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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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How many more FOMC meetings without a QE3 announcement will it take for the QE3 cargo cult to give up their faith that a quantitative easing “Third Coming” is on the way?
4 years and $2.7 TRILLION later, the deflationary spiral rages on.
The Central MoneyChangers are corrupt liars.
Apparently the Fed has been, is, and will remained concerned with unemployment, so that is a red herring. What is concerning is the durability of the FOMC’s belief that further quantitative easing, or using bond purchases to further drive down long-term interest rates, remains a viable solution to reduce unemployment when long-term rates have already been driven down to generational lows.
At some point, the FOMC seems likely to finally realize they are pushing on a string.
PRECIOUS-Gold falls for 3rd day, Fed disappoints
Thu Jun 21, 2012 12:17pm IST
* Spot gold to fall to $1,580 -technicals
* Coming Up: U.S. jobless claims weekly; 1230 GMT
(Updates prices, adds physical activity in Singapore)
By Lewa Pardomuan
SINGAPORE, June 21 (Reuters) - Gold slipped for a third straight day on Thursday after the U.S. Federal Reserve stopped short of launching another round of quantitative easing to stimulate the economy, a move that would have boosted bullion’s appeal by fueling inflation prospects.
But lower prices attracted purchases from jewelers in Asia, while a fragile U.S. economy and the debt crisis in Europe may eventually prompt the Fed to adopt more aggressive measures to help the economy.
A Reuters poll showed Wall Street’s top bond firms still see a 50 percent chance of a third bout of quantitative easing or “QE3″, in which the Fed effectively creates money to fund large asset purchases, to stimulate the economy.
Cash gold fell $4.48 an ounce to $1,600.90 by 0608 GMT. Gold rallied to its 2012 highest level of around $1,790 in February after the Fed at the time said it would keep interest rates near zero until the end of 2014 at the earliest.
“The fact is that the Federal Reserve’s attitude hasn’t really changed at all,” said Yuichi Ikemizu, head of commodity trading, Japan, at Standard Bank. “I mean if you read Bernanke’s speech, he’s still very worried about unemployment. I am still bullish,” said Ikemizu, who expects gold to hold around $1,580 to $1,590 on the downside.
…
Bernanke has already consistently displayed the kind of hubris that only the truly deranged can exhibit. Although he has been consistently wrong about the state of the US economic activity and has shown consistently bold and reckless policy (I would say Unconstitutional) responses, he remains undeterred.
Expect MORE ridiculous responses from the FED.
Krugman will channel the spirits of dead money past and egg on the FED for MORE, yea, MORE Central Bank interference.
It’s like a gambling addition. When you’re on a roll, you just can’t stop, even though you are losing big.
When you invoke the name of jackasses like Krugman, you set up a false dichotomy where someone will draw in jackasses like Art Laffer, thus detracting from the criminality that is The Federal Reserve and the FR moneychangers.
What is Unconstitutional about what he has done?
Polly… I’m interested in truth. I’m not interested in becoming a ShitHouse litigator….
We could start with the answer “everything”.
“Congress created the Federal Reserve, yet it had no constitutional authority to do so. We forget that those powers not explicitly granted to Congress by the Constitution are inherently denied to Congress and thus the authority to establish a central bank never was given.”
Ron Paul 2007
That’s an entire book in itself. If you allow that the Federal Reserve Act of 1913, passed, much like the OBAMA-care bill, but with most of the Congress on Christmas recess is even Constitutional in its own right (google unconstitutional FEDeral reserve and you will get lots of discussions), Bernanke and Co. has violated many of the RESTRAINTS put into the Authorization Act.
Here is just one, for starters:
…………the policies and procedures governing emergency lending under this paragraph. Such policies and procedures shall be designed to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid a failing financial company, and that the security for emergency loans is sufficient to protect taxpayers from losses and that any such program is terminated in a timely and orderly fashion. The policies and procedures established by the Board shall require that a Federal reserve bank assign, consistent with sound risk management practices and to ensure protection for the taxpayer, a lendable value to all collateral for a loan executed by a Federal reserve bank under this paragraph in determining whether the loan is secured satisfactorily for purposes of this paragraph.
Under Section 13, 3B, for corporations, individuals, partnerships, etc.
the FED must always PROTECT the taxpayers by taking GOOD COLLATERAL as part of a loan. Not “marked to fantasy” real estate papers, just to bail out the banksters.
This was just stealing and lying.
It’s become a way of life in America, so I guess most people don’t see this as sinister. I do.
The banks should have been LIQUIDATED and their “owners” and managers wiped out for their gambling.
Jamie Dimon has shown that he still thinks banks are casinos, not lending institutions.
I’m interested in truth. I’m not interested in becoming a ShitHouse litigator….
That’s the tooth, Tooth!
I am sick of lawyer talks as well. Outside of few defense lawyers, today’s lawyers are like mafia thugs. Sure the mafia thugs used guns and knives, the lawyers use “the law” to beat the man down. Of course the lawyers work for families; gobmint, wallstreet, business and so on.
Damn that stupid rule of law anyway, huh…
“Damn that stupid rule of law anyway, huh…”
It’s not the rule, but some of the biased interpretations that bother me.
I was just looking for some specifics. I’m aware that a lot of people think the Fed is unconstitutional all by itself. I was just wondering if there is anything specific about operation twist or something else recent that brought that particular word forward.
If something is simply a violation of the Fed’s authorizing act, that makes it illegal, not unconstitutional. There is little short term practical difference between the two if the courts agree with you - either one would be stopped by a court. However, Congress could, if it so chose, to make something that is currently illegal, legal by changing the law. Making something constitutional that is currently unconstitutional is much harder process.
Illegal, unconstitutional…..po-ta-to…..po-tah-toe……
What’s the fine line between illegal and extralegal? Giving $14Tr to European banks seems extralegal to me. Just a feeling.
“Damn that stupid rule of law anyway, huh…”
Drone attacks are legal, too. Doesn’t make it right.
I think in early days slavery was legal too. Law is nothing but a device to keep already lawful moms and pops down.
Just because it’s law doesn’t mean it’s just, but at least it’s an agreed upon starting point. Generally works out better than anarchy in the larger society.
“It’s like a gambling addition.”
Seems more like a gambling subtraction in the case at hand.
Fed’s War on Savers continues unabated. Savers are punished in perpetuity; gamblers and spendthrifts are rewarded for helping to turn the economy into a profligopoly.
June 22, 2012, 12:02 a.m. EDT
Fed helps borrowers, savers get clobbered
Commentary: Less income is a drag for consumer spending
By Kathleen Madigan of Dow Jones Newswires
NEW YORK (MarketWatch) — During his press conference Wednesday, Federal Reserve Chairman Ben Bernanke said monetary policy had been helping the general public. In particular, borrowers are benefiting from extremely low interest rates.
When signs of economic collapse appeared in 2008, the Fed cut short-term rates to zero, and Wednesday’s policy statement reiterated that rates would stay there until at least 2014. Policy makers hope cheap borrowing will spur businesses and consumers to finance big purchases to boost demand.
What tends to be glossed over is the flip side to the Fed’s zero-rate strategy: Savers are getting whacked. And while some portion of interest earned is left to accumulate in savings account, any loss of income is a drag on consumer spending and consumers’ sense of financial well-being.
Saving had gone out of style during the housing boom, when many families looked at their homes as giant piggy banks. The recession quickly turned shoppers into savers. Fed data show interest-related financial assets (including bank saving accounts, money-market funds and government securities) held by households increased by about 20% from the end of 2007 until the first quarter of 2012.
Yet even with a larger nest egg, savers are falling behind, according to Bureau of Economic Analysis data. At the end of 2007, savers earned $1.3 trillion in interest, at an annual rate. In the first quarter of 2012, the sum had dwindled $986.2 billion.
…
It’s like the “Age of the Grasshopper” versus the “Age of the Ant.” We’ve been in the Age of the Grasshopper.
An economy that requires growing debt to keep growing or even to stay even is like a junkie who requires more and more drugs.
The powers that be are all pointing to growth - reducing debt as a percentage of GDP - as the way out. I think it’s a route fraught with risk. It’s like taking out a too-big mortgage and counting on income growth to eventually make it manageable. Countries add another component - despite all their unmanageable debt, they keep piling on more.
I posted a video recently of an airplane just barely getting off the ground at the very end of the runway. I’m thinking the planners are going for that instead of slamming on the brakes mid-runway and melting the brakes. The planners are hoping that more and more borrow print will help the economies lift off. I guess when the only tool you have is a hammer, every problem looks like a nail.
1) Close call takeoff: http://www.youtube.com/watch?v=aWtdtuspnoM
2) Rejected takeoff (slamming on the brakes at max weight and speed): http://www.youtube.com/watch?v=am392XmYBps
The Fed can make it possible for banks to make loans, should a qualified borrower walk in the door. It cannot make more qualified borrowers walk into a bank looking to take out a loan.
When you are living in the land of make-believe, then anything is possible. It’s possible the banks are actually solvent, when you make-pretend the losses aren’t real. You can have double-entry booking and say that values are “marked to………. a really good number”.
And when that doesn’t work, you can just print more money and give it to the banks to put in their vaults and let them “invest” in speculative ventures, backed by the full faith and credit of the US government, i.e. US working families that pay the taxes that provide the backstop to really bad banking rules, regulations and policies, or lack thereof.
You can lead a mark to money, but you can’t make him borrow.
The media is putting out some odd stuff, with strange quotes these days:
‘Are Western Leaders Making Fools of Themselves?’
‘The banks are propping up the government, the government is propping up the banks. I live in Russia right now and we’re making complete fools of ourselves in the West,’ Liam Halligan, chief economist at Prosperity Capital Management told CNBC.’
‘IMF Managing Director Christine Lagarde on Thursday called on the European Central Bank to cut interest rates and said giving aid directly to struggling banks in the euro zone rather than to governments would be a better way of dealing with the debt crisis.’
http://finance.yahoo.com/news/western-leaders-making-fools-themselves-112008825.html
This one has bothered me:
‘Jim O’Neill, chairman at Goldman Sachs Asset Management and the man who coined the term “BRIC” for the fast-growing emerging markets of Brazil, Russia, India and China, said in response…’
OK, every time they mention this guy, they bring up the BRICs thing. How hard was it to line up b,r,i,c?
‘Jim O’Neill, chairman at Goldman Sachs Asset Management and the man who coined the term “BRIC” for the fast-growing emerging markets of Brazil, Russia, India and China, said in response…’
How hard was it to come up with the ‘decoupling’ theory — and be flat-out wrong?
C.R I.B. was copyrighted by MTV
“…The banks should have been LIQUIDATED and their “owners” and managers wiped out for their gambling.”
But the “theory” goes thu$:
FedInc. “Private” “Bidne$$” + U$ Gov’t $upport = “Financial Innovation$!”
What do you think would re$ult if this happens:
“Private” “Bidne$$” + U$ Universities & $tudent$ = Lower cost$ for families finances & Cooperative free Di$tribution of intelligent-creative idea$! :-/
Low interest rates do tend to make more people qualified.
Let’s forget having any income and just drop the rate to zero, the EVERYBODY qualifies.
that’s the kind of thinking that got this blog started.
While we are at it, loosen up the length of the loan repayment period to infinity…
To infinity … and beyond!
Interest only loans with 0% interest rates = win. Imagine how much money would be borrowed into existence at that rate.
Win what? A truckload of it wouldn’t buy anything.
I find it telling that credit card rates are even higher then before QE1.
I dunno but a good CC QE1 would do a lot for this economy.
But that wouldn’t help the “right” people.
Time for the government to start issuing CC insurance to banks, like they do on mortgages? That would increase lending and bring down rates.
I sure hope FPSS graces us with many condescending opinions this weekend, as so far his QE3 prediction has failed. Perhaps he will be so kind as to put a time limit on how long it will be until QE3 is finally invoked, as in the long run, we are all dead.
June 20, 2012, 1:50 p.m. EDT
Twist extension doesn’t rule out QE3
The Federal Reserve has not only extended Operation Twist. It says it’s “prepared to take further action.” Economist John Canally of LPL Financial believes it. He thinks the Fed could bring on QE3 by early fall.
What if the Fed has been accomodating all along and just didn’t issue a press release.
Spot on. They could do it with announcements, do it without, do it while you are sleeping, do it more than they say, do whatever they damn well please, with no accountability to the U.S. voter, so far as I am aware.
Is it safe to reject out of hand the dire prognostications of a man nicknamed “Dr. Doom”?
Faber: ‘100% Chance’ of Global Recession
Thursday, 24 May 2012 04:15 PM
By Newsmax Wires
Investors need to prepare for a global recession.
That’s the takeaway from one well-respected economist after his recent appearance on CNBC’s Fast Money Halftime Report.
According to Marc Faber, the author of the Gloom, Boom, and Doom Report, a global recession is all but a certainty later this year or in early 2013.
When he was asked what sort of odds he put on a global recession happening, the economist famous for his ominous predictions quickly answered:
“100%.”
Faber’s pessimism during his recent appearance on CNBC wasn’t surprising for a man whose nickname is “Doctor Doom.”
What was surprising was his level of certainty that a global recession was coming.
Faber stated that there is a “meaningful slowdown in India and China” that many investors are missing due to the media’s focus on Greece and Spain.
He is also worried that the wealthy may be showing signs of spending fatigue after Tiffany’s reported slowing sales.
“There are more and more stocks that are breaking down — economic sensitive stocks and companies that cater to the high end. That suggests to me the economy is likely to weaken and the huge asset run is likely to come to an end with significant asset deflation.”
While it is worrisome that Faber’s odds of a global recession are “100%,” it is hardly as alarming as the scenario laid out by another economist.
Read more: Faber: ‘100% Chance’ of Global Recession
Even a broken clock is correct two times a day. Like bulls who are always waiting for the next rally and bears waiting for the next collapse, markets trend up and down.
We’ve had a recent rally that has failed. It’s in a topping phase, awaiting more FED “assistance”.
Faber may actually be right. I favor the breakdown more than the “boom”. But, again, I don’t manage millions of dollars and I don’t have a newspaper column. If I did, I probably wouldn’t be typing here this morning.
“He also worried that the wealthy may be showing signs of spending fatigue after Tiffany’s reported slowing sales.”
Because of - what? - massive krill death, maybe.
The wealthy need the less-than-wealthy to send to them all the money they can spare. But since the less-than-wealthy is fresh out of spare money the wealthy will somehow have to learn to do without.
Oh, the pain!
When plankton dies, whales die, too.
There it is.
Which then get eaten by the sharks.
I don’t think most sharks do eat carrion. But it should be great for the bone eating snot flower worms.
Sharks eating dead whale:
http://io9.com/5920393/100-sharks-eating-a-dead-whale-close-to-shore–worst-beach-day-ever
That’s cool. That girl in the bikini has some — whatcha call them — cajones?
When the Krill die, the government steps up with $1.3T a year krill deficits to ensure the the whales still eat.
The wealthy need the less-than-wealthy to send to them all the money they can spare.
Birth of a Keynesian.
Presuming the Spanish banking crisis is contained by bailout promises, why should a slight upwards adjustment in the anticipated size of the bailout impact Megabank, Inc’s credit score?
Banks downgraded as size of Spanish crisis revealed
Giles Tremlett in Madrid, Jill Treanor and Dominic Rushe
guardian.co.uk, Wednesday 20 June 2012 19.39 EDT
Fifteen of the world’s biggest banks downgraded hours after Spain admits its banks might need up to £50bn of bailout money
Bankia, Spain’s fourth biggest lender, has already been forced to seek government support in the Spanish banking crisis. Photograph: Sergio Perez/Reuters
Moody’s has cut the ratings of 15 of the world’s biggest banks, hours after the markets were digesting the admission by Spain that its banks could need up to €62bn of bailout money to see them through the next three years.
The result of the independent audit of Spain’s banks put the gap in their finances at between €16bn and €62bn – similar to the €50bn calculated by the International Monetary Fund (IMF) two weeks ago.
Banking giants including Bank of America, Barclays, Citigroup, HSBC, Goldman Sachs, Morgan Stanley and Royal Bank of Scotland all had their credit ratings cut.
…
Are we running out of economists who know how to speak their minds, rather than endlessly blathering on with consensus bullsh!t that also happens to be wrong?
Remembering economist Anna Schwartz
David Shankbone / Wikimedia Commons
Economist Anna Schwartz.
by Kai Ryssdal
Marketplace for Thursday, June 21, 2012
This final note, a moment to remember economist Anna Schwartz, who died today at the age of 96.
Fifty years ago, she wrote a book with Milton Friedman called “A Monetary History of the United States,” that Ben Bernanke said is the best explanation there is of the causes of Great Depression.
When we had her on the program three years ago to talk about the Fed’s response to the Great Recession, Dr. Schwartz didn’t return the favor.
Anna Schwartz: Considering Bernanke’s background, you would have expected a much more, should I say a tidy kind of performance by the Federal Reserve.
‘Course, she didn’t care much for Alan Greenspan either.
Schwartz: Well, I think the verdict of history will be different with regard to his stature than it has been so far.
Anna Schwartz. She was 96. Got her Ph.D in economics, by the way, at the age of 48.
You can hear the whole interview here.
Greek humor thread, anyone?
etc.
It’s too late to avert a bubble now, eh?
Canada’s Flaherty Tightens Mortgage Rules to Avert Bubble
By Andrew Mayeda and Theophilos Argitis - Jun 21, 2012 1:35 PM PT
Canadian Finance Minister Jim Flaherty said he will tighten mortgage terms as the Group of Seven country with the soundest government finances tries to avert a household debt crisis.
The government will shorten the maximum amortization period on mortgages the government insures to 25 years from 30 years, and lower the maximum amount homeowners can borrow against the value of their homes to 80 percent from 85 percent, Flaherty said in a statement delivered in Ottawa.
…
Luckily this could never happen in the US.
Korea Home Price Slide Persists With Property Anxiety
By Seonjin Cha and Cynthia Kim - Jun 21, 2012 11:00 AM PT
Yook Jeong Soo last month renewed a two-year lease on his three-bedroom home on the outskirts of Seoul, preferring to pay the 30 percent rent increase his landlord demanded rather than buy in the city’s housing market.
“The rent rise was huge, I know, but why should I bother buying a house now with borrowed money when I’m not so confident the price will go up?” said the 49-year-old office worker. “The heyday is over for the housing market.”
…
“… to avert bubble.”
LOL.
Once politicians start talking about averting bubbles, you can stick a fork in it…
Ancient Chinese Proverb say:
“Those who wish to avoid bubbles, should not fart in tub.”
ROTF and LMFAO!
“Those who wish to avoid bubbles, should not fart in tub.”
How about the ones who act like their $hit doesn’t stink? I am certain these people don’t fart either.
After 28 long years of persistently falling stock prices, are there any serial bottom callers out there who are still trying to pick a bottom on the Japanese stock market?
GLOBAL MARKETS-Tokyo stocks hit 28-yr low as investors flee risky assets
Mon Jun 4, 2012 1:55am EDT
* Tokyo’s Topix hits lowest since late 1983
* MSCI Asia ex-Japan falls to 2012 lows
* U.S. crude slips nearly 2 pct, Shanghai copper touches 2012 lows
* JGBs soar, 10-year yield lowest since July 2003 on safety bid
* European shares likely slump
By Chikako Mogi
…
In an era when trust in the banking system went up in smoke, it must really suck to own stock in Megabank, Inc.
Moody’s sees big banks’ risks of ‘outsized losses’
By Pallavi Gogoi
AP Business Writer / June 22, 2012
NEW YORK—Moody’s Investors Service has lowered the credit ratings on some of the world’s biggest banks, including Bank of America, JPMorgan Chase and Goldman Sachs, reflecting concern over their exposure to the violent swings in global financial markets.
The downgrades late Thursday ultimately are a measure of Moody’s view on the ability of the banks to repay their debts. The ratings agency also cut its ratings on Barclays, Deutsche Bank and HSBC, some of the largest banks in Europe, a region fighting to contain a government debt crisis.
…
Hell freezes over Headline
“Gollum Suchs analyst downgrades ……Gollum Suchs”
Drill Baby Drill
Here is a map of the regions where they’re actively drilling for oil Shale. These will also be the areas where jobs are plenty.
http://www.eia.gov/oil_gas/rpd/shale_gas.jpg
If any of y’all want or need a job, you might want to consider moving to one of these areas.
Frothy bubbly speculation that materializes into nothing.
Petro-fuels are an hugely inefficient energy drawn from a literally dying source which would best be conserved for other uses, known and unknown. Our century-long addiction to oil is the cause of war, famine, corrupted dictatorships and oligarchies, and certainly a vast polluting of our planet.
Other far more efficient and plentiful energy sources are out there waiting to be tapped and developed, and will literally change the face of our planet and our philosophical institutions (low energy nuclear reactivity, for one). But for the predations of the oiligarchy, they would have been available by now. Imagine what a trillion of those dollars we squandered in Iraq (trying to secure our dwindling oil supply) would have wrought in the area of energy research and development?
The technology exists today to put a closed-system mini-refrigerator-sized low-energy nuclear generator in every household but, horrors! The Terrorists could use the minute amounts of plutonium in them to make weapons!
My German and Aussie friends shake their heads in wonder when they see all the empty rooftops in California. Much of Europe has essentially gone solar, with panels on every roof. But just listen to the squawking from the oil interests when we try to develop the infrastructure here in America!
Oil is an ongoing boondoggle perpetrated on a dumbed-down public who, as I believe meason so aptly put it, “Bark when your TV tells you to bark.” The industry’s days are numbered.
Read Greg Palast’s excellent muckraking, “Vulture’s Picnic” for a more horrifying peek into the empire’s hold over our government and treasury.
There isn’t a whole lot of oil being used for electricity generation.
But otherwise, what she said……
Any national policy developed to solve this issue will involve Socialist management/direction. And we know what a dirty word that is.
There isn’t a whole lot of oil being used for electricity generation.
True, but a lot of Nat Gas and coal are burned to generate electricity.
ahansen,
Petrols are hugely inefficient??? Compared to what???
Someday those “other fuel sources” might be plentiful and efficient, but in today’s world they aren’t. European rooflines are filled with solar because their governments have been subsidizing their installation.
http://www.energytrend.com/node/1818
Right now we can get our economy going and get people jobs by drilling for the petroleum fuels that we’ve been given.
How about saving them for areas where they are not replaceable, like plastics and fertilizers?
Wouldn’t it be nice to have metro areas that didn’t have the perennial brown cloud hovering over them?
Enjoy that 100 degree weather on the Front Range this weekend, the squad will be in Telluride (party at Jerry Seinfeld’s crib)
Which will be exported to China.
So much for “Energy Independence”
‘Compared to what?!!!”
Compared to what we could have with less archaic technologies.
Only 14-26% of the gasoline that goes into our cars gets used as energy. And the jobs you tout will be gone when the infrastructure is built and the robots take over operations. The oil is getting shipped to PRC anyway– the only ones who will benefit are the oil execs. Drilling more oil is not the answer. Using less of it is.
More efficient use of fuel sources? Hmmmm, solar comes to mind. Wind. Hydro. Vacuum energy. Fusion. You be amazed at all the patents that have been bought up by GTE, BP, DoD, et al over the years and “stored”.
I guarantee you that if petro-fuels were banned tomorrow, our core systems would be up and running with alternatives within the month. Scaling up to replacement levels might take a year or two, but the systems and technologies are out there.
Like everything else in our bloated-arse society, we consume too many hydrocarbons. Americans will have to be dragged kicking and screaming to other energy sources, but when we stop subsidizing oil and ramp up the subsidies for alternatives, the sheepl will figure it out all by themselves.
I just completed a submission to the FBI on another mortgage fraud ring. 50 pages of documents. I am thinking of publishing the cover letter here this weekend just for kicks. You won’t believe the activities and what these idiots get away with doing. I might have to change the names to protect the guilty, but I would rather air the whole dirty laundry with proper names, dates and addresses just to stir up the pot. It is a two and half page letter, so it will take a lot of space. What do you think Ben? If I add enough “allegedlies” and “in my opinions” would that protect you? I can guarantee it is all true. The FBI agent reviewed it yesterday and said he didn’t care if I published it, because the deeds are all documented now and the perps can’t deny their actions.
I’d love to read it, Pal.
Sunday Morning, 6:12 AM
I tried to post the FBI submission letter this morning, but nothing happened. Either Ben is not interested or the blog is having problems posting. I sent it into the site an hour ago. That is too bad, because I have some fascinating updates with conversations from the FBI agent. They have two of the people under arrest already….
Is that you, JingleMale?
Yes. I dipped my quill in the ink well and reported some mortgage fraudsters to the FBI this week. I forgot how much fun it is and how much work it takes. 20-30 hours over the weekend.
I suspect that such fraud is widespread in AZ. But waddoo I know? I’m just an artiste freelancer with a bad after-hours deejaying habit.
Did you read my Tuesday (6/19/12) bits bucket post about my fellow traveler who fell victim to a Sacramento-area foreclosure scam?
If not, you might want to have a look…
I did read it and found it fascinating. My sister lives on the SF peninsula and had a lot of friends from the bay area wanting to buy houses up here in Sacramento in 2005-2006. I told them not to do it and pointed them toward this blog.
When I read your post CIBT, I did wondered if the “victim” was as innocent as she claimed. A lot of people bought claiming they would be owner occupants, with the idea they would flip it before completion of construction.
A lot of people bought claiming they would be owner occupants, with the idea they would flip it before completion of construction.
Here in good ole Tucson, there were/are quite a few home purchases that are listed in the county assessor records as “residential owner occupied.” Which means that they’re not rentals. Well, guess what. A lot of them are rentals from the get-go.
I’d be interested in knowing how to report these. Not just from the standpoint of the neighbor who keeps having to deal with the fallout from lousy tenants at those rentals down the street, but from the fraud aspect. I’m sure that quite a bit of tax money isn’t being reported or collected.
Yes, please post it. I believe you’re local to me (Sacramento area) and I know there has been all kinds of shenanigans over the last 10 yeard, and I suspect there is no sign of them ending any time soon.
I don’t normally read the blog on the weekend, but I’ll make an exception for this.
Check for an early Sunday morning post. I will put it up then.
You’ve done this bfore, haven’t you? Does the FBI actually launch an investigation after submit your documentation?
It will if all of us call our State Attorney General’s Office and demand they do so. FBI is quite sensitive to ongoing public pressure.
Yes, the FBI busted a 25 property mortgage fraud ring from So Cal buying builder inventory he could not dump in Sacramento. I believe the builder looked the other way, while the fraudster ring bought 25 homes from him for about $550,000 each and put $750,000 loans on them. It was unbelievable and the FBI took them down.
There are a couple of other fraudsters who did 1-4 properties and I created 5 of those reports (all in 2008 I think). Not all of them were arrested, but the FBI agent suggested I create an IRS file on these fraudsters and submit it to the IRS whistleblower office.
You see, proceeds from fraud are taxed as ordinary income in the year you receive the money. So the fraudsters had taxable income of $400,000, indicating 38% should go to Uncle Sam, or $152,000, plus interest and penalties. I have 7 cases open and the IRS will forward me anywhere from 15-30%, but they have to actually collect them money. That is like trying to get blood out of a turnip, so I hold little hope of ever seeing a nickle. But knowing the IRS is chasing these idiots is a nice reward of its own right!
cool
Great Recession took deep toll across U.S. states
…Researchers said their study is the first state-by-state look at the how the downturn affected economic security and household incomes. It was paid for by the Rockefeller Foundation, a global nonprofit organization focused on relieving economic inequality….
The index represents the percentage of the population who experienced a substantial financial loss from one year to the next. Specifically, it shows the share of Americans who experienced a financial loss of 25 percent or greater due to either a decline in income, an increase in medical spending or both.
States with the worst economic losses from 2008 to 2010 were Florida, Georgia, Alabama, Mississippi, Arkansas and California. Among the states with the least impact were Vermont, Connecticut, New Hampshire, Rhode Island, Massachusetts and Maine….
The longer-term findings indicate “the broad vulnerability of Americans of all walks of life and in all parts of the nation to large income losses,” Hacker and his team wrote.
http://www.reuters.com/article/2012/06/21/usa-economy-insecurity-idUSL1E8HL3CX20120621
Does looking back at the “The Great Recession” mean that the outlook is brighter?
Great Recession took deep toll across U.S. states
Yeah…I was going to say “took” sounds nicely past-tense to me. Glad it’s over.
Yeah, me too. I’m so glad to hear that the Great Recession is now history.
Okay, ahansen, it’s funny video showdown time.
You previously posted the “Gopher Tuna” video. Well, here’s my response: “Help the stupid. They’re contagious.”
Is the stock market about to experience yet another epic correction — the kind needed to get valuations back in line with fundamental reality?
June 22, 2012, 12:44 p.m. EDT
U.S. stocks aren’t cheap: Grantham
Earnings out of line with global concerns, GMO co-founder says
By Rachel Koning Beals
CHICAGO (MarketWatch) — There’s nothing wrong with a little market optimism, but this just isn’t the time for it, asset manager and GMO co-founder Jeremy Grantham said Friday.
“It’s a very strange time, and I get this kind of Groundhog Day effect as if the news is just replaying and replaying,” Grantham said in a speech at the Morningstar Investment Conference here. “The EU just goes round and round in tortuous circles, [Federal Reserve Chairman Ben] Bernanke is talking the same game and the market just goes up and down.”
Yet being optimistic is “programmed” into human nature. History tells us things will turn around. After all, the financial-services industry has a “huge investment in being bullish,” he added.
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Is today’s Chinese investor in U.S. residential real estate positioning himself similarly to Japan’s commercial real estate investor circa 1990?
A guy can hope…
Updated June 21, 2012, 10:37 p.m. ET
Courting the Chinese Buyer
By LAUREN A. E. SCHUKER
A new wave of buyers from China is snapping up luxury properties across the U.S., injecting billions of dollars into the country’s residential-real-estate market.
The industry is scrambling to court the new buyers. Some developers of new projects are installing wok kitchens, following feng shui principles and putting lucky numbers on choice units; others are packaging property sales with government programs designed to encourage foreign investment. Real-estate agencies are flying representatives to China, and hiring Mandarin-speaking agents.
In Los Angeles, New York and even Miami, buyers mostly from China—and some are from Hong Kong, Singapore and Korea—are radically altering the landscape. Last month, a Chinese couple paid $34.5 million for a Versailles-style mansion on Sunset Boulevard in Beverly Hills, Calif. A year earlier, a Hong Kong businessman paid around $28 million for a nearby estate. Over the last six months in New York, several full-floor apartments in a new Manhattan high-rise called One57, each with a price tag of roughly $50 million, have gone into contract with Chinese buyers, according to two people close to the situation.
Late last year, Fang Yi Liu, a businessman from Shanghai, snapped up 17 apartments for a total of $14 million in the Artech, a modern glass building resembling a cruise ship that overlooks the Intracoastal Waterway near Miami.
In a nod to Asian buyers, the building put many of its most luxurious full-floor apartments on the 80th through 88th floors—a clever way to appeal to the Chinese belief that eight is the luckiest number. Apartment 88 is under contract to a Chinese buyer for around $50 million.
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Here’s a short video on Slab City I happened across…
http://www.youtube.com/watch?v=TpPmT7S4zHE&feature=fvwbrel