Bits Bucket for December 9, 2012
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Watching all the squirming going on in DC this week, I’ve almost been tempted to feel sorry forJim DeMint (who got himself kicked sideways to marginalize his TeaParty wingnuts) and poor John Boehner who’s coming to the stark realization that his party’s been well and truly pwned. An especial little frisson of, oh, let’s call it gloating, occurred to me when I came upon this forgotten little gem:
“The subjects of every state ought to contribute towards the support of the government…in proportion to their respective abilities.”
-Adam Smith, “The Wealth of Nations” 1776
Oops….
“…who got himself kicked sideways to marginalize his TeaParty wingnuts…”
Ya gotta have a heart of gold to not take immense pleasure in that.
Exactly. These corrupt hacks are to be despised.
“…in proportion to their respective abilities.”
Adam Smith was a communist progressive!?
Who’d've thunk…
from each according to his abilities, to each according to his needs
Isn’t that the plan for the next four years?
Forward!
My needs are BIGGER than your needs.
all animals are equal, but some animals are more equal than others
Americans abilities represent a fraction or their needs. Its called credit. Put our gargantuan needs on our tab please.
Yes, yes, we just gotta give the government more money. Spending money solves all the problems.
Education in America is the Prime example.
Washington, D.C. schools spend more per student than anywhere in America.
The result, a TOTAL failure. And what success they have is based on Fraud. Here’s an interesting article from the Wall Street Journal:
(subscription required), but, I’ll post the gist of it.
http://online.wsj.com/article/SB10001424127887324352004578131361948093492.html
How Washington, D.C., Schools Cheat Their Students Twice
Caleb Rossiter, Wall Street Journal, November 30, 2012
I recently bumped into a former student of mine outside the high-poverty public high school where I used to teach math. Quaniesha, as I’ll call her, was on her way home, and I was on my way in for the SAT tutoring sessions I hold with athletes trying to become “NCAA-eligible” so they can accept sports scholarships.
Quaniesha feigned anger as we walked past the school’s metal detectors: “Why you do me like that, Doc? I gotta start Credit Recovery next week.” She was smiling and knew full well how our back-and-forth was going to go.
She’d say I failed her in math. Then I’d say no, you failed yourself. She’d say I was a bad teacher. Then I’d ask her how often she had come to class, done her homework, or even brought her notebook and done the class work rather than cursed and fought and joked around.
{snip}
But if Quaniesha was feigning anger, I was really angry, because the Credit Recovery program she was starting is a fraud to which I alerted the chancellor of Washington, D.C., schools last summer in a memo and at a one-on-one meeting.
In Credit Recovery, students who have failed a semester-long course attend a special class after school for a few weeks and magically earn credit for it—without taking a mastery exam. It is a big reason why the 50% of high-poverty, public-school students who actually graduate from high school are generally helpless before a college curriculum.
The dirty little secret of American education is that not only do half of students in high-poverty high schools drop out, but most of those who graduate—as I found in my two years teaching and testing students—operate at about the fifth-grade level in academics, organization and behavior. {snip}
Of my ninth-graders last year, only 10% were present in class more than three days a week, and a full 50% attended two days a week or fewer. When they did attend, the chronically absent did virtually none of the class work or homework. As a result, I thought it remarkable that a mere 68% of my ninth-graders failed—which, by the way, was typical across the ninth grade in the math department.
Instead of insisting that students retake failed courses and actually work, the school system allows students to take Credit Recovery or equally bogus summer-school courses. Thus students “age-out” of middle school with second-grade skills and “D-out” of high-school courses they rarely attend.
That explains why my so-called precalculus class of seniors last year entered with an average fourth-grade math level, just like my freshmen: They had learned little in the previous three years while “passing” algebra I, geometry and algebra II/trigonometry.
{snip}
From my experience, 80% of high-poverty high-school freshmen are at elementary-school level, which includes the 50% who are going to drop out. {snip}
Given that a great many jobs of late are governmental in nature, I’d say there’s been excessive “support”.
The following states that 73% of all new jobs during the five months beginning in June have bene in government:
http://cnsnews.com/news/article/73-new-jobs-created-last-5-months-are-government
Government Bubble in overdrive. Wonder what Adam Smith would have to say? Does this equate to a “contribution”?
Did the new source that calls itself “THE RIGHT NEWS. RIGHT NOW” do any analysis of what those jobs were? Because talking about 600,000 of the civilian jobs created in the last 5 months being government jobs sounds a lot like teachers going back to work in September to me.
But are teachers counted as “new” job when the school year starts?
Of the teachers I know, they usually elect to be paid over 12 months and get their bennies in the summer. Are not officially unemployed in the summer even though some take temp jobs or teach summer school for extra pay.
Could there be that many new teaching jobs?
I read the link and some of the comments. The article had zero analysis. None. No talking about the jobs that were created. And the comments included a lot of people getting into discussions about how the numbers used to get to 73% were taken from different studies using different ways of counting jobs and therefore couldn’t be combined in the form of raw data at all.
So yes, depending on the exact methodology used in the study or studies that produced the number of government jobs created in the last 5 months, it is perfect possible for that to include teachers starting work again in August or September. It depends on how you count it. If you are counting people who spent x number of hours per week at required employment related activities, it would absolutely include teachers going back to work.
As my Grandma used to say…
Figures don’t lie but liars can figure.
Priceless comment, Polly.
The data comes from The Bureau of Labor Statistics, a government agency.
Are you saying they are incorrect?
Knock yourself out.
No. I’m saying that the Bureau of Labor Statistics collects lots of numbers and that some methodologies generate different final numbers than others.
If you count new jobs as companies adding a person with a new unique SS number that they hadn’t paid anyone under in the last 6 months, that study wouldn’t count teachers coming back to work except for ones that might be coming back from a maternity leave.
If you count new jobs as people who have to be in the location full time this week and didn’t last week, then it would.
If you count new jobs as whatever the HR department of a statistical sample of company/agency reports to you (and requiring them to interpret it as they choose), then you get one set of numbers.
If you call a statistical sample of people at home (again requiring them to interpret the words as they choose), you get a different set of numbers.
The one thing you can’t do is combine numbers from different ways of collecting the data. That is what the commenter accused the article of doing. Taking raw data from a study using one collection method with the raw data from a study using a completely different method. It one of the classic method of lying with statistics.
Oh, and just as a side note, a lot of school districts routinely “fire” all of their teachers (or all the ones without tenure) over the summer to make certain budgeting issues easier. They are pink slipped right after the last day and not hired back until towards the end of the summer. There is generally a contract in place that allows them to keep health insurance during the summer period. They may even be able to sign up for a program to get their pay distributed over the entire calendar year. But for a lot of teachers to be technically not employees for that time period happens quite a bit.
I ‘knocked myself out’ by quickly checking the BLS website, and discovered that your article is a TOTAL LIE. Go see for yourself, it’s quite easy. The site shows that government employment showed little change over the period discussed, and what changes there were, were job losses.
This link covers June, July and August, you can link to the other months from it:
http://www.bls.gov/news.release/archives/empsit_08032012.htm
Please quit linking us to articles from notoriously unreliable sources like CSN, or we’ll think you’re either a gullible fool, Macbeth, or a fellow liar.
Oops- CNS (Conservative News Service), not CSN.
I find it interesting to call someone a liar and the information posted Misleading, when it says JOBS since July, the LAST FIVE MONTHS>
You then post a link that shows job creation from JULY 2011 to July 2012, and EXCLUDES the last 5 months to prove that the post was a “lie” or misleading.
I also liked all the previous talk about how the information was gathered and parsed and how ignorant people can use the data mix/ and matched to provide misleading information.
I most particularly found the “data collection” method discussion enlightening, since i know that they don’t get ANY information by tracking SS numbers or checking with business hires.
IT IS ALL DONE WITH A SURVEY. And “calculated” overal results.
That is why they continually provide UPDATED, REVISED, usually revised downward several months later, because the SURVEY comes up short. This is NOT real-time data by information from the IRS by quarterly filings. It’s more like a poll.
But I was intrigued, once again, by the expert discussion about how the government works collects and correlates information. It was like the LONG drawn-out discussion on LAW Schools, requirements and entrance exams, which apply to all white people but are NOT the same for “minorities”, so you can take all the requirements and completely disregard them. But we got the lecture about how “tough” it is, anyway.
I find it interesting to call someone a liar and the information posted Misleading, when it says JOBS since July, the LAST FIVE MONTHS
Wrong as usual. the quote was:
“73% of all new jobs during the five months beginning in June have been in government”
Five months beginning in June means June, July, August, September, and October. Still with me? My link covered June and July, where the gov LOST 9,000 jobs each month. Had you followed obvious links on that page you would have seen this:
http://www.bls.gov/news.release/archives/empsit_11022012.htm
and you will see that there was a net gain of 47,000 government jobs during this period (June, -9,000; July, -9,000; August, +58,000; September, +20,000; October, -13,000). A net gain of 47,000 jobs is no where near the article’s claim that “In the same five-month period since June, the number of people employed by government increased by 621,000 “.
And before you get excited about the fact that there was a net gain of 47,000 government jobs during that five-month period, just add in May where we lost 29,000 gov jobs, and you see that there’s been almost no net gain or loss during the period- just as the BLS says.
Conclusion: The article is a LIE.
Darn those pesky facts.
I have been out of circulation on this blog for the past few years, but thought I ought to check in now that I am thinking of stepping into the market to buy a house in the rather overheated little pocket of the Eurpean market where I now live.
Anything interesting happen lately? More to the point, is the bottom in for the US market?
It depends. All markets are different.
It seems like the PTB are pulling out all the stops to create incentives for J6P and “investors” to voluntarily take the housing inventory off of the banks hands.
Seems like every time a government program implodes due to losses, another program magically appears to hand out low rate financing.
(Someone needs to explain to me why the USDA is financing suburban sprawl)
(Someone needs to explain to me why the USDA is financing suburban sprawl)
I believe population density is criteria…
“…is the bottom in for the US market?”
Absolutely. There has never been a better time for foreign buyers to liberate their home equity and snap up ten or so U.S. investment homes.
Go for it!
Exactly. Take CIBT’s valuable advice. Get in now before prices double.
Ha! Some things have not changed in the last couple years.
The funny thing is, if I shopped it around a bit, I just might be qble to find a bank here that might lend me money for investment properties in the US. But the banks here… what is there to say? More and more zombies, shambling around.
Where in Europe are you thinking of buying, Xenos?
The “bottom” depends on where you are looking.
If you want to buy in Detroit, that shining example of Democrat governance and Fair markets, you can get some really, really good deals.
That are practically giving them away.
Most likely, though, you won’t want to live there.
GOOGLE up Detroit Demographics and see if it’s right for you. And one more thing, here’s the latest news on Detroit, the City that Obama saved by keeping the auto industries alive in America:
Even as the state Treasury prepares to begin another financial review of Detroit’s books, a plan is being solidified in the governor’s office that would guide Michigan’s largest city through what is being called a managed bankruptcy.
The working concept, still evolving, assumes that the state’s financial review would find severe financial distress in Detroit, that Mayor Dave Bing and City Council would be unable to push through overdue restructuring, and that the process would culminate in appointment of an emergency financial manager under Public Act 72.
The case would be filed under Chapter 9 of the federal bankruptcy code, according to two ranking sources familiar with the situation, following efforts to reach prenegotiated settlements with as many key creditors — unions, vendors and pension funds among them — as possible before any filing.
“Clearly, we will always try to do that,” one source familiar with the situation said in an interview Thursday. “You can move on a much more expedited basis if you can demonstrate that your cash is running out” — as Detroit clearly is with each passing week.
The evolving bankruptcy scenario is a clear signal that Gov. Rick Snyder and Treasurer Andy Dillon have lost confidence in the ability of the mayor, his management team and council to honor their commitments under the eight-month-old consent agreement with the state, or to make any meaningful progress on restructuring.
Contingency planning in Lansing for a possible Chapter 9 bankruptcy filing is not likely to be popular inside council chambers or the Mayor’s Office. But it’s the responsible and necessary thing to do, whatever the protests from the elected officials whose denial and self-delusion are hastening the arrival of a reckoning they can no longer avoid.
The goal of a managed bankruptcy is to streamline the protracted process by minimizing the chaos, uncertainty, delay and steep costs associated with Chapter 9. It would be the largest municipal bankruptcy in the nation’s history, an unambiguous symbol of the city’s epic failure and a chance for a fresh start.
From The Detroit News: http://www.detroitnews.com/article/20121207/OPINION03/212070365#ixzz2Eb6zCTlv
At this point, I wouldn’t live anywhere in Michigan with their current state government.
The emergency manager law is ripe for a corrupt sale of government assets to political cronies. There should be some form of public oversight of these city managers.
Here is another look at the bankruptcy option:
http://www.freep.com/article/20121209/NEWS01/312090283/Detroit-bankruptcy-would-be-long-painful-experts-say?odyssey=mod|newswell|text|FRONTPAGE|p
And later in the same article, the causes of Detroit’s problems are at least partially structural.
Detroit was too dependent on manufacturing for its economic base. Population migration compounded its problems.
As a result of the housing bust, my small town was hit hard by a drop in property taxes (as values fell) and development fees (as new development completely dried up). These items are its major revenue sources. I suspect most municipalities were in the same position. Those that had overcommitted to major projects or had long established city union contracts are the ones in the biggest trouble now.
You could argue that union contracts and pensions were overly generous and in some places they were. But in other places, like Detroit, population declines led to fewer people paying to support contracts agreed to decades ago when the city was stable or growing. Union contracts and pensions contribute to the current problems, but are not the sole cause.
I see long term care insurance having some of the same problems as pensions. I could pay premiums for many years only to have the company go bankrupt just when I needed them to pay out.
Do dead cat bounces last forever?
San Diego Real Estate Inventory is Dangerously Low
PRWeb
Published 8:00 a.m., Saturday, November 24, 2012
The Real Estate Marketing Insider issues its comments on news that the inventory of properties for sale in the San Diego area is in freefall, and could threaten the recovery of the industry.
The Real Estate Marketing Insider offered its observations on news that San Diego County has a dangerously-low inventory of available homes, and is seeing rising home prices as a result; REMI worries that this is bad news for the housing market, which is still recovering to full strength and could face a serious setback should housing demand drop and drive prices back down.
Realtor.com reported that from October 2011 to October 2012, the number of homes for sale dropped almost 35 percent. October marked the fifteenth straight month of falling housing inventory in the region. Meanwhile, the San Diego Association of Realtors reported that the year-over-year price change for single-family homes has increased 13 percent. Experts in real estate sales and marketing are saying that these two are related, and that the thin inventory base in San Diego is directly affecting the price medians.
The inventory shortage itself has multiple contributing factors. Many home buyers are concentrating their attention on neighborhoods near the coast, adjacent to San Diego’s beaches and San Diego rentals on the beach. The targeted demand in this area has likely driven inventory down. Also to blame are investors who, through market analysis, were able to predict the market floor and are buying up property in large numbers before prices rise. Because they pay cash and can often over-bid the asking price, home buyers are having more difficulty purchasing properties than usual. The single most important factor in dwindling inventory levels, though, is the spike in demand; with unemployment in San Diego down more than 2 percent from 2010, and mortgage rates at all-time lows, buyers at all financial levels are seeking to buy.
Experts forecast that San Diego’s inventory will continue to fall for at least the next few months, and that because investors are so quick to bid above home buyers, transactions above the asking price will become more common. REMI is worried, however, that thinning inventory and buyer frustration may combat the rise in demand, especially with the fiscal cliff potentially causing severe rises in tax levels. Should the housing demand drop precipitously and cause home prices in the region to plummet, San Diego may be due for another housing crisis.
…
Yes. Plan accordingly.
when the bankers control every aspect of the market how can they lose?
Take all the inventory off the market and create a feeding frenzy.
Nothing has really changed folks.
With sales at 16 year levels, it’s hardly a feedy frenzy.
call some realtors in san diego.
Inventory is low and bidding wars on all properties basically.
“Call some realtors”???? lol
After everything we’ve seen and know and you’re here falsely validating the “low inventory” lie? Worse, you’re suggesting that realtors are going to substantiate that?
BWHAHAHAHAHAHAHAHAHAHA
“the “low inventory” lie?”
That`s a fact, and I have tried to show that but it`s a yawn factor like all the other BS anymore.
Posted: 8:18 a.m. Thursday, Dec. 6, 2012
Wells Fargo serves up principal reductions and popcorn
By Kimberly Miller
Palm Beach Post Staff Writer
Wells Fargo Home Mortgage took over a portion of the Palm Beach County Convention Center on Thursday, beckoning 13,500 homeowners within a 100-mile radius to come talk face-to-face about their mortgage challenges and possible solutions.
About 235 homeowners registered for the free event _ an average amount for a homeowner workshop, Wells Fargo officials said.
http://www.palmbeachpost.com/news/business/wells-fargo-invites-13500-homeowners-to-event-in-w/nTN8y/
——————————————————————–
So Wells Fargo alone has 13,500 homeowners with “mortgage challenges” in a 100-mile radius and 235 of them show up for help? and yet….
Updated: 7:52 a.m. Thursday, Sept. 20, 2012 | Posted: 6:00 a.m. Thursday, Sept. 20, 2012
Palm Beach County home sales up in August as inventory shrinks
By Kimberly Miller
Palm Beach Post Staff Writer
Wells Fargo analysts said the increase was more than expected, and noted that 32 percent of homes sold nationwide in August were on the market for less than a month.
http://www.palmbeachpost.com/news/business/real-estate/palm-beach-county-home-sales-up-in-august-as-inven/nSFzs/ - 94k -
Posted: 5:16 p.m. Monday, Nov. 19, 2012
Rise in Palm Beach County home sales cuts into inventory
By Kimberly Miller
Palm Beach Post Staff Writer
Higher home sales and prices were a repeat theme in Palm Beach County last month, but a shrinking inventory has so discouraged some buyers they have given up searches for low- to medium-priced properties.
But West Palm Beach Realtor Shannon Brink likened the choices of homes available to a department store clearance rack a week after a sale. Inventory has dropped 55 percent from last year to a 4.7 months’ supply in October.
“There is nothing left but the items no one wants,” said Brink, adding that he’s had four buyers looking in the $100,000 range recently end their pursuit for a home. “Or they’ve decided to try and save up more money for a higher down payment because there is virtually nothing left that’s available that doesn’t need repairs or exists in less desirable areas.”
http://www.palmbeachpost.com/news/business/real-estate/rise-in-home-sales-cuts-into-inventory/nS95r/ - 93k -
Well as long as those 13,500 homeowners with “mortgage challenges” are OK don`t worry about anyone looking for a decent place to live at an affordable price, let em deal with the clearance rack.
I believe the Federal intervention into the housing markets in collusion with the Banksters has temporarily caused the impression that we “don’t have enough houses”.
WE have plenty of houses. They just aren’t being put up for sale. AS a result, people are getting into bid wars and NEW Construction is taking place. This is nuts.
Bernanke’s whole goal with his money games and asset purchases has been to get prices back up to where they were unaffordable, to save the banksters. IF prices are up, he believes the rest of the shadow inventory can be slowly fed back into the market at full value. IF it takes 10 years, what will be the condition of the properties??
As an anecdote, I live on a street that was platted and first developed in 1950, just after WWII. I own both my house and an adjacent vacant lot of 1/4 acre.
There are 3 more lots adjacent to mine that have been vacant since 1950.
It is not a highly desirable area, and there is a development with townhouses built in 2006 and 2007 that stopped, immediately in 2008 and has been idle since. Unfinished.
Yet, 2 of the vacant lots started NEW construction, side-by-side just last week.
The foundations are already in, and the block walls are coming out of the ground.
Had I not built a house there in 1998, I would seriously consider not, but I am on the Canal side of the street, so I had other incentives.
I missed an opportunity to sell the vacant lot in 2007. I agreed to the Bubble price of $26,000, but the buyer backed out before I could get a firm contract. The taxman did not and jacked up my property taxes until recently. New value, about $6000. I bought the lot in 1987 for about $6500 and have paid taxes for 25 years. I think I made a bad deal.
“I agreed to the Bubble price of $26,000, but the buyer backed out before I could get a firm contract. The taxman did not and jacked up my property taxes until recently. New value, about $6000.”
So much for the failed theory that ‘the comps set the market value’ in a mania.
“…when the bankers control every aspect of the market how can they lose?”
They might run out of people with buckets of money and boxes of stupid again, just like they did circa 2007.
the same ones in 2007 are coming back into the game again thx to fha. Its like a casino atmosphere.
Bankers only control what they can control. In San Diego County, that’s 3,500 REO (from Foreclosure Radar). Nearly in their control are 5,500 homes that are scheduled to go to auction, and even less in their control are 5,200 that are have an NOD filed (also from Foreclosure Radar).
To my understanding, even if ALL of the REO were dumped on the market immediately, the inventory levels would still be far below “normal”.
At what point do people start complaining that non-distressed homeowners are screwing up the market by deciding to NOT sell today, or pricing too high?
Once the distressed inventory is gone (and it’s on it’s way out–look at the most recent LPS Mortgage Monitor, showing 7.9% non-current loan rate in CA…down from 15% at the peak), where will the next sellers come from?
Homebuilders (new homes)? Existing homeowners (many who can’t if they are underwater)?
Do you believe there is any prospect for there to be a substantial increase in homes available for sale OTHER THAN regular folks deciding to sell their homes on a non-distressed basis?
If there is no such prospect, then I would say this isn’t a dead cat bounce.
With 20+ MILLION excess empty houses, it’s pretty fair to say the “dead cat bounce” is over. Especially considering prices resumed their downward price decline in October.
It’s a damn good thing that less than one percent of U.S. households earn north of $500,000, and of those, many earn way more than $500,000.
Otherwise all this talk of raising taxes on the one percent would be worrisome for the future U.S. household consumption outlook.
“$119,878 is just paying their fair share.”
Fair share of what personal income? The writer never bothers to mention what the average income for those who earn over $500,000 is; let’s conservatively guess, for the sake of argument, that it is $1,000,000. A 12% tax rate with $880K left over doesn’t look like that much of a financial hardship, does it?
The writer also seems oblivious to the difference between the marginal propensity to consume for a cash-strapped middle-class household versus that of a cash-rich wealthy household.
I guess I miss the writer’s point, unless he is merely invoking the politics of class warfare.
David John Marotta, Contributor
12/09/2012 @ 12:43AM
The Fiscal Cliff Is Almost Everything the Democrats Want
The so-called fiscal cliff is a series of tax increases and spending cuts bundled into a name to scare people and serve political ends. It is a crisis fabricated 100% by politicians. And avoiding the fiscal cliff is being used hypocritically for additional political gain.
The Democrats prefer much of what the fiscal cliff would mean. They want tax increases in general, specifically on high earners. They campaigned on raising taxes on those in the top two brackets. They act as though the resulting tax increase on the middle class will be catastrophic. But they also argue that these are the tax rates in force during the Clinton administration when the economy did just fine.
During the Clinton years, spending was under control. Regulations were less oppressive. And most importantly, average corporate tax rates around the world were higher than the United States. Since then the world has cut more than we have and left the United States with the highest marginal corporate tax rate in the world.
Obama claims tax increases on the middle class may cause a recession. He has said the taxes on a family of four will go up by $2,200. Meanwhile taxes for those earning over $500,000 will rise $119,878. And those earning over $200,000 will pay an extra $39,880. Obama would have you believe that $2,200 is a fiscal cliff, but $119,878 is just paying their fair share.
…
Um, CIBT, not rise TO $119,878.
Rise BY $119,878.
That’s not $880k leftover, it’s much less than that leftover.
In what universe do you think someone with $1MM of income (that isn’t earning it all from dividends/capital gains, and living in Nevada), pays a total effective rate of 12%?
If those people were paying, say $300,000 of their million to the Feds (plus whatever else to their state), would you consider that “fair”?
That would leave, what? $700,000?
Cry me a river.
We should just have the government take $800k, since $200k is more than enough, right?
Take out state, self-employment taxes, the new 3.8% for Obamacare, etc. You get to overall tax rates over 50% if you are self-employed in much of the country…at what point do taxes become confiscatory?
And this is being done BEFORE dealing with corporate tax issues (where many hide earnings in complex structures), and the differential between capital gains and ordinary (which is a bigger source of losing progressivity in the tax code than personal income taxes).
John Boehner: ‘No progress’ on ‘fiscal cliff’ talks
Fri Dec 07 2012
House Speaker John A. Boehner said Friday there has been “no progress” on “fiscal cliff” negotiations between Congress and the White House.
The Washington Post
Boehner is a capable spokesman for Republican concerns.
Will the housing market bottom out after the Souper Bowl?
I love this guy’s “poke-in-the-eye / kick-in-the-nuts” approach to dealing with serial bottom callers.
Has The US Housing Market Really Bottomed?
Charles Hugh Smith, Peak Prosperity | Dec. 6, 2012, 5:33 PM
The Good Times Really Are Over In America
Everyone interested in real estate is asking the same question: Is the bottom in, or is this just another “green shoots” recovery that will soon wilt?
Let’s start by reviewing the fundamental forces currently affecting real estate valuations.
Expanding the pool of potential buyers has reached the upper limit
There are two ways to expand the pool of qualified home buyers, and they both rely on expanding leverage: A) lower the down payment from 20% cash to 3%, and B) lower the mortgage rate to 3.5%.
Lowering the down payment increases the leverage from 4-to-1 to 33-to-1, a massive leap.
Increasing leverage increases risk. Over 90% of all mortgages are guaranteed or backed by Federal agencies such as FHA. This “socialization” of the mortgage industry means that losses ultimately flow through to the taxpayers, who are subsidizing the housing industry via these agencies.
Lowering the mortgage rate increases the leverage of income. It now takes much less income to qualify for greatly reduced monthly payments.
With mortgage rates barely above the prime rate and Treasury bond yields negative in terms of inflation, there is simply no room left for lower rates or down payments. The “increase home sales by expanding the pool of buyers” game plan has been run to the absolute limit.
The pool of buyers cannot be expanded any further; that boost to sales is done.
The unintended consequence of enticing marginal buyers to buy homes is that defaults are rising: 1 out of 6 FHA-insured loans are delinquent. This is the “blowback” of qualifying everyone with an income above the poverty line as a homebuyer.
…
Bailout for FHA?
FBN’s Peter Barnes on the FHA posting a $16.3B deficit and possibly needing a bailout.
One of these years, the perennial serial bottom call prediction will prove correct, at which point some lucky serial bottom caller will be heard crowing, “I told you so.”
House Prices Are Nowhere Near a Bottom, Says Analyst
Published: Tuesday, 20 Nov 2012 | 9:15 AM ET
By: Henry Blodget
In recent months, most economists have come to believe that U.S. house prices have finally bottomed after a horrible five years of declines.
Most of the major house-price indices, including the monthly Case-Shiller report, have turned higher. And yesterday’s Existing Home Sales report showed an increase in the median house price of a startling and encouraging 11 percent year over year.
In the past couple of years, there have been periods in which house prices have risen temporarily, only to soon begin falling again. These “head fakes” caused many analysts and real-estate agents to prematurely call the bottom. And they have likely left some home buyers and investors sitting on losses that they didn’t expect.
One analyst, Keith Jurow, who writes about the housing market for finance site Minyanville, thinks that the current price rebound is just yet another head fake. Jurow thinks the bottom for house prices is “nowhere in sight.” And he thinks that homeowners in some markets like New York, which haven’t experienced price declines that are as sharp as in some other markets, will get particularly clobbered in the next few years.
…
Like global warming, the housing recovery is real.
The Housing Recovery Is Getting Real
Published: Tuesday, 20 Nov 2012 | 9:39 AM ET
By: Bob Pisani
CNBC “On-Air Stocks” Editor
Home builders up 2 percent on strong housing starts data. October housing starts at 894,000, the highest level since July 2008.
Single-family home starts were basically flat, but there was a big increase in multifamily home starts.
Bottom line: The housing recovery is real, and housing starts are approaching the psychologically important 1 million level. This is far below the record of 2.2 million set in 2006, but those were unrealistic levels — the 10-year average is close to 1.2 million units.
…
there are bidding wars for coastal property. Party is on dude.
Interesting considering prices are falling in Santa Clara County California(bay area).
LOL
Per Zillow, in Santa Clara county, home prices are up:
0.9% Month to Month
3.5% Quarter to Quarter
11.8% Year on Year
Where do you get your data?
I don’t consider zillow a very good source of price data. It can be useful for some things like photos and certain history information. But it seems to always be skewed high on prices.
The other day I was talking with someone who owns a house I’ve worked on. Said, ‘zillow has my house at x dollars and I know I couldn’t get anywhere near that much’. And I agreed as I am very familiar with that area. Zillow says that house has almost doubled in the past three years, and it’s just not true.
Rental Watch is lying once again.
Santa Clara County prices are down MoM and QoQ 1.2% and 3.6% respectively.
http://www.zillow.com/local-info/CA-Santa-Clara-County-home-value/r_3136/#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3136%26el%3D0
Why are you lying to the public about this Rental Watch?
Oh, I see, you are looking at the MEDIAN, not the Zillow index which looks at the whole market.
http://www.zillow.com/local-info/CA-Santa-Clara-County-home-value/r_3136/
Ben, do you have any better data for home price direction by county? I know Zillow is imperfect, especially home by home, however, if they are consistently wrong, their price direction is about as good as I’ve seen.
The data they are showing is their index today, as compared to their index a month ago, a quarter ago, and a year ago. Is the direction of price movement also wrong?
Oh, I see, you are looking at the INDEX, not the SALE prices which IS the market.
http://www.zillow.com/local-info/CA-Santa-Clara-County-home-value/r_3136/#metric=mt%3D19%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D3136%26el%3D0
My house went up by $46,000 in 6 months.
“My house went up by $46,000 in 6 months.”
Did your house buy ‘ya new car?
CIBT: I think the interference patterns between the marketing plan for the fiscal cliff and the marketing plan for the super bowel are going to be interesting to watch this year. J6P is supposed to alternate between terror, thanksgiving-like food stupor on the recliner, shopping for big screen TVs, and hiding from rioters, all at the same time. Add the usual frenzy on site reports about it snowing during the winter as icing on the cake.
Even little stuff, like are the super bowel TV commercials going to be cheesy pandering stuff as seen lately “… in this economy …” anti-aspirational blather or the hopium inspired pipe dreams about every family having a giant SUV in the driveway of their giant mcmansion as they eat from a giant bag of pork rinds? I bet during the same commercial break you’ll see cheesy ads for bankruptcy lawyers AND subprime home mortgage loans, all to be paid for by the great job you’ll get after taking out huge student loans at that new diploma mill.
“J6P is supposed to alternate between terror, thanksgiving-like food stupor on the recliner, shopping for big screen TVs, and hiding from rioters, all at the same time.”
It doesn’t get any better than that!
Got popcorn?
Here, take this money. Now stimulate me.
An excellent summary of Idiocracy in America in the year 2012.
So happy we do not watch TeeVee!
‘J6P is supposed to alternate between terror, thanksgiving-like food stupor on the recliner, shopping for big screen TVs, and hiding from rioters, all at the same time.’
We’ve seen that already:
http://www.imdb.com/title/tt0075765/
Agencies set up plans to manage cuts if Congress, Obama fail to reach deficit deal
A sequester was made real in a 394-page report the White House provided to Congress in September, listing more than 1,200 agencies and programs that would lose 8.2 percent (domestic) and 9.4 percent (military) of their budgets. About $2.5 billion would be excised from the National Institutes of Health and $555 million from nutrition-aid programs for low-income women, infants and children, for example.
Administration officials called this week’s notice “technical” planning given that agencies are living under a temporary budget funded at last year’s levels. They reiterated the White House’s optimism that Democrats and Republicans will reach a deal.
“This action should not be read . . . as a change in the administration’s commitment to reach an agreement and avoid sequestration,” said Jay Carney, the White House press secretary. The budget office “is simply ensuring that the administration is prepared” to order the spending cuts.
Under the 2011 law, the federal budget would shrink $108 billion starting in January and continue on that scale — divided between civilian and defense agencies.
… nervous employees say they are in the dark about what might happen, and some are downright cynical.
“They cry wolf every time,” said Mike Granger, a Navy computer programmer at the Patuxent River Naval Air Station. “It always ends up being resolved. So I just ignore it.”
The sequester dates to the Gramm-Rudman-Hollings law, passed during the Reagan administration to force a balanced budget as the federal debt ballooned.
Five of these automatic cuts were triggered from 1986 to 1990. Four were automatically rescinded or substantially reduced by a budget agreement or later law. Only the first, in 1986, resulted in $11.7 billion in cuts.
Today, federal employees and contractors find themselves confronting the many what-ifs and gaming out the possibilities.
One line of thinking is optimistic: Congress will agree to tax increases and targeted spending cuts before its Christmas recess, and there will be no sequester. Or there will be, but with only some cuts. Or, if there is no deal by then, there will be soon thereafter. Another act of Congress would be required to undo the trigger.
“There’s just a lot of waiting and monitoring,” said Gary Somerset, spokesman for the Government Printing Office, where a task force has produced a list of cuts.
Administration officials point out that a sequester would not look like a government shutdown, which resulted in 1995 and 1996 from failed budget talks and came close to happening again last year.
Federal employees would still go to work — at least in the beginning. The government would not cease to function. Furloughs would be weeks, if not months, down the road, because the cuts could be delayed until later in the fiscal year. A sequester requires reductions to take effect across the board, but it does not say they must start in the first month or two.
Still, budget experts note that January is three months into the fiscal year. That means the cuts must be compressed into nine months, which equates to reductions of 10 or 11 percent.
…
Take very long story about peon attitudes toward the fiscal cliff. Run thru .zip file compressor. Result, “google for wikipedia cargo cult”
We have nothing to lose but our chains.
That “chains” quote was taken from a late night post by Mr Ben Jones.
I wonder why underwater homeowners don’t simply walk away from their ‘underwaterness’ and lose their chains, once and for all?
Moreover, why do real estate pimps believe that homeowners who HELOC’d away their wealth during the boom years are now somehow entitled to $100Ks in tax-free income?
Underwater homeowners fear drowning
By Kenneth R. Harney
December 9, 2012
WASHINGTON — Patrick Boris, a banquet chef in Las Vegas, is inching toward his own “fiscal cliff,” 2,100 miles away from the political brinkmanship underway in Washington.
If Congress and the White House don’t solve the fiscal impasse this month, Boris figures he could owe federal income tax on more than $100,000 in forgiven mortgage debt following the short sale of the two-bedroom townhouse he plans to sell next year — a personal financial “disaster,” in his words.
In Sacramento, Elizabeth Weintraub, a real estate broker who specializes in short sales, says many of her clients have potentially taxable exposures on $200,000 or more in negative equity balances on their short sales next year if Congress fails to act.
In the Tampa Bay, Fla., area, Pam Marron, a mortgage loan officer who works with underwater homeowners seeking to avoid foreclosure, says some clients are in panic mode, terrified that Congress could force them into massive federal tax bills after their short sales.
“This is ludicrous,” she says. “These people already are on the losing end. Now it could get much worse.”
Across the country, fears such as these are mounting. With the outcome of negotiations over taxes, spending and the federal debt uncertain, huge numbers of underwater owners worry that a single legislative provision that has been sucked into the “fiscal cliff” vortex could devastate them personally.
The issue is the extension of the Mortgage Forgiveness Debt Relief Act, which is set to expire Dec. 31. Dating to 2007, the law temporarily amended the federal tax code to allow mortgage debt on a principal home that is canceled by a lender through a loan modification, short sale or foreclosure to escape taxation as ordinary income.
…
“I wonder why underwater homeowners don’t simply walk away from their ‘underwaterness’ and lose their chains, once and for all?”
Well if they did that then they would miss out on the big enormous pending and historical real estate price come back and would forever kick themselves for getting out just as the market bottomed.
To walk away now would make them look stupid, would imply that they were stupid in the first place for getting in when they did and paying the amounts of money that they did.
People do not like for other people to consider them as being stupid, and these people will do a lot of stupid things in order to convince other people that they are not stupid.
Because some people think of them as being stupid a way to demonstrate that they - in the long run - are not stupid is to hang in there and listen to the real pros - the realtors - and commit their lives, their fortunes, and their sacred honors to the historical fact that the prices of real estate always goes up. To think otherwise, of course, is stupid.
(sarc)
Great post, and thanks for the (sarc) tag at the end.
You almost had me out there in early 2013 trying to find a home at a serial bottom call price…
My advice: Go to Bodie and then go all in.
Prices in Bodie have bottomed - it is not possible for them to go any lower.
Go all in and stay all in and wait for prices to return. (Prices are sure to return right after the gold ore returns.)
Temperatures in Bodie have also bottomed.
Think long term: Think Global Warming. Go all in on Bodie.
“Go all in on Bodie.”
And Greenland…
“I wonder why underwater homeowners don’t simply walk away from their ‘underwaterness’ and lose their chains, once and for all?”
Perhaps their HARP 2.0 mortgage payment plus taxes and insurance is less than rent.
“Though it’s a relatively small and noncontroversial item compared with the multitrillion-dollar debates over taxes and spending, what’s striking about the mortgage debt relief provision is that it potentially affects such a large group of owners and could be extremely painful.”
Maybe FB offspring will learn something valuable about debt if their parents are summarily impaled on the proverbial Joshua tree?
Speaking of chains, watch out for new drivers on the road: http://www.bbc.co.uk/news/world-asia-20614593
My driving would definitely improve if somebody fed me treats every time I made a correct maneuver.
Many commentators, including our own Rental Watch, buy into the notion that it’s the ‘comps’ that set real estate prices, as though there is some kind of central clearing house comparable to the stock market to determine what homes are worth.
I know quite a few folks who bought foreclosure or short-sale homes in perfectly fine condition at fire sale prices, who provide the evidence that housing is not ‘just like’ stocks in this respect.
many commentators, including our own Rental Watch, buy into the notion that it’s the ‘comps’ that set real estate prices,
Bullseye!
And I and a million other contractors destroy those comps in thousands of neighborhoods every day.
destroy those comps
until 2007 all the work we were doing was an effort to create those comps. 5 years later, that work is not returning there is very little of it but now a new trend to detroy comps is what we are all about.
I have jobs in Nevada in places like Yerrington and Fish Lake Valley where home sites are affordable. In Mammoth and Tahoe we are working on refurbishing a lot of short term lodging. In Mammoth we are refurbishing old housing in stead of building new. A 35 year old condo development has been shut down for 5 years but is now back after getting a realistic new price from the bank on the land. Units are down $500,000 and will go lower after current units are built new ones will be smaller.
House prices are set by buyers and sellers agreeing on a price. These are “comps”. Distressed sales are just other comps–differently motivated buyers and differently motivated sellers. These comps do affect the market.
The equivalent effect would be in the stock market when Wells Fargo dropped below $10. Once it did that, many institutions no longer saw the stock as marginable…it essentially was worth zero for any stockholder who was using it as collateral for a margin loan. As such, there were lots fo margin calls, and lots of forced sales of Wells Fargo…the “comps” were affected by the distress.
Once those distressed sellers finished their remargining, the stock price pretty quickly bounced back above $10–quickly up to about $15. That was a unique point in time…similar to the housing market with it’s currently level of distressed sellers.
In “normal” times, there are VERY few distressed sales as compared to normal.
As we get through the distress, all that will be left are buyers and sellers agreeing on prices.
This sets the market.
What does it tell you that very few non-distressed owners are willing to sell at today’s prices?
House prices are set by buyers and sellers agreeing on a price.
We supply the market. We are the seller. And we’ll continue destroying the comps.
“As we get through the distress….”
They just keep a-comin though. Most do not appreciate how far we have wandered away from normalcy, nor that we have retraced but a tiny fraction. The distress is going to be with us for a while, at this rate of avoidance, maybe for a generation.
At least a generation.
It took that long to get to where we are today.
California’s peak was 15.3% non-current (percent of loans that are delinquent or in the foreclosure process). We have come back down to 7.9%. 15.3% was February 2010, 7.9% was October 2012.
“Normal” is about 5%.
Arizona was at 16%, now about 7.7%.
We have come a long way back in non-judicial states–a lot closer to “normal” levels of distress than many want to believe.
At the rate of reduction in those two states, they will be back to “normal” levels of distress in about 12 months.
In other states, it will be much longer, unless things are sped up, but there is a HUGE difference between judicial and non-judicial states in dealing with the distress. Surprisingly, IL and NJ are taking steps to speed up the process for abandoned homes that are in foreclosure…a small step, but a step in the right direction.
How about my full commentary:
“They are…owners see comparable sales and get into their heads what their home is “worth”.
Why do you think listings are so low?
1. Little distressed inventory hitting the market;
2. Underwater borrowers unable to sell; and
3. Owners believing their homes will go up in value, because they’ve seen such higher values before (some buyers believe they could go up again since they’ve seen such values before as well).
I know folks would like to believe that #1 and #2 represent the bulk of the reason for few listings, but the math doesn’t seem to work for me.”
We’ve seen what your “commentary” is about. Especially related to construction. You’re FOS.
#3 is technically correct as well…..if they hold on long enough, they may see actual gains. They will likely have paid off their 30-year note by then as well.
By the time they pay off their 30 year note, they will have paid for the house 3 to 4 times over. You think there might be a gain in that?
Every one alive in 2006 will be dead before we see another housing mania like this one.
“Every one alive in 2006 will be dead before we see another housing mania like this one.”
The same thing was said about the S&L disaster.
This latest mess happened just 20 years after the last one started.
Not saying you are wrong, just pointing out some history and especially how in a surprisingly short of time it happened again.
“By the time they pay off their 30 year note, they will have paid for the house 3 to 4 times over. You think there might be a gain in that?”
At 3.5%, the total P+I is about 1.6x. With Prop 13, max taxes paid over 30 years will be max another about 40% (1% increased by 2% annually—which assumes values go up at least approximately 80% over 30 years–if they don’t go up as much, taxes will be less). The math is quite a bit different on the overall mortgage payments when interest rates are sub-4%.
What else are you including in your 3 to 4 times?
Rent over the same timeframe is anyone’s guess.
Low Inventory has my attention, although were a cash and close done deal. I did a Redfin search using the criteria I used during our search. I use to see 17-22 homes and now I see 10. What use to be $400K is now $430K-$460K and up. We closed escrow in late Sept, just 2.5 months ago.
Escrows seem to be longer as well. I count my blessing our deal went through.
We just got our kitchen in, and when the installer came to touch up issues and adjust the bells and whistles, he left wood stain fingerprints all over the cabinet doors. Idiot.
Not one contractor didn’t have to be babysat. All were sloppy monkeys.
So you paid an inflated price for a depreciating house in a falling price environment and then threw more money at it?
Dust Grinder
We paid in the high $300’s (Broker was a deal animal) and its now worth more than $459K. Paid cash, never moving again, and we don’t care. Our taxes on this joint are $400+ a month . Try renting a room for that. We’re happy. The serenity of having no debt whatsoever is wonderful and the redo is beautiful. Toe-Tag home.
“its now worth more than $459K.”
Yet the reality is you couldn’t find a buyer for a fraction of that amount.
Dust Grinder
We don’t care about prices anymore. It’s our long term home. We’re happy, don’t owe a dime on it, and we spent our lives post bubble waiting for this experience. Life is too short to be housecentric. It’s Christmas time, and the beautiful music awaits.
Dust”y”
The same floor plan w/o a pool sold for that price in Aug 2012 (a nice flip). We paid a lot less. Like I said, who cares.
“We don’t care about prices anymore.”
It’s a good thing because you already made a tragic financial error from which you’ll never recover.
Wanna have some fun? Wikipedia in the “Personal Income in the United States” article claims “The overall median personal income for all individuals over the age of 18 was $24,062″. 24062/2000 = almost precisely $12/hr.
Now a little math, which I’m sure appears magical to about 99% of the population, and you can convert “thousands of dollars of house price” into “person-years of income” merely by dividing by 24.
So lets say you have a sand state $400K house, that represents 400/24=16.6 years of personal income, assuming zero commissions, taxes, fees, and interest (LOL).
So for a median couple, paying for a median hovel takes around a decade of slave labor for the couple. Harsh! Those prices will be going away soon.
Also something doesn’t add up here… My grandfather built his own house about 60 years ago one summer. Sears delivered a (couple) flatbeds of stuff. All his neighbors did about the same thing at the same time. House was small but not that small. He subcontracted out maybe 20% of the work, for electrical, plumbing, specialty stuff like that. Lets say your median McMansion hovel takes twice as long to build…. so two seasons or about 6 months of labor. We’ll even round up the cost of the subs and material to one full year. Hmm one year of labor doing it yourself (while also holding down a full time regular job) vs one decade of labor to buy someone elses labor.
If the median house cost about $40K, that would make some sense.
Good thoughts.
The bankers own the market now. Unless you want to go out in the country somewhere you are basically at the mercy of the banks to buy a home at these prices.
Just like how car prices got so high. They kept changing the financing terms to get the prices up. extend the loan length and lower the interest rate.
Buying a home these days means really renting from a bank. At 3% down it will take years before you have any equity by paying down the loan. The way the loans are structured most of your payment in the early years is towards interest.On avg a person moves every 7 years. You get stuck in a perpetual debt cycle.
they have turned home ownership into a windfall for the banks.
“Just like how car prices got so high”
At least cars have taken some of that increase in cost and put it into improving the product. A 30K car today is an order of magnitude better than a 15K car 20 years ago. Safer, faster, more efficient, more comfortable, more entertainment, etc..
Is a 300K house today better than a 150K house from 20 years ago. I’d argue, no, in fact, it might actually be worse (see, bubble era house construction). Sure, it might have Cat5 wiring. It might have better windows. Maybe more crowns and little details. But the overall construction quality is probably down, and, in some cases down a LOT.
To me the automobile hasnt changed much in 20 years. Add a cup holder , gps unit, and a dvd player and there u have it. The only thing I like is an increase in fuel mileage.
Really? IMHO a 1992 vehicle compared to a 2012 is like night and day. 1992 vehicles might not even have fuel injection. Probably don’t have 4 wheel disk or even antilock brakes. No airbags. No advanced entertainment at all (Sirus, MP3 playback, etc). Probably get’s about 3/4 to 1/2 the MPG of the new model. Weighs more, less HP..
I mean, yes, it’s still a car and it still serves the same basic purpose. But IMHO, the changes in auto over the last 20 years has been night and day more significant than the changes in houses. A house built today probably isn’t as good as the one built in 1992, and, if you go to 2005-6, it certainly wasn’t as good as the ones built in 1985-6.
My point with all this, there haven’t been any big technological changes in home construction that result in a 2012 house being dramatically different or better than a 1992 house. The same cannot be said for cars.
‘technological advancement’ makes stuff cheaper, not more expensive.
Perhaps the biggest change to American cars is that they now have overhead cam engines as opposed to the push rod engines more common 20 years ago. Our early 1990’s cars had fuel injection, ABS and airbags. Newer cars have stability control (a nice addition) and more airbags. They also have more gears in the slush box, which helps compensate for the increased weight they have.
“‘technological advancement’ makes stuff cheaper, not more expensive.”
True. And it has, a GPS in a car used to be a hugely expensive option, now it’s pretty much a “gimmie” on most higher end cars. Same thing with Sat radio. The “pure tech” is getting a lot cheaper.
The things that aren’t getting cheaper are the commodities that make up the car. As well as the machining processes and materials necessary to create what; 50 years ago, would be a supercar and deliver it to our garages.
“‘technological advancement’ makes stuff cheaper, not more expensive.”
True unless a lack of alternatives in the market force consumers to either do without or else to purchase the newer, more technologically-sophisticated model of whatever.
Starter cars are $20k these days, and anything considered a family car is $30-fugg’n-thousand dollars! Toss in a faux mc-mansion, the family iPhone plan and three vacations a year, and no way one can retire before 80-yrs of age. I’m still waiting to wake up.
Retire? The trick is to do that without going bankrupt. Forget retiring. That faux McMansion better have been purchased in the 90s.
“Safer……., etc”
“Safer”? Maybe. Marginally. Although a lot of the more recent changes have been to benefit “pedestrians”, not the people inside the car.
More “entertainment”? Sure. Although I wish some of these chowderheads on the road would quit with the “entertainment”, and drive the damn car.
The rest of it? Yeah, marginally, maybe. I’d say no. Especially when you consider all of these marginal “improvements have doubled the price of the car/truck.
A Honda civic used to weigh around 2000-2200 pounds. Now it weighs 3000. A Ford Taurus used to weigh 33-3400, now it weighs close to 4000, if not more. Both of these use more “exotic” materials (aluminum, plastics) than the did in 1990. Neither of these vehicles get “better” gas mileage than they did in 1990.
IMO, it’s a giant conspiracy by the tree-huggers, safety nuts, and urban elitists to kick the wretched refuse off the road, by pricing them out of the “personal transportation” market. There aren’t many kids under 21 who can afford a vehicle anymore, without a significant subsidy from the Bank of Mom and Dad.
Especially when you consider how even used cars retain their value compared with the not so distant past. Used to be that domestic cars would lose 50% of their value in 2 years. I just looked online at prices for the 2005 Saturn VUE our kids share. It about 45% of what we paid for it new. For a car hat will be 8 years old in February.
Of course it’s the new car prices that are driving the used prices up. A well equipped Kia Sorento costs as much as $38K. Kia Sportages, with 4 cylinder engines, command as much as $30k.
I wonder what it would cost nowadays to build a diesel VW Rabbit, ca. 1981 model? Try finding one on the cheap. Geez, the sucker got 40 mpg back way when diesel was a $1/gallon. Now for some reason just because they can get that same 40 mpg they are golden. Weren’t so golden in late 1990’s, lol. Nobody wanted one and opted for SUVs. Point is, the car was better than a Yugo. What would it cost to build a no-thrills diesel like the Rabbit again?
“I just looked online at prices for the 2005 Saturn VUE our kids share. It about 45% of what we paid for it new. For a car hat will be 8 years old in February.”
That’s because new cars have such a long useful life. In the distant past (1970s or so) it was common to rebuild an engine with 50K miles on it, now it’s almost a badge of honor to run an engine until it needs a rebuild; in almost all cases, the car will fall apart around it first.
A modern engine today is good for at least 150K and perhaps 250-300K miles. That’s a huge increase in expected life.
Also, the steel is so much better today; a 10 year old car used to be a rust bucket, now you could park your car at the beach for a year and not expect to see a single rust bubble underneath the paint.
Listen, I’m in agreement that cars expensive and probably overpriced. And much of that overpricing is the easy availability of credit. However, arguing that a car from the 80’s is “as good” as one you buy today is, IMHO, not very defensible. A house from the 80s and one from today are nearly identical. A car, not so much.
Having checked the resale price of single engine planes made 50 years ago it goes to show that if you keep things maintained they retain their value. A new 4 place plane costs six figures and up and yet still gets close to the same mpg.
Seeing the price quotes for that Kia, which I assume it pretty high tech for the Koreans, why wouldn’t a Volt be a better deal?
That’s because new cars have such a long useful life
True, but the high depreciation was around as recently as 10 years ago.
And while modern power trains are indeed very durable, the other gadgetry in the cars isn’t, which is why I prefer a bare bones “stripper” model (which will still have power windows, power seats and A/C) over the “loaded” models that wipe your butt for you. If any of the many computers in the car needs replacing outside of warranty, it’ll cost you, pilgrim.
“Just like how car prices got so high. They kept changing the financing terms to get the prices up. extend the loan length and lower the interest rate.”
I think the advent of leasing cars for consumers (late 70’s if I remember correctly) was the beginning of a certain type of car madness. Lease payments were lower and you could get a flashier car and pretend you were more prosperous than you really were. And have an excuse/rationalization to trade in/trade up when lease was up.
Or, like a brilliant friend of mine, buy the car with your home equity line when lease was up…
Staying on the debt treadmill!!!
“Or, like a brilliant friend of mine, buy the car with your home equity line when lease was up…
Staying on the debt treadmill!!!”
Your friend is just responding to market dynamics. Why finance the car with a car loan when you can finance it with a HELOC and make it tax deductible (well, not really, but nobody is checking).
The current environment is totally off the rail insane with financing rates for everything. You can finance a house today with a effective rate for 30 years approaching 2-2.5% (after figuring in the deductibility of interest). Does anyone here really believe that inflation for the next 30 years is likely to be <3% YOY? I’ll be shocked if we don’t have a spike to close to 10% inflation in the next 10 years, and yet, banks are still handing out “free” money because the government is willing to take all the interest rate risk on their books (Freddie/FNM).
I own a lot of municipal bonds, which currently yield between 4-6% tax free. And I can borrow with a HELOC at 3% (again, after deduction). Who here thinking I’m more likely to pay back my loan than a municipal government? Let me start, I sure as s**t wouldn’t take that bet. And yet, every day, banks are making exactly that gamble.
This market is so distorted right now it’s almost laughable. Basically, if you have the stomach for it, you can become a bank; just borrow as much as you can against your house and lend that money to municipal government agencies. I don’t have the stomach to borrow to do it, but, if I did, I’d have a LOT more money today than I currently do.
Moral of this story.. People are not supposed to be able to borrow money cheaper than the government. That makes NO sense at all.
“So for a median couple, paying for a median hovel takes around a decade of slave labor for the couple. Harsh! Those prices will be going away soon.”
I don’t see how the masses are able to so persistently miss what simple arithmetic could so easily tell them.
Doing the math gets in the way of the American Dream.
They won’t let you read the mortgage contract and you think they might encourage you to do the math?
No math. No critical thinking. You’re just a critical input to their model.
You’re fed the feed they feel you need to make their meal your dinner.
“…You’re fed the feed they feel you need to make their meal your dinner…”
That’s one gorgeous lyric. Thanks.
Those who refuse to do arithmetic are doomed to speak nonsense.
I did the math, and if a couple makes $48,000 a year (two median personal incomes), then they could afford a median priced house in all the sand states except California, generally at less than 3x income. So say about 1.5 years of work (or slavery, if you prefer) per person per house.
California is at about $300,000 median house price so it would be 3 years each of work/slavery there.
Oops- make that 3 years of work/slavery per person for most sand states, 6 years in Cali. ( I thought my ’slave’ years count seemed awfully low.)
NOW, I’ve done the math. I think.
It does occur to me that one has other expenses besides the house just to live and work, so make it 24 years. Oh and there is our personal tax obligation, so make it 48 years (100 in California). Darn, I forgot the interest payment, so make it 70 years at these very low interest rates (150 years in California). Does anyone expect their spouse to hang in there and carry their end for 70 years!? Oh darn darn, I forgot about the costs of raising those 2.3 ankle biters…..
We are so glad we are not a “household” with a mortgage on the median (or better) these days. It’s a killer.
We are so glad we are not a “household” with a mortgage on the median (or better) these days. It’s a killer.
Mois aussi.
It looks like our friend failed to do the simple arithmetic once again.
Back from house-hunting, Dusty?
How’d it go?
Time for your ethics class Alpo.
Math is easy. The assumptions are a bitch.
median personal income for all individuals over the age of 18 was $24,062″. 24062/2000 = almost precisely $12/hr
This is precisely what “the future belongs to Lucky Ducky” means.
Now tell us again about “pent-up demand” for household formation, NAR-scum.
Welcome to the recoveryless recovery.
Using the “median” income actually helps the NAR support the household, “starter-home” lie even better than breaking down the numbers by age-group.
This survey takes everyone over 18. The numbers I have been reading have been telling me the 18-25 y.o. group has about a 25% unemployment rate, along with lower incomes.
The Over 55 group, if still employed, is getting most of the gains in income.
So, in terms of “household formation”, the young people are sharing group housing, while the older folks can afford a second home, not a new household.
I better yet, if they get a vacation home and retire early, then the “pension” and “social security” systems they are counting on for future income are currently still functioning, so they can go to Outback Steakhouse every other night for dinner and Red Lobster for the weekend.
When you were born plays a big role in where you will be in the dividing of the pie. 1st come, 1st served.
Oh? You didn’t get any? I’m sorry we ran out.
“Welcome to the recoveryless recovery.”
+1 At some point into the retirement tsunami the bankrupt pension scheme will become apparent to the average retired Joe. Lots of promises on paper, but the investment bankers have already stolen the money years ago.
To most people I know at or near retirement, it’s already apparent. But there isn’t a damn thing they can do about it.
‘Former US President Jimmy Carter has slammed American assassination drone strikes in other countries, saying that killing civilians in such attacks would in fact nurture terrorism. ‘…the drone attacks also kill women and children, sometimes in weddings… so this is the kind of thing we should correct,” he added.’
‘Carter also criticized incumbent American policy makers for violating the country’s “long-standing policy” of “preserving the privacy of US citizens.” “We now pass laws that permit eavesdropping on private phone calls and private communication,” he noted, explaining that in the past, in order to do that, the government had to obtain a court ruling that proved the nation’s national security was at risk, “which was very rare, but now it’s done all over America.”
“We need to back off [and] restore basic human rights as spelled out in the Universal Declaration of Human Rights (UDHR),” the former US president underlined. He concluded by saying that there are 30 paragraphs in the UDHR, “and at present time, my country, the US, is violating 10 out of the 30.”
http://www.thenews.com.pk/article-78826-Former-US-president-slams-drone-attacks
Carter will stand taller than many of his peers when viewed through the lens of history’s rear-view mirror.
No he won’t. According to the meme pushed by the rah-rah Reaganites, he will forever be known as President Buzzkill.
Jimmy Carter’s ‘Malaise’ speech wears well:
http://www.politico.com/news/stories/0709/24944.html
‘the meme pushed by the rah-rah…he will forever be known as’
Yes, let’s fall back into the world wide wrestling mode of politics, instead of considering what was actually said:
‘the drone attacks also kill women and children…We now pass laws that permit eavesdropping on private phone calls and private communication…which was very rare, but now it’s done all over America…there are 30 paragraphs in the UDHR, “and at present time, my country, the US, is violating 10 out of the 30′
But it’s so much more interesting to see these things as a sport! We even have colors now; read state, blue state. That didn’t exist until recently. My team scored, yea! The other team is doing something; booo!
Now we can sit on a couch and watch our political wrestlers 24/7. Ohh, look Ma, faceplant! Ha ha, that’s so embarrassing. Look, he’s limping, he deserves it! And we get all so wrapped up in this theater, the important things go by unnoticed. I can remember 20 years or so ago, we weren’t so distracted that things like this would go unnoticed:
‘The FBI records the emails of nearly all US citizens, including members of congress, according to NSA whistleblower William Binney. In an interview with RT, he warned that the government can use this information against anyone.’
‘Binney, one of the best mathematicians and code breakers in the history of the National Security Agency, resigned in 2001. He claimed he no longer wanted to be associated with alleged violations of the Constitution, such as how the FBI engages in widespread and pervasive surveillance through powerful devices called ‘Naris.’
‘WB: It’s everybody. The Naris device, if it takes in the entire line, so it takes in all the data. In fact they advertised they can process the lines at session rates, which means 10-gigabit lines. I forgot the name of the device (it’s not the Naris) – the other one does it at 10 gigabits. That’s why they’re building Bluffdale [database facility], because they have to have more storage, because they can’t figure out what’s important, so they are just storing everything there…’
‘RT: You say they sift through billions of e-mails. I wonder how do they prioritize? How do they filter it? WB: I don’t think they are filtering it. They are just storing it. I think it’s just a matter of selecting when they want it. So, if they want to target you, they would take your attributes, go into that database and pull out all your data.’
‘RT: You blew the whistle on the agency when George W. Bush was the president. With President Obama in office, in your opinion, has anything changed at the agency, in the surveillance program? In what direction is this administration moving?’
‘WB: The change is it’s getting worse. They are doing more…If you ever get on the enemies list, like Petraeus did or… for whatever reason, than you can be drained into that surveillance.’
‘RT: Tell me about the most outrageous thing that you came across during your work at the NSA.’
‘WB: The violations of the constitution and any number of laws that existed at the time. That was the part that I could not be associated with. That’s why I left. They were building social networks on who is communicating and with whom inside this country. So that the entire social network of everybody, of every US citizen was being compiled overtime.’
http://rt.com/usa/news/surveillance-spying-e-mail-citizens-178/
And don’t think of fleeing to country either. If you do, you might run into a drone with your name one it.
Jonesy-
We’re not framing this as an R vs D thang. It’s about the willingness to admit to economic reality vs the attitude of relentless optimism of the USA Number One koolaid drinkers.
Our position is that of a nattering nabob of negativism, not of that choosing a side in the 1%er bought and paid for false duopoly.
See also:
http://www.barbaraehrenreich.com/brightsided.htm
I hope this William Binney guy doesn’t end up in an “accident” of some sort.
That news article was probably written by computer. In a few years you won’t be able to tell whither a human or machine is feeding us our daily dose of reality.
http://www.wired.com/gadgetlab/2012/04/can-an-algorithm-write-a-better-news-story-than-a-human-reporter/
‘The FBI records the emails of nearly all US citizens, including members of congress, according to NSA whistleblower William Binney. In an interview with RT, he warned that the government can use this information against anyone.’
Your tax dollars at work: 100% email surveillance, all the time.
“If you do, you might run into a drone with your name one it.”
I’ll opt for the email (and blog) surveillance…
Mr. Binney needs to be careful he doesn’t get suicided.
Wow finally something that Carter says that I agree with!
You just weren’t listening, Bila. Alas, having the courage of one’s convictions doesn’t play well in the world of White House politics.
Several Political Science professors extended an invitation to former president Carter share his knowledge and understanding of the middle-east situation. Unfortunately the University Provost(s) barred him from these speaking engagement(s). The University is supposed to be a place where anything can be openly discussed in pursuit of higher knowledge and truth, but apparently that’s not the case.
Carter is from a time when we believed that what differentiated the US was that it was a country based on laws. Sure, they broke the laws, but still believed in them in principle.
This is a question for AlbuquerqueDan. How much has Rio Rancho grown in the past decade? It was sprawling endlessly when I last visited NM.
Rio Rancho doesn’t grow… it metastasizes. It is a cancerous canker on the cloaca of NM.
How many real estate pimps will it take to save the mortgage interest deduction from the ‘fiscal cliff’ scalpel?
Interest deduction is vital to the economy
12:10 AM, Dec 8, 2012
Written by Blane Johnson
In an effort to find revenue sources and avoid the looming “fiscal cliff,” Congress and the White House are debating limits on a wide range of tax deductions.
One of these is the mortgage interest deduction, a widely utilized tax break that Realtors believe is vital to the stability of the American housing market and our economy.
Specific legislation capping or eliminating the mortgage interest deduction has not been introduced, at least not yet. However, some pundits and experts have suggested that it could or even should be on the table as public policymakers in Washington, D.C., look for ways to address the U.S. budget deficit.
The National Association of Realtors has always been a supporter of the mortgage interest deduction. As 2013 NAR President Gary Thomas said, “Until Congress introduces specific legislation, there’s nothing to say about any proposed changes to the mortgage interest deduction. We will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest.”
…
The MSM hasn’t run out of NAR-funded real estate pimps just yet…
Love the NAR. Our economy needs money to flow and the NAR is doing its best to make that happen.
But nonetheless, they are miserably failing, as the flow of housing transactions is a shadow of its former self, thanks in part to federal government efforts to keep home prices propped up on a permanently high plateau.
Any half-decent undergraduate economics textbook includes a graph of a demand curve which immediately reveals the inverse relationship between price and transactions volume.
we need some more home equity to get the party going. People need to buy all the inventory at chevy dealerships.
“… thanks in part to federal government efforts to keep home prices propped up on a permanently high plateau.”
This is called “Saving the Lenders”.
Propping prices:
1. Props up the value of the mortgages that back the real estate with the propped up prices.
2. Draws in the Price equals Value folks - the folks who use price to determine value. These folks will buy what would otherwise be unsellable. If the price goes down they lose interest; If the price goes up then they buy.
3. Draws in OPM - money looking for a decent return. Maybe the promise of a decent return will not pan out for the investors but at least it generates hefty fees for the OPM managers, and this is what is second in importance. First in importance, of course, is keeping prices propped up, which saves the lenders.
This is called “Saving the Lenders”.
Which is what it’s all about. Meanwhile, we are distracted by families who get $450 a month in food stamps.
Meanwhile, the MID won’t be going away. It doesn’t matter that it doesn’t help the middle class. It’s perceived to help. And if it goes away a lot of people will decide to NOT buy a house, regardless of the real world effect of the MID. And the last thing the banksters want is for that to happen.
“It doesn’t matter that it doesn’t help the middle class. It’s perceived to help.”
It’s really sad that they can be considered middle-class, yet they’re incapable of understanding that the MID benefits the wealthy at their expense.
Now is the time to get rid of it…with low interest rates, it matters less than it has in a LONG time.
Now, or never.
Aaaaaand……..never it is.
“How many real estate pimps will it take to save the mortgage interest deduction from the ‘fiscal cliff’ scalpel?”
Is this a trick question? Remember, no banker left behind.
I guess not all economists have found time yet to read all the news articles lately explaining why the MID offers little if any benefit to middle class tax payers.
December 9, 2012 10:29 AM
Stein: Eliminating mortgage deduction is “foolish”
(CBS News) The battle over how to reduce the federal deficit continues this week in Washington. One of the suggestions under consideration doesn’t pass muster with our contributor Ben Stein:
My late father, the economist Herbert Stein, had a few favorite quotations.
One of them was from a European thinker named Oxenstierna, if I have that name right. The quote went simply, “Observe, my son, with what little wisdom the world is governed.”
This comes to mind as our nation is convulsed by fiscal problems, especially a titanic budget deficit.
This bipartisan mess, caused by GOP tax cuts that went too far and Democrat spending that went too far, is stirring talk of the need for tax increases and spending cuts.
Some of this - tax increases on the very rich - makes perfect sense to me.
But one of the ideas getting noodled around is just plain foolish. That’s the idea of junking or severely limiting, the deduction for tax purposes of interest on home mortgages.
Look, we are just barely limping off the bottom of a residential housing catastrophe, and home buying and building are finally, after a genuine nightmare, reviving.
If we could get housing roaring back, that would go a long way towards full recovery for our economy.
Obviously, taking away the home mortgage interest deduction is the very last thing the housing market needs.
I’m not saying it would hit every home buyer, but a home is an investment. If we lower the return on an investment, well, you get the picture.
This bad idea is apparently meant to substitute for tax increases on the wealthy. But this is strange. The rich, by definition, are RICH. That’s why they are CALLED “rich.” They can afford to pay more tax.
The middle income home buyers, or some of them, need that home mortgage interest deduction to buy.
…
But, but, people are smart!
From the article’s comments: “Mr. Stein is no dummy (he was a speechwriter for Nixon) so he’s evidently feigning concern for the middle class while really protecting his friends in the upper brackets.”
AL’S EMPORIUM
Updated December 8, 2012, 6:05 p.m. ET
Who Do You Trust?
By AL LEWIS
People who sell cars are considered the least-honest, least-ethical professionals, according to a Gallup poll released last week.
They were the only ones to rank lower than members of Congress.
Survey respondents also ranked them below advertising executives, stockbrokers, HMO managers and folks who sell insurance. Yes, insurance—even though the chief spokesman for one of America’s most widely advertised insurance companies is a lizard.
Fortunately, Gallup’s annual “honesty rating” did not rank snakes, rats and pigeons.
Car sales people do not deserve our deepest mistrust. They only want to sell cars. They might try to sell you an overpriced car. They might try to stick you with a shoddy car. But once you know their game, they become very transparent.
Someone who sells you a car is not going to blow your retirement accounts, foreclose your home, deny you medical care, ship your job to China or shove the entire nation over a fiscal cliff.
At least the professionals Americans find the most honest and ethical are nurses. My mom was a nurse. When I went to journalism school they said, “If your mother says she loves you, check it out.” I did. And she does. But I still don’t see why nurses are trusted more than pharmacists, who ranked second in the survey, and doctors, who ranked third.
…
I asked my lovely wife who the next least trusted group was after used car salesmen.
“Congress,” she responded without a moment’s hesitation.
I asked whether she had heard the news story about this.
“No,” she replied, “it was just an educated guess.”
Try finding a decent contractor who actually has a valid license.
Got that right.
Do You Live In A Death Spiral State?
William Baldwin, Forbes Staff
11/25/2012 @ 8:13AM
Don’t buy a house in a state where private sector workers are outnumbered by folks dependent on government.
Thinking about buying a house? Or a municipal bond? Be careful where you put your capital. Don’t put it in a state at high risk of a fiscal tailspin.
Eleven states make our list of danger spots for investors. They can look forward to a rising tax burden, deteriorating state finances and an exodus of employers. The list includes California, New York, Illinois and Ohio, along with some smaller states like New Mexico and Hawaii.
If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent.
http://www.forbes.com/sites/baldwin/2012/11/25/do-you-live-in-a-death-spiral-state/ - 195k -
“Do You Live In A Death Spiral State?”
Yes.
How did Kentucky, South Carolina, Alabama and Mississippi (2nd worst ratio of “makers : takers” according to Forbes) get on that list?
Being invisible hand of free market, right to work (for low wages), states they should all be economic utopias, right?
Spent some time in Alabama. Virtually everybody I met worked for the town, city, county, state or federal government. Even liquor store clerks are government employees with great benefits and retirement. Builders look for government floated bonds to build roads before they will build houses (unlike other states where the builders are responsible for same). Add in farm subsidies for thousands of farmers not to grow, early retirement govt. employees double-dipping, the list is almost endless. That is why they are a “Taker” state. And as govt. statistics show, the state contributes far less in federal taxes than they receive. Yet they view themselves as being self-reliant. More like a welfare state.
Interesting that there was a mix of red and blue states on the “taker” list.
I noticed that too.
If your state is not on the list cheer up, we all live in a country that is in a Death Spiral.
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 213k -
BOBBY MCFERRIN - DON’T WORRY, BE HAPPY LYRICS
You say your state ain`t on the list
I`m pretty sure that it barely missed
Don’t worry, be happy
Oo, oo-oo-oo, oo-oo-oo, oo-oo-oo-oo-oo-oo
Don’t worry
Oo-oo-oo-oo-oo-oo-oo
Be happy
Oo-oo-oo-oo-oo
Don’t worry, be happy
Ain’t got no place to lay your head
Somebody came and took your bed
Don’t worry, be happy
The Banker say your payments late
He may have to litigate
Don’t worry, be happy
Look at me, I’m happy
Oo, oo-oo-oo, oo-oo-oo, oo-oo-oo-oo-oo-oo
Don’t worry
Oo-oo-oo-oo-oo-oo-oo
Be happy
Oo-oo-oo-oo-oo
Don’t worry, be happy
Bobby McFerrin - Don’t Worry, Be Happy
http://www.youtube.com/watch?v=_DWgm48jIFE - 238k -
The article left me thinking that empire governments are always a blackhole in the making.
Yep.
“Daddy, what’s a long-term investor?”
“He’s a short-term speculator who is underwater.”
love it dude, that is true!!!!
Spook -
What’s neat about powering up a space vehicle and reaching the correct velocity is one gets to coast a lot. And this is what a large part of space flight is about, which is coasting.
Power your space vehicle up to the necessary velocity and then you get to shut down your engines and coast to whereever it is you want to go.
How long can you coast? For as long as you don’t run into some sort of friction or maybe get yourself captured by a gravitational field somewhere.
But this David McGowan guy in the link you provided yesterday doesn’t mention this, instead he compares flying a space vehicle to driving a car - and a car requires a constant supply of power applied to it (which requires a constant consumption of fuel) in order to overcome the friction it encounters. Which is a stupid comparison since driving a car encounters all manner of friction that a space vehicle doesn’t.
So either this McGowan guy doesn’t know this or he knows this and is making the comparison anyway. Either way his credability drops to somewhere around zero.
FWIW.
From yesterday:
The 60s must have been a golden age for NASA; a fat budget, good paying jobs,
I know a guy who worked at Cape Canaveral in the 60’s. He had an engineering degree. He told me that he couldn’t get a mortgage because his pay was too low. The banker’s advice? That he get a job a grocery store instead.
Anyway, my old friend Dave told me that STEM jobs paid cr@p in the 1960’s.
Not in Southern California, they didn’t. Half our neighbors in Palos Verdes were aerospace engineers and execs. (Although in ‘68-’69 a lot of them were laid off when the Apollo Program started winding down.)
“(Although in ‘68-’69 a lot of them were laid off when the Apollo Program started winding down.)”
IMHO there is a big, a BIG lesson here: If you are going to choose a career make sure this career you choose is not dependent on a project because once the project is completed you either have to:
1. Look for and land a job with another project, or
2. Find another career.
Plus …
If the project-orientated career you choose is a very glamorous and popular one (which aerospace was) then there will be a LOT of people attracted to this career. It is not a good thing to be in an overstuffed career field when this career field encounters some downsizing.
(… something the financial folks are now discovering.)
Know some peeps whose bread winner worked in defense up in California’s high desert. When the evening news showed clips of eager young Germans knocking chunks of concrete from the Berlin Wall the older (think wiser) engineers quickly put their homes on the market below comps and sold. Said peeps weren’t so lucky — they didn’t see the big picture. But twelve years of shagging by the prickly Joshua tree made them wise too.
I think that it probably depended at what level you were at. My friend was a recent grad at the time. He was an EE and not a “rocket scientist”. His job was to set up all the cabling between the launch towers and the rocket. There was an interesting aspect to his job. He remained on the tower and disconnected some stuff before the rocket ignited. He said he would ride the elevator down to a bunker under the launch pad, where the pressed a button letting them know that he made it (presumably so they could abort the launch if he didn’t). He said that the people who worked on the launch site were known as “space men”, at least in Canaveral. And that the pay really sucked.
He said that he moved on after a few years, returning to SoCal where he worked as an EE at a series of companies. He eventually co-founded a company in the Carlsbad, CA areas known as “Coded Communications”.
My bills for a 2 day stay at the hospital where I basically slept.
RC Semi Pr 2 day $3052.00
Emergency Room $2475.00
Lab $1177.00
Imaging X-rays $13,183.00
Pharmacy $269.64
Cardiology $241.00
Total $20,397.64
America has gone NUTS with the health care cost. JMHO
What insurance will pay for that will be WAY less.
If everyone paid the same amount, the numbers would look a lot smaller.
Pending Ins Pymt -$15,282.22 amt due from Patient $5,115.42
Are you okay, guy?
Yes
Thank you
That is quite surprising…glad to know you are OK.
I had a similar bill for a two day stay in 2011. I thought I had something serious and they took precautions. I ended up paying 25% of the total cost. Got a good specialist out of it over on the east coast and have a good specialist out on the west coast. The recommendation: Keep doing what I’m doing.
that is a total scam. dont pay the crooks.
Does anyone here know the Stone Mountain GA area? How are the schools?
Nevermind.
That didn’t take long.
Nope.
http://www.infowars.com/george-carlin-on-the-illusion-of-choice/
Watch this and then when the dimwits here attempt to detract from the truth, you’ll better understand who the dimwits are.
Carlin told many truths.
He will always be missed.
If most people knew what I know, they would implode upon realizing what a sham it all is in this country.
There’s an old saying: “Money can cover up a lot of stupidity.”