Bits Bucket for May 14, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
June 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
http://blog.redfin.com/blog/2012/05/want_my_house_first_take_my_poodle_may_2012_roundup.html
Seriously, taking the poodle to get the bid? That’s so 2005…
They do seem to be trumpeting the return of the bubble market. Not likely, at least outside certain key markets.
Rental Watch
Thank you for that link. Most interesting to say the least. I am seeing the long term owners who want out listing high, and the few REO’s listing reasonably priced. Two-story homes are cheaper than one. Inventory is really tight, few pick’ins, but in the last two weeks, homes in our price range aren’t flying off the shelf.
Behavioral Economics vs. Fundamentals…
FHA buyers are the norm in my area. The UHS are telling them to overbid (knowing damn well they are going to default). What I was wondering about is the 203K fix up loans. Does anyone know if suckers are still going for them?
It’s my understanding that FHA loans have a 31% Debt to income ratio for the mortgage payment. If so, there is a limit to “overbidding” and 31% should be manageable for most. A lower ratio is better of course, personally I think an RTI of 25% is better.
Our first purchase was a SoCal condo, and we had an RTI of of about 16%. That was very manageable. I recall coworkers back then saying that we “aimed low” when we bought that condo.
I have no idea about the fix-up loans. I spoke to a friend yesterday who started at 5% down…he’s refinancing and paying down to 10% down, and is working to chunk away at the debt so he can get rid of PMI (which he views as throw away money). His house has work to do on it, but he noted that even if he wanted to borrow to do the work, the appraiser wouldn’t give him the value to allow the fix-up money.
In other words, I understood that the “fix-up” loans were largely gone from the market (which is why buying “clunkers” with cash was the only way it worked).
Are people seeing “fix-up” loans in the market again?
One piece of data that I also thought interesting was in the foreclosure radar data:
http://www.foreclosureradar.com/california-foreclosures
There is lots of data on the page, but one piece that is nearly imperceptible is in the foreclosure bid graph.
A year ago, the difference between the opening bid and winning bid was $5k. Now it is $13k. If you track the difference over the past year, the move into double digits is fairly recent (last few months). There is definitely a shift of the balance of supply/demand at auctions, which is a significant explanation for fewer homes going back to the bank.
The clearing of inventory is a prerequisite to getting to a “normal” market.
I wish Foreclosure Radar had data on Florida…
In other words, I understood that the “fix-up” loans were largely gone from the market
203K rehab loans are readily available: http://www.fhainfo.com/fha203k.htm
After I bought with 10% down, my major focus was to eliminate PMI.
A great tool to enable a first-time buyer like me, but it should be the first thing to pay off for a borrower who was pressed into signing up for it.
Squirrels I can live with. Poodles, no matter how intelligent, NO!
My friends have been somewhat amused by my telling of this story/nightmare. So, I will share………
Background…….youngest daughter is 19, and until age 16 was always “Dad’s little buddy”. Her father held out high hopes for her, because she (was) smart, and wasn’t a shrinking violet, wasn’t intimidated/taking no crap from anyone. Sometimes this tendancy got her in trouble with minor authority figures, but I felt that this taught her that running her mouth without using a little discretion/judgement meant there was a price to be paid. And one of the messages I’ve been telling all three of them from age 13 on, is that nobody has any business getting married before they are 25-30, and have lived on their own for a few years; that it was insane for 18 year olds to get married…..people change a lot between 19 and 25, and you may not like that person when he/she is 25.
Started dating “C” in High School. At the same time, coincidentally or not, (IMO) her brain cells seemed to be dying off faster than they were replaced. Spent way too much time watching “16 and Pregnant”, and thought it was great that 17 year old mothers would be young enough to be “friends” with their daughters. Spent a lot of time hanging around with “C”’s parents, who (as many kids out here in Farm State do) had him at age 18-19. This makes X-GSfixr almost 20 years older than most of the parents of the kids she went to school with. About this time, the -fixr started hearing comments from the youngest daughter about how he was … “no fun, unlike “C”’s parents” and “You are old enough to fart dust…..”
And his mom is a realtor.
Anyhoo, they broke up two years ago, reasons unknown. “C” joined the military and trained as a helicopter mechanic. Daughter graduated last year, started working full time (with dad’s approval) because she had no idea what she wanted to major in, or where to go to school, unless it was to party…..so why waste the time/money? The -fixr was in the same situation himself 30 years ago, so it seemed to be an okay plan. Started an on again-off again relationship with a kid that I liked less and less as time went along.
Fast forward to approx 6-8 weeks go. Loser boyfriend is out for good. Hearing rumors that she has been in contact with “C” who is coming home on leave from an overseas deployment, in mid April. Daughter asks to borrow my car to go pick him up at the airport. No problem, I have a spare vehicle. She has it for 2-3 days. A couple of days after that, I pull the car in the hangar to clean it out/wash it.
Now, ask yourself this……what is the VERY LAST thing a father needs to find in his car, after he has loaned it to his daughter, to go pick up a kid who has been deployed for a year?
(To digress, I have three daughters. And one of the things you have to know is that, when they turn 16 or thereabouts, there are some things you really don’t want to know. I remember a conversation I had with daughter #2 when she was 17 and living with me, and I raised the subject of getting her on the pill, by asking her if she felt like she needed to be on them. She looked at me like I rode the short bus, and said “I’ve been dating “X” since I was thirteen; what do you think?????”)
Returning to my narrative, you are right. Found a giant, economy sized variety pack of Trojans. Unopened. I couldn’t decide whether I should be happy about this or not. Evidently, he was planning on getting, as they say, “mad at it”.
Seeking an explanation, I took a picture of the box, and texted it to her.
Says it is a gag gift from his buddies. As I told my friends, “Her story is semi-plausible, so I choose to believe it……..”
A week and a half ago, I get text messages from my other two daughters, saying that daughter #3 is engaged. No calls from daughter #3 to confirm/deny, other than I should plan to take a specific day off next week, if I could. A couple of days later, they say that they are getting texts saying they are getting married NEXT WEEK.
Still nothing until last Monday, when I get a TEXT MESSAGE from her, letting me know what time/day it was……and a request to help pay for it if I could.
Needless to say, the -fixr has about 10 Megs worth of reasons that he’s not happy about this. (Unlike everyone else……the ex- and his parents for starters) Starting with getting a text message, instead of a visit, or at minimum, a phone call. And keeping me out of the loop, because she didn’t want to hear what she knew I was going to say. Don’t know what their plans are, nobody thinks I need to know, evidently.
After a week of turmoil,decided to go to the wedding. Know his parents only thru 2-3 brief conversations. Didn’t know anybody there, other than the ex- and her hubby. Most of the other attendees were his family and his/her friends. Dad’s worst nightmare; the group looked like a combination of the people from “People of Wal-Mart”, and “LA Ink”. Didn’t stay long, anything I was going to say would have ruined the festivities.
Which is why I’m still up at 3am. Her older sisters are doing okay (things considered) but I really had hopes that she was really going to do something useful for mankind, unlike her dad. She is fooked, and she doesn’t even know it. “C” has a good head on his shoulders (Kinda…..the military seems to have helped quite a bit), but who knows what he’s going to be like at 25-30? Her maturity seems to have regressed over the past year and a half, they won’t be getting any adult leadership (especially financially) from his parents or her mom (all debt slaves), and they aren’t paying any attention to mine. Every fiber of my being tells me that this is going to turn out badly, and I have the statistics on early marriages to back it up. I’m feeling like stupidity and ignorance have defeated common sense, and that somehow I’ve failed to get the message across.
Then,it may be that it takes ignorance and stupidity of youth to even think about getting married, and that they have some kind of plan. I hope it works out, but I doubt it. I expect that I won’t hear a peep for 3-4 years, then end up supporting her again when she’s 24, with 2-3 kids, and no college/skills.
I got married last month for the first time at 34YO. Been with my wife for the last 8 years (7 living together). I can’t imagine marrying someone at that age; seems crazy to me when I think back on who I was at 22 and who I am today….
Good news is, they got the marriage out of the way without spending a ton of their/your money (at least it sounds like it). Just hope they can hold it together.. And, whatever you do, try to get them to delay having children. A bad marriage is a mistake, a bad marriage with children is a lifelong disaster.
A couple of my friends got married when they were both 19. They had to, as she had gotten into, ahem, a family way.
They’re still married, almost 50 years later. And happily married at that.
You’re dealing with social paleoconservatives, future young republicans of america or whatever. That might help you figure then out and help figure out how to guide them if possible.
Watched a lot of MTV
Enumerate the examples above of paleoconservatism, ultra conformity:
1) They paid into the marriage industrial complex
2) They text
3) They dress to the style of the current “rebellion thru conformity” teenager look (the whole tats and people of walmart thing)
4) They bought into the teenager “rebellion” thing. I never did that. I did my own thing without either copying or rejecting my parents, which is super non-conformist. Industrialized mass marketed teenager rebellion culture is a very recent development in history anyway.
5) They joined .mil
6) Debt slave relatives other than -fixr
7) commissioned used home salesperson mom
All they need is a 4 year liberal arts degree with $150K in debt, and a massively overpriced house, and they’ll be the poster children for hyperconformity. Oh and I bet they join a “I love christ and hate every other demographic group just like they claim he hated them” hyper conformist church too.
“it may be that it takes ignorance and stupidity of youth to even think about getting married,”
No not ignorance. They’re very closely, almost perfectly, copying bad role models. Paying extremely close attention to the other kids and his parents. Not ignorant at all. Admittedly +100 on the stupidity for picking the wrong role models. There’s a guy named Paul Graham who pointed out that the hardest working most focused people in the whole world are American youth trying to be “cool” and trying to fit in. Pity its all a waste.
They can pick up the pieces in their 30s after all this IF they have their health, so I’d suggest your goal is directly or indirectly to make sure they extend their existing hyper conformity into conforming with “say no to drugs” and conforming with “no drinking and driving” and conforming with “a bit of exercise is a wise idea” then they’ll almost certainly be healthy enough to pick up the pieces.
Your other points may be on, but I don’t know many paleoconservatives with liberal arts degrees. Seems that a liberal arts degree might serve to inoculate against the other issues raised.
Going 150K in debt to get one should definitely be avoided, however.
It is interesting how liberal arts are so denigrated by some. It’s as of man’s only purpose in life is to work and make money, and anything that doesn’t directly encourage this activity is bad.
Sure would be a cold, boring world if everyone thought that way. Like living in an anthill.
paleoconservative psychologically, as in being a follower.
Liberal arts are great. Once you have a way to make a living, liberal arts make life worth living. I read as much as I can and it improves my quality of life, has nothing to do with my finances or job.
The disaster is not in getting a degree in english lit, the disaster is in getting mortgage sized loans for a degree in english lit resulting in no real opportunity to pay the loans off.
The net of (happiness from liberal arts degree) - (agony from grinding poverty for most holders of that degree) = negative number.
Lots of unemployed/underemployed college grads floating around now.
Another way to put it, is in our current declining economy, if we only produced about a tenth the number of english lit grads, they would probably be able to happily earn a living. There’s just too many grads and too few jobs.
You can get a science/engineering degree and read good literature on your own time. Seems to make a lot more sense to me.
“It is interesting how liberal arts are so denigrated by some. It’s as of man’s only purpose in life is to work and make money”
Many of the liberal arts majors (anything that ends in “studies”) are useless outside of academia. While literature and history are not majors leading to lucrative careers, they provide an understanding of life and the world that IT, engineering, accounting, et cetera do not.
goon squad, BA American Literature and MAcc Accountancy
they provide an understanding of life and the world
Then they’re not really useless outside of academia, are they?
You can get a science/engineering degree and read good literature on your own time. Seems to make a lot more sense to me.
I tend to agree with you, but many folks are not the critical types with the curiosity or endurance required of these rigid programs.
I totally agree with Vince, “There’s just too many grads and too few jobs,” yet the schools are in-business, so they continue to crank-out the diplomas.
It is interesting how liberal arts are so denigrated by some. It’s as of man’s only purpose in life is to work and make money, and anything that doesn’t directly encourage this activity is bad.
A good friend has a bachelor’s and master’s degree in English. Yet, despite these two degrees, he somehow got accepted into the USAF officer training program. And went on to fly fighters for 20 years.
In the Air Force, he found that his speaking and writing abilities opened a lot of doors. Commanding officers didn’t like to write? Well, give it to him! He loves that stuff!
Ditto for briefings of superior officers. His command dreaded giving those. Not him. My friend jumped at the chance to present them.
Liberal arts is a great SECOND major to have. These days, if a kid isn’t double majoring, he’s not getting his money’s worth out of college.
“paleoconservative psychologically, as in being a follower.”
Pass me some of that liberal arts you’ve been smoking.
Sure, help out some but don’t hock your house in any form to do it . A 2nd cousin of mine is 78 and getting foreclosed on because he put his house on the line to help out his close family , on recurring legal matters over 20 years time. Like a 400K house ,too . crazy.
“Sure, help out some but don’t hock your house in any form to do it ”
Nope debt addiction is just like opiates or alcohol… last thing you do is give an addict money. Not a penny. The sooner they hit bottom the sooner they bounce back. Every day older just makes it harder.
Now, non-monetarily you can help out by baby sitting the grandkids once in a while, etc. But never, ever, give an addict money.
(Chuckle) Ah, fixr, why do I have the feeling this will all turn out OK? I feel a little sorry for “C”, because you just know that your daughter will always be comparing him to you, and unless he mans up, he’ll come up lacking in her eyes. I think he’ll man up eventually.
You haven’t failed, not by a long shot. She’s the one who feels that she has failed you, as evidenced by her behavior.
Yeah, she was rude, thoughtless, ungrateful, etc. But she loves ya.
They could end up like my brother and his wife. (He was married 3x before 40. Married the first one because he was in the coast guard and wanted to have a family. The second two were just plain bimbos. It was kind of frightening he couldn’t see that these were not the type of women you marry and expect them to honor vows.)
….Or they could end up like my in laws. They met before he went to Korea, he was gone for quite a while, then he came back and they married. Everyone said it would never last. They’re truly best friends w/a marriage we hope to emulate.
The kid could be an example of the apple doesn’t fall far from the tree or his meager beginnings could inspire him to work hard. It’s so hard to tell at this point. There was one guy I dated before my husband that I just didn’t see as going anywhere. He seemed to be the type that wanted his parents (or sometimes me) to do things for him instead of doing things for himself. Fast forward a few years, he ended up doing just fine. Just fine indeed. I think even if it’s hard, you need to support them as best you can. But I do understand why that’s hard. I’m terrified my son will bring home the type of woman I’ve always had a tough time with: the entitled princess. I should start practicing biting my tongue now in preparation.
“Found a giant, economy sized variety pack of Trojans. Unopened. I couldn’t decide whether I should be happy about this or not.
…
Every fiber of my being tells me that this is going to turn out badly, and I have the statistics on early marriages to back it up. I’m feeling like stupidity and ignorance have defeated common sense, and that somehow I’ve failed to get the message across.”
Thanks for sharing your heartfelt tale, and good luck! Whatever comes out of the situation, don’t blame yourself for it. It’s scary how little control parents have over their kids’s lives once they reach late teenage years
Its a tad shade better than finding all of the trojans opened I suppose.
Not really, Liz….:-(
Gulfie, you’ve done your job and the plane’s aloft. There’s nothing you can do about it now, so don’t beat yourself up worrying about the flight. You’re the fixr, remember? Just be the ground crew on this one, there waiting in the hanger for maintenance and repair upon landing.
Hugs.
I wish the best for X-GSfixr…but something to consider in this comment:
Its a tad shade better than finding all of the trojans opened I suppose.
What makes you think there was only one box to start with?
Thanks. Just what I needed……
You interpreted the evidence differently than I did. My version was that given what played out in the car, the Trojans would best have been opened, but weren’t.
Yeah, you are a load of help too, Mr Ray-of-Optimism…..
Plenty of kids teater on the edge and come back. If what she’s doing now fails, she may very well consider the advice given to her by her father in the past. Both my brother and sister turned it around. One after dropping out of highschool and blowing all the college money. Leave a door open for redemtion.
My three sisters and I have all ‘turned it around’ in one way or another, at various points in our lives. At this stage, we are fortunately all in reasonably good health, both financially and physically speaking, and old enough to worry about how the next generation is going to pull through their formative years of adulthood. Thankfully, our parents have always left the door open for redemption or regrouping, and none of us have overtaxed the parental welfare system to the breaking point.
It isn’t the best scenario, but it is a long way from the worst.
One can say that the better scenario is not to get hitched until close to 30, when you are a little less sex-driven and a little more level headed. Less likely to be tempted when things get tough and alternatives come along.
Or one can that being dedicated from the start is better. Less likey to be ever considered alternatives to start with.
The ultimate question is what is “C” like, and how will he evolve? If my daugthers end up with someone who is kind and responsible, regardless of any other attributes and circumtances, I’ll be satisfied that they’re (unfortunately) with someone in the top 25%. (The share of females with those characterisitics is slightly higher).
If he’s kind but not responsible it could be OK, but she’llhave to carry him. If he is responsible but not kind it probably won’t be OK, but might be. If he’s neither, your scenario will pan out.
“…a little less sex-driven and a little more level headed.”
That could inadvertently turn into a recipe for fewer grandkids…
My condolences.
I made plenty of mistake when I was young, but getting married wasn’t one of them.
Having kids either. I was too poor.
Many people have asked me if I regret not having kids. Not as much as I would have trying to raise them at a serious economic disadvantage. Grew up poor and swore I never subject my own kids to that.
Hang in there fixr. Every generation has to re-invent the wheel.
Same situation with me. I could not afford to be a father until my 40s. A salaried engineer in an area that is boom and bust is not stable enough for me. But in my late 49s I started reading about more risk of autism and mental illness in children who have older fathers. I decided it was sadly too late to be a father when I just started being able to afford it.
On the bright side, I have less stress about financial issues than most fathers.
I swam 4100 yards this morning and did 176 pushups (military style and with the wrist-saving pushup bars). I have time enough to stay in shape and have a better build than the average man 20 years younger. Focusing on health and career over relationships is the key.
I guess I’ve just watched too many friends get divorced, and seen too many parents dealing with children who made their lives worse instead of better, to have any illusions about marriage and parenthood.
Another deterrent is that, while I love my parents, I look at how they raised me and feel like I can both realistically see their failings as parents, and also realize I have many of the same personality flaws that would make me mess up in the same ways.
“I really had hopes that she was really going to do something useful for mankind, unlike her dad.”
You are too hard on yourself and your daughter. If she manages to settle down to a stable family life and raise a family against the backdrop of a troubled world, she will be doing something useful for mankind.
How many lives have been saved by your work, fixer? Probably dozens.
Yeah…..but most of them are banksters and 1%ers.
Mixed feelings = Watching your new Corvette or Ferrari go over a cliff, with your mother-in-law in the drivers seat.
My oldest sister did about the same thing. She, an honors student, went directly to college majoring in child development. Two years into college her friends hooked her up with a gardener. Marriage in Nevada with only them and her best friends, not the family. She was pregnant before marriage. Ended up with the degree but decided she just wanted to be a homemaker supported by a gardener. Two more kids, separation. Now she has been working low wage the last eleven years as our parents are not around to subsidize them. Her husband left a long time ago and good riddance to him. The bright side of this story is that her youngest, in late 20s now, is graduating from college. Arts and humanities, but at least she wants to pursue masters degree. Maybe your grandkids will know better than your girl.
Children Are Liars.
That’s gotta hurt. I have some hope for them, though…my wife’s parents wouldn’t have had much reason to feel any better about me when we got married in the military. And I have to say her life and her marriage have worked out far better than any of her siblings.
My husband’s cousins are both living very successful lives after apparently behaving like absolute wild children in their early years. It’s hard to believe the stories when I meet them now. They’re described as the type of girls that gave their parents ulcers.
OTOH, I’ve seen some straight A, straight arrow kids swerve severely off course once they get a bit of bitterness in their veins. They just don’t recover once it’s revealed how unfair life can be even when you’re that good and work that hard. You just never know how kids will handle the curve balls in life. Some will rise above. Some will stumble and fall.
OTOH, I’ve seen some straight A, straight arrow kids swerve severely off course once they get a bit of bitterness in their veins. They just don’t recover once it’s revealed how unfair life can be even when you’re that good and work that hard.
Wow, you have to expand on this tangent.
-fixr:
The best you can do is try to imprint your values on your kids. But - they eventually become autonomous actors. You can’t control them. You’ve given the daughter all the tools you can provide so she can make decisions on her own.
My recommendation: There’s nothing you can do about this short of kidnapping your daughter. And the authorities tend to frown on that sort of thing. So - smile politely when you’re in their company. Perhaps write down your thoughts about what’s going to happen, maybe even get it notarized. So you can show your daughter what you predicted would happen.
But for now - there’s no point in sweating it. She’s an adult, you did the best you could with informing her, she’s an autonomous actor and will behave how the intersection of her reptilian brainstem and logical forebrain dictate.
Get some popcorn and watch the show.
Every fiber of my being tells me that this is going to turn out badly,
It most likely will - but don’t be a part of of it turning out badly.
For good or bad - your adult daughter is married now. Support her and her new family as best you can. Be someone they can trust. Be a pillar of strength - they are going to need it.
You can prepare for the worst in private and silence (a divorced daughter moving back in with you with a couple of kids).
You can pray too. I know to some on this board that means you have lost your mind - but miracles do happen. And marriages that started out far more rocky have lasted for a lifetime of bliss.
“For good or bad - your adult daughter is married now. Support her and her new family as best you can. Be someone they can trust. Be a pillar of strength - they are going to need it.”
Awesome advice! Accepting what you cannot change, and making what you can change better is what parenting is all about.
You can pray too. I know to some on this board that means you have lost your mind…
+1
I feel for you, X-GSfixr. They should have follow-up reality shows to the 16 and pregnant that show the downside 10 years later.
It sounds like she didn’t know what to do with her life, so she may have felt that marrying C provided direction. I say felt, because she may not be consciously aware of it. And a lot of girls get sucked into the romance of rings and showers and weddings.
To look on the bright side, she chose to marry someone who has military and job training. At least she didn’t marry the loser. And she didn’t have kids before getting married. If she had gone to college for a year or 2, she could have met some nice young college man with 100K in student loans.
19 is a bit on the young side. But I have known successful marriages where the parties were both young.
For women, I think 30 is getting a bit on the old side. Just on the basis of the biological clock and earlier maturity. I think 23-27 works better.
If she had gone to college for a year or 2, she could have met some nice young college man with 100K in student loans.
Good point, and a sad commentary of our times.
Wouldn’t she have attended Kansas State, perhaps? You can get through most State U’s without borrowing 100K, especially if you live at home.
I did the not-well-though-out marriage thing 20 years ago. I had to live through the results of that “decision”, and learned alot. And got out. But we had no kids, so…. yeah, that’s the kicker. Especially if “C” is in the military, these guys get bounced around the country/globe. Not the most stable situation, even in a healthy marriage. It sounds like you’re going at this with the right attitude though. Good story too, so thanks for sharing! I just had my first child last year, at age 46. A boy, though. Different issues will present themselves
First line should read “well thought out”
not-well-though-out
That kinda works, too, though.
Out of curiosity, what size Trojans were they?
Sorry fixr, I couldn’t help myself.
Fixr, much empathy. You showed real class going to the wedding, given that you had gotten the cold shoulder on the details, being effectively shut out of the time honored traditions.
Looking at it from another angle. She may know she is behaving poorly, and doesn’t want to hear about it. You have succeeded in conveying your message - it’s locked in the DNA.
That being said, this is a difficult era. There is a lot to be said for economies of scale, combining households, etc. If, as you say, they both have heads on their shoulders, this is one way to survive in difficult times. I’m sure she sees marriage as more than a way to introduce some novelty into what may have become a somewhat constrained life. There’s a lot to be said for the old fashioned notion of having a “helpmeet”. They could grow to be the best of friends.
Which doesn’t help you at the moment, of course. But I’m betting on inherent good sense. At least they’re not drowning in debt.
IMHO, the thing to do is to set your mind to the dignity of self-determination and maintain a benevolent posture. Sometimes people rise to the level of the highest expectation. Having a life with a friend to share the events, and the expenses, is an honorable course.
They are both adults and merit the benefit of the doubt. Look on the bright side. You’ve got somebody else to share the load of worry!
Best to you.
Reply to NYCdj, re: layoffs at Hawker Beechcraft
HBC is a dead man walking. The only franchise they have that’s worth anything are the King Airs, and their military sales. They sell 30-40 King Airs/yr to the US government and the T-6 program is winding down. HBC is protesting the decision of the USAF to supply the Embraer Tucano to foreign governments as a low cost ground support aircraft, but the fact is that the Tucano is bigger, cheaper (as I recall), carries more, and flies farther.
Their new product development/engineering/manufacturing team has blown every new product launch since 1990:
-The “Starship” was too heavy, too slow, too many problems, and too late to market/certification. It then had to compete against the Cessna Citation V, which carried more passengers, flew farther, 100 knots faster, with fewer problems, and cost the same money. (Beech built 50 Starships, Cessna around 1000 Citation Vs of all models)
-The “Premier” was the same. A year late to market, too heavy, too slow, and more expensive than a Cessna 525/CJ1 or CJ2.
-The “Horizon” has been a disaster. It took Cessna approx. 2 1/2 years to get the Citation X to market, from first flight to certification (and the C-X is arguably a more complex/sophisticated airplane). Hawker Beech needed EIGHT years to certify the Horizon/4000 (including an extension from the FAA, otherwise they would have had to start over, and redesign the airplane to be in compliance with all certification regs since 2000).
The airplane (note: IMO) is a giant piece of crap, totally unreliable (rumor has it that the very first airplane delivered to a customer had to declare an emergency on it’s flight home), and like rats from a sinking ship, all of the engineering guys that might get the thing straightened out are baling out, heading for greener pastures. A buddy of mine is the Chief of Maintenance on one. All kinds of problems, many trips cancelled. Electrical systems (Disclaimer: evidently) aren’t wired per the Maintenance Manual, impossible to troubleshoot. On several occasions, Hawker Beech supplied them with ANOTHER AIRPLANE AND CREW to follow them around on trips, in case the thing broke and left the owners stranded. Nobody wants to risk their job recommending that their company buys one, especially when reliability is compared to the Gulfstream/Falcon/Canadair competition.
The Hawker 400 has stopped production, due to lack of orders. Wasn’t that competitive 20 years ago, and now has to go up against a bunch of next generation jets.
The Hawker 850 is a slow, inefficient design, but some people swear by them (not mechanics; they are a PITA to work on). Sales (reportedly) have been supported mainly by offering “good buddy” deals.
The piston engine product guys are evidently finding that it’s tough to sell a $750K-1 million dollar Bonanza.
Prediction: Someone will buy the King Air line, some Defense contractor will get a good buddy deal to finish out the T-6 order, and somebody will buy the 850 tooling to support all of the Hawkers built.
The Premier and Horizon/4000 are more problematic. First of all, you will need access to a giant autoclave(s) to build aircraft and/or parts. Then you are still stuck with the weakest (IMO) products in their market segments.
All of this must be the Machinist Unions fault……
“All of this must be the Machinist Unions fault……”
[... not to mention that the machini$t are gro$$ly overpaid as compared to the geniu$-of-the-Executive$$$$$]
I’ll always wonder what it’s like to lose the company you manage, millions of dollars and still get to keep your job.
It costs millions to retain that kind of talent!
Fixer, my husband and I co-own a 2001 Bonanza with a partner. Evidently there is a market for used ones that the brokers hope to snap up from owners who find themselves in dire financial straits…at least I gather this from the mail we receive offering to buy our plane. Is HBC’s bankruptcy the beginning of the end of general aviation in the U.S. ?
No. It will prove that there is no market for a new, one million dollar piston engine single/twin, when you can buy an used early C-525 jet for about the same money.
Looks like we are going to transition/evolve into a copy of the rest of the First World/europe is currently. Business is way down, current owners are 70 years old and losing their medicals, too expensive to learn to fly for recreation (unless you are a 1%er) most pilot starts now are for guys looking to go fly for a living.
Airframes are a loss leader. The real money is made in engines and avionics. Airframe manufacturing could get bought up by the Chinese, but prices won’t drop much, because
A) The current US manufacturing employees are “Lucky Ducks”, no $50/hr plus bennies salaries to be seen, and
B) All of the expensive components are still Made in USA, by companies smart enough to avoid “partnerships” with the PRC.
Even if prices were cut in half or 2/3, I’m not sure it would help much. Most kids don’t seem interested, would rather fly an F-15 on Flight Simulator, than fly a real airplane.
Most kids don’t seem interested, would rather fly an F-15 on Flight Simulator, than fly a real airplane.
If it flies, floats, or effes, then rent it.
The last one I always took to mean things like horses, but you know…
In other words, a luxury industry has priced itself out of business.
I love it.
Not really. More like the cost of slightly used “high-end” luxury has dropped significantly, making new “low-end” luxury overpriced in comparison.
If you were in the market for an airplane of any kind in 2009, and had cash, you were definitely in the catbirds seat.
In the interim, the “upper high-end” market (big cabin/10 or more seats, more than 4000 mile range) market has firmed up considerably. Mainly because of the international business demand, and the limited number of available airplanes/delivery positions (basically, the G-IV/G450, G-V/G550, Bombardier Global Express and Challenger 604/605s, Dassault Falcon 900/900Easy/7X).
Anything smaller (less than ten seats, 3000 miles or less range) still has more sellers than buyers.
Heck, just the R/C version is a luxury.
Is HBC’s bankruptcy the beginning of the end of general aviation in the U.S. ?
I’ve toyed with the idea of buying a Cessna 180/185, but the fixed costs today (even if not flown) prove too high for my taste — insurance, taxes and hanger costs. I used to own a $7500 Cessna 172 back in the late seventies, but it wasn’t powerful enough or equipped with the avionics to travel long distance safely.
Comment by Ben Jones
2012-05-12 08:04:02
“They just now told me I was on a list of agitators, and if I caused a problem they would kick me out. Should be an interesting day.”
That is one of the most aggravating things I’ve heard. An agitator? THis blog compared with Fox News? Come on! Just someone who more or less seems to believe what Republicans supposedly believes and says so.
I’d probably get about the same reception from Democrats in NY.
And forget about any shareholder who shows up at a corporate board meeting and suggests reducing executive pay and using the savings for dividends.
“An agitator?”
I’d be very curious whether anyone backing a non-Romney candidate fit that definition. Ben?
That is one of the most aggravating things I’ve heard. An agitator? THis blog compared with Fox News?
I interpreted that to mean he might have some extra-curricular agitator activities outside this blog :-).
Or that anyone who backed Ron Paul was identified as an agitator.
Sounded to me like they might have singled him out even amongst the Paul supporters.
The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy
http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?ref=magazine&pagewanted=all
article is based on an interview with the author of an upcoming book
tease:
Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support. He advocates creating a new government program that guarantees to bail out the banks if they ever face another run. As for exotic derivatives, Conard doesn’t see a problem. He argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors, who bought them in droves. And they didn’t cause the panic anyway, he says; the withdrawals did.
Seriously, guys, read the article. It is more interesting than Krugman’s speculation on the end of the Euro. That is why I posted it first.
“romneys-former-bain-partner-makes-a-case-for-inequality
…
Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support.”
So is Romney going to come out in favor of derivatives bailouts (and less financial regulation)?
Hopefully he will stop talking so much about ‘taking this country back’ and clarify his position on a few big issues before November.
They’re playing poker with each other. Unlike real investments, the only money created outside a zero sum in the taxpayer bailout.
Contrary to Fast Puss’s impertinent assertion on Saturday, the clueless dumbass defense isn’t gonna fly for Dimon.
JPMorgan Sought Loophole on Risky Trading
Jim Young/Reuters
JPMorgan’s trading mistakes “were self-inflicted, and this is not how we want to run a business,” said Jamie Dimon, above, the bank’s chief executive. The bank’s shares tumbled 9.3 percent on Friday.
By EDWARD WYATT
Published: May 12, 2012
WASHINGTON — Soon after lawmakers finished work on the nation’s new financial regulatory law, a team of JPMorgan Chase lobbyists descended on Washington. Their goal was to obtain special breaks that would allow banks to make big bets in their portfolios, including some of the types of trading that led to the $2 billion loss now rocking the bank.
Several visits over months by the bank’s well-connected chief executive, Jamie Dimon, and his top aides were aimed at persuading regulators to create a loophole in the law, known as the Volcker Rule. The rule was designed by Congress to limit the very kind of proprietary trading that JPMorgan was seeking.
…
I have to wonder how many times this guy has watched “It’s a Wonderful Life” reruns? He seems utterly clueless to the reckless Wall Street-fueled credit binge which played out in the years leading up to the Fall 2008 financial collapse.
…
In 2008 it was large pension funds, insurance companies and other huge institutional investors that withdrew in panic. Conard argues in retrospect that it was these withdrawals that led to the crisis — not, as so many others have argued, an orgy of irresponsible lending. He points to the fact that, according to the Financial Crisis Inquiry Commission, banks lost $320 billion through mortgage-backed securities, but withdrawals disproportionately amounted to five times that. This stance, which largely absolves the banks, is not shared by many analysts. Regardless, Conard told me: “The banks did what we wanted them to do. They put short-term money back into the economy. What they didn’t expect is that depositors would withdraw their money, because they hadn’t withdrawn their money en masse since 1929.”
…
I would read the article, but the tease alone makes me want to strangle somebody. This guy argues that things were going along just fine, and it only went bad when the OP in OPM cut off the M for him to skim. And this was Romney’s BFF?
Karma is acting like Godot, and it’s mightily depressing.
Classic junky.
I did pick a very provocative ‘graph for the tease. The rest is infuriating, but more in a slightly more indirect way, I suppose.
His basic argument is that people who are smart and just have normal jobs like teaching and programming and research and generally doing stuff (sounds like he would include doctors) are a burden on society because they should be out there taking huge risks and trying to get giant financial rewards. That is why he thinks that we have too little inequality in our society and that rewards should be even larger for risk takers and that society should be structured to make sure they get it (evidently helped by at least some of them not taking a hit when they bet wrong as evidenced in the quote).
How is it taking a risk when the gov bails you out. If the gov will guarantee me against losses I’ll go put my entire savings on #7 in Vegas.
He seems to define risk as the chance (not guarantee) to make a lot of money without any real prospect of losing a lot of money (other than opportunity cost of a less “risky” job).
Sounds like a gambling addict.
However, I too agree that those who take big risks should be able to reap big rewards. Under our current system, in the financial sector, big risks can lead to big rewards. But if they fail, they suffer no consequences. The taxpayer suffers the consequence. From the JP Morgan incident, “The Whale” made about 100 million last year. This year, he’ll walk away from the company, no personal loss from his botched trading, and he’ll probably walk away with a golden parachute. JP Morgan is TBTF. If the company gets into trouble, it’ll get bailed.
I urge these people to feel free to take risks. Feel free to take advantage of arbitrage opportunities, as they do. But if they go bad, expect to bear the full brunt of the downside. Don’t pawn it off onto unwilling bagholders and their families as they’ve been doing.
It’s not a “risk” if you can’t lose.
Yet, a point from yesterday, Dodd Frank makes it more expensive for small investment funds to take risk with equity capital. Small funds comprised entirely of equity, that do not lend to consumers, but invest in private enterprise, who were not bailed out, are now subject to more regulation than ever.
Dodd Frank makes it more expensive for people to take the good kind of risk (equity, not subject to massive, financial market ending calamities).
The top financiers are still partying like it’s 1999.
Why do I keep thinking of what NASDAQ did in early 2000?
That is why he thinks that we have too little inequality in our society and that rewards should be even larger for risk takers and that society should be structured to make sure they get it
The guy is a complete moron. I have no problem with risk-takers reaping a reward, but Wall St. is based on gambling OPM with backing from the Fed Reserve and US Treasury… what “risk” are they taking?
I think a swift kick in the junk might be in order for this guy…
“I think a swift kick in the junk might be in order for this guy”
After this country’s transition to Idiocracy (see also above post referencing People of Walmart) maybe they could air it on “Ow! My Balls”
maybe they could air it on “Ow! My Balls”
LOL.
They’re really proud of themselves aren’t they. like the big swinging ____at Enron.
“stupidest b1tch a Realtor can buy”
The new handle is great.
My crack dealer says crack is good for me and the press has bene overly hard on the drug.
Damn agitators!
http://www.businessinsider.com/and-now-we-know-the-truth-about-wall-street-its-kids-playing-with-dynamite-2012-5
“Wall Street can’t be trusted to manage—or even correctly assess—its own risks. This is in part because, time and again, Wall Street has demonstrated that it doesn’t even KNOW what risks it is taking.
In short, Wall Street bankers are just a bunch of kids playing with dynamite.
- “The first reason is that the gambling instruments the banks now use are mind-bogglingly complicated. Warren Buffett once described derivatives as “weapons of mass destruction.” And those weapons have gotten a lot more complex in the past few years.”
- “The second reason is that Wall Street’s incentive structure is fundamentally flawed: Bankers get all of the upside for winning bets, and someone else—the government or shareholders—covers the downside.”
$torage! $torage! $torage! + “bottleneck” withdraw dynamic$ = Profit$! Profit$ Profit$
Theys $mart, real $mart!
New Obama TV ad attacks Romney’s Bain Capital past
May 14, 2012, 10:14 AM
A new Obama reelection campaign ad attacks Mitt Romney over his Bain Capital past, in particular his firm’s 1993 acquisition of a majority of GST Steel, a Kansas City steelmaker. The campaign didn’t have to look hard to find the firm — Texas Gov. Rick Perry also attacked Romney over Bain’s handling of the firm during the Republican primary.
“Bain Capital was sucking money out of the company like there was no tomorrow,” one former worker says in the Obama ad. The aid is due to run in Iowa, Ohio, Colorado, Virginia, as well as the state most closely associated with the steel industry, Pennsylvania.
…
A gay bashing bully who loves to fire people is the best the GOP can nominate?
Four more years of the Community Organizer coming your way!
Which Republican candidate would you have preferred?
- Newt?
- Rick Perry?
- Michelle Bachman?
- Herman Cain?
By Hamilton Nolan
May 14, 2012 9:49 AM
Herman Cain’s Just Another Wacky Gold Bug Now
Whatever happened to that guy, baldie, the funny mustache man, the one who was momentarily taken seriously as a Republican candidate for the Presidency of the United States of America? Pizza guy? Oh, I see—he’s just writing op-eds in the WSJ to reconfirm his fundamental lunacy. What say you, Herman Cain?
…
Well, let’s see what else they had in their quiver:
A Catholic who thought he was a Protestant Fundy
A serial wife cheater
A philandering, former pizza chain CEO who wanted to give even more tax breaks to rich.
A governor whose state prospered thanks to high oil prices (didn’t we have that guy already?)
And a few wild eyed fundies.
All of which are better than the Communist community organizer and his team we have serving today…and I do not say that with much reverence for any of the republicans.
We are not a communist country, only a small fraction of a percent of the population want us to become a communist country and very few will vote for communists if they tell the truth when they are running for office.
The democrats have to go back to their roots…John Kennedy and Hubert Humphrey. This social justice road you are on is a very dangerous one for this country.
Nearly every economist I spoke with said that Conard has too much faith in the market’s ability to reward only those who create real value. Conard, for instance, insists that even the dodgiest financial products must have been beneficial or else nobody would have bought them in the first place. If a Wall Street trader or a corporate chief executive is filthy rich, Conard says that the merciless process of economic selection has assured that they have somehow benefited society. Even pro-market Romney supporters take issue with this. “Ed ought to be more concerned about crony capitalism,” Hubbard told me.”
At least half right about rewards verus risks but what merciless process of economic selection and bailing out Banks have to do with each other ?
It is going to be a lot of fun if he goes on John Stewart when when the book comes out.
Uh huh. Because people have perfect information. I think Mr. Conard should stop spouting canards. I think Mr. Canard thinks that because someone can be suckered into buying a worthless (or worse) logical construct, then it has some value. A better name for this is a scam. It’s similar to the shell game. Just because the Con running the game gets the mark’s money, doesn’t mean there was a net benefit to society. The product had no value to the mark, or to society. It was just a fraudulent transfer of wealth.
And is this guy for real? His name sounds Onion-esque, a combination between “Con” and “Canard”. A fictional, slightly humorous villain’s name in a novel. Like Louis Cypher.
And I hate to bring up poor Fabrice again, but he too created dodgy financial products, and below is his description of some of them. He talked too much. From his emails:
“I managed to sell a few abacus bonds to widows and orphans that I ran into at the airport, apparently these Belgians adore synthetic abs cdo2,” Tourre said.
In an even more blunt description, Tourre calls the CDOs he produced “intellectual masturbation” and likens himself to Dr. Frankenstein.
“When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: ‘well, what if we created a ‘thing’, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?”) it sickens the heart to see it shot down in mid-flight…It’s a little like Frankenstein turning against his own inventor ;)”
http://money.cnn.com/2010/04/26/news/companies/Tourre_Goldman/index.htm
Too little inequality.
How much inequality is enough? When he owns everything, will that be enough inequality?
Eurodämmerung
(this is a Paul Krugman blog post)
Some of us have been talking it over, and here’s what we think the end game looks like:
1. Greek euro exit, very possibly next month.
2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.
3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.
3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing.
4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:
4b. End of the euro.
And we’re talking about months, not years, for this to play out.
That was the whole thing, but here is the link if you are interested:
http://krugman.blogs.nytimes.com/2012/05/13/eurodammerung-2/
“4b. End of the euro.
And we’re talking about months, not years, for this to play out.”
Thank God. Although truth be told, it has been playing out for years already. The drip-drip-drip of the long-running Greek tragedy is painful to even read about.
It sounds like there will be plenty of Eurozone-driven financial excitement over the summer months — perfectly timed for the runup to the Fall 2012 U.S. presidential election!
“2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.
3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.”
Whatever causes the most destruction and pain is always what happens. My alternate reality for 3a. is the funds dumped into Germany are “forced” into being sent into Spain and Italy to prop them back up for a little while longer. After the collapse that’ll destroy Germany too, which is why it’ll be done that way.
$1K gets withdrawn from the Bank of Pasta and deposited in Cologne Coo Coo Clocks Bank Inc.
$100K (the power of fractional reserve banking) from Coo Coo Clocks bank gets spent on Bank of Pasta bonds and perhaps even deposited into the bank itself.
I almost guarantee that money that gets pulled out of Italy and sent to Germany is getting sent right back to Italy, one way or another. With heft transaction fees and taxes, of course.
“Eurodämmerung”
For those of you who aren’t fans of Richard Wagner’s operas, this is a cultural reference to Götterdämmerung (Twilight of the Gods), last in Richard Wagner’s cycle of four operas titled Der Ring des Nibelungen (The Ring of the Nibelung, or The Ring for short). … The title is a translation into German of the Old Norse phrase Ragnarök, which in Norse mythology refers to a prophesied war of the gods that brings about the end of the world.
(Sorry to steal Faster Puss’s thunder here, but I assume he is busy today trying to make some money by “hedging” the Eurodämmerung…)
What’s that saying, if you owe the bank a hundred thousand dollars, the bank owns you. If you owe the bank a hundred million dollars, you own the bank.
Greeks May Hold $510 Billion Trump Card in Renegotiation
By John Glover - May 10, 2012 6:04 AM ET
Bloomberg
Greece’s next government may hold a trump card worth more than $510 billion if it heeds voters’ demands to renegotiate its bailout with the European Union.
The ECB “would have to do a capital call on the rest of the members if there was a default,” said Darren Williams, chief European economist at AllianceBernstein Holding LP in London, which manages about $420 billion. “It would be a meaningful hit. So, yes, the Greeks do have some leverage.”
http://www.bloomberg.com/news/2012-05-09/greeks-may-hold-510-billion-trump-card-in-renegotiation.html
Could it be that private financiers underestimated the Greek government’s skills in playing the “too-big-to-fail/must-be-rescued” trump card?
Interesting but Krugman is so excitable, I wonder if he stopped taking his meds or something.
Just a note:
Yesterday is was implied that I had a child. I DO NOT. That was a misread. There was another HBB poster, eastecoaster, a single mother with a son. After she bought, she wisely left the blog.
Joesmith, I’m probably being attacked because I bought in a much higher price range than you did. There is quite a difference between Montgomery County and Baltimore City. I also do not have the luxury of two incomes. I guess HBB won’t be happy until all the single people are stuck in 1-bed apartments until we retire, and then wind up in a box under a bridge because we can’t afford rent on SS.
Victim. But not in the way you think.
Oxide,
Keep your head up. I bought 2 years ago, told the folks on here about it, and then quickly shut my pie hole.
Just because buying was the right decision for you/me doesn’t mean it’s the right decision for others, or for many of the people on this blog.
In case you’re wondering, given recent sales, I’m about “even” with what I paid for the house (no real appreciation, but no depreciation either).
The way I look at it is this. What are future inflation expectations (gold bugs, feel free to chime in here)? A fixed rate mortgage at 4-5% if inflation touches off (which the government is trying to do in every possible manner) will be a huge money maker. I’m in a high tax bracket, so that MTG interest really only costs me about 3% (after factoring in the deduction); the question to ask yourself, what do you think is going to happen to inflation over the next 10-15 years? I think that people who assume it’s going to stay <3% are crazy; IMHO, it’s already higher than that!
I’m hoping this will be my “one and done” house. I’m going on 35 years old, and would like to have this house paid off by the time I’m 50-55. Moving is way too expensive (transaction costs and actual hard costs) and disruptive to my life, my previous 3 rentals all were “get out” situations (2 foreclosures and 1 condo conversion); all of them seemingly occurring at a time in my life when I really didn’t need the added stress.
Is it the best financial decision? Probably not. Does it improve my quality of life? Yes, it does. So, IMHO, it wasn’t a terrible buy, and I’m happy with my decision.
My parents also bought a few months ago down here in FL. 80K for a 1500 sq/ft home in the Tampa suburbs. I’m not sure how wrong you can go with a purchase like that.
Unlike 2006, there ARE deals out there in the market right now; they may not appreciate, but they will lower your cost (or raise your standard) of living. It’s just a question of what do you think is more likely; continued depreciation for the next 10-15 years, or increased inflation?
Which Tampa suburb did your parents buy in? $80k for 1500 sqft sounds like the real sweet spot.
I tried asking Overtaxed this before, but got a “it’s all true / read it and weep” response which means it’s in the ‘hood.
“Keep your head up. I bought 2 years ago, told the folks on here about it, and then quickly shut my pie hole. :)”
Exactly, same here. And with so many pluses and minuses. I’ll just share the minus, I’m sure many here will love it. It’s a 1600 square foot house, 4/3. Was a foreclosure, listed for 185,000. The flipper had bought it for the obscenely low price of 156,000 at auction. It had some exterior wood rot (the exterior is that masonite crap). We loved it, and it appraised at 225k, so we actually offered 189k on the condition that they replace the masonite sheets that were rotted, and repaint the whole house, which the seller agreed to. A year later, a small leak during rainstorms. Most raindrops here fall from SE to NW (well, and down also). There’s a particular part of the house that gets pelted the most from October-April. And in the summer, that same part of the house gets the most of our brutal summer sun (we’re near Sacramento). Add in the fact that masonite siding is crap and needs to replaced every 8-10 years regardless of weather, and you have a bad mix. We have to have the house re-sided sometime before September, to the tune of a few thousand dollars. I guess we’ll do vinyl, I’ll be dead before it needs replacing. Anyone feel free to offer advice here. I’m happy that we can afford the new siding, but hell, we paid someone $4000 to do something in October of 2010 that we’re going to pay around $5000 to have done again this summer.
Oxide, maybe it’s because we are personally acquainted, but I am absolutely certain that you made the right decision for you at the right time. In fact it gives me pleasure to think of you spending these spring weekends sprucing up your new nest and planting things in your yard. Would you send me your address? eowyndor(at)gmail.com
I would love to take part in a virtual housewarming party for oxide. Anyone else?
Absolutely! Your suggestion alone has increased her home’s *value*. Make it so. Congrads, oxide!
There are some bitter posters here on HBB.
If you love your house and can truly afford it - who cares what other people say?
I have been in my house 22 years. My wife and I bought a 4 bedroom fixer-upper we thought we would fix-up and move in a few years.
22 years later with a bunch of kids we are still in the same house. It is mostly fixed up and we love it.
And it is almost paid off.
I almost drank the kool-aid a few times. “Liberate the equity” loans and/or buy a bigger/new house and move up with your peers…
“Liberate the equity” = take out a loan and put your house up as collateral. An absolute triumph of marketing.
Yep - I kept coming to back to the part of where I need to pay the money back.
No one ever talked about that. Only what you could DO with the money NOW.
“I kept coming to back to the part of where I need to pay the money back”
That is what I always thought about when people said you could borrow the money for the down payment. Doesn’t that mean I have to pay back two loans?
Ha! Hi, Oxide. Didn’t completely leave the blog…just don’t visit as often.
So how about a little update? Been 2 years in the house. Still an unbeatable neighborhood in my school district. Still great neighbors. Still managing just fine financially.
Negatives are that value has dipped a bit (I knew that would happen…it’s currently hovering around where I thought it would drop to ultimately…a bit concerned the dip is not over). Doesn’t matter unless I need to sell, of course. However, though I hadn’t seen any “better” houses for sale for close to 2 years, I have been seeing some lately. Better meaning in better shape and cheaper than I bought mine for. A few in my general neighborhood, but not on my exact street (I have a very private street - these are on busier roads). Still, the thought of having something already in better shape has bummed me out some. I need a few major things done (the most pressing being siding/windows and a few things that go along with that project that I’ll spare the details on). However, I’ve just come to the conclusion that nothing is perfect and our house is fine…the work will get done in time.
Am I in love with the house? No. Is that bad? I don’t think so. Why? Because I don’t think I should have that strong of an emotional attachment to a structure. My son loves it (like I loved my childhood home) so that’s great.
Will I die in that house? Probably not. If not before, I do see myself downsizing to a townhouse when my son graduates high school in 10 years.
For now, we’re A-OK, though. Proud of myself both for making the purchase and, subsequently, being able to manage it.
But I do still tell younger folk to take their time…housing is still getting cheaper…don’t buy if you’re planning to sell in a few years…renting is not a bad option…yada, yada, yada. My view has not changed one iota since I started visiting this blog oh-so-many years ago. Not one.
Unfortunately, I think I’m going to fall in love with my house… when I’m done renovating it … in a decade.
Hahaha! That’s what happened to me. For the first ten years or so, we referred to it as “the Little House From Hell” as it sucked up a lot of our otherwise disposable income. Then, sometime between the basement-finishing project and the kitchen remodel, we stopped calling it that name. It is a very homey, comfortable abode now. Although on occasion my mind does wander to thoughts of adding a second floor…. :O
Stockholm Syndrome
eastcoaster
Thanks for checking in. Glad to hear your son is having a happy childhood, and you’re still happy with your purchase overall. I can’t believe 2 yrs has flown by.
Watch your wallet.
Labor unions and food stamps are destroying this country!
No…. it’s the gays and lesbians…. they drove the global economy off a cliff!
Only the ones who are out of the closet and getting married did. The closeted, married to women, downlow, mens’ room toe tapping, congressional page groping, meth and escort seeking “family values” types are the kind of real leadership this country needs!
GS - Only the Republicans -
What’s in YOUR wallet?!
The Great Realtor Rip-off”
http://www.economist.com/node/21554204
If you bought a house 1998-current, you got ripped off by a Realtor.
Run go tell it on the mountaintop! She’s sticking with us! Just got a little impulsive, is all.
Bachmann Accused of “Treason” for Swiss Citizenship
http://www.slate.com/blogs/xx_factor/2012/05/11/bachmann_s_swiss_citizenship_is_it_treasonous_.html
Michele Bachmann’s short-lived experiment as a Swiss citizen ended awkwardly this week, when her beloved philosophy of American exceptionalism came back to bite her in the tushy. It turns out the far right concluded that her brief bout of dual citizenship made her anti-American. Remember that this is the congresswoman who skyrocketed to fame on an accusation that Barack Obama was anti-American. Oh, the irony!
[N]ews that Bachmann had opted to become a “Swiss miss,” as Politico delightfully termed her, upset pundits on the right wing, who called her dual citizenship “an insult to both countries,” “political bigamy,” career-ending,” “egregious,” and tantamount to “treason.”
All which appears to be why she announced Thursday that she would withdraw her Swiss citizenship. “I am proud of my allegiance to the greatest nation the world has ever known,” she said in a statement. How awkward for the Republican from Minnesota, who waxed on and on about her reverence for the Constitution and has said that God created our government.
A former Bachmann congressional staffer told POLITICO that the congresswoman sometimes acts “impulsively” and suggests that she must have registered for citizenship without considering all consequences.
Where’s lil Opie’s birth certificate!!!!!
Like I said…. we need a penetrating expose on these unpatriotic activities in congress.
http://www.reuters.com/article/2010/09/28/us-usa-democrats-offshore-idUSTRE68R40I20100928
But nobody cared then and nobody cares now.
Pass the Brawndo! Who got voted off the island on Dancing with the Idol last night?
I’ve read that the Swiss aren’t very welcoming toward Americans who decide to live there. Frank Schaeffer talks about this in his books.
Too late now to sell gold in May and go away?
Metals Stocks Archives | Email alerts
May 14, 2012, 9:19 a.m. EDT
Gold futures slump further below $1,600 mark
By Polya Lesova and Kim Hjelmgaard, MarketWatch
NEW YORK (MarketWatch) — Gold futures fell sharply Monday, as investors flocked for the safety of the U.S. dollar amid deepening worries over Greece’s political turmoil and position in the euro zone.
Gold for June delivery slumped $24.80 to $1,559.20 an ounce on the Comex division of the New York Mercantile Exchange.
The precious metal settled at its lowest level this year on Friday.
“The firm U.S. dollar is weighing on the mood of market players now that crisis-ridden Greece is likely to face new elections,” said analysts at Commerzbank AG in a note to clients.
…
Gold and stocks are starting to look better. I have a shopping list and it includes “the precious” but I wait patiently. I am anticipating a May through July dip but probably not a low enough dip before the Obama rally starting in August.
The Associated Press
Big trading loss raises pressure on JPMorgan CEO
FILE - In this May 11, 2012 file photo, people stand in the lobby of JPMorgan Chase headquarters in New York.
JPMorgan Chase is expected to accept the resignation of one of the highest-ranking women on Wall Street after the bank lost $2 billion in a trading blunder, a person familiar with the matter said Sunday, May 13, 2012. The bank will accept the resignation of Ina Drew, its chief investment officer, the person told The Associated Press, speaking on condition of anonymity because the person was not authorized to discuss the decision publicly.
(AP Photo/Mark Lennihan, File)
By Pallavi Gogoi
AP Business Writer / May 14, 2012
NEW YORK—Pressure is building on CEO Jamie Dimon after JPMorgan Chase & Co.’s $2 billion loss in a trading blunder.
JPMorgan’s disclosure has led lawmakers and critics of the banking industry to call for stricter regulation of Wall Street. Many post-crisis rules governing risk-taking by banks are still being written.
The largest bank in the United States is seeking to minimize the damage. But Dimon concedes the mistake will complicate the efforts of banks to fight certain regulatory changes three years after the financial crisis.
…
Dimon concedes the mistake will complicate the efforts of banks to fight certain regulatory changes three years after the financial crisis.
Step right up, get your conspiracy theory here, first! How’s this:
Dimon, a lifelong Democrat, picks a fake public fight with the Kenyan Muslim over Dodd(sellout)-Frank(you-know-whatter), and then goes out and purposely makes a huge, expensive blunder that actually justifies Dodd-Frank. Coincidence? No such thing- next you’ll be telling me we actually landed on the moon.
You heard it here, first! Soon to appear on the Drudge-Murdoch circle of jerks.
Ahh… the Drudge Report. Actually an interesting website if you don’t take it seriously. The headline link there now is from the UK Daily Mail tabloid. It’s a one stop shop for right wing talking points that one HBB poster loves to repost here
Just went to the Drudge Report.
Lots of articles of Greece going down in flames and the JPM fraudsters.
Are those articles off limits too? You need to post the goon squad rules on what or can not be posted (I am assuming anything that infringes on any kind of liberal group thought is off-limits).
And FYI - also on Drudge. California is $16 billion in debt and instead of touching one public union they are going to cut education.
And FYI - also on Drudge. California is $16 billion in debt and instead of touching one public union they are going to cut education.
The amusing thing about the California Budget crisis is that the state government assumed it would only be $9 Billion short this year… so now they panic when it’s actually $16 Billion? Who thought it was acceptable to be $9 Billion short?
“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Jeez, all Drudge does is link to other publications. With one little story of his own usually. Before blogs I would use it to find interesting stuff to read.
Keep posting those Drudge Report links, post them all day every day
New York Post
UK Daily Mail
New York Daily News
World Net Daily
Breitbart
Nothing is “off limits” here until Ben decides it is. Those are the “rules” since you asked. Looser!
Documentary Alert
(morning treadmill time)
Frontline PBS “Money, Power & Wall St.” (4 episodes)
http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/
Frontline PBS “Money, Power & Wall St.”
I was really disappointed with this story for not presenting the Wall Street insiders for what they really are, financial termites. For example, recall Brooksley Born’s Battle With Alan Greenspan, Robert Rubin And Larry Summers to oust her from the Commodity Futures Trading Commission.
Frontline is more propaganda, IMHO.
Hey, watch it! You just insulted termites.
rms
I agree, although I confess to going to part 4, because I was bored. I loved the math major, and some other smarty pants who had a morals epiphany, but only after their pockets were stuffed. I was just sharing for those who had no idea the Documentary was out there in cyberspace.
Fast Pussy keeps insinuating that Richard Fisher’s opinion doesn’t matter, since he lives outside of NYC, but his name keeps coming up again and again in articles about busting up Megabank, Inc.
Break up the banks
JPMorgan mess is ‘Exhibit A’
Last Updated: 12:04 AM, May 14, 2012
Posted: 10:23 PM, May 13, 2012
The $2 billion trading loss at JPMorgan — a failure of the famed risk-management prowess of bank chief Jamie Dimon — is cause for celebration in some quarters.
Dimon deftly steered his bank from most of the excesses that brought about the 2008 banking crisis. He’s since emerged as the industry’s chief spokesman — an effective one — against some excessive regulations in the Dodd-Frank financial-reform law.
So fans of Dodd-Frank aren’t too unhappy at seeing the Great One take a tumble.
But JPMorgan’s mess doesn’t necessarily mean Dodd-Frank is the answer. It’s also fodder for those who argue that JPMorgan — and Citigroup, Bank of America and the rest of the country’s large financial institutions — are simply too big to manage and need to be broken up.
Too much to manage? Trading at JP Morgan’s London office (above) lost the bank $2 billion recently, the firm announced last week.
I’ve written about this before, but Dallas Federal Reserve chief Richard Fisher recently laid out his case as to why the big banks need to be broken up — and I hear that the industry’s lobbyists have been reaching out to both the Romney and Obama camps to see if the idea’s gaining traction even before the “London Whale” trading loss at JP Morgan came to light.
…
FPSS keeps insisting that more Quantitative Easing is a done deal. Not everyone with an MSM bully pulpit seems to agree.
Bloomberg News
Dallas Fed’s Fisher Not Supportive of Quantitative Easing
By David Scanlan on May 01, 2012
Federal Reserve Bank of Dallas President Richard Fisher said he’s not supportive of another round of quantitative easing. He also said Congress remains the biggest risk to the U.S. economy.
“No amount of monetary accommodation will make up for this problem of not dealing with this fiscal cliff,” Fisher said in an interview from Los Angeles played today on BNN Television in Canada.
He said Europe’s fiscal and economic issues are a lesson for the U.S.
“Monetary policy alone cannot solve problems without proper fiscal policy,” Fisher said. “If we let it go too far as the Greeks obviously did, we’ll end up with riots in the streets in the United States.”
…as I was saying…
“If we let it go too far as the Greeks obviously did, we’ll end up with riots in the streets in the United States.”
So what will happen if we slash our military by half? Were will all those formerly well paid soldiers go? And what will happen to all the military suppliers and their well paid employees when the layoffs arrive? And what about all the towns that thrive off of local military bases?
And then what would happen if we cut off foodstamps and unemployment insurance?
Riots in the streets, perhaps?
Will “austerity” somehow make us magically competitive with the sweatshop nations (where college grads earn less than US minimum wage) and bring the jobs back?
I’ve written about this before, but Dallas Federal Reserve chief Richard Fisher recently laid out his case as to why the big banks need to be broken up — and I hear that the industry’s lobbyists have been reaching out to both the Romney and Obama camps to see if the idea’s gaining traction even before the “London Whale” trading loss at JP Morgan came to light.
I heard Richard Fisher speak at the University of Arizona business school two years ago. He was test-driving his TBTF speech.
What Jamie Dimon didn’t tell you on ‘Meet the Press’
JPMorgan Chase CEO Jamie Dimon speaks in early May, just before disclosing a $2-billion trading loss by his bank. (Mario Tama/Getty Images / May 14, 2012)
By Michael Hiltzik
May 14, 2012, 5:00 a.m.
Without even waiting a decent interval for mourning, JPMorgan Chase Chairman Jamie Dimon launched his defense campaign over the disclosure that he presided over a $2-billion trading loss in derivatives within days of the disclosure itself, choosing the comforting confines of NBC’s “Meet the Press” for the campaign kick-off.
Dimon’s theme was essentially as follows: “Hey, everybody makes mistakes — sure, we lost $2 billion, but we’ve still got billions more, and we’ll figure out this one ourselves without the need for any further regulations, thank you.”
His argument is plainly designed to distract from the right way to think about JPM’s fiasco, which is that it’s exactly the sort of thing that regulations should forbid banks from doing, lest they destroy the financial system — again.
…
I copied this MarketWatch headline a split second before they replaced it with a new one that says “Triple-digit Dow damage.” It’s too late now to “sell in May and go away,” folks.
The silver lining: Each triple-digit down day on the DJIA further bolsters the Fed’s QE3 case.
Wall St.’s weak but steady
Bears remain firmly in control as U.S. investors take their early Monday cues from the latest travails of Spain and Greece while digesting fallout from J.P. Morgan’s trading loss and the Yahoo CEO saga.
…
It’s too late now to “sell in May and go away,” folks.
Better late than never. What if it goes down to 11K?
Some MarketWatchers are predicting the current crashing Wall Street wave to play out until August!
May 14, 2012, 6:30 a.m. EDT
A re-election year suggests a low in August
By Dr. Alexander Elder and Kerry Lovvorn
The U.S. stock market tends to follow a specific pattern in the years of presidential re-election campaigns. This pattern calls for reaching a low in August.
…
It’s still a great time to own long-term Treasurys!
May 14, 2012, 8:44 a.m. EDT
Treasury yields drop as Greece fears rise
Greece still without a government as parties can’t reach agreement
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch)—Treasury yields dropped on Monday, as renewed worries about Greece’s political uncertainty encouraged traders to seek the safety of U.S. government debt.
Yields on 10-year notes (10_YEAR -3.69%) slumped 7 basis points to 1.785%. A basis point is one one-hundredth of a percentage point.
…
The Euro is still high relative to $ however.
Woman buys and renovates wrong house, learns truth after survey:
http://www.bubbleinfo.com/2012/05/14/bought-wrong-house/
“(Senatobia, MS) Terry Jordan, of Tate County Mississippi, quickly fell in love with a home in Senatobia. It was a foreclosure and needed a lot of work. Her husband had just lost his job. He was going to fix it up and sell it for a profit to help them while they got through a tough time.”
The first paragraph about these dopes speaks volumes.
So you lose half your household income, buy a house when prices are falling, sink more money into a depreciating house….. yeah….. stupidity abound.
I liked this bit. She “fell in love” with a house…and then decided to buy, renovate and rent it out. Isn’t that what you do when you fall in love with a house? You want to stick renters in it?
Realtor-esque isn’t it? Mindless, thoughtless lofty platitudes packaged to get a bunch of boo-hooing going for some loser who paid an inflated price for a depreciating dump.
Read the documents?
Title search?
Title insurance?
NEVER.
Housing is a sure bet…. right? RIGHT?
All that cuts into renovation time.
Note this article was written before JPM’s great big fat Greek derivatives blowup.
Morgan Brennan, Forbes Staff
I write about real estate markets, outrageous homes and cities.
Follow on Forbes (235)
Business | 4/24/2012 @ 10:35PM
How Wall Street Layoffs Will Affect The Housing Market
Investment banks including Goldman Sachs, JPMorgan Chase, Citigroup and Morgan Stanley may slash and burn dozens of jobs as soon as next month, as my colleague Halah Touryalai reports. And these positions may never be replaced. It’s the latest round of layoffs for Wall Street, which let thousands of workers, particularly traders, go in 2011.
Wall Streeters have already suffered some discouraging news this year, as cash bonuses for work done in 2011 were cut and capped. A February report estimated that Wall Street bonuses dropped 14% from 2010 to 2011. For staffers at firms like Bank of America and Citigroup, the cuts were as high as 30% and bonuses at Morgan stanley were capped at $125,000.
All that cost-cutting has had repercussions that fan out past that eight-block swath of downtown Manhattan street where smocked traders scream in pits and analysts calculate risk. In years past, Wall Street has always affected Main Street. Literally.
“The finance sector plays a very large role in New York City and as a result of that, those people play an overall role in the residential real estate market,” explains Gary Malin, president of Citi Habitats, a New York City-based realty firm.
…
Society’s fight to control Wall Street is like a homeowner’s fight to control a cockroach infestation. The battle is never over. The best one can do is begin to prevail, control the infestation, and try maintain the advantage.
As soon as the homeowner/society stop being vigilant, the cockroaches will come right back.
This is not a battle which will be won. It is a condition which will be managed. Like any chronic condition.
“This is not a battle which will be won.”
Pessimism over the prospect for victory is the enemy’s most powerful weapon.
I’m pretty sure the infestation can be controlled - that effective regulation can be instituted. But that will not be the end of it. Wall Street doesn’t give up. It doesn’t stop. It will constantly trying to undermine and again create a rigged system. So even when/if sane regulation and controls on Wall Street are instituted, that will not be the end of it. It will be a constant battle to maintain those controls. It just requires constant vigilance on the part of the citizenry.
Not to worry, NYC real estate will still be unaffordable for most people.
All in good time MiddleCoaster. NYC, DC, Bay area and Boston are just entering their price decline phase.
All in good time MiddleCoaster. NYC, DC, Bay area and Boston are just entering their price decline phase.
Well not San Francisco.
It appears that (for now) we are 6 months late for the bottom, barring an earthquake.
The RE market here turned on a dime: since last winter asking and selling prices have gone up 30-50K.
We are sitting out until the late summer/fall, hoping that this latest “bubble” is not a true bubble, but just a result of low inventory and infestor infestation.
Give it time. You know as does everyone else that market forces are not at play here.
We are sitting out until the late summer/fall, hoping that this latest “bubble” is not a true bubble, but just a result of low inventory and infestor infestation.”
it’s possible. Funny I always read that bottoms are easier to call than tops. This RE bottom is very hard for me to guess , the top was easy.
Funny I always read that bottoms are easier to call than tops. This RE bottom is very hard for me to guess , the top was easy.
What’s amazing is how quickly the market turned here. Literally a matter of months.
I mean WTF, common wisdom is that RE moves slowly, but here in SF it’s like the stock market, time-wise.
Did the bottom really pass us by in a matter of months?
<i.Did the bottom really pass us by in a matter of months?
No.
The bottom is in front of you. Not behind.
CA has a long ways to go, what with the Greek-like crisis and all. Either higher taxes and less services or riots and less services coming soon.
I mean WTF, common wisdom is that RE moves slowly, but here in SF it’s like the stock market, time-wise.
Did the bottom really pass us by in a matter of months?”
When I lived in Poway CA the same thing happened but it was a fake prehaps brought on by the home buyers credit?
I think we are near a bottom on the coast were the 1% live. Who are getting richer and can buy what they want. Other areas may fall for years even though they are much cheaper.
Not before time. All these areas have growing sectors that are being choked by housing prices, because they can’t afford to pay their people enough to compete for housing with Wall Street, government “consultants,” and Web 2.0.
Buy your kid a condo:
http://finance.yahoo.com/news/skip-dorm-buy-kid-condo-040159198.html
Guessing a lying Realtor wrote this.
http://www.marketwatch.com/story/skip-the-dorm-buy-your-kid-a-condo-2012-05-14
I heard something on the radio about mortgages going to those with higher credit scores. Commentator said that this lowers affordability and discriminates against minorities who have lower credit scores and keeps Americans out of the American dream.
My retort is - making dodgy loans does not increase affordability. It’s not like those people are staying in their houses. They’re defaulting at significant rates. All that’s happening is that a bad loan is being made, the FIRE sector makes profit and the taxpayer gets put on the hook for it. And the bad loan leaves a smoking ruin from the financial bomb it created. The family is lied to, they lose the house and the economy is warped by pulling resources into the FIRE sector; the MSM is deluded into thinking that more people are owning homes and the net result is one more displaced family and more public debt.
I heard something on the radio about mortgages going to those with higher credit scores. Commentator said that this lowers affordability and discriminates against minorities who have lower credit scores and keeps Americans out of the American dream.
—————————-
This is the same argument used back when passing the CRA (under Carter) and greatly expanding the CRA (under Clinton).
We have learning nothing.
The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 563e, is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate.
Here’s How The Community Reinvestment Act Led To The Housing Bubble’s Lax Lending
http://articles.businessinsider.com/2009-06-27/wall_street/30009234_1_mortgage-standards-lending-standards-mortgage-rates
And yet default rates on CRA-originated loans are 13% (last noted in 2010) less than private loans from the same decade.
How many times do we have to refute this nonsense?
It should be against to “red-line”.
It is NOT against the law to deny because of bad credit.
The commentator is a dope.
“against the law”
Canon Inc. is moving toward fully automating digital camera production in an effort to cut costs — a key change being played out across Japan, a world leader in robotics.
If successful, counting on machines can help preserve this nation’s technological power — not the stereotype of machines snatching assembly line jobs from workers, Jun Misumi — company spokesman, said Monday.
The move toward machine-only production will likely be completed in the next few years, perhaps as soon as 2015, said Misumi, although he declined to give specific dates.
Well I hope the machines will be purchasing the cameras as well. Seriously anyone in the free market, don’t tax the job creators, community want to talke about unemployment and small business developement in a world where you need zero people to manufacture goods. This day is coming.
I’ve worked with automation all my life.
I’ve never seen a BIGGER oxymoron.
When it work, it works great. When it works.
I’m reminded of the wars which wracked Europe for hundreds of years, culminating with WWI and WWII: Leaders with large egos and vendettas using other people as their pawns to march into powder and steel. With the 700 trillion derivatives market, when/if it goes bad, it’ll once again be the commoners who pay.
This gets back to the topic no one wants to talk about, and possibly no one understands. Synthetic derivatives – Credit Default Swaps. There is a $700 trillion derivatives market, that is 10x larger than the GDP of the planet earth. How is such a large market possible? Just like “Voldemort” did not have the $100 billion he bet with, there is no actual money to back this $700 trillion market.
No one we have spoken to over the years has explained how this is possible.
Which gets us back to where we began… JP Morgan has unlimited access to virtually free money from the Fed… They could loan it out to the middle class (of course they do some of that) but they can take that free money and make huge, incomprehensible bets in the hopes of huge profits – multimillion dollar bonuses and if it’s all just a house of cards, it’s ok because they are too big to fail.
http://abcnews.go.com/blogs/business/2012/05/jp-morgan-dj-vu-there-you-go-again-wall-street/
With leverage at 30 I am surprised that it is only 10X ! Must be some honest bankers out there.
If voodoo economics fail - the big guy that gets badly hurt will hurt back.
Squeezing blood from a stone?
China Lowers Banks’ Reserve Requirements to Support Growth (Update 2)
By Bloomberg News - May 12, 2012 11:56 AM ET
China cut the amount of cash that banks must set aside as reserves for the third time in six months, pumping money into the financial system to support lending after data showed a slowdown in growth is deepening.
Premier Wen Jiabao is increasingly shifting to supporting the nation’s expansion from fighting inflation and containing property prices. China’s import gains stalled in April while industrial output rose at the slowest pace since 2009 and new yuan loans were the lowest this year, adding to global growth concerns just as Europe’s debt crisis reignites.
http://www.bloomberg.com/news/2012-05-12/china-cuts-banks-reserve-requirements-to-sustain-growth-1-.html
Years ago, James Carville, in response to the Paula Jones accusations against Bill Clinton said, “Drag a hundred-dollar bill through a trailer park, you never know what you’ll find.” Referring of course, to Paula Jones.
I thought, that’s nothing. The bigger problem for society is this: “Drag a hundred-dollar bill through Congress, you never know what you’ll find.”
Listening to the Congressional responses to the JP Morgan incident underscored the point.
Years ago, James Carville, in response to the Paula Jones accusations against Bill Clinton said, “Drag a hundred-dollar bill through a trailer park, you never know what you’ll find.” Referring of course, to Paula Jones.
Talk about a war on women.
I woman claims sexual harassment and rape - and she is thrown to the wolves and she is blamed for the incident.
Happens on both sides of the aisle, unfortunately.
Clinton was, without dispute, a philanderer.
What he wasn’t, was a war monger.
We are STILL in Bosnia…
Which is why we should think ten times before sending troops anywhere. Once we move in we have a devil of a time getting out. We’ll probably still have troops in Iraq and Afghanistan long after I’m pushing daisies up.
We had to step in because the “Highly mobile, but unwilling” (AKA the rest of NATO) didn’t want to get involved, no matter how much ethnic cleansing was happening.
Such a deal. Have a problem? Call the “World’s Policeman”, and let Joe Q Sucker/US Taxpayer foot the bill.
And don’t forget how safe we’ve made it for China, Russia, and the Euro crowd to set up shop in Iraq.
ditto to all the above.
Oh, please.
Chinese Embassy in Belgrade?
Pharmaceuticals in Sudan?
A man of his times.
“Stephen Reed, Harrisburg’s mayor for 28 years, pushed Pennsylvania’s capital into insolvency as the more than $500 million in bond deals he oversaw to finance community development drained city coffers…“He leveraged things and wasn’t concerned about paying any debt off, just getting more and more money,” Dan Miller, the city controller, said of Reed.”
I used to get really upset about politicians like this, until I figured out they really were men of the people. Why did he get re-elected?
“Reed’s indulgence in credit also generated millions of dollars in bank fees, sometimes for deals that auditors said didn’t make sense. It even extended to his own home, on which deed records show he took at least 18 loans over about 35 years.”
http://www.bloomberg.com/news/2012-05-14/harrisburg-ex-mayor-left-pennsylvania-city-near-bankrupt.html
“The tragedy of Reed is that he did have 28 years, he did have a generation, to do positive things…Instead he kicked the can down the road.”
That could be said of every politician in office during the past 30 years, no?
That could be said of every politician in office during the past 30 years, no?
————————-
No. There are actually many fiscally conservative folks who run many cities/counties/states in the black.
To many on this board - they are called things like “they want to starve children and throw grandma in the street” and “war on workers” when they draw the line on public union goons.
In our case, in the Centennial state TABOR restricts the funding, so administrators have to be very careful with the spending. But in some cases, no matter how hard they try to make do they just fail.
In our school district we spend about 6K per pupil, and Colorado is near the bottom nationally on student spending. Our schools look very run down, and have a 3rd World look and feel. Teacher pay starts at 30K and unless you have an advanced degree tops out at 60K (after 30 years). My son was taking German and couldn’t finish the four years as they had to let the German teacher go. Still, they do well on standardized testing, but the increased level of decay over the past 8 years (or oldest was a HS freshman 8 years ago) is visibly noticeable.
One of the high schools in the district had to resort to fundraisers to repair a damaged pool, and it took almost 10 years to raise the money.
As for wanting children to starve or throwing granny onto the street, how else would you describe calls to eliminate food stamps or social security? And yes, there are righties who want to eliminate said programs.
Colorado please get your talking points in line. If one, just one school administrator somewhere gets a $200,000 pension (and is promptly reported on Drudge and linked here) then the entire system of taxpayer funded public education must be DESTROYED!
Any Lucky Ducky anywhere getting any kind of handout is theft from the Producers, the John Galts, the bootstraps, rugged individualists
Know your meme, love your meme, live your meme…
Just for fun, this is the administrative salary schedule for our school district:
http://www.thompson.k12.co.us/Divisions/School_Support/human_resources/apt_a_salary.html
Same deal with my kids school district. Nobody wanted to pass bond issues/taxes to fund “improvements” like fixing leaky roofs, and replacing old air conditioning units.
People in Johnson County, Kansas have it figured out. Good, well financed schools cause property values to be higher than areas with crappy schools. Maybe it’s because most of the engineers/techs that work at Garmin, Honeywell and Sprint live there.
“Indication of how Millennials may vote?”
How do you all feel about forgiving (with taxpayer money) the hybrid Lexus SUV driving fool with $41,000 in student loans?
obama will save him…just like “julia”
————————–
Millennials Are Keeping The Economy Afloat One Splurge At A Time
The Fiscal Times | May 11, 2012 | Julie Halpert
John T. Rogers, age 26, grew up in rural West Texas, raised by a single mother who often worked three jobs to make ends meet. He says his 59-year-old mother remains fiscally conservative, refusing to spend a dime on herself, though she now earns a respectable income. But when it comes to spending, Rogers is not following in her footsteps. “Not to knock J.C. Penney’s, but I definitely wanted to step up my style,” he said. Earning $46,000 a year as a communications manager for a private, non-profit university in Denver hasn’t held him back. He bought a hybrid Lexus SUV after graduating from college and recently purchased a $950 Hugo Boss suit as well as the iPad 3, since the MacBook he purchased five years ago “moves at a glacial pace and I can’t carry it around to meetings and look cool.”
To balance his spending, Rogers skimps in other areas, shunning trips to Starbucks and seeking out free or inexpensive cultural activities. Still, he’s racked up $3,500 in credit card debt and owes $19,000 in undergraduate loans and $22,000 in graduate loans that will kick in this September.
All the data says the opposite about most young people. They are living cheaper.
“He says his 59-year-old mother remains fiscally conservative, refusing to spend a dime on herself, though she now earns a respectable income. But when it comes to spending, Rogers is not following in her footsteps.”
But most people in that age group are spendthrifts. Perhaps that’s the answer — all the young do the opposite of their parents. My kids are DOOMED!
There are those who believe having money left over after a paycheck is a failure. Saving is an alien concept. This mindset has been encouraged by Wall Street and the government.
TV is make believe and politicians are first and foremost looking out for their own interests. In order to live in a free(ish) society where people are responsible for their own actions, these basic facts need to be reiterated.
46K a year in income buying a 55K car?
I’m out of here folks, I can (using the same ratios) afford a Ferrari!
What’s the matter with people. Spend no more than 3X your income on a house, and no more than 1/3rd of your annual income on a car. 46K per year, should be buying a car that costs about 15K, not 45-50K!
I don’t know. Sounds like it’s working for him. He’s 26, and “earning $46,000 a year as a communications manager for a private, non-profit university in Denver”. Not a bad gig for someone a couple years out of college.
Two years out of college, I was earning about the same… back in 1998, 14 years ago.
I too bought a car after I accepted my first job: a 3 year old VW Passat GLX that cost all of about $15k, certainly not the $50k+ of this wannabe’s Lexus. Oh, and I had less than a quarter of his school loans. What a complete moron…
I see it all the time: 20-somethings driving late model BMW and Mercedes thinking they are the new hotness because of the car they drive. Fake it till you make is still in effect. Meanwhile, these a55hats don’t have any cash and barely able to fill up the tank.
I’ve noted this before, but one reason that there is so much student debt outstanding is that the rates were so low that people are milking repayment.
My wife graduated from law school with debt. I graduated with debt. We both hunkered down and paid it back before spending on anything extravagant. My wife drove a 15 year old, POS Nissan for 4-5 years after passing the bar before buying a new car…and then it wasn’t a BMW.
At the same time we paid off debt, there were partners at her law firm that were still paying off student debt…PARTNERS. They were milking it because the rates were so low. This is no rinky-dink firm either, so the partners were/are doing just fine.
And other law school friends of my wife’s deferred starting repayment of their loans by taking classes at community colleges toward additional degrees (and may still be deferring for all I know…more than 10-years later).
I’m not saying that there aren’t problems with the current cost of college, but there are other factors contributing to the continual growth of student loan debt…namely:
1. The low rates available for the borrowers (why pay it back faster?); and
2. The ease at which a graduate can continue to defer the real start date of debt repayment.
I guarantee that the overall student loan debt number would be lower if the cost of the debt was higher, and it was harder to defer repayment.
It’s working for him if he lives cheap.
He’s moving and shaking, got the look going. Wouldn’t have made manager at 26 if he drove a used Kia.
He’s moving and shaking, got the look going. Wouldn’t have made manager at 26 if he drove a used Kia.
LOL. You’re going to fall back on “act as if” sales psychology? The guy is all show, no substance… typical of sales & marketing (no offense to those here on this blog in those fields.
.
typical of sales & marketing
That’s where the money is. No one buys from a guy wearing a cheap suit, brown-bagging his lunch to work. Gotta be out there with the players. Gotta be in it to win it.
That’s where the money is.
Funny, but Mark Zuckerberg is a comp-sci-code-guy at heart. Not sales, not marketing, but code development… he’s about to make more money than God, and he’s about to do it through hard-work, natural talent, luck, and some backstabbing along the way. He isn’t all-show-no-substance like almost every single sales/marketing type I’ve every met… (again, no offense)
Zuckerberg is more than a mere bit twiddler. He was also an entrepreneur, who took myspace’s idea and improved on it. I think he could have done it without being a great bit twiddler (cough … Steve Jobs). There are TONS of superb programmers who will never become rich.
For every bit twiddler who hits it big there are hundreds of “suits” who become rich as CEO’s of companies they didn’t start. In just about any Fortune 500 corporation it’s the sales droids who make the big coin.
Where’d Zuck rub the right elbows to set up/steal FB? At Harvard, playing with the players.
Gotta be out there with the players. Gotta be in it to win it.
Just saw this in the Washington Post (a traffic and commuter Q&A):
Traffic Alert
Dr. Gridlock, just a heads up that in addition to Police week parades, the National Association of REALTORS will be holding a rally on the Mall Thursday morning. It will be located on the Washington Monument grounds, on the corner of 15th and Constitution. Buses will be loading and unloading 10,000+ REALTORS just off of Independence. This will be going on all morning long - rally is scheduled from 9:30am-11:00am - and will likely add plenty of congestion to that area for the morning commute. Just wanted to let you and your readers know as a heads up to perhaps take an alternate route that morning if possible.
– May 14, 2012 12:47 PM
A.Robert Thomson :
Thanks very much. On Monday mornings, I do a blog post called “The week ahead for traffic, transit,” and it’s really long, but I know I haven’t accounted for all the likely causes of traffic delays coming up each week. So I appreciate the assistance provided by other travelers in identifying obstacles.
– May 14, 2012 1:02 PM
Don’t most people take Metro that deep downtown, and aren’t they already in place by 9 am? But it sounds like a good day for a brown bag lunch.
My old office was a few blocks from the White House. I think there were 4 garages on our block. Lots of people drove. I didn’t (except occasionally on weekends), but a lot did.
“Buses will be loading and unloading 10,000+ REALTORS just off of Independence.”
Funny how they have time to ride buses to DC in the middle of the spring selling season.
Nice catch!
Rah rah.
What are the NAR members up in arms about these days?
I heard on the radio CAR (Ca AR)and NAR are unhappy about the REO Bulk Sales for rentals and no homes to sell, but they whine so much, I can’t keep up.
NAR are unhappy about the REO Bulk Sales for rentals and no homes to sell
Hey! They finally agree with most HBBers, for a change. Be weird to have them as allies calling for the release of the shadow inventory to the average buyer, eh? But it makes good business sense for them, really.
Realtors are allies?
Realtors are allies?
True story: When I was back east tending to my mom and dad, one of the most helpful people I dealt with was a local real estate agent. She’d been in the biz for about 20 years.
And wouldn’t you know it, she has family members who got caught up in the “buy an AZ investment house” frenzy. It baffled her no end. She told me that things did not work out well for those family members.
“…unhappy about the REO Bulk Sales for rentals and no homes to sell…”
I assume REO bulk sales avoid price discovery, while arms-length sales do not?
Good call that UHS are allies on the inventory crunch issue. But, where were they when we were watching $20K monthly increases and being priced out? Can you say commission whores.
Goes back to the saying “to be effective, you must be selective.”
Since Obama recently took the blame for high gas prices, is he due credit if they drop after oil’s big global selloff?
Crude Oil - Electronic (NYMEX) Jun 2012
$94.19
Change -1.94 -2.02%
Volume 169,497
May 14, 2012 1:20 p.m.
Previous close $ 96.13
$torage! $torage! $torage!
Demand$ Down, down, down …
Price$ up$, up$, up$
All hail!: “Free Market$ & Invi$ible hand$!”
i thought speculators were to blame therefore the should get the credit?
In fairness, anyone who wrongfully blamed Obama for high gas prices should wrongfully credit him if they decrease.
I dunno…
obama takes all the credit (and constantly tells us about it) for killing OBL.
But nothing is his fault with the economy.
Ok, go ahead and blame him for the economy. Go right ahead. I dare you.
DOW back over 12K and unemployment down from 10% and staying there.
FIRE sector prosecutions proceeding full steam ahead.
Despite the a full on blitzkrieg by the neocons, Obama HAS improved things.
Man, that’s gotta hurt!
And anything he hasn’t fixed yet is still Bush’s fault!
My talking points are better than the other side’s talking points…
Not O’s fault at all.
But CA is doomed. See Greece, Italy and Spain. Darrrn pension scammers!!
Not to worry. MSM experts now universally suggest that California real estate has bottomed out and is on the road to recovery. Once California real estate starts always going up again, everything else will automatically fall into place.
Amusing image - the Time breastfeeding cover updated to reflect the current financial system. As safe for work as the Time cover.
http://i.imgur.com/LsAo9.jpg
Amusing image
+1 Indeed!
For some reason, my 11-year old kid found the original cover more offensive than the satirical version. He found the updated version quite puzzling; I told him he would have to know more about banking to understand the meaning.
Is a lower dollar price of Euros the ticket to ending the crisis?
Sounds too simple…
THE OUTLOOK
Updated May 14, 2012, 5:26 a.m. ET
Europe’s New Woes Raise U.S. Threat
By SUDEEP REDDY
During bouts of European turmoil in the past two years, U.S. financial markets regularly stumbled and growth ebbed due to fears of a euro-zone meltdown. But Europe muddled through and avoided calamity, and the effects on the U.S. economy weren’t all bad. U.S. exports to Europe rose, and many U.S. banks benefited as overseas competition fell away.
Now, the troubles in the currency union—the threat of a Greek exit from the euro zone, rising borrowing costs in Spain and Italy, recessions in several European countries—are renewing fears of an escalating crisis that could deliver a more serious blow to the fragile U.S. recovery.
U.S. companies are bracing for a hit. Networking giant Cisco Systems Inc. last week blamed worries about Europe, along with other uncertainty, for its cautious outlook. Watchmaker Fossil Inc. reported a slowdown in German sales on top of deeper pullbacks in Italy and Spain. Chemicals firm Celanese Corp. attributed its disappointing results to weakening European demand.
Federal Reserve Chairman Ben Bernanke recently noted that some of the improvement in financial markets late last year and early this year has been reversed by “what remain significant problems and concerns in Europe.”
Despite Europe’s debt woes, U.S. exports to the continent have been recovering since the 2008 financial crisis. By the first quarter of this year, U.S. exports of goods to Europe had returned to around their pre-crisis peak. Overall exports have been a critical driver of the U.S. recovery, far outpacing their growth in most recoveries since World War II.
One key reason: the U.S. dollar has remained relatively weak against the euro, at or above $1.30 for most of the past three years.
That could change quickly if a wave of deeper troubles in the euro zone, or interest-rate cuts by the European Central Bank, spur a flight from the euro. A sustained drop in the euro—even to just $1.20—could help European economies recover by boosting their exports.
While a cheaper euro would dent U.S. exports slightly, it could alleviate fears of a more disastrous scenario for Europe. That outcome “would be a reasonable trade-off for the United States,” said Citigroup economist Nathan Sheets, who until last year led the Fed’s international-finance division. “That might very well be a channel that helps Europe in solving this financial crisis.”
…
Paging Combotechie…
May 14, 2012, 3:51 p.m. EDT
Dollar index marks longest rally since 2008
Dollar gains as euro falls on Greek political impasse
By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — The dollar strengthened Monday, pushing the dollar index to an 11th straight session of gains — its longest winning streak since 2008 — as a political stalemate in Greece weighed on the euro.
The ICE dollar index DXY +0.44% reached 80.612, up from 80.296 late Friday in North American trading, while the euro EURUSD -0.5188% fell to $1.2840 from $1.2920.
Greek stalemate roils markets
Markets fret that Greece will soon be forced out the euro zone. Plus: J.P. Morgan’s Jamie Dimon comes under pressure over his bank’s huge trading loss, more on the unfolding crisis at Yahoo and a dramatic close to the English Premier League season.
The 11-session winning streak of the dollar index, which measures the greenback against a basket of six currencies, matches a winning span in August 2008.
…
I get Gross’s concerns about the “Great White Whale,” but have no idea about what scenarios are likely to play out when it moves from the horizon into the plankton swimming area.
My one initial hunch is that the future may be relatively kinder to savers than the present is. Digging yourself into a deep debt hole and hoping for the best does not seem like a sustainable financial strategy.
ft dot com
A whale in the waters of negative yields
By Bill Gross
In nature, the mighty whale depends upon the lowly plankton for its survival and the same analogy rightly applies to global developed economies, which have dominated trade and finance at the expense of developing nations. Now the tides may be turning as once minuscule global economies find themselves in possession of a plethora of reserves. The hunted may be turning into the hunter and the global monetary system, which has evolved and morphed over the past century – but always in the direction of easier, cheaper and more abundant credit – may have reached a point at which it can no longer operate in the same way. Major changes to our global monetary system may lie on a visible horizon.
…
Both the lower-quality and lower yields of previously sacrosanct debt therefore represent a potential breaking point in our now 40-year-old global monetary system. Neither condition was considered probable as recently as five years ago. Now, however, with even the US suffering a credit downgrade to AA+ and offering negative 200 basis point policy rates for the privilege of investing in Treasury bills, the willingness of creditors – as opposed to debtors – to support the existing system may soon fade.
While all monetary systems are a struggle between debtors and creditors, it is usually creditor nations that establish the rules for transitions to new regimes. Such was the case in the late 1960s as France threatened to empty Fort Knox unless a new standard was imposed. Now, with dollar reserves widely dispersed in China, Japan, Brazil and other surplus nations, it is fair to assume that there will come a point where 2 per cent negative real interest rates fail to compensate for the advantages heretofore gained in buying sovereign bonds.
There is the potential for both public and private market creditors to effect a change in how credit is funded and dispersed – our global monetary system. What that will look like is a conjecture, but it is likely to be more hard money as opposed to fiat-based, or if still fiat centric, less oriented to a dollar-based reserve currency.
The world’s financial markets seem obsessed with daily monetary and fiscal policy evolutions in euroland which form the basis for risk on/risk off days in the marketplace and the overall successful deployment of carry strategies so important to asset market total returns. Euroland is just a localised tumour, however. The developing credit cancer may be metastasised, and the global monetary system fatally flawed by increasingly risky and unacceptably low yields, produced by the debt crisis and policy responses to it. The great white whale lies on the horizon. Investors should sail carefully.
Bill Gross is founder and co-chief investment officer of Pimco
Does it seem as though the MSM publishes the same articles, day-in, day-out?
May 14, 2012, 9:00 a.m. EDT
Fears of Greece EU exit rattle markets
By William L. Watts and Kim Hjelmgaard, MarketWatch
LONDON (MarketWatch)—Fears were growing Monday that Greece could soon be ousted from the euro zone in an increasingly likely confrontation with its international creditors, as the chances for an 11th-hour deal for a coalition government looked evermore remote.
The failure of Greek party leaders to reach an agreement to form a unity government stirred fresh carnage across financial markets as euro-zone finance ministers prepared to meet in Brussels.
…
Global shares slide as Greece risks dominate
Related News
S&P 500 down for 4th day of five, Groupon up late
7:24pm EDT
Euro zone finance ministers dismiss Greek exit “propaganda”
7:11pm EDT
Greek leftists reject proposal for technocrat government
6:04pm EDT
Gold drops to 4-1/2-month low as euro sinks
4:57pm EDT
A man is reflected on a stock quotation board outside a brokerage in Tokyo May 10, 2012. REUTERS/Toru Hanai
By Chikako Mogi
TOKYO | Mon May 14, 2012 8:42pm EDT
(Reuters) - World shares fell on Tuesday as investors liquidated riskier assets and sought refuge from the political turmoil fuelling fears of Greece’s exit from the euro and threatening to ruin any progress made so far to solve the euro zone debt crisis.
The euro slipped to a four-month low of $1.2815 early on Tuesday and the risk-sensitive Australian dollar hovered near a five-month low of $0.9957 touched on Monday. The U.S. dollar and the yen, perceived as safe haven currencies for their relative stability, stayed well bid.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent to a four-month low, while Japan’s Nikkei share average opened down 0.7 percent.
Greek president President Karolos Papoulias has gathered party leaders to hear his proposal on Tuesday, but opponents of austerity steps needed in exchange for an international bailout expressed little hope for resolving a deadlock, pushing the country towards a new vote which the anti-bailout leftists are likely to win.
European leaders say that unless Greece fulfills its bailout commitments, they will cut off funding, which could oust Athens from the euro, threatening to put in disarray the restructuring efforts by other highly indebted euro zone economies which had agreed to harsh fiscal reforms in return for rescue funds.
“Risk has primarily traded with European headlines, which we suspect will continue to put a damper on prospects until a more sustainable solution can be found to Greece’s political imbroglio,” said Morgan Stanley in a research note.
…
Oil prices keep dropping while our gas prices gyrate ever higher.
What gives? It sure doesn’t seem like there is much competition in the market for gasoline. Can inventory be held off the market, the same way housing inventory is withheld?
Gas Prices Surge, Average Nears 2012 Record High
Earlier this year oil experts predicted a “superspike” in prices by May or June
By Consumer Bob | Monday, May 14, 2012 | Updated 11:39 AM PDT
If you fill your tank at the start of the work week, expect to pay nearly 13 cents more a gallon than you would have on Friday.
Monday’s average is $4.35 - just 3 cents away from this year’s record high.
…
The Associated Press May 14, 2012, 6:16PM ET
Governor eyes more cuts as Calif deficit swells
JUDY LIN
SACRAMENTO, Calif.
California’s sputtering economic recovery is putting a heavier-than-expected drag on state tax revenue, leaving Gov. Jerry Brown on Monday to propose deep budget cuts across an array of government services and warn again that even more cuts are ahead if voters reject his tax-hike initiative in November.
Brown’s latest budget plan for the fiscal year that begins July 1 proposes $8.3 billion in spending cuts to close a revised deficit of $15.7 billion deficit, an amount equal to 17 percent of the state’s entire general fund.
The plan would reduce child care for mothers trying to get off welfare, in-home supportive services for the needy and health care for the poor, as well as cutting funding to courts and postponing payments to schools.
Those reductions come on top of tens of billions of dollars in state budget cuts implemented since the recession started in late 2007.
Brown also is asking state workers to share the pain by taking a 5 percent pay cut, most likely by reducing their work hours. The pay reduction would be handled in contract negotiations with the state’s public employee unions.
In addition to the cuts, Brown hopes to close the deficit with $5.9 billion in new revenue from the tax initiative he proposed earlier this year that would add a quarter cent in the state sales tax and collect higher income taxes on those who make $250,000 a year or more.
…
LOST IN SPACE: The Curse of Dr. Smith
X-Gs, I just got caught up on your saga. Lordy, my daughter is only 2.5 and you got me freaking out.
I have nothing to add. I’m just more freaked out.
When I was the same age, I was too big of a book-nerd to even know what a box of Trojans looked like.
Could be worse; mine’s 17, and about to go off on her own to college.
I’ve got 4.5 and 2.5 (both girls), with a third on the way (?? on gender–I’m guessing girl).
I have my fingers in my ears…la, la, la, la…ignorance is bliss for another 5-6 years (I keep telling myself I’ve got until teens, but my head knows better than that).
Warning PDF…great data though:
http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2012/q12012_credit_summary.pdf
Notables as it comes to comparing the different bubble states:
Page 8:
Serious Delinquency Rate (to answer “how many more foreclosures are coming?”):
Overall: 3.67%
AZ: 3.22%
CA: 2.24%
FL: 11.35% (wow)
NV: 7.06%
Average LTV (to answer “how many more people will walk away?”):
Overall: 80%
AZ: 105.2%
CA: 81.1%
FL: 106.4%
NV: 137.9% (wow)
Page 14:
More recent modifications have been more successful with people staying current post-mod.
Page 20:
Apartment credit losses:
CA: $3 million with over $10B of total debt
FL: $66 million with between $5B and $10B of total debt
NV: $29 million with between $1B and $3B of total debt
AZ: $7 million with between $3B and $5B of total debt
Wow! We’re leading in two of three of the above categories! Go Arizona!
If you’re European….
Coming to a theatre near you:
The European Gendarmerie Force (EGF) is an initiative of 5 EU Member States - France, Italy, The Netherlands, Portugal and Spain – aimed at improving the crisis management capability in sensitive areas. Since Wednesday, 17th December 2008, the High Level Interdepartmental Committee Meeting (CIMIN) decided to welcome the Romanian Gendarmerie to become a full member of the EGF. Therefore the EGF consists from that moment of 6 member states.
EGF responds to the need to rapidly conduct all the spectrum of civil security actions, either on its own or in parallel with the military intervention, by providing a multinational and effective tool.
The EGF will facilitate the handling of crisis that require management by police forces, usually in a critical situation, also taking advantage from the experience already gained in the relevant peace-keeping missions.
http://www.eurogendfor.eu/
Greek EU exit = the story that keeps on giving.
May 14, 2012, 9:00 a.m. EDT
Fears of Greece EU exit rattle markets
By William L. Watts and Kim Hjelmgaard, MarketWatch
LONDON (MarketWatch)—Fears were growing Monday that Greece could soon be ousted from the euro zone in an increasingly likely confrontation with its international creditors, as the chances for an 11th-hour deal for a coalition government looked evermore remote.
The failure of Greek party leaders to reach an agreement to form a unity government stirred fresh carnage across financial markets as euro-zone finance ministers prepared to meet in Brussels.
…
A ragin’ contagion threats to consume the green shoots of recovery in a Santa Ana-driven firestorm.
Try not to let all your stuff go up in smoke.
MARKETS
Updated May 14, 2012, 10:25 p.m. ET
Contagion Fears Hit Markets
Worries Over Greek Exit From Euro Spur Slump; Specter of Collateral Damage
By CHARLES FORELLE
LONDON—Investors battered European stocks, dumped the bonds of Spain and Italy, and bid the euro down against the dollar Monday after the collapse of weekend coalition talks in Greece edged that country closer to an exit from the euro zone.
The sweeping market action dealt a blow to hopes that the damage of a Greek exit, should it occur, could be comfortably contained.
In the market carnage, Greek stocks fell to two-decade lows, and Spanish bond yields leapt to levels not seen since the panic of last November. Shares of a big Spanish lender dropped 8.9% on the Madrid bourse, pulling the benchmark index down 2.7%. The Italian market also fell 2.7%, and the euro slid to $1.2845 late Monday in London, its lowest level in four months.
The troubles in Greece come at a perilous time for the rest of the currency union. Its policy of restoring financial-market credibility and international competitiveness through tough fiscal austerity is running aground. The grand “firewall” of funds meant to insulate precarious countries from their sinking peers is still modest relative to the potential needs. The vast cleanup of the troubled corners of the banking system has hardly begun. The central bank is reaching the limits of its desire to step in and help—and its injection of €1 trillion ($1.3 trillion) into the banking system seems to have bought only a small measure of calm for its very big price.
“We are more or less in a vacuum,” says Jens Nordvig of Nomura in New York. “We are entering a very dangerous phase.”
…
This seems like the perfect time to revisit the cockroach theory.
JPMorgan’s loss: More than a blip in the news cycle
Spencer Platt/Getty Images
A Chase sign is viewed at the company’s New York headquarters in New York City. New York bureau chief Heidi Moore discusses why JPMorgan’s loss is a warning that suggests risky practices are taking place at other Wall Street banks.
Interview with Heidi N. Moore
Marketplace for Monday, May 14, 2012
Kai Ryssdal: The JPMorgan news of the day goes something like this: We’re still at $2 billion as far as the total known losses go. The woman who ran the division responsible for those losses, Ina Drew is her name, has resigned. What we don’t know so much is what it all means in the bigger picture of Wall Street and its effect on the American economy and what happens now. That’s why we’ve called our New York bureau chief Heidi Moore. She’s on the line with us. Hey Heidi.
Heidi Moore: Hey Kai.
…
Ryssdal: Yeah, which you haven’t heard Jamie Dimon, the CEO of JPMorgan, talk about at all. Let me ask you this, though, Heidi. What are the odds that banks not as strong as JPMorgan — which is the strongest bank out there — that other banks are doing this?
Moore: The odds are very strong. In fact, Moody’s is worried about a number of those banks. Standard and Poor’s is taking a look at how it measures risk for those banks as well. There’s a Wall Street saying: There’s never just one cockroach in the kitchen. So if JPMorgan — the biggest and supposedly the smartest bank in the country — is taking these risks, why would anyone else not be taking the same risks? They are under the same pressures. Where are they going to get those profits? Where are they going to get those revenues? It’s the equivalent of not being able to pay the bills and taking your last $20 and going to Vegas.
Ryssdal: Right. Seeing as how the world hasn’t ended yet and it’s been three-and-a-half days on this story already, what are the odds that by, I don’t know, Wednesday afternoon, we’ll be turning to the Facebook IPO and this will have faded into nothingness?
Moore: Right. This is the memory of goldfish, right? The chances are fairly high, but we shouldn’t it let go by that quickly because this isn’t just another blip in the news cycle. This is not the way pundits entertain themselves. This is a warning. It tells us that the machinery of finance isn’t quite working right. It would be a mistake to ignore that. It’s exactly the same as driving your car. When you hear those weird sounds, it’s a sign you should stop driving and go to the mechanic.
…
Is this a good time to buy the dip?
I have to admit to feeling the urge to buy some stocks now, but last time I felt this way was Spring 2008. I bought then, and was quite astonished at how far the stock market subsequently tanked between October 2008-March 2009.
This time I am sitting on my hands.
Warren Buffett says buying stocks amid market dip
By Ben Berkowitz
Mon May 7, 2012 6:38pm EDT
(Reuters) - Berkshire Hathaway Inc is adding to its shareholdings of two U.S. companies amid a market dip, billionaire investor Warren Buffett said on Monday.
Buffett, Berkshire’s controlling shareholder, also forecast record results this year for Berkshire’s largest non-insurance businesses, among the railroad BNSF and utility MidAmerican.
Berkshire class B shares led the insurance sector to close 1.9 percent higher at $82.47 on Monday.
In an interview on cable television network CNBC from just outside his conglomerate’s home base in Omaha, Nebraska, he dismissed the dip in European shares after weekend elections in France and Greece.
“It’s going to be very, very difficult to resolve their problems,” he said of the euro zone countries, but he insisted they would do so eventually.
Buffett declined to identify the two portfolio stocks Berkshire was purchasing more of. He said Berkshire spent $60 million buying stocks last Friday and would buy more on Monday. It was not clear if the $60 million was spent on just two stocks.
Over the weekend, Berkshire held its annual shareholder meeting in Omaha, a festival that draws nearly 40,000 people for an hours-long question-and-answer session with Buffett and Berkshire Vice Chairman Charlie Munger.
It was during that session that Buffett revealed he had very nearly made an acquisition of more than $22 billion recently, which would have been one of his biggest ever.
…