Bits Bucket for May 22, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Bill in LA:
“Thanks CarrieAnn. Alpha Commie and Rio collectivist think OPM never will run dry, of course due to the socialist nature. They prefer people like you to provide them a living. Frogs on a log waiting for a fly to come by.”
nycdj:
(para) Carrie gets mad at me when I say everyone should speak English.
Yesterday was quite the interesting day on the hbb. I kept reading positions that were supposedly mine that I didn’t even recognize.
Bill, I’m the girl who wants to go take my family and live in the woods away from a society I increasingly see as pack driven (and unable to think clearly themselves). I’m from the Live Free or Die state . My ideas are strongly attached to the self sufficiency I learned there. I am the girl who worked 70 hour weeks up to the days before I gave birth and told my husband to quit work so he could keep his grades up. So you can quit with the waiting for a fly to go by condescension. I’m about as opposite of socialist as you can get except for the fact I can’t stomach the neocons and their use of hate to corral us. Maybe you mistook when I had some sympathy for someone’s position as socialist? Is it possible you’re the type that if I agree w/some of our more socialist leaning commenters’ points on a certain day I must be “one of them”. I dunno. Just trying to figure out how you got it so wrong.
Nycdj, I am quite sure you never heard me get on you for that position. I couldn’t agree more. I am very dismayed we are not insisting on a common language, although my very own great grandmother who came over through the front door (Ellis Island) refused to ever learn English herself. She raised my father, and she would smack him for even breaking into any English at all. He had to talk to her in fluent Polish. I could go on. I have always agreed with legal immigration but I’m starting to feel like there is increasingly no middle to bind us. I do find that frightening. I have sympathy for some of the illegals but overall I don’t think we can afford to have them here while we continue to pay out massive unemployment benefits to people who were born here. And for security reasons I’m not a fan of having borders that are sieves.
Hope that clarified my positions. They are opinions. I respect that people have different ideas…or is that too socialist to respect others?
Carrie,
Your comment at the end of yesterday’s thread struck me. It is good to be reminded to stay in the drama free zone.
Skye
“…stay in the drama free zone.”
Daffy: ” …Page 14, Daffy gets blasted!, page 22, Daffy gets blasted again! page 31, !…”
Marvin the Martian: “That makes me soooooo angry!”
“Alpha Commie and Rio collectivist think OPM never will run dry, of course due to the socialist nature.”
Then what would that make Wall St.?
Those Occupiers need to occupy a shower and go get a job!
Maybe they dont have a passport.
+1
“Thanks CarrieAnn. Alpha Commie and Rio collectivist think OPM never will run dry”
If anyone thinks that there is an infinite supply of OPM, it’s the banksters.
The bankers will not cut them selves off. We have to end the bailouts, TBTF, ZIRP, the discount window, the entire FED. We must also prosecute bankers that break the law.
That was a reply to PB that landed in the wrong place.
“end the bailouts, TBTF”
That sounds suspiciously like “regulation.” Run for the hills!
Actually the bailout policy is the regulation that needs to be de-regulated.
“and Rio collectivist”
This actually made me laugh.
Rio is a businessman and an entrepreneur. He’s signed paychecks in the past.
Bill in LA is a contractor, suckling at the government teat, his paycheck funded by the US Taxpayer.
Who’s the real “collectivist” here?
Rio is a businessman and an entrepreneur. He
What line of business, Rio? I never caught that…
“contractor, suckling at the government teat, his paycheck funded by the US Taxpayer”
Invisible hand of the free market baby! Private sector, for profit, bootstrapping, rugged individualist, John Galt, contractor here. Working hard every day to shrink government down to the size you can drown it in the bathtub, like Grover Norquist says.
And for every Fed that retires, two more contractors will replace them, we just hired 5 more this week! BWA HA HA HA HA HA HA HA HA HA HA HA HA HA
So you can quit with the waiting for a fly to go by condescension.
CarrieAnn, I’m pretty sure that comment was directed at alpha and Rio, not you. Bill was showing solidarity with you.
That’s the way I read it.
And the way I meant it.
http://www.reuters.com/article/2012/05/21/china-coal-defaults-idUSL4E8GL1BS20120521
Chinese buyers default on coal, iron ore shipments-trade
At least six defaults of coal cargoes - traders
* U.S. cargoes bear brunt of defaults
* South African, Colombian supplies also hit
* China buys more lignite, seen replacing some Indonesian
* Chinese buyers also reneging on iron ore contracts
What a surprise!
China’s markets have dried up so now they are forced to cut back on their purchases of raw materials.
Which leaves places such as Austrailia sort of stranded.
Of course nobody could have forseen any of this.
Another thing unforeseeable: Not honoring contracts is part of the Chineese business culture. I’ve seen it ruin a few trusting US enterprises over the past few years. The most monumental default from China originated with that Steve Jobs guy, so I figure they were well matched partners.
contract? we don’t need no stinkin’ contract.
Not honoring contracts is part of the U.S. business culture they imported. If you think this never happens over here, you are nuts, or never had accounts receivable from a big firm.
“…never had account$ receivable from a big firm.”
x1 “peon” example:
GM / Delphi medical = $ Billions in Revenue$ … ability to NOT PAY $173,000 to x1 small American peon “bidness” by filing “strategic” BK? = “Financial Innovation” + payout$ to “move-to-another-Inc.-executive$” for their “Genius” corporate “guidance’$”
[Eyes been tellin' ya, theys $mart & theys got their honed Profee$$ional Ethic$]
Talk to some of local developer Robert Congel’s hired hands if you believe Americans don’t stiff people.
I have a friend whose husband works for the guy who won’t even identify that fact to people until she feels comfortable she won’t get blasted for it.
I have been shafted by two Fortune 500 companies that simply refused to pay.
I dunno, my boss who is SE Asian once explained to me agreement by handshake was “the Chinese way.” I don’t know but I suspect they have a business culture that predates ours.
I have been shafted by two Fortune 500 companies that simply refused to pay.
When I was in the book publishing business, I had one customer — a big wholesaler for the bookstore and library market — that was notorious for placing big orders, then refusing to pay for them. They’d return the books to me in unsalable condition.
The issue of contracts in the United States is as it always was: The contract only means something if you can afford to defend it. Too many individuals and small businesses can’t afford the time and legal expense required to enforce a contract.
More people need to be aware of the efficacy of small claims court. As least in that venue, you have a reasonable chance of contract enforcement that’s affordable and effective.
“…contract only means something if you can afford to defend it.”
Same goes for patents.
Read up on AMSC to get a true taste of China.
Of course nobody could have forseen any of this.
Yup, it was completely…
…unexpected!
That just the free market in action is what that is.
lol…china (and even the u.s. these days) are free markets.
Court-bound housing meltdown is stark at Plumas Lake
By Hudson Sangree The Sacramento Bee
Published: Monday, May. 21, 2012 - 12:00 am | Page 1A
At the height of the housing bubble, Plumas Lake seemed like a good deal to buyers willing to trade a long commute for a big house.
Sales were brisk for a while in the sprawling subdivision about 40 minutes north of Sacramento on Highway 70 in rural Yuba County.
Home prices have crashed hard, and residents are underwater and upset.
In the lawsuit, filed in federal court in Sacramento, more than two dozen plaintiffs demand their money back.
“I was duped,” said Christopher White, who estimates his house is worth about half of the $525,000 he paid for it in 2006.
White, a technical consultant for Hewlett-Packard, and his wife, Monique, moved from Seattle during the boom and thought Plumas Lake seemed like a deal.
http://www.sacbee.com/2012/05/21/4504365/court-bound-housing-meltdown-is.html - 98k -
“I was duped,” said Christopher White, who estimates his house is worth about half of the $525,000 he paid for it in 2006.
No, Chris. You can’t cheat an honest man, and you were either looking to Flip That House, or you were far too eager to sign any document in order to move away from the Blacks.
F*ck you, Chris. Pay your mortgage, you deadbeat. You’re an adult, right? So you’re liable for what you signed.
You can’t cheat an honest man
Maybe he is Chinese?
Housing bubble in literature?
Last night was reading a 2011 detective novel called Rule 34 by Charlie Stross (I like his laundry series too, although his characterizations of workplace culture remind me way too much of work) and its set a decade or so in the future and one phrase jumps out at me “Greenspan Favellas” and yes in context it means exactly what a HBB reader would think it means. I think that phrase needs greater coverage, more popularity.
Any other modern bubble literature references? I know, I know, there’s plenty of lit, fiction and nonfiction about the previous Florida bubble in the 20s. I’m curious about how many references to the current bubble have slowly finally seeped thru the stages of grief or whatever to enter modern pop culture.
Closely tied discussion question, everyone knows about google bombing where careful linkage by thousands if not millions means the mighty GOOG links phrases like “Santorum” to … other sites, or “Miserable Failure” used to link to Bush the Second. My point is, if there were a google bomb for “Greenspan Favella” then what would it link to? The fed? Some bankrupt McMansion builder?
… references to the current bubble …. to enter modern pop culture.
If video counts for culture, you gotta include Hitler’s rant upon learning his McMansion is being foreclosed on. Google “real estate downfall” for the piece.
“They said ‘Buy now, or be priced out …FOREVER’”.
A classic.
If video counts for culture, you gotta include Hitler’s rant upon learning his McMansion is being foreclosed on. Google “real estate downfall” for the piece.
The German dialogue of the original movie, juxtaposed with the housing bubble crash captioning, is hysterical.
That bit of the video where he says “real estate only goes up” is destined to be a classic. That look, that delivery, and tone of voice sounds just like my coworkers typical response during the denial phase of the bubble. LOL time
Alpha, here are a few of the people whose opinons I’ve decided to consider:
David Stockman, Meredith Whitney, Peter Schiff, Dallas Fed Reserve President Dick Fisher, Eric Janszen, Martin Wolf and other Financial Times authors, Ambrose Evans Pritchard (even if he does write w/hyperbole), many of the original article’s authors linked to via Zero Hedge (very often from Reuters or Financial Times) but I do take many of the un-id’d positions w/a big grain of salt, and Jesse from the Cafe Americain. Lately he’s more into commenting in the metals market but earlier he had much to say about what was going on that I found myself trusting and believing. I find myself really wanting to know who he is. Oh yes, and Yves Smith from Naked Capitalism is a major influence.
A few of these people presently may appear to have been disproven but I’ve always believed that it was only the shock and awe government intervention and that pushed back what is the inevitable. Whenever people try to say it’s not inevitable I have to ask, where did all that debt go then? and What has changed between now and 2008 except more debt?
Disengage Carrie, unless you haven’t been mocked enough.
Offline, I take it.
here are a few of the people whose opinons I’ve decided to consider
Many of the people you reference I also listen to and sometimes agree with, but I don’t think most of them (Schiff, of course, excluded- but he’s a gold bug with a financial interest in everyone else being one) think we’re inevitably doomed, as you seem to.
Most of the horrific deficits predicted for the future are based on health care cost projections, and overlook the fact that there’s a rather simple alternative to our ridiculously expensive current health care system- the one the rest of the civilized world uses.
You said people that think the current system can be saved with tweaking are sheep, but that puts you in disagreement with most of the people you just referenced.
Don’t overlook that you might be the sheep, herded by the Austerian Shepherds into giving up supposedly unaffordable (but actually quite affordable) programs like Social Security and single-payer health care coverage, while of course reducing the taxes and increasing the wealth of the 1%.
“…herded by the Austrian Shepherds into giving up supposedly unaffordable (but actually quite affordable) programs like Social Security and single-payer health care coverage, while of course reducing the taxe$ and increa$ing the wealth of the 1%.”
Them $hepards have “pedigree” dog$ too. They run around in circle$, chasin’ & tryin to bite ya!
Austerian Shepherds. It’s a multi-pun.
HWY,
How about your write an english translation of your posts and post a link to the translation? I never know what the h*ll you are talking about.
I have figured that you have some kind of issue with Bush and Cheyney and yellow cake but I have no idea what it is.
Thanks
So, just recently [since the distribution model of learning was adapted] there has been a quasi-sustaining of x7 Billions of peoples roamin around the spinning, wobbling terra firma, …how did they get to that number, with only a few true 300 geniu$ economi$t laying the “natural” foundation for the “ideal” economic model that utilizes the relaince of cast sunlight to efficiently feed-clothe-house a village of predator$ whilst also promoting the continually emerging genetic path to intellectual illumination for a certain bi-pedal species?
In other words, why can’t EVERYONE just copy the Swiss template?
Tango,
You have to read it for the poetry.
Here’s your translation:
“Those Austrian economists have well-known media acolytes who bring sharp attention to their school of thought while extracting large amounts of money from the gullible who believe them.”
[Wow alena, you'd whip-me-good in $crabble, eyes just knows it!]
“Eyes Hwy50 & eyes approve of that tran$lation!”
So it’s not Tourette’s then?
No. Hwy’s posts are among the most intelligent on HBB. Not only is he correct but he chooses to make us work for it.
“No. Hwy’s posts are among the most intelligent on HBB. Not only is he correct but he chooses to make us work for it.”
Exactly. “Charlie don’t read.”
Don’t overlook that you might be the sheep
I think if you go back and read my earlier posts, that was part of my argument.
“Most of the horrific deficits predicted for the future are based on health care cost projections, and overlook the fact that there’s a rather simple alternative to our ridiculously expensive current health care system- the one the rest of the civilized world uses.”
Like this?
http://nhshorrorstories.blogspot.com
Yeah, very civilized indeed. Where do I sign up?
You know why NHS spends less on health care than we do? Because they provide piss poor quality. You want a brand new Cadillac but at the price of a used Hyundai. You can have one or the other, but not both.
The problem in the US is that we are not given the choice between the Caddy and the Hyundai. The only option is the loaded $50,000 Caddy. In the UK, you can go to a private doctor, if you are willing to pay. In the US the only choice is to pay through the nose or do without.
As for horror stories, we have our own share. There’s a reason why malpractice insurance is so expensive, American MDs also screw up, and often. No system is perfect, and there will be mistakes made.
Smithers,
You want horror? Look no further than BlueCross/Anthem.
I’ve only read three of your posts, but I’m betting my left patootie you make your living in the “health” insurance industry.
I am reminded of the Marks Twain’s excellent short story “The £1,000,000 Bank-Note.” Full version can be found here: http://www.eastoftheweb.com/short-stories/UBooks/MilPou.shtml
The mian point is that you don’t need to have money, you just have to make other people think you have money.
Thank you. I’ll check it out.
“The main point is that you don’t need to have money, you just have to make other people think you have money.”
Oh, that’s an old Federal Re$erve Inc. $leigh-o’-hand trick$ter $tory!
[much unlike the current $it-u-a-$hun, which is actually based on an old fairy tale. Most recent adaptation is Wimpy & his hamburger tradin' $trategies.]
Justices weigh bad documents vs. debt in foreclosure case
By Dara Kam and Kimberly Miller
Palm Beach Post Staff Writer
Posted: 8:31 p.m. Thursday, May 10, 2012
TALLAHASSEE — There was no slam dunk for homeowners in the Florida Supreme Court on Thursday as justices considered a Greenacres foreclosure case, commenting at one point that the defense attorney was just looking for a “gotcha to get out of the mortgage.”
The case, Roman Pino v. the Bank of New York, is the first significant foreclosure complaint to be heard by the high court since Florida’s housing collapse. Although Pino and the bank reached a settlement last year, justices said in December they wanted to weigh in on the potentially benchmark case.
“There has never been a matter of greater public importance than this court’s obligation to deter fraud and defend its integrity,” said homeowner attorney Amanda Lundergan, of Ice Legal, in her opening remarks.
“I appreciate all those very lofty statements,” Justice Barbara Pariente cut in. “Let’s talk about the facts of this case.”
http://www.palmbeachpost.com/money/foreclosures/justices-weigh-bad-documents-vs-debt-in-foreclosure-2350685.html - 85k -
Interesting issue: can the rich lie all they want, and just say “whoops” when the are caught, in cases where the poor would rot in jail.
Heads I win, tails we are even.
“I appreciate all those very lofty statements,” Justice Barbara Pariente cut in. “Let’s talk about the facts of this case.”
‘When the law’s not on your side, argue the facts.’
An old saying, and good advice. Of course, it’s meant for lawyers, not the court, which is always supposed to represent the law.
And when you don’t have the law or the facts on your side, scream and shout and pound the table. That will really sway the jury!
A variant of this phrase that I learned is that when you have neither the law nor facts on your side, abuse the plaintiff.
I always heard it as “When the facts aren’t on your side, argue the law.”
A good case rests on the facts, because once you establish your facts and apply the already well settled law to your facts, you are done.
A bad case is one where the law applied to your facts doesn’t get you the result you want so you try to “argue” the law is different than the already settled meaning of it is.
The real world, of course, is never even remotely that easy. Once one side starts arguing the law, everyone has to jump in. You don’t trust judges to get it right when only one side is talking to them.
And I’ve heard (from a very experienced litigator) that even if you have 100% of the facts and 100% of the law on your side, you still have a 25% chance of losing.
Litigation is a crapshoot, which is why people who have been through the process seek to avoid it.
25% sounds a bit high unless you generally have very unsympathetic clients who can’t choose to go before a judge rather than a jury. But the number is definitely not zero.
His experience was generally litigating business disputes related to a written contract. I think in many cases, educating the judge/jury on how the contract/facts relate to the law can be more difficult in those situations (I know it was for the matters in which we were involved).
Also, while he was an excellent litigator, he was a proponent of his clients always talking with the other side to see if a settlement could be reached. He never took part in such settlement discussions…his job was to fight, not settle, so he fought like hell until his client said to stop.
I think his percentage given was partially to encourage his clients to seek an alternate resolution to litigation.
I believe the complete saying is “When the facts aren’t on your side, argue the law. When the law’s not on your side, argue the facts.”
But again, it’s an admonition for lawyers, not judges.
So Ca (east Ventura County) Update
Oh man, we saw an approved short sale (30 day coe/buyer backed out-docs say no restart)yesterday at a fair price. Great neighborhood, and nice neighbors. No DR, and the add on didn’t flow right. Had to pass. This morning 4 offers (our broker emailed me).
This market is a sellers, and most offers are FHA with closing costs financed. Our broker told us good credit people w/hardly no cash are buying (financing closing costs), along with 620 credit scores 3.5%ers, with default intensions (also financing closing costs), all FHA deals. How freakin lovely.
Maybe they (the PTB) are chumming the market. Get some sales going, get some prices rising and maybe fence sitters with stashes of money will come off the fence.
Coffee is for closers and sheep are for sheering.
To us it may seem a transparent plan, but it’s a plan that will work.
A good recent example of sheep being sheered is JC Penny. They decided to offer everyday low prices in place of sales specials. It’s failing. The reason being that people are conditioned to “specials” and therefore do not perceive full time bargains as, well, bargains.
Just like people think Mercedes Benz is a luxury car whereas in Germany, it’s the equivalent of Chevy and in China, they think a Buick is the equivalent of BMW.
Go figure.
It’s the same with beer.
Like I said yesterday in Bend, a listing for 144k will get snapped up quick, with multiple offers the norm. The bottom end, for whatever reason, is very active.
Even in Prineville(out in the sticks, used to be a bedroom community for Bend but the prices rose to match Bend’s prices during the bubble, so now both towns are moving bottom end stuff at $85-100/sq ft). I own a home “worth” about 125k. I could list it close to 150k, as ANYTHING in the bottom bracket moves quickly; due to small inventory.
A buyer could get into a(perfectly liveable, move in ready) 144k house for 5k at 3.5% down; and have a payment of around $600 bucks. this house would rent for $1000, so investors are salivating at the chance to jump in.
but the condo my wife foreclosed on was offered for 200k; and since it is in a investor heavy vacation market, there are lots of repo-ed units in the development. Unit was pulled off the market quickly. The GSE’s, I believe, are selectively dribbling out the inventory in a controlled fashion. And choosing not to “find the market by dropping the price till it sells” on higher priced inventory. I think they don’t want to mess with the feeding frenzy that is the bottom end.
My parents have failed to get a unit in their price range (100k; with the intent of renting it out for $900) after making 4 offers they have given up. I will be selling my house to them. So they don’t have to screen tenants (we have a good one); or fight over it with other investors.
Is 144k a decent price for a close in, SFH, on .37 lot, that would rent for 1k? It seems like it pencils out, so long as the market manipulators get to choose what they want to sell and what they want to pull off the market or not list period. Keeping the bottom from dropping out seems to be the name of the game here. The folks in the middle(200-400k) who need to sell I think are in for tough times. And when they lose their homes to Fannie or Freddie these seem to never hit the market, not like the lower priced ones.
mikeinbend, I don’t understand why you are selling your paid-for house to your parents. Sure, it simplifies _their_ search for a rental—but you bought it for very good reasons, to protect what assets you had and to have the option of living somewhere for “free” if your incomes were not solid in the future.
Your situation doesn’t seem to have changed, so why would you change the decision that you had made: the way that you were protecting your assets and also providing a degree of safety for your family?
He wants the cash to get a masters degree in education.
I have given up giving advice to Mikeinbend. He isn’t interested in a defensive postion which is what Oxide and I have laid out for him. Grabbing the cash is what he wants. His choice.
I would think long and hard before I gave up a fully paid for house.
PIC–sorry for the extended answer!
Cuz kids need braces, hospital wants to be paid for wife’s surgery, and I need to go to grad school if I want to continue in my chosen new profession of teaching. It has been a rocky career change for me to be sure(but I am making headroads with various schools/admins). From farmer to flipper to teacher.
Servicing these new and upcoming debts will cost us most of the “free rent” offered by the house. I suppose I could buy a cheaper version of the same thing after paying off the debts. but then what, wash, rinse, repeat? As we spend more than we make.
I sort of like the idea of not having the whole 100k in my hands at once. I could get out of debt/pay tuition/braces/hospital with the down payment;( planning OWC contract with parents; 25% down, $800 payments for 10 years, 20k balloon due at that point). Then the home is theirs. They will likely also will it to me as part of their estate. And I, the guy with equity buy with next to no income, would carry none of the risks of being a home owner or ll. Plus I trust my parents to do business with; and I like the tenant I would be handing them with their investment. We will solve the income less than spending problem during this time; well, hopefully so!
I want to pay my debts and then; either buy a cheaper home, or do a OWC with my parents. 10 years hence, I will be an employee of the state(teacher) with my masters degree I will certainly have more decent employment options(such as continuing to sub but also teaching night school at the local community college, which also needs a masters). If I don’t believe I can do that, may as well apply at Costco to serve hot dogs and forget the masters.
Which I can get without sacrificing any income or professional development I am doing by being a substitute teacher (classes are evening/weekends) in the schools. I could also go back to CA and sell vegg)ies; but my body does not like that plan so much (I quit job making $65k/yr cash money in order to go be a teacher, mostly cuz it hurt. But I have come to terms with the pain, enough to go back? Maybe, but not likely)
It ain’t foolproof, I know. The house is also not in the school district that my kids have become comfortable with. It is in Prineville, a 9,000 person community 45 minutes away, and where my parents live. It is four doors down from my parents house currently, and they may want to move into it as it is a single level, which they may be needing in the next few years.
I could cash out rather than OWC financing to my folks, but looking for another home sound tedious, and what if I buy a money pit? Alternatively I could find cheaper ways to finance our debt(medical bill payments, dentist payments, braces payments, student loans) and keep things status quo. But frankly, seeing how I have numerous times run up to 100k in CC debt and then paid it off using 0% teasers), I am tired of juggling payments.
My parents are already looking and offering on bottom end homes(mom worries; she is afraid we will have nowhere to live, honestly, so they are buying a home for my family to live in if necessary).
If I become destitute under this plan, they would still allow me free rent in the home they are buying from me. Or they would cash me out in full at any time. But rather than be their dependant; this gives me another chance to make it on my own. I will inherit it back from them in the event they pass and their regular state and federal pensions die with them. That which affords them a income/lifestyle to easily be able to afford a second house.
And not worry so much about their black sheep son who won the real estate lotto in 2005 and again in 2006 and has been spending it ever since.
I am not sure what to do…..so I prattle on….TIA for your thoughts…
There may be some value if he sells a $125K house for cash and buys an $80K house with it OUTRIGHT, and uses the profit to pay off medical bills and/or high-interest credit card debt. But he’s resisted that.
He wants to sell his paid-off house to his parents on seller-financing, and then buy a new house with low money down. Then he can use the mortage money coming in from his parents in the old house to pay the mortgage on his new house. That’s not a cash grab so much as it is trying to re-start the little real-estate empire that the already screwed up once.
I think some of our advice is sinking in!
Good to see you’re thinking of doing the masters degree only part-time, and as a pay-go, instead of spending precious cash on it.
You’re in a very good position to simplify simplify simplify your finances. Sell the house to your parents for CASH if you can. Pay off the medical and other debts with CASH if you can. Fill up the holes in your finances so that you don’t receive any bills in the mail. It will be a load off your mind and boost to your FICO.
Use the rest to buy a house for CASH.
It may be that after you pay the medical bills, you may not have enough left over to buy a house fully outright. Given that situation, I think it would be better for you to square away the outstanding bills first, and then put 60-70% down on the house. That’s a very small mortgage payment, and with some extra towards principle, you should be able to pay off the house in 6-7 years. (Polly, how would this affect his gov benefits?)
Oxide, I don’t read his post the way you do. I don’t think that much is sinking in. Having a mortgage shouldn’t have any effect on the rules protecting the equity of a house you live in (especially not counting it as an asset for various benefit programs or vulnerable in bankruptcy), but you have to look at the state rules.
I think he is just trading getting rent from his tennant with getting mortgage payments from his parents plus getting his $20K payoff at the start. He will still be living in a rental. He may have less risk with getting payments from his parents than with a tennant, but the current tennant isn’t much of a risk either. And he is still counting on getting that full time teaching job as some sort of done deal because the principals like him. They may like lots of people. When they get around to hiring they may be told no hiring anyone more than a year out of a BA program. They may not be hiring at all.
And people wonder why the market here in Oregon is so effed. Good grief.
FYI, I’m seeing more personal attacks this morning. Those that do this may be banned. And I’m seeing some unacceptable language as well, so please consider what you are posting before you hit add comment.
thanks for stepping in and regulatin’, Ben. It’s been getting ugly in here the past couple of days…
“It’s been getting ugly in here the past couple of days…”
Loss of civility = early indication of next leg down on the way.
A lot of people think the first great depression was just one spike down and a gradual climb out. Not so. And the second great depression is similar.
How many outmoded obsolete belief systems have been truly fundamentally changed? Not many. Long way to go before bottom. When beliefs change, when the topic of arguments change, then maybe growth can occur. Till then?
Prices of everything keep rising, salaries stagnant, something will have to give. I see the affect on my own finances, I can only imagine how bad it is getting for people making less than 30k and people with children to support. The FED, Congress and the Organizer are inflicting death by a thousand cuts to the middle class.
thanks for stepping in and regulatin’, Ben. It’s been getting ugly in here the past couple of days…
I agree. I’m a regular at patrick.net (more local for my purposes) and it sometimes gets a little cesspooly over there cuz it’s a little more anything goes.
Continuing a sub-thread from yesterday, it appears that a remarkable number of people still believe there is a Social Security trust fund. So let me try to explain why there really isn’t.
First let’s assume that there never was a Social Security trust fund. Instead, each year the government allocated some of the tax money paid by you to go to retirees and those on disability. The taxpayer pays the full amount.
Now assume we have a trust fund, where excess FICA contributions have been used to buy Treasurys and those excess contributions are spent for other purposes. Soon the excess will shrink to zero, and the bonds will start to be cashed in to help pay recipients. Where do you think that money will come from? The taxpayers of course, same as above.
It’s all an accounting construct. There ultimately is just one pot. If the excess money had been used to buy ECB bonds, or Jefferson County, Alabama munis and corporate bonds from the likes of GM and Chrysler (oh, wait) it would be different. But the taxpayer is on the hook to provide the full amount of money needed to pay SS recipients each year, regardless of whether the accounting transaction is direct taxpayer-to-recipient, or the taxpayer pays the trust fund holder who’s cashing in the Treasury bonds in order to pay the recipient.
Unless you believe an accounting construct qualifies as a trust fund, there isn’t one.
It sounds to me like you are arguing that the US treasuries in the trust fund need to be traded for foreign treasuries, munies and corp bonds.
Then others ( not US tax payers ) would be on the hook but we would have less chance of collecting ( given the current flight to US debt ) no?
‘The money’s been loaned out to Frank, here, and Ted, and Roger, to start his own business…”
Oh, so the money’s not sitting in a pile with Uncle Scrooge sitting on top of it? Thanks for explaining that.
It’s all an accounting construct. There ultimately is just one pot.
OK, so the money has been spent, just like it was any other tax revenue. In that case, we should treat it like any other tax, and not have it apply only to the first $100k that people earn, right? That solves all of Social Securities problems, right there. Good thinking, Bill.
And remember, if treasuries held by the trust fund are just IOUs (which you seem to think makes them worthless), then so are those treasuries held by the 1%. If we renege on the former, then we renege on the latter. Unless being owned by the 1% makes them sacrosanct.
What happens to the FIRE sector if we declare all US treasuries to be “worthless IOUs”? Will the banking regulators have to cosider all those reserves worthless? What will happen to the US ability to issue new treasuries if we declare the existing ones to be worthless? Isn’t that called a default? Sounds like Bill wants to shoot the confidence fairy, no?
No, I don’t think the Treasurys are worthless. It’s just that taxpayers pay the full cost of SS benefits each year, whether it’s a direct accounting transfer or a subterfuge where taxpayers redeem bonds which go to pay the benefits.
There’s no pot of money sitting in banks or with the ECB or some other entity that can be cashed out to pay part of each year’s SS benefits. There are only IOUs from the government to an agency of that same government. An accounting construct.
There’s a “trust fund” T account or something on paper, but the money itself is in the general fund, right? So it goes in and out. AFAIK the “trust fund” as a segregated account was more or less a sham from the beginning.
“Unless you believe an accounting construct qualifies as a trust fund, there isn’t one.”
Why not? My 401K is also an accounting construct, as is my savings account at the local “Trust Company”. The money isn’t sitting there.
The problem isn’t whether there is a “fund” or not. The problem is that the whole of the US FedGov budget is grossly underfunded. We’ve been watching the deficit grow exponentionally since the ’70s, thinking there was some kind of boundary that would be hit sooner than later. Still watching! It’s the final frontier of the largest expansion of credit in history.
“US FedGov budget is grossly underfunded”
That sounds suspiciously like a revenue problem instead of a spending problem. Run for the hills!
Food stamps and earned income tax credits are bankrupting this country!
And don’t forget school lunches!
Meanwhile, we’re gonna spend 1.5 trillion on the F-35 program. But I suppose that’s OK because that money will go to defense contractors.
But I suppose that’s OK because that money will go to defense contractors.
It ain’t socialism if it kills and destroys! That’s why the Great Depression-era Austerians came around to support government spending when WW2 broke out.
The F-35 project will guarantee it is the last fighter jet built by the US.
“The F-35 project will guarantee it is the last fighter jet built by the US.”
Yeppers, …then it just A-leap / $kip & jump, to these eXpenditure$:
“All aboard Amtrak!”
List of Star Wars starfighter$
From Wikipedia, the free encyclopedia
1 A-wing
2 ARC-170 starfighter
3 B-wing
4 Droid starfighter
5 Droid tri-fighter
6 E-wing
7 General Grievous’ starfighter
8 Geonosian fanblade starfighter
9 Geonosian starfighter
10 Hornet Interceptor
11 Jedi interceptor
12 Jedi starfighter
13 Naboo N-1 starfighter
14 P-38 starfighter
15 TIE fighter (and variants)
16 V-19 Torrent starfighter
17 Vulture Droid starfighter
18 V-wing
19 X-wing
20 Y-wing
21 Z-95 Headhunter
“The F-35 project will guarantee it is the last fighter jet built by the US.”
Why are we even doing this? Are the current jets we have not good enough to bomb Afghanistan. What is this “threat” that necessitates spending 1.5 trillion on 2400 fighter jets?
Funny how when it comes to this, spending “Other People’s Money” isn’t a problem.
Yes Oxy, we must be in a grow or die dilemma. Cyclic contractions in earnings will not be tolerated.
I’m not an Austerian, but it seems like borrow and spend, and printing money as a solution to the Great Recession, seems too good to be true.
I mean, if it works, wow. That’s great. But… borrowing and printing - can it really work? If so, for how long?
But… Zimbabwe. I know, I know, we’re not Zimbabwe. If borrow/print works for us, why didn’t it work for them? Okay, we’re the reserve currency. So what? What line did they cross with their currency that we have not / cannot cross? Why can’t, say, Pakistan, borrow/print its way into prosperity? Or Greece? Or Iceland?
I think “let it all crash, we’ll dust ourselves off and rebuild it even better than before” sounds too good to be true.
Start fresh in this age of Faux News/Kochtopus astroturf/Rush Dittodimwits propaganda mastery? No thanks. I don’t see many Jeffersons, Adamses, or Hamiltons out there in positions of power.
We’ll be in able hands with Paul Ryan and Eric Cantor at the helm
I’m not a fan of either Ryan or Cantor. Ryan and Cantor talk about fiscal responsibility, but the Republicans have lost all credibility on their talk of fiscal responsibility. Ryan/Cantor will borrow/spend/print as much if not more than the Democrats. Because that’s what politicians do in our current age.
But back to the subject… we’ve been borrowing-and-spending for 30 years, and printing money for four years.
Don’t try to paint me as some political partisan in an attempt to dismiss my observation.
I’d like to see some non-talking-point-esque thoughts about the subject - “Can we borrow and print our way into prosperity?”
A while ago, there was some prediction that the Austrians/Austerians made that turned out to be not true. As a result, the Keynesians jumped on it and said, if that’s not true, they’re wrong about everything. But is that itself true?
Or - and this is crazy talk in this hyper-partisan election year - might there be some elements of truth and falsity in both positions?
Keynes theories worked quite well for 50 years. Go check the charts at zfacts. ‘Borrow and print our way to prosperity’ is a strawman.
You say we’ve been borrowing and spending for thirty years. Well, guess what happened thirty years ago? Reagan and Greenspan took over and switched from Keynesian economic policy to trickle-down monetarism. Coincidence? Sure is a doozy.
Coupled with the right amount of inflation it just might work.
So, buried in the reams of data at that website, you assert there is evidence that borrow/print (or as you seem to be equating, “Keynes’ theories”) can lead to prosperity. Do you perhaps have any hints as to what I could search for which might narrow the search? Or would you be so helpful as to actually summarize your argument, followed by a few succinct, supporting links? (Meaning, no links to commerce.gov and telling me the evidence is in there somewhere
A strawman is a logical fallacy in which I make argument X, but my opponent claims I made argument Y, and proceeds to demolish argument Y, without dealing with argument X.
How on earth is my questioning whether borrow/print can lead to prosperity a strawman? It’s a question.
This is common knowledge. It’s one of the reasons I say the Republicans have lost credibility on fiscal issues.
You’re looking to score political points in response to some perceived/illusory political attack. I don’t care if you make the Republicans look feckless and venal, or if you make the Democrats look feckless and venal. Because evidence indicates they BOTH are.
Channeling Grover Norquist, how about shrinking the size of the Pentagon down to where it can be drowned in the bathtub? And create national single payer health care.
“Can we borrow and print our way to properity?”
We can if we keep it up until the baby boomers stop sucking up Social Security and Medicare (that’s a euphamism, folks). Or if we can kick the can until Congress finally passes better trade agreements and single-payer health care. Or until general inflation lifts underwater FB’s above water and the FB’s start spending money at the mall again. Or until banks finally overstep their reach and fail… only this time they die as per Dodd-Frank instead of being bailed out by Fannie Mae.
“I’m not a fan of either Ryan or Can’torwon’t. Ryan and Can’torwon’t talk about fi$cal respon$ibility, but the Republican$ have lost all credibility on their talk of fical responsibility. Ryan/Can’torwon’t will borrow/$pend/print as much if not more than the Democraps. Because that’s what politician$ do in our current age.”
Well $tated!, now out to tend the garden eye go … countin’ ladybugs today … [whilst watching out fer rattlers!]
Straw man arguments often arise in public debates such as a (hypothetical) prohibition debate:
Person A: We should liberalize the laws on beer.
Person B: No, any society with unrestricted access to intoxicants loses its work ethic and goes only for immediate gratification.
The proposal was to relax laws on beer. Person B has exaggerated this to a position harder to defend, i.e., “unrestricted access to intoxicants”.[1] It is a logical fallacy because Person A never made that claim. This example is also a slippery slope fallacy.
wikipedia
That’s how ‘borrow and print our way to prosperity is a textbook example of a straw man. I never made that claim, you exaggerate a philosophy that calls for stimulus when times are bad and constraint when times are good into ‘ tax and spend our way to prosperity’. A straw man, QED.
Here’’s a relevant chart:
http://zfacts.com/p/318.htm
countin’ ladybugs today … [whilst watching out fer rattlers!]
I’ve been eating my strawberries. Tastiest crop yet.
Same here. Watch out for the sowbugs, alpha.:-) (burp)
When was the last time when ‘times were good’? Because I’ve been employed for the past 12 or so years, and it’s been pretty much the same middling mostly bad the whole time. How long should true Keynesian stimulus spending last?
“You say we’ve been borrowing and spending for thirty years. Well, guess what happened thirty years ago? Reagan and Greenspan took over and switched from Keynesian economic policy to trickle-down monetarism. Coincidence? Sure is a doozy.”
I tell you that Reagan was a real mean SOB. He got all the Democrats who controlled congress during his 8 years in office to do exactly what he wanted them to do. They really, really, really wanted to cut spending. But Reagan forced them into increasing it.
Coming soon from the people that brought you
Medicare
Social Security
Medicaid
The USPS
Amtrak…
Govt run health care. Yes you heard that right. The people that couldn’t hit water from a boat without losing $1B, will now run health care and - this is the really funny part - do it for less money than the eeeeevil private sector. When you want fiscal prudence, turn to Uncle Sam first!
You’re welcome to call my question whatever you want to call it. You’ve made your case, and this tangent is not relevant to my point. Readers can decide if my question - whether borrow-and-print can end the Great Recession - is a strawman argument.
That still leaves the question: Borrowing and printing money (because that’s what we’re doing) as a solution to the Great Recession seems too good to be true. Is it? Can it really work?
I’m actually a supporter of Keynesian theory. It was a brilliant insight. But we’ve been deficit spending for 30 years. We’ve been printing money for four. Is this what Keynes intended? Because it’s what we’re doing. Is there any alternative? Or are we approaching this problem entirely the wrong way, only thinking in terms of increasing or decreasing government spending, and not dealing with structural economic issues? This would of course require Congress to do something other than political theater.
How long do we keep doing Operation Borrow/Print? We’re at 100% debt to GDP. We’re coming up on QEIII.
And historically, but for a handful of years, we’ve never reduced the actual debt after WWII. We’ve only reduced it as a percentage of GDP.
http://en.wikipedia.org/wiki/History_of_the_United_States_public_debt
What’s your solution, Nuero?
So - you think we can borrow and print our way to prosperity?
OR - are both austerity and borrow-print two roads to the same dismal end, driven by larger underlying currents? And we just gather different baggage on the way to that end?
Is the Great Recession even being looked at in through the right lens? I mean, if someone has a lung infection, and we’re talking about whether to give them an emetic or a laxative, we’re both wrong.
I guess what I’m getting at is this - we talk about monetary policy because, “When the only tool you have is a hammer, every problem looks like a nail.”
We’ve de facto given up on Congress’s ability to do anything about the situation. All they can provide is pointless political theater which they think scores them some points.
I’m guessing the real way to prosperity is not talk of borrow/print or austerity (which might be the emetic/laxative discussion), but Congress putting in place laws which encourage job creation here, laws which encourage them to be responsive to their constituents, not merely the highest bidder, laws which encourage sane trade policies.
But that’s hard work. So I suppose we just go back to talking about austerity versus borrow/print.
but Congress putting in place laws which encourage job creation here, laws which encourage them to be responsive to their constituents, not merely the highest bidder, laws which encourage sane trade policies.
+1 neuromance.
Hard work?
Seen the protests around the world, including here, lately?
Here’s Chicago yesterday:
http://www.republicaffair.com/wp-content/uploads/2012/05/nato-protest-crowd-numbers.jpg
“I think “let it all crash, we’ll dust ourselves off and rebuild it even better than before” sounds too good to be true.”
Isn’t that the Cloward and Piven strategy? Except the “rebuild it even better than before part”. I would think communists would be all about collapsing the system and replacing our constitution.
I would think communists would be all about collapsing the system and replacing our constitution.
I would think so, too.
Bringing in Pakistan is a straw man. The purpose of deficit spending in the American context is to reduce the severity of the recession and shorten its duration. We do it to bring up back to previous level of jobs and output more quickly then we would without the deficit spending. It coudn’t be used to raise the standard of living in a country like Pakistan.
No we don’t Mike. We’re short about six million jobs of bringing anything back “up”. There must be some other reason we do it.
There must be some other reason we do it.
Because we’d be short 20 million jobs if we didn’t? Austerity’s not working anywhere it’s being tried. It’s no depression curer. It’s for good times, like Keynes said.
Austerity’s not working anywhere it’s being tried.
As good old Albert Einstein one said, doing the same thing over and over, expecting a different result …
To be fair to Keynes Alpha, he also said that stimulis spending should only be done by governments with a healthy purse. For spendthrifts, it is a trap.
Just who is austerity not working out for wherever it has been tried? I’ve read this in some economist’s articles, but I am not sure who they are speaking for.
I expect it is not working for those who take their skim off the top, and for those who take their skim off the bottom. For those who pay the bills, it might work better than debt exhaustion. It’s another one of thsoe words that depends entirely upon who is speaking. If you want your bennies jacked up, then the rest of us have to accept more austerity at home.
Just who is austerity not working out for wherever it has been tried?
Europe. The people therein.
I’d be ready to agree, but I don’t think any of them have actually gone all austere, except maybe Iceland. I believe they have been fooling us about their draconian austerity. Could be wrong.
Wait. The Ukraine. They have been austerized I think. Very painful.
except maybe Iceland.
Iceland walked away from their debts and devalued their currency. Everything the Austerians are against. And something only possible with a fiat currency, as Keynes argued.
There must be some other reason we do it.
We do it because we can. To balance the budget, you would either have to raise taxes considerably, and most likely see a revolt, or cut programs and services considerably, or some combination thereof. Those options seem unpalatable to politicians, so here we are. Also, as long as other countries are willing to buy our debt and use dollars in commerce (or support our central bank), it behooves us to use them.
As to the question of why we are able, it’s because the dollar is the global reserve currency by virtue of our military and sole superpower status, as well as deals with allies like Saudi Arabia (trade oil for dollars). Much of global trade is enacted with the dollar. Our status as one of the largest economies in the world means our trading partners (China) use dollars. Lastly, there is the “con” game, whereas the dollar is backed by the “full faith and credit” of the US and is viewed as a safe haven in times of economic stress.
Like Rome, slowly but surely we our global empire is crumbling. Other countries are looking at other means of enacting trade and backing currency. At some point, investors and trade partners will realize we will default or devalue and the view of the dollar as a safe haven will disappear. The question is not if, but when… the when could be 6 months from now or 20 years.
You might notice that the other countries are crumbling as well. Some a lot faster.
Yeah, look at that pesky leaning tower of Pizza! $till $tandin’!
[talk about "intervention$!"]
You might notice that the other countries are crumbling as well. Some a lot faster.
If you mean the Eurozone, I agree. I’m sure we’ll see a breakup of the EU before too long. Problems with China will hit us as well as they are one of our largest trading partners and buyers of our debt. If they slow or stop purchasing Treasuries, there will be trouble.
What is most disturbing are rumors of the Swiss looking at returning to a gold-backed currency (see the recent article on zerohedge). If and when that becomes more prevalent, then the dollar won’t be the global safe haven. I would expect the decay of the dollar to accelerate in that scenario. As I said, 6 months, or 20 years… doesn’t really matter to me as the outcome is inevitable. I’m not trading on the timing, rather investing for the long term.
rumors of the Swiss looking at returning to a gold-backed currency
That sounds unlikely. The Swiss have been struggling quite a bit over the past couple of years as their franc has risen in value significantly against the euro. Since the euro is used by most of Switzerland’s important trading partners, their exporters have been put at a disadvantage. If their currency was to be linked to gold at this point, it could get even worse.
Once again, I wouldn’t bet on an economic market almost 3 times the size of the US’s, going away any time soon.
Once again, I wouldn’t bet on an economic market almost 3 times the size of the US’s, going away any time soon.
Gambling has nothing to do with it. Without a political union, the EU is/was doomed to fail. A monetary union without the political force to dictate member states fiscal health is useless, as we’re seeing with the PIIGS currently. The EU will fail miserably as nationalism, protectionism and austerity revolt take over in the PIIGS, leaving Germany and France holding the debt bag.
The Swiss have been struggling quite a bit over the past couple of years as their franc has risen in value significantly against the euro.
Here’s what I was referring to:
Swiss parliament examines ‘Gold Franc’ currency
Here’s another disturbing comment out of China:
China sovereign wealth fund says Renminbi will become global reserve currency
The US economy is about 25% of the world economy, and Eurozone slightly more.
Are you saying that every ounce of the economy outside of the US is going to disapear?
No we don’t Mike. We’re short about six million jobs of bringing anything back “up”. There must be some other reason we do it.
I wrote “reduce the severity of the recession and shorten its duration.” The fact that the total number of jobs has not reached its pre-recession level doesn’t mean that the sitmulus failed. This is standard textbook economics. The recession would have been worse if not for the spending increases and tax cuts enacted in Washington.
MightyMike
Agreed. But along with stimulus you should have massive regulatory reductions to encourage the entreprenuiral class. Regs have only gotten worse. Again because of the banks.
We have to see that bank overleverage reductions have stalled out in the last five months or so at 30. The only way they can get it down to 18 is massive deposit imports (repatriate foreign profits, flight to safety, and growth - with growth having to account for more than half the reduction).
Our economy doesn’t restart until 18 is in the bag. Having broken the window once, bankers cannot do it again. They are truly frightened. Watch out for the long throws now - oh wait, JP tried already. Oops.
“The purpose of deficit spending in the American context is to reduce the severity of the recession and shorten its duration.”
Does that go for reflating the housing bubble? Who picks the winners and losers? I am pretty sure a middle aged - middle classed white guy like myself would be among the losers.
Normally there are 2 fixes for debt. Pay it back or default. Austerity is an attempt to pay back the debt, but it’s too late now. Cutting enough to balance the budget will lead to revolt (a la Greece.) And even then, it would only be a balanced budget without debt being paid back.
Default is ugly at the national level. It’s happened before and life went on, but the process is painful.
Printing is a 3rd option when dealing with sovereign nations. It’s a hybrid of the other 2. You create the illusion of paying back money, when in reality you are stealth defaulting since you’re diluting the currency. This works on a small scale as creditors will accept that some loss in value to diluting is better than full scale default, but I don’t believe this could solve the debt problem. Printing enough to make a serious dent in the debt would trigger hyperinflation.
I believe that ultimately the US will default, either via hyperinflation or refusal to pay its debts. But I’m not foolish enough to try to predict a timeline. The US will go on claiming its untenable position is manageable, and the creditors and general public will accept those claims because they want to. The fear of the alternative is to great to accept freely.
This is an interesting observation. But there is a third option - maintain the debt and keep paying interest on it in perpetuity. Like a person who maintains a credit card debt from month to month instead of paying it off.
Historically, this is what the US has done. The US never actually reduced its debt load after World War II, only reduced it as a percentage of GDP (except for a handful of years where it was actually reduced).
It’s taxation by a different name, painful and regressive. Inflation.
Currency tied to gold would have had significant deflation, big crash, higher unemployment, and faster recovery.
The borrow/spend/print/inflation softened the crash, will cause pain through inflation, and and will extend the length of time necessary for recovery.
Currency tied to gold would have had significant deflation, big crash, higher unemployment, and faster recovery.
Ever heard of the Long Depression? Currency was tied to gold, and yet we underwent the longest depression in US history.
I hadn’t heard of the Long Depression, but based on a quick Wikipedia search, it sounds like part of that fiasco was tied to the Coinage Act of 1873, which was the start of the gold standard, and destruction of wealth by reducing the relative value of silver as compared to gold (which was used previously to back $). A shortage of gold was part of the problem (alleviated with the Klondike Gold Rush in 1896, which also marked the end of the depression–voila, gold rush=creation of money!).
Not a clean test tube in any event as an example of an economic cycle with the gold standard.
I’ve heard economic historians point to the 1920 depression as a potential model (massive deflation, relatively quick bounceback).
Looks like the fix -n- flip crowd is hard at work in my nabe. A few months ago, I noted that this foreclosure was on the market for $58k. Some of you guys and gals were of the teardown frame of mind on this property.
Well, some enterprising flipper disagreed. It’s been given a fresh coat o’ paint and some other cosmetic improvements, and it’s back on the market for $129k.
As near as I could tell from watching the renovations, the original wiring, plumbing, and mechanicals from before the foreclosure are still there. Which means all sorts of fun for the next owner.
Did they leave the landscape like that?!?
No they didn’t.
They cleared every living plant from it, and you can imagine what that will feel like during our summers. Tucson Electric Power must be rubbing its hands with glee.
Why are they using the old photos?
Beats the Sam Hill outta me. I wish I knew.
But for the lack of any living plant life on the property, the new version of the house looks a lot better.
From zillow:
http://www.zillow.com/homedetails/1701-N-1st-Ave-Tucson-AZ-85719/8475475_zpid/
‘Recently Sold: $76,900
Zestimate®: $109,500
Charming bungalow built in 1947,located on a large corner lot…’
1947? No wonder it’s got those TV antennas from the 50’s.
Used house are just like used cars. It’s all about “horse trading.”
how is an ocean front lot like a used car?
I kind of like that house. Looks like it has polished concrete floors, maybe that’s common in the desert? Good sized living room, cool fireplace. Built in 1947, it’s probably sturdy as hell. A new coat of paint and a clean-out might have done it wonders.
A friend of mine used to own that place. He had a print shop in the back, and he did fabulous work.
Alas, his business ran into trouble during the middle of the last decade. ISTR him telling me that he refinanced the house in order to keep the business going.
Uh-oh, I thought.
But I held my peace. The refi was already water under the proverbial bridge, so my saying something wouldn’t have made a whit of difference.
Well, around the time that he was having trouble making the higher payments on his house, he met the woman who became his second wife. He moved out to her place, let the house in this nabe go back to the bank, and that was that.
He was a nice, solid neighbor, and I miss him. I’ve heard that he found a job at one of the top printers in town, and that’s a good thing. Perhaps he should have done that instead of trying to save his sinking business, but who knows? Had times been better, things might have turned around for him.
But the economic slowdown we hear so much about now actually started here around 2005. The trigger was the slowdown in real estate sales. In such a real estate-addicted area as this one, such a slowdown can be a real killer.
Built in 1947, it’s probably sturdy as hell.
Where can I find some good info. on what building standards, decent construction, materials, etc. by decade?
As a longtime renter, I’ve never thought about this stuff. The housing stock here in SF is really diverse, from Victorians built in the early 1900’s, 1930’s craftsmen, 50’s boxes, 70’s ugliness, etc.
I’m learning as I go along, and of course nothing beats a thorough professional inspection, but I would like to know more.
Saw a run down 1930’s SFH that had beams that looked like they could have come from a large ship. And then a 1990’s built house that looked like it was coming apart at the seams.
I asked a home inspector if the quality of homes when down when they started buiklding them en masse after WWII. His response was actually the crappy cunstruction began in the late 60’s/early 70’s when people’s tastes started moving from wood to plastic/formica, we were in recessionary times, and a few other things that made sense. I also was told that houses built during the depression were especially well crafted, since the people worked as long on them as they could to retain their jobs. But who knows how true that is.
My last house was built in 1930 and the one I live in now was built in 1928.
There are many reasons for the quality of older houses, not the least of which was not using unskilled illegal labor to crank them out like plastic keychains.
And I do mean plastic.
by decade?
The people I know in the biz say that the 20s to the 70s was the sweet spot of modern design and materials, plus quality craftmanship. But there are duds within that period, and quality built before and after. I feel like you can usually tell by close inspection of the property.
You guys are crazy with this older is better fallacy. Pre WW2 is almost all balloon framed structures. You don’t want these things. They’re fire traps, aren’t braced or hinged where they need to be. Stick with stick framed structures using nominally dimensioned lumber. Nobody cares that your 1930 house was framed with super duper redwood bla blah blah lumber. One exception would be single floor balloon framed structures with fire blocking installed at top of walls. Even then, it better be something very special and very inexpensive.
What would it cost to rent such a place in your ‘hood?
If you’re referring to my nabe, I’ve seen rents going from anywhere from $850 to $1,000 a month. And this is for 50-year-old houses of around 1,000 square feet.
A bit high, IMHO, and I think the reason is the landlords’ buying the properties to rent out, and they have to cover that monthly mortgage nut. I don’t think that a lot of them are that successful in the mortgage-covering department.
Furthermore, I think a lot of them underestimate the damage that tenants can do to a property. Or the liability issues they could face. Could be something like a tenant’s dog biting a visitor to the property. Or something like the property being used for the drug trade or as a house of ill repute. Or, as we suspect may have happened a couple of years ago, a place to, ahem, mess with children.
“A bit high, IMHO”
Slim, the rent… is too damn high!!
Do landlords get those rents? Or are they “wishing” prices?
Muahahaha, Morgan Stanley tells major clients of a Facebook downgrade just before the IPO. Of course, no one clued the rest of the muppets who rushed in.
Morgan Stanley cut Facebook estimates just before IPO
By Alistair Barr
Tue May 22, 2012 11:15am IST
REUTERS - In the run-up to Facebook’s (FB.O) $16 billion IPO, Morgan Stanley (MS.N), the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank’s consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company.
http://in.reuters.com/article/2012/05/22/facebook-forecasts-ipo-morgan-stanley-idINDEE84L02Y20120522
unexpectedly
There’s that word again.
You know, this reminds of a fantastic Saturday Night Live skit, back in the days of the tech crash, about the veracity of investment banks and brokers:
Investment Advisor Admits To Misleading His Clients In Order To Make Profit.
(2:45 minutes): http://www.youtube.com/watch?v=_GS_pvhcI5c
Excellent, Neuro. Thanks!
Facebook. The Tim Tebow of IPO’s.
It was fun to read the articles about how NASDAQ “pooched” the IPO. Does this mean that FB flopped because it wasn’t properly marketed? So much for fundamentals… If I were Zuckerberg, I would cash the hell out of Dodge.
I think the market is realizing that social media isn’t a license to print money after all.
Lol…if he cashed out you would be the first one in line to prosecute him for securities fraud and calling for investigations.
There’s got to be a way to cash out without being fraudulent.
borrow against the stocks, don’t pay the loan and hand over the stocks after the holding period is over.
The Nasdaq flub is unrelated to the poor performance of the stock.
IMHO, this has everything to do with:
1. Supply;
2. Demand;
3. Valuation.
Supply of shares was high.
Demand was artificially high for the offering based on:
1. Buyer’s belief that their allocation would be cut down at IPO, so they place orders larger than they actually wanted (and were surprised when they got 100% of their request…many expected that they would get 50% of their request);
2. The public were allowed to participate to some extent, which both increased demand for the offering, and REDUCED the number of buyers once the stock was being traded. There were fewer buyers for FB after NASD fixed their mess.
If the stock was a good value, there would have been fundamental value investors stepping in regardless of the hype, absorbing the selling shareholders. However, it was a 100 PE (on last year’s earnings), a hard value argument, even with rapid growth.
Brother in law sets up strawberry stand on the weekends during the summer. I asked him how much he grosses each year…he said about $ 10,000.
I immediately offered him $ 800,000 for his strawberry stand.
I’m praying the nasdaq flub was somehow caused by the front-running machines of the big boyz.
You might want to check out http://www.openinsider.com.
It shows that Zuckerberg already cashed out 30,200,000 shares on Tuesday for a price of $1.13 Billion. He cashed out at $37.58 per share. It also shows that other insiders cashed out, as did Goldman and at least one subsidiary of Goldman.
But it doesn’t show how many shares Zuckerberg may still be holding on to.
I understand that Mr. Zuckerberg had a ~$1 billion tax bill from an equity grant of some kind, which was going to be part of the reason he was selling some stock. I don’t know if this $1 billion is in addition to that sale or not.
I know of no other way to do this so here goes, just in case:
Yahoo, your website is broken and you have no way for anyone to let you know. And you wonder why you’re not making money?
Someone here once called Japan, “a bug in search of a windshield.” Well, looks like they’re moving towards the interstate.
Japan Rating Cut Rings Alarm for Lawmakers Gridlocked on Taxes
By Keiko Ujikane - May 22, 2012 11:00 AM ET
Bloomberg
Japan’s sovereign-rating cut by Fitch Ratings escalated pressure on lawmakers to double the sales tax, with the Organization for Economic Cooperation and Development warning the nation’s debt is heading into “uncharted territory.”
The local-currency rating was reduced one step, and foreign-currency grade two levels, to A+, the fifth-highest ranking, Fitch said in a statement yesterday. The Paris-based OECD said separately that boosting the 5 percent consumption levy is a “top priority.”
A surge in demand for Japanese government bonds that sent 10-year yields to the lowest level since 2003 this month is masking the risks from rising debt. Prime Minister Yoshihiko Noda has failed to persuade opposition lawmakers to support his legislation, leaving gross public debt poised to reach 223 percent of gross domestic product next year, the OECD said.
http://www.bloomberg.com/news/2012-05-22/japan-rating-cut-by-fitch-on-leisurely-efforts-to-tame-debt.html
I think I may have said it, but the attribution goes squarely to John Mauldin in his book Endgame…it’s his phrase.
Recession in 2013?? The what are we in now?
http://thehill.com/blogs/on-the-money/budget/228903-cbo-sees-recession-in-2013-unless-lawmakers-act
I just capped a 14 hour day and I’m speed reading through today’s bits.
Alpha, thank you for your comments. Please keep explaining all of this — I only took micro 101, so a lot of what is discussed here is new to me. I make it a point to know a lot about a lot things, but I am lacking in econ. so this is helpful.
I hope you continue to lay out arguments they way you do because I am learning a lot.
Slob is on Meth.
I suppose the commies such as Colorado want the “provide for the common defense” done for free. Odpf course that fits with them as communism is slave labor.
“Slob is on Meth….Rio’s a “Socialist”…..commies such as Colorado”
I’m scanning fast and late some interesting posts but something is off with Bill in Los Angeles’ posts. His posts are most always short, never say much and are often name-calling and insulting. He obviously does not walk his walk in his professional life but he’ll be glad to tell you how many push-ups he can do. (IDK, maybe his wife cares about that) Instead of coming out with reason and logic to make his points he often just calls people names.
Watch it and see if I’m wrong. When someone like alpha makes historical points and uses real world examples that encourage people to think, most times Bill won’t counter with a reasoned argument as many others with a different opinion do, but rather BillinLA calls him a “slob” and say he’s “on meth”. It is predictable, rude and a bit odd in a hostile way. Check it out.
Wife?
BillinLA calls him a “slob” and say he’s “on meth”
I thought someone said something about not permitting personal attacks, and yet Bill personally attacks me every time he talks to me, and does it here again. And it gets posted.
http://www.cnbc.com/id/47520242
A discussion about the reason for the change in median home price (more expensive homes, less cheap homes are sold).
I can see this both ways.
Bears would have a point in saying that the reason fewer cheap homes sold is because of less distressed properties being sold temporarily, but on an apples-to-apples comparison, home prices have not risen, and distressed sales will resume after the near-term effects of robo-signing wear off.
Bulls would say that less distressed homes on the market does not explain why more expensive homes sold unless there was more demand for the higher priced homes, which is a positive sign of sentiment and lending.
The only way the bears would be 100% correct is if the decrease in cheap homes being sold was combined with flat sales of more expensive homes to result in an increase in the median.
The only way the bulls would be 100% correct is if the decrease in distressed sales is permanent (not temporary from the robo-signing settlement), and if Case Shiller begins to reflect apples-to-apples, year-on-year home price increases in the coming months.