Bits Bucket for October 25, 2012
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
April 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Rigged Housing Market
Rigged Labor Market
Rigged Capital Markets
Avoid playing as much as possible.
Did you miss the memo? Thanks to financial innovations in central banking introduced by Alan Greenspan and continued to the present, investing in stocks and housing is a guaranteed win (not so sure about labor…better to be born with a silver spoon in your mouth, if at all possible).
Deep in the HBB archives, anyone who searches for it long and hard enough will come across a quote from Ben Jones to the effect that, “There is no plunge protection team for housing.”
Is that still the case today, now that quantitative easing is used to buy $40 bn of MBS each month?
How the Fed began rigging the stock market
By JOHN CRUDELE
Last Updated: 1:13 AM, October 23, 2012
Posted: 11:58 PM, October 22, 2012
Saturday is one of the most important anniversaries for Wall Street.
No, it’s not the anniversary of the big market crash in 1987. That took place with a lot of fanfare last Friday. And the 23rd commemoration of the 1989 mini-crash quietly took place two weeks ago.
This Saturday isn’t on anyone’s calendar. But it should be because on Oct. 27, 1989, a guy named Robert Heller proposed rigging the stock market so that crashes like those in ’87 and ’89 would never happen again.
Kooks propose things like this all the time. But Heller was the real thing. He was a renowned banker who had just left the Federal Reserve board weeks before he gave a speech that was reprinted in the Wall Street Journal.
Heller worried that the Fed was dangerously pumping too much money into the financial system whenever crashes occurred. All it really had to do, he said, was buy enough stock to keep the market afloat until the markets calmed down. Simple enough!
“The stock market is certainly not too big for the Fed to handle,” said Heller. “The stock market is the only major market without a market-maker of unchallenged liquidity or a buyer of last resort,” he added, noting that the Fed already had the much larger currency market’s back whenever it got into trouble.
In short, Heller wanted the Fed to rig the stock market when things looked dire — and only when they were dire. And he said stocks could be bought easily and cheaply enough through index futures contracts.
Just the year before President Reagan had put together the apparatus for rigging the market when he signed an executive order that created the President’s Working Group on Financial Markets. The commander-in-chief had created the rigger-in-chief or, as it came to be nicknamed, the Plunge Protection Team.
I mention this now because the Fed today is rigging the stock market. Indeed, ever since the day Heller proposed the unthinkable, Washington has been making sure stocks don’t go into an unstoppable slide.
The hand of the Fed was clearly protecting the markets during the crisis in 1998 caused by the collapse of an out-of-control hedge fund called Long-Term Capital Management. And in 2001, when the first Internet bubble of ridiculously overpriced stocks popped, the invisible hand of the Fed helped stocks along.
The Fed and the US Treasury kept stock prices lofty right after the 2001 terrorist attacks. But once rigged, it was hard to bring asset values back to Earth when things got overpriced before the latest collapse in 2007. But the Treasury, the Fed and some major Wall Street firms propped the market up then, too.
We should all say “hooray,” I guess. Sure, a lot of innocent investors get hurt when these Fed-created market bubbles pop. But it’s the integrity of the financial system that really matters, right?
There’s a big difference between what Heller proposed and what’s going on today. Heller wanted the Fed to be a temporary emergency backstop because he didn’t want the central bank to flood the financial markets with cash. That was too dangerous.
Yet that’s exactly what current Fed chief Ben Bernanke is now doing — flooding the financial markets with cash, although he calls it quantitative easing and pretends that the electronic money he’s creating is somehow better than printing currency and dropping it from helicopters.
…
Serious concern, which perhaps the geniuses in the Fed’s brain trust missed: By destroying the price signal in the stock market, artificially propping it up might completely undermine the market’s ability to allocate funding to profitable, useful projects.
What you end up with instead is a bunch of morons at Megabank, Inc deciding behind closed doors to allocate funding to money-loosing projects like Facebook, and laughing all the way to the bank as they collect their fees. Economic collapse is also a logical consequence, as central planning is known to be a failed model of investment allocation.
Didn’t we used to make fun of communist countries for that?
I like to call it “faking demand.”
It’s a great way to enrich favored sectors, cronies, and create malinvestment. What’s not to like?
“…faking demand.”
Deep in the HBB archives, anyone who searches for it long and hard enough will come across a quote from Ben Jones to the effect that, “There is no plunge protection team for housing.”
I don’t remember the comment, but I assume it was correct at the time. I think they created one as soon as they figured out what we had figured out, though. I’ll be the first to admit I didn’t anticipate that.
Just because it’s rigged doesn’t mean you can’t make money.
Good point. Just remember, real estate and stocks always go up, in the long run. Buy some now and just wait a few years, and you can get rich!
Unless you’re the one doing the rigging (”the house”), it’s unlikely that a player is going to make money.
Just because it’s rigged doesn’t mean you can’t make money.
Good point. But it also means you’ll only make money as long as someone else lets you. And they can take everything on the table any time they feel like it. I’m not comfortable with that. I’m surprised that anyone is…unless they are the ones doing the rigging.
What surprises me is how the stock market manages to keep going up, despite massive stock fund withdrawals.
It seems quite similar to the housing recovery without jobs…doesn’t really make sense from a fundamental perspective.
AP News
Cash pulled from stock funds 13th straight week
Posted on October 24, 2012
WASHINGTON (AP) — Investors withdrew money from stock mutual funds for the 13th consecutive week during the period ended Oct. 17, although cash was pulled out at a slower pace than during previous weeks. Bond funds continued to attract new money at a rapid clip.
The movement of cash was in line with the conservative approach that many investors have taken since the financial crisis of 2008. Money has consistently been withdrawn from stock mutual funds and added to lower-risk bond funds.
Stocks:
Investors withdrew a net $1.4 billion from U.S. stock funds, the Investment Company Institute said in a preliminary report Wednesday.
The total was the smallest weekly amount pulled out of U.S. stock funds during a period in which withdrawals have exceeded deposits for 13 weeks in a row, dating to July 18. In the week ended Oct. 10, a net $2.3 billion flowed out.
Cash was pulled out during the latest week as the Standard & Poor’s 500 stock index rose nearly 2 percent. Net withdrawals from U.S. stock funds have continued even as the market has gained 12 percent year-to-date.
The ICI said a net $369 million was withdrawn during the latest week from funds investing primarily in foreign stocks. Those funds attracted cash through most of the first half of this year. But withdrawals have exceeded deposits for 13 consecutive weeks dating to mid-July.
Bonds:
Investors deposited a net $8.9 billion into bond funds, which have attracted new cash in all but one week so far this year. The latest week’s total is down slightly from the $9.5 billion in net deposits during the previous week.
Most of last week’s bond fund total was from cash flowing into taxable bond funds, which primarily invest in corporate bonds. Those funds attracted nearly $7.6 billion in new cash. Municipal bond funds took in a net $1.3 billion. Those funds invest in bonds issued by state and local governments.
A net $818 million was added to hybrid funds, which invest in both stocks and bonds.
Overall, investors deposited a net $8 billion into long-term mutual funds of all types during the weeklong period, up from net deposits of $7.1 billion in the previous week.
This is amazing! I just clicked on a DJIA chart at the moment it was only down by just -0.0064%…what are the chances of that happening: something like one in a million?
Countdown to close
Dow Jones Industrial Average
13,076.50
Change -0.84 -0.0064%
Volume 70.59m
Oct 25, 2012, 3:28 p.m.
Previous close 13,077.34
Day low 13,040
Day high 13,165
Open: 13,079.64
52 week low 11,232
52 week high 13,662
“Make money” doing what?
“Make money” doing what?
Ha, so you never operated a printing press?
S&P 500 is up over 80% since O took office, side liners missed out on bug gains.
Historically with Dems as POTUS, markets do well.
Good Morning everyone.
I could give a darn about “electile dysfunction” and the same old promises, I am too busy reading up on Ca Title 24, aka The Electrician’s Right To Work Bill.
Other than the fact we need a money tree, we love the new digs. Luckily, our friend is a general contractor and has offered us to use his license for flooring and granite. Get this, this house is only 1900 sq ft (one-story) and one interior texture and paint quote was north of $11K. The 2.5 story living area high ceilings is part of that, but let’s get real.
Have a great day.
It’s a one-story house with 2.5 story living area ceilings?
alpha-sloth
So the MLS said, but I gotta tell you, the LR ceiling is at least 18′-20′ at its peak. It is a monster. Had to place a ceiling fan in it to cut energy costs. It’s pleasant cosmetic upgrade as well. 1960’s home. (peak=one of the “warts”)
I stand corrected, 16′ high peak ceiling in LR. Can’t imagine no fan to move air around. Previous owners evidently liked to burn money.
The pool pump was set to peak billing hours as well. We didn’t think about that until yesterday morning, and promptly reset it. We’re just so darn busy.
“I stand corrected, 16′ high peak ceiling in LR.”
As the dot-com bubble was crashing we looked at a house that was priced right for the time. It had vaulted ceilings, glue laminated beams, and the interior walls resembled partitions. As we wandered around our kids had a disagreement and started yelling at each other. The noise echoed throughout the place, which ended that deal; no vaulted ceilings!
rms
Yeah, we are carpeting the LR & DR for that reason. The echo is a pita. We figure carpet, furniture, and hard case items will help calm the echo.
Keep enjoying your projects, Awaiting.
The only news coverage that we are going to have over the weekend in DC seems to be the election and Sandy, with possibly a few side notes about Halloween activities and the Marine Corps Marathon.
A friend of the family may be running in the Marine Corps Marathon. To say the least, the story of how he got to this point is inspiring.
The Marine Corps Marathon is very, very well organized. They do a good job. However, they cannot control the weather.
lmao
Tears of Joy do not come cheap.
lol
“Other than the fact we need a money tree, we love the new digs.”
Keep the new digs as they are and you won’t have to worry about needing a money tree.
A general observation:
The seller of a house will spend money to fix the house up in order to sell it and then the buyer will spend money in redoing the house so as to fit his/her tastes.
What the seller does the buyer undoes.
Thus a high turnover of houses will lead to a lot of spending whereby a low turnover of houses won’t.
Good Mornin Combo
The previous owner was an widow and nothing got done right from shady contractors or handymen. That’s part of our costs. She lived here alone after her husband died in the 1980’s.The house needs some updating as well.
Can’t wait to light our fireplace for the holidays. A great 2013 and beyond is awaiting us.
Well that’s good.
If you didn’t have the price jacked up by the seller to cover the costs of fixing up the place then the selling price to you should have been lower than if the seller did spend money in fixing up the place.
In theory at least. Good luck to you in any case.
Can’t wait to light our fireplace for the holidays ??
Did you have the flue checked…??
scdave
Our first cost was a fireplace flue replacement and to bring it up to new fireplace code. Money well spent. Love a warm safe fire.
That was a expensive fix…
I hope Combo is right because our kitchen and main bath are not going to get done in my lifetime.
Unfortunately, I think a seller still has to look like he *tried* to reduce the yuck factor, even if it’s all changed again later.
$1,800 smackaroos, but we use it every winter. This FP was never used, btw. FP man said it was 1994 quake damage-flue cracked on top part. Really pricey if it had been worse.
Last home had 3 FPs.
The previous owner was an widow and nothing got done right from shady contractors or handymen
This is Reason #1 why I took construction courses at the community college. I did NOT want to be ripped off by these people.
It is only money.
I have had 3 houses, they are very expensive to own. I scored as I sold them all in 2005 and one in 2009 in a small town that was still up. Now I rent and play on the weekends vs improve the casa.
LMAO……you are exactly right.
When getting ready to sell my house in 2004, I repainted one of the bedrooms, from some pasty looking, generic light blue, to a “light rose” or something like that……redid the woodwork, replaced the carpet. The room looked awesome, if I do say so myself.
Has to go over to one of the neighbor’s a few days after closing. While there, two of the daughters had the windows open, in this bedroom…….repainting it generic light blue.
Oh well.
Ka-ching (heard at Low’s and HomeDeport)
What the seller does the buyer undoes.
Seller put in brand new off-white wall-to-wall carpeting throughout the entire house we just bought.
We had to tear it out and give it away before we even moved in. Put in engineered hardwood, which looks great.
Off-white carpet + kids + dogs = Fail
We did the white carpet thing in our oversized McMansion (4,000 sq ft) and did the medical bootie/shoes off thing for 5 years. Perfect when sold.
Still a shoe free home,but white carpet is only for photos.
Still a shoe free home
We are a shoe free house, too, but I can’t figure out how to get the dogs to wipe their paws before coming inside
“engineered” hardwood……. lmao.
sfhomeowner
We’re starting to look for our dog at the pound. I am tempted to find disposable dog booties and teach our Havamalt to wear them, but my husband threatened to get me locked up in a mental ward. lol
I like a clean home. I’m the mistress, not the maid.
Had some repair work done. Two guys told me they got paid $400 to paint new houses. Inside and out. I think they mix the paint 50-50 with water ’cause the had a half a 5 gallon container to use at my place.
urine works better
Posted: 6:00 a.m. Thursday, Oct. 25, 2012
Mortgage aid slow to flow to hardest hit homeowners
By Kimberly Miller
Palm Beach Post Staff Writer
Too few homeowners are getting mortgage aid from the $7.6 billion Hardest Hit Fund, according to federal officials who said Florida needs to ramp up approvals to meet its goal of 45,000 helped by 2017.
A quarterly report to Congress set to be released today found that more than two years after the Hardest Hit Fund was announced, about 58,500 unemployed or underemployed Americans were receiving mortgage assistance as of June 30. Of the $7.6 billion, just $506 million, less than 7 percent, had gone to homeowners.
In Florida, which received $1 billion in Hardest Hit money, 5,995 homeowners had been approved through Oct. 1, according to the Florida Housing Finance Corporation, which oversees the plan. Nearly $51 million, or 5 percent of Florida’s award, had gone to homeowners.
Those who are eligible can receive up to a year of mortgage assistance with a cap of $24,000, and up to $18,000 to bring a mortgage current on payments. Homeowners seeking only to have their mortgage arrearage paid can get up to $25,000.
About 36,870 Floridians have applied for the program.
Homeowners interviewed by the Palm Beach Post have given the plan mixed reviews. Most cite paperwork and communication problems with the non-profit groups managing the application process.
“It’s been a real rollercoaster,” said Stephen Pawley, who lives near Sarasota and started receiving Hardest Hit money in April.
The 64-year-old was kicked out of the program last month after he couldn’t reach his case manager to check in with required documents. He’s since been reapproved for the plan and said he would have lost his home without Hardest Hit.
Hardest Hit applications are available online at flhardesthithelp.org or by calling (877) 863-5244.
Those who are eligible can receive up to a year of mortgage assistance with a cap of $24,000, and up to $18,000 to bring a mortgage current on payments. Homeowners seeking only to have their mortgage arrearage paid can get up to $25,000.
So, it’s a free money give-away to people who are behind on mortgage payments. It says it helps the owner, but really only helps the banks.
From where I sit, it allows DEADBEAT parasites who bought in for more than they could afford to sit in the house they can’t afford for another year, while restoring the payments the Bank missed.
then, we reset the payments and start over again with a 2 year delay to foreclosure.
In essence, it’s a program to forestall foreclosures.
Is it too late for me to stop paying?
Latest in mortgage fraud: Flopping
By Les Christie @CNNMoney October 23, 2012: 6:22 AM ET
NEW YORK (CNNMoney) — Why would anyone spread possum urine around a house, turn up the heat and close all the windows for a few days?
Because they’re flopping, of course.
Flopping is the latest in mortgage fraud, in which sellers actually want as low a price as possible.
The scheme works if they are underwater on their mortgage, and their lender agrees to a short-sale, forgiving the difference between the sale price and the amount owed.
The seller unloads the home for the sandbagged price to an accomplice, who can then clean it up and flip it for a quick gain.
http://money.cnn.com/2012/10/23/real_estate/mortgage-fraud-flopping/index.html - 66k -
Nothing new about this. But good find and certainly something that people should beware of.
Where do you even buy possum urine?
And who sells stuff like that anyhow?
I heard a great variant on this scam not long ago on a flight to the PNW. Across the aisle from me sat a young lady who lived in SF. Somehow the conversation turned to real estate (I’m sure I must have dropped a leading question, like, “Do you own a home in San Francisco?”)
It seems she had planned to fund her outlandishly large SF mortgage with a Sacramento investment property. Her Sacramento renters trashed the house, then walked. She didn’t have the cash flow to fund the renovations needed to make the Sacramento home rentable again, and without the Sacramento home rental income, she couldn’t pay her SF mortgage. (There was a divorce at some point in the story, but I don’t recall at what point or whether it was a contributor or consequence of the real estate snafu.) At the end of the day, she lost both her SF residence and her Sacramento investment home to foreclosure.
And it turned out the Sacramento renters were part of a real estate scam operation; when the home they had trashed went on the market, they bought it back for pennies on the dollar, rehabbed it, and flipped it for a profit. Seems like this scam deserves a different moniker than flipping or flopping; how about focking?
And it turned out the Sacramento renters were part of a real estate scam operation; when the home they had trashed went on the market, they bought it back for pennies on the dollar, rehabbed it, and flipped it for a profit.
There’s a special place in he11 for those folks
She didn’t have insurance?
Good grief.
Must have been a shady realtor if those renters could buy it for “pennies on the dollar.” Because if they had truly trashed it to where the market value was pennies on the dollar, then the repair bills would have cost more than any profit from the flop.
Maybe they engaged in strategic trashing? Purposely trashed so that it’s cheap to fix?
That’s a good theory, though I didn’t get those details from my story teller.
Perhaps they were strategic fockers?
And you held out on telling us this story until now, why?
It’s a recycle. I think it was in March 2012 when I first told that one. Retold here because it seemed on topic…
flipping or flopping; how about focking?
No thanks. How about flip-flopping? Flop-flipping?
“…flip-flopping? Flop-flipping?”
Flocking = what bird-brained FBs do before getting focked.
Why Are College Students Using Loan Money For Beer And Clothes?
College Insurrection | 10/24/12
Because they can.
In our current climate of high unemployment among recent college grads, one would think students would be much more careful about spending.
According to a report at Time’s Healthland Blog, some students are taking reckless spending to a whole new level.
The student-loan-debt crisis is massive. Americans owe more than $1 trillion in student loans, and according to a July report by the Consumer Financial Protection Bureau, $150 billion of these student loans are from private lenders, which means they often come with higher interest rates than federal loans and are almost impossible to shed in bankruptcy proceedings.
Nightmare stories about young adults struggling under mountains of student-loan debt appear in the media nearly every day. But how many college students are using their loans only for necessities? How many are taking out more money than they need and blowing it on silly stuff that they’ll be paying off for years or even decades to come?
I conducted some informal research to determine how endemic the misuse of loans really is. I tapped my kids as well as other recent college graduates, friends and co-workers, and I was stunned at how pervasive this seems. When I asked my stepson, who graduated last winter, if he knew of kids using their student loans for non-school-related purchases, his response was, “Don’t even get me started.”
First, he told me about a family friend who, a few months ago when she was a junior in college, used her student-loan money to buy a used car. I almost flipped. Didn’t she realize this means she’ll be paying that car off — at an interest rate almost twice as high as a typical auto loan — long after it breaks down?
My colleague Meghan, also a recent grad, mentioned classmates who had purchased flat-screen TVs, sound systems and trendy decor for their dorm rooms. I heard from various people about kids using student loans to pay for expensive spring-break trips, clothes and, a common refrain, “partying.” These students will be paying high interest rates for purchases they probably won’t even remember in five years.
OK, but thats the economy around these college campuses. The bars and clubs especially. The spendy” students keep the money flowing and businesses running.
Its similar to EBT cards keeping a grocery store open.
And similar to how HELOC kept most of our consumer economy flowing. Until it stopped.
“Why Are College Students Using Loan Money For Beer And Clothes?”
1. De gustibus non est disputandum.
2. Tradition.
I remember several decades ago hearing one of my old high school buddies lamenting his decision to spend some of his college student loan funds to buy himself a nice new guitar. It had dawned on him by the time of our conversation that the money needed to be repaid, and he still needed to come up with the money for tuition and living expenses.
spend some of his college student loan funds to buy himself a nice new guitar
One year I spent part of my student loan on a used guitar - a 1966 Gibson ES-335. My friends thought it was hilarious.
I’m sure I spent a lot on beer. I have no regrets but college was way less expensive in the 80s.
So what. We used some of our graduate school loans for non-education related spending. Because we weren’t majoring in Ethnic/Gender/Pick-A-Victim Studies and knew we’d be making a lot more money (eventually) after graduation. Our income has doubled since leaving TARP bank in 2006 for graduate school.
One of my undergraduate profs told a story about offering Albert Einstein a ride in the car he bought with his stipend money. Students have been wasting money on non-necessities for as long as people have been given funding for school (whether loans or grants).
Einstein said he preferred to walk, by the way.
It’s all relative.
You haven’t met my relatives.
Einstein said he preferred to walk, by the way.
Yo, Einstein, why are you walking in circle?
Fool, anyone can see that I’m really walking in a straight line!
“Why Are College Students Using Loan Money For Beer And Clothes?”
ben bernanke?
I did it too. Was lucky enough to be in a position to pay it off quickly, though.
I’ve known that since my best friends blew their Pell grant money on a stereo and stuff circa 1970. In fact, financial aid is what kept the stereo shops going in a college town. There’s no business for them without that.
Interesting. I keep forgetting that loans are sent out basically as cash checks. I could get a loan and theoretically not go to college at all, just party. When I went to college, the $$ checks were made out in nearly exact amounts (no extra) and went directly from the gov to the school. The parents had some loans, and they too sent the check right to the school.
In light of this, I suppose it’s a good thing that student loans are not dischargable in BK. IMO, even if it was allowed in BK, it should only be a partial wipe-out, to cover tuition, books, fees, and some pre-calc’d amount of reasonable room and board. No wipe-out of beer money…
or don’t guarantee them at all and watch the lending to irresponsible nitwits dry up as their parents co-sign signature requirements brings a modicrum of restraint back into the picture…
“as their parents co-sign signature requirements brings a modicrum of restraint back into the picture”
Private loans are already not guaranteed by the government. And there are plenty of private loans outstanding.
I wouldn’t normally suggest this, but if you want to see how unlikely it is that requiring a parental signature will help, watch a few episodes of Suzie (sp?) Orman. The stories are beyond belief.
There were both types IMHO. Direct Student Loans paid tuition to the school, Guaranteed Student Loans were checks to the student.
They use different names now.
Students who are responsible enough to hold a part time job in addition to their loans tend to be good renters. Renters who only rely on financial aid and perhaps $$ from teh parents - not so much - and in a number of ways not just financial.
The latest I heard from a student renter is the loans or grant or whatever was held back for a month to ensure the student stayed in school. Not a bad idea from the standpoint of a taxpayer/loan guarantor.
And if they can’t find jobs after graduation to repay their loans they can join FEMA Corps:
https://www.dhs.gov/blog/2012/09/14/welcome-fema-corps-inaugural-class
Student loans made to pay your on campus food can also be used off campus today - in bars, MacD, etc - places surrounding the school. Just swipe your student card.
I wonder how much kickback the universities are receiving.
Note to Pusssy:
Old man Buffet doesn’t fool me. He is borrowing from his insurance companies to buy these assets. And BB is making sure his “investments” keep their value.
He can easily be the biggest loser of all time simply by the Fed not being able to support his stock prices anymore.
But I digress, you and I will actually be holding the bag when our insurance policies collapse. Like real estate.
Buy Bye Ben.
The ‘Mortal Enemy’ of Home Prices: Excess Housing Inventory
By Morgan Korn | Daily Ticker – Thu, Oct 18, 2012 10:42 AM EDT
http://finance.yahoo.com/blogs/daily-ticker/mortal-enemy-home-prices-excess-housing-inventory-144251815.html - 258k -
So long as collusion can be used indefinitely to hold that inventory off the market, where is the problem?
So long as collusion can be used indefinitely to hold that inventory off the market, where is the problem?
Depreciation. Vandalism. Deterioration. and the forces of Nature. Everything ages and needs repair and maintenance. Vacant houses get none.
More likely, they become targets of “Bandos”.
Those are problems for the local communities where homes are kept off the market, but not for the colluders who profit from artificially inflated housing prices.
Did countrywide dupe fannie and freddie because the private market to purchase mortgages had fallen apart in 2008? Was it keep the mortgages moving or go out of business basically?
Nobody duped anyone. Remember Franklin Raines, another Obama buddy and appointee. He was in Charge of the government take-over of bad loans and got MILLIONS of dollars of bonuses for the volume of loans taken on the “non-governmental/government sponsored private companies.
Recall he was CONGRATULATED by Maxine Waters during the runup of bad loans for “making homes affordable” and completing its MISSION of providing houses to poor and minority communities.
Barney Frank assured the Congressional Oversight committee that these Agencies were SOUND.
There was nothing to worry about. Keep the lending going. Keep the buying going.
Nothing to worry about.
I still recall those hearings. The regulator was grilled by Maxine Waters and told the HE should be investigated, not Franklin Raines.
Remember??
Remember Franklin Raines, another Obama buddy…”
Say what?
In 1969, Raines first worked in national politics, preparing a report for the Nixon administration on the causes and patterns of youth unrest around the country related to the Vietnam War.[2] He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie’s Mae’s Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO.
Also:
http://www.factcheck.org/hot-topics/
Are three former Fannie Mae executives “economic advisers” to Obama?
No, claims made in a chain e-mail are false. Jim Johnson advised on non-economic matters but quit after a week. Franklin Raines says he took a “couple of calls” but was never an adviser. We find no evidence Tim Howard ever had a connection to the Obama campaign.
Oct. 9, 2008
Raines first went to DC to work for Nixon.
Dang it. My first post got ate.
From Wiki:
“In 1969, Raines first worked in national politics, preparing a report for the Nixon administration on the causes and patterns of youth unrest around the country related to the Vietnam War.[2] He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie’s Mae’s Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO.”
Countrywide duped EVERYONE. Just ask BofA.
One of the Bank of America branches in my neighborhood just shut down. At least, I think that was the BofA branch.
Anyway, another empty store front in the high end retail district.
Here there is a Chase bank on almost every corner, it seems.
Don’t confuse Countrywide (now part of BoA) with Washington Mutual (now part of JP Morgan Chase).
The only American Bank I’ve seen in Brazil is Citibank.
The other foreign banks are HSBC and Sandander. There might be more but IDK.
WSJ - More People Eschew Jobless Benefits Than Scam System:
“Some people scam the system to get jobless benefits they don’t deserve. But far more don’t claim the benefits for which they are eligible, according to research by economists working with the Federal Reserve Bank of St. Louis.
In 2009, for example, the federal and state governments paid almost $121 billion in unemployment insurance, including $11 billion in overpayments.
If everyone eligible for jobless benefits that year had claimed them, the program would’ve had to shell out an additional $108 billion…”
Damn liberal Wall St Journal.
Do you have a link for that? I’ll use it to link-blitz the nazi-cons.
Thanks.
http://blogs.wsj.com/economics/2012/10/24/more-people-eschew-jobless-benefits-than-scam-system/
Good luck with that plan. They are sleeping in today, as usual, but once they get to work, they will once again drown the HBB in propaganda messages.
Not sleeping in. Working hard towards a Nov 8 beta product release. You know, trying to create value out of nothing, which in turn creates more jobs…
No, they do not know. “You did not build that.”
“You did not build that.”
I know. if it wasn’t for the government, we wouldn’t have the internet. That alone should be justification for higher taxes and more regulation…
No business, NONE, operate in a vacuum.
Without infrastructure of all kinds, there is no business except “tooth and nail”.
That infrastructure was NOT built by private money. Oh they tried, but soon went of business almost every single time.
Here’s the short list of things you might want to try and do without built and maintained by the government:
Consistent weights and measures and enforcement thereof
The ENTIRE aircraft industry
Consistent money and enforcement thereof
Roads
Safe water
Safe power
Safe buildings
Safe consumer everything (until funds are withheld)
Consistent and (sort of) fair labor laws
Civil rights (try doing business without these)
Civil and criminal judicial systems (I did not promise to pay you for your labor/product/service and you can’t make me)
Em regency and natural disaster response and rescue
Shall I continue?
Out of all of those, the main one I disagree with is the money one. As for the rest.. do you have any idea of the cost for permits for a new building in San Diego? I’d rather build a crapshack that falls down during an earthquake, then rebuild it again, all for less than the cost of the permits. In Santa Ysabel, Ca. there is a general store from 1896 that they won’t permit for public use because it doesn’t conform to earthquake standards.
And when your crapshack burns down and takes the neighborhood with it, or collapses on a family while they shop, or backs sewage into the community water supply, you can tell your neighbors it was their own damned fault for living next to you.
I’d rather build a crapshack that falls down during an earthquake, then rebuild it again, all for less than the cost of the permits.
But make sure you cremate the dead bodies in Mexico. It’s cheaper there.
But make sure you cremate the dead bodies in Mexico. It’s cheaper there.
That was funny… true, but funny.
Government is good ergo more government is better.
It’s scary how many people believe that.
“Critics of the nation’s unemployment program, created in 1935, have often worries about incidents of fraud in the system. Meanwhile, some Republican lawmakers have argued that jobless benefits may undermine unemployed people’s motivation to look for new jobs.
(because living on $500/week is so high on the hog. They probably all get free Obama phones too, right)
But most of the overpaid benefits didn’t result from acts of fraud, which must be committed deliberately. Cases of fraud made up about a quarter of the total overpayments between 2007 and 2011…”
Goon nobody ever listens to people that actually use the system….
The extension to 99 weeks was a a scam a pacifier to be lazy. sure people got cash side jobs but what if…after 26 weeks you have to be in a training program or internship or the unemployment office assigns you to work 20 hours a week….at something close to your last job?
For example if you are a paralegal and cant find work 20 hours at the public defenders office it’s a win win and you still get an p/t income aka unemployment check each week……you just cant be lazy anymore after 26 weeks…
Are you working, or are you lazy?
I don’t know about where you live, but in my state, you MUST not only look for a job each week (3 jobs actually) but document it and send that in with your weekly claim.
Also in my state, your weekly check would embarrass a college student and the monthly total does NOT pay all of even the most basic of your bills in the low rent part of town. (food, shelter, power)
But there you are, STILL arguing it’s a scam when the WSJ has just shown it isn’t. And you wonder why you are having trouble finding job?
If you are working, you don’t get unemployment benefits at all. This includes volunteer work.
Are you working, or are you lazy?
As InColorado has stated previously: “It’s a bad time to be of average or lower intelligence.”
I get unsolicited calls and emails from recruiters and hiring managers weekly for software development jobs. One recruiter I know is looking for a J2EE/Java developer in the greater MA/RI/NH area. This job pays to $130k and can telecommute 4 days a week. You’d think this job would go quick…
That’s a pretty damn good job offer, but the recruiter will need to look nationwide or network the over the Internet better.
I don’t see how that job is going unfulfilled. 130K is good money no matter WHERE you live.
“If you are working, you don’t get unemployment benefits at all. This includes volunteer work.”
Depends on what state you are in.
In NY if you work part time your weekly benefit is reduced but the “pot” of benefit stays the same (i.e “pot” of 26 weeks = $X benefits.)
Everything is based on a theoretical 4 day work week, so if you work 2 days you get 2 days benefit instead of 4. but you can get that 1/2 benefit for more total weeks.
As an addendum to my post above:
Every line of code I’ve written for my startup was done at night or on weekends, after working an 8-9 hour day at my paying job and commuting 2-3 hours.
I’ve had to ditch 2 other senior level developers on this project because they couldn’t deliver. Why couldn’t they deliver? Because they too had paying jobs and until my startup is funded, we work for nothing but our equity stake. Unfortunately for me, they were fat and happy with six-figure incomes and so the incentive to work hard for merely an equity stake in a risky venture was not there.
Sometimes it’s not the carrot that creates incentive, but the stick. From what I’ve seen, there is way too much carrot and not nearly enough stick in our society…
I don’t see how that job is going unfulfilled.
In case anyone is interested, google Scott Dunlop Boston recuiter or Boston Bivium Group. I’ve worked with him previously and he’s good. He is connected in the startup world in New England and is the recruiter I plan on using once we get funded…
Good post and info NE.
Sometimes it’s not the carrot that creates incentive, but the stick. From what I’ve seen, there is way too much carrot and not nearly enough stick in our society…
So what we need are some starving kids to help light a fire under their deadbeat parents?
So what we need are some starving kids to help light a fire under their deadbeat parents?
Yes and no. My children aren’t starving, but I came to the realization that my family wouldn’t be able to afford to send them to good universities and provide a safe, comfortable environment for them to grow up in (an SFH in the burbs), and save for our retirement, even with a mid-six figure family income. The pain of that realization is what drives me. I can’t speak to what drives others, but it generally requires pain (the stick) to force a change in behavior and circumstance.
I’m not saying we should reduce our social safety net, but I am saying we need to look hard at balancing survival with incentive to change…
I have found those incredible sounding jobs don’t really exist. It’s a bait and switch by savvy recruiters.
“Every line of code I’ve written for my startup was done at night or on weekends, after working an 8-9 hour day at my paying job and commuting 2-3 hours.”
That’s impressive.
“Sometimes it’s not the carrot that creates incentive, but the stick. From what I’ve seen, there is way too much carrot and not nearly enough stick in our society…”
I should get going on my startup project idea before I am too old and decrepit to think anymore. I agree with your point about too many sticks and not enough carrots.
I have found those incredible sounding jobs don’t really exist.
Maybe in flyover country, but Boston is in dire need of more technical talent… lot’s of start-ups and a number of larger companies all vying for people. Very similar to San Francisco right now.
As I said, I’ve worked with him previously and he’s good at what he does. Don’t think that job is real? Throw your CV into the mix and see if you’ve got the chops…
A warning: if you’re a technical candidate, expect to be tested on technical material, including code examples and problem solving. If you say you know Java/Hibernate, you better be able to write a controller class, methods and hibernate models without having to look up syntax. And don’t get me started on the number of programmers who don’t know how to write recursive methods (or why you would need to).
As InColorado has stated previously: “It’s a bad time to be of average or lower intelligence.”
Thank you. I think you are basically agreeing with my premise that the current American economic system is not well serving about 70% of the American population. (whereas it did in the past) And I know that 70% of Americans are not lazy.
And if only 10% are doing really well in America, telling the other 90% to be like the 10% mathematically cannot be an answer to America’s problems. It can be an answer to 1 or 2% of Americans but it is not a real answer to main problem.
ITS obvious none of you had temp jobs seasonal work or horrible bitter employers…..
What the big deal its easy to find 5-10 jobs a week to apply for…nothing in the law states it has to be in your field…and just cut out the ad and make a BINDER so if UI want to see cool you got it. Nobody responds anymore to anything….so who cares You’re OVERQUALIFIED anyway.
You ask UI to help you with a job search, just let them try and contact any employer…. they will be just as frustrated and most likely just dont want to do the work, so you are covered there too.
States allow you to make 1/4 or 1/3 of your weekly benefit before they reduce it so 1 or 2 days a week is fine as long as you keep looking elsewhere.
You can even go to school…if you are registered or in classes now and they are fully paid for…..But If your classes start in 2 weeks and you didn’t pay fully they can deny you if you go.
But they dont exactly deny you benefits those are yours but they may penalize you for 6-8 10 weeks before you can collect the first check…
I don’t know about where you live, but in my state, you MUST not only look for a job each week (3 jobs actually) but document it and send that in with your weekly claim.
That’s impressive.
That’s not what my wife calls it… she calls it “avoiding family responsibilities”. I try to explain that something has to give, as there are only 24 hours in a day and I need to sleep at some point…
“avoiding family responsibilities”
My wife gave me a one-month pass while I slept for three hours a night in order to write a dissertation.
I suppose if I had a one-month brainstorm and did it again to try to start a business, she would give me another pass, but I’m not sure I’d win a second round of Russian roulette with my health…
That’s a pretty damn good job offer, but the recruiter will need to look nationwide or network the over the Internet better.
I don’t see how that job is going unfulfilled. 130K is good money no matter WHERE you live.
Here in flyover you have to be a “Principal Engineer” or “Architect” to get that kind of dough. A regular Java bit twiddler might get about 80K.
As InColorado has stated previously: “It’s a bad time to be of average or lower intelligence.”
More bad news: the bar is raised every year.
Here in flyover you have to be a “Principal Engineer” or “Architect” to get that kind of dough. A regular Java bit twiddler might get about 80K.
From what I know of that position, the $130k is for a team lead java guy, 60% hands-on development and 40% management, tech planning, etc.
For Boston, $80k is entry to mid-level level for software engineers with Java, C++, etc. $90k-120k is senior level software engineers. Architects and such are in the $130-150k range depending on skill set. Anything over $150k and you’re looking at Director/VP level manager role.
Here in flyover you have to be a “Principal Engineer” or “Architect” to get that kind of dough. A regular Java bit twiddler might get about 80K.
That’s true at the big companies where management carefully compares what they are paying against their peers to make sure they don’t pay more than absolutely necessary. I am discovering that there are exceptions at smaller companies that depend on some really odd folks as single-point-of-failure, and part of your pay is for being willing and able to put up with those people. So you can get more money but there are tradeoffs. There are days when I’d love to have some process and a defined scope and just be able to work like a normal engineer rather than following the guru around with the giant pooper scooper and turning his output into something the rest of the world can recognize.
rather than following the guru around with the giant pooper scooper
LOL. The imagery is superb…
Im one of them.
Always went and got/made another job rather than collect benefits.
After all, how can I criticise lazy black people if I am one of em?
That would make me no better than a racist.
You may be racist but you’ll never be a Racist®.
Associated Press - Guns, climate, gays missing in presidential race:
“Of the roughly 50,000 words spoken in this month’s three presidential debates, none were “climate change”, “global warming” or “greenhouse gas”. Housing was discussed in the first debate, but the word “foreclosure” was mentioned in none. Nor was gay marriage.
The 2012 presidential campaign, not just the debates, has focused heavily from the start on jobs, pushing other once high-profile issues to the sidelines.
With fewer than half of Americans believing that human activity contributes to global warming, according to Pew Research, President Barack Obama talks far less about climate change than he did four years ago. When he locked up the Democratic nomination in June 2008, he said future generations would recall “this was the moment when the rise of the oceans began to slow and our planet began to heal.”
Obama hasn’t come close to making such claims in recent months.”
I wonder why “guns” was in the headline? It came up in the 2nd debate where Obama admitted that if he had his way, he’d prefer to bring back the/a assault weapon ban.
Lol!
You got it wrong, Romney talked about the assault weapons ban he passed while Gov of Mass.
I watched with my own eyes…in addition to what you are talking about, Obama was also asked point blank if he wanted to bring back the AWB and he said yes.
Other than the idea that it’s a slippery slope into regulations/bans you don’t want, what’s the big deal about an AWB?
Heck, I’d love to take an M1A1 out for a spin but there’s a (pretty compelling) reason why I can’t.
We’ve covered it here before, but in addition to the slippery slope issues, it’s a law that makes no sense if you understand firearms. An intellectually honest version would ban everything that autoloads (can fire semi-automatic), but that would never pass. So instead they make bogus distinctions between one firearm and the next and declare one acceptable and one not when there is no functional difference.
It becomes obvious that in the end it’s about emotion over appearance and groups of gun owners and trying to carve away rights one piece at a time and not about actually protecting anyone.
I guess in my version, it would not include semi-automatic firearms as I believe the 1994 version did.
But to your point, I think the recent shootings (since, say, Columbine) saw the use of semi-automatic weapons, not automatic weapons…
To be clear, when I say “to your point…” what I mean is that most AWB proposals are in response to recent shootings and can’t address what they intend to do without doing what you say (banning all semiautomatics).
I guess in my version, it would not include semi-automatic firearms as I believe the 1994 version did.
But if all you care about is fully automatic, they are already tightly controlled. The AWB was simply bad law, based on emotion.
Guns, climate, gays? How about “first term accomplishments,” few though they may be. All the ads I see by The One and his surrogates just trash the other guy.
On climate and guns the silence is deafening. You can add in America’s longest war (the drug war). Wonder what the total $$ cost of the drug war is now? Would b cool to see a website that keeps a rolling total of the money, tons of dope, # of incarcerations like the one they have for the national debt.
+1…I agree…We have more drug users by a factor of 20X then we do in prisons or convicted felons…
So what are you saying?
Make drug use legal?
great,
Now you got thousand/millions of broke a$$ ___gas high as sht and p—y still costs money.
Do you know what that looks like?
Make drug use legal ?? Do you know what that looks like ??
I know what illegal looks like…Besides…You miss the whole friggen point of my post…Its only illegal if you don’t get it at Walgreens…
Drug Sentencing Disparities
About 14 million Whites and 2.6 million African Americans report using an illicit drug
5 times as many Whites are using drugs as African Americans, yet African Americans are sent to prison for drug offenses at 10 times the rate of Whites
African Americans represent 12% of the total population of drug users, but 38% of those arrested for drug offenses, and 59% of those in state prison for a drug offense.
African Americans serve virtually as much time in prison for a drug offense (58.7 months) as whites do for a violent offense (61.7 months). (Sentencing Project)
SF its not racism the courts do discriminate against the severely stupid…
Once you use that as the benchmark…its about even
You can add in America’s longest war (the drug war).
Marijuana is dangerous because it is illegal, not the other way around.
This just proves that jobs are the #1 issue, always. Global warming, gay marriage, etc are luxury issues.
The Recovery® as reported by Bloomberg - Firings Highest Since 2010 as Ford to Dow Face Slump:
“Ford Motor Co and Dow Chemical Co joined a growing number of companies firing thousands of workers as sluggish U.S. growth and Europe’s deepening recession lead to a persisting slump in sales.
North American companies have announced plans to eliminate more than 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.
So far, out of 235 S&P 500 companies that have released third-quarter earnings, 137 have reported sales that trailed analysts’ estimates.
Those results, similar to the S&P 500’s second-quarter performance, signal employers may increase firings over the next two quarters, according to John Challenger, chief executive officer of Challenger, Gray & Christmas Inc.”
But the government is reporting lower unemployment, they would not lie or distort numbers.
“…they would not lie or distort numbers.”
Great point! Unlike politicians who lie or distort numbers, government workers could get into lots of trouble for doing that sort of thing.
Keep the faith because I sure don’t believe that, I think that is how you get promoted under this administration and others.
Where did you get your information about how government statistics are produced — Rush Limbaugh?
No, just on the reality that there is no way 900,000 jobs were created last month as was alleged to drop the unemployment rate to 7.8%. All the private data is showing that it was a soft month, a second government report showed just over a 100,000 jobs, but keep drinking the kool-aid Cantank.
Trends, how do they work?
We are looking forward to the next two quarters of layoffs being spun as follows:
If Obama is re-elected, the Republicans say this confirms his failure on the economy.
If Romney wins, the Republicans say this is because the hole Obama left this country in was so deep it takes time to climb out of it (this should sound quite familiar).
“Ford Motor Co and Dow Chemical Co joined a growing number of companies firing thousands of workers as sluggish U.S. growth and Europe’s deepening recession lead to a persisting slump in sales.”
Yet both companies showed profits. Billions, in fact.. just not the profits they expected.
Yet both companies showed profits. Billions, in fact.. just not the profits they expected.
Problem # 126 I have with Wall St. Investor expectations of profit growth are ridiculous. The corporate model of layoffs because profits were below consensus estimates is complete BS. Now, layoffs because sales/demand was below forecasts, I understand…
Definitely the other half of why decent jobs are hard for J6P to find and why lack of demand can become a dangerous feedback loop.
Agreed. I wonder how much Wall St. actually hurts our economy, in that respect. I know of one very-well-run medical software company in New England, Meditech, that has been around for years and can boast that they have never had a layoff.
They are a private company and grow every year… the difference from a public company being that they answer to the owner(s) and not outside investors. The owner(s) actually value their employees. Of course, he doesn’t pay his employees that well to start, but everyone starts at the bottom. The company promotes from within, so everyone is given a chance to prove themselves and move up.
If I had to model my company after something, it would be this…
“I wonder how much Wall St. actually hurts our economy,”
I don’t wonder at all.
don’t wonder at all.
All kidding aside, I’m trying to balance the whole “access to capital” Wall St. thing with the “Wall St expectations drive company performance” thing… access to capital is a good thing, but not when it creates too much churn in our labor market because of investor demands for higher returns.
Which was its daily function before the first deregulation started in the 1980s, causing an almost immediate financial cascade disaster with the S&L debacle before the end of that decade.
You know, the one that is VERY similar to what we just went through.
The thesis in this article is incoherent. Doesn’t extreme uncertainty about the future outlook normally add to the gloom rather than reduce it?
Generally speaking, articles which purport to predict what Wall Street analysts are currently missing but will be able to see clearly months into the future seem patently specious. If this is obvious to the writer, wouldn’t people who make their livelihoods studying the capital market already see it, too? Are the people who make six figure (and more) incomes on Wall Street really that dumb? And is Mr Market even dumber?
None of this makes sense.
Oct. 24, 2012, 4:03 p.m. EDT
Analysts slow to admit fourth-quarter gloom
90% of corporate forecasts see results below Wall Street consensus
By Wallace Witkowski, MarketWatch
SAN FRANCISCO (MarketWatch) — Halfway through the third-quarter earnings season, one thing is becoming clear: the fourth quarter is likely to be gloomy.
Even though many companies have forecast fourth-quarter results below the Wall Street consensus, analysts have been slow to react. That worries Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Analysts currently estimate fourth-quarter operating earnings of $26.60 a share for the S&P 500 Index (SPX +0.67%), according to Silverblatt. That’s down from $26.87 a share at the end of the third quarter, but well above the all-time record of $25.43 a share reached in the second quarter of this year. The current estimate is still too high given the number of profit warnings during this earnings season, Silverblatt said.
Uncertainty over the U.S. elections in November may be holding many analysts back from changing their numbers for the sake of clarity, he said.
“At least when we wake up the day after election day, we’ll know who the players are,” Silverblatt said. “We’ll know the House, the Senate, who the president is, and most importantly, have an idea of how negotiations will go, so you can do realistic projections.”
Right now analysts have so many variables going on, they have to run more scenarios than is practicable. The problem with that practice is that the longer analysts wait, the more pronounced an effect it’ll have on markets when they do cut estimates.
“I’m just hoping it will not be a massive one across the board,” Silverblatt said. “That can come somewhat as a shock.”
…
Got incipient gloom?
As Q3’s profits falter, Q4’s prospects have worsened
As high-profile companies slash their earnings and sales outlooks for the fourth quarter, analysts have been slow to follow suit: The operating-earnings forecast for the S&P 500 remains at an all-time high.
Profits ares still being made, yet not meeting Wall St. expectations is somehow catastrophic.
U.S. stocks flat as worry list returns
iPhone and iPad maker Apple is due to report after the bell
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks returned to a near-neutral stance Thursday as worries about earnings and growth vied with reports that cast a more favorable light on the global economy.
“The economic news was fairly decent, but there’s a continual overhang about earnings and growth going forward,” said Robert Pavlik, chief market strategist at Banyan Partners in New York.
Durable goods climb in September
September’s increase in orders for durable goods is largely tied to the purchase of civilian aircraft.
“We’re focused more on earnings, and even more on sales. At some point, 2% sales growth and 10% earnings growth can’t work mathematically forever,” said Paul Nolte, managing director at Dearborrn Partners in Chicago.
“We’re at that point now, where margins have maxed out or are darn close to it,” Nolte added.
…
Not only has housing bottomed out, but it has clearly rediscovered its mojo. Buy now, or get priced out forever!
Pending home sales contracts edge up in Sept.
10:18AM EDT October 25. 2012
WASHINGTON (AP) — Slightly more Americans signed contracts last month to buy homes, another sign that the housing recovery is picking up, boosted by mortgage rates that continue to hover near record lows.
The National Association of Realtors says its seasonally adjusted index of sales agreements rose in September to a reading of 99.5. That’s up from August’s reading of 99.2 but below a two-year high of 101.9 reached in July. Contracts are up 14.5% from a year ago.
A reading above 100 is considered healthy. The index bottomed at 75.88 in June 2010 after a home buyer’s tax credit expired.
…
I’m looking forward to plenty of more stories about foreign investors who got burned buying Chinese property. Generally speaking, I think it is a great fundraising idea for sovereign governments to let an army of foreigners in to buy real estate at inflated prices, then screw the lid on the market in order to part the greater fool foreigner investors from their money. I hope Uncle Sam tries something similar over the next few years.
Luckily this could never happen in America.
October 25, 2012, 7:24 PM HKT
Chinese Property: Not Out of the Woods Yet
…some high-profile players say there are still signs of pain lingering in the closely watched sector.
Hong Kong-listed China Overseas Land & Investment, one of China’s largest property developers, is one of those players. “The worst time for the China property market is not yet over even though liquidity is likely to ease further,” the company said in its third quarter business review late Wednesday.
“Before middle of next year there will not be obvious relaxation in the tightening policies,” the developer added.
Officials have reiterated that property policy tightening will continue, and that China must not allow speculators back into the market. Chinese officials fear that rising housing costs could lead to social unrest.
There are still signs of weakness in the market for high-end homes, which was particularly hard hit by China’s property tightening measures. A fund run by J.P. Morgan Asset Management lost $80 million in a luxury housing project in northeast city Dalian, as its lender foreclosed on the property over the summer after the asset manager breached loan covenants due to poor sales. J.P. Morgan Asset Management has declined to comment.
Real estate agencies also said that investors have become more risk-adverse amid uncertainties about the country’s economic growth outlook. A highly anticipated boost in housing sales in the September and October “golden months” also failed to materialize. This means that inventory levels are likely to remain high, diminishing property developers’ appetite for investment says Capital Economics.
Recent evidence of warming in the land and housing markets could be a false dawn, said Capital Economics chief Asia economist Mark Williams.
While property sales were up in the third quarter overall in terms of floor space, they dropped 3.6% in September relative to a year before, Mr. Williams said.
Since June, housing prices have risen modestly, but that momentum started to fade in August and September, according to official data and private sector data of average home prices in the country.
Average home prices in 70 Chinese cities increased by a marginal 0.01% in September from a month earlier, compared with a 0.05% increase in August, according to China Real Time’s calculations from official data. In July, average prices rose 0.13% on-month, the highest level in the year-to-date.
“We think it is too soon to call the end of the downturn,” Mr Williams said.
Not OUT of the woods YET? Didn’t it just enter the woods?
Funny how everyone wants eagerly to be a contrarian these days. So much so that ANY downturn, even one in its earliest stages, is seen as “Time to Buy!”
BUSINESS
Updated October 25, 2012, 10:51 a.m. ET
CEOs Call for Deficit Action
Executives to Press Congress to Embrace Spending Cuts and Higher Tax By DAVID WESSEL
Chief executives of more than 80 big-name U.S. corporations, from Aetna Inc. (AET +0.92%) to Weyerhaeuser Co., (WY -1.11%) are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts.
The CEOs, in a statement to be released on Thursday, say any fiscal plan “that can succeed both financially and politically” has to limit the growth of health-care spending, make Social Security solvent and “include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.”
The declaration differs sharply from those of several other business groups, which urge Washington to deal with the deficit and avoid across-the-board spending cuts and tax increases set for year-end—but avoid any stance on the politically charged issue of raising taxes.
The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. “There is no possible way; you can do the arithmetic a million different ways” to avoid raising taxes, said Mark Bertolini, CEO of Aetna. “You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.”
Mr. Bertolini emphasized that he and like-minded CEOs will resist raising taxes unless accompanied by significant spending restraint. “If someone were to make the argument, we just want to increase revenues so we can increase entitlements, the answer is no,” he said.
Attempting to create a climate in which compromise is possible, the business executives are stepping into a debate over taxes that is one of the defining differences in the presidential campaign. President Barack Obama says tax increases on upper-income Americans, CEOs included, are an essential and fair element of any deficit-reduction program. Republican candidate Mitt Romney is against raising taxes, but backs a tax overhaul that he says would spur economic growth.
The executives didn’t endorse Mr. Obama’s proposal to raise the marginal income-tax rates for the top 2% of taxpayers or any other proposal. Rather, they called for an overhaul of the tax code that, among things, would eliminate or reduce deductions, credits and loopholes (known as “broadening the base”), and one that also would bring the Treasury more revenue than the existing code does.
The CEO statement was organized by the Fix the Debt campaign, a bipartisan effort largely inspired by Republican Alan Simpson and Democrat Erskine Bowles, who chaired a 2010 deficit panel appointed by President Obama and have been crisscrossing the country sounding fiscal alarms.
The executives called the Simpson-Bowles commission approach—about $3 in spending cuts for every $1 of tax increases—an “effective framework” for addressing what they termed “a serious threat to the economic well-being and security of the U.S.”
…
The only spending cuts they want are less regulations and oversight. All in the name of “patriotism” of course.
“Broadens the base”
Too bad the aren’t “broadening the tip”. That’s where all of the money is.
“Lowering the rates”
Give the Lucky Duck a ten percent tax cut, and he might take home an extra couple hundred bucks a year. A set of tires, two trips to the grocery store, or fill up the tank a few times.
Give the 1%ers a ten percent cut, and they will lay off their US employees and hire 5 times the number of Chinese or Mexicans, or buy a new G-650, so more pillaged loot can be hauled out of the country.
There’s several reasons why we don’t hit the lucky ducks with a Federal income tax. One of them is that it costs more to collect than what is collected.
LOL!
None of those companies pay any taxes now.
Of course they didn’t mention removing sweetheart tax breaks.
“The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. “There is no possible way; you can do the arithmetic a million different ways” to avoid raising taxes, said Mark Bertolini, CEO of Aetna. “You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.””
BINGO
And SB-style revenue increases would put more tax burden on the investor class of wealthy (capital gains taxes higher) and less on the productive class of the wealthy (ordinary rates lower). This is good.
It is a shame that SB wasn’t pursued vigorously.
“…and you can’t cut entitlements enough to fix this problem.”
Yeabut you might be able to cut entitlements a hell of a lot under the pretense that you can cut entitlements enough to fix the problem, including welfare payments to Big Bird.
Just like you can raise more taxes under the pretense that there are enough rich people that we can tax to solve the problem.
I don’t believe anyone has proposed that the problem can be solved solely through “soak the rich” taxation, but if you have contrary evidence, please post…
As of right now, it’s the only plan that Obama has set forth.
If you have a different plan presented by Obama, please post…
I keep hearing him say a balanced approach, that includes spending cuts and tax increases on the upper crust.
I don’t know who you’re listening to.
Which spending cuts? How does he intend to reduce entitlement spending? Is that like the Simpson Bowles approach that he has thus far ignored?
So, we are now to believe that he can get a plan like THAT done?
He said that he wishes to get something done “based on the principles of my bipartisan debt commission.” (his words from his convention speech). Yet, he’s had the specific recommendations of that commission since December 2010, and he has yet to say what part of the recommendations he likes, and which ones he would change.
The only specific tax plan he has put forth (Clinton era tax rates on the wealthy) is going AWAY from the Simpson-Bowles tax suggestion (which suggests lower rates, and a cut to deductions–sound familiar?).
Has he simply not had enough time to consider the commission’s recommendations? How much time does he need? Or is he simply playing politics?
He says, “balanced approach”.
He says, “based on his debt commission.”
Yet his tax plan isn’t consistent with his debt commission.
And he hasn’t said whether his spending cut approach is consistent with his debt commission.
Forgive me if I take these statements and positions as inconsistent with someone being open and straightforward, but they are just that, inconsistent with someone being open and straightforward.
Can I summarize?
Dear Politicians,
The current fiscal course will lead to a debt crisis.
That is bad.
The course needs to be changed.
Do your job.
Signed,
CEOs
No, more like this.
……..
Dear Leaders,
As much as we have proclaimed that we are the masters of the universe, it dawned to us recently that we have been relying way too much on government’s and taxpayers’ generosity. Without the government’s or for that matter taxpayers’ t1t$ to suck on, we will undoubtedly be exposed as the biggest frauds out there. Furthermore, our salaries, our bonuses and our financial contributions to your next election cycle all depend upon whether the t1t$ are still available for us to suck on. You know the answer as to what needs to happen.
Sincerely,
Masters of the Universe (AKA Captains of the Industries)
I like your style, Ross.
…but keep gov out of business. Specifically, OUR business.
No, more like this.……..Dear Leaders,…
Hey, that was pretty good.
It seems like only a few short months ago the London whale was loosing billions of dollars for J.P. Morgan in a trade that went sour. I’m surprised to see them in the news so soon for getting burned yet again.
COMMERCIAL REAL ESTATE
Updated October 24, 2012, 3:11 a.m. ET
J.P. Morgan Gets Stung by China Downturn
Fund Run by Bank Loses High-End Residential Tower to Foreclosure as Rules on Property Purchases Hit Luxury Market
By ESTHER FUNG
Investors are feeling the effects of China’s tightening measures. The WSJ’s Deborah Kan speaks to reporters Te-Ping Chen and Esther Fung about buyers’ changing appetites in both Mainland China and Hong Kong.
SHANGHAI—A luxury apartment building that is one of the most visible casualties of China’s high-end property bust is up for auction in the northeast city of Dalian, after a bank foreclosed on the property.
The 48-floor Park Central was owned by a fund run by J.P. Morgan Asset Management, which invested $80 million in the property. But the asset manager lost the property when U.K.-based lender Standard Chartered (STAN.LN +1.61% PLC), which provided the majority of a roughly $140 million loan, foreclosed over the summer after sluggish sales put it in violation of loan covenants, according to people with knowledge of the matter.
The loss, which came after China tightened rules on buying luxury apartments, shows how exposed some European and U.S. investors are to Chinese real estate. Several potential investors have been offered the property, but no deal has been reached, the people said.
…
Hey, I can lose $140 million just well as the next guy! Send that money my way next time.
Hey, I can lose even more money than that. So, send your multi-millions my way!
One conclusion seems clear from the QE experiments being run by central banks around the world: When easy money is made available to Megabank, Inc at rock-bottom rates, households get screwed out of borrowing opportunities.
25 Oct, 2012, 02.52PM IST, AFP
Eurozone crisis drying up credit to households: ECB
FRANKFURT: Bank lending to private households in the euro area, which has practically dried up in recent months, contracted again last month in face of the region’s crippling debt crisis, data showed Thursday.
Eurozone bank loans to the private sector declined by 0.8 percent in September compared with the same period last year after already shrinking by 0.6 percent the previous month, the European Central Bank said in a statement.
President Mario Draghi has said that weak lending to the private sector reflected a pessimistic view of eurozone growth prospects and heightened risk aversion amid the crisis.
In a bid to boost lending in the embattled 17-member bloc, the ECB offered banks more than 1.0 trillion euros ($1.3 trillion) in ultra-cheap long-term loans but the operation appears to have been less effective than Draghi hoped.
The ECB also published eurozone money supply data, which suggest the money supply — a key guide to future inflation — is growing less strongly than expected.
…
Business investment stalls as ‘fiscal cliff’ looms
By Jason Lange
WASHINGTON | Thu Oct 25, 2012 11:10am EDT
Job seekers stand in line to meet with prospective employers at a career fair in New York City, October 24, 2012. REUTERS/Mike Segar
(Reuters) - Business investment showed signs of stalling in September, an indication that worries over a possible sharp tightening in the federal budget are already weighing on the economy.
Other data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week, a fresh sign the labor market is slowly healing.
New orders for capital goods outside of defense and excluding aircraft — a proxy for business spending plans — was unchanged last month at $60.3 billion, Commerce Department data showed. Analysts polled by Reuters had expected a modest gain.
The reading highlighted concerns that companies are holding back investments due to fears the U.S. Congress could fail to avert sharp tax hikes and spending cuts in 2013, which threaten to send the country back into recession.
“The slowdown in business fixed investment during the second half of the year is even more pronounced than feared,” said Harm Bandholz, an economist at UniCredit in New York.
Shipments of non-defense capital goods other than aircraft, which go into the government’s estimates for economic growth, fell for the third straight month. As a result, JPMorgan lowered its estimate for third-quarter economic growth by two tenths of a point to a 1.6 percent annual rate.
The investment readings were part of a larger report that showed orders for long-lasting factory goods last month posted their biggest gain since January 2010. However, the rise was fueled by a spike in volatile aircraft orders and failed to make up ground lost in August.
Manufacturing has been a major driver of the recovery from America’s 2007-09 recession, but now is beset by softer demand at home and abroad. The European debt crisis has suppressed orders at factories around the world, from China to the United States and Latin America.
…
Not much demand with double digit inflation and single digit raises.
“Let them eat i-pads” - Federal Reserve Bankster William Dudley
Is it possible Utah will choose Obama over Romney? I recall from the 1992 election that Utah was the only state where Clinton came in third behind Bush and Perot, so this would be quite an upset.
October 19, 2012, 4:45 pm
Newspapers in Salt Lake City, Tampa and Denver Endorse Obama
By ASHLEY PARKER
Mitt Romney may be something of a Utah native son, having helped turn around the 2002 Salt Lake Olympic Games, attended Brigham Young University and once owning property there. But on Friday, The Salt Lake Tribune tossed its support to President Obama, in a editorial titled “Too Many Mitts.”
Though the endorsement begins by acknowledging Mr. Romney’s Utah and Salt Lake Olympics bona fides — “Romney managed to save the state from ignominy, turning the extravaganza into a showcase for the matchless landscapes, volunteerism and efficiency that told the world what is best and most beautiful about Utah and its people,” reads the second paragraph — the tone quickly changes. The editorial calls Mr. Romney a “shape-shifting nominee” and adds that the major question of the campaign is, ““Who is this guy, really, and what in the world does he truly believe?”
“Politicians routinely tailor their words to suit an audience,” reads the editorial. “Romney, though, is shameless, lavishing vastly diverse audiences with words, any words, they would trade their votes to hear.”
The Tribune editorial page, which endorsed Mr. Obama four years ago but went with President George W. Bush before that, concludes: “Therefore, our endorsement must go to the incumbent, a competent leader who, against tough odds, has guided the country through catastrophe and set a course that, while rocky, is pointing toward a brighter day. The president has earned a second term. Romney, in whatever guise, does not deserve a first.”
Mr. Romney’s campaign declined to comment on the endorsement.
…
What are you smoking today? Do you even look at facts (polls) before you make your comments. You really are like Obama, he does not have an original thought without a teleprompter. You just cut and paste entire articles but you have the audacity to say I get my thoughts from Rush. If you think that Rush gives his listeners the complicated analysis that I use with say global warming, I think you are overestimating Rush.
Salt Lake City is a very liberal city, google Rocky Anderson a former Mayor. The Salt Lake Tribune reflects its audience. Get back to me when the Provo paper backs Obama
Polls are not facts.
They are on November 6th.
That would be an election.
The poll result is a fact.
Election result is a fact.
“What are you smoking today?”
I don’t smoke, but I am enjoying a pot of Kona coffee.
> Is it possible Utah will choose Obama over Romney?
No.
Utah will choose Obama in the same universe that California chooses Romney.
That was my guess, though I note that Utah is a much smaller state than California, and hence lots fewer voters would have to change their minds in order for Utah to go to Obama than for California to go to Romney.
Utah last voted for a Democrat in 1964.
This is the first Mormon candidate (for a major party).
A larger PERCENTAGE of voters need to change their mind in Utah than California.
IMHO, Utah voting for Romney is the biggest “lock” in the electoral college this year.
“Utah last voted for a Democrat in 1964.
This is the first Mormon candidate (for a major party).”
True confession: I only suggested this in order to generate discussion. I honestly am 100% certain that Utah will go to Romney and California will go to Obama.
Sure it’s a small number- but a switch from red to blue would still require a unrealistically high percentage of Utah voters to change their allegiance.
I find it humorous to see the local politicians clutching so fervently to the Romney coat-tails here. According to the political ads, they’re all ready to help President Romney succeed in Washington. They all have Utah values- not those (cringing with disgust) “Obama” values.
I’ve read that one of the most accurate predictors of a persons vote is: how often do they go to church. I suspect it might have something to do with how appropriate one thinks it is for for morality to be dictated from authority… but I digress. In any event, your typical Utah resident (statistically) spends a lot of time in Church.
Thankfully, neither party has anything to win or lose here, so we’re spared most of the political advertising at the national level. McCain won Utah in 2008. Romney is Mormon. The result is a foregone conclusion.
Heh heh…like the average voter in a bright red state cares what those liberals that work down at the paper say…
That’s true. Come to think of it, my (Utah) MIL cancelled the subscription to the local paper. She is too busy to read it, …
Exactly!! also, the average voter in a bright red state doesn’t know how to read.
I know you’d like to believe that, but I lived it and it’s not true. They just don’t read what you think they should read.
Rasmussen has Romney up in Provo.
Is it possible to exceed 100%?
Confusion Reigns Over Greece Bailout Extension
Published: Thursday, 25 Oct 2012 | 8:35 AM ET
By: Shai Ahmed
CNBC Associate Editor
Confusion reigned on Thursday, a day after Greece’s finance minister told the parliament that Greece had received an extension on its bailout, with the European Central Bank and Germany denying a deal had been done.
Jorg Greuel | Getty Images
Greece
Greece is locked in discussions with its international Troika of lenders – the International Monetary Fund (IMF), European Commission and the ECB – to extend the deadline it has been given to implement a range of austerity measures as part of its 130 billion euro ($169 billion) bailout.
A two-year extension that Greece is seeking would cost around 13 to 15 billion euros, according to a number of reports.
The country is running out of money and needs the next tranche of aid without which much of the country would cease to function.
Top officials have denied that an extension has been formally granted.
In Berlin, ECB President Mario Draghi insisted that there had been no agreement and negotiations were on-going with “progress being made.” The denial was a rebuttal of Greek Finance Minister Yannis Stournaras’ claim in parliament that the country had won an extension.
…
“A two-year extension that Greece is seeking would cost around 13 to 15 billion euros, according to a number of reports.”
Beware the blue-eyed lenders.
“And even if he is not romantic personally he is very apt to spread discontent among those who are.”
This is what comedians do.
Like I said yesterday - the government is actively urging people to turn their finances over to Wall Street and to go more deeply in debt. What’s going to happen when Joe SixPack realizes that the government, which is supposed to represent his interests, is actively trying to f–k him?
Greg Smith (the Goldman Sachs “muppet” guy) on his book and his time with GS:
http://www.bloomberg.com/video/grilled-taking-greg-smith-to-task-on-goldman-sachs-MQrZhWvkRKGtEmxGgvugDw.html
“What’s going to happen when Joe SixPack realizes that the government, which is supposed to represent his interests, is actively trying to f–k him?”
Nothing.
Did you miss the last 30 years?
Why do the PTB do what they do? Because. They. Can.
- with love, Honey Boo Boo
“…Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable…”
If only that were true. It wasn’t even true in Mencken’s time. If it were true, liberterians (lower case) would be in charge of a dramatically smaller government. No, too many people believe government is good and more government is better.
The median price per square foot appears to be slowly degrading at an excruciating pace. But chin up, there is more to the story. Today’s market is populated with houses that are much NEWER than last year’s houses. You can get a newer house today for slightly less per square foot than an older house last year.
http://www (dot) realtor (dot) com/data-portal/Real-Estate-Statistics.aspx
That’s right. Newer inventory, lower price.
Get used to it because it’s going to be with us for a dacade or two.
From the Defense Prisoner of War-Missing Personnel Office website- “Recently Accounted For”:
“Lt. Col Don C. Faith, commander of the 1st Batallion, 32nd Infantry Regiment was lost 12/2/1950 near the Chosin Reservoir. He was accounted for on October 11, 2012″
http://tinyurl.com/cp5cbpr
“We’re still attacking, and we’re going all the way to the Yalu. Don’t let a bunch of Chinese laundrymen stop you.” Ned Almond, Commander US Army X Corp, November 1950 to the commander of the 31st Regimental Combat Team
“Task Force Faith-31st Regimental Combat Team”
Wiki: http://tinyurl.com/cvrkf39
Party like it’s 1999.
San Francisco Rental Market Drives Applicants to Extremes
Alma Freeman, Emil Meek and dog Pete have been on a grueling hunt for an affordable apartment in San Francisco.
San Francisco’s rental market usually cools down in the fall, but not this year. The average asking price for a one-bedroom in the city is now $2,673 a month, up more than 10 percent from last year. This big rent increase reflects a housing shortage fueled on one side by the recent wave of tech hires and the other by an absence of new units. In response, apartment hunting has returned to the frenzy of the dot-com boom, with prospective applicants packing open houses, forking over application fees and even engaging in bidding wars just to secure a temporary place to live.
I experienced this superheated market firsthand. My girlfriend and I spent three months this summer searching for an apartment. We saw over two dozen one-bedrooms, most for more than $2,200 a month, and almost all of them completely horrible. We’re talking shag carpet, mold, and converted garages with no windows. Even the worst places we saw drew crowds. The open houses were like some twisted beauty contest where you had five minutes to tell your entire life story, woo the landlord, and leave everyone else in the dust. Emil Meek puts it perfectly: the process “turns you into a monster.”
I met Meek and his girlfriend Alma Freeman outside of a packed open house in Potrero Hill. They are in their mid-30s and both have that stretched-out look of put-on smiles and constant heartbreak. Meek is a landscaper and Freeman works for a non-profit downtown. They have great credit and collectively earn $110,000 a year, but they still can’t find a place. Freeman says “it feels a little bit like you are looking on the sidelines and not really able to compete.” The desperation of the search has made them manic. They are arriving to open houses as much as an hour early, peeking into the windows to try and scope the place out, and doing everything in their power to get their application in before anyone else.
Even more worrisome Meek says, is how the process corrupts everyone involved. At one place they saw, the landlord was running a bidding war like it was some kind of game show. The couple had actually met the same landlord a week earlier at a different apartment, and there he had said he was looking to fill the vacancy with “just the right person.” At the second place, the “right person” had come to mean whoever was willing to pay the most money. He looked around at all the applicants and then said “sorry, it’s San Francisco!” As disgusted as the couple was, it didn’t stop them from putting down a bid of their own.
Solution: don’t live in town
This has been another answer in the series of “Simple Answer for Simple Minds”
Sigh, LOOSERS!
I am sooo Mad. I went to an open house in Rancho Santa Fe, and people were bidding against ME! I DESERVE a 10 acre ranch in Rancho Santa Fe. No I don’t have 10 million dollars, and no I just work as a regular middle class fellow. But it is a SOCIAL PROBLEM that I don’t get 10 acres in Rancho Santa Fe! I WANT IT! *foot stomp*
landscaper and a worker for a non-profit pulling in a combined $110K — is this normal for SF?, what am i doing here in the desert working for peanuts?
Average salary here is 65K.
the weather sucks in SF, not sure why sheeple like it there?
I prefer Santa Cruz.
what am i doing here in the desert working for peanuts?
People on the coasts don’t realize how low pay is in flyover country.
Flyover = The Great American Desert (for decent paychecks)
There’s a reason why houses are cheap out here. Nobody wants to live out here, given a choice.
The sound of the holiday seasons around here is the whine of jets picking up the local 1%ers, and getting them TFOOD, typically Palm Springs in the winter, and Aspen or Jackson Hole in the summer.
There’s a reason why houses are cheap out here. Nobody wants to live out here, given a choice.
So here’s a broader question for y’all:
If money was not an issue, where would you choose live?
There’s a reason why houses are cheap out here. Nobody wants to live out here, given a choice.
Not 100% true. But not a lot of people willing and able to successfully work for the corporate American machine actually want to live there. So some of those people have to be imported…
If money was not an issue, where would you choose live?
I need sunshine and low humidity and mild to cool temps.
If I could also wipe away most of the people, probably SoCal. Beach AND mountains would be nice.
The Rocky Mountains are a nice compromise for me…you just pick the distance you need to be away from the city. I don’t need a lot of distance, but plenty do.
I need sunshine and low humidity and mild to cool temps.
I had that half of my life up until 4 years ago. But I could live in parts of the Mid-West as I have. It could be a good base if you didn’t have to go to an outside job. It’s so much cheaper you could go on a lot of trips from there.
(And I hear they have cable now)
what am i doing here in the desert working for peanuts?
Paying cheap rent?
Boulder, santa fe, durango…. there are some fantastic cities out there. Even ABQ and Kansas City can be fun and soooo cheap!
The open houses were like some twisted beauty contest where you had five minutes to tell your entire life story, woo the landlord, and leave everyone else in the dust
Sounds like the most of the Bay Area in 1999.
Seriously, people I pay money to had better be giving me the “wooing” or they can kiss my “woo”.
I don’t expect 5 star service from 1 star places, and understand everyone has bad days, but don’t EVER think of having an “I owe you” attitude, when you have so far delivered NOTHING, or I WILL bust your chops “to your boss”.
So terrorists are romantics at heart?
They are passionate.
disappointment is always the mother of rebellion.
These guys (SFGate) are real estate shills, but , still…
Only time will tell if we managed to but at the tail end of what some are calling a bottom. Even though we have no plans for selling for a very long time, it’s interesting now being on the other side of the fence and reading these articles now that I am no longer a renter.
Seasonal slowdown? Not in the Bay Area
Real estate in some parts of the nation experiences the malaise of fall, buyers cooled off by chilly weather and shorter days, distracted by the impending holiday season. But not the Bay Area. This September, Bay Area property sales made improvements in three key areas: days on the market (DOM); listing prices; and, most importantly of all, sales prices.
ZipRealty recently released September 2012 data in comparison with 2011 for each county in the Bay Area. And that data shows a very hot market, with no sign of seasonal slowdown whatsoever
to but
to but= to buySo now that Facebook mobile ad revenue is up the sky’s the limit for rents in the Land of Fruits and Nuts!
the sky’s the limit for rents in the Land of Fruits and Nuts!
I could be wrong, but it’s not sustainable. It will always be more expensive to live in some places, but 3-4K month for a 2 or 3 bedroom?
Many people are paying 40-50% of their salaries on rent, which is also ridiculous.
Hubbard, prominently featured in The Inside Job seeks the Treasury Secretary position.
In Maryland, there’s a ballot question on whether to expand gambling to National Harbor, a beautiful, upscale hotel complex across the Potomac from DC. I oppose gambling because a) it creates dead zones around casinos and b) it brings in organized crime. But I’ll probably vote for the expansion just to bring the ultimate collapse sooner (Maryland’s had gambling in the past and got rid of it when the costs became apparent).
Likewise, with a Romney administration, I almost look forward to seeing what kind of Wall Street shenanigans would take place if Romney wins. While it may not be good for the country, it would provide a lot of conversation and traffic to the HBB
Glenn Hubbard, the chief economic adviser to Mitt Romney, would rather be Treasury secretary than Federal Reserve chairman if the Republican candidate wins the presidential election, according to three people familiar with his thinking.
http://www.bloomberg.com/news/2012-10-25/hubbard-said-to-prefer-treasury-to-fed-if-romney-wins.html
A vote for Romney is a vote for Inside Job star Glenn Hubbard to get a high-level position in the next administration!
P.S. The Treasury Secretary, not the Fed Chairman, is also chair of the Plunge Protection Team.
Things would certainly get interesting.
“Some men just want to watch the world burn.” — Alfred Pennyworth, “The Dark Knight”
Do the ‘hustle‘! And be sure to keep dancing until the music stops playing!
Legal/Regulatory
October 24, 2012, 12:35 pm
U.S. Accuses Bank of America of a ‘Brazen’ Mortgage Fraud
By BEN PROTESS
A Bank of America branch in Manhattan. The Justice Department took aim at a home loan program known as the “hustle.”
9:34 p.m. | Updated
Five years after the housing market crumbled, government officials are still trying to assign blame for the problems that fueled the mortgage boom and bust.
On Wednesday, federal prosecutors in New York took aim at Bank of America. They accused it of carrying out a scheme, started by its Countrywide Financial unit, that defrauded government-backed mortgage agencies by churning out loans at a rapid pace without proper controls. In a civil suit, prosecutors seek to collect at least $1 billion in penalties from the bank as compensation for the behavior that they say forced taxpayers to guarantee billions in bad loans.
Financial firms have been battling chaotic — and at times redundant — litigation related to the mortgage mess. The cases have come from a patchwork of federal agencies, state officials and shareholder suits, some of which have been resolved in multibillion-dollar settlements.
“They never know who’s going to be coming after them next,” said Dan Hurson, a former federal prosecutor who now defends securities cases. “There’s no central traffic cop.”
Still, the public has been frustrated with the limited number of criminal actions that have been filed since the financial crisis. Few cases have taken aim at top executives. Even in the latest case against Bank of America, no company officials were sued as part of the complaint. Angelo R. Mozilo, the former chief executive of Countrywide Financial, never faced criminal charges but did agree in 2010 to pay $67.5 million to settle a civil fraud case brought by the Securities and Exchange Commission.
Mr. Hurson said that the government had yet to overcome the notion that federal authorities were reluctant to pursue the top rungs of Wall Street. The criminal actions to come from the crisis, he noted, have focused on “small-time operators.”
The government, however, has contended that it has aggressively pursued mortgage fraud. As the legal deadline approaches for filing crisis-related cases, President Obama formed a mortgage task force to investigate wrongdoing. The unit recently announced its first case, taking action against JPMorgan Chase over mortgage deals created by Bear Stearns, the firm that JPMorgan bought during the crisis.
The legal problems for Bank of America, however, have taken a deeper financial toll, costing the bank billions in write-downs and settlements. Much of its problems stem from its takeover of Countrywide Financial, once the nation’s largest mortgage lender. The bank also struck a $2.4 billion deal in September to settle a class-action lawsuit over shareholder claims that it misled investors about the 2009 purchase of Merrill Lynch.
In the lawsuit on Wednesday, the Justice Department attacked a home loan program known as the “hustle,” which the bank inherited from Countrywide in 2008 and kept alive through 2009.
Prosecutors say the venture was a symbol of Wall Street’s slipshod standards during the mortgage bubble. According to the lawsuit, Countrywide rubber-stamped mortgage loans to risky borrowers and passed them on to Fannie Mae and Freddie Mac, the two government-controlled mortgage financial giants that guaranteed the loans. The two entities were ultimately stuck with heavy losses and a glut of foreclosed properties.
“The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope,” Preet Bharara, the United States attorney in Manhattan, said in a statement. “This lawsuit should send another clear message that reckless lending practices will not be tolerated.”
Mr. Bharara filed the civil suit along with the inspector general of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. The government watchdog for the bank bailout program, the special inspector general for the Troubled Asset Relief Program, or TARP, also joined the complaint.
In a statement, a Bank of America spokesman said the bank “has stepped up and acted responsibly to resolve legacy mortgage matters; the claim that we have failed to repurchase loans from Fannie Mae is simply false.” The spokesman, Lawrence Grayson, added, “At some point, Bank of America can’t be expected to compensate every entity that claims losses that actually were caused by the economic downturn.”
The case builds on a broader federal crackdown of Wall Street that continues years after the onset of the crisis. In a last-ditch effort to hold financial firms accountable, Mr. Bharara this month sued Wells Fargo over questionable mortgage deals.
The assertions in the Bank of America suit, however, do not shed much new light on the mortgage mess. The Federal Housing Finance Agency last year sued 17 big banks over losses sustained by Fannie Mae and Freddie Mac over different mortgage-related products. The twin mortgage finance companies, also bailed out by taxpayers in 2008 and still controlled by the government, continue to push firms like Bank of America to repurchase billions of dollars in bad loans.
The flurry of litigation, which comes on the cusp of the presidential election, has caused some on Wall Street to question whether the effort is rooted in political motivations.
Other white-collar lawyers say the complaints rehash old claims put forth by private investors. JPMorgan says that the government urged it to buy Bear Stearns, a defense that does not apply to Bank of America, which acquired Countrywide as part of an aggressive expansion effort.
Still, a lawyer close to the Bank of America case, who spoke on the condition of anonymity because the case was continuing, argued that the bank had already repaid Fannie Mae for some of the soured loans in question. Other loans, this person argued, were never before disputed by Fannie Mae.
The lawsuit threatens to impose steep fines on the bank. The Justice Department filed the case under the False Claims Act, which could provide for triple the damages suffered by Fannie and Freddie, a penalty that could reach more than $3 billion.
The act also provides an avenue for a Countrywide whistle-blower, Edward J. O’Donnell, to cash in. Under the act, the government can piggyback on accusations he filed in a lawsuit that was kept under seal until now.
Mr. O’Donnell, who lives in Pennsylvania, was an executive vice president for Countrywide before leaving the company in 2009. The government’s case in part hinges on the credibility of his claims.
In the 46-page lawsuit, prosecutors contend that Countrywide abandoned its lending standards in 2007 with the creation of the “hustle” program. Short for “HSSL,” or “High-Speed Swim Lane,” the program adopted the motto “move forward, never backward,” prosecutors said, citing Countrywide documents.
With the goal of generating a high number of loans, Countrywide tore down internal controls known as tollgates that were in place to slow the mortgage process and root out risky borrowers. The firm at one point removed trained underwriters from the loan process, opting instead to rely on “unqualified and inexperienced” loan processors.
At times, prosecutors claim, loan processors crossed a legal line. Some “repeatedly did manipulate” loan forms, jotting down higher incomes for borrowers so they would qualify for Fannie Mae’s standards.
By early 2008, the lax standards started to show. More than a third of the unit’s loans were defective, a significant jump over the industry standard of about 5 percent.
Despite the poor performance, prosecutors said, the bank sold the loans to Fannie Mae and Freddie Mac and “concealed the defect rates and continued the hustle.”
…
At times, prosecutors claim, loan processors crossed a legal line. Some “repeatedly did manipulate” loan forms, jotting down higher incomes for borrowers so they would qualify for Fannie Mae’s standards.”
I’m sure there was never any pressure form the higher ups. Nope. No siree!
Some very rough info on the Brazil bubble:
Brazil 1 year price appreciation = 10%
Rio 4 year price appreciation = 165%
In 2007, average Brazil home loans were R$82,000 and monthly payments were 42% of an average Brazilian couple’s income, with a 30-year maturity. 20011 average loans were R$150,000, with payments being 52% of a couples’ income.
Brazil built maybe 600,000 new units last year compared to America’s over a million. I’ve read Brazil has a shortage of 6-8 million homes.
“On average, every year, the nation of 194 million people creates about 1.5 million households, while builders there construct only half that number of housing units. At the current rate of homebuilding, Brazil’s housing deficit is projected to last at least a decade.”
85 % of total Brazilian buyers plan to live in the houses bought. 56% are first time buyers. 44% are repeat buyers.
Brazil total mortgage debt/GDP =8% compared to USA’s 75%
Thanks for the update. Imagine how deep their deflationary spiral will be.
Nah, it’s different in Brazil. I remember rio saying that early this year. Something about natural resources, energy, and an energetic population.
Nah, it’s different in Brazil. I remember rio saying that early this year.
You remember squat. I’ve always played games and had fun with Brazil being “different”….since 2008. It is different, way different, but that does not mean it is not a bubble.
But it is a different kind of bubble than the USA had. In Rio, more international and more of a cash bubble.
But don’t wait for me being hurt. It won’t happen. I like where I live and I have no mortgage.
(But I do miss America sometimes)
Episode 136
Hardest Hit Snorkels
Builders deserve to starve. Asked for a builder to build a two story house, 750sq x750 and 750 basement, no garage = 300k.
To upset to respond to builder without inducing hbb tag lines.
Just for the house? No lot?
Post the bid. Otherwise you’re FOS.
If it’s not one of his stock plans, or if it’s not in a development where he owns at least some of the lots, then it’s a one-off “custom” job and priced accordingly.
OMG! I just learned that Boulder CO is banned from participating in the Soap Box Derby competition.
(Anyone remember the Soap Box Derby scandal from the Seventies? Go here for a read - Scroll down to “Scandals”.)
http://en.wikipedia.org/wiki/Soap_Box_Derby
Jimmy could have made some serious cha-ching had he put his electromagnet in the nose of his go cart in 2009 instead of 1973.
Electric-car battery maker A123 Systems files for bankruptcy
A123 Systems, an electric-car battery maker that received a $249-million federal grant, says it filed for bankruptcy and was selling its auto-business assets.
October 17, 2012|By Don Lee, Los Angeles Times
WASHINGTON — Exposing President Obama to further criticism of his administration’s economic policies, a leading electric-car battery maker that received a large federal grant filed for bankruptcy protection and said it was selling its auto-business assets.
A123 Systems Inc., a company built with innovative MIT-developed technology and a $249-million grant under Obama’s 2009 economic stimulus program, said Tuesday that it signed a deal to sell its two Michigan manufacturing plants and some other assets to Johnson Controls Inc. in a deal valued at $125 million.
http://articles.latimes.com/2012/oct/17/business/la-fi-battery-bankruptcy-20121017 - 81k -
“In 1973, 14 year old Jimmy Gronen of Boulder, CO was stripped of his title two days after winning the national race. Suspicions were running high even before the finals, and Gronen was actually booed by many spectators.”
“The unusual dimensions of Gronen’s margins of victory and heat times tipped off derby officials to illegal circumstances surrounding Gronen’s racer. Subsequent X-ray examination of his car revealed an electromagnet in the nose. When activated at the starting line, the electromagnet would pull the car forward by attracting it to the steel paddle used to start the race. Gronen would activate the electromagnet by leaning his helmet against the backrest of his seat, which activated its power source.”
What gets me is, apparantly, the entire town of Boulder is banned from the Derby.
I once thought that a good way to cheat was to specially build the wheels to include a high-density metal ring within each wheel (think flywheels) and these rings would be set spinning right before the race and then braked to the wheel as the race begins. The stored energy of the spinning rings would then be transferred to the wheels.
There are real world applications for that idea.
Can stimulus cargo cult beliefs save Oz from a hard landing?
Caixin Online Archives
Oct. 25, 2012, 10:18 p.m. EDT
Australia facing a hard landing: Andy Xie
Australia may suffer a financial crisis in 2013
By Andy Xie
BEIJING ( Caixin Online ) — Mining has been a boom-bust industry throughout its history. The reason is the long development process of a mining asset. When demand pushes up prices for minerals, supplies take time to respond. Hence, prices can go very high in the initial phase of a demand boom.
The eye-popping profitability draws all kinds of people into speculating for new mines, massively increasing the supply capacity years down the road. When the demand boom cools and prices decline, supply capacity keeps rising rapidly, which throws the industry into a depression with severe repercussions for its financiers.
A decade ago, some Australian investors came to my office for advice on how to invest in China. I told them to go home and buy shares of Australian companies in the mining industry. Bellwether stocks like BHP have appreciated ten times since.
The story began with China joining the WTO. This change would increase China’s share of global trade. As China’s expenditure is heavily weighed towards fixed-asset investment, this redistribution of income would increase the demand for mineral resources. Hence, I believed that the industry would have good times ahead.
As the prices of minerals like iron ore surged, the super profitability attracted all sorts of people into prospecting all over the world. Numerous investors went into African jungles and Mongolian grassland to strike it rich.
Even though risks for investing there very high, like getting one’s head chopped off by upset locals, the fantastic margins pumped up these people’s courage. Unfortunately, if and when these assets become productive, the margins are gone. Most stories about chasing riches in faraway lands end like this. Some smart people have sold undeveloped assets to others through initial public offerings in Hong Kong. Those who haven’t sold are stuck.
‘There are such opportunities’
The market went from not believing in China’s growth story a decade ago to extrapolating past performance into the infinite future. In particular, China’s massive stimulus in 2008-09 that revived demand for commodities amid a global downturn convinced investors or speculators in this industry not to worry, i.e., China could do the same again if there was another downturn.
As demand has weakened and prices collapsed, the faith in demand and prices coming back is surprisingly strong. That is why so many marginal projects continue to seek funding.
The year 2008 should have been the end of this boom cycle. China’s stimulus misled the market into believing otherwise. China’s demand revival in 2009-10 was purely a governmental phenomenon. It piled more capacity formation on top of overcapacity.
It merely postponed the inevitable adjustment and made it bigger. This is where the economy is now, paying for past mistakes. But the mining industry continues to believe and propagate the view that a big stimulus like in 2008 is coming.
…