Bits Bucket for December 29, 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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This is Absolute tosh, a lot of people will be cheesed off if this codswallop happens to a gallon of cow juice.
Bob’s your Uncle.
Palm Beach Post staff and wire reports
Posted: 2:51 p.m. Friday, Dec. 28, 2012
Milk prices could skyrocket to $6 to $8 per gallon without action by Congress, senator says
PITTSBURGH —
Without congressional action by year‘s end on a new farm bill, consumers could be forced to pay $6 to $8 for a gallon of milk, U.S. Sen. Bob Casey said Friday.
Lawmakers are running out of time to avoid sending the nation‘s agriculture policy back to a 1940s law that could lead to steep price increases, said Casey, who plans to call for the House to adopt a new bill to avoid price hikes. The Senate has passed a bill.
Without a change, he said, the Department of Agriculture will have to buy milk at inflated costs that will escalate prices at grocery stores.
In Western Pennsylvania, the minimum retail price for a gallon of regular milk is set at $3.95 for January, according to Pennsylvania‘s Milk Marketing Board.
Why not let the free market set milk prices, instead of Congressional meddling?
Because the Congress in 1949 already meddled and all of the Congresses since then have only put in temporary fixes.
Are you saying the free market shouldn’t set the price now because of tradition?
No, I’m saying that the reason the free market isn’t setting the price now is that the elected representatives of the citizens of the US in 1949 decided not to let that happen and none of the Congresses since then have changed that. That is the reason it is happening. There is no should or shouldn’t involved. There is only what our country has chosen though our Constitutional system of a representative republic.
If you want what you consider the “better” outcome, then you will have to participate in the system and work to elect a Congress that will implement laws you consider to be better. Or find a country ruled by a philosopher king with absolute power and whose philosophy coincides with your own if you like, but it isn’t the United States.
Why not let the free market set milk prices,
I took you too literally. The question was”Why not let the free market set milk prices[?]…” but you explained why the free market is not in control.
IOW the question was ‘Why shouldn’t we put the free market in control?’
This policy looks a lot like Mexico’s subsidized tortilla policy that Colorado has mentioned previously.
A satiated serf is generally less prone to violence than a hungry one.
A few years ago the right wing PAN (which is no longer in power) briefly removed the tortilla subsidy. It wasn’t pretty.
But the confusion is really the heart of the matter. We have a nation of laws, not men. It is important. We are a pretty clever bunch on this blog and many are quite opposed to government interference with markets. I bet we could put together a list of 100 instances of government interference with various markets that should be ended in the course of an afternoon, and we just might be right. But legislative power isn’t invested in a bunch of clever people who got together on the internet because they were angry about a giant market failure called the housing bubble. It is invested in the representatives elected by the citizens of this country over the age of 18 who choose to vote and manage to fulfill the voting requirements of the states where they live.
Look, in my job, I have to implement a lot of very complicated rules that have previously been passed by Congress. It takes quite a lot of time to figure out exactly how to apply the rules to the situation I am facing. It would be much faster to read through the file, make a judgement call and move on. But I don’t do that. We aren’t set up to do that. We implement the rules the actual elected representatives of the people wrote and passed and became law. Because that is how the system works.
You might be OK with some people in my office substituting their opinion for laws and the procedures that have been put in place to enforce those laws. It would certainly allow a lot of us to be fired and no longer collect salaries paid out of taxes. But you should not accept such a system. No one should. People should have a chance to know what the rules are ahead of time. And the same thing goes with all the various programs. We shouldn’t let government employees decide to kill one or implement another just because they know they are clever people and that what they want to do is a good idea. We need to let the elected representatives of the electorate do that.
Is it hard to get people who represent your interests elected? Oh, yeah. Is is hard to get them to vote against a program that has a lot of money behind it? You better believe it. It is a miserable system. But it is what we have. And if you went to a system where government employees could just decide what to do because doing what the rules say is dumb, you would probably hate that system even more.
People should have a chance to know what the rules are ahead of time.
Agreed they should but I can’t agree that is how it works. Laws (rules) are selectively enforced, there are far too many too know. Even within the tax code the rules aren’t knowable due to their being thousands of pages of them.
More rules than are knowable is the norm with obamacare being the best example. Thousands of pages that we have to pass in order to know whats in it.
The voluminous rules that we are to follow ensures the government can prosecute you at will, there is always an applicable rule on the books that can be applied.
My bigger gripe is when I am prosecuted because others have violated the rules but I receive the punishment.
It may seem like the failures of the system are the system, but they are not. We do the best we can with the time and resources we have. We really do. It isn’t perfect, but it is an attempt.
Having it all done by the best guess of the people who work in enforcing the rules without any procedure at all or any chance to defend yourself or even the chance to know what the rules are through research and advice would be worse. Much, much worse.
Between the hormones in the milk and mad cow diasease, people would be better of not drinking so much milk.
people would be better of not drinking so much milk.
Sounds like the old soviet joke:
Sent to Kremlin: “People out of food. Send food.”
Sent from Kremlin: “Tighten belt.”
Sent to Kremlin: “Send belts.”
Milk is a “need.” We already tried the free market model on a need. Remember electricity deregulation in California?
It isn’t whether something is a need or not. It is whether it is a monopoly. That was the issue in the CA electricity deregulation.
There are much, much better ways to address a need that isn’t fulfilled by an actual competitive market than a complete market price support, especially a price support so extreme that it will make the product unaffordable for a great many people who “need” it.
“Remember electricity deregulation in California?”
Who could ever forget “Kenny Boy” and his gang of thieves. I bet Gray Davis remembers too.
“I bet Gray Davis remembers too.”
+1 Ha, the coin operated governor.
+1 CITB
Milk is bad for you. Don’t drink the stuff. There’s more calcium in spinach, and milk is full of pregnant cow hormones. Ewwwww.
Addressing Polly and CT’s point above, I was involved in a zoning/use dispute in which I was being simultaneously prosecuted and fined ($1000 a month by each!) by competing State and County agencies each requiring contradictory compliance, and each enforcing enacted law. I had to hire an attorney to take it before an appellate judge to see who got the right to dun me, and I was still required to pay their fines while it was being adjudicated. No reimbursement was ever made and I was forced to erect a mile of fencing to delineate a landlocked roadway that has never and can never be used.
THIS is why so many people scoff at The Law.
Sounds like a really good time to run for the county council. Not that I would want to wish that sort of boredom on you, but fixing brain dead local laws is a good reason to put up with it. Or the county council has a lot more sway with the state regulators on their rule being at odds with what makes sense in your area.
LOL! Good old boy network pulling the strings in the first place, and our Congressman is Majority Whip. County Supervisors like it just fine as it is, thank you very much. We tried running a local guy (publisher of our local newspaper) and got creamed with RNC money funding our opponents. Plus the supervisors’ cronies own all the media, the county jobs, the pork barrels, the courts and sheriffs, the natural resources, the….
I’m down to about two cups of half & half each week. Not sure I’d want to go below that.
I’ll bet you are working behind the scenes to incrementally have milk products banned, just like you admitted you were behind the incremental acceptance of smoking bans. Got Statism.
They ran out of cash.
“TAMPA — A local institution that began as a corner grocery serving Italian and Cuban immigrants in Ybor City has closed after 120 years.”
http://www.tampabay.com/news/business/retail/castellano-amp-pizzo-italian-market-closes-after-120-years-in-tampa/1267807
They ran out of customers.
The customers ran out of cash.
Bayshore Patriot2 days ago
The first mistake the Pallones made was posting “Under New Management” on the marquee outside. Why would you buy a revered, successful business and then call attention to a changing of the guard?
Second mistake: Hiring people who knew nothing about Italian food. In the spring of 2011 I asked the produce manager when they’d be getting in the fresh fava beans. He said the Castellanos had taught him how to go to the wholesale produce market, but he’d never heard of fava beans. He pointed me to the canned goods aisle. No favas there either, although you can buy ‘em at Publix.
Third mistake: Reducing inventory so that the store became a shadow of its former self — instead of learning from their mistakes and infusing some fresh capital.
I’m a south Tampa native in my late 50s. Been going there all my life. Stopped at least six months ago.
This seems to happen a lot: a long running and well established mom and pop biz changes ownership, only to fold within a year or two.
Methinks these businesses were already in trouble and the owners dumped them before they blew up.
True or here the kids didn’t want to take over the profitable Halloween/Christmas store only open for 4 months for 30+years…so the storefront sits empty for 2+ years gets a new business then it closes in a year ….still empty
“Methinks these businesses were already in trouble and the owners dumped them before they blew up.”
Some are and some aren’t.
The biggest problem is the usual problem: new, VERY inexperienced business owners.
I would also argue that the new owners’ cost basis, in most cases, is far greater than the former long term owners.
Who here remembers “video arcades?”
Thats a business where some owners saw the x-box/Playstation writing on the wall and sold the business to someone they convinced, “you can make a killing!”
This is exactly what the Housing Crime Syndicate does.
The truth? Shelter is an expense ALWAYS. Therefore, you buy it as efficiently as possible. At current inflated asking prices of resale housing, renting is far far more efficient.
+1 SV Guy: New guys overpay thinking they can make it work with a higher cost basis.
We had a great restaurant right next to our office…the place was killing it. Then it changed hands, they changed the menu, fired a bunch of people, tried to run the bar with fewer bartenders, etc.
I don’t go back anymore…
I would also argue that the new owners’ cost basis, in most cases, is far greater than the former long term owners.
That was most certainly the case. Rent plus loan payments probably made it not profitable for the new owners.
Like I said…
“The gourmet market has catered to generations of Tampa residents looking for authentic Italian meats, cheeses, desserts and prepared foods. Its wine tastings and lunch buffet and salad bar were big draws.”
“Peate went for the Cuban sandwiches, sausages and sweets.”
Not enough cr@p that would go on SNAP. What were the new owners thinking?
They also point out that a Whole Foods opened up the street 6 years ago.
Personally, I’ve never much cared for Cuban sandwiches. Too much pork (ham and pork, together at last!), no real magical flavor combinations. It’s no philly cheesesteak, or reuben.
Posted: 8:20 a.m. Saturday, Dec. 29, 2012
North Korea’s caste system faces power of wealth
By TIM SULLIVAN
The Associated Press
SEOUL, South Korea —
For more than a half-century, a mysterious caste system has shadowed the life of every North Korean. It can decide whether they will live in the gated compounds of the minuscule elite, or in mountain villages where farmers hack at rocky soil with handmade tools. It can help determine what hospital will take them if they fall sick, whether they go to college and, very often, whom they will marry.
It is called songbun. And officially, it does not exist at all.
Songbun, a word that translates as “ingredient” but effectively means “background,” first took shape in the 1950s and ’60s. It was a time when North Korea’s founder, Kim Il Sung, was forging one of the world’s most repressive states and seeking ways to reward supporters and isolate potential enemies.
“If you were a peasant and you owned nothing, then all of a sudden you were at the top of the society,” said Bob Collins, who wove together smuggled documents, interviews with former North Korean security officials and discussions with an array of ordinary North Koreans to write an exhaustive songbun study released this year by the Washington-based Committee for Human Rights in North Korea. While the songbun system theoretically allows for movement within the hierarchy, Collins said most families’ standing today remains a reflection of their ancestors’ position in the 1950s and ’60s.
Generations after the system began, many of North Korea’s most powerful people are officially identified as “peasants.”
http://www.palmbeachpost.com/news/ap/energy/north-koreas-caste-system-faces-power-of-wealth/nThXc/ -
All peasants are created equal, but some peasants are more equal than others.
So true. Thank God we don’t have that sort of tribal stuff here.
Just slap a COEXIST sticker on it and it’s all good bro
I guess they’ve never heard of “Gangnam Style”
Or, the “talented tenth”
Sounds pretty much the same as it is in the US.
Homeowners faking filings to delay foreclosure
(Bob’s your Uncle)
Nick Taylor
27-Dec-2012
Homeowners in California are buying fake documents to delay foreclosures on their properties, a local paper reports.
Prosecutors in Stanislaus County, California, have cottoned on to the practice and begun cases against four homeowners. The four are accused of filing phony court documents - claiming the debt has been repaid or changing a trustee - in an attempt to stall foreclosure proceedings.
“It comes to a point where enough is enough. How many breaks can we give these people?” Jeff Mangar, a prosecutor with the district attorney’s fraud unit, told The Modesto Bee. Staff handling filings are now aware of the practice and tip off investigators.
The counterfeit court filings are available online - for a fee - from websites claiming they can tie up banks in administrative proceedings for years. A website reviewed by the Bee claims none of its 2,600 customers have made a mortgage payment in the past two years.
http://www.securingindustry.com/security-documents-and-it/homeowners-faking-filings-to-delay-foreclosure/s110/a1550/ - 38k -
The only mysterious aspect of North Korea, IMHO, is how its sponsors, Russia and China, get away with it.
Thats simple.
North Korea is to China
as
Al Qeada is to the U.S
I make it a habit to introduce all my friends to my crazy alcoholic Vietnam Vet Uncle who lives alone in a shack by the railroad tracks with guns; lots of guns.
More like:
North Korea is to China
as
Mexico is to the U.S
A populous country on their border whose failure would screw up their own country.
Although I agree they have a destabilizing ability that is useful to the Chinese.
“…from websites claiming they can tie up banks in administrative proceedings for years.”
It’s great to know that extend-and-pretend options are available at the household level…
The “foreclosure specialist” attorneys probably get inside info supplied by the lenders (the lenders might even pay them) to help with the stalling tactics. The last thing the banks want is the properties handed back to them without a fight. Left uncontested they have to delay the courthouse sales themselves and if they have to dothis every time it looks suspicious.
Don’t be absurd. Court records are public including the papers filed by both sides. All you have to do is look up the cases that worked before and conform your submissions to those. You don’t need any insider information. Just a Westlaw connection or access to the public records room at the courthouse.
It’s great to know that extend-and-pretend options are available at the household level…
The little people aren’t supposed to use fancy legal strategies to pursue their own interests, that’s for corporations and 1%ers only!
Jethro I posted this yesterday.
California debt-junkies have themselves desperately anchored to their rapidly depreciating houses and are doubling down by forging documents to stave off the inevitable foreclosure.
It’s going to be a doozy when this begins to unwind in California.
Talked to a victim Wednesday on a demo job we were starting and I asked him if he was paying his mortgage yet (he stopped paying about 5 years ago) he said … Yes, I pay my lawyer $400 evry month and that`s my mortgage payment.
The dude bought his house in the mid 90s ($120k) and refied it up to boom prices during the boom years (close to $400k) quit paying and jumped on the Robo signed Victim train to Beatsville.
Hey, wasn`t that a song?
Take the last train to Beatsville
and I`ll meet you at the station
“Yes, I pay my lawyer $400 every month and that’s my mortgage payment.”
From the lawyers point of view this is easy money; Get the FB’s signature on some papers and receive $400 every month. What’s not to like?
From the lender’s point of view he gets his property maintained by the FB while he, the lender AND true owner, keeps the property on hold. What’s not to like from his point of view?
The FB is probably convinced that he is now the true owner or will someday become the true owner and hence treats the property AS IF HE WERE the true owner. Again, what’s not to like?
This will work until … something happens.
After something happens the lawyer will no longer get his $400/month from the FB (but, hey, it was a good ride while it lasted), the FB will find his stupid a$$ tossed out into the street, and the lender will reclaim the well-maintained house and will put it on the market to be sold to another soon-to-be FB.
That’s the way I’d bet.
“and the lender will reclaim the well-maintained house”
This house is far from “well-maintained”. It looks like what it should be, a foreclosure. Meanwhile his “stupid a$$” has lived rent free for 2+ years and for $400 a month for 2+ years where other people are paying at least $1,400 a month to rent or own in the same hood. So put that $60k togther with his $250 in extracted “equity” and he comes out with $310k in tax free victim bucks. Now tell me exactly how stupid his “a$$” is.
Where do we get our Victim Vouchers?
Where do we get our Victim Vouchers?
Look in your wallet.
“Where do we get our Victim Vouchers?”
Snork the magic Deadbeat
Lives here for free
He lost his job
He`s Hardest Hit
He don`t rent like you and me
Snork bought in 2000
Refied back in 03
Again back in 05 and six
He`s a victim can`t you see
Snork ain`t got no income
The refi money gone
But if you rent your out of luck
Cause there are no Renter songs
Oh
Snork the magic Deadbeat
Lives there for free
He lost his job
He`s Hardest Hit
He don`t rent like, you, and meeeee
Nice, tre.
Mayor urges New Yorkers to keep deadly incident in perspective.
“the best thing is what they tell you — don’t stand near the edge, and keep your eyes open.”
That’s probably good life advice in general, regardless of whether you ride NYC subways within reach of people who should be institutionalized, but aren’t.
There it is. If somebody needs to be close to the edge your job is to make sure that that somebody is not you.
It’s also a good idea to look behind you often enough to prevent crazy people from sneaking up on you and pushing you over the edge.
Only take the subway with a friend. You look one way, s/he looks the other.
Ghost (6/10) Movie CLIP - Get Off My Train (1990) HD - YouTube
http://www.youtube.com/watch?v=cjkkKO5Gsno - 255k -
It’s also a good idea to look behind you often enough to prevent crazy people from sneaking up on you and pushing you over the edge.
————————-
Or you can turn around often and pace nervously to make sure no one is sneaking up behind you.
Oh wait, now you look suspicious.
Somebody should invent some tennis shoes with 2 big suction cups on the bottom.
Time to ban extending your arms in a rapid fashion.
And nobody needs arms that extend that far.
From theburningplatform blog:
The truth that no one wants to acknowledge is the standard of living for every person in Europe, the United States and Japan will decline. The choice is whether the decline happens rapidly by accepting debt default and restructuring or methodically through central bank created inflation that devours the wealth of the middle class. Debt default would result in rich bankers losing vast sums of wealth and politicians accepting the consequences of their phony promises. Bankers and politicians will choose inflation.
I don’t see ‘inequality of wealth’ as having much to do with the current crisis/disaster. ‘Inequality’ only illustrates that rent-seekers are making out like the true bandits they are.
“The truth that no one wants to acknowledge is the standard of living for every person in Europe, the United States and Japan will decline.”
I predict this prediction will fail for some fraction of the 1%, whose standard of living will continue to increase as the rate of increase in their share of a shrinking wealth base continues to exceed the rate of shrinkage.
I predict this prediction will fail for some fraction of the 1%
I really don’t care what the hell happens with the 1% rent-seekers. Somebody will most likely profit even if the rest of us become destitute.
Sadly, the share of the U.S. population who can profit while others become destitute seems to be trending towards a vanishingly-small fraction of 1%.
“Debt default would result in rich bankers losing vast sums of wealth and politicians accepting the consequences of their phony promises.”
Not if it is done right it won’t. If the bankers do some shifting of assets and the politicians do some shifting of blame then both groups will be given a pass.
both groups will be given a pass.
If and only if the ultimate suffering they are seen as inflicting on everyone else is well tolerated &/or obscured by BS.
“… well tolerated &/or obscured by BS.”
In will step the MSM to help “explain” the situation.
“The truth that no one wants to acknowledge is the standard of living for every person in Europe, the United States and Japan will decline.”
This has been ongoing for 30 years. Anyone under 40 doesn’t realize it… yet.
The double-digit unemployment 18-25yo Lucky Duckies are starting to realize it. And this “lost generation” will not be contributing to the NAR-scum’s alleged pent-up demand for overpriced housing
They just all need to become petroleum engineers and and molecular biologists. The lazy bums! So what if their IQ isn’t high enough to get a “real job”? Whose fault is that?
I am reminded of a Star Trek Next Gen episode where we learn that young school children (say 9 years old) on the Enterprise all take Calculus class.
I wonder what the Federation does with the “regular” kids? I guess they get galactic SNAP cards and free Obama communicators, plus section 8 housing on Vega 5 (which used to be a nice little planet before the moochers moved in)
All the kids on the Enterprise were above average.
http://www.youtube.com/watch?v=nx5GwULPU90 - 198k -
Deadline nears for foreclosure review
By Kimberly Miller
Posted: 7:09 a.m. Thursday, Dec. 27
Palm Beach Post Staff Writer
Florida residents who believe they suffered from shoddy foreclosure practices have through Monday to apply for a free case review that could net them up to $125,000 if wrongdoing is found
http://www.palmbeachpost.com/news/business/deadline-nears-for-foreclosure-review/nTgK8/ - 87k -
you should buy a house today and get on board the gravy train.
Why buy a house when prices are falling? Buy later after prices crater for 65% less.
It’s 65% now? Where did the extra 5% come from?
You haven’t bought yet? Why not? What’s wrong with you?
From the same place those extra infusions of 5 million empty shadow inventory homes come from. Didja notice that number creeping up too?
That’s my housing hooker. You can’t see 5′ in front of you because your entire future gets in the way of the truth.
I believe it was a typo in the version of the spreadsheet he sent me.
My calendar says December 29, 2012. Is there still time before year-end to put together a deal to avoid going over the ‘fiscal cliff’?
Dec. 28, 2012, 4:33 p.m. EST
U.S. stocks sink with hopes for cliff deal
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks fell hard on a report that President Barack Obama did not have a new offer to avert the so-called fiscal cliff in talks with congressional leaders Friday afternoon.
“There might be some last-minute Hail Mary resolution or a chance there is some tax agreement, but I don’t think there will be any spending agreement” before the end of the year, said Chip Cobb, portfolio manager at BMT Asset Management.
Equities extended a losing streak into a fifth session.
…
The real traders are on vacation till Jan 2nd.
Temporary extension?
Many versions of bills have been written already by the think-tanks and lobbyists. Wouldn’t surprise me they do up-an-down votes and we get a bill that we have to pass to find out.
Love the handle, and I got it…
Actually, the handle is incorrect. “Jesus Christ” in Spanish is “Jesucristo” (one word, no ’s’ at the end of Jesus), pronounced (roughly) Heh-Sue-CREES-Toh.
The Prez doesn’t want a deal because he knows he can blame the Repubicrats and the MSM will follow his lead.
I don’t give a hoot if he cut short his vacation in Hawaii.
The most fiscally conservative deal os to let it happen.
Isn’t that what the CBO said at one time? Let the tax cuts expire and end the wars and we’ll have a balanced budget?
Salon dot com posted an article that we would balance the budget in 2019 by doing noting. That included the wars, the tax cuts, the doc fix, the AMT and full-scale Obamacare. I also suspect it counts a lot of boomers dying off.
Not sure how true it was, but it was compelling.
The Do-Nothing Plan
How Congress can balance the budget in eight years by literally doing nothing. This is not a joke.
-Slate- Magazine
http://www.slate.com/articles/business/moneybox/2011/04/the_donothing_plan.html
The amount of tax increases on the middle class is no joke.
“The amount of tax increases on the middle class is no joke.”
So do we need to balance the budget or don’t we?
Given all the recent happy talk about a housing recovery, I am somewhat puzzled by the ongoing pandering for ever more largess for sad-sap homeowners. How about a 2013 bailout for renters who lost the ability to make their monthly rental payments and got kicked to the curb? How did homeowners gain the status of a protected political class?
“How did the homeowners gain the status of a protected political class?”
Look closely and you will discover it is not the homeowners that are the protected political class, it’s the lenders that are a protected political class.
If saving the homeowners saves the lenders then the homeowners will be saved. The moment the homeowners can be thrown under the bus in order to save the lenders then under the bus they will go.
We have a winner.
Yes we do…+1 combo…
If an owner of an asset wants to keep an asset that is subject to deterioration in good shape then he will have to continually do some maintenance on it. He can either pay for the maintenance himself or set the situation so somebody else pays for the maintenance. One way or the other the maintenance has to be done else the value of the asset will deterioriate and the owner of the asset will suffer this loss of value.
If the lender is the owner then he will be the one who will have to eat the cost of maintenence UNLESS he can set it up whereby SOMEBODY ELSE thinks they are the owner of the asset. If somebody else thinks they are the owner then this somebody else will be the one who will pay for the maintenance - and will keep paying for the maintenance all the way up to the day when the true owner - the lender - lays claim to the asset.
Agree 100%. This is all about the Banksters.
“Bankstas”
Geez I would be such an Obewanna supporter if I gotz my 6 months of rent relief….let alone 4-5+ years of mortgage relief others got.
Well, then, get out there, “buy” yourself some real estate and don’t make the payments.
Always guessed you were for sale, dj. Thought the number was a little lower than 6 months rent. Why did you up the ante? Used to be just $3000.
I guess I needed to grow up and get with the program….lets see how poor i can make myself look on paper…..Obewanna I want my phone and free health insurance too.
How about a tax break for struggling renters for a change? You could make rental payments 100% tax deductible, and it would still take many years for the value ‘rental payment deduction’ to add up to the value of tax-free debt-forgiveness income enjoyed by many homeowners.
Clock ticking on mortgage tax break for struggling homeowners
By Les Christie @CNNMoney December 24, 2012: 6:35 AM ET
Struggling homeowners with principal reductions may have to pay more in taxes if the Mortgage Debt Forgiveness Act is not extended by the end of the year.
NEW YORK (CNNMoney)
A tax break that has saved struggling homeowners from paying thousands of dollars to the IRS is just days away from expiring.
If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.
That means if someone owes $150,000 on their home and it sells for $100,000 in a foreclosure auction, they could owe taxes on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure. Similar taxes would apply for amounts that were forgiven in short sales and principal reductions.
“Allowing the act to expire would harm these families and their communities and it would run counter to current loss mitigation efforts,” wrote Tim Pawlenty, president of the Financial Services Roundtable, Mike Calhoun, president of the Center for Responsible Lending, and John Dalton, president of the Housing Policy Counsel in a letter to the Senate Finance Committee.
So far, though, very little has been done to extend the act as Republicans and Democrats continue to butt heads over the fiscal cliff.
…
Photos from privately-owned UAV lead to indictment of Texas meat-packing company, its president and its VP.
Old news but still a good find.
MORTGAGE-INTEREST DEDUCTION SHOULD BE CUT
By Emily Washington
12:01 a.m., Dec. 27, 2012
Updated 4:48 p.m. , Dec. 26, 2012
While myriad factors contributed to the housing bubble burst – and the particularly slow recovery that has followed in California – federal policies aimed at encouraging homeownership deserve a solid share of the blame. As Washington struggles to get its fiscal house in order, eliminating the mortgage-interest tax deduction should be a key part of any deal.
This issue is particularly important for Californians. With one of the nation’s lowest rates of homeownership and some of the highest housing costs, it is especially vulnerable to policies that transfer wealth to homeowners and increase local housing costs. The federal home mortgage-interest tax deduction does just that.
The mortgage-interest deduction – which reduces federal revenues by about $100 billion each year – is an important component of Washington’s strategy to increase homeownership. The more buyers spend on their homes, the more they receive from the deduction. This distorts the housing market by encouraging them to purchase larger and more expensive homes than they would otherwise buy.
As the deduction is designed to benefit those who spend the most on mortgage interest, it also encourages consumers to take on greater debt. Lower-income homeowners who are likely to have smaller mortgages and interest payments may not receive the break at all because they are often better off taking the standard deduction. Of middle-income households earning between $50,000 and $75,000, the average benefit of the deduction is $179, and only about one-third of this group claims it. High-income taxpayers, on the other hand, disproportionately benefit: those with incomes over $200,000 receive an average of around $2,221, making it a highly regressive policy.
The Federal Reserve Bank of Boston has found that while the mortgage-interest deduction encourages homebuyers to purchase larger homes than they otherwise would, it is ineffective at encouraging people on the margins to buy – which is its stated intent. In other words, it favors established buyers over those who must choose between buying and renting by failing to create a big enough incentive to enter the market for the first time with a starter home.
In fact, the negative effects of this deduction fall hardest on renters. By providing tax advantages for homeownership, the federal government subsidizes all housing, artificially raising its price by increasing demand across the board. Renters don’t see their wealth rise along with home prices, making their housing needlessly expensive as government intervention keeps driving up its market value. And because they can’t use the deduction, renters pay relatively higher federal income taxes than homeowners do for the same services.
The mortgage-interest deduction often also favors those who live in suburbs over those who live in cities. As Harvard economist Ed Glaeser argues in “Triumph of the City,” the current policy drives many to abandon renting in the city for homeownership in the suburbs – simply to gain the tax deduction. While suburban communities are providing the large, single-family homes that the deduction creates demand for, cities are losing residents who are just beginning to prosper and pay more in taxes. The phenomenon occurs within city borders as well, where it leads to greenfield development at the outskirts of town instead of infill development. This requires municipalities to build entirely new infrastructure as they expand outward, rather than redeveloping existing areas that already have it.
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current policy drives many to abandon renting in the city for homeownership in the suburbs – simply to gain the tax deduction ??
BS alert….
I’d say that’s pretty accurate wouldn’t you? This deluded group has been a constant stream of commissions for the lying realtards for decades.
Agree.
People can buy in the city just fine and get the deduction. They move to the burbs to get a bigger house, a yard, non-city lifestyle, etc., not the deduction.
Comment by ahansen
2012-12-29 01:02:59
When I was a kid, Mt. Morrison was covered in snow year round, and MM officially closed ski operations on July 4. Having climbed and skied the planet for over five decades, it’s painfully obvious that glaciers are not simply in retreat, they’re disintegrating exponentially.
Allena,
Hi and hope you got my sorry two days ago.
Let me help with some of your confusion. First Mt Morrison really doesn’t cover in snow even in the winter. http://3.bp.blogspot.com/_ejAk42p7jdY/SYhnk3FFgvI/AAAAAAAAC48/1IK_ZqbgR9g/s1600-h/Mt.+Morrison.jpg It is mostly exposed rock. I have been looking at it daily for over 30 years. I have skied it as well. If memory serves Morrison has held some year round snow every year except this year. Look at the snow fall history and you can see why, it didn’t snow last December and the Sierra was as dry as I have ever seen it. Not cold but dry. Morrison remains as it was when we were kids.
http://www.mammothmountain.com/Mountain/Conditions/SnowConditions/HistoricalSnowfall.aspx
When I review the snowfall history I cannot see the trend you refer to. In the 80’s we skied MM lifts one year into September, not because it was a cold year but because it was a wet year. Today Mammoth closes due to the fact that it is not profitable in July. The snow patterns look the same to me, Dave McCoy used to operate whenever he could.
Between your house and mine is the country’s southern most glacier the Palisades. I fly over the glacier every chance I get and I watch the ebb and flow of its boundaries. The alarmists love to point at the ice and claim retreat real or not and point at warming when precipitation levels determine short term advancement and retreat. My observation is that the Palisades as the rest of the Sierra’s permanent snow fields ebb and flow in reaction to wet and dry years.
We are over 8,000 years into the interglacial which means glaciers will retreat until the next glaciation begins. Pointing at an 8,000+ year old trend does not support AGW. All glaciers are not in retreat a portion of them are growing. Its noteworthy that the IPCC feels the need to misrepresent regarding glaciers, with their position on the Himalayan retreat being fraudulent.
What has happened in the last 100 years is there is 30% less glacier coverage. Lets accept that we don’t know exactly why but don’t downplay the fact it will have a negative effect on the regional biosphere. People can adapt or move but to the local flora and fauna this can be life threatening.
“we estimate a total reduction in glacier cover in the central and southern Canadian Rocky Mountains for the period 1919–2006 of 750 km2 (30%).”
“Area change is not an immediate response to a change in climate. The response time of a glacier depends on its size, attributes, and topography. We thus cannot quantitatively relate our area changes to climate, but we do see similarities in the two over the periods of decades, which are evidenced by the correspondence between rates of area change and the temperature and precipitation anomalies (Fig. 7 and 9). From 1919 to 2006, temperatures increased, precipitation decreased, and rates of area loss increased.”
http://www.the-cryosphere.net/6/1541/2012/tc-6-1541-2012.pdf
Global warming is a BIG LIE that Al Gore made up to sell more movie tickets. It’s true, it was in the Washington Times.
Global warming is a BIG LIE that Al Gore made up to sell more movie tickets. It’s true, it was in the Washington Times.
Big lie to help Al Gore make over 100 million dollars selling worthless carbon credits. Was in Sedona yesterday did not find any global warming with the snow on the red rocks. Enjoyed the view. Look it is normal to warm up in an interglacial period so the last 100 years do not show AGW particularly when for more than 15 years we have been adding record amounts of co2 into the air without any warming. There are short term warming and cooling periods and longer warm and cold periods. I am much more worried about a natural ice age than AGW. If you look at the natural cycles over the last 400,000 plus years, you will see that it could begin at any time. Maybe that is what the Mayans were really trying to tell us the end of the interglacial period is at hand. Ice ages last ten times the period of interglacial periods and an ice age would kill billions.
Dan, What are your thoughts about Sudden Stratospheric Warming events? Looks like to me the upper atmosphere is acting like a relief valve of sorts. What we do know is when we have a SSW event it is associated with a sudden reversal of the polar vortex which seems to be related to jet stream anomalies like the current record wet winter England is experiencing. Like I said yesterday we don’t have much historic data before 1951 so we don’t know if this is a normal atmospheric condition.
Do mass coronal ejaculations cause global warming?
http://www.youtube.com/watch?v=pdhtXzMPTdk
Or something interesting resulting from a large solar ejaculation such as a big surge into the power grid set up all over the country and after such a surge the thousands of the grid’s transformers that will be blown out cannot be immediately replaced because there is no large stockpile of transformers to draw from.
Something of this sort happened a hundred-or-so years ago involving the telegraph grid after a large solar ejaculation encounter the earth.
Wiki-up “solar storm of 1859″ for an interesting read.
I have visions of young hip people bumping into each other as they stare into the dead screens on their smart phones.
Dan, What are your thoughts about Sudden Stratospheric Warming events?
I am really not seeing any connection between what is more a weather event than a climate event.
I suggest that people look at the climate for the last 420,000 years and see that the warming we are experiencing is the norm (actually less) for an interglacial.
I think one can make an argument that before the environmental movement some warming might have been impeded by pollution and when we cleaned emissions we caught up to normal warming but the link between co2 emissions and a significant amount of warming is very weak.
BTW, climate4you.com is a good source for the climate record.
Here’s a good pie chart of the scientific, peer-reviewed published papers, and how many reject global warming (hint- it’s a mighty thin piece o’ pie!):
http://www.desmogblog.com/2012/11/15/why-climate-deniers-have-no-credibility-science-one-pie-chart
Is his article peer reviewed? I have personally seen more peer reviewed articles than he is claiming. I don’t know how he arrived at his numbers. But the real point is the hard data shows that 2012 is cooler than 1998 and no computer model predicted that or anything close to that. We were suppose to be at least 1C warmer by now. Until someone can explain why the models do not work, meaningful AGW has not been proven.
I don’t know how he arrived at his numbers
He explains how in the article. His conclusion:
Anyone can repeat this search and post their findings. Another reviewer would likely have slightly different standards than mine and get a different number of rejecting articles. But no one will be able to reach a different conclusion, for only one conclusion is possible: Within science, global warming denial has virtually no influence. Its influence is instead on a misguided media, politicians all-too-willing to deny science for their own gain, and a gullible public.
Scientists do not disagree about human-caused global warming. It is the ruling paradigm of climate science, in the same way that plate tectonics is the ruling paradigm of geology. We know that continents move. We know that the earth is warming and that human emissions of greenhouse gases are the primary cause. These are known facts about which virtually all publishing scientists agree.
Look if the question is does putting co2 in the air cause warming, most everyone will say that it contributes. However, the question is how much and if you think it is the majority of the increase there is far more disagreement than he is stating.
Even I agree it is a minor contributor but you still ignore the central question how can we have had no warming for over 15 years. The AGW advocates cannot explain and it is contrary to their models that is why they hid it and lied about it and their own e-mails from a few years ago proved that.
About the fraud:
http://online.wsj.com/article/SB10001424052748704888404574547730924988354.html
RE: climate4you.com. Now I know why your views about AGW are so wrong. Dr. Ole Humlum is to climate science what Allen Greenspan is to sound economic theory.
The IPCC reference to “Himalayan retreat” was not done by IPCC scientist and was not in the actual report. It was submitted by a third party organization (authored by Greenpeace, not peer reviewed) and was considered ‘grey literature’”. It was wrong to use it but the IPCC still approves the use of similar material. At least it’s better identified in the next report due out next year.
http://www.ipcc.ch/news_and_events/docs/ipcc33/PRESS_RELEASE_Outcomes_abu_dhabi_13_may.pdf
“…It is mostly exposed rock….”
You rest my case. (We’ve been there since the 1950’s.)
Not
coldwarm but dry.I see Schumacher is advertising nationally for new housing…. get this…. it states “Get your new home for less than the cost of someones used home.”
It’s coming. And it’s coming in a big way.
Lol. So the talk at cocktail parties will be the one-upmanship of the buyers of new over the buyers of old.
Oh, and there’s the mortgage rates. Not only do the buyers of new get to buy cheaper, their cost of money is also cheaper.
Something else they can use in their game of one-upmanship.
(One-upmanship = I’m smarter than you)
Schumacher is a build-on-your-lot builder. Says so right on the webpage.
I looked up my tax assessment. My property value is 60% land, 40% house. Taking out the land value, my house cost less than Schumacher’s starting price of ~$85/ sq ft.
Quit posting crap.
Your “assessment”??? Your ASSESSMENT? lolol
And what does “your realtor” say my my dear debt-junkie?
And the reality is their national commercial states clearly, “Get your new home for less than the cost of someones used home.” that’s not “crap”. That’s the truth.
You got ripped off. Get over it.
And the reality is their national commercial states clearly, “Get your new home for less than the cost of someones used home.” that’s not “crap”. That’s the truth.
That’s the most laughable thing I’ve heard today.
And you’re still ignoring the cost of the land. Not that we expect you to provide an honest perspective.
You still haven’t addressed the fact that you have to have a lot before you can build a house.
YOU address it. You’re taking issue with it. Carry on now.
Looks like I struck a nerve!
Don’t know about my Realtor, but Trulia says my property has gained 3% since I bought it less than a year ago.
“Get your new home”
Typical ad copy. Of course your “get your new home…” except… it’s a floating box of air and you have to provide a place to put it.
Now you’re quoting “Trulia”? LMAO
“Get what you can get for your house today because it’s going to be less tomorrow for many many years to come.”
Amy Hoak is Lawrence Yun’s personal fluffer.
Why does she need to stop there?
http://www.c-span.org/Events/Washington-Journal-for-Thursday-December-27/10737436884/
OK so I have been angry about DBLLs collecting rent and former Donald Trump wannabes crying victim after hundreds of thousands of $ in “equity” extractions but at least I have never been a battered boyfriend for bad sex.
Woman, 50, battered boyfriend, 32, for bad sex, deputies say
By Barbara Hijek
FloriDUH
8:15 a.m. EST, December 29, 2012
Guess they just can’t get no satisfaction in the Bradenton area.
Jennie Lyn Scott, 50, allegedly struck her 32-year-old boyfriend after he reportedly “finished first and stopped pleasuring her,” reports The Smoking Gun.
Deputies said alcohol was a most definitely a factor and the Palmetto woman had been uspet with her lover because she had reportedly “heard [him] having sex with another woman over the phone earlier.”
And she’s not the only woman in Manatee County that that can get nasty due to poor partner performance.
Remember Raquel Gonzalez, 24, from East Bradenton?
She also allegedly attacked her boyfriend after disapponting sex.
http://www.sun-sentinel.com/news/strange/floriduh-blog/sfl-bad-
sex-20121229,0,2431813.story?track=rss - -
No wonder poor Palmy is always so disgruntled with his neighbors. But maybe her lawyer will get her off….
“…Jennie Scott, 50, was booked into the Manatee County lockup on a misdemeanor charge stemming from the 11 PM encounter in the Palmetto bedroom of Jilberto Deleon, 32….”
http://www.thesmokinggun.com/buster/battery-over-bad-sex-497812
To extend the laughs a bit read the comments.