living in some sort of Sci Fi nightmare movie, a la Bladerunner?
LOL! We need tyrants who are above the law in order to be free. Orwell would have been proud!
A key purpose served by wars and financial crises is to provide national leaders political cart blanche. “It’s a crisis! None of the usual rules apply!!”
Here’s something interesting, if you enter problem-reaction-solution in wikipedia, you get this:
‘Problem-reaction-solution
Redirect page
Jump to: David Icke’
http://en.wikipedia.org/w/index.php?title=Problem-reaction-solution&redirect=no
Hmm, so poking around:
‘Problem Reaction Solution (Latin: Ordo ab Chao) is a mass mind control system. It is used to make changes to the law that the citizens would not accept otherwise.’
Create a problem
Terrorism, financial crisis, etc.
Manufacture a reaction
Let the mainstream media only broadcast/print the side of the problem you want to show
Provide a solution
wars, corporate tax-cuts, welfare budget cuts, etc.’
http://ethics.wikia.com/wiki/Problem_Reaction_Solution
Very classic technique.
“It’s different this time!”
Seems there is plenty of moral hazard for politicians to manufacture crises which provide opportunities to prove their leadership effectiveness…
‘provide opportunities to prove their leadership effectiveness’
Or:
We need a pretext for giving hundreds of billion$ to corporations.
If we don’t give hundreds of billion$ to corporations, there will be a global depression.
Corporations receive hundreds of billion$, global depression is averted.
So, leadership effectiveness is icing on the cake.
barney frank was very good at it.
Ben you didn’t get into the David Ickes claim about the lizard people: “tall, blood-drinking, shape-shifting reptilian humanoids from the Alpha Draconis star system, now hiding in underground bases, are the force behind a worldwide conspiracy directed at humanity.” He did say that George W. Bush and Queen Elizabeth II were lizard people as well as Don Rumsfeld.
http://en.wikipedia.org/wiki/Reptilians
I know who he is, I just thought it odd that a search for those terms was automatically redirected to him! I also looked through Hegel’s wiki page. No mention of P-R-S that I could find, and I searched the whole page by key word.
…and then there was Bernays.
Sounds like someone has watched too much Doctor Who.
Ummmmmmm
What was the date Aliens were supposed to invade earth in the X files????
Be tyrannized by one guy, or tyrannized by the feeb majority… tough choice.
Be tyrannized by one guy, or tyrannized by the feeb majority… tough choice.
Farewell to the republic’s concept of liberty.
Oh, and seriously? using the 19th century as an example of ANYTHING GOOD?
What have been saying about the PTB wanting to take us back to the 19th century?
Embrace the Robber Baron!
I honestly think the Robber Barons of old provided more utility to the country than the billionaires we mint today…
So we have robber barons ++?
But yeah, I find the race back to 1880 to be somewhat unnerving. Even more so as millions support the concept, romanticizing a situation that never existed.
100%
I concur, InCO…
using the 19th century as an example of ANYTHING GOOD?
Ah, but just think of how free a slave plantation owner was! Those were the days, my friend, the days of real freedom- the kind our oligarchs want.
Since none of us were alive then, I think people who would like to go back there are assuming it would be kind of like the 50s except without the cars.
Malaria killed my great grandmother in the late 1800s.
And your great-grandmother was probably an “ancient” 60 years old.
Actually, I think she was probably in her early 30s. My grandfather was about 10 when she died.
What do we have to show for all the various asset price stabilization measures in play?
Confused investors with very cold feet.
And confused pundits who don’t seem to realize that extend-and-pretend measures currently in play have the effect of leaving the crisis unresolved.
March 9, 2012 6:00 PM
Why are Americans avoiding stocks? Ask a shrink
NEW YORK — The headlines say the financial crisis is behind us. The Dow is back to pre-financial crisis levels. Layoffs are the slowest since the financial crisis, and car sales the highest since the financial crisis.
So why are Americans still too scared to get back in the stock market?
Because all they hear is “financial crisis.”
Every comparison to 2008, even a comparison that’s supposedly good, stirs memories of 2008. For some people, it rekindles the fear of losing a job or a house. For others, years of retirement savings swallowed by a plunging stock market.
So say the experts in the budding field of behavioral finance. Professional investors and money managers may be baffled that Americans are shaking off the good news. But people with a background in psychology are hardly surprised.
A broad measure of the stock market, the Standard & Poor’s 500 index, is up more than 20 percent from last October. The index has more than doubled since March 9, 2009, the low point for stocks during the Great Recession.
But everyday investors refuse to jump in. They pulled $19 billion from funds that invest in U.S. stocks in December, according to the Investment Company Institute, and $2 billion more in January.
“In the old days, if there was a market rally, people would call and ask to put more money in. They felt they were missing the party,” says Deborah DeMatteo, an independent wealth manager at 10-15 Associates in Goshen, N.Y.
This time, investors seem more than happy to miss the party.
“Now, people call and ask, ‘When is it going back down?‘” DeMatteo says. “There’s a sense of doom.”
…
“So why are Americans still too scared to get back in the stock market?”
Maybe they don’t want to get their arses burned, the way that many did in the September 2008-March 2009 episode?
“So why are Americans still too scared to get back in the stock market?”
Ummm…isn’t it hovering around 13K? I wouldn’t call that “scared to get back in”.
I would call that….CANNONBALLLLLLLLL!!!!!!!!!!!!!
“experts in the budding field of behavioral finance.”
That one sentence tells me all I need to know.
“But everyday investors refuse to jump in”
I’ve read that individual investors have been taking money out of the stock market since 2008. Yet it has gone up, up, up.
I’m just guessing that it has been flat as measured against things we buy like food and fuel, and that the half life of a retirement savings account is way down. Thank you Fed for waging war on us on behalf of the big banks.
Confused investors with very cold feet.
Bernanke the Magician is all smiles on Market Watch this morning.
Or maybe because… it’s rigged?
I call BS
They are afraid because they know markets and stocks don’t move based on fundamentals. They move based on manipulation. FED Hedge fund CEO you name it.
Pshaw… I can stand up against dozens of supercomputers trading in a rigged market millions of times a day. Dollar cost averaging makes me invincible!
They pulled $19 billion from funds
If you’re a stockbroker on Wall Street, this would be called “profit taking,” a smart thing to do.
If you’re an “everyday investor” it’s called “being too scared to get in.”
That tells ME all I need to know. Wall Street ran out of OPM, but J6P figured out the game and won’t give them anymore. Wall Street is calling J6P a coward in a desperate attempt to extract the OPM they so desperately need.
Data point:
Bain or blessing?
The buy-out industry is under attack for destroying jobs. Its returns to investors are the real problem\
The Economist
Jan 28th 2012 | LONDON AND NEW YORK | from the print edition
“Prices have also remained painfully high. Last year the average purchase-price multiple for firms bought by private equity was 8.4 times earnings before interest, tax, depreciation and amortisation, higher than it was in 2006. That’s because the industry is sitting on $370 billion in unused funds, or “dry powder”, that firms need to spend soon or risk giving back to investors, which means there is fierce competition for deals. Many transactions are between private-equity firms, which does little good to investors who have placed money with both the seller and the buyer.”
http://www.economist.com/node/21543550
This poll reminds me of the prank my older son sometimes plays on his little brothers: “Do you want me to hit you? No means yes and yes means no.”
It’s unclear whether the question to be answered is “Will Greece need a third bailout?” “…is this the end of it?” or “Will it be third time unlucky for Greece?” The second and third questions seem to ask the opposite thing from the first.
It’s worth remembering that the UK is where Monty Python originated.
Business
Eurozone crisis
Will Greece need a third bailout?
Greece has won enough backing from its private-sector creditors to clinch its second bailout package - but is this the end of it?
guardian.co.uk, Friday 9 March 2012 05.24 EST
Ancient Parthenon temple, Athens, Greece
Will it be third time unlucky for Greece? Photograph: Petros Giannakouris/AP
81.7% Yes
18.3% No
Poll closes in 7 days
“Do you want me to hit you? No means yes and yes means no.”
Excellent home school program.
No means yes…
I once knew a lady like that.
“I once knew…”
Presumably in the Biblical sense?
New$ from “Thee OC!”
13 outta 13, … pretty accurate inventory data being to$$ed about, eh?
Published: March 11, 2012
Where are distressed homes 100% of listings?:
By JONATHAN LANSNER
All 13 of Portola Hills’ 13 listings were either foreclosures or short sales. So distressed properties were 100% of supply of homes for sale — highest in Orange County and mor ethan triple the 30.4% average found countywide. Stanton was second at 63.6% of listings; and Rancho Santa Margarita was next at 58.3%
Overall, ReportsOnHosuing found that homes in Lake Forest sell faster than the countywide pace while its listings have a higher share of distressed properties than the rest of Orange County.
The overall Lake Forest home market — older parts of the city plus Foothill Ranch and Portola Hills — had 156 residences listed for sale as of March 1 with 123 new deals opening in the past 30 days. That means, by one theory, it would take 1.27 months to sell all inventory at current pace of new escrows in the Newport region vs. 2.02 months countywide.
Lake Forest communities combined had 89 residences listed that were either foreclosures being resold or short sales, where sellers owe more than the home’s value. So distressed properties were 57% of supply of homes for sale vs. 30.4% countywide.
I had mentioned before the house next door that was listed last year for $ 229 K reduced to $ 224 K then taken off the market. Last year there were lots of delusional people with too-high asking prices. The market was pretty dead in the latter half of the year.
This year it was re-listed about 3 weeks ago for $ 199 K and a sold sign went up last week…amazing what happens when people price to sell..Several other houses on my street are for sale, and are starting to sport “New price” or “Price reduced” signs. One of them now has a sold sign.
And I live in one of NB’s supposedly “hot” housing markets.
According to the real estate association, prices in NB will be flat for the next two years. I guess a 10% drop is considered flat.
10% isn’t all that much of a haircut, considering that in some markets they got year after year of 20%+ gains not that long ago.
Not in NB…we bought our house in 1988 for $ 98 K. We could probably list today for $ 205 K (we have a garage, next door neighbour doesn’t, otherwise houses are pretty similar), which is about 3.2 % appreciation per year.
What are the medians in your neck of the woods (NB = New Brunswick?)
One Republican’s mortgage relief is another Republican’s taxpayer-funded welfare payment.
Despite his hands-off policy, Romney criticizes Obama for not stopping foreclosures
Associated Press
Mitt Romney speaks to supporters at his election watch party Tuesday after winning the Michigan primary in Novi, Mich.
By Karoun Demirjian (contact)
Tuesday, Feb. 28, 2012 | 8:51 p.m.
Sun Archives
When he was campaigning in Nevada, Mitt Romney said he thought the federal government should steer clear of the housing crisis, letting the free market work, even if that meant allowing things “to bottom out.”
But in his victory speech after the Michigan primary Tuesday night, Romney was openly critical of President Barack Obama for not doing more to “tackle the housing crisis” during his first term — especially when he had a supermajority in the Senate to help him.
Romney’s comments came as he rattled off suggestions of policy endeavors in which Obama might better have spent his time in the early days of his presidency, instead of tackling a health care bill and “putting us on a path toward debt and deficits and decline.”
It’s a standard part of his stump speech. The nod to housing, however, is not.
The idea that Obama should have tackled housing more forcefully is a refrain often voiced in hard-hit states like Nevada, even by some Democrats. But it’s a curious paradox for Romney, who has stuck by his assertion that a market free from government intervention is best to restore normalcy to homeowners, lenders and mortgages since he first made the comments to the editorial board of the Las Vegas Review-Journal in October.
Romney’s hands-off approach to housing is the one area of his policy platform with which many Nevada Republicans, even some who endorse him, have either taken issue or agreed to disagree.
That legacy made Romney’s comments Tuesday night all the more surprising.
But Romney’s sudden turn to suggest the government ought to have taken a far stronger role tackling the housing crisis was likely more of a sign that he’s feeling good enough to go off-script on the campaign trail, rather than an indication he is re-writing his housing policy.
…
“But Romney’s sudden turn to suggest the government ought to have taken a far stronger role tackling the housing crisis was likely more of a sign that he’s feeling good enough to go off-script on the campaign trail, rather than an indication he is re-writing his housing policy.”
It’s also an indication that armchair resolutions to financial crises are far easier than real-world solutions.
He was against it before he was for it.
I’m guessing where he stands currently depends on which direction the political wind is blowing.
“When he was campaigning in Nevada, Mitt Romney said he thought the federal government should steer clear of the housing crisis, letting the free market work, even if that meant allowing things “to bottom out.”
But in his victory speech after the Michigan primary Tuesday night, Romney was openly critical of President Barack Obama for not doing more to “tackle the housing crisis” during his first term — especially when he had a supermajority in the Senate to help him.”
…and there you have the Republicans, in a nutshell.
May we also attribute to Ms. Turkey all the attributes of her party politic headline players?
Perhaps Ms. Turkey was using Republicans as a shorthand for Republican candidates and did not intend to include all voters who identify as Republicans.
I sometiimes use that shorthand. But perhaps I should be more careful to avoid giving offense to people I respect.
The list is long.
No doubt. These are strange days for all of us.
The only think we can count on Romney doing if elected is:
1) More tax cuts for the rich.
2) More bailouts and welfare for corporations and banks.
Yep. Obama will be slightly less bad on that score.
Neither will do anything about the deficit that would require any sacrifice by those now over 55.
Neither will do anything about the deficit that would require any sacrifice by those now over 55.
It’s going to be interesting to track how this meme develops.
For example, will 55 still be the magic number next year? How about the year after that?
If it takes a few years to get the meme sufficiently entrenched, and then it sticks in people’s heads that that is the right number for some number of years, then I’ll be within a handful of years to being included in the “protected” class.
“If it takes a few years to get the meme sufficiently entrenched, and then it sticks in people’s heads that that is the right number for some number of years, then I’ll be within a handful of years to being included in the “protected” class.”
This is where I find myself. When Bush started talking about making changes for those under 55 back in 2005 or so, I was on one side of that divide and my husband was on the other. Now we are both solidly in the “protected” class. If they wait another 7 years to implement a split policy, all of the boomers will be on the older side of 55. At which point, it seems moot to me.
Nah. It will happen under Obama.
I am hopeful that Dems will stop all these nonsense when they do not have presidency any more.
“I’m-Thee-Decider!” was a repubican motto creation from what eyes recall.
heheeheeheeeheee
“I am hopeful that Dems will stop all these nonsense when they do not have presidency any more.”
I have read this several times and I can’t figure out what nonsense you are talking about and why the Dems should stop the nonsense when they no longer have the presidency.
OWS. No Democratic Prez, the whole democratic party will go OWS. That could be the only saving grace.
Then again, no statue of limits and with this $25 billion settlement, the dems have sold everyone out.
Ellen, you are smart. Is it statue or statute of limitations?
statute
So this year’s race will be between a very liberal democrat and a very, very, very liberal republican. Ugh.
Between a moderate Republican and a whacko liberal Republican, as I see it.
Come on turkey lurkey, I have very negative feelings about Mitt Romney but Bill Clinton was the undeniable master at this skill. My husband and I would laugh and laugh that none of those happy constituents ever appeared to listen to any of this other speeches where he’d also tell that group exactly what they wanted to hear.
Oh they ALL are, but it’s the Repubs who have thrown J6P under the bus the most, over the last 30 years.
Just to clarify, I’m no fan of the Dems, but the Repubs are downright sociopathic.
Are there any laws against lenders giving owners of $1m+ homes more time to work out their foreclosures? I would think summarily kicking poor families lacking legal resources to the curb while giving $1m+ homeowners years of payment-free living to work out their situations would be illegal, but as Polly and other attorneys will readily point out, I am pretty much a legal ignoramus.
Million Dollar Foreclosures Rise as The Rich Walk Away
Thursday, February 23, 2012
By Brianna Johnson
America’s wealthiest families are losing their homes due to foreclosure at a very fast rate. A lot are voluntarily giving up their mansions. Over 36,000 homes valued at $1 million or more were foreclosed on — or at least served with a notice of default — in 2011, according to data compiled by RealtyTrac, which tracks foreclosures. Though it’s less than 2% of foreclosures nationwide, this represents a larger impact of foreclosing activity than in the years before.
It’s like the rich are just abandoning their homes. Even mega mansions in some of America’s wealthiest neighborhoods are losing their homes to this housing crisis.
“These properties are accounting for a bigger piece of the foreclosure pie,” Daren Blomquist, vice president of RealtyTrac, said. The share of foreclosures on properties valued at $1 million or more has sky rocketed by 115% since 2007. The share of multi-million dollar foreclosures bumped up to 273%. The share of foreclosures on mid-range properties value between $500,000 and $1 million went down by 21%.
“Until recently, many homeowners at the high end of the housing market were able to postpone the foreclosure process,” Blomquist explained. “With other assets and alternatives, they had more financial means to hold out against default.”
“In addition, lenders are typically more amenable to working with homeowners that have other resources,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell. His real-estate firm in Miami represented 9% of all foreclosures last year.
…
America’s wealthiest families are losing their homes…
If they were wealthy, they wouldn’t be losing their homes. These are faux-wealthy. A more honest opening sentence would be “America’s biggest borrowers are losing their homes…”
If they were wealthy, they wouldn’t be losing their homes.
+1 Wealthy isn’t a huge payment obligation.
I think that most of the non discriminatory laws pertain to granting loans and not so much enforcing the bank’s right to foreclose.
So banks have free rein to give their best customers four our more years of payment-free living to work out their foreclosures, but can kick poor families out on a moment’s notice?
Seems unfair, but then again, I am no legal expert.
No, they have to foreclose more slowly on people who raise legal arguments against the proceeding than on people who don’t do anything to prtect themselves. The former may be richer than the latter.
And where on earth do you get the idea that being poor is a protected class under the law? It isn’t. Anti-discrimination laws mean you can’t refuse to rent (for example) to someone because they are black, or muslim, or from Denmark. You are allowed not to rent to rent to them because they have halitosis, or an ugly car or a mullet or no money.
I find your concept of the legal definition of discrimination to be fascinating.
No, they have to foreclose more slowly on people who raise legal arguments against the proceeding
FWIW, doesn’t that cost money? Lawyers aren’t exactly cheap, are they?
Then again, maybe it costs a lot less than the monthly nut on a million $+ mortgage?
Exactly. Bear is arguing that there is discrimination or some giant planned coporate give away to the rich when all that is happening is that they have enough cash to hire someone to defend them. The person who has enough cash to hire a lawyer will get more time than they otherwise would have. On average that means that the people with lawyers will get more time than the people without. So the rich people will get more time than the less wealthy.
Seriously. This country has pretty much always had the best “justice” system money can buy. A few lucky folks who get defended by my sister-in-law notwithstanding, you get a better result when you can pay for it. OJ’s defense team invented a whole new subset of forensic science to prove the cops tampered with the evidence (put blood on his socks at a time when his foot was not in the sock). Dershowitz is pretty sure that was the one key thing that turned the jury against the prosecution. I tend to agree.
So whats you take Polly on OJ? guilty or not?
And where on earth do you get the idea that being poor is a protected class under the law? It isn’t. Anti-discrimination laws mean you can’t refuse to rent (for example) to someone because they are black, or muslim, or from Denmark. You are allowed not to rent to rent to them because they have halitosis, or an ugly car or a mullet or no money.
Precisely, polly. Thank you for weighing in on this. I tried to explain this to PB the other day, but maybe it will have more weight coming from an attorney.
I’m not sure that anti-discrimination laws apply here. Even if they do, “low income” isn’t a protected class.
‘…OJ’s defense team invented a whole new subset of forensic science to prove the cops tampered with the evidence (put blood on his socks at a time when his foot was not in the sock). Dershowitz is pretty sure that was the one key thing that turned the jury against the prosecution.”
The jury makeup (9 black, 1 hispanic, 2 white) had no bearing on the outcome.
That demographic group might have been slightly easier to pursuade, but if the defense shows you absolute proof that the cops added blood to the socks after they took hold of them, wouldn’t you start to doubt that the cops had the right guy? Because of the science, adding blood meant that there was no proof at all that there was blood on them before. None.
The state has to prove their case beyond a reasonable doubt. I’m pretty sure I would have had a reasonable doubt after finding out that it was pretty much 100% guaranteed that the cops tampered. The prosecution team probably didn’t even know or they would not have introduced the socks. This is a price we all pay when cops tamper with evidence. Hopefully, it keeps them from doing it most of the time.
My take on OJ? He did it. But I think the jury made the right decision or at least a perfectly valid one. Cops seriously messing with evidence, especially blood evidence, is more than enough to raise a reasonable doubt. The LAPD basically threw away the case and the prosecution didn’t help matters.
“I find your concept of the legal definition of discrimination to be fascinating.”
I find fascinating in turn your accusation that I said the poor were a protected class.
hud.gov
Affordable Housing - CPD - HUD
The HOME Program helps to expand the supply of decent, affordable housing for low- and very low-income families by providing grants to States and local governments called …
Low Income Housing Tax Credit - HUD
Memorandum Of Understanding Among The Department Of The Treasury, The Department Of Housing And Urban Development, And The Department Of Justice
Affordable Housing Application Information - Affordable Housing …
Affordable Housing Programs administers three separate programs designed to make safe, quality housing available to low-and moderate-income households. While HUD does …
HUD’s Public Housing Program/U.S. Department of Housing and Urban …
WHAT IS PUBLIC HOUSING? Public housing was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with …
Eligibility - Affordable Housing - CPD - HUD
To be eligible for consideration under the LIHTC Program, a proposed project must: Be a residential rental property. Commit to one of two possible low-income …
FHA ANNOUNCES PILOT PROGRAM TO ACCELERATE FINANCING OF LOW-INCOME HOUSING TAX CREDIT PROJECTS Four cities selected to test new streamlined process to cut approval …
Rental Help: South Dakota - HUD
Veterans Supportive Housing The recent award of nearly a half million dollars means … HUD helps apartment owners offer reduced rents to low-income tenants. To apply …
Affordable Housing Programs In the State of Alabama - HUD
Balance of the State Alabama Housing Finance Authority (334) 244-9200 : 100 PERCENT FINANCE PROGRAMS: United States Dept. of Agriculture Rural Development
Find Your Local Public Housing Agency (PHA)
Housing Choice Vouchers allow very low-income families to choose and lease or purchase safe, decent, and affordable privately-owned rental housing.
The LIHTC Program is an indirect Federal subsidy used to finance the development of affordable rental housing for low-income households. The LIHTC Program may seem …
The difference between poor and rich people after being foreclosed?
The poor are much more likely to find themselves on the street, or in a homeless shelter, or living under a bridge with God-knows-who as neighbors.
Last time I heard, nobody thought any of those options led to positive outcomes, and preventing those results was in the public’s best interest.
But then, I’m just a worthless, parasitic, Socialist.
The point of my lengthy post above relates to a very short legal question, which is whether it is possible to institute myriad housing policies aimed at low-income families without inadvertently creating a protected class for them.
I have no idea — just find this an interesting area for discussion.
“A few lucky folks who get defended by my sister-in-law notwithstanding,…”
Sounds like your SIL and my sister are in the same biz…
You can’t “create a protected class” for purposes of the various discrimination laws by creating a few government programs. They don’t have anything to do with each other.
The closest some discrimination laws come to protecting the poor is to prohibit discrimination based on source of income, so that a person who couldn’t afford an apartment on her own salary might be able to afford it if you count her salary and child support payments, but that does not amount to forbidding discrimination against the poor.
Seriously, how does a government program to provide housing for the poor negate the very limited nature of the protected classes that can’t be discriminated against in housing and provision of services generally held out as available to the public, etc.? How? Does it have some effect on the societal results? Yes. Is that result the same result that would happen if you really couldn’t discriminate against people who have no money when renting? No, not at all.
Do the programs provide some protection from homelessness/really bad housing situations (only if you manage to get off the waiting list as they are rarely fully funded) to poor people? Yeah. They do. But those programs don’t change other laws.
And I think you know that. You are purposefully pretending to think that one has some effect on the other. Why? Is it fun? Why is pretending to be ignorant fun?
Good job CIBT. My jaw dropped when I read the comment that low income people are not a protected class.
And you, Bill, don’t have any idea what “protected class” means. That is fine. You don’t have to unless you get involved in one of the businesses where it is relevant. But it isn’t the hallmark of a well-educated citizen to think that a few affordable housing programs are relevant to civil rights protections.
My jaw dropped when I read the comment that low income people are not a protected class.
I am becoming convinced that a lot of people, particularly conservatives, don’t understand what ‘law’, and the ‘rule of law’, means. You see it in the ‘just throw the deadbeats out’ demands, that ignore the fact that in many instances the law does not allow that. Or that the banks are choosing, legally, not to do that. When confronted with these facts, they say ‘change the law, throw them out anyway’. They seem to think that the law is whatever they desire it to be at that moment- whatever seems ethical in that situation- and if not, it should be immediately and retroactively changed to agree with their present desire.
Here, we see another confusion- the idea that because a government program helps a group of people, that means that group is a ‘protected class’, and cannot be discriminated against based on their membership in that class. It’s a Rush-style combining of two very different things: on the one hand, laws that protect members of some groups from discrimination, and on the other, programs designed to help a perceived-to-be-needy group. If the government helps the victims of a hurricane, it doesn’t mean that hurricane victims are a protected class.
“…the idea that because a government program helps a group of people, that means that group is a ‘protected class’, and cannot be discriminated against based on their membership in that class.”
I just asked an honest question, which seems to have touched a few nerves.
“Protected class is a term used in United States anti-discrimination law. The term describes characteristics or factors which can not be targeted for discrimination and harassment.”
So how are myriad government programs which discriminate in favor of one group, which is not a protected class, legal?
Or is my definition of discrimination wrong, too?
dis·crim·i·na·tion
noun \dis-ˌkri-mə-ˈnā-shən\
Definition of DISCRIMINATION
…
3a : the act, practice, or an instance of discriminating categorically rather than individually
…
The programs you reference are not discriminatory based on the legal definition. Your question is based on some other definition of the word which is irrelevant. Do you store a bass guitar in water because it is a fish? Pretending that legal definitions are the same as your preferred definition is just as silly. My uncle and his partner are married in the state in which they live and in the church they attend. But they aren’t married when they file their federal taxes. Legal definitions. Not the same as other definitions, even legal ones in other jurisdictions. Not the same.
*CRICKETS*
“Do you store a bass guitar in water because it is a fish?”
Thanks. Now I finally get it.
*CRICKETS*
Hmmph. I already answered your question, if you’d bothered to read- and think about- my post.
“If the government helps the victims of a hurricane, it doesn’t mean that hurricane victims are a protected class.”
Giving assistance to a group, even when done at the expense of the rest of us, does not mean that group is a protected class, in terms of discrimination, or else any recipients of government assistance- which we almost all receive at some time in our lives- could be considered protected classes.
“If the government helps the victims of a hurricane, it doesn’t mean that hurricane victims are a protected class.”
Low income folks are somehow analogous to hurricane victims?
a woman needs a man like a fish needs a bass guitar.
Low income folks are somehow analogous to hurricane victims?
Yes. Being lower income isn’t a fixed class, it’s a class which people enter and leave, much like victims of natural disasters.
“Being lower income isn’t a fixed class, it’s a class which people enter and leave, much like victims of natural disasters.”
So what I take from all of the above helpful legal advice is that it is OK to discriminate against the poor because they are not part of a protected class. Is that a reasonable conclusion?
“Pretending that legal definitions are the same as your preferred definition is just as silly.”
I have to keep reminding myself that attorneys have their own special definitions of commonly-understood words in the English language dictionary.
Bill Clinton and the Meaning of “Is”
Posted Sunday, Sept. 13, 1998, at 9:14 PM ET
Years from now, when we look back on Bill Clinton’s presidency, its defining moment may well be Clinton’s rationalization to the grand jury about why he wasn’t lying when he said to his top aides that with respect to Monica Lewinsky, “there’s nothing going on between us.” How can this be? Here’s what Clinton told the grand jury (according to footnote 1,128 in Starr’s report):
The distinction between “is” and “was” was seized on by the commentariat when Clinton told Jim Lehrer of PBS right after the Lewinsky story broke, “There is no improper relationship.” Chatterbox confesses that at the time he thought all these beltway domes were hyperanalyzing, and in need of a little fresh air. But it turns out they were right: Bill Clinton really is a guy who’s willing to think carefully about “what the meaning of the word ‘is’ is.” This is way beyond slick. Perhaps we should start calling him, “Existential Willie.”
…
Bill Clinton and the Meaning of “Is”
Nice reductio ad absurdum…
Americans should watch out for their wallets when it comes to any policy involving Megabank, Inc.
FT dot com
February 16, 2012 10:02 pm
US taxpayers lose over banks deal
By Shahien Nasiripour in Washington
The $40bn foreclosure-abuse settlement reached last week between regulators and big US banks gave President Barack Obama another shot at resuscitating his three-year-old initiative to help troubled homeowners.
As details of the agreement dribble out, it appears the deal may also give big banks reason to celebrate and mortgage bond investors and taxpayers reason to pause.
The agreement in principle between state prosecutors, federal agencies and five leading US banks – Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial – allows the lenders to take advantage of the federal home affordable modification programme when reducing distressed borrowers’ loan balances as part of the settlement, officials said.
Hamp partially reimburses owners of mortgages for losses incurred on writedowns and it pays servicers for averting foreclosures.
Shaun Donovan, the US housing secretary, has said the banks will forgive more than $35bn in mortgage principal and interest as part of their punishment for repossessing homes based on faulty documentation and practices – including the use of “robosigners”, who rubber-stamped documents without checking their accuracy.
“America’s biggest banks – banks that were rescued by taxpayer dollars – will be required to right these wrongs,” Mr Obama said of the settlement last week. The accord grants the president a fresh chance at tackling an intractable problem – the slow recovery of the US property market – with his re-election bid on the horizon.
…
US taxpayers lose over banks deal
I’m not clear on how the taxpayers lose, except through the convoluted logic that since some of the banks were rescued by the gov, theoretically with taxpayer money, any punishment of those banks is punishment of taxpayers. But I don’t think that makes sense. The taxpayers don’t own those banks. We probably should, but we don’t.
And why don’t we own them?
Because our government has more in common with the banksters, than they do with Joe Q Citizen.
American should watch out for their wallets every day.
There isn’t one single week that goes by without some business trying to ripped me off.
This weekend is was the gas station shorting me gas.
The week before it was my old phone company trying to bill me for the month after I switched to another carrier.
The week before that, another gas station shorting me on gas.
The week before that… my mechanic not wanting to honor some warranty work. (in their defense, the owner wasn’t there and it was his employee. the owner bends over backwards when it comes to customer service)
It goes on and on every day. Megabank is just the most highly visible of our rip off culture.
The week before that, another gas station shorting me on gas.
How do you tell? Are you saying that based on having dispensed more gallons than the spec sheet shows as the tank capacity?
I know my gas gauge to the half gallon based on all conditions as well as mpg based upon all conditions. I calculate it on every fill up.
Yes, I was shorted.
I know my gas gauge to the half gallon based on all conditions as well as mpg based upon all conditions.
How do you detect or measure a head-wind when you are driving?
Winds can have a dramatic effect on mileage.
I know my gas gauge to the half gallon…
+1 Volume is volume regardless of fuel economy.
LOL! A 16-gallon tank can be read to within a half gallon with a gauge that has what, five marks (including empty)?
Hopefully you’ve called your state’s department of weights and measures. Your taxes are paying their salaries so you may as well use them.
Decades of driving and doing these calculations.
I know a windy week will affect my mileage but one windy day will not.
I know that temps will affect my gas gauge.
I know that after heavy rains, gas is more likely to be contaminated.
I know that maintenance is important and 5lbs difference in my tires can too.
This isn’t rocket surgery.
I did indeed call them BIll.
14 gals and yes, it’s easy. I watch the gauge all the time. I know that accelerating moves the needle one way and decelerating the other and well as what inclines do.
This is EXACTLY why I watch my gauge and the calculation weekly.
This society will STEAL nickles and dimes from you every day if you aren’t watching. And they add up.
I have two recipes from eating out and they don’t square with my on-line balance sheet. It’s in my favor, so I can’t figure out the scam. I think the wait staff is skimming extra cash that won’t show up in the electronic records of the restaurant.
It’s in my favor, so I can’t figure out the scam. I think the wait staff is skimming extra cash that won’t show up in the electronic records of the restaurant.
Sometimes it’s just an honest error.
If the error was in your favor, there was ZERO extra money for the wait-staff to skim! Either the restaurant or the staff came out behind—e.g. the opposite of skimming.
Mill hill houses in the upstate SC area can go for 20K or less . The most important thing about these is Location , Location, and Location . I won’t consider one That is not safe to visit 24-7.
Had an interesting thing happen last week when we offered 45% of asking price on a bank forclosure , The Real estate agent paused, and mentioned that ”You’ll have to have room to go up on this one”.
Lucky for us , our offer was preceded by a letter from the city codes office to the bank to ”Fix up the house or else, and soon”.
After an on-site conference with the codes guy , we will let the offer stand . The Bank is almost soiling itself to unload the thing at this point ,and at our price……….. We smell a 3-year payoff.
Hey, Jess, good luck to you. Sounds like you’re having fun with this one.
Sounds good- but what the heck is a ‘mill hill house’?
According to Zillow and Homepath, Mill Hill appears to be a distressed area north of Spartanburg. Run down houses in the $50K range.
Looks pretty Oil City to me.
Also in upstate SC, a 23 year old fanily friend just got a loan from a credit union to buya house.The house apparently listed for98k last year but went for 57k now. The loan is for more than that amount because he had to borrow closing costs as well. He is a sweet boy but since he has been a clerk at Walmart for almost 6 years,I see little chance for pay increases.His wife wants to start a family now and doesn’t want to own.While I can understand his desire for his own place-he grew up in government housing, I see a disaster in their future. And there is little or no money on either side of the family to bail them out shen disaster strikes. Sadly, I am certain that the disaster will come since by son-his best friend-loaned them rent money twice in the last 6 months.At ;east that money was paid back since my soninin graduate schoolwith more student loans that I wish he had.
I see a disaster in their future. And there is little or no money on either side of the family to bail them out shen disaster strikes.
I smell a quality learning opportunity in their future
At least with no assets, they really have nothing to lose—other than their peace-of-mind, sleep, contentment, marriage, etc, etc.
But those are all things that are within their realm of control, even if things get difficult financially.
I just really hate seeing them go into the situation since moving back home is unlikely to be an option. His mother lives in Section8 housing,so that’s out.I’m not sure about her parents,but part of the reason she moved in with him a couple of years ago was to get out.Children will only complicate the issue since they wildly differ on the idea of discipline. I feel as if I’m watching a train wreck in slow motion.
The monthly payment on that would be $300. How much does it cost to rent over there?
They were paying around 350 for a small duplex.The loan amount is actually not out of line with their income. They just spend moare than they make because of stuff she wants.Hetold me that it’s a 3% loan with around 350 a month including taxes and insurance.That doesn’t sound too bad. But they want to do things like refinish the floors before they move in. On paper it makes sense. I hope I’m wrong. After all I was the only one who go the marriage a chance. His grinds were betting how long it would last before they ever said I do. And none of the dates were more than six months ahead. I think it’s doable. I just have doubts based on their spendidng habits.
Careful Jess. Some areas are never going to recover and the resale value could drop to the value of just the land LESS the cost of demolishing the house.
Never mind whether it is fair to force renters to cross-subsidize home ownership: It is critical to avoid policies which would allow the value of homeowners’ most valuable asset to drop further!
Elimination of one man’s taxpayer-funded subsidy is another man’s “tax increase.”
Politics Realtors protest proposed interest deduction cut
Realtors protest
Realtors protest
Coldwell Banker Chesapeake Realtor Gwen Eskridge, Realtor, right, and her husband Doug Eskridge on Feb. 29 protest proposed cuts to mortgage interest deduction rates.
Posted: Friday, March 9, 2012 12:00 am | Updated: 7:56 am, Fri Mar 9, 2012.
By DUSTIN HOLT Business Editor
ANNAPOLIS About 40 Realtors from the Eastern Shore bussed over to Annapolis Feb. 29 and protested Gov. Martin O’Malley’s proposed budget plan to cut mortgage interest deduction rates.
Under O’Malley’s budget plan, mortgage interest deduction rates would decrease by 10 percent for those earning more than $100,000 a year. The cut would have doubled for anyone making more than $200,000 a year. Realtors stood in the rain at Lawyers’ Court in front of the State House. They voiced their opposition and carried signs with the slogan “Save mortgage interest deductions.”
“I was pleased to see so many Realtors turn out for the Mortgage Interest Deduction rally last week,” said Mid-Shore Board of Realtors President Valerie Brown of Powell Realtors, in Cambridge. “It’s good to know that the Realtors in Maryland are committed to preserving current incentives for homeownership.
“There couldn’t be a worse time for even considering changes; neither the housing market nor the housing finance system has recovered and there is no benefit to the economy if the market is made worse by tax law changes. Any change that erodes the value of the tax incentive to homeownership becomes a tax increase and can cause a further decline in the values of homes.”
…
The $100K salary threshold is a dead giveaway that this is a scare-tactic bill and not serious legislation. I know that $100K is rich in flyover country, but in Maryland it’s middle-middle class. It’s a strange line to draw for a tax hike.
On MID in general, I don’t understand the all-or-nothing mentality. Nothing lends itself better to half-measure compromises than the MID. It wouldn’t be hard for MID to apply only to primary residences, or to first time buyers, or to have a ceiling. I don’t expect it to be swept away entirely.
Despite the fact that they often seem to be used as requirements, enforcing a primary residence or first time buyer requirement is actually pretty hard. You have to look outside the return for that year to get the information. A ceiling (based on the amount of interest or the filer’s income) is pretty easy since the information is right on the same return.
Losing 10% of your mortgage interest deduction if you make over $100K is pretty tame. What is the average state and county tax rate in MD? About 6%? So you lose 10% of 6% of the interest deducted? If that is $2000 a month (not total payment, just the mortgage interest) that is an extra $144 a year for that first 10%. Cry me a river.
“I know that $100K is rich in flyover country, but in Maryland it’s middle-middle class.”
Gotta go further west in flyover than Syracuse too. $100k is definitely middle class here. We’re were w/in a few thou of that last year. We don’t vacation, skip a lot of entertaining we did when we were younger, and don’t go anywhere fancy and we still feel broke.
My friends that reported making over $300k (and whose company reimbursed them for the $50k loss on their home) reported not feeling broke.
According to wikipedia:
“According to the U.S. Census Bureau, Maryland households are currently the wealthiest in the country, with a 2009 median household income of $69,272″
Not quite 100K, which I guess is more in the upper middle class range.
Depends on where you live. Parts of MD are basically West Virginia economies. Even including those the median is almost $70K.
Agreed. Check the median numbers for Montgomery, Howard and Baltimore Counties (not Baltimore city). The Eastern Shore (which Governor-at-the-time William Donald Schaefer once called a “$hithouse”) and western Maryland (adjacent to WV) are definitely low rent districts.
Depends on where you live. Parts of MD are basically West Virginia economies. Even including those the median is almost $70K.
Given Maryland’s lilliputian size, that’s interesting. According to Wiki half the state’s population lives in the “Baltimore metro area”. Once you add in those who live in MD’s portion of teh DC metro area, I’ll bet that’s the lion’s share of the population. I really doubt that the “backwoods” pulls the states averages and median down that much.
Ancedotally, I thought on my last visit to Maryland in the late summer, my dollar went pretty far, so I would say its yet another area where housing is more expensive, but everything else is pretty much the same price. I stayed with some friends who have a house on the Chesepeake Bay, and we found a bar on a boat/pier near their house (near the giant bridge - sorry I don’t remember any small town names) that had $2 beers and $3 shots on a Thursday night which is super cheap.
On Friday & Saturday, we went to Ocean City and Annapolis, and ate at some fancyish old seafood restaurant around the Naval Academy that wasn’t any more expensive than a Red Lobster (ha!). It was a fun trip, except I don’t understand the huge dose of old bay on the seafood thing you all do. It tastes fine without it.
100K is well off in MOST of the nation.
Especially the trailer park.
I know that $100K is rich in flyover country, but in Maryland it’s middle-middle class.
FWIW, I’m averaging about $80k/yr (gross) in fly-over country, and we are not on the edge, but damned close; no new cars in our garage! Easily the biggest drain on our budget is health-care, dental and vision for our one-income family of four.
And $100k/yr wouldn’t be enough along coastal California.
“There couldn’t be a worse time for even considering changes”
There was no bubble anomaly. Why are you getting in the way of sales returning to “normal”?
There was no overextension of credit. Let buyers return to the market to buy!
There is no need to tax us more even though the tax payer is on the hook for everything.
That person over there needs to be taxed. Don’t you dare tax me!
<Realtors working overtime at the same childish games.
Sham Dow!
Street takes overseas cues
U.S. stock-index futures tilt lower, as investors keep an eye out for Eurogroup meeting on Greece while mulling what China’s surprising trade deficit might mean for the global economy.
China running a trade deficit? Does swapping their stockpile of USD for imported gold count as “trade”?
China has a big holiday when familes get together and the factory production goes way down. An adjustment to their trade surplus/deficit status during this time is very predictable.
Google “Beat the Press.” Dean Baker covered it.
Where does the risk lie in tapping into these outsized Greek bond yields, especially given that they are too-big-to-fail (or not)?
March 12, 2012, 7:19 a.m. EDT
Yields jump on new Greek bonds after restructuring
By Sara Sjolin
LONDON (MarketWatch) — New Greek bonds issued after the country’s 206-billion-euro ($270 billion) bond-swap deal last week started trading Monday at the highest yields in the euro zone, according to media reports. The debt-laden country issued 20 new bonds with maturities between 11 and 30 years and early pricing showed that bonds with the shortest maturity traded at yields around 19%, while the 2042 bond traded at yields around 14%.
…
The debt-laden country issued 20 new bonds with maturities between 11 and 30 years and early pricing showed that bonds with the shortest maturity traded at yields around 19%, while the 2042 bond traded at yields around 14%.
Any ideas on why the yield-curve is inverted? I would expect that the chances of default on the new bonds would go up with time, not down…
Unless the market expects them to hit the wall again immediately.
Hey, whatever happened to wmbz? It just dawned on me he hasn’t posted in a while. Hope he’s OK. I know people fall off the line from time to time, but I found his posts informative.
Welcome back, palmy…
PB took over for him.
Yeah right — I am pretty much of a ditto head.
On Friday we closed escrow and got the key to our new abode. Plan on being there for twenty years. After 8 yrs of renting a two story with virtually no gardening area it feels good to be back into a single story house with an area to garden. It already has an established nectarine,orange, apple, 2 types of pear, plum, loquat trees and an established garden area.
The owner told me to put up a deer fence along one area of the property as the deer were active this last winter. Koi pond has 19 koi from twenty inches downward in size. The lot has great views as the house is in a hilly area of Salinas with scattered bunches of trees. People tell me I live in Prunedale but the deed says Salinas.
The house is one owner, built in 1991 by what people here say was the best builder. I paid 17% over the 1991 purchase price and after the owner paid RE costs he walked away with $50K after 21 yrs of profit. After allowing for window covers, outside lighting, landscaping, sprinklers, etc. it was not and investment but a home. They put a lot of love into it but with failing health in their 80’s they chose to move into town nearer stores and hospital. Lot size is 1.2 acre. I will talk more later on the mortgage hassles and hoops we needed to jump through.
That’s about the way it was supposed to work, pre-bubble. Perhaps you’ll be there more than 20 years. I’ve about hit my 18-year anniversary in our home.
Wow, that sounds like a dream property.
Sounds fantastic, salinasron!! Congrats! I hope that it suits you perfectly for your twenty-year intended time-frame.
Sweet, sounds like the type of property I’d like. Wish we’d see ‘91 prices +17% around here but glad to hear someone gets to move on after 8 years of renting. Good luck.
On Friday we closed escrow and got the key to our new abode
Congrats!
We are still looking. Saw a nice place yesterday (lovingly maintained for 40 years by the same family), but I think it’s too small for us.
Another house we saw yesterday blew me away:
Short sale for 688K
Built in 1994
3200 sq. ft 4br/3 ba
Block from the park (a park we love)
Views
I was disgusted by how trashed this house was. Trash everywhere. Ripped screens. Walls a mess - marked up with crayons and pen marks. Mold in all the bathrooms. Selling agent sitting on a box with her laptop, and then yelling at me from another floor when I started asking a guy watching TV questions (”DON’T TALK TO HIM. DON’T ASK ANY QUESTIONS, ONLY TALK TO ME!”), and an entire family (3 kids, 2 parents) in the 1 br unwarranted ground floor inlaw apt).
Price History
09/22/2005 Sold $940,000
04/26/1995 Sold $361,000
04/08/1994 Sold $125,000
412 Amherst St. 94134
Wow, just wow.
With price histories like this, short sales everywhere, and so many people underwater, no one knows what to price at.
It’s kind of crazy out there.
We have placated the landlord for now, accepted the $200 month rent increase, and are very clear that we will only buy if we find our dream home and it’s n our price range. Taking it nice and easy and watching the prices fall.
$688K is still a “wow” to me.
$688K out in Flyover is enough to make sure that you won’t have to deal with neighbors. Hell, you won’t even be able to SEE your neighbors, if you bought that much acreage, and built a house in the middle of it.
Here’s a “for example”…..
http://tinyurl.com.7st8k9d
Douglas County, Kansas. 10 minutes away from Lawrence, the veritable Wake Island in the Tea Partier ocean that is the Sunflower State. 30 minutes from downtown KC.
A fine building site for whatever kind of bunker you choose to build for riding out the upcoming apocalypse/societal breakdown/economic implosion/starter-police-state/wanna be banana republic.
Close to the Kansas River. Close to major highways, but not adjacent, so you don’t have to worry about the big city evacuees.
high ground, which means clear fields of fire for that Barrett .50 cal…….the wretched refuse will never get close to getting within handgun or AK range.
Enough annual rainfall to grow corn, or plant fruit trees. Plenty of deer to hunt, or just scrape up one of the almost daily roadkills from nearby I-70.
Discount for gold/kruggerands.
There is a lot more wretched refuse in this world than there are .50 BMG rounds :-).
“With price histories like this, short sales everywhere, and so many people underwater, no one knows what to price at.”
Fed strategy numero uno: CHURN, BABY, CHURN.
The minute prices settle down to levels where the comps provide transparent indication of how far prices have fallen is the minute the banksters finally get to digest their housing losses, and we can’t have that, can we?
“After 8 yrs of renting a two story with virtually no gardening area it feels good to be back into a single story house with an area to garden. It already has an established nectarine,orange, apple, 2 types of pear, plum, loquat trees and an established garden area.”
Sounds lovely — congrats!
Nice job Ron!
BofA will reduce loans for 200,000 underwater mortgages
NEW YORK (AP) – Bank of America is providing mortgage relief to about 200,000 homeowners whose home values have fallen below what they owe on their mortgages.
Bank of America will reduce the amount owed by the homeowners as much as $100,000 in some cases. Only mortgages currently owned by Bank of America will qualify. Those owned by government entities Fannie Mae and Freddie Mac, or backed by the Federal Housing Administration will not be eligible.
The move will help the bank reduce the amount of penalties it owes to the government’s Housing & Urban Development agency by $850 million.
Those penalties were ntry to resolve investigations into abusive home lending and fraudulent foreclosure practices.
About 11 million American households are “underwater” on their mortgages, meaning they owe more than their homes are worth. The settlement with five mortgage lenders is expected reduce loans for only about 1 million of those homeowners and send checks to others who were improperly foreclosed upon.
Details of Bank of America’s and other mortgage lenders’ plans to help homeowners as part of the settlement will be contained in court documents expected to be filed Friday.
http://www.usatoday.com/money/economy/housing/story/2012-03-09/bank-of-america-underwater-loans-relief/53434958/1 - 44k
Student loans seen as potential ‘next debt bomb’ for U.S. economy
By Eric Pianin, Published: March 10
Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.
http://www.washingtonpost.com/business/student-loans-seen-as-potential-next-debt-bomb-for-us-economy/2012/03/05/gIQAM0iF4R_story.html -
They might be seeking relief, but they won’t get any.
Which means that all their other creditors are going to be screwed, big time.
If they don’t want to lose a whole generation of housing buyers they’re going to have to let the rules revert back to student loans being dischargable in bankruptcy. Or maybe instead we’ll lose a generation of college graduates, at least till the cost of that asset falls.
There are some comments following the article talking about providing student aid only for “useful” majors. I predict a glut of engineering/science/comp sci majors if that happens.
This has happened in nursing, at least temporarily.
http://seattletimes.nwsource.com/html/businesstechnology/2017720619_nurses11.html?prmid=4939
“Nursing was once viewed as a recession-proof field with a chronic labor shortage. But there’s a new reality for nurses: It’s hard to find a job.
A decadelong recruitment effort beefed up the supply of nurses, but the Great Recession has curtailed hiring as older nurses work longer, fewer nurses quit, and financially pressed hospitals and clinics find ways to get more work done with lower-paid medical assistants.
Working nurses have found themselves laid off, too. Public Health — Seattle & King County laid off 12. And Swedish Medical Center recently announced it was closing its home-health program, which will eliminate the jobs of about 50 registered nurses.”
Computer Science remains an unpopular major. The young pups know those can still be offshored.
The dot-com era increased demand for programmers, engineers and analysts and prompted many students to enroll in computer science programs. Enrollments swelled. At its peak in 2001, the average enrollment in computer science departments was 398, but by 2007 it had dropped in half.
Enrollments now average 253 students per department.
http://www.computerworld.com/s/article/9215720/Computer_science_enrollments_rebound_up_10_last_fall
You’d think that 10 years after the dot com crash that the demand for programmers would be higher than ever. But it isn’t, thanks to offshoring. The young pups understand this (plus it’s perceived as “hard”) so they are still avoiding the profession.
For most people, computer tech and science IS hard.
“providing student aid only for “useful” majors.”
Don’t companies already provide that in the co-op system?
UPDATE 4-Harrisburg, Pa. to skip two debt payments
Sat Mar 10, 2012 1:54am EST
By Hilary Russ
March 9 (Reuters) - Pennsylvania’s distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services.
The payments that will be skipped consist of: $2.735 million due on the city’s general obligation refunding bonds, Series D of 1997, and $2.53 million due on the city’s general obligation refunding notes, Series F of 1997, Unkovic said.
The city filed a rare municipal bankruptcy, but a judge threw out the case last year.
Unkovic has said that five to 10 companies are interested in purchasing city assets. He hopes to name winning bidders by June.
http://www.reuters.com/article/2012/03/10/pennsylvania-harrisburg-idUSL2E8E9DMS20120310 - 98k -
More from the article:
“So far in 2012, there have been 21 defaults on muni debt totaling $978 million, according to Richard Lehmann, publisher of Distressed Debt Securities Newsletter, who expects the pace of defaults to increase.
“For cities and counties it’s starting to happen now because they’re running out of cash,” he said, noting that Stockton, California, announced a default last month.
During the same period in 2011, there were 28 defaults totaling $522 million, while the full-year total was a whopping $25.2 billion, which included defaults on $18 billion of tobacco bonds that occurred when reserve funds for the issues were tapped, Lehmann said.
In a sign that Harrisburg’s financial crisis was expanding to affect additional types of debt, Unkovic noted that this is the first time the city has defaulted on its general obligation debt. It has previously defaulted on revenue bonds tied to its incinerator project, and continues to not make those payments.”
Republican politicians want to push more funding for federal mandates to the states. I suspect states will pass much of that on to municipalities, exacerbating their financial troubles. I would not want to invest in municipal bonds at this point. Pension funds already invested in these “safe” securities are going to be in big trouble if this trend continues to gather steam.
Moreover, you didn’t even mention the deficits in the public employee pension funds themselves.
True and much of that is driven by 8% ROIs that have disappeared and by underfunding of pensions based on rosy projections. In some places, good times fostered unreasonable union contracts. And in a lot of places, unions have been willing to renegotiate now that times are not as good.
A lot of the problems in state and municipal budgets are driven by market forces - drops in property tax and other revenues, increased demand for some services, unfunded mandates passed by Congress.
I remember all the CNBC talking heads ridiculing Meredith Whitney after her 60 Minutes warning about the upcoming muni implosion, well what do you know, buckle up!
And it’s not even January 2013 yet.
Watch out if you hold muni bonds!
Birmingham, Alabama, just declared bankruptcy - and the judge DID NOT throw it out.
Never thought I would see the day Since NYC went BK many moons ago, when big city muni’s were suspect again.
Wow. Just… wow.
Once upon a time most municipalities were fiscally conservative and had dependable if unexciting tax bases.
Fast forward to the present. Many municipalities are up to their eyeballs in debt and their tax base isn’t what it used to be.
The Old Gray Mare
The old tax base,
Just ain’t what it used to be
Ain’t what it used to be,
Ain’t what it used to be
The old tax base,
Just ain’t what it used to be
Many long years ago.
Many long years ago,
Many long years ago,
The old tax base,
Just ain’t what it used to be
Many long years ago.
The old tax base,
Was based on pure fantasy
Based on pure fantasy,
Based on pure fantasy
The old tax base,
Was based on pure fantasy
Many long years ago.
Many long years ago,
Many long years ago,
The old tax base
Was based on pure fantasy
Many long years ago.
To Johnny Cash’s “Ring of Fire”
I fell in to a set of re-capped tires
They wore down, down, down
And the mileage kept gettin higher
And they’s burn, burn, burn
Them re-capped tires
Them re-capped tires
Stockton residents watch their port city slip away
Within three months, the Central Valley city of 300,000 could become the nation’s largest municipality to file for bankruptcy. The City Council is trying to slow or stop the bust by entering mediation.
By Diana Marcum, Los Angeles Times
March 10, 2012, 6:32 p.m.
http://www.latimes.com/news/local/la-me-stockton-bankruptcy-20120312,0,1237230.story - 186k
Buffett’s NetJets Countersued by U.S. for Unpaid Taxes
By Andrew Harris - Mar 9, 2012 3:51 PM ET
NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), was countersued by the U.S. over $366 million in taxes and penalties.
NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.
Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax — an excise tax on payments made in exchange for air transportation — to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.
The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.
NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed.
http://www.bloomberg.com/news/2012-03-09/buffett-s-netjets-is-countersued-by-u-s-over-unpaid-taxes.html - 180k -
Sounds like their business model doesn’t work at that level of taxation.
The government wants to charge a ticket tax on the passengers, even when the passengers “own” the airplane (or a fractional share of one).
For the great unwashed, “fractional ownership” works like this……you actually “buy” a specific aircraft, either the whole aircraft or a “fractional” share of one (typically 1/4 share, hence the EJA “N” numbers always ending with “QS”). This aircraft is added to a pool of identical aircraft, which is managed/operated/maintained by EJA, under contract to the owner.
When you buy a “share”, you are guaranteed that an aircraft (not neccesarily the one that is “yours”) will be available at any “legal” airport in the US, within 4 hours of your call. The number of flights/flight hours is typically 200 hours a year, per 1/4 share.
When the aircraft is sold, typically after five years, the owner gets his “share” of the sales price.
The FAA recognizes the distinction between an Part 91 “owner” and a Part 121/135 “customer”. They know that an owner will be better informed about the operation of the aircraft, and assumes that owners accept the additional risk.
The more stringent Part 121/135 rules are intended to protect dumbazz Joe Q Citizen that doesn’t know (or care) anything about the airplane. 121/135 guarantee a “minimum level of safety” for Joe Q, and have higher regulatory requirements and oversight. The excise tax supposedly pays for the extra oversight.
Rule/tax is supposed to apply to the airlines and air charter, not privately owned airplanes. Basically, they want people to pay the taxes they incur as “owners”, and as “customers”.
The FAA recognizes that a guy riding in the back of an airplane can be an owner. The IRS doesn’t recognize the distinction. The IRS is wrong, they are trying to bill people for “services” they didn’t ask for, aren’t mandated, and didn’t receive.
Once again, another situation where the government can’t even agree with itself. The FAA agrees that these are “privately owned airplanes”, and even added new rules to address how “managed” aircraft were operated. (Part 91, Subpart “K”).
Lots of news from Phoenix, Arizona. This time of year the snowbirds are heading back north, I am about to pack up myself and head back east for the summer. That means that “For Lease” signs are sprouting up like mushrooms after an April shower.
Some quick anecdotes:
- The house I am occupying has had 20+ showings but is still for sale. Owner not interested in budging on price, I calculated his yield for the year around 8%. It takes 3 months of rent just to cover HOA + taxes. Last I checked one could make 3% yield easy in bonds.
- Lots of articles in the AZ Republic about shortage of homes for sale. If they omitted the prices one would believe it’s 2005 again. I smell another crash in the making. Every block here has 1 or 2 for sale signs, so not sure about a “shortage”.
- Many of the cheapo homes the media speaks of are in areas 30 miles out from the jobs.
- Booked on the “foreclosure flight” again this week. I took the lady out for a dinner at a high-end local restaurant, the party next to us was discussing real estate, the comment that made me laugh out loud was “agents are claiming the rental market is strong out here - BULLS&^T!”.
- Agents have taken to comparing all sorts of non-traditional metrics to support their claims that prices are rising quickly.
Last I checked one could make 3% yield easy in bonds.
Easily, but not safely.
I should also note that when I leave next month, the owner will be -300 a month in cash flow. So that 8% yield becomes a 10% loss until he is able to rent the unit again, which judging by last year, was not easy to do, and might be harder this year considering there is a vacant home down the road, larger, for the same price.
+1
3.25% annual rate of return on AAZAX (Arizona municipal bond fund through Alliance Bernstein) the last decade, accounting for it’s .75 expense ratio. Tax free. I buy AAZBX with a 1.48 ratio but in six years each purchase gets shifted to AAZAX. I now have a higher balance in AAZAX. Been dollar cost averaging well over $1,000 per month into AAZBX since January 2002.
Banks to Face Tough Reviews, Details of Mortgage Deal Show
By NELSON D. SCHWARTZ
Published: March 12, 2012
Banks will face stiff penalties and intense public scrutiny if they fail to live up to the standards of a $25 billion mortgage settlement with state and federal authorities, according to court documents filed as part of the deal Monday in federal court in Washington.
While the broad outline of the deal was announced last month, the mechanics of the agreement that took more than a year to negotiate were laid out in Monday’s filing, including exactly how much credit mortgage servicers would receive for varying levels of loan forgiveness. and just what kind of conduct from the past is off-limits to future investigations.
“We are taking a zero-tolerance approach,” said one senior Obama administration official on Monday morning, who spoke on condition of anonymity because the documents had not yet been filed.
…
Yeah, right. They are going to be tough.
I think I’ll go steal someone’s house, as long as I can get the same “beaten with a wet noodle” treatment.
Fool me once, shame on them. Fool me half a gazillion times, shame on me.
Largest debt default in history, and the markets collectively yawned.
Hmmmmm…
Greece Swaps Bonds Worth $232.5 Billion
By NICHOLAS PAPHITIS Associated Press
ATHENS, Greece March 12, 2012 (AP)
Greece implemented the biggest debt writedown in history on Monday, swapping the bulk of its privately-held bonds with new ones worth less than half their original value.
Although the exchange will keep Greece solvent and at the receiving end of billions in international rescue loans, markets were underwhelmed amid fears that the country’s debt load still remains far too heavy.
…
Chicken feed, Cantankerous. Chicken feed.
Didn’t you hear? The last six months of Sturm and Drang have been all about giving the Masters of the Universe a chance to “contain” things.
Or it was all priced in. Can’t seem to keep my metaphors straight anymore.
When things are “contained”, it’s a message that someone needs to go buy some Astroglide.
How come Lehman Bros, Fannie Mae and Freddie Mac weren’t similarly “all contained”? Perhaps because “nobody could have seen it coming”?
Atlas shrugged, too.
‘Schizophrenic’ markets shrug off Greek deal
By CHRISTINA REXRODE, AP Business Writer – 6 minutes ago
NEW YORK (AP) — U.S. stocks struggled for direction Monday, unsure of what to make of news about Greece’s debt workout and eclectic announcements from a few well-known U.S. companies, such as mattress maker Sealy and luxury retailer Michael Kors.
The Dow Jones industrial average and the Standard & Poor’s 500 ended the day higher, but the Nasdaq fell. Trading for the latter two indexes was choppy, as they wavered between small gains and losses for big chunks of the day.
The Dow was the most stable, staying above Friday’s close for all but a few minutes and closing up 37.69 points to 12,959.71. That marked four straight days of gains for the Dow, only the second time that has happened so far this year.
The S&P 500 and the Nasdaq spent much of the morning and early afternoon in the red, then bounced between gains and losses for the rest of the day. The S&P ended the day virtually unchanged at day’s end, up 0.22 points to 1,371.09. The Nasdaq fell 4.68 points to 2,983.66.
“The market is going to continue to feel very schizophrenic,” said Carol Pepper, CEO and founder of Pepper International, a money management firm in New York. “Some days it’s depressed, some days it’s excited, some days it’s terrified.”
…
Pundits haven’t run out of economic worries.
China Could Trigger a U.S. Recession
Posted: March 12, 2012 at 6:30 am
A lack of demand for China’s factory goods could be triggered by a slowdown in demand, particularly from EU countries. That almost certainly would hurt GDP growth in the People’s Republic. Chinese authorities likely would push more money into the economy, which has happened in the past month. What has not been discussed often is that, if China’s economy slows considerably, the problems created by lack of demand for its exports could cause a recession in the United States.
S&P recently put out a list of potential problems for the U.S. credit markets and economy. Among those are the usual risks, including the housing market and contagion for a collapse of one of more of the European economies. Also included among the threats is that China’s gross domestic product could drop to 5%.
…
China’s economy goes like gangbusters = USA screwed.
China’s economy goes into the crapper = USA screwed.
My pointy little Neanderthal head just doesn’t understand all of this sophisticated economic analysis.
Perhaps the USA is just screwed and there is no correlation to China.
Damn! (smacks own foerhead)
That’s it. I shoulda thought of that.
Isn`t “Desperate homeowners” a reality show? Or is somebody else desperate too?
Complaints mount against Palm Beach County foreclosure rescue company accused of defrauding desperate homeowners
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 10:24 p.m. Sunday, March 11, 2012
Complaints are mounting against a Palm Beach County foreclosurerescue company accused in lawsuits and letters to state officials of defrauding desperate homeowners.
The 3-year-old Nationwide Investment Firm promises to conduct short sales, obtain loan modifications or “negotiate with lenders to stall foreclosure,” according to a contract attached to a Feb. 15 lawsuit filed in Palm Beach County.
But clients allege in complaints to the Florida Attorney General’s Office and court actions in Broward and Palm Beach counties that instead of getting the help they sought, they unwittingly signed over the deeds to their homes.
Some claim they were then threatened with eviction and left with mortgage debt on properties to which they no longer have title.
‘One of the victims’
In the Feb. 15 Palm Beach County lawsuit, Josette Dimanche, 23, a Costco clerk with limited English skills, claims Nationwide told her in August 2010 that it would negotiate a loan modification with her lender.
In 2006, when she was 18, Dimanche was given $250,000 in loans by America’s Wholesale Lender to buy a 1,500-square-foot home in Lake Belvedere Estates, according to records.
Within a year, she was in foreclosure. The bank won a judgment against her in July 2007. But for an unknown reason, the sale of the home was canceled .
Looking for a way out, Dimanche signed on with Nationwide in 2010 and moved out of the house.
Her lawsuit states Nationwide began renting the home . In January, the bank filed to reschedule the foreclosure sale.
Dimanche’s attorney, Pierre St. Jean, wants to get the deed back in her name so that she can pursue a short sale and mitigate damage to her credit.
“The homeowners have the banks after them. They are afraid. They grab at promises, even empty promises,” Pierre said. “Josette is one of the victims.”
http://www.palmbeachpost.com/money/foreclosures/nationwide-investment-firm-faces-more-suits-2231820.html?printArticle=y - -
When I fill out my taxes this year, I think I’m going to put “Victim” in the “Occupation” box on the 1040.
“Complaints are mounting”
Mount Complaint, the highest mountain in the world, is on the Palm Beach County and Broward County border … British surveyors named the peak for desperate homeowners.
Complaint’s current elevation is based on a GPS device implanted on the highest rock point under ice and snow in 2012 by an American expedition. The mountain is higher than 21 Empire State Buildings stacked on top of each other.
Mount Complaint is also called Chomolangma, meaning “Goddess of Squatters” in Tibetan and Sagarmatha, meaning “Mother of the Victims” in Nepalese. The mountain is sacred to the native people.
The best time to climb Mount Complaint is in early May before the monsoon season.
Overshadowed by Mount Unrealistic. The summit has never been reached from the Base Camp Dipstk Desire.
Just passed by Occupy Wall Street in NYC. I didn’t realize the park was as close to the NYSE as it is. Only about 15 protestors, more people watching them than protestors. They were mainly screaming unintelligible blather at us as we walked by. Most looked like they had one too many acid trips in the sixties. Curiously, one guy looked like he’d just gotten off work at JP Morgan Chase and had a group around him he was preaching to.
Curiously, one guy looked like he’d just gotten off work at JP Morgan Chase and had a group around him he was preaching to.
I hope someday they all use that tactic.
Curiously, one guy looked like he’d just gotten off work at JP Morgan Chase and had a group around him he was preaching to
Has He returned?
Comment by alpha-sloth
2012-03-12 04:56:22
If the system was fair, I’d be having my choice of housing right now.
But fair is where hogs go to get judged, right? And look on the bright side- it gives you something to pin all your troubles on. ‘If only the gov wasn’t interfering, my life would be hunky-dory’.
————————–
I don’t understand this comment. Aren’t we all here because were a little annoyed with the current situation, regardless of which angle we approach this mess from?
Are you saying you’re happy with everything? FWIW, yes, my life would be hunky-dory if we didn’t have inflation combined with absurd house process right now. Other than foreclosure and lower prices, I don’t see another solution.
Aren’t we all here because were a little annoyed with the current situation, regardless of which angle we approach this mess from?
I think most of us are annoyed, some are not.
Are you saying you’re happy with everything?
No.
FWIW, yes, my life would be hunky-dory if we didn’t have inflation combined with absurd house process right now.
Really? Study after study shows that renting is better economically than owning. Why would your life be hunky-dory by making a bad economic decision?
Higher wages.
+1
“Comment by alpha-sloth
2012-03-12 17:30:07
+1″
Got it. I just need more money.
LOL- I replied to you a while ago, Muggy. I’ll give it a little longer, if it doesn’t make it through the filter by then, I’ll repost. If I can remember what I said…
Hi Darrell, if you know Florida’s Governor, Rick Scott, could you tell him about these “higher wages.” Thanks
Government get out of the way of foreclosures so I can get a cheap house.
Government give me a raise.
“Lobbying pays off big for business in Florida’s 2012 session”
http://www.tampabay.com/news/business/lobbying-pays-off-big-for-business-in-floridas-2012-session/1219536
What is really quite remarkable is that whenever I go looking for politicians’ funding sources, on all levels, the FIRE sector is typically the largest contributor.
It’s uncanny.
HB 7087 Private planes: Eliminates sales taxes on repair and parts for small planes 12.3M
Amazing… now I know where my 3% pay cut is going.
The problem with taxing airplanes is that they can just as easily fly to South Carolina to be worked on, as Florida. Many states do not charge sales tax on aircraft service and parts.
The airplane I currently work on is coming up on a “C” Check/6 year Inspection. Takes about three weeks, costs around $500K, if we don’t repaint it, or do any major mods. If we take it somewhere that charges sales tax, we are adding another $30-40K onto the bill. (There are only a few shops in the country with the capability of doing this inspection……none of which are in the state where the aircraft is based)
Not saying it’s right, but I’m paid to minimize the maintenance bill. You may notice the stress/tension it creates, in that I’m helping a 1%er avoid paying taxes, so he can spend an extra week in Europe.
If these dumbazz states were smart, they would have a big meeting and standardize their rates and policies, instead of letting themselves be gamed. Or playing games themselves, by taxing the crap out of hotel rooms, rental cars, restaurants, etc. used by out of town (and unable to vote/protest) guests and visitors.
OTOH, it perfectly illustrates how being able to “vote with your feet” minimizes your taxes. There’s a reason why states tax the crap out of land/property. This trend will get worse before it gets better.
One of the reasons (besides not having any money) why I may never buy a house/land again.
“Lobbying pays off big for business in Florida’s 2012 session”
According to a friend in Sacramento if you want to bid on CalTrans jobs you’d better plan on buying an entire table, about 10-12 settings, whenever the governor has a luncheon or dinner speaking engagement.
A 40% drop in the DJIA from its current level would leave it at
0.6*12,959.71 * = 7,775.83.
I agree with the writer: A 40% move in the Dow in 2012 seems completely plausible. Remember how much the Dow dropped back in 2008 after bond yields and the BDI fell to similar levels to where they currently stand?
Michael A. Gayed
Is a 40% move in 2012 possible?
The probability for a large move in equities is certainly there, but many seem to be discounting the idea because of the rally already in place.
The writer is predicting a 40% move up.
And I’m pointing out the absurdity of one-way predictions, especially since we had a 40% down move under similar conditions only four years ago.
There’s trouble at Dongfang Shipbuilding.
March 12, 2012, 10:24 p.m. EDT
Sea change for China’s shipbuilding business
Falling orders, tight credit could sink private-sector shipbuilders
By Wu Jing
BEIJING ( Caixin Online ) — The son of Wenzhou shipbuilding executive Chen Tongkao scrambled to quell fears of a company shutdown after his father, under financial pressure, fled the country in mid-February.
Chen’s whereabouts are unknown, and since his disappearance the city’s business community has buzzed with rumors about the status and future of his apparently captain-less company, Dongfang Shipbuilding (UK:DFS -24.14%).
The son, company General Manager Chen Guojun, told Caixin his father had been working hard as Dongfang chairman to find investors and raise funds. Indeed, last year the company successfully listed on the London Stock Exchange’s Alternative Investment Market.
He said the whole family continues to steer the company, which is very much alive, while his father maintains long-distance contact with Wenzhou government officials.
The elder Chen “was based in Singapore,” the son said. “My sister Chen Xiudan runs the Leqing shipbuilding base, I run the Congyang base, and my younger brother runs the company’s shipping operations.
“We haven’t stopped production.”
But something’s obviously wrong at Dongfang — and at other drydocks and shipyards around the country struggling these days after years of rapid expansion based on strong orders from overseas clients.
The shipbuilding industry is slumping, new orders are rare, banks are calling loans and companies are closing.
“Dongfang Shipbuilding is not the first private shipbuilding company to face difficulties, and it won’t be the last,” said an industry insider and former executive at heavy machinery manufacturer Zhenhua Heavy Industries Co. (CN:900947 +1.70%). “The question is, if there is a restructuring, what is the direction of the restructuring?”
…
Too much help is detrimental.
Fed’s push on housing crosses a line, critics say
View Photo Gallery — “Unlikely revolutionary”: Since he was selected in 2005 to replace Alan Greenspan as chairman of the Federal Reserve, Bernanke has made bold, unprecedented moves in an attempt to bolster the U.S. economy.
By Zachary A. Goldfarb, Published: February 21
Senior Federal Reserve officials are injecting themselves into a noisy debate over how to solve the housing crisis, drawing criticism from some lawmakers who say the Fed has no business straying from its traditional role as the U.S. central bank.
Amid complaints that the Fed has encroached on Congress’s territory, Chairman Ben S. Bernanke has tried to allay concerns on Capitol Hill over the past few weeks, in the latest flap in a broader debate about the Fed’s proper role in the economy.
That discussion began after the Fed started taking unorthodox measures in 2008 to address the financial crisis, including several rounds of massive bond purchases and steps to shore up lending markets. All the Republican presidential candidates have criticized Bernanke on various counts, saying he has printed too much money, damaged the value of the dollar and carried out programs that simply haven’t worked.
In Washington, the reaction to the Fed’s efforts to bring down unemployment has divided along partisan lines. Democrats say the steps are necessary, but Republicans say they risk sparking inflation and undermining the currency.
The latest commotion follows the Fed’s release last month of a report analyzing housing policy, which central bank officials say is closely related to their efforts to reinvigorate the economy. The report suggested that additional federal efforts to help homeowners could be worthwhile, even at taxpayer expense.
Democrats have seized on the “white paper” as ammunition in arguing for billions of dollars in new federal relief for beleaguered borrowers. Some Republicans have accused the Fed, which generally avoids addressing policy questions before Congress, of potentially compromising the central bank’s independence.
“It appears the Fed may have overstepped their bounds in recommending fiscal policy actions,” said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. “It does get a little bit into dangerous territory.”
…
There’s a whole lot of mutual back patting going on at the Fed over supposed success of QE1 and QE2.
But given that QE3 is already out of the bag, where is the upside for the U.S. stock market from here? Isn’t it already fully priced in by now, given that it is common knowledge among everyone except a few clueless Rubes (e.g The Dallas Fed’s Fisher)?
Agustino Fontevecchia, Forbes Staff
Bringing You The Bull And Bear Case From The Markets Desk
3/12/2012 @ 6:47PM
Expect A Quiet Fed Meeting, But $500B QE3 Is Around The Corner
While the Fed isn’t expected to announce any new policy action on Tuesday, the FOMC will probably hint at further easing which shouldn’t be too far away. With a lagging job market, despite strength in the latest non-farm payrolls report, and housing still depressed, the Bernanke Fed will probably deliver an “insurance ease” to keep the fragile recovery on track and hedge itself ahead of fiscal headwinds and external shocks, according to Nomura’s fixed income research team.
On the much commented issue of sterilized bond buying, Nomura’s analysts note it’s essentially an “academic issue.” Bernanke & Co. will probably favor sterilized QE, though, in order to appease inflation hawks and keep a lid on oil prices.
Risk assets hit the road running in 2012, with U.S. and international equities rallying along with commodities. All of that changed on February 29 when Fed Chairman Ben Bernanke, in Congressional Testimony, failed to emphasize how ready he was to deliver QE, sparking a global sell-off that hit U.S. equities (including the financials), emerging markets (as measured by the EEM ETF), and gold, among other assets.
Bernanke’s comments sparked a debate in the investing community, as market players tried to figure out what was next from the Fed. While the consensus toward the end of 2011 was that QE3 was around the corner, improved economic data in the U.S., partial resolution in Europe (as Greece effectively defaulted), and what appears to be a soft landing in China have forced many to reconsider the need for additional monetary stimulus.
The Fed will deliver additional quantitative easing over the next 3 to 6 months, according to Nomura; an opinion seconded by Goldman Sachs’ Jan Hatzius. While the Fed has used relatively more optimistic language in their latest Beige Book and in Bernanke’s prepared remarks to Congress, it continues to stress the economic expansion is still modest, while significant downside risks abound. Furthermore, Bernanke has made clear he still believes housing markets are in the gutter, and that the Fed isn’t delivering on the employment side.
QE will be delivered via purchases of mortgage backed securities (MBS) and Treasuries, with a bias for the former, and will be sterilized in order to appease inflation hawks and critics, Nomura says. With housing prices still looking for a bottom, meager job growth, record-high oil prices, and the probable resurgence of the European sovereign debt crisis in the near future, Bernanke must deliver an “insurance ease” to make sure the economy maintains its “escape velocity,” Nomura’s analysts argue. In other words, the Fed needs to “pump the economy to a high enough level to weather the […] storms that sill lie ahead for the nation.”
Fed involvement in bond markets has been consistent since 2008, suggesting Bernanke will try to avoid the “cliff effect” if they were to stop purchases cold turkey. Operation Twist, by which the Fed sold short-term assets and bought longer-termed securities, is set to come to an end in June.
Thus, the Fed will engage in an approximately $500 billion operation over the next 7 to 9 months, unveiled by the end of Q2, with an 80/20 split between MBS ($400 billion) and Treasuries ($100 billion). Sterilization, which will occur via a small extension of the Twist, term deposits, and reverse repos, will “keep the hawks at bay because a slight rise in front-end rates should support the dollar and reduce oil inflation,” explained the analysts.
The Fed views all three of its latest unorthodox operations as successful. QE1 was the perfect remedy in an emergency situation, while QE2 served to stave off deflation; the Twist worked in putting pressure on longer-rates while giving Bernanke time to let policy take effect.
…
Ignore the gloomsters and buy stocks now, or get priced out forever!
Why Stocks Are Riskier Than You Think
March 13, 2012
Most people can get the money they need for retirement without gambling heavily on equities, Rachelle Taqqu reports on Markets Hub. Photo: Reuters/Adam Hunger.