The Housing Bubble

Good Morning.
Does anyone know the questimated cost of a “Litigation Opinion” when it comes to title reviewing?

I got some advice from another blog, that you can’t trust the banks nor a connected title rep of anyone you’re doing business with, and you should run all contracts and title review through an Attorney for all REOs and Short Sale deals. Some of these people who thought they got clear title were rudely awaken. And of course, the carveouts in title policies these day are like HMOs and the blues. Just send in your money, and leave us alone. We cover nothing. Cloud On Title cost these new homeowners big money to fix.

Yesterday I mentioned a guy named Peter Beter (pronounced “Peter Beater”) a guru to the fringies in the Seventies who fired up his flock by, among other things, claiming that there was no gold in Fort Knox and who stirred up the issue to the point that an audit of the gold was conducted.

That was just part of it: Wiki-up the guy’s name and you will uncover a very interesting read.

FWIW.

Why You Should Like Ed DeMarco
Bruce Krasting, My Take On Financial Events | Aug. 4, 2012, 5:59
Bruce Krasting is a former hedge fund manager

Edward De Marco is the acting head of the FHFA. He is responsible for what happens at Fannie and Freddie. A lot of people hate this guy and want to see him sacked. I like him. I think he is one a few people in D.C. who actually gives a damn about taxpayer losses at the mortgage agencies.

As per usual in America, this is a matter between left and right. Democrats hate De Marco. The Republicans are standing behind him.
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REVIEW & OUTLOOK EUROPE
Updated July 26, 2012, 7:21 p.m. ET

Geithner’s ‘Best Rate Available’
If Libor was a fraud, why did regulators use it themselves?

Timothy Geithner sure does lead a charmed life. As a powerful regulator throughout the financial crisis and its aftermath, he gets to blame every mistake or scandal on the evil bankers while claiming he was hot on their case all along.

This pose is wearing especially thin on the much-ballyhooed Libor rate manipulation scandal. Facing Congress this week, the Treasury Secretary stuck to his story that as president of the New York Federal Reserve in 2008 he was blowing the whistle on Libor manipulations even as he let everyone in the world continue to use Libor as a benchmark—including his own Fed.

Mr. Geithner told a House committee that he “personally raised [the matter] with the Governor of the Bank of England” and later sent him “a very detailed memorandum” on how to fix the “incentive” and “opportunity” for banks to “underreport” their borrowing costs under Libor.

At the same time, however, he admitted that the Fed used Libor as the benchmark for several bailout programs because it was “the best rate available at the time.” If a rate that the head of the New York Fed knew was subject to manipulation was “the best rate,” then the financial system was in even worse shape than anyone thought.

Or more likely, the truth that Mr. Geithner won’t admit is that he wasn’t very worried at the time about how Libor was set. The Fed could have used the prime lending rate or even its own federal funds rate as the benchmark for its rescue loans to AIG and through the Term Asset-Backed Securities Loan Facility, if it felt the problems with Libor were so serious.

Mr. Geithner essentially wrote a memo in 2008 that nearly everyone ignored, and that he barely followed up on, but he now wants to use that memo to suggest he was Eliot Ness. As Texas Republican Jeb Hensarling put it, “It appears you treated it as almost a curiosity, or something akin to jaywalking, as opposed to highway robbery.”
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Bloomberg News
Geithner Says 2-3 Years of Creative Housing Needed
By Ian Katz and Cheyenne Hopkins on July 31, 2012

Treasury Secretary Timothy F. Geithner said two to three years of “aggressive, creative” programs are needed to help the U.S. recover from its housing crisis.

“We’re going to keep at this as long as necessary,” Geithner said at an event in Los Angeles today. “We think there’s a very good case for people deeply under water, experiencing hardship, to modify their mortgages by reducing principal.”

Government-sponsored enterprises Fannie Mae and Freddie Mac won’t forgive principal on delinquent mortgages they guarantee, the firms’ regulator said today. Months of analysis showed there would be no clear benefit to taxpayers if the Federal Housing Finance Agency were to change its policy barring the mortgage- finance companies from loan modifications that include debt writedowns, Edward J. DeMarco, the agency’s acting director, told reporters.

Geithner criticized the decision in a letter to DeMarco today. “I do not believe it is the best decision for the country,” Geithner wrote. “The use of targeted principal reductions by the GSEs would provide much-needed help to a significant number of troubled homeowners.”
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Now it comes out that even Romney is a lib — who knew?

Richard Zombeck
Founder, Home Preservation Network
Below the Fold: Ed DeMarco Should Do His Job — It’s a Matter of Principal
Posted: 08/02/2012 1:45 pm

A wrap-up of stories and posts you might have missed or overlooked — the ones below the fold.

Acting Federal Housing Finance Agency (FHFA) Director Ed DeMarco has not been shy about letting underwater homeowners sink. This week, he made it painfully clear that despite the Administration calling for principal reduction, he would have no part of it. His reasoning appears to be more out of contempt for borrowers and the minions whose loans are held by Fannie and Freddie Mac than any legitimate business or accounting decision.

Since 2008, DeMarco has run the FHFA as an independent regulator of the now government (and taxpayer) owned Fannie Mae and Freddie Mac. Over the past year DeMarco has been under pressure by liberal advocates, congressman, and journalists to use his position and authority to help struggling homeowners.

In March of this year, Rep. Barney Frank called DeMarco “rigid” in The Hill and chastised DeMarco for the way he’s running the agency:

He’s acting as if he was head of two private companies called Fannie and Freddie and not taking into account the impact this has on the economy, and I think he should be more cooperative with efforts to reduce foreclosures.

Congress Gary Peters of Michigan wrote in a press release on Tuesday:

By refusing to implement a principal reduction program, FHFA is turning it’s back on hundreds of thousands of underwater homeowners and costing taxpayers billions of dollars. Principal reduction would not only help struggling families stay in their homes, it would also stabilize housing markets and bring much needed relief to communities that have been hit the hardest by the housing crisis. I introduced the Preserving American Homeownership Act to force FHFA to give thousands of underwater homeowners the option of principal reduction and I’m going to keep fighting to get it done.

Peter Goodman of Huffington Post wrote a scathing piece about DeMarco, calling him the single largest obstacle to a meaningful recovery.

If DeMarco were fire chief and your house became engulfed in flames, you could forget about calling 911. By his reasoning, the taxpayer would be best served by keeping the fire engines in the station, lest they get damaged in the line of duty. It would not matter whether the flames licking your windows were the result of your recklessness or the product of an explosion at, say, the methamphetamine lab down the street. He would not run up the municipal water bill by saving your block.

Even Republican (and international gaffer) Mitt Romney is on board with similar plans that have been proposed to DeMarco. Glenn Hubbard, Romney’s chief economic adviser who also served as President George W. Bush’s chief economist proposed plans that would reduce monthly payments:

Hubbard is an advocate for using Fannie Mae and Freddie Mac to set off a nationwide wave of mortgage refinancing. In a paper co-authored with Columbia economist Christopher Mayer, Hubbard estimates that more than 75 percent of the homeowners with 30-year mortgages backed by Fannie or Freddie are paying interest rates higher than 5 percent. But for the past two years, interest rates have been closer to 4 percent. That means tens of millions of Americans are paying more than they need to every single month.

Or, as was also proposed, he could have let Fannie and Freddie borrowers use the Treasury’s principal reduction plan, HAMP, resulting in homeowners paying interest on less mortgage.

On Tuesday, in a one page, two paragraph, 204 word letter, he rejected that option…

Funny how Wall Street enjoyed a massive rally on Friday, a couple off days after the bond king declared equities dead.

Markets
Pimco’s Gross: Death of Equities Is Imminent

Bill Gross, Pimco co-founder and bond king, says stocks are dead. Steven Russolillo discusses reader reaction to Mr. Gross’s statements. Photo: Bloomberg.
Are Expectations Set Too High for Fed and ECB?
8/1/2012 11:05:30 AM3:03

It’s a good thing for Megabank, Inc that collusion to fix prices is legal in America. Otherwise they could soon find themselves in the same situation as the London bankers accused of manipulating Libor.

The Mystery Of Rising US Housing Prices – OpEd
By: Mike Whitney
August 4, 2012

What we are seeing is a bottoming out of home prices. This is a good thing overall for everyone. It means we no longer have that vicious cycle between declining home prices and buyers and sellers remaining on the sidelines.

–Gregory Daco, an economist at IHS Global Insight.

Housing prices are going up, but demand for housing is getting weaker. How can that be?

Typically, when demand is weak, prices fall, but that is not what’s happening now. According to the latest Case-Shiller report, that was released on Tuesday, average home prices in the nation’s 20 biggest cities rose 2.2% in May from the prior month, “the strongest month-over-month percentage gain in more than a decade.” According to the Los Angeles Times:

All 20 cities in the index posted positive monthly results. The May data showed that average home prices across the country were back to spring 2003 levels. Home prices are off about 33% from their peak in the summer of 2006.

Okay, so prices are going up, but where’s the proof that demand is weakening?

The National Association of Realtors (NAR) reported two weeks ago that sales of previously occupied homes decreased 5.4% in June to a seasonally adjusted annual rate of 4.37 million while new home sales tumbled 8.4 percent to a seasonally adjusted 350,000-unit annual rate, the lowest pace in five months. Also, applications for loans to buy homes fell last week despite record-low mortgage rates. So, demand is weaker across the board, and yet, prices are inching higher. Why?

Supply. It’s all about supply.

Existing inventory has dipped more than 20% year-over-year while distressed inventory (which is what really pushes down prices) has been has been slashed dramatically. In fact, completed foreclosures are down 24 percent from a year ago. According to Bloomberg: “Foreclosures and other sales of distressed properties made up about a quarter of the month’s sales, down from about a third a year ago.”

The banks are operating on the theory that if they reduce the number of severely discounted properties on the market then–Voila–prices will rise. And so they have. It’s the same as if you had 5 bikes for sale and 4 of them were worth $100 each, but the last one had a bent frame and was worth just $25. The best way for you to raise the average would be to ditch the $25 bike, right? That’s what the banks are doing and, what’s interesting, is they all seem to be doing it at precisely same time.

Is that just a coincidence or proof of collusion? Anyone who has been following the Libor scandal knows that collusion is simply the way the big boys do business. And why not? They are a cartel aren’t they?
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The Wall Street - K Street cabal seems quite determined about forcing an artificial recovery in U.S housing.

Never mind that prices never bottomed out to end the bust in many places, or that China’s, Canada’s and Oz’s bubbles have yet to deflate. Damn the torpedoes!

Bloomberg News
Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing
By Prashant Gopal on July 23, 2012

U.S. homebuilders are an attractive investment as the housing market starts a “strong” recovery that may drive a surge in new-home sales, Goldman Sachs Group Inc. said in a report today.

Housing has a “long list of positives,” including rising prices, job growth, supportive government policies and a decline in the so-called shadow inventory of homes, Goldman Sachs analysts Joshua Pollard and Anto Savarirajan wrote in a note to clients. They raised their rating on the homebuilding industry to attractive from neutral.

Public homebuilders, which have been taking market share from closely held companies, reported increasing orders this year as mortgage rates fell to record lows and the supply of existing homes for sale shrank. Construction of single-family houses rose 4.7 percent in June to a 539,000 annual rate, the fastest in two years, the Commerce Department said last week.

“The super cyclical housing market has turned and a strong recovery in new-home sales is ahead,” the Goldman Sachs analysts wrote. “Over the last year a number of risks to the housing market have abated, giving us confidence that rising home prices will drive a 3-7 year up-cycle in the U.S. market.”
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Listings down, but ‘shadow inventory’ looms
Low housing stock yields epic bidding wars
July 27, 2012 01:00PM
By Kenneth R. Harney

Though many home shoppers who assume they are still in a buyer’s market find it hard to believe, one of the sobering fundamentals shaping real estate this summer is shrinking inventory: The supply of houses for sale is down significantly in most areas compared with a year ago, sometimes dramatically so. And that is having important side impacts — raising prices and homeowners’ equity stakes, and reducing total sales.

In major metropolitan markets from the mid-Atlantic to the West Coast, the stock of homes listed for purchase is down by sometimes extraordinary amounts — 50 percent or more below year-ago levels in several areas of California, according to industry studies. In Washington, D.C., and its nearby suburbs, listings are down by 28 percent, reports Redfin, a national online realty brokerage. In Los Angeles, available inventory is 49 percent lower than it was last summer, San Diego by 53 percent. In Seattle, listings are off by 41 percent. According to the National Association of Realtors, total houses listed for sale across the country in June were 24 percent lower than a year earlier. The dearth of listings is often more intense in the lower- to mid-price ranges, less so in the upper brackets.

Peggy James, an agent with Erick & Co. of Exit Choice Realty in Prince William County, Va., says she gets calls “all the time” from buyers asking, “Where are all the new listings? Are you agents bluffing” — holding back? But the reality is that “there just haven’t been many” listings in some high-demand price categories lately, she says.

In Orange, Calif., Carlos Herrera, broker-owner of Casa Blanca Realtors, says “it’s really strange right now. We have many buyers but few sellers,” forcing purchasers to bid up prices on what’s available.
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These serial bottom callers have been picking a bottom every few months
for what, five years already? They will never give up until they get it right, at which point they will claim they nailed it.

I saw a clip about this on the local news. These homes are literally falling apart, and they’re in this relatively newer “upscale” area of Manatee County, (south of the Tampa Bay area and north of Sarasota, Florida) called Lakewood Ranch. I worked in that area for a brief time and it was full of posers and pretenders.

http://www.wtsp.com/news/local/article/266873/8/Bradenton-residents-demand-justice-from-KB-Home

Wow — a conservative Christian white guy in the skin of a scion of poor subcontinental Indian immigrants. Good find there!

Romney’s potential running mate: Bobby Jindal
With unofficial Republican nominee Mitt Romney due to make his decision shortly, here’s one in a series of Politics Now profiles of potential vice presidential running mates.
By Mark Z. Barabak
August 5, 2012, 5:21 a.m.

By selecting Bobby Jindal as his vice presidential running mate, Mitt Romney would be reaching for history, much as John McCain did four years ago. The Louisiana governor—born Piyush Jindal—would be the first Indian-American ever to run for the White House on a major party ticket.

But Jindal could not be more different from Sarah Palin, McCain’s pick, who was the first Republican woman nominated for the vice presidency.

While Palin was the antithesis of a policy wonk, Jindal, 41, is a former Rhodes scholar who made his name deep-diving into substantive issues like healthcare. At 24, he was appointed head of Louisiana’s Department of Health and Hospitals, beginning a pattern of firsts and youngests that have marked Jindal’s nearly two decades in public life.

Despite that contrast, however, Jindal could serve Romney in the same manner that Palin boosted McCain in 2008. He is likely to appeal to the social conservative base of the GOP more than the candidate topping the ticket. A convert to Roman Catholicism, Jindal steadfastly opposes same-sex marriage and legal abortion—without exception—supports prayer in the public schools and earns high marks from the National Rifle Association.

His placement on the ticket could also serve as a one-man rejoinder to the image of the GOP as a province of the rich, white and privileged. Jindal is none of those things.
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Costs, conflicts arise in Reid push for green power

Steve Sebelius
Posted: Aug. 3, 2012 | 2:06 a.m.

Say this about U.S. Sen. Harry Reid: He really believes in renewable energy.

Reid has beat up NV Energy pretty good in recent years. In the closing days of the George W. Bush administration, Reid blocked plans to build coal-fired power plants in Nevada. He said in April on the “Nevada Newsmakers” show, “I don’t think NV Energy has done enough to allow renewable energy to thrive.”

But that same month, NV Energy reported it had exceeded its state-imposed green-energy requirement of 15 percent by purchasing 16.7 percent of its power from renewable sources. And that was in spite of the Public Utilities Commission rejecting a handful of renewable contracts in July 2011, saying the company hadn’t justified the purchases were necessary to meet its quota.

Now Reid is pushing for a Chinese company he played a key role in recruiting to Nevada, ENN Mojave Energy LLC. The company plans a billion-dollar solar energy manufacturing and generating plant near Laughlin, but an ambitious development schedule is being threatened by a lack of green power customers.

Steve Tetreault quoted Reid in Tuesday’s Review-Journal saying the project “would start tomorrow if NV Energy would purchase the power,” but the company “has not been willing to work on this and that’s such a shame.”

Reid added: “NV Energy is a regulated monopoly. They control 95 percent of all the electricity that is produced in Nevada and they should go along with this.”

They’re not, at least not yet.

And there are some legitimate reasons: Power costs are passed directly to consumers, and green energy currently costs more than power generated by coal-fired or natural-gas burning plants. State law mandates NV Energy buy power as cheaply as possible, except when it’s required to buy more-expensive green energy to meet state-mandated quotas. But the more green energy you buy, the higher bills climb.

NV Energy has already met its quota, and the PUC has already turned the company down when it proposed contracts that would have exceeded quotas. And when the company does buy power - which it plans to do next in 2014 - it does so by analyzing competitive bids.

Reid says those weak excuses. He said in that April interview that if “NV Energy wanted to do more with renewable energy, they could.”

There’s another factor, however, one more personal to Reid: His son, Rory Reid, is one of the attorneys for the ENN Mojave Energy project. A Reid spokeswoman said the senator did not suggest Reid’s firm - Lionel, Sawyer & Collins - to ENN, nor has the elder Reid spoken to this son about the deal. (Reid imposed a strict ban on family members lobbying his office in 2003 after the Los Angeles Times asked him about lobbying by three of his four sons.)

But success for ENN in finding customers helps Rory Reid, and its failure could cost him a client. It’s an undeniable conflict that Harry Reid should keep in mind as he twists arms at the PUC and NV Energy, lest he earn himself an ethics complaint.

http://www.lvrj.com/opinion/costs-conflicts-arise-in-reid-push-for-green-power-164858086.html - 134k -

Morgan Brennan, Forbes Staff
I write about real estate markets, outrageous homes and cities.
Business

7/28/2012 10:05AM
Real Estate’s Latest Mess: Big Banks Now Face Foreclosure

Foreclosures are back on the rise. RealtyTrac reports that foreclosure starts increased in 2012′s second quarter for the first time since 2009. One reason for the renewed uptick is the fact that lenders are finally beginning to process the backlog of defaults that they stalled on following the 2010 robo-signing scandal. Millions of homeowners have faced foreclosure over the past five years and now, another 311,000 have started the process. In an ironic twist, however, it turns out this new foreclosure wave includes some rather surprising owners: America’s biggest banks.

Take JP Morgan Chase. In April 2010, it foreclosed on and took ownership of a Homestead, Fla. condo after the homeowner defaulted on his loan and a consequent auction yielded no takers. As would be the case for any other condo owner in the development, the bank was legally required to pay monthly maintenance dues to the Homeowners’ Association (HOA), Keys Gate Community Association. But JP Morgan allegedly didn’t. Two years and nearly $20,000 in owed fees later, Keys Gate Community Association is pursuing foreclosure against the bank.

“This is not an isolated case or just about a month or two of maintenance; these are growing trends, at least here in Florida, and I would presume around the country,” asserts Ben Solomon, a managing partner at Association Law Group and the attorney representing Keys Gate. Solomon says his firm is currently working on dozens of filings like the one leveled at JP Morgan. He is aware of hundreds more. “The number of these cases is growing by the day.”

But that’s not all. In the JP Morgan Chase Bank v. Keys Gate Community Association suit, a recent turn of events has mired the property further in legal and financial woes. Earlier this month, the bank offloaded the condo at a foreclosure sale of its own, handing over the title to an unsuspecting buyer for a mere $43,000. Now the suit extends to the new owner as ”jointly and severably liable” for those dues. (Note to distressed housing investors: always do a title search to check for liens against a property.) The condo has undergone three foreclosures in two years and now faces a fourth.

In another case, Deutsche Bank failed to pay its maintenance fees on a Broward County home it reclaimed in September 2009. The Southbridge Homeowners Association filed a lien and foreclosure suit in response. In June, two and a half years later, the bank finally coughed up the tens of thousands in back payments.

A condo at Miami‘s Palm Bay Yacht Club has suffered a similar fate. Owned by Chase Home Finance, maintenance fees haven’t allegedly been paid in more than nine months. Just this week, with a summary judgement hearing scheduled, the lender contacted the HOA’s firm to resolve the issue.

“When a bank takes title to a unit through foreclosure, it owes past due arrearage immediately and from that day forward, it is like any other owner and has to pay maintenance fees,” stresses Solomon. “Yet they ignore their own monthly obligations and sadly they turn into a second defaulted owner in a row.”

A “second defaulted owner” doesn’t just prolong the foreclosure crisis; it damages the real estate holdings of every other owner in the community. Firstly, foreclosures push the price of comparable real estate down, forcing neighboring sellers to drop prices to compete. Secondly — and perhaps lesser known — in developments with HOAs, when an owner doesn’t pay monthly dues, that default pushes the maintenance bills up for everyone else in the development and in many cases, forces the association to simultaneously cut amenities.

In Florida’s hardest hit developments, as many as 40% of units are delinquent on monthly fees, thanks to both defaulting residents and defaulting banks.

“There are no big banks that aren’t wrapped up in this trend,” adds Solomon. Cases have been leveled against Citibank, Bank of New York, Wells Fargo, Deutsche Bank, Bank of America, U.S. Bank, Countrywide, GMAC, HSBC, Washington Mutual, Penny Mac, and Aurora.
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Greenwich home sales down in first half of 2012

Lisa Chamoff
Saturday, August 4, 2012

Since the economy bottomed out in 2008, the Greenwich real estate market had nowhere to go but up.

In the first half of 2012, it didn’t.

Sales of single-family homes were down 13 percent through June of this year, the first mid-year decline since 2009. In the first six months of 2012, there were 291 single-family home sales, down from 334 sales during the same period of 2011, according to data from Prudential Connecticut Realty.

The median sale price was also down a hefty 19 percent, from $1.8 million to $1.45 million.

“When you start out the year behind where we were, it’s not a good sign,” said Bill Andruss, an agent with Sotheby’s International Realty in Greenwich. “The first half of every year is a very big component to how the year ends up. I think it’s like a baseball game — you can’t go into the eighth inning behind and not be concerned.”

Andruss thinks buyers are still concerned about the economy, along with instability in Europe, the upcoming election, unemployment and the state of Wall Street. He noted that in the “sweet spot” of the Greenwich market — homes between $2 million and $3 million — there were only 44 sales through June, down from 68 during the first half of 2011.

“I think the discretionary buyer continues to be discretionary, and I think this market allows first-time buyers to take advantage of the change in prices,” Andruss said.

Sales of homes priced below $1 million, Greenwich’s “entry level,” were up over last year, with homes priced between $400,000 to $600,000 seeing the biggest growth.

While home sales slowed, the condominium market seems to be rebounding. Buyers purchased 70 condominiums in the first half of the year, up 25 percent from 56 over the same period. However, Coldwell Banker agent Maxwell Wiesen said he doesn’t see the condo market as strong.

“I think that if there are more sales, that is misleading,” Wiesen said. “The offers have been so ridiculously low.”

Wiesen had a listing at 77 Indian Harbor Drive that his client had originally purchased for $2.4 million. The highest offer was $1.6 million, and it is currently being rented.

“The condo market is not going to get better dollar-wise until the housing market gets out of its way,” Wiesen said. “You can buy a beautiful house in midcountry for $2 million.”

Julianne Ward, a broker with Prudential, said that some buyers are seeing that purchasing a condo can be a better deal than buying a house.

“I think it’s because they’re in better shape than the similarly priced houses,” Ward said. “The majority of them are just in move-in condition.”

The single-family home market in Riverside and Old Greenwich is another one that continues to be busy. Houses have been snatched up by young families who want more of a neighborhood feel, said Laura Calabrese, who works in Coldwell Banker’s Old Greenwich office. That’s also one segment of the market where prices aren’t falling much, and buyers are surprised because they hear the market is weaker overall.

“We do have a lot of clients who are just a little but frustrated with the lack of ability to find something in Riverside and Old Greenwich,” Calabrese said.

There were also twice as many sales of homes for $10 million or higher — eight this year versus four in the first half of last year. Andruss explained that five of the homes that sold this year were on the waterfront, which is a rare commodity, even in Greenwich.

“People look at that as a place where people can preserve their investment,” Andruss said. “Once you own waterfront, you know there is always demand for that.”

John Cooke, the broker who compiles the data for Prudential, said he is optimistic about the second half of the year. The 82 sales in June were approaching 2006 and 2007 numbers, when there were 93 sales that month in both years, Cooke said. They didn’t touch the 114 sales in June of last year, but the spike was attributed to the increase in the state’s real estate conveyance tax that went into effect July 1, 2011.

“I see buyers out there, and of course there are still listings to be sold,” Cooke said. “I think we’re leading into the fall market in a strong position.”

Read more: http://www.greenwichtime.com/news/article/Greenwich-home-sales-down-in-first-half-of-2012-3762571.php#ixzz22g4Y6pdi

So I’ve been talking about my friends here for a while. The ones that bought for $1.2M in NYC.

Turns out the building is a Soviet-style cinderblock building.

I just found out. Thank you, Google Streetview!

No, dear heavens, no. How can humans be so unbelievably stupid?

Their rental was so much nicer. And cheaper. And with better connectivity to the city.

I think I want to kick something but why damage my own stuff?

Well OK, some thangs ’bout the 40 day zipper ride across this awesome land known as America.

{Yes Alpha, a 45 day rail pass}

1. The best dressed folks seen walking around the big city downtown streets was in DC.

2. The cleanest Big City we walked around was Chicago from Union Station 2 mile radius to Lake Michigan. [DC around the Mall being an exception]

3. The best small train depot was a slam dunk: Tucson, AZ
[Albany, NY solid 2nd place]

4. Best rail visitor feature goes to Chicago Union Station for $15.00 per 24 hrs for huge locker rentals.

5. Worst rail station for access to supplies-food: San Antonio, TX

6. San Francisco, CA best city for public transportation & rail fun [ love those trolley cars & electric buses! ]

7. Kudo’s to the beautiful State of Virginia for their VRE [Virgina Rail]

8. The light Rail system in Seattle, WA was excellent. [connects to both rail & airport hubs]

9. Hollywood has done a great disservice portraying Texas mostly as a John Wayne sage-bush big buckle white-hat state. [ tons of trees going south from Texarkana & guitar cases galore @ the Austin TX, depot ]

10. Unique on board train event: a New Zealand free-spirited woman singing [great voice] Amazing Grace @ sunset in the lounge car.

11. Personal note: [not having been outside the Phoenix airport terminal in 20+ years] I give who-ever is responsible for the freeway landscaping & designed colored cement freeway bridges & pedestrian walkways leading into Tempe, … two BIG thumbs up!

12. The funkiest bar [ eye felt right @ home! ] was the 909 Saloon in Fredricksburg, VA “their motto: “It’s about the Love!” [wonderful avocado sandwich]

The saddest scene was all the dead corn we saw.

The worst thing that happen was our 4:30 am train hit a person [fatality] between NYC & DC

Meet many wonderful people, doing many different wonderful thangs, … The peoples of America are just fine, The land is wonderful. Much housing & Infra-structures need attention, The Gov’t should be leading the way with JOB$! to spruce thangs up. America is a terrific place to invest monie$ & labor$.

[ political authorial intrusion: Not once was lil' Opie's birth certificate mentioned. ]

What was the actuary who designed a pension plan to give a 52-year-old cop a pension at 92 percent of final pay thinking?! Calper’s one percent annual investment fund returns would be enough of a problem without this kind of outlandish payout to selected individuals. What a clusterfork!

Police Chief’s $204,000 Pension Shows How Cities Crashed
By Alison Vekshin, James Nash and Rodney Yap - Jul 31, 2012 7:28 PM PT

Stockton, California, Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago.

He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 — the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.

Stockton, which filed for bankruptcy protection on June 28, is among California cities from the Mexican border to the San Francisco Bay confronting rising pension costs as they contend with growing unemployment and declining property- and sales-tax revenue. The pensions are the consequence of decisions made when stock markets were soaring, technology money flooded the state, and retirement funds were running surpluses.

“We didn’t have very many people looking out for the taxpayers when these deals were negotiated,” San Jose Mayor Chuck Reed, 63, said in a telephone interview. San Jose, the state’s third-largest city, approved a ballot measure in June to contain annual retirement costs that soared to $245 million from $73 million in the past decade.

Bloomberg News compiled data from the California Public Employees’ Retirement System for more than a dozen cities facing the financial strains of rising pension costs and declining revenue. The data show how local governments struggle to support six-figure lifetime benefits for some retirees even as they cut police and fire services for city residents.
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Cheerleaders for the outlandishly loose mortgage loan underwriting standards that fueled the bubble haven’t yet given up hope for a near-term resurrection.

KENNETH HARNEY NATION’S HOUSING
ARE LENDERS LOOSENING UP? DON’T BET ON IT
By Union-Tribune
12:01 a.m., Aug. 5, 2012
Updated 5:18 p.m. , Aug. 3, 2012

With home prices rising in many markets around the country, might mortgage lenders start loosening up on their hyper-strict underwriting rules and extend loans to buyers who now find themselves on the sidelines?

Could current preferences for FICO credit scores in the mid-700s, down payments of 20 percent-plus, and tight debt-to-income ratios begin to ease a little, given the widely acknowledged fact that loans underwritten in the past several years have performed exceptionally well — that is, defaulted at low rates?

Maybe. A lower unemployment rate would help, say mortgage industry leaders, as would signs of more robust growth in the overall economy. But the industry is unlikely to go back to what Frank Nothaft, chief economist of Freddie Mac, the giant federally backed investor, calls “the loosey-goosey standards we had in 2005 through 2007”: minimal documentation of income and assets, zero down payments and a widespread disregard for applicants’ ability to afford payments on the mortgages they sought.

Nothaft added in an interview, however, that “we have gotten better news on the home-pricing front,” which might allay some bankers’ fears about making loans secured by assets that are declining in value.

So the answer is yes, there are possibilities for easing in the months ahead. But there are also signs that for certain borrowers, things could get worse.
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Economist says Florida construction jobs will come back — in 19 years

by Jeff Ostrowski

Construction was a high-horsepower driver of Florida’s economy during the real estate bubble, but University of Central Florida economist Sean Snaith says the state better look elsewhere for job growth.

Florida’s construction industry lost 384,000 jobs since peaking during the housing boom, Snaith says in a Florida economic forecast out today. By his calculations, Florida construction employment won’t return to its pre-recession peak until 2031.

On the bright side, Snaith said, Florida construction employment will begin to grow again next year and could expand at a double-digit pace in 2014 and 2015.

Snaith expects Florida’s economy to start growing again over the next 30 years. He projects that Florida’s gross state product will quadruple by 2042, and he forecasts that the state’s population will top 30 million.

“I sure hope the jet pack has made it on the scene by then, or I-4 and I-95 will be the 10th layer of Dante’s inferno,” Snaith writes.

This entry was posted on Thursday, August 2nd, 2012 at 11:54 am and is filed under Florida economy, Job market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Deadbeat Super hero

Aquaman

The story must start with my mother, a famous serial refinancer/victim — if I spoke her name, you would recognize it. My father went to Vegas when I was a baby, and she turned to her work of living for free without paying the mortgage. Her greatest discovery was an ancient city, in the depths where no other Deadbeat had ever penetrated. My mother believed it was the lost kingdom of Atlantis. She made herself a water-tight home in one of the Mcmansions and lived there, studying the records and devices of the race’s marvelous wisdom. From the books and records, she learned ways of Robo signing to live under the ocean, drawing oxygen from the water and using all the power of SNARP to make me wonderfully strong and swift. By training and a hundred scientific secrets, I became what you see — a human being who lives and thrives in a free Mansion that is under water.

So a dump I put a 50% offer on back in 2010 is now listed on realtytrac and Trulia as “pre-foreclosure/Lis Pendens”.

This mess just balloons year after year.

So whatta ya think….. Should I offer 10 cents on the dollar if it ever actually comes on the market?

One of the two main presidential candidates has voiced a lack of support for QE3.

Where does the other one stand? Could this emerge as a wedge issue? And if Romney wins, will he try to dictate monetary policy to Bernanke or his successor?

Romney says more Fed stimulus would not help US economy
U.S. Republican presidential candidate Mitt Romney talks to two women after a campaign event in Golden, Colorado August 2, 2012. REUTERS/Rick Wilking
By Rachelle Younglai
WASHINGTON | Sun Aug 5, 2012 10:24pm IST

(Reuters) - Republican presidential candidate Mitt Romney said on Sunday that a fresh round of monetary stimulus from the Federal Reserve would not help the fragile U.S. economy.

A stream of disappointing economic reports has underpinned expectations that the U.S. central bank will do more to stimulate growth with a third round of billions of dollars of bond purchases, also known as quantitative easing, or QE3.

“I am sure the Fed is watching, will try to encourage the economy, but I don’t think a massive new QE3 is going to help this economy,” Romney said in an interview with CNN’s “State of the Union” television program aired on Sunday.

“The Fed’s first action, quantitative easing, was effective to a certain degree. But I believe that the QE2, the second round of easing, I don’t think it had the impact that they were hoping for,” he said.

Romney, who has been stressing his business acumen and years as Massachusetts governor as experiences he would employ to help heal the economy, has vowed to create 12 million jobs in his first four years as president were he to beat Democratic President Barack Obama in the November election.

The unemployment rate ticked up to 8.3 percent in July, the government’s latest jobs data showed last week, prompting Romney to tear into Obama’s handling of the economy, a key election issue.

On Wednesday, the Fed signaled that more bond buying could be on the way if the recovery does not pick up - a move that could unleash fresh attacks on the central bank.

Many prominent members of the Republican party have strongly opposed the Fed’s unconventional policy measures to sustain the recovery from the 2007-2009 economic crisis, accusing the central bank of going beyond its mandate and saying that new monetary stimulus could fuel inflation.

Foreign governments have also attacked the Fed’s previous two stimulus programs, saying they artificially weakened the U.S. dollar and hurt their exports.

In addition to pumping more money into the economy, the Fed has tried to push down longterm borrowing costs with its “Operation Twist” program of replacing short-term debt it holds with longer-term securities.

Democratic National Committee Chairwoman Debbie Wasserman Schultz said on Sunday it was up to the Fed to decide whether the economy needed more stimulus, not Romney or the White House.
…

Posted: 3:10 p.m. Sunday, Aug. 5, 2012

Social Security not deal it once was for workers

Associated Press

By STEPHEN OHLEMACHER

The Associated Press

WASHINGTON —
People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.

“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”

If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.

As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.

Not anymore.

A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.

Social Security benefits are progressive, so most low-income workers retiring today still will get slightly more in benefits than they paid in taxes. Most high-income workers started getting less in benefits than they paid in taxes in the 1990s, according to data from the Social Security Administration.

The shift among middle-income workers is happening just as millions of baby boomers are reaching retirement, leaving relatively fewer workers behind to pay into the system. It’s coming at a critical time for Social Security, the federal government’s largest program.

The trustees who oversee Social Security say its funds, which have been built up over the past 30 years with surplus payroll taxes, will run dry in 2033 unless Congress acts. At that point, payroll taxes would provide enough revenue each year to pay about 75 percent of benefits.

To cover the shortfall, future retirees probably will have to pay higher taxes while they are working, accept lower benefits after they retire, or some combination of both.

“Future generations are going to do worse because either they are going to get fewer benefits or they are going to pay higher taxes,” said Eugene Steuerle, a former Treasury official who has studied the issue as a fellow at the Urban Institute.

What’s a poor politician to do at the height of financial panic — run around screaming like Chicken Little?

ft dot com
August 5, 2012 8:18 pm
The silent Rajoy is deaf to the Spanish emergency
By David Gardner

About this time two years ago in Dublin, it was hard to escape the talk of bond “spreads” and “yields”, as the soaring cost of Ireland’s borrowing entered the twilight zone beyond which lay an autumn rescue package from the International Monetary Fund and the EU. So it is now in a hot and febrile Madrid, where seemingly everyone is fixated by the prima de riesgo or risk premium on Spanish government bonds over German Bunds. Spain looks to be in a similar fix to Ireland, stumbling towards some sort of EU bailout this autumn.

The extent to which the government of Mariano Rajoy – or any Spanish government in these circumstances – can be considered master of its own fate is limited. As Spanish borrowing costs reach euro-era highs, the markets are not just placing bets on Spain (or Italy) but on the survival of the euro. This administration, in power for a little more than seven months, already has the feel of a government approaching the end of its term.

Since winning an absolute majority last year, Mr Rajoy’s Partido Popular has liberalised rigid hire-and-fire laws, started (albeit belatedly) to clean up regional savings banks crippled by overexposure to the burst housing bubble, slashed public spending and raised taxes. While all this has won plaudits in Brussels and Berlin, it clearly does not feel like a viable programme for recovery to a surprisingly broad spectrum of Spaniards. Among the middle classes of Madrid, Barcelona and Bilbao, there is a pervasive sense of a government losing control. Even though so much about Spain’s future depends on its eurozone partners, this is an odd situation to be in for a newly elected, majority government.

One distressed PP insider says of Mr Rajoy: “He is the wrong man, in the wrong place at the wrong time.”
…

When in Athens, do as the Athenians.

ft dot com
August 5, 2012 8:02 pm
Greek bank head sent savings abroad
By Kerin Hope in Athens

A political row has erupted in Athens after the former head of a big Greek state bank admitted to transferring €8m of personal savings abroad to buy a London property months before his Agricultural Bank headed towards insolvency.

Theodoros Pantalakis, former chief executive of Greece’s Agricultural Bank (ATEbank), strongly denied any wrongdoing, telling Realnews, a Greek website, that he had declared the transaction to authorities in 2011 and had paid tax on the amount transferred.

“I’m on holiday and I don’t plan to say anything more until I come back to Athens,” Mr Pantalakis told the FT from his villa on the Aegean island of Paros. He is expected to testify on his three years at the helm of ATEbank before a parliamentary committee at the end of August, said a person with knowledge of the dispute.

Dozens of wealthy Greeks, among them politicians, bankers and shipowners, have bought high-end properties in London in the past three years seeking shelter from the country’s deepening crisis, which has left millions of ordinary Greeks squeezed by tough austerity measures.
…

ft dot com
July 30, 2012 6:59 pm
Libor review to look into scrapping rate
By Kiran Stacey, Political Correspondent, and Caroline Binham, Legal Correspondent

Libor, the London Interbank Offered Rate, could be scrapped altogether and replaced with an interest rate that is set using actual trades, according to a review set up by the UK government.

Ministers on Monday announced the remit for Martin Wheatley to investigate the Libor benchmark rate, which has been heavily criticised after it emerged that Barclays and several other leading banks manipulated it. Mr Wheatley is the chief executive-designate of the new Financial Conduct Authority, the incoming City watchdog,

The terms of reference for the Wheatley review include considering whether the rate should be set based on transactions made by traders, rather than the estimate of the rate at which their banks are borrowing at any given time.
…

ft dot com
August 5, 2012 9:32 pm
Wall St eyes protection against euro exit
By Tom Braithwaite and Dan McCrum in New York and Patrick Jenkins in London

Wall Street banks are increasingly telling counterparties and borrowers to restructure contracts or find another bank as they prepare for the potential exit of a country from the eurozone.

Using hedges, such as credit default swaps, US banks have reduced their net exposure to troubled eurozone countries. But they are also engaged in more work behind the scenes to ensure that if a country leaves the eurozone they will not have to receive payments in a devalued drachma or peseta.

The eurozone continues to be the predominant concern of US bank executives, ahead of the faltering US recovery. Last summer the worsening of the eurozone crisis produced wild swings in US banks’ stock prices and led the Securities and Exchange Commission to demand they provide more disclosure of assets in Spain, Greece, Italy, Ireland and Portugal.

An analysis of regulatory filings since then shows JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley and Goldman Sachs have generally trimmed their exposure but the picture is not uniform.
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Strange thought for the day:

While reading the last paragraph of this link, a day or two ago iirc:

http://trends.truliablog.com/2012/08/housing-glut-or-housing-shortage-americas-got-both/

It occurred to me that if we had housing units that were constructed out of shipping containers, we could easily move surplus housing units from Detroit to San Jose. Just put ‘em back on trailers, train, ship, etc…

ft dot com
August 5, 2012 10:01 pm
Key repo contracts market falls 14%
By Mary Watkins in London

The market for a key funding instrument for banks has shrunk in Europe, highlighting how reliant financial insitutions in the region have become on European Central Bank support.

The market for European repurchase, or repo, transactions contracted by an estimated 14.2 per cent year-on-year in the six months to June 30, based on constant samples over the period.

The total value of outstanding repo contracts – in which banks pledge their securities as collateral for short-term loans from money market funds or other investors – stood at €5.647bn in June, according to the latest bi-annual snapshot of the market by the European Repo Council of the International Capital Market Assocation (ICMA).

Richard Comotto, senior visiting fellow at the ICMA Centre at Reading University, said that while repo markets are vulnerable to swings, the most recent contraction highlights how dependent banks in the region had become on ECB funding.

Eurozone banks borrowed more than a €1tn from the ECB in December and February via its three-year longer-term refinancing operations. The LTRO has reduced the reliance by some banks on funding from the repo market.

Mr Comotto said the worry was that if banks continued to sideline the repo market in the long-run it would lead to a capacity problem as the market “shrivels”, ultimately making it more difficult to wean lenders off ECB funding.
…

David Rosenburg, Gluskin Sheff Chief Economist & Strategist David Rosenburg;

The deflation in housing is going to continue. Housing is only about 40% through its reversion process. In fact, along with housing, the entire household debt deleveraging process is still in progress and still has a tremendous way to go. This deleveraging cycle will remain a dead-weight drag on the economy for quite a long time.

Why buy a house today when you can buy one later for 60% less?

Mama mia…

August 3, 2012, 4:36 p.m. ET
UPDATE: S&P Downgrades 15 Italian Banks on Deeper-Than-Expected Recession
–S&P raises economic-risk score on Italy, also lowers the outlook on one Italian bank

–S&P notes nation faces deeper and more prolonged recession than originally anticipated

–The ratings firm says it now expects Italy’s GDP to decline 2.1% in 2012 and 0.4% next year

(Adds details on S&P moves on individual banks starting in eighth paragraph.)

By Nathalie Tadena and Kristin Jones

Standard & Poor’s Ratings Services raised its economic-risk score on Italy and downgraded 15 Italian banks Friday, noting the country faces a deeper and more prolonged recession than the firm had originally anticipated.

S&P also lowered its outlook on one bank.

A severe recession likely will increase Italian banks’ problem assets in 2012 and 2013 to levels higher than anticipated, and higher than other banks in Europe, the ratings firm said.

At the same time, the banks’ coverage of problem assets has weakened in the past few years, S&P said.

S&P revised its economic-risk score, which is a component of the firm’s banking-industry country-risk assessment, or Bicra, on Italy to 5 from 4. The firm now views credit risk in the Italian economy at “high risk” from its earlier assessment of “intermediate risk.” It affirmed Italy’s Bicra at group 4.

The ratings firm now expects Italy’s gross domestic product to decline 2.1% in 2012 and 0.4% next year. S&P noted the state of the Italian economy, which hasn’t recovered since its 2008-09 recession, is increasing the vulnerability of its banks’ asset quality.
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How are the dancing fairies working out for the home-pawners?

I want some fairy mushrooms. They’re edible and delicious with pasta.