Bits Bucket for October 2, 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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Housing is only about 40% through its reversion process.
http://advisoranalyst.com/glablog/tag/capital-preservation/
It’s still a very long way down for housing yet. The largest losses have yet to be taken.
But CoreLogic says that prices are going up! Happy days are here again!
Hint to Republicans who believe austerity is the ticket to U.S. economic recovery: IT ISN’T.
And don’t soil yourselves claiming that isn’t your plan, because everyone with at least two working brain cells knows it is.
Greece’s economy to contract for sixth year
By Marcus Bensasson and Maria Petrakis
Tuesday October 02 2012
Greece’s economy will contract for a sixth year in 2013 as the government prepares further cuts to pensions, wages and social benefits to meet the terms of its bailout packages.
Greece’s international lenders have demanded details on Athens’s proposals in an austerity package worth nearly €12bn, Yannis Stournaras — the Greek finance minister — said.
“There are discussions on the measures. The troika wants clarifications,” Mr Stournaras told reporters after the latest round of talks between the government and its European Union and IMF lenders.
Greece’s draft budget submitted to parliament yesterday shows the country is set for a sixth year of recession, with its economy predicted to contract by 3.8pc in 2013.
Stabilising
This compares with a prediction in Greece’s March rescue agreement with the EU and the IMF that the economy would contract 4.8pc this year before stabilising in 2013.
This year’s recession is expected to see the economy shrink around 6.5pc, the document said. Unemployment is predicted to rise to 24.7pc in 2013 from an average 23.5pc.
The budget sees Greece’s government still running at a loss despite waves of spending cuts and tax hikes over the past two years.
…
Up late tonight, eh CIBT?
Earthquake
Gotcha…I trust all is OK in the CIBT household?
Totally fine, except for lost sleep (wife and I both woke up at 1:30am…).
Seemed like a little shake–glad it was nothing more for you…I envy your ability to get sleep. We have a newborn in the house…I’m pretty much awake except for one 4 hour stretch each night.
Coffee is my friend.
“We have a newborn in the house…I’m pretty much awake except for one 4 hour stretch each night.”
Been there / done that.
Nonetheless, coffee is still my friend…
“…Nonetheless, coffee is still my friend….
Maybe if you stopped giving it to your new baby…?
Hang in there, Rental. Those first little smiles of recognition make it all worth the effort.
Since I am the only coffee drinker in our household, I guess I naturally am the parent who gets blamed for our “old baby” (now a freshman in college) trying it…
Wiki-up “austerity” and you will learn that supporters of austerity predict there will occur “expansionary fiscal contraction”.
“Expansionary fiscal contraction” - now there’s an interesting term. Two of the words in this three-word term seem to contradict each other.
Wiki-up “expansionary fiscal contraction” and you will learn that: “The concept of that fiscal contraction can result in growth is commonly know as ‘expansionary austerity’.”
“Expansionary austerity”?
Lol. Has everyone gone crazy?
It is really quite simple Combo if you get the perspective right. What is expanding is the Center, while the whole contracts.
“What is expanding is the Center, while the whole contracts.”
Taken to the extreme the center will grow to become the same size as the whole.
I sense a new talking point.
“Expansionary fiscal contraction” = Stagflation
Printing as fast as they can, while the economy is cratering. Welcome to the “weimar inflation rate chart”. The good news is the GDP will be 1000 trillion dollars, which makes 100 trillion of outstanding debt not look so bad, the bad news is a cup of starbucks coffee will be one trillion dollars.
Basically we’re headed back to the late 70s, minus the disco. We do have a modern CB craze equivalent that being facebook and texting (while driving, of course, just like CB).
Remember what happens after the 70s? Yes, 20% interest rates.
Stagflation is nothing new to Lucky Ducky
But as long as “volatile” prices are excluded from “core”, it’s all good, right?
Would anybody here buy if they lowered rates to 2% for a 15 year note fixed ?
HW interest rates could be zero and not worth it…my father the bricklayer taught us if you buy a house and the rent doesn’t cover your monthly bills you paid to much…..I learned that as a kid…..guess i was lucky
“Would anybody here buy if they lowered rates to 2% for a 15 year note fixed ?”
How high are you assuming prices would go?
Remember what happens after the 70s? Yes, 20% interest rates ??
I remember it well…All too well…Economic activity was frozen…
“Economic activity was frozen…”
Alternative energy was enjoying a boom, until that bubble popped. Shale oil, ethanol, wind turbines, solar. Then semi conductors were a lot of fun. Then that went away. Then building factories in Singapore or Mexico was the rage. Things were not frozen at all.
Things were not frozen at all ??
Tell that to the millions, maybe tens of millions that lost everything they had…Did you go through that period as a working adult ?? just wondering….
Yeah Dave. I got married in ‘72. There weren’t a lot of jobs for Biology majors so I switched to Engineering. I spent the next couple of decades jumping from one hot rock to the next. I didn’t say things were stable, I said they weren’t Frozen. Most of the people who got crushed were committed to long term stability, and were in debt. Any lessons to learn there?
“Most of the people who got crushed were committed to long term stability, and were in debt.”
Exactly. It’s no different now with that same mindset/group. They’re stuck paying inflated carrying costs on nearly worthless assets. Can’t afford to stay, have no where to go. If you don’t want to end up like that, live like you’re going to lose your job and bank account tomorrow. That means NO debt. None.
“Things were not frozen at all.”
While there was still a detectable heartbeat I’ll have to side with scdave that business had dropped off the proverbial cliff. Construction ground to a halt with the prime interest rate near 18%. A family friend had an LTL delivery business in San Jose, CA, and they struggled to stay alive and hang onto their home in the Almaden Country Club. They were generally conservative and optimistic, but they aged quickly having spent a few years gripped in fear of losing everything. Yeah, their fear was palpable!
“Most of the people who got crushed were committed to long term stability, and were in debt. Any lessons to learn there?”
Once you decide to start a business or enter college, you are making a commitment that is difficult to back out of particularly when the economy turns downward. Things happened quickly back in the early seventies when Nixon decided to ship arms to Israel pushing the Arab states to form OPEC, and cut-off our oil. It didn’t take long for the high energy prices to draw the life from the economy.
LBJ’s Great Society programs and Vietnam left us buried in debt. Nixon tried price controls and dumped the gold standard, and Carter tried money printing causing home prices to climb around San Jose as the micro-processor made its debut. Reagan and Volcker eventually cranked the interest rates to halt runaway inflation. It was a nasty decade, the seventies.
“…It was a nasty decade, the seventies….”
I got stoned and I missed it.
“they struggled to stay alive and hang onto their home in the Almaden Country Club.”
Only in America is struggling to pay the mortgage at the Country Club barely staying alive.
LOL….I new the lady was a stoner….
I guess I look at it through the lens of being self employed…. Everything dried up…There was no work…No income…You had to rely on reserves to carry what ever burden you had…If reserves were low, selling assets was the next step…Problem with selling assets was, nobody wanted to buy anything…I saw many friends go bust and never recovered…It almost got me also…
Only in America is struggling to pay the mortgage at the Country Club barely staying alive.
Yup, talk about a First World problem.
“I got stoned and I missed it.”
You stopped?
David Peel - I Like Marajuana
http://www.youtube.com/watch?v=6sE1qcbxEdU
“Only in America is struggling to pay the mortgage at the Country Club barely staying alive.”
Ha, good call. Funny thing . . . same thing goes for squeeze too. Po’ folks rarely tap the fine trim stuff. No country club, no trim!
Expansionary austerity relies on the appearance of the confidence fairies. My 5 year old niece appears to believe in garden fairies. On occasion, she also needs mom or dad to check for monsters in her room.
Mommy! There’s hyperinflation under my bed! And communism in the closet!
And food stamp zombies scratching at my window!
To be fair, austerity has a definite end point.. when the national debt is erased, the austerity can end. What is the end point for inflationary economic policy?
The last thing the rest of the world wants is US austerity. Who will buy their crap if we tighten our belts? The EU?
There is too much crap.
“There is too much crap.”
Exactly. There is too much production of everything worldwide. The real problem is that once this production slows down greatly to reflect what is actually needed, hundreds of millions of people worldwide are out of a job, with no future.
Technological advances promised to make life easier for all through reduced work hours and more leisure time, falsely assuming no loss of income. Instead, it made a precious few extraordinarily wealthy while hammering the masses into oblivion.
“austerity is the ticket…to recovery…”
Some of us expect it is an inevitable consequence for our spendthrift nation; a consequence of decades of faux expansion, malinvestment and living large on credit. It is already in full swing for most of us; savings earning nothing, confiscation of shrinking income at the grocery checkout and gas pump, taxes going up and for millions, no job at all.
Austerity is baked in the cake.
“It is in full swing for most of us.”
It’s this micro behavior that screws up the Grand Plans of the macro guys.
Two nice articles on Bloomberg today about the Recovery®
http://www.bloomberg.com/news/2012-10-02/top-1-got-93-of-income-growth-as-rich-poor-gap-widened.html
http://www.bloomberg.com/news/2012-10-02/health-care-costs-keep-1-in-3-americans-from-the-doctor.html
33% say that costs keep them from visiting the doctor. Self-rationing.
Americans who can afford it have access to the best care in the world. Those who can’t afford it have access to no care (until it is an emergency).
If Medicare is changed to a voucher system, how many will self-ration? As more people self-ration, will investment in medical research decline? How long until we have a 3rd world medical system for everyone?
33% say that costs keep them from visiting the doctor. Self-rationing.
I resemble that remark. Not just the doctor. I’ve also stopped seeing the dentist for the same reason.
“Austerity is baked in the cake.”
No need for politicians to pile on, then, is there?
New normal….
The voting public wants to HEAR austerity but they want to FEEL stimulus.
It’s a curious conundrum for a politician. The result is talking austerity but enacting a backdoor stimulus (yes, yes, I’m well aware of the double entendre this post is building
). Perhaps the Fed adding to its magic balance sheet via an accounting gimmick which allows it to spend money in lieu of the government.
The trick is to plan for austerity over a long period of time, so the market takes comfort that the problem is fixed, without actually impacting near term spending/consumption/attitudes.
Examples of this?
Slowly increase the age at which one can collect social security.
Freeze spending increases for discretionary budgets–don’t slash them in year 1.
Reduce government employment through attrition…only hire back two people for every three who retire.
If government implemented such things as the path to a more stable fiscal situation, foreign countries would be more comfortable buying long-term US debt. This would generally keep longer term rates lower WITHOUT the need for the Fed to constantly grow their balance sheet.
The problem is that politicians won’t act to slow down the train until it has hit the station going 100 mph.
“If government implemented such things as the path to a more stable fiscal situation, foreign countries would be more comfortable buying long-term US debt.”
That’s the solution, set it up so as to be able to borrow more money from foreign countries.
(sarc)
Borrow our way to prosperity!
We illustrious leaders have already put us in this position. We have $16 Trillion of debt.
Most of this has a short duration.
Even if we were to cut the deficit to $0 magically overnight, we would need to borrow billions upon billions on a regular basis just to roll the current debt.
The best way through this mess is to keep interest rates for US treasuries as low as possible for as long as possible, so interest costs on the $16T doesn’t suck all of the oxygen out of the tent.
The best way to keep interest rates low is to convince the world that we are on the right path.
“We illustrious”…sb “Our illustrious”. Me tired.
The best way to keep interest rates low is to convince the world that we are on the right path.
The rest of the world has no choice but to prop us up, as we are the consumers of last resort. Imagine if we started making our own consumer goods again because we lacked foreign reserves to purchase them. That would be the ultimate nightmare for the world’s exporters.
Comment by In Colorado
2012-10-02 10:18:25
The rest of the world has no choice but to prop us up, as we are the consumers of last resort.
———————-
Ive heard this before, but its still hard for me to understand. Could a wino or crackhead pull this off?
The best way through this mess is to keep interest rates for US treasuries as low as possible for as long as possible, so interest costs on the $16T doesn’t suck all of the oxygen out of the tent.
The best way to keep interest rates low is to convince the world that we are on the right path.”
Might the Government raise taxes to show they are serious about the debt? which will cause a slow down in the economy which could bring on a deflation threat again.
And the other plan is ……..?
I take it to follow the digging the hole and not wanting to stop philosophy. We are aiming to end up in China.
Eurozone jobless rate hits a record high of 11.4pc
The debt crisis that began in Greece in 2010 and has spread across the eurozone to engulf Ireland, Portugal, Cyprus and the much bigger economy of Spain.
By Thomas Molloy
Tuesday October 02 2012
The unemployment rate in the euro area reached the highest on record in August as the festering debt crisis pushed Europe’s economies towards recession. Economists say the rate will rise further in the months ahead.
Joblessness in the 17 countries sharing the euro was 11.4pc of the working population in August, which was stable compared to July on a statistical basis, but another 34,000 people were out of work in the month, the EU’ statistics office Eurostat said yesterday.
Ireland, which has seen unemployment triple since the debt crisis began, had the fourth highest rate at 15pc.
That left 18.2 million people unemployed in the euro zone, the highest level since the currency’s inception in 1999, while 25.5 million people were out of a job in the wider 27-nation EU, Eurostat said.
The debt crisis that began in Greece in 2010 and has spread across the eurozone to engulf Ireland, Portugal, Cyprus and the much bigger economy of Spain has devastated business confidence and sapped companies’ abilities to create jobs.
“There is simply not enough growth in the euro region to create sufficient jobs and the unemployment rate still has not reached its peak,” said Thomas Costerg, an economist at Standard Chartered Bank in London.
“A worrying trend is that the number of unemployed is now also expanding in core countries like Germany, which had been rather sheltered up to now.”
Joblessness could go beyond 19 million by early 2014, or about 12pc of the eurozone’s workforce, according to a new study by consultancy Ernst & Young, predicting that rate to rise to 27pc in Greece. That compares with 24.4pc in the country in June, the latest data available.
“In this difficult environment, companies are likely to reduce employment further to preserve productivity and profitability,” the report said.
…
A watched pot never boils.
Senators try to deal with ‘fiscal cliff’
New York Times
Updated 12:02 a.m., Tuesday, October 2, 2012
Washington –
Senate leaders are closing in on a path for dealing with the “fiscal cliff” facing the country in January, opting to try to use a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution.
Senate Democrats and Republicans remain far apart on the details, and House Republicans continue to resist any discussion of tax increases. But lawmakers and aides say a bipartisan group of senators is coalescing around an ambitious three-step process to avert a series of automatic tax increases and deep spending cuts.
First, senators would come to an agreement on a deficit reduction target - likely to be around $4 trillion over 10 years - to be reached through revenue raised by an overhaul of the tax code, savings from changes to social programs like Medicare and Social Security, and cuts to federal programs. Once the framework is approved, lawmakers would vote on expedited instructions to relevant congressional committees to draft the details over six months to a year.
If those efforts failed, another plan would take effect, probably a close derivative of the proposal by President Obama’s fiscal commission led by Erskine Bowles, the Clinton White House chief of staff, and former Sen. Alan Simpson of Wyoming, a Republican. Those recommendations included changes to Social Security, broad cuts in federal programs and actions that would lower tax rates overall but eliminate or pare enough deductions and credits to yield as much as $2 trillion in additional revenue.
Finally, they would vote to put off the automatic spending cuts, known as sequestration, and tax increases scheduled to hit all at once in January - but with some deficit reduction down payment to signal how serious Congress is.
Obama has said he would not allow Congress to simply pass a new law to override the $1 trillion in automatic cuts agreed to in the Budget Control Act of 2011, but senators said they believed the White House would go along with a deal that locks in as much as four times those savings in exchange for canceling the automatic cuts.
With both sides awaiting the outcome of the election, negotiators will not even try to determine how much money would come from the three components until after the voting, when, presumably, the victorious side would emerge with new leverage.
“A lot of what happens and when it happens depends on the outcome of the election,” said Sen. Mitch McConnell of Kentucky, the Republican leader.
…
“A lot of what happens and when it happens depends on the outcome of the election,” said Sen. Mitch McConnell of Kentucky, the Republican leader.
Translation: If Romney wins, we’ll turn on the spigots. If Obama wins, we’ll continue to try to drive the country into the ditch.
To which “spigot” are you referring?
Those marked ‘print’ and ‘borrow’.
But it’ll all be for the deserving defense industry (and our war with Iran), and for Job Creators.
“Those marked ‘print’ and ‘borrow’.”
those spigots are running full blast under obama…not sure how they would turn them on anymore than they are.
republicans and democrats will print and borrow forever…they will only stop when the bond markets make them stop.
not sure how they would turn them on anymore than they are.
New wars are expensive. Plus we need to reduce taxes on the Job Creators.
New wars are expensive ??
Especially when you borrow the money to fight them….
Amazing how much sway the minority leader in the Senate holds. Where is Harry Reid? Was he not available for comment?
Amazing how much sway the minority leader in the Senate holds
You can thank the unconstitutional filibuster for that. And the Blue Dog Democrats.
Unconstitutional?
The Senate’s rules can be changed by a simple majority vote. This includes the rules on when/how or even whether a filibuster can be invoked. Over the years both parties have toyed with the idea of getting rid of the ways that 40% of the members can block things that 60% might want. The majority has always stopped short of doing so however, knowing that sooner or later they’ll be the minority.
Unconstitutional?
The people who wrote the Constitution clearly were against the idea:
The Senate’s rules can be changed by a simple majority vote.
Not if the changes are unconstitutional themselves.
Both blockquotes from
http://www.washingtonpost.com/blogs/ezra-klein/post/is-the-filibuster-unconstitutional/2012/05/15/gIQAYLp7QU_blog.html
Assuming one had the goal of getting the Supremes to declare the filibuster unconstitutional, how could that issue be brought before the court?
Who would have “standing”?
In what type of case?
Who would have “standing”?
In what type of case?
Apparently this guy.
Will Obama and Romney Debate Housing?
October 1, 2012
Mitt Romney sits between Mary Pinion of Tampa, Fla., left, and Todd Swift of Lutz, Fla., as he holds a discussion on housing and foreclosure on Jan. 23, 2012.
With the first presidential debate just days away, speculation about what issues the candidates will tackle — and what zingers they’ll pitch at each other — is already swirling.
While there are plenty of touchy topics for Mitt Romney and Barack Obama to trade barbs about — China, jobs, energy policy — perhaps none are as far-reaching as the morass the housing market has become. But as much as housing is a uniquely national issue, it’s also all about “location, location, location,” as the real estate adage goes.
This election cycle, Romney and Obama will go head to head in Denver, Colo., Long Island, and Boca Raton, Fla. — three very different metro areas with equally diverse housing market histories and futures, according to Jed Kolko, chief economist at real estate website Trulia.
Here’s a look at the housing markets where Romney and Obama will do battle this fall:
Denver, Colo. The mile-high city escaped the worst of the housing market bust with prices falling only 8 percent from peak to trough, making it the 19th-best among the nation’s largest metro areas. And real estate in Denver is still heating up — according to Trulia’s price data, the city has the 7th fastest gains in asking prices and is the only city seeing big price increases now that didn’t have home values torpedo during the bust.
While that’s good news for Denver homeowners, it makes the city an unlikely site for discussion of the nation’s housing woes, Kolko says.
“Obama could point out that the 2009 economic stimulus ultimately prevented a worse recession and was therefore good housing policy,” he wrote in a recent post. “Romney, however, could argue that with strong economic growth, the housing market improves on its own.”
…
And real estate in Denver is still heating up — according to Trulia’s price data
Yet rental rates are falling quite precipitously in Denver.
Denver (-8.8%)
Chicago (-4.8%)
Los Angeles (-2.6%)
http://newsroom.transunion.com/MediaLibraries/TransUnion/Documents/graphics/1Q12/Q1-2012_SolutionsReport.pdf
good news for Denver homeowners
Because the path to Recovery® is overpriced real estate, right? Some stats on zip codes of interest from city-data dot com:
80210, median house value 2010: $396,575, average AGI in 2004: $68,310
80228, median house value 2010: $266,917, average AGI in 2004: $56,788
Yes, the income stats are dated, but assume they are close to now as neither zip has had significant boom or bust before, during, after the recession.
80210 (Denver University / Rosedale) prices are 5.8 x incomes. 80228 (Western Lakewood / Green Mountain) prices are 4.7 x incomes.
We will continue to rent at 13% of gross monthly income, thank you.
Money hoarder.
The Credit Union of Colorado is currently rewarding our hoard with 0.1% APY.
Think of the income taxes you won’t have to pay.
A bit of sarcasm here but if interest rates were higher then taxes would also be higher and places such as Californy wouldn’t be in such a deep financial hole.
Then again … I’m talking about Californy here…
80210, median house value 2010: $396,575, average AGI in 2004: $68,310
80228, median house value 2010: $266,917, average AGI in 2004: $56,788
I would say that the job market in Denver is weak at best. The only thing that is propping the market up here is the lack of inventory in desirable nabes, and that could change on a moment’s notice. I’ve seen this in my own neighborhood, almost no houses were offered for sale this past summer. One house that I know did sell wound up selling at its 2004 sale price. So I’d say that things are hardly on fire here.
One realtor I know said that while the local market in our little burg has bottomed out, that except for very low price points it’s still very weak.
What is median house “value” and how does it compare to the median selling price for the same year?
Both here and in our old nabe in Sarasota which I occasionally check, the asking prices for houses on the market are considerably higher than what recent sales actually went for. Neither of those is “value,” so I’d be curious to know what is meant by that term.
We don’t know how accurate the stats from city data are, but our on the ground observations confirm that both of these zip codes remain overpriced.
Here in Loveland the median HH income for a family with children (the kind of people one would expect to buy a house) is about 70K. The median price here, IIRC, is in the low 200’s. That buys you a 2000 sq ft house with a basement.
Hope the housing pundits enjoy whistling loudly as they stroll past the housing bubble’s graveyard.
With Economy Slumping, Can the Housing Market Hang On?
September 21, 2012
We’ve heard time and time again how intertwined the recovery of the housing market is with the recovery of the broader economy and vice versa. Now with a floundering housing market no longer a dead weight on the economy—analysts expect the industry to add to GDP in 2012 for the first time in seven years—could the reverse happen?
Based on the recent data dump from all corners of the economy, things aren’t looking too pretty. All signs point to sluggish-at-best growth for the remainder of the year and still-looming risks such as the European debt crisis and the so-called fiscal cliff are putting even more pressure on an already fragile economy.
Then there’s the deceleration in hiring, probably one of the more worrisome potential drags on housing, according to economists. After relatively strong numbers in the first half of the year, job growth has slowed from an average monthly pace of 225,000 in the first quarter to a measly 95,000 in recent months.
“The bottom line is, robust growth in housing will depend on job growth,” says Doug Duncan, chief economist at Fannie Mae. “Job growth will generate income growth and then you’ll start to see more households start to form and the pattern will accelerate.”
“It really is all tied to the prospect of job growth,” Duncan adds.
But even with projections for future job growth shuttered, Duncan doesn’t expect a doomsday scenario. Barring disaster in Europe or an unsavory resolution to the fiscal cliff—the expiration of Bush-era tax cuts paired with severe budget cuts agreed to as part of a debt-ceiling deal—most economists don’t anticipate a double-digit drop in property values.
…
most economists don’t anticipate a double-digit drop in property values.
Of course, they didn’t anticipate it in 2006 either…
JPMorgan sued over Bear Stearns mortgage securities
The New York Attorney General has sued JP Morgan Chase for allegedly defrauding investors who lost more than $20bn (£12bn) on mortgage-backed securities sold by Bear Stearns.
JP Morgan bought the investment bank Bear Stearns in March 2008.
It said that it would contest the allegations.
This is the first action to come out of a working group created by US President Barack Obama looking into the causes of the 2008 financial crash.
JP Morgan said: “The NYAG civil action relates to Bear Stearns, which we acquired over the course of a weekend at the behest of the US government. This complaint is entirely about historic conduct by that entity.”
http://www.bbc.co.uk/news/business-19795646
Might as well just put a match to the money.
MassHousing, the state’s affordable housing bank, provided a record-breaking $965.3 million in financing in fiscal year 2012 as thousands of homeowners flocked to its new program for low-cost, low down payment loans that don’t require mortgage insurance.
http://www.boston.com/businessupdates/2012/10/01/masshousing-lent-record-setting-million-fiscal/m5vjhVdw1mMbt66QYiIUGK/story.html?comments=all#readerComm
Ex-Chelsea housing chief allegedly diverted federal funds, drawing investigation
Former Chelsea housing chief Michael E. McLaughlin appears to have diverted millions in federal money from construction projects for low-income family and elderly housing, records show, freeing up an enormous slush fund that benefited himself, his family, and his friends…
money went to lavish salaries and travel, to poorly documented everyday expenditures such as $530,000 paid to the city of Chelsea for trash pickup, and more unusual expenses such as the $165,000 the authority paid a social service agency that hired McLaughlin’s son Matthew to oversee maintenance work at the authority.
http://www.boston.com/news/local/massachusetts/2012/10/01/chelsea-housing-chief-allegedly-diverted-federal-funds-drawing-investigation/CJgfVcLWJnNJHgmCneI63I/story.html
Home improvement craze?
Went to a weekend opening of a new Home Improvement center in Dayton and the place was so crowded that there was a line out on the highway to get to the side-road to get to the parking lot. Once inside, I could hardly move due to the crowds. The checkout line took 40 minutes. Seems the whole city was there getting supplies for their home.
Also, a new office building is going up next to my place of employment, and a sign about immenent construction on a new hotel across from that just went up. Expect construction to start soon.
Elsewhere in the 2 metros, construction on new buildings and houses just keeps ticking along…..
Are the rest of you like us? Loosing some froth from the local economy, but absolutelyl no signs of a recession ever occurring?
These are the questions I was asking yesterday in the California post; great depression type unemployment/welfare numbers, but houses are getting 10 or more offers?
I do a little writing on the craft beer industry. Over the last year or so, all the insiders are ’scratching their heads’ at the explosion in new breweries opening. This during a recession. Everyone is speculating on how it will end. But almost no one has any figures that the public can buy all the new product. There isn’t even enough shelf space for what’s being made now. Doesn’t make sense, huh?
I was listening to a tech radio show the other day. This guy calls in for advice on three iPads he wants to buy for his grand daughters, aged 2, 3 and 7. The host remarks on how generous he is, and the guy replies, ‘the stock market has been doing well recently.’
These earnings per-announcements have been building for a while:
‘All totaled, more than 80% of Q3 earnings pre-announcements have been negative, a rate that Jeff Kleintop, chief market strategist at LPL Financial, says is not only running at more than double the historic norm, but is a key factor in why he thinks we’re looking at the start of a “global profit recession” that is going to see estimates come down.’
‘Everywhere you look we’re seeing declines now for the first time in three or four years, back to a recession in profits,’ Kleintop says, pointing out the negative profit outlooks that exist for markets in Europe, Asia, and the U.S.’
‘Kleintop is also on watch for any erosion in profit margins, pointing out that “companies have already cut costs to the bone.” As he sees it, there is a limit to the amount of time that corporate America can deliver double-digit profit growth while revenues are barely moving.’
‘As he sees it, traders may be focused on policy events like the easing authorized by the Federal Reserve and ECB, but “what matters most to investors” is long-term earnings growth.’
http://finance.yahoo.com/blogs/breakout/great-disconnect-awful-earnings-vs-hot-stock-market-113011268.html
Yeaaup! Plenty of supply and add more.
Demand? Cratering.
There are a couple of new wineries here on the lake as well. At the same time we’ve had about 10% of our retail stores close in town. The lending bank put up billboards on the winery sites during construction. Our wine is mostly twice the price and half as good as imports. The party is not over until the grapers get crushed.
“The party is not over until the grapers get crushed.”
A few years ago there was global wine glut (hence Two-Buck Chucks). If this glut still exists (and it probably does)then profit margins can still be wide as long as you can convince customers to fork over the bucks.
“The lending bank put up billboards on the winery sites during construction.”
And since wine is one of those items whereby quality is mostly determined by perception and billboards and such can create perception then - presto! - there’s your demand.
Are wineries the new nail salon shops (money laundering operations)?
“Are wineries the new nail salon shops (money laundering operations)?”
Strikes me as too much work. For example of our local candle / weed store takes infinitely less effort than planting, harvesting, and fermenting grapes. Probably not as much paper cash flowing thru the system. Being a “food” even if you’re just pretending you have some sanitation and especially, inspections, that a candle store doesn’t require. You have to keep working to renew / replace the living stock like grapes and yeast and stuff, whereas the candles can sit on the shelf for 25 years untouched. Extensive daily foot traffic of deliveries and pickups is not overly shocking in the candle store strip mall, but questions will be asked about extensive shipping operations at some grape farm. Security is a huge issue… a candle shop technically only needs one person running the show, maybe two, whereas a winery probably has to have extensive illegal alien labor involvement. On one hand, they’re illegals so they’ll shut up, on the other hand there’s so many more of them. A winery takes more cash up front, and its all about the return on investment and minimizing compartmentalized losses (so the cops busted the candle shop, what are they out, a bunch of wax and jars? Whereas losing the winery could be kinda expensive loss)
Could it be a retirement plan on the assumption that the land will always go up?
Vince, I enjoyed your comparison of candle shops vs. wineries. It’s the sort of thing that keeps me coming back to the HBB.
“comparison of candle shops vs. wineries.”
Candle / weed shop vs wineries to be precise.
I thought of another huge issue. At least some people think wineries are romantic and are going to want tours, tasting parties, and hold weddings there, etc. A huge pain and drain on your time if you’re busy laundering money. On the other hand, nobody wants to tour the backroom of the “candle ‘n weed” store or get married in one of the store aisles next to the vanilla flavored candles.
You could go vertical if you corrupted the other businesses in the winery marketplace… So someone special pays you $50K for a semi full of empty crates labeled as wine crates delivered to a corrupt wholesaler, who sticks your winery label on $10K worth of bottles of imported antifreeze from China. You take your $50K and hand it to the corrupt labor contractor who is supposed to supply $50K worth of illegal labor, but since you’re not a “real” winery anyway, you don’t need $50K of labor, just need to put on a good show… But the winery itself can’t really siphon off much money as a laundering operation.
No I think you’re 1e6 times better off with the traditional money laundering operations… payday loans, chinese food, nail salons, (always found adjacent to each other as per previous HBB discussion), tanning places, pirate stores, scrapbook stores, basically everything in my local strip mall except the big box anchor stores.
When walmart came to town 20 years ago “they” said all the small retailer storefronts would be boarded up. None of the buildings are boarded up, in fact there’s three times as much floorspace open today. Then again none of them are “real” retailers anymore. I don’t think anyone expected this outcome, 20 years ago?
This is why I don’t buy into the “CRE is gonna crash because its overbuilt” stories. Try an inductive proof. OK, sure we have 3 times as many money laundering sites as 20 years ago. Fine we’ll close them all as an experiment. Now what do the crooks do to launder money by cash handling? Um… I see no way around them inevitably (re-)opening new “candle ‘n weed” stores.
Now if you did something to destroy the demand for money laundering, maybe drug legalization, then CRE would utterly crater, yes. But tweedle dee and tweedle dum both exclusively representing the same 1%ers interests are not going to do that, so hows that for a “new” conspiracy theory?
Small-craft breweries and wineries are their own reward– and they’re GREAT for barter. A case of wine for a haunch of elk or crate of lobsters? Can’t figure out what to give your friends and associates for birthdays and weddings?
If you have a good home winery/brewery, you’ve always got a great place to weekend and a seat at the feasting table. And a fine evening’s entertainment.
you’re 1e6 times better off with the traditional money laundering operations
So, how is it done? The money laundering that is. There are some businesses that have been here forever that I just.don’t.get. how they stay in operation. One is an import market and the other is a….Chinese restaurant no one goes to.
I used to live 30 miles from Mexico and saw some of this. There were these 7 tourist/T-shirt shops that never sold much, all owned by these Israelis that drove black Mercedes. These people barely spoke English (I’d go inside and they wouldn’t say anything the entire time I was there, but I would overhear them on the phone) and the T-shirts had been sitting so long they had a quarter inch of dust on them. They seemed to have zero interest in selling stuff. I suppose they could take cash in to the bank to deposit each day. Not that hard really, but I’m sure keeping law enforcement quiet was a part of it. That area is crawling with DEA, Border Patrol, you name it.
I understand the casa de cambio houses (pesos to dollars exchange companies) are the big money launderers.
These are the questions I was asking yesterday in the California post; great depression type unemployment/welfare numbers, but houses are getting 10 or more offers?
I suspect that they are getting 10 or more offers in Silicon Valley, but not in places like Vallejo. And especially not in places like Fresno, Merced or Bakersfield.
California stopped being a homogenous place a looooong time ago. Now it’s a place where you’re either a 6 figure income techie (or other white collar private sector worker), a state/muni employee, or a lucky ducky. And these groups are not distributed evenly throughout the state.
‘And especially not in places like Fresno, Merced or Bakersfield.’
I guess you, like many even here on this blog aren’t paying attention to what’s going on:
‘Realtor.com statistics show the Fresno metro area experienced the third-largest drop in listing inventory nationwide in the past year, down 43.1 percent in August. Active inventory currently stands at a 1.5 months’ supply — far less than the six-month supply many analysts see as a balance of demand from buyers and sellers. ‘I counsel buyers to be patient, and not get discouraged, that it may take extra time to find the suitable property,” said Tom Avent, broker-owner at Tom Avent Real Estate in Fresno. “I have also seen some buyers give up looking, frustrated with low inventory and losing out in multiple-offer bidding.’
‘While only the lowest-priced properties used to generate bidding wars, now homes in nearly all prices ranges attract multiple offers, according to several real estate pros. “We’re seeing multiple offers for well-priced properties all the way through $500,000,” said Charles Roberts, a director at the Denver Board of Realtors’
‘Homebuyer Cori Ward, 35, a financial and administrative services manager in Salt Lake City, decided to dive back into the housing market after selling her home four years ago…She’s made an offer on only one home so far — a multiple-bid situation that spurred her to be more aggressive than she thought she would have to be when she first started her search. Ward offered full price, but lost out to an offer of $15,000 above the asking price, all cash.’
‘Kevin Coyle, principal broker at SLC Homes, is Ward’s Realtor. He’s had 11 buyers in multiple-offer situations so far this year, and has won eight of those bidding wars. “I learned something from the last boom,” Coyle said. “When the market is going up, and it’s the beginning of a new boom, it’s OK to push a buyer to full market value if they love the house, you think it will appraise, and they’re willing to go there.”
‘Ward said Coyle has advised her to “act fast” when a home comes on the market.’
http://www.inman.com/news/2012/10/1/low-inventories-thwarting-buyers
Yeah, it’s Fresno, all of the Central Valley, Inland Empire, Utah, Arizona, Florida, do I need to go on? This while prices are still falling in most markets, or at least very weak. Unemployment is terrible. Food stamp use is off the chart. Many of these California markets have 50% of house loans underwater!
Why? That’s the question being stepped over by the media. To me it’s simple; it’s a freaking bubble! Of course it makes no sense, that’s what makes a mania a mania!
Now, what set this in motion is another question, but slowly but surely, the idea that one can get rich buying houses has been awakened in the minds of millions.
The level of appraiser fraud must be stunning at this point.
I guess you, like many even here on this blog aren’t paying attention to what’s going on:
OK, so maybe I’m wrong about Cali. I guess if you shove enough foreclosures into the shadow inventory you can pump up the market, if temporarily. And the underwater debtors only contribute to the lack of inventory as they can’t sell. I do have to wonder if the mania is everywhere in Cali. Per zillow, our old house in Escondido has not appreciated in years, and as we know, zillow tends to overestimate values.
What I observe in my little corner of the world is that the sub 200K market is showing signs of life, above that, not so much (actually, no life at all). More than one local realtor has confirmed this to me as well (instead of telling me that now is a great time to buy). In parts of Denver I understand that the price points are higher.
Another observation in my town is that inventory offered (on Realtor.com) is about 1/3 of what is was say 4 years ago.
“it’s Fresno, all of the Central Valley, Inland Empire, Utah, Arizona, Florida, do I need to go on?”
Charlotte, Vegas, Chicago, Seattle, Detroit….
and the employment forecasts are getting grim.
I guess if you shove enough foreclosures into the shadow inventory you can pump up the market, if temporarily.
Ding-ding-ding! We have a winner!
California stopped being a homogenous place a looooong time ago.
Agreed. California could probably be sliced into four to six states were it not for the lack of water and conveyance issue.
Ben is correct. From north to south, Stockton, Modesto, Merced, Fresno and Bakersfield are all still experiencing 15% plus unemployment, which would likely be 10% higher if real data were collected. Lots more pain for asset prices!
A few items:
1) I get the impression the stock market is doing a low motion pump and dump. I read an article on UHNWI’s (Ultra High Net Worth Individuals) which said they are buying equities. Rest assured they don’t actually make money till they sell. So, seeing the market going up is sure to suck in the dumb money and they’ll be abandoned at the prom like they always are.
Ref: http://www.nytimes.com/2011/06/25/your-money/25wealth.html?pagewanted=all&_r=0
2) Rolls Royce says its customer base always grows regardless of the economic conditions: (video, 4:19 minutes)
http://www.bloomberg.com/video/the-rolls-royce-phantom-2-debuts-in-hong-kong-W2McB52XQCeGsJmKjKaQlw.html
3) The Citigroup Plutonomy memo, remember that? The plutonomy is doing fine.
The reality I think is that all the money that the central banks are pumping in (to be extracted from the populations) to the financial system are lining the pockets of the UHNWIs.
People don’t revolt until things get REALLY bad. Like no food, shelter, medical care. Technology has perhaps gotten society up to a level where the average person can exist without physical discomfort, so skimming by the central banks and the UHNWIs will prompt ire from the chattering classes but no action from the population at large.
Perhaps.
California doesn’t have enough housing units. I’ve tried to say this a few ways, I’ll try one more.
Before, I’ve used housing units per person as the metric. How about housing units per job?
This data is as of Census 2010 (which I believe is July 2010). Jobs data is NOT seasonally adjusted at July 2010 as well from the BLS.
AZ: 2.84 million housing units, 2.322 million jobs (0.82 jobs per housing unit)
FL: 9.0 million housing units, 7.080 million jobs (0.79 jobs per housing unit)
NV: 1.173 million housing units, 1.116 million jobs (0.95 jobs per housing unit)
CA: 13.68 million housing units, 13.837 million jobs (1.01 jobs per housing unit)
Of course, people will say “there need to be more jobs per home in CA because prices are so high”. However, there also needs to be a counterbalance for retirees who can stay in their homes very inexpensively due to Prop 13. And after the crash, there are lots of people who lost their jobs and/or homes and had to figure out how to make it all work on one income–that adjustment as been made.
When a new job is created and household formed in CA, it adds pressure to the housing situation (even if that person rents a studio apartment). There is no slack in the system.
And yes, I know people will also say that Florida has more retirees.
Percent of folks over 65 in each of the states as of 2010:
FL: 17.8%
AZ: 13.9%
NV: 12.3%
CA: 11.5%
So, more retirees could make up part of the difference (but not all the difference).
My husband and I went to Nordstrom on Saturday to have his nice dress shoes resoled. It was a freaking ZOO! People were just piling in from every which way, loaded down with shopping bags and buying, buying, buying! It was like Christmas!
No, we don’t have that here in Monterey Co.. We have a lot of infra road projects going on all over. All major works. Best of all they are in areas that will make my travels easier.
My brother the electrician has gotten more side jobs last month, then all year…and this month he booked solid on weekends, looks like people are throwing in the towel they are resigned to missing the bubble or got greedy.
So they are enclosing and insulating back porches, family rooms in the basement….he’s noticed people in small ranches 3/1 1000 sq ft garage under the house, throwing out all their overstuffed furniture and getting futons,smaller kitchen tables trying to make the best use of the space they have
Plus almost everyone is getting new double pane windows….looks like they are hunkering down for the future of possibly never moving again.
looks like they are hunkering down for the future of possibly never moving again ??
And these ridiculously low fixed rate loans could play a big part in peoples decision to make a move in the future….I say the remodeling industry could be a huge benefactor….Buy Lowes & Home Depot Stock….
Pete keeps putting his hand on the stove top .
Agency officials said the increase is largely due the innovative program that helped some 2,422 borrowers qualify for $588.8 million in loans since January. The program is meant to help eligible low-to-middle income borrowers refinance or purchase homes with a downpayment of as little as 3 percent and still avoid paying mortgage insurance, which can add more than $1,000 to a borrower’s annual costs.
2006
“‘We’ve created a monster,’ said Peter Milewski, director of the mortgage insurance fund for MassHousing. ‘Credit is now readily available, but at what cost and what consequence?’”
http://thehousingbubbleblog.com/?m=20061112
2012
Peter Milewski, director of the MassHousing mortgage insurance fund, said the bank launched the program with mortgage giant Fannie Mae to keep up with an increasing number of loan applications and “limited availability” of mortgage insurance. To cover additional risks, homeowners who receive the loans must pay a slightly higher interest rate.
Turns out the monster is friendly.
JP Morgan sued over Bear Stearns mortgage securities
JPMorgan building The New York Attorney General wants JPMorgan to pay damages
BBCNews
http://www.bbc.co.uk/news/business-19795646
The New York Attorney General has sued JP Morgan Chase for allegedly defrauding investors who lost more than $20bn (£12bn) on mortgage-backed securities sold by Bear Stearns.
JP Morgan bought the investment bank Bear Stearns in March 2008.
It said that it would contest the allegations.
This is the first action to come out of a working group created by US President Barack Obama looking into the causes of the 2008 financial crash.
JP Morgan said: “The NYAG civil action relates to Bear Stearns, which we acquired over the course of a weekend at the behest of the US government. This complaint is entirely about historic conduct by that entity.”
7 years after the actual knowledge of “GOOD BANK /BAD BANK “,which was a term that Hank Paulson used to describe the
bad paper that needed to be dumped by major Investment banks ,along with their counter bets like credit default swaps ,they are now saying that Bear Stearns was a naughty Bad Bank . As if the whole group wan’t a ‘Bad Bank” and this buying of “BAD BANKS “.with the help of the taxpayers ,wasn’t a attempt to cover up the the biggest crime spree in financial history .
As if all the Banks weren’t marketing that junk paper ,with Countrywide Funding being one of the others that would be at the top of the list of bad paper fraud with default rates that became unheard of because of the fraud .
I’m sorry but in most peoples book you can’t say that something is something that it isn’t just to sell it .That Industry had become so corrupt and non regulated that it was able to exhault prices of real estate by widespread fraud that was from the front lines up to the top .It was as if lending principals didn’t matter anymore ,rating securities based on true risk didn’t matter anymore ,and business
was just a casino of who gets stuck with the bad shit when TSHTF .Why would AIG have to pay off on that fraud should be the first question ( or better yet ,why should the tax payers pay on that fraud ) . 13 billion in credit default pay offs went to Goldmans
of course .
You can point out that Bear Stearns was one of the worse ,along with Countrywide Funding ,but all the Money Changers were playing the same game . The choice was to bail out the Culprits
along with a feeble attempt to try to re-inflate the bubble prices
that didn’t work ,or dump the junk on the taxpayers .
All JP Morgan has to say is that they were doing Gods work and helped out the Government and bought the good part of that Entity , while the rest of that junk was dumped somewhere .
Turnabout is fair play?
Oregon farmer eaten by his pigs
Hogs rooting the ground for food Pigs are omnivorous
BBCNews
Authorities are investigating how a farmer in the US state of Oregon was devoured by his pigs.
Terry Vance Garner, 70, went to feed his animals last Wednesday on his farm by the coast, but never returned.
His dentures and pieces of his body were found by a family member in the pig enclosure, but the rest of his remains had been consumed.
The Coos County district attorney’s office said that one of the animals had previously been aggressive with Garner.
Aporkalypse!
Zombie Swine
UNK–
Snort. (urp)
Bricktop was right!
Ribs for dinner tonite?
“Ribs for dinner tonite?”
How about Chinese?
By Christine Roberts / NEW YORK DAILY NEWS
Monday, October 1, 2012, 7:35 PM
A Chinese restaurant in Kentucky is closed for business after officials found road-kill in its kitchen.
Health inspectors shuttered the Red Flower Chinese Restaurant in Williamsburg after customers saw two employees wheel in a dead deer stuffed in a trash can, WYMT-TV reported.
“It was really disturbing. There was actually a blood trail that they were mopping up behind the garbage can,” customer Katie Hopkins told the local television station.
“There was like a tail, and like a foot and leg sticking out of the garbage can and they wheeled it straight back into the kitchen.”
“They said they didn’t know that they weren’t allowed to,” Lawson told WYMT, adding that he’s concerned that the owner may have committed a similar health violation before.
The eatery, however, won’t be forced to close its doors for good.
Lawson said that it can reopen if they pass an inspection proving that they completely cleaned and disinfected the facilities, WYMT reported.
http://www.nydailynews.com/news/national/closed-roadkill-deer-found-chinese-restaurant-article-1.1172323 -
Again I ask, why didn’t they use the back door? That should be a restaurant rule: When wheeling in a dead carcass, always use the BACK DOOR. At least during business hours.
Again I ask, why didn’t they use the back door?
When they closed down the Chinese place here in Mammoth the restaurant was on the 3rd floor. They did take the deer in the back door but it was spotted riding up the elevator.
Again I ask, why didn’t they use the back door? That should be a restaurant rule: When wheeling in a dead carcass, always use the BACK DOOR. At least during business hours.
I’m having a truly lousy morning, alpha-sloth. But thanks for giving me a laugh. I could really use one.
They don`t show the Chiese guy chasing the deer.
Skateboarder slams into deer at 65km/h - YouTube
http://www.youtube.com/watch?v=dnTYCKMZDUY - 149k
Chinese food is full of DEAD ANIMALS!
I had dead animal for dinner last night. It was good, I think I’ll do it again tonight.
The live animals keep crawling off the table.
I am going to have a double patty dead animal sandwich with a few strips of Oregon farmer on it for lunch today at 5 Guys. Unless one of the 5 Guys was an Oregon farmer in wich case it would now be 4 Guys.
But if I see anyone dragging a cow into the kitchen with it`s hoof sticking out of a bloody garbage can I`ll be finding a new place to get my dead animal sandwiches.
Why? At least you know it’s fairly fresh.
I like my dead animals de-hoofed before they hit the resturaunt.
My most memorable (and delicious) Christmas dinner was a road-kill peacock I wrestled (well, intimidated away) from a coyote in a snowstorm.
The kitchen at the Cristiana Inn up in Mammoth used to prepare your fresh-caught fish/deer/marmot for your supper. And I guarantee you some FishnGame warden ate venison for a month after they raided the Chinese place.
“My most memorable (and delicious) Christmas dinner was a road-kill peacock I wrestled (well, intimidated away) from a coyote in a snowstorm.”
I saw a picture of a billboard in a magazine one time advertising the annual banquet and awards ceremony for a fish and game club in Saskatchewan (Canada). It read “There is room here for all god’s creatures….. right next to the mashed potatoes”
Are those perhaps the same pigs who were abandoned in the Oregon foreclosure home a few years back?
So uh… if I eat something that ate a person, that doesn’t make a cannibal. Right?
Hey look, I`m in the local news.
Posted: 5:00 p.m. Monday, Oct. 1, 2012
Palm Beach County ruling: Foreclosure law firm wrong to charge for paperwork served to ‘unknowns’
By Kimberly Miller
Palm Beach Post Staff Writer
A foreclosure law firm violated state law by charging homeowners for summonses served on “John and Jane Doe” and other unknown parties who may have claims on the property, a Palm Beach County judge has ruled.
It is common practice for law firms to serve foreclosure paperwork on homeowners, as well as separate summonses for “unknown tenant,” or “unknown spouse,” even if the borrower is single and is not renting out the property. The borrower is usually billed for the additional summonses at about $45 each.
Law firms have said the practice is necessary because they need to sue every person or entity who may have a claim on the home in order to ensure clear title at the end of the suit.
But Circuit Judge Lucy Chernow Brown said in a ruling last week there is no legal basis or justification for issuing a summons made out to an unknown party, and that attempts to collect payment on those summonses violates the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act.
“Further, the court finds that the defendants, who are a law firm and its managing partner, have knowledge of the law and have knowledge that they are attempting to collect a debt that is not legitimate,” the order says.
The ruling was made in the 2009 class action lawsuit of Loxahatchee resident Rory Hewitt vs. the Law Offices of David J. Stern. Once the largest so-called “foreclosure mill” in Florida, Stern’s firm shut down last year after losing clients following the robo-signing scandal and an investigation by the Florida attorney general’s office.
Stern attorney Jeff Tew said he plans to appeal the order. Brown’s ruling conflicts with an earlier ruling by Palm Beach County Circuit Judge Thomas Barkdull in a similar class action against Stern, in which he held the summons fees were reasonable.
Although the establishment of the class action is under appeal and last week’s ruling is also expected to be appealed, attorneys representing the 1,900 homeowners in the Hewitt class action are hopeful this will ultimately have a statewide impact.
Brown also issued orders in the case against charging for mortgage payments not yet owed, attorneys’ fees for work not performed, and excessive title search fees.
“This is the first time we’re aware of in Florida that a court has ever found that it’s improper to charge borrowers for this service on unknowns,” said attorney Kirk Friedland, who is co-counsel on the case with attorney Louis Silber.
Hundreds of thousands of Florida homeowners have faced foreclosure since the real estate crash.
“If, on average, $90 was being charged for service of process, well, do the math,” Friedland said.
Silber said another significant result of the Hewitt case is that Brown made her ruling using the Florida Deceptive and Unfair Trade Practices Act, which the Florida Attorney General’s office was told by the 4th District Court of Appeal couldn’t be used to investigate improper foreclosure practices by law firms.
“I’m still stunned as to why the attorney general’s office just gave up,” Silber said. “Their approach was all wrong. They could have looked at the firm as a debt collector.”
So, you’re Jane Doe?
It’s starting to rain again; it’s—the rain has slacked up a little bit. The sub-prime loans of the market are just holding it just, just enough to keep it from — It burst into flames! Get this, Charlie! Get this, Charlie! It’s fire—and it’s crashing! It’s crashing terrible! Oh, my, get out of the way, please! It’s burning and bursting into flames, and the—and it’s falling on HELOCs and all the folks agree that this is terrible, this is the worst of the worst catastrophes in the world. [Indecipherable word(s)] It’s–it’s–it’s the flames, [indecipherable, possibly the word "bailout"] oh, four- or five-programs are going to try and it … it’s a terrific crash, ladies and gentlemen. It’s smoke, and it’s flames now … and the loans are crashing to the ground, not quite to the Prime loans. Oh, the humanity and all the Homeowners screaming around here. I told you, I can’t even talk to people whose friends are in there. Ah! It’s–it’s–it’s–it’s … o–ohhh! I–I can’t talk, ladies and gentlemen. Honest, it’s just laying there, a mass of smoking wreckage. Ah! And everybody can hardly breathe and talk, and the screaming. Lady, I–I’m sorry. Honest: I–I can hardly breathe. I–I’m going to step into a rental where I cannot see it. Charlie, that’s terrible. Ah, ah—I can’t. I, listen, folks, I–I’m gonna have to stop for a minute because I’ve lost my voice. This is the worst thing I’ve ever witnessed
Posted: 9:16 a.m. Tuesday, Oct. 2, 2012
Homeland Security says Border Patrol agent killed
The Associated Press
WASHINGTON —
A U.S. Border Patrol agent was killed and another wounded in a shooting near the U.S.-Mexico border in Arizona, the Department of Homeland Security said Tuesday.
The agents were shot while patrolling in Naco, Ariz., at about 1:50 a.m. MST Tuesday, according to the Border Patrol.
The wounded agent was airlifted to a hospital after being shot in the ankle and buttocks, according to Homeland Security.
Authorities have not identified the agents who were assigned to the Naco, Ariz., station about 100 miles southeast of Tucson.
The last U.S. Border Patrol agent fatally shot on duty was Brian Terry, who was killed in a shootout with Mexican bandits near the border in December 2010. The shooting was later linked to the Fast and Furious gun smuggling operation.
The border patrol station in Naco was recently named after Terry.
Copyright The Associated Press
Mexican “bandits”
Interesting word choice from the AP. They’re not criminals, drug cartel gangsters, or terrorists, they are bandits. Just kids, having a lark. The shooting surely was an accident
I dunno “bandits” doesn’t sound like kids - more like Pancho Villa. Like it’s a tradition for Mexico to have bandits, nothing to see here etc.
Those bandits are just a bunch of horse thieves and card cheats, they have nothing to do with the estimated 55,000 deaths related to Mexico’s drug war
You got it.
Just give them Fritos, it calms them down.
With no mission remaining in Afghanistan and now we can’t tell the enemy from the friendlies its time to give up.
We could practice on our southern border, see if we can at least require peace and order there?
+1 CT!
Posted: 9:46 a.m. Tuesday, Oct. 2, 2012
Stocks higher after improved housing data
The Associated Press
NEW YORK —
Stocks climbed Tuesday on Wall Street after a measure of American home prices posted the largest gain in more than six years, the latest data to indicate an improving housing market.
Like I said, the “ghetto” is not a place, its a person
California: Jury Backs Death Penalty for Man Convicted in Deadly Wildfire
Prosecutors say Mr. Fowler set the fire out of rage after he was thrown out of a house where his family was staying.
http://www.nytimes.com/2012/09/29/us/california-jury-backs-death-penalty-for-man-convicted-in-deadly-wildfire.html?src=recg&_r=0
I’ve seen lots of crimes downgraded in court by highly paid lawyers, but the few rare arson cases were given the maximum punishment each time.
You really have to take wonder of the motivation of those who were here on this blog from the very beginning, go out and buy a house and then return here saying they “got a bargain” and “now is the time to buy”.
The reality is they paid a massively inflated amount for what is always a depreciating asset….. I can only guess that their “now is the time buy” statement is a means to quench the fear they experience knowing they’ll never recover financially.
Good post, the first I have read from you in memory.
Go take a rolling donut bud. I couldn’t care less what you think.
Go take a rolling donut bud. I couldn’t care less what you think.
Why would you post on a public blog if you don’t care what people think about your posts?
Do me a favor, if you ever come to Mammoth Lakes or any where close let me know. I would very much like to meat you in person.
meat you in person
That sounds a little more *intimate* than meating over Skype
Why would you post on a public blog if you don’t care what people think about your posts?
“People”? I don’t care what YOU think. Here it is again;
I couldn’t care less what you think.
Hear me now?
My brother is heading up to June lake this weekend Tango…I was hoping to get to the lower Owen before winter sets in but I just have to many things to do…
Why don’t you include a list of people that are not welcome to respond to your posts? That would save you the trouble of telling us to take a flying ef.
Better yet ask Ben to keep a list published of who is or who is not welcome to talk to you.
“Always” a depreciating asset? Or just since 2006?
always
My brother is heading up to June lake this weekend Tango…I was hoping to get to the lower Owen before winter sets in but I just have to many things to do…
June is another interesting housing story. Mono County just gifted June Lake $100,000 to mitigate impact of their ski area closing this winter.
How much do values change in a neighborhood when its subsidized ski area closes?
I think he means that while it’s “value” may rise over time, a home physically depreciates without expensive maintenance.
it’s = its.
Oct. 2, 2012, 12:04 a.m. EDT
Romney, Obama both stock-market killers
Commentary: Both lack vision and courage, Pimco CEO says
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. — “Like an earthquake rocking a house, the 2008 global financial crisis exposed a shaky new foundation underpinning Western economies,” warns Pimco’s CEO Mohamed El-Erian, in the latest Foreign Policy journal.
Unemployment and inequality has “heaped social unrest atop financial turmoil,” spreading uncertainty, volatility and lower market returns that Pimco labeled the New Normal a few years ago.
Flash forward: “Something has changed” as this economic crisis has gone on far too long without a political solution: Instability has morphed into “vicious feedback loops that turned bad economics into bad politics” that’s now recycling, converting “bad politics into even worse economics, further threatening an already tenuous economic future … welcome to the New New Normal.”
The core problem? Washington’s “inability to deal with the aftermath of a huge wave of excessive debt creation and credit entitlement gone crazy … But where politicians … act ponderously, markets don’t. They move at much faster speeds … so as the New Normal morphs into the New New Normal, the economic and financial system risks breakages that the political system will be increasingly incapable of mending rapidly enough.”
Yes, America is sinking into this toxic New, New Normal hell with more and “more political dysfunction and greater sluggishness in economic growth, unacceptably high youth unemployment and long-term joblessness, redoubled debt and deficit concerns, and worsening inequalities between rich and poor.” Normal? No, Abnormal.
…
What’s the saying? “There is no escape from the consequences of a debt bubble”?
Oct. 1, 2012, 5:11 a.m. EDT
China’s workers are revolting
By Tom Orlik
China’s communists have to stop discriminating against the workers.
A migrant worker tribe that swelled from 25 million in 1990 to 158 million in 2011 has been a key contributor to China’s rapid growth. The move from the farm to the factory expanded the workforce, increased productivity, and super-charged China’s export competitiveness.
The fear is that after decades of migration, the store of rural workers is close to exhausted. Wages increased 14.8% in the year to June, despite a sharp slowdown in the export and construction sectors where migrants work. That certainly suggests a dearth of workers.
The reality though, is that it is policy not population that is the main cause of the shortage.
Xin Meng, an expert on China’s labor market at Australian National University, calculates that most rural migrants spend only seven years away from the farm. They arrive in the city in their late teens and return to the country aged around 25 to raise children. Of the 380 million-strong rural population aged 16-40, just 100 million are working in the cities.
To see why, look no further than discriminatory policies that deny rural migrants and their families access to the benefits of city life. Ms. Xin’s survey work shows that in 2011, 13% of migrant workers had unemployment insurance, and 20% health coverage, compared with 66% and 87% for urban residents. The destruction of schools for migrant children in Beijing in 2011 shows how welcome migrants’ families are in China’s major cities.
When the lower supply and higher expectations of migrant workers runs up against management intransigence on pay and conditions, the results can be explosive. Riots at a Foxconn factory last month, for instance, may be symptomatic of a deeper malaise.
…
There was a story last night on NPR about how the factories are now going to the provinces to follow the workers.
Or maybe the migrants are rooted to the land they left and they only left the land to make some bucks (or rather, yen) and then after they made the yen they returned to where their heart always was which is the place they originally left.
Lot of migrants throughout the world do this.
I read in one link that there were over 150,000 revolts (protests, uprisings?) in 2011 alone. Can’t recall the link specifically - it was a while ago - but couple this with massive, questionable muni debt, 70% of the Chinese GDP driven by RE, empty cities, hundreds of milions of displaced, dissatified workers,…. and I think you have a recipe for trouble.
Should be exciting.
China’s communists have to stop discriminating against the workers.
Wait a minute…I thought communists WERE the workers?
Randall: do you want to be leader of this gang?
Strutter: No, we agreed: No leader!
Randall: Right. So shut up and do as I say.
- Time Bandits
Some animals are more equal than others.
When the lower supply and higher expectations of migrant workers runs up against management intransigence on pay and conditions, the results can be explosive. Riots at a Foxconn factory last month, for instance, may be symptomatic of a deeper malaise.
In the past, I’ve said that there’s massive social unrest in China. We haven’t heard much about it in the Western media, but it’s definitely happening.
Now the problem is getting too big to ignore. And, as we all know, problems that are allowed to fester have a way of doing that.
I find that the moves that were made in 2006 and 2007 and 2008 by the Power brokers at the time where simply a attempt to obstruct Justice and bail out Fraudulent Entities and attempt to reinflate a false housing bubble that was created by those very entities .
Hank Paulson was actually insulting with his talk about GOOD BANK /BAD BANK . What he was saying was FRAUDULENT BANK /NON FRAUDULENT BANK .
The idea that you overlook fraud because these Entities would of
been liable in the final analysis was the game plan . It was a lending Ponzi scheme ,based on fraud ,and by all rights if the rule of law was followed as well as Contract Law they should of failed as well as been restructured along with the casino games of Wall Street .
We found out later all the bad things that were done during the mania where fines were charged that were peanuts compared to the damage . They didn’t even transfer title in accordance with the law for God sakes .
The TBTF became to big to prosecute . So the Government and the taxpayers have been at their mercy since the decisions were made to
prop up and bail out the corrupted .
I can’t believe that there isn’t a general notion that all loans written between 2003 and 2008 aren’t the byproduct of fraud ,therefore voidable under the law . If mass fraud raised the market by 200% ,than it was a false raising of value by fraudulent lending . Therefore innocent parties should be made whole again . However ,they decided to make the Culprits whole again .Innocent parties would not be people who lied on their loan applications to get in on the mania . In truth ,the property taxes that were raised on
innocent parties were false also ,and there were some people that had to sell because they could no longer afford the rise in taxes that fast .
Because many tax structures are based on real estate values ,it makes it really a unforgivable sin to mess with real estate by faulty lending .
But ,this job loss situation with lower wages overall ,while prices are rising isn’t going to work IMHO .
Talking about harm in general . Look at all the contracts that were
made under the illusion of the false real estate values and the property taxes that would be collected . Look at all the employment contracts that were written under the notion of high property taxes being collected that can’t be collected now that
is creating short falls on obligations . Look at the rise in medical costs in the last 12 years that hasn’t been adjusted down in light of a adjustment on prices and income .
The housing lending scam affected many areas of the economy in terms of pricing that is no longer valid .
“Because many tax structures are based on real estate values ,it makes it really a unforgivable sin to mess with real estate by faulty lending .”
Very perceptive.
“Governments are instituted among Men, deriving their just powers from the consent of the governed” - U.S. Declaration of Independence.
How far have we come that the people are now looked at as simply a revenue stream to the state???
John Locke founded these ideals. Before that the power of the state came from God. If you read the early U.S. charters for the U.S. colonies and cities they were something along the lines of “to further the will of God.” Citizens were at the mercy of authority. And authority was arbitrary. Bacon argued on laws based on reason and science and not on the basis of authority. It wasn’t until Roger Williams was exiled from Massachusetts and went on to form The Providence Colony that John Locke’s and Bascon’s ideas were finally written into a founding charter and Williams formed the idea of the foundation of a civil state based upon the consent of the people and separate from religious authority that things changed. Locke, Bacon and Williams became the inspiration for Jefferson and Madison to frame the Constitution and The Bill of Rights.
Now we’re coming to a complete circle - we are tolerated and looked upon as merely resources used to support the authority and perpetuation of the state.
So true what you write SFBA.
“The housing lending scam affected many areas of the economy in terms of pricing that is no longer valid .”
Sam Zell made the exact same claim on CNBC SquawkBox.
Prices across the economy are being held up and need to clear.
“It was a lending Ponzi scheme ,based on fraud”
And the longer it went on ( with no penalties or law enforcement…) the more people join in to participate in the fraud.
It was a financial riot, complete with looting, arson…
Mammoth Lakes settles municipal bankruptcy out of fear of consequences.
Background: Population: 8,000; Judgement to developer $42M
The judge sent the town and developer back to mediation and a deal was struck to pay the developer $29.5M plus interest over 23 years.
The deal was struck in response to threats that the judge would through the case out, or the developer would get calPers involved and calPers has deep pockets and their opposition could break the town.
So we made a deal in secret and town staff recommends cutting 1/2 of our police department plus various other cuts to fund the payments to the developer.
There are interesting suggestions from the townspeople being offered and one of them is to fire the police and hire new non-union police. I think we should take it a step farther and fire the whole town staff and replace them with new hires who’s costs are in line with mean income in this area. Currently much of the staff costs are over 500% of the town or counties mean income.
I don’t have the writing skills that some anti-govt-union proponents here have. Can one of your offer some language that would suggest that we fire our union govt staff in its entirety and replace them with new hires who’s costs are in line with the population?
Thanks
Offer to ship into Mammoth some of those ghetto-persons Spook is always posting about. That might get their attention.
Trust me Combo, they’re already there. They will “activate” when the money runs out.
Think “sleeper ghettos”
Charlie,
How about:
“I suggest we disband our entire city government and subcontract out their jobs to Bishop, or better yet Bridgeport for half the cost we’re paying now because…we’re out of money. Furthermore I suggest we halve the pensions of those whose retirements we are now paying and let their unions worry about them because …we’re out of money.”
If Intrawest wants to keep the ski area going, let them maintain the roads, amenities, infrastructure and town facilities for the tourist base because …we’re out of money.
Corporate outlets need to talk to their parent companies if they want to stay in business, because…we’re out of money.
Or better yet, arrest the city manager for non-feasance and tell the developers get it from him because “we’re out of money”.
If each private citizen in Mammoth Lakes declares bankruptcy, what could the developers do to collect from you jointly? Or you could just go with the traditional solution and hire a gun from Tonopah to “disappear” them. It’s definitely no country for old men….
Monday, October 1, 2012
Debt Jumped $1.2759T in FY 2012; Up $10,855 Per Household in Just 12 Months; Beats 2011
According to the U.S. Treasury, the debt of the U.S. government climbed by a total of $1,275,901,078,828.74 in fiscal 2012, which ended yesterday.
That means the federal government borrowed approximately an additional $10,855 for each household in the United States just over the past twelve months.
The total debt of the United States now equals approximately $136,690 per household.
http://www.conservativehappenings.com/2012/10/debt-jumped-12759t-in-fy-2012-up-10855.html -
But uncle Cheney says deficits don’t matter!
July 3, 2008: Obama says adding $4 trillion to debt is unpatriotic …
http://www.youtube.com/watch?v=zUPZJDBJI84 - 171k -
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 213k -
California has over $350 billion in debt according to a recent audit including off balance sheet debts and future promised benefits. So over $10K per person and over $30K per household.
We continue to borrow money to buy political constituents. Starting January 1st we’ll have a top marginal rate in California of 59.6%. That’s not covering it even.
//Sarcasm on//
Clearly the rich here are not paying their share. Let’s make it 90%!
Eat the Rich!
Let the transfer payments continue!
Bullish!
This can only end well.
//Sarcasm off//
State of California Debt Clock - US National Debt Clock
http://www.usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html - 19k -
Starting January 1st we’ll have a top marginal rate in California of 59.6% ??
Where did you get that number ??
California Debt at 380 billion if you include all obligations:
http://sbaction.org/sbAction/WallofDebt?1=1
Other studies put it much higher at over $600 billion:
http://newyorkcollectionagency.net/report-california-state-debt-twice-that-of-new-yorks-more-than-greece/
SCDave,
I posted this a couple days ago:
Comment by SF Bay Area
2012-09-30 11:56:40
Income tax rate for CA for 2013 59.6%:
39.5% FedEx + 16.3% CA State + 3.8% Obamacare = 59.6% top tax rate in California for 2013.
So we’ll get to keep 40.4% of our income! Yippee!
How can that be right?
39.5% is the top federal bracket assuming the Bush tax cuts on the “rich” expire January 1 2013.
The 3.8% Obamacare tax kicks in on January 1 2013.
The state of CA has two income tax increases on the ballot that look like they are easily going to pass according to the latest polls:
CA Proposition 30 - raised the top rate from 10.3% to 13.3%
If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).
CA Proposition 38 would add another 3% on top of that - for a total top CA bracket of 16.3% Wow!
And there you have it -a 59.6% top tax rate in California for 2013. That leaves 40.4% for the tax payer to keep.
That’s gotta be bullish for Coastal California Real Estate, especially the $1M+ segment.
Looks like I’ve got two choices:
1) leave the state
or
2) go Galt in-state, quit my business and just living off the old savings.
After I posted that I heard a number over 60% for the top rate for Californians starting next year on Bob Brinke’sr Sunday AM Radio show. So possibly I’m missing up to a percentage point more.
Pollsters and political experts are starting to all but write off Proposition 38, the income tax hike measure on the November ballot, putting the focus on whether the campaign’s wealthy backer will now set her sights on defeating Gov. Jerry Brown’s competing measure.
A USC Dornsife/Los Angeles Times poll released Friday shows that just 34 percent of registered voters plan to vote for Proposition 38, while 52 percent oppose it. Analysts said they can’t remember a state measure coming back from that large a deficit with only several weeks to go before an election — particularly one asking most Californians to raise their own taxes.
“You never say never, especially in such a volatile political environment,” said poll director Dan Schnur, director of USC’s Unruh Institute of Politics. “But there’s no historical precedent for an initiative making up this much ground in weeks before an election.”
With the future of California schools at stake and tens of millions of dollars in campaign cash in play, the poll results are sure to ramp up a rivalry between those touting the two high-profile tax measures on the Nov. 6 ballot.
Funded by civil rights attorney Molly Munger, Proposition 38 would increase income taxes by 0.4 to 2.2 percent, depending on how much you make, to fund K-12 and early-childhood education.
Everyone in California, from students to CEO’s, should know about Proposition 30 on the November 2012 Ballot. If passed, Prop 30 will increase sales tax by 0.25% and incrementally increase income tax on households earning more than $250,000. If not passed, a multi-billion dollar cut in state funding to education at all levels will be triggered automatically.
Looks like I’ve got two choices:
1) leave the state
or
2) go Galt in-state, quit my business and just living off the old savings.
3) make less than 250K by slowing your business down
Thanks for the clarification SF Bay Area…
“3) make less than 250K by slowing your business down”
Unanticipated consequences…
Time to start firing some California workers from my business. I doubt I’ll be the only one.
Interesting how the voters seem to be favoring the proposition that taxes the other guy and not themselves.
Brown’s Prop 30 kicks in at income over $250K. Munger’s Prop 38 starts to kick in at around income of $7K. (Although both include yet another sales tax increase). Brown’s look like it’ll pass by a large margin.
We have 10 propositions to vote on most of them very complicated. I could mail in my vote. But I like the entertainment value of going to the polling place. Every time I go to vote I see scores of people who are clearly reading the propositions for the first time and have no clue what they are about. You can see the moment of discovery dawn on their brow. And they vote yes to every single one of them.
And the transfer payments continue.
I’m out if these pass. 16.3% just to the state is too much. I can move to Nevada and pay zero. There are countries that tax less than 16% and manage to support a Navy and free health care. This is just for local services!
only one of the 2 measures can go into law. the one with the most votes if they both pass
Thats what I read http://vig.cdn.sos.ca.gov/2012/general/pdf/30-title-summ-analysis.pdf
This money printing. I have a feeling they’re missing something. Getting something for nothing just by printing currency. I’m reminded of Irving Fischer’s “stocks have reached a permanently high plateau” regarding their missing of some important point.
It’s the “Getting something for nothing” indicator that’s bothering me. The TINSTAAFL issue.
One cannot get something for nothing in physics. I have a strong suspicion one cannot get something for nothing in economics either.
Money printing violates TINSTAAFL in my opinion.
The retort could be is that they’re not printing money to increase wealth, rather they’re printing to maintain the status quo - the imploding debt. But what’s the difference? They’re still trying to increase actual wealth from where the economic “ocean” says it should be.
So the reason the printing press fails in Zimbabwe is because they got too greedy and currency logical construct encapsulating the Zimbabwe dollar dissipated? But we’re much more sophisticated here, have much greater public acceptance of the dollar and wouldn’t do something like that.
What gives currency its value? Scarcity. Public acceptance and endorsement. Public acceptance and endorsement comes from stable prices.
But… money printing is letting the camel’s nose in the tent. Giving the Fed a dual mandate, specifically the full employment mandate, is what allows the camel’s nose in the tent. And it’s particularly dangerous with their magic balance sheet. Congress should have an industrial policy which deals with full employment. But they are derelict in their duty. And the Fed steps in, sees that more currency = perception of more wealth, and it’s so easy to print money. Industrial policy is hard and time-consuming. And it takes away from precious fund-raising and shmoozing time.
TINSTAAFL violation.
Damn the (well known) unintended consequences, full speed ahead!
My late HS physics teacher use to tell us that TINSTAAFL pretty much on a daily basis.
As my partner says, once inflation EXPECTATIONS tick up, we could all be screwed…
If the Moneychangers printed 2 trillion and stored it in underground bunkers, is it really currency dilution?
Not until it gets spent. So who is getting it and when will they spend it?
Velocity of money is at a historic low…wait until it picks up…
“…wait until it picks up…”
LMAO….. you can’t resist pimping.
What we should wait for is the next big leap in household debt, say to 200% of household income.
Printing $2T of money and putting it in an underground bunker is essentially what happened when the printing coincided with decreasing monetary velocity.
When monetary velocity picks up, it’s equivalent to that money coming out of the bunker.
Sure it is.
You go girl.
When monetary velocity picks up, it’s equivalent to that money coming out of the bunker.
———————-
Can you cancel out the inflationary effects of 2 trillion in printed money by bringing in a gank of poor Mexicans who will work for less?
You CAN actually by bringing in an army of robots. Soon to actually come to a lot of professions near you.
Automation is gonna rock your world. In a very bad sorta way.
I don’t think you understand fully what the consequences of Moore’s Law actually are.
Incomes are going lower, a lot lower than most can imagine. I shouldn’t be surprised if the median salary fell 30% or even more. (For time frames, let’s just say about 7-10 years.)
What that does to housing prices is an obvious corollary.
Since we’re doing predictions, teachers (both school and college) are going to be eliminated. At least as we know it. Online is gonna become “routine”.
There will be no need of drivers either. Congress will probably try and delay it a bit but it’s inevitable. Airline pilots are an endangered species. (Technically co-pilots not the pilots themselves but that’s still a 50% loss.)
Routine nursing is probably dead too (Shots, scans, etc.)
I’m sure I can think of more. Coming to a town near you in less than 10 years.
Incomes are going lower, a lot lower than most can imagine. I shouldn’t be surprised if the median salary fell 30% or even more. (For time frames, let’s just say about 7-10 years.)
What that does to housing prices is an obvious corollary.
Why is this so difficult for people to wrap their minds around?
Because they are st00pid? Deluded? Don’t understand the corollaries of automation?
Ironically, I was being conservative. Didn’t want to scare off the sheep who can’t seen to connect the dots.
I see a lot of pain.
Particularly over student loans. That one is gonna be truly EPIC. One for the ages.
A new Abraham Lincoln shall be needed for that one. History rhymes but does not repeat?
FIRE supression.
There COULD be unexpected force multipliers which is sort of a free lunch. In physics, there are levers. An amazing thing really, where I can press down with a little bit of force, and the lever multiplies it dramatically, resulting in the ability to lift heavy weights. Or hydraulic systems, where I can push down with a little bit of force and the fluid dramatically magnifies it.
But, no free lunch. No perpetual motion machines.
In economics, I think the difference is knowing what is a free lunch and what is a force multiplier.
Question for LL or renter in CA: LL wants to fumigate for termites (tent property for three days) because he is trying to push a sale through. Does the renter have to allow this while renting? Any recourse as having the LL pay for a motel during the process? After the renter has leased for over a yar does the LL have to give a written 60 day notice? Does the owner, current LL have to return security deposit or the new owner?
Not legal advise here but I will try and help you on this one;
LL wants to fumigate for termites (tent property for three days) because he is trying to push a sale through. Does the renter have to allow this while renting ??
Probably not…Renter has paid for “quiet enjoyment” of his unit and is in possession….
Any recourse as having the LL pay for a motel during the process ??
You won’t need recourse if you don”t accommodate him…Yes the landlord would typically pay for all expenses associated with having the tenant go to a hotel for e few days maybe also with a thank you kicker for putting up with the hassel…….
the renter has leased for over a yar does the LL have to give a written 60 day notice ??
60 days written notice if occupied beyond one year….
Does the owner, current LL have to return security deposit or the new owner ??
The new owner is taking title subject to the current lease…When the tenant request his deposit returned, he will be requesting it from the new owner…If the new owner did not get the credit for the deposit from the previous owner, thats his tuff luck…
There is some related info here:
http://www.caltenantlaw.com/Temporary.htm
I think that compensation for being banned for three days from the housing that you are paying for is a given. How much money/notice are the issues to be worked out.
ft dot com
Last updated: October 1, 2012 10:47 pm
Banks reap profits on mortgages after QE3
By Tracy Alloway, Michael Mackenzie and Stephen Foley in New York and Robin Harding in Washington
Bank profits from new mortgages have soared since the Federal Reserve began its third round of bond purchases two weeks ago, fuelling the debate over the fallout of the latest dose of quantitative easing.
The extent to which QE3 drives down new mortgage rates and helps homeowners or is pocketed by banks will be crucial to the success of the policy and the prospects for growth in the US and global economies next year.
The rise in profit earned by banks from creating new mortgages came as Fed chairman Ben Bernanke sought to defend QE3 against attacks from Republican presidential candidate Mitt Romney and other critics. Mr Romney said last week the Fed was keeping interest rates “artificially low”.
Speaking in Indianapolis on Monday, Mr Bernanke said it would be “inappropriate” and “ineffective” for the Fed to raise interest rates to put pressure on Congress to tackle the deficit. QE3 would not lead to long-term inflation, he said, adding that stronger growth would help savers in the long run despite low interest rates today.
Although the average rate on a fixed 30-year mortgage reached 3.4 per cent this week – a record low – mortgage rates could be lower if banks passed on the full drop in their funding costs.
“For banks which are mortgage originators this [QE3] was some of the best news they could possibly have heard,” said Steven Abrahams, mortgage strategist at Deutsche. “They will continue originating loans and selling them into the market at a significant premium.”
The interest banks pay on mortgage bonds has dropped from 2.36 per cent on September 12, the day before the Fed announced its programme, to as low as 1.65 per cent last week. It edged up to 1.85 per cent on Monday.
That means the profit, or spread, banks earn from creating new mortgages for homeowners paying around 3.4 per cent and selling the loans into the secondary market has risen to around 1.6 per cent. That is higher than the 1.44 per cent spread they pocketed before QE3 and significantly greater than the 0.5 per cent they earned on average in the decade between 2000 and 2010.
The Fed plans to buy around $40bn a month of mortgage-backed securities from investors until there is a significant improvement in the economy. That has sent prices for the bundled mortgage loans soaring in the secondary market.
Banks say they are charging more because of capacity issues in processing new mortgages and tighter credit standards for borrowers.
“The banks are able to originate mortgages with these funds at prices well below the sale price in the secondary market,” said Dick Bove, bank analyst at Rochdale Securities. “Since the supply of new mortgages cannot meet demand until the origination facilities are rebuilt, the prices in the secondary market remain high [and] profits to the banks from mortgage originations soar.”
…
ft dot com
September 25, 2012 5:48 pm
Hedge fund sceptics warn on ‘QE Infinity’
By Sam Jones
“A man’s got to know his limitations,” says “Dirty Harry” Callahan, the gun-toting, rule book-ignoring cop immortalised by Clint Eastwood in Magnum Force.
It is a principle the US Federal Reserve – which earlier this month embarked upon its own, third bout of “unorthodox” enforcement, “QE3” – could learn from, according to Stephen Jen, the former Morgan Stanley FX-guru turned hedge fund manager.
“The Fed officials are some of the smartest economists around,” he wrote in his most recent note to clients. The trouble is, said Mr Jen, “they know everything except their own limitations”.
Barely two weeks on from Ben Bernanke’s announcement of potentially unlimited bond-buying by the Fed, and concerns like those of Mr Jen are reverberating across the hedge fund industry.
Among the trading rooms and floors of Connecticut and Mayfair, supposedly sophisticated money managers are raising big questions about QE3 – and whether, this time around, the Fed is not risking more than it can deliver.
Such scepticism is not easy to maintain. “When I started out in asset management I was told two rules: the trend is your friend and don’t fight the Fed,” says Luke Ellis, who oversees $19.5bn in hedge fund investments at Man Group’s FRM. “For the first time we now have the Fed fighting the trend.”
All of which is not to say hedge funds do not agree on where markets will go in the coming weeks.
Fund managers can easily reel off the broad outcomes of a third bout of quantitative easing: a weakening in the dollar, a rally in commodities, and almost certainly, a rally in equities.
“QE3, or QE Infinity, as some have branded it because of its open-ended nature, will certainly push global asset allocators to look increasingly at riskier asset classes,” says Guillaume Rambourg, founder and chief investment officer of Verrazzano Capital. “Equities should ultimately benefit.”
…
FED: We need to buy $40 billion per month in MBS to lower funding costs to spur buying demand for foreclosed homes.
ME: If we have such a need for lower funding than why are almost all investor purchases paid for with cash while trillions of dollars from QE1 and 2 sit in excess reserves at the Fed?
In our area there aren’t enough forecloses on the market to even come close to meeting demand from cash buyers right now.
Palm Beach County moves to ban sale of bath salts, other synthetic drugs
(What did you say? I was snorting Cascade and I missed that)
By Jennifer Sorentrue
Palm Beach Post Staff Writer
Palm Beach County commissioners this morning tentatively approved a plan to ban the sale of herbal incense, synthetic marijuana and bath salts, saying that state laws have not been able to keep the substances off of convenience store shelves.
A final vote on the countywide ban is set for Oct. 16.
The substances are readily available at many gas stations and convenience stores. Law enforcement officials say side effects can include hallucinations that last for days.
State lawmakers have passed laws the past two years banning bath salts, but local officials say that manufacturers have continued to find a way to keep the items on the shelves by changing the ingredients or marking the packages with a warning that they are not intended for human consumption.
The county’s rules would prevent store owners from displaying and selling bath salts, herbal incense and synthetic marijuana.
Store owners, managers and agents that violate the ban will face a fine of up to $500 and up to 60 days in jail.
County Commissioner Karen Marcus proposed the ban in July, after receiving an email from a local parent about the problem and talking to a friend in Martin County whose son was addicted to herbal incense.
Marcus said the issue has drawn the attention of the Florida Association of Counties. She said the county should also considering banning or restricting the sale of paraphernalia associated with the use of these substances.
I remember taking forensic toxicology back at Berkeley - fascinating class - we got to read a lot of case law. In one case the Feds and California agents blew it and raided someone making something completely unrelated to drugs. They thought he was making drugs and needed the charges to stick to justify the warrants, RAID, expense and time involved. The defense brought in a University chemist to prove the substance had nothing do do with drugs. The prosecution brought in an expert witness shill that stated that if 50% or more of the atoms were the same - it could be classified as “substantially similar” to the drug and should be therefore covered under the controlled substance law. WHAAAAAAAAAAAAT? And the jury bought it hook, line and sinker - and the guy went to the slammer.
The prosecution brought in an expert witness shill that stated that if 50% or more of the atoms were the same - it could be classified as “substantially similar” to the drug and should be therefore covered under the controlled substance law. WHAAAAAAAAAAAAT? And the jury bought it hook, line and sinker - and the guy went to the slammer.
That’s the kind of thing that really scares me.
It scares me too - because a businesses should not under this kind of tail risk. Anything they sell couldn’t be misconstrued to be an analog of a controlled substance buy the “authorities.” It’s about the same level of proof as a Salem witch trial. It’s becoming like a protection racket.
Are you being an obedient citizen? Why do you have a Ron Paul sticker on your front window?
Did you know in much of California if you want to legally sell used items you have to have a complete criminal background check, get fingerprinted, etc and get visited regularly by the cops? Say you sell used books for example? used appliances? Used computers?
Kinda like when the noozpaper reports that the terror suspect had “bomb making materials” in his garage
Duct tape, propane canisters, bleach, coat hangers, muratic acid…
“… and the guy went to the slammer.”
I’m surprised. Usually when you randomly collectly twelve people together one or two of them have enough background and common sense to refute evidence that is nonsense. At least this has been my experience.
You clearly haven’t been to California.
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LOL
“You clearly haven’t been to California.”
Not all that clearly; California is where I live.
I’ve been a juror on maybe ten trials that lasted all the way up to the deliberation and verdict phase and I am satisfied with the verdicts of every one of them.
Most of the decisions have been supported and verified as correct by information gathered informally AFTER the trial was completed, information that was excluded for one reason or another during the trial.
Also a clue can often be obtained from the judge’s reaction to the verdict. If the verdict is just the judge will react in a different manner than if the verdict not just.
The judge decides issues regarding the law, the jury decides issues regarding the evidence. So judge gets to see a lot of evidence that the jury does not.
From the FWIW dept:
If you feel you must haul around a baseball bat in your car for protection then also carry around a baseball. If a cop points to the baseball bat and asks you what it is tell him it is a baseball bat - do not tell him it is a club. If you tell him it is a club then it becomes a club.
If you carry a knife in your pocket then make sure it is not a switchblade. It’s not too tough to convince a jury that you should carry around a pocketknife but it’s a bit tougher to convince them you should be carrying a switchblade.
Good stuff Combotechie - thanks!
Is Megabank, Inc facing the revenge of the Lilliputians?
ft dot com
October 2, 2012 11:21 am
EU review wants bank trading ringfenced
By Alex Barker in Brussels
Europe’s biggest banks must detach their risky trading activities from their retail operations to protect taxpayers and avoid shocks to the financial system, according to conclusions of a flagship EU review.
The trading ringfence is the central recommendation of the Liikanen Group, which was established by the European Commission last year to provide independent advice on structural reforms to make banks safer.
While the verdict goes much further than first expected by the industry, the measures were toned down during the group’s deliberations so that some important trading activities are allowed within the deposit-taking entity.
Erkki Liikanen, chair of the committee and governor of Finland’s central bank, said a legal separation of “particularly risky activities” aimed to make banks more resilient and “to limit the implicit or explicit stake of taxpayers in the trading parts of banking groups”.
Other suggestions include paying bonuses in debt, which can be wiped out when a bank fails, and a review of the capital required against trading and property assets.
The “important recommendations” were “welcomed” by Michel Barnier, the EU commissioner responsible for the financial sector who will decide whether to propose any Liikanen-inspired legislation.
But in a clear sign that no new reforms will be rushed out, Mr Barnier said the report will “feed our reflections on the need for further action” and ordered an impact assessment on both “growth and the safety and integrity of financial services”.
“We need to look at these questions also in light of the financial reforms that I have already put on the table,” he said, referring to existing proposals moving towards a European banking union.
The Liikanen reforms are a twist on the UK’s Vickers commission, which last year recommended that banks’ retail operations should be ringfenced, and the US’s Volcker rule that limits proprietary trading.
It marks the first EU response to the question of whether structural reforms are necessary to remove risk from banks that are too big to fail. The findings are being watched closely in Paris, where President François Hollande is considering his own structural banking reforms.
…
The EU encompasses different countries with different views on economics. The anti-printers tend to be the wealthier core. Printing is a response to a weakening economic conditions. More currency means more wealth, right?
But this is not a new thought they’re having. There’s no extra credit for relearning lessons on which the tuition was paid long ago.
Printing has every indication of a TINSTAAFL violation.
Drudge Report Siren
Something to do with Obama. So, the republicans dug up something juicy??
I doubt it.
Back to you, Democrats. Let’s find some Mittens tapes…..Tis the season.
Looks like a video…tbd whether it is juicy or simply hyped as juicy.
CRAZY!! Mob Of Teens Take Over Detroit Gas Station On … - YouTube
http://www.youtube.com/watch?v=tzO8weur4Q4 - 148k - Cached - Similar pages
3 days ago … Video Detroit Teens At It Again Taking Over Gas Station! (Man Saus His Business Is Being Held Hostage By These Groups Of Teens).mp4 …
Another “Youth Mob” goes on violent rampage. - YouTube
http://www.youtube.com/watch?v=kbpOfrjcf_o - 158k - Cached - Similar pages
Jul 13, 2011 … http://detroitiscrap.com REDFORD, Mich. (WJBK) - A surveillance video shot inside a Redford Sunoco station is just a snapshot of a teenage …
That would not happen in Florida.
And all of you call me a racist for demanding we have a war on Ebonics, and force black people to speak English…..
Ohbewanna legacy is the death of political correctness.
God, I love Joe Biden.
Headline: Biden says middle class has been ‘buried’ the last 4 years, a statement drawing GOP criticism
http://www.washingtonpost.com/national/vice-president-joe-biden-blasts-romney-tax-plans-in-north-carolina-campaign-stop/2012/10/02/8aa39422-0cb7-11e2-97a7-45c05ef136b2_story.html
By Associated Press, Updated: Tuesday, October 2, 2:59 PM
CHARLOTTE, N.C. — Vice President Joe Biden said Tuesday that the middle class has been “buried” during the past four years, a statement that Republicans immediately seized upon as an unwitting indictment of the Obama administration.
“Pinellas sheriff hunts mysterious manatee rider”
http://www.tampabay.com/news/publicsafety/crime/article1254405.ece
Don’t forget those juicy comments. Enjoy!
“5 shot and killed over 18 hour-span in Oakland”
“OAKLAND, Calif. — Police say a man shot to death on the porch of his Oakland home is the fifth person to be fatally shot in an 18-hour period across different parts of the city.”
http://www.sacbee.com/2012/10/02/4876004/5-shot-and-killed-over-18-hour.html
Can Riots Be Predicted? Experts Watch Food Prices
Categories: Food For Thought
10:02 am October 2, 2012
by Maria Godoy
A Tunisian protester holds a baguette while taking to riot police in January 2011.
Martin Bureau/AFP/Getty Images
When French peasants stormed the Bastille on July 14, 1789, they weren’t just revolting against the monarchy’s policies. They were also hungry.
From the French Revolution to the Arab Spring, high food prices have been cited as a factor behind mass protest movements. But can food prices actually help predict when social unrest is likely to break out?
Yes, say a group of researchers who use mathematical modeling to describe how food prices behave. Earlier this summer, their model had predicted that the U.S. drought would push corn and wheat prices high enough to spark social unrest in other parts of the world.
“Now, of course, we do see this happening,” says Yaneer Bar-Yam of the New England Complex Systems Institute in Cambridge, Mass. And unless those food prices come down, the researchers warned last week, more waves of riots are coming.
Obviously, there are complex social reasons why people riot. The current protests in the Mideast were set off by outrage over a crude anti-Islam film. Years of government oppression and economic instability led to the Arab Spring uprising. But it’s high food prices, Bar-Yam and his colleagues argue, that create “the range of conditions in which the tiniest spark can lead to riots.”
Over the past year, the institute has gotten a lot of attention for its accurate predictions of food price behaviors. Last fall, the researchers released a study that showed big spikes in food prices coincided with food riots in 2007-2008 and 2011, including the events of the Arab Spring.
But their model also offers the potential to forecast future social unrest by identifying “a very well-defined threshold [for food prices] above which food riots break out,” Bar-Yam tells The Salt.
In fact, Bar-Yam and his colleagues say they submitted their analysis warning of the risks of social unrest to the U.S. government on Dec. 13, 2010. Four days later, Tunisian fruit and vegetable vendor Mohamed Bouazizi set himself on fire – an event widely seen as the catalyst for the Arab Spring.
The researchers define the riot danger zone in relation to the U.N.’s FAO Food Price Index, which tracks the monthly change in international prices for a basket of cereals, dairy, meat, sugars and oil/fats. Riots become more likely, their model showed, when the index goes above 210. The index has been hovering above that “disruption threshold” since July, pushed upward by the drought in the U.S., the world’s biggest exporter of corn and wheat.
“What happened was that food prices went up exactly as predicted,” Bar-Yam says.
…
snoop