Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Post off-topic ideas, links, and Craigslist finds here.
Posted By: Ben Jones @ 1:20 am
Houses are never investments. They are depreciating assets.
one question: Do you think the current craziness (in Palm Beach County) will last until September? That would be just long enough to benefit from the sale of my house. I will have been living there for 2 years and would like to make a little tax free money. Seriously, what do you think?
Get what you can get for it if you can find a buyer.
My house is under contract. Took one day to sell it, without putting it on the MLS or hiring a realtor. Total closing costs of selling it will be $8000(I am paying 5k in closing costs and 3k in repairs). Not paying a realtor 6% though.
So I will be breaking even as the sales price is 8k more than I paid; but the house did pay me 30k in rents over the three years I owned it. There were carrying costs(taxes, insurance, repairs) totalling 9k over the three years.
So it paid (30k rents-9k carry costs=21k profit) 7k per year on a 120k investment.
So it paid me to have $ in housing almost 6% per year. Too bad CD rates were 1/5 of that. Still, I am glad to be getting out from under it; better to sell now than to sell later for 65% less! Thanks for the constant reminders PW.
Tell me how I could have gotten a better return anywhere else.
‘Tell me how I could have gotten a better return’
How about getting a job?
“How about getting a job?”
“Tell me how I could have gotten a better return anywhere else.”
Pretty much any muni-bond fund you could choose from a dartboard would have beaten that over the same time period; also tax free.
The only way that housing works as an “investment” for most people is leverage. If you had only put down 20K on the house and made 14K (7K/yr, as you state above), your return over the same period would have been about 75% (you turned 20K into 34K). Of course, if you had done that; you would have had interest costs eating into that profit, so that 14K isn’t 14K in profit anymore.
What I’m trying to get across.. If you have cash, there are lots of investments out there that would get you your return. It’s only if you’re willing to do the “leverage up, fly by the seat of your pants” that you can see some big dollar returns in housing. Of course, you could also go broke post haste when playing the leverage game, when it turns against you, it’s not a pretty sight!
A risk adjusted 6% return sounds good. Also a hedge against potential inflation. Why did you sell it? Do you expect rents to fall? Do you have a place to invest that will return more than 6%? Where is the rest of your net worth invested?
‘If you have cash, there are lots of investments out there that would get you your return. It’s only if you’re willing to do the “leverage up, fly by the seat of your pants” that you can see some big dollar returns in housing.’
Housing is far riskier than the other investments to which you allude. It looks great at the moment primarily due to the Fed’s and other federal government price supports.
‘Of course, you could also go broke post haste when playing the leverage game, when it turns against you, it’s not a pretty sight!’
Some folks call this kind of highly-leveraged gambling activity “Picking up nickels in front of steam rollers.”
Muni bond fund, series I savings bonds and TIPS purchased more than five years ago, precious metals coins (physical and in your own possession). All are movable assets. All allow you to relocate across the country for a higher paying job. Whereas home ownership tends to make you want to stay put, which means you may have to sometimes work at Mickey Ds one shift, then Wal-Mart on another shift, 80 hours a week.
“Some folks call this kind of highly-leveraged gambling activity “Picking up nickels in front of steam rollers.””
And those folks would be right, IMHO. The only thing, if you can pull it off, it’s not nickels, it’s dollars. But there’s no sure fire way to do it, and it’s exceedingly risky. If I had 100M in investible assests, I’d probably put some of it to work with leveraged up rental property. But suggesting that to someone who’s trying to scrape together next week’s rent is, IMHO, a terrible disservice to financial planning. It’s way to illiquid and not at all diversified. You have to think, if I bought this for 250 and had to sell it for 125, would it impact my lifestyle? If the answer is yes, you shouldn’t be in the rental housing game. Lots of small investors are, and some of them are making eye-popping returns. But, the same can be said for the craps wheel in Las Vegas, and it’s much faster!
mikeinbend - did you bother to factor in your time?? If you are working on your rental, you are not getting pd to work elsewhere.
My tenant has taken care of the house, and sent me receipts on work done. Ben I work as a substitute teacher. Last week 40hrs of 6th grade.
there is more than just maintenance as an owner. and a FSBO takes time.
My point was that so many people are focused on making money doing no work. Buy a house, sell a house. Buy a stock, sell a stock. What happened to starting a business, or a side business? Getting a second part time job? It’s pretty telling to me that hedge funds are buying houses. Isn’t there something out there; a new technology that needs funding, etc?
It’s not you, but the way this country looks at things anymore. Who’s on TV all the time? Celebrities that make big money acting like fools. Athlete’s throwing a ball around. Reality TV shows are the most popular now; no talent required there. Let’s flip houses or try to find some crap in a storage unit. Even in the business world, they put some kid on a pedestal for creating facebook, which is probably the most boring waste of time on the internet. But he struck it rich! And he hardly did anything, even better!
What happened to starting a business,
Amazon,Walmart,Petsmart, etc. every year fewer and larger businesses in every segment.
Getting a second part time job?
Work is for suckers. Pay is falling many peole do take second part time jobs just to make ends meet. The tax structure is such that work is taxed at a much higher rate than capital, especially if you are in the top 10% of wage earners. The tax structure greatly favors flipping over working.
It’s pretty telling to me that hedge funds are buying houses. Isn’t there something out there; a new technology that needs funding, etc?
Why gamble on technology where you won’t get bailed out by the gov and central banks. The other possibility is that blackrock may be gambling with other peoples money. Nice fees and commission minimal risk.
RealTards can’t. Nobody is going to hire these skill-less, shiftless clowns.
NEW YORK/HONG KONG (Reuters) - Tales of shady business practices abound in China - fake revenues, phony invoices, sham factories - but until recently, the problem seemed confined mostly to Chinese companies.
Concern is growing about risks to U.S.-based multinationals in a country where American audit regulators are locked out by the Chinese government and bribery and fraud are routine.
There was the Chinese company that billed itself as a high-tech television screen manufacturer, but had a factory that turned out to be a man selling fireworks from a shack.
Or there was the Chinese biodiesel plant that sat idle for months, then sprang to life one day - when investors showed up for a tour - only to fall silent again.
Last month, there was the scandal at a Chinese unit of Caterpillar Inc (CAT), the world’s largest construction equipment manufacturer, based in Peoria, Illinois.
One has to wonder how much of the multinational profits and CEO pay are based on this third world accounting. My guess is it is not insignificant. I’m sure it’s why globalization is so important to the elite. What better way to surf the world for the proper venue to avoid taxes and fleece stock owners.
aterpillar, based in Peoria, Ill., disclosed on Jan. 18 that it had uncovered “deliberate accounting misconduct” at Zhengzhou Siwei Mechanical & Electrical Manufacturing Co., a maker of roof-support equipment for underground coal mines that it had acquired last June. Siwei is a subsidiary of ERA Mining Machinery, a Hong Kong-listed firm controlled by a shell company whose principals are two American entrepreneurs in China. Caterpillar paid about $700 million for ERA but said earlier this month it was writing down the value of that company by $580 million. “It’s disappointing,” Oberhelman said. “But how we respond defines us.”
One wonders if these two un named owners of this shell company have hidden hedge fund investors in high places or have a huge kick back scheme. Did the CEO give back his bonuses?
And those folks would be right, IMHO. The only thing, if you can pull it off, it’s not nickels, it’s dollars.
Nickels used to be worth a lot more.
Millions of people worked for years,teaching, or in health care,in engineering, in research. A large number of these people realized passbook savings got them nowhere, so they invested in stock index funds. The ones who were fools all this time thought the social security Ponzi scheme would take care of them.well it took care of the Greatest Generation. I have no problem with wanting a comfy retirement by providing capital to companies, allowing them to expand. In other words, by investing in stocks.
Ben Jones -
It is not easy, in fact very hard to start a new business in a small town.
My cousins kids make more babysitting (cash) in a big city then a lot of my friends with masters degrees do.
After 10 yrs of being an entrepreneur and haveing a hard time the last 4 yrs, I am looking for a boring gov job with a pension. Cal Trans even…
Location is everything. I could wash windows for $25 an hour in Newport Beach, or TSA at a local airport here for $12.
‘very hard to start a new business in a small town’
I own two small businesses and I know what you mean. Plus I was a public accountant for a few years and saw the books of many a small business. When it’s said that 80% of small businesses fail, that’s probably over optimistic.
‘haveing a hard time the last 4 yrs’
I understand. Some months I lose money. That means every day that I get up early, every hour worked, I paid to do that. It’s the risk I take. But you know, to hear some people on this blog describe it, if you work for yourself you’re greedy, undeserving and tie grandmothers to railroad tracks. I don’t think business owners are special or should get some award for what they do. But the freedom to try your hand at business is one of the things that makes this country a great place to live.
u nailed it ben. the problem is there arent a lot of jobs out there that pay. 10 bucks an hour wont cut it for most people. they can collect more freebies sitn at home. They have shifted a lot of jobs out and focused on asset appreciation to make up for it. When you have bankers sitting around trading stocks all day it doesn’t set a good example for the rest of the herd.
“When you have bankers sitting around trading stocks all day it doesn’t set a good example for the rest of the herd.”
I can say with no hesitation, the less actual “work” I do, the more I continue to be paid. My job, initially, required a very high level of technical skill. Over the past 5 years, I’ve moved from technical skill to sales skills (basically, make presentations and technical sales pitches) and my salary has increased dramatically. Yes, you still need the technical background (so that you understand what you’re talking about). And managing people is a PITA, not really interesting and/or exciting like technology work was.
It’s shocking to me that at my level (director) there’s not really any work being done anymore. Above me I have a VP, SVP, COO and division president (in that order). Those people are so far removed from actual work that the concept of sitting in front of keyboard to actually “make something work” instead of typing e-mails and using WebEX is probably totally foreign.
I’m not saying that I’m not busy, I’m incredibly busy. I put in very long hours, flying all over creation, giving presentations, taking a million calls a day, etc. But, it’s shocking to me that what I see as my most valuable talent (technical skill) sits idle on a pretty much constant basis.
I would hazard a guess that my experience translates across most industries, the higher up the ladder you go, the more removed you are from actually doing something that somebody directly pays you for. Yes, I understand that a good presentation that gets a customer to buy makes the company a boat-load of money, which is why they find what I do valuable. Problem is, I don’t find it all that fulfilling.
“I can say with no hesitation, the less actual “work” I do, the more I continue to be paid.”
There is a certain beauty to the art of delegating, but you need to employ sophisticated talent and have real cash-flow for compensation. You would likely enjoy Andrew Grove’s book, “Only the Paranoid Survive.”
What are these freebies??
Food stamps, sure if you dont have a 401k. Not many freebies for self made people, who currently have no income.
“It is not easy, in fact very hard to start a new business in a small town.”
Ronald Reagan really crushed sole proprietorship with his “economic miracle plan.” Bringing in cheap labor across the southern border was the easy part; keeping them from establishing their own father and son businesses was difficult because America’s vast sole proprietors would endure economic collateral damage. It was the insurance industry that foisted these changes, and business owners with several dozen employees were elated as competition from efficient sole proprietors was erased overnight. I know because I was one of them. Fortunately I didn’t have a family to support, so I was able to return to college.
if you are seeing multiple offers in your area, I’d list and see what happens. nothing wrong with cashing out. One the Canadians and Chinese back off, game over in snowbird states.
I am selling to a realtor, who is doing the legwork without charging commish. It is already under contract, so not too much time investedthus far. Maybe 1 hour so far. “Hey realtor tenant of mine, I need to sell my house” Realtor: “I’ll take it”
I am selling because I want to continue teaching and need $$ to attend classes. I need a masters degree to keep my license valid. Plus to pay for some outstanding medical bills from wife’s surgery last year.
Both kids need braces, too.
Trapper, other places my net worth is spread: stocks(etrade accounts for kids’ college), some savings bonds, and three paid off vehicles.
I have been working the last couple years establishing my reputation around the schools where I wish to work; it is getting me regular work and I plan to attend college at night so I can keep working while earning credits for the masters. Going into ESL or special ed, both areas that various colleagues have said I have a good shot at landing a permanent, benefitted, position.
Most people that I deal with IRL actually like me and like the way I interact with the students; it is worth it for me to continue teaching even if I have to pay for a night school masters program.
I liked my experiences landlording over the past 18 years but that well is tapped for me and I am happy to cash in my chips at this point and not own housing for awhile. I also like working with kids. I liked working with vegetables as well; they just don’t haves so much personality.
Investing in your education sounds wise to me.
Best of everything.
Another tall tale from a shiftless realtard.
ESL and “special ed”-type programs will be the first to go when austerity hits. Oh, and school psychologists and teen mom teachers.
Get credentialed in bio or physical science (or consider teaching ag/organic farming at a community college — something you’d probably be great at) or else prepare to work for a private contractor at minimum wages. Good luck, mike.
“Both kids need braces, too.”
Did that for both of mine in 2011, $9k on the barrel-head. Really was a benefit for my son who has a narrow palate. They had to pull teeth as well. The before and after photos are an amazing contrast.
Last year, 2012 was the European vacation for the wife and kids, visit with family in Germany, and then all fly to Sardinia, Italy. I stayed behind to work.
This year, 2013, it’s the wisdom teeth, and a new R410 HVAC for the house. Also recently purchased a Toyota coupe for my daughter who is now at driving age. Auto insurance doubled.
It never ends.
what i’m seeing is that i bought my house (to live in) sept 2011 at $66/sf. in nov, the house next door sold (fannie mae) for $80/sf, worse condition, on a much smaller lot, and no pool. now the fannie mae across the street (after sitting empty and bank owned for 2 years) listed at $99/sf (in same condition and lot size as previously sold house). lots of people viewing house the minute it went on market and under contract within 2 weeks. don’t know how much it’s under contract for, but do know that fannie mae doesn’t even consider offers below 85% of asking price (at intial listing). now i see another house (with a pool) just listed for $125/sf. started thinking i may not want to live here forever and might be smart to get out while the gettin is good. but due to capital gains, will wait until july to list, so that i can close at the end of september. how’s that for confidence!
Dump it while you still might be made whole.
Had an appraiser friend and his family over for Friday game night this weekend. He shared some fascinating stories from the trenches over recent years. One point of discussion was over how much easier it is to do appraisal work when prices are increasing than when they are falling. I guess an honest appraisal doesn’t go over too well when it comes in below the agreed transaction price between buyer and seller.
Another very interesting experience he related was how, after the big Fall 2008 financial collapse, home values he worked on in some areas of Riverside County dropped to a level where the standard appraisal model he used produced negative values for the land, after taking into consideration price declines and subtracting the value of improvements. He found such valuation results created big challenges with communicating them to his clients.
i was playing around on foreclosureradar.
Check this out:
Temecula, CA, huge bubble area from 2006. Homes have dropped 50%.
Check out the statistics on Foreclosure Inventory.
Bank owned last year 34%, this yr 3.8%?? where did they go?? Similar stats for other ca cities.
Did banks unload in bulk?? and now that Blackstone or similar has them they are not REO’s??
Who cares whether the bank unloaded? They’re still there, still empty, still depreciating.
my Q is: where? Who has them now and what are they doing with them? If they defaulted, and Blackstone has them, u would think they would evict irremediably. A mystery.
My worry: They somehow were dumped on the U.S. tax or monetary base — e.g. the Fed snaps up $40 bn a month in MBS and indiscriminately sweeps toxic mortgages that will never be repaid onto its balance sheet, implicitly purchasing the underlying collateral in the process.
We know people who are buying homes to rent them out…over 90% of the time the home is occupied when foreclosed. Sometimes these folks rent the home back (ie. go from being an owner to a renter), other times they are evicted.
It’s a game of musical chairs–just look at the housing vacancy rates in CA…about 5% for rental property. People leave one house as an owner, and rent the same or a different one (perhaps a different one that was just foreclosed).
What’s the mystery? These houses end up being occupied, but simply owned by different people.
The conspiracy theories are just too much. When a house is foreclosed in CA, the debt is gone. The home is the collateral, and the bank takes the collateral at their bid price (or sells it if someone wants it for more). A loss is taken by the lender (whether it be a bank, or other owner), and the house goes to a new owner (bank or third party). Then the new owner of the house can do whatever they want with it…live in it, rent it out, whatever.
I’m not sure you’re looking at the data the right way.
Last year in Temecula, banks owned 349 homes, this year, same month, they owned 227, a reduction of 35%, not 35% of the inventory. REO is only REO while the bank owns it (Real Estate Owned)…once they re-sell, it is no longer REO.
So, there are constantly homes going into REO, as banks foreclose (and don’t sell to a third party on the courthouse steps), and constantly homes leaving REO, as the banks re-sell the homes. If the banks are selling more than they are taking in, their inventory of REO shrinks.
If you look elsewhere on the page, you’ll see over the prior year fewer foreclosure filings, fewer notices of sale, etc. There were simply less homes going through the process, so less ended up in the hands of the banks at the end of the process.
At the same time, the banks are selling the homes they take into REO, just not as quickly as we would all like. In December, this was 197 days.
If you look at non-current loan rates in CA, you’ll see that there are fewer and fewer non-current loans in the state, and thus the trend that you noted appears likely to continue…that is unless the new laws throw a monkey wrench into things…which WON’T serve to speed up things.
The other thing to look at is time to foreclose. The latest readin in Temecula was 237 days…compare this to FL, where this is over 800 days. In CA, the minimum possible from the date of initial filing is something like 120 days. At 237 days, they could go faster, but are going faster than last year, when this was 274 days.
So, fewer homes are going into the foreclosure process, and those that go in, are resolving faster….let’s see what this new law does…I’m assuming nothing but slowing things down.
It’s very different if you are wise enough to buy a property with a guest house, as we did -
southern CA experiencing another real estate party. Get on board before prices rise out of your reach.
I notice a lot of homes are being bought with cash. I wonder how much of this is from hard money lenders?
I love when Realturds say this: “Get on board before prices rise out of your reach.”
I see it on the central coast too. Trying to create a last ditch frenzy.
America Classified Military Martial Law Drills Conducted … - YouTube
http://www.youtube.com/watch?v=8Nlus7nAfSc - 172k - Cached - Similar pages
Feb 1, 2013 …
And meanwhile they can’t catch one guy in California. The LAPD is so trigger happy they shoot an old lady delivering newspapers in the back. I read the people in the mountains where they think this guy may be hiding out are ‘well armed’, and not too afraid of the fugitive.
“And meanwhile they can’t catch one guy in California”
Too many drills going on to look for that guy.
Massive Army Drill in Texas Scares Residents - YouTube
http://www.youtube.com/watch?v=Smmu8DGv7-g - 207k - Cached - Similar pages
Jan 28, 2013
Are they armed enough to fend off the cops, though?
If one guy can cause this much trouble, I don’t see how the police could stand up to an armed populace. Look at that newspaper delivery shooting. It’s the wrong type of truck, the wrong color. They shoot dozens of rounds without warning, and the driver only had cuts on the hand from broken glass. They hit cars and houses all over the block. Can these guys even aim?
“Can these guys even aim?”
DHS Purchases 21.6 Million More Rounds of Ammunition
Submitted by emalvini on Thu, 02/07/2013 - 11:39
in Politics, General + Law(s)
Federal agency has now acquired enough bullets to wage 30 year war
Paul Joseph Watson | Infowars.com | February 7, 2013
The Department of Homeland Security is set to purchase a further 21.6 million rounds of ammunition to add to the 1.6 billion bullets it has already obtained over the course of the last 10 months alone, figures which have stoked concerns that the federal agency is preparing for civil unrest.
A solicitation posted yesterday on the Fed Bid website details how the bullets are required for the DHS Federal Law Enforcement Training Center in Artesia, New Mexico.
The solicitation asks for 10 million pistol cartridge .40 caliber 165 Grain, jacketed Hollow point bullets (100 quantities of 100,000 rounds) and 10 million 9mm 115 grain jacketed hollow point bullets (100 quantities of 100,000 rounds).
The document also lists a requirement for 1.6 million pistol cartridge 9mm ball bullets (40 quantities of 40,000 rounds).
An approximation of how many rounds of ammunition the DHS has now secured over the last 10 months stands at around 1.625 billion.
Comment viewing options
Submitted by FreedomIsntFree on Thu, 02/07/2013 - 22:32. Permalink
All I’m getting out of this is that DHS agents don’t know how to aim.
http://www.dailypaul.com/273646 - 144k -
Just saw an article from dailybreeze dot com. The LAPD chief of Police met with the two women who were shot and apologized. He announce they will get a brand new pickup this week.
If I was their attorney I would have warned them to not accept. If they accept, their chance of winning in a lawsuit will probably be reversed. The two women miraculously survived over two dozen rounds of bullets shot at them in their truck by several policemen as they delivered newspapers in Torrance Thursday morning last week.
In that part of Torrance it is common for newspapers to be delivered very early, 5:00-ish. I also see them on Anza stuff the coin-boxes that early with newspapers.
I don’t see how the police could stand up to an armed populace.
The cops are useless. All they’re good for is writing speeding tickets. But our vast military isn’t useless, and a Walmart bought rifle won’t do much good against a tank or a missile launched from a drone.
This shows California cops could never handle two man hunts at the same time without shooting at everyone in sight.
“..against all enemies, foreign and domestic…”
This term of President O is the term when hundreds of thousands of conservatives fully realize DHS will deem them terrorists, when all along, said conservatives thought they were safe for owning guns and standing for the constitution. Rand Paul is the lone Republican elected official who is questioning drone strikes, the NDAA, the TSA, and the PAtriot Act. He also says he strongly opposed executive orders during the Bush administration, as well as the Obama administration, but I do not think he was elected to public office during Bush.
Well, being that DHS was created under the watch of a “conservative” admin that was supported by all those gun toting patriots, it is kind of ironic how things might turn out for them. Meanwhile, you continue to collect your paycheck from your oppressors, helping to create the tools of oppression you so despise. IIRC, that is known as being a “collaborator”.
‘was created under the watch of a…’
At some point, we’ve got to get past the blame game of which ’side’ did this or that. We’ve got a freaking police state being constructed all around us and the media want to talk about how big the first lady’s butt is. If anything is going to change, it’s going to have to come from the people.
“At some point, we’ve got to get past the blame game of which ’side’ did this or that.”
Best thing to do is zero in on the current liar named Obama and drag the partisans along.
Best thing would be to appeal to those willing to drop the partisan hook. The guy is in office, elected. What do the people demand?
He may be elected but his errors precisely duplicate the previous jackass. I prefer not to look to the clown for answers. I like him for one simple reason and dislike his policies for many reasons.
Like. Dislike. What do the people demand beyond making 6% on their house flip?
“Well, being that DHS was created under the watch of a “conservative” admin that was supported by all those gun toting patriots, it is kind of ironic how things might turn out for them.”
Not to mention the First Amendment too.
“It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or
immigration,” said the report, which also listed gun owners and veterans of the Iraq and Afghanistan wars as potential risks.”
Napolitano stands by controversial report
By Eli Lake and Audrey Hudson
The Washington Times
Thursday, April 16, 2009
Homeland Security Secretary Janet Napolitano said Wednesday that she was briefed before the release of a controversial intelligence assessment and that she stands by the report, which lists returning veterans among terrorist risks to the U.S.
But the top House Democrat with oversight of the Department of Homeland Security said in a letter to Ms. Napolitano that he was “dumbfounded” that such a report would be issued.
“Rightwing extremism,” the report said in a footnote on Page 2, goes beyond religious and racial hate groups and extends to “those that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely.”
“It may include groups and individuals that are dedicated to a single issue, such as opposition to abortion or immigration,” said the report, which also listed gun owners and veterans of the Iraq and Afghanistan wars as potential risks.”
Read more: http://www.washingtontimes.com/news/2009/apr/16/napolitano-stands-rightwing-extremism/#ixzz2KRNEaStV
Follow us: @washtimes on Twitter
Ron Paul on HR 645 - ” Wake Up Congress ” - YouTube
What is H.R. 645 - Yahoo! Voices - voices.yahoo.com
http://voices.yahoo.com/what-hr-645-11614804.html - 36k -
Then you better put everybody on the list.
Christopher Dorner was a Obama supporter?
The supposed manifesto of a fired Los Angeles police officer being sought in several slayings contained praise for President Barack Obama and gun control and disdain for the National Rifle Association in portions apparently redacted at the request of the LAPD.
L.A. Fox affiliate KTTV-TV published a portion of Christopher Dorner’s writing that left out his political views. Other local news outlets including KTLA-TV and KFI AM 640 did the same.
KTTV did originally publish a full version but removed it from their website after a request from police, a spokesman told BuzzFeed. Reached for comment, a KTTV assistant news director told TheBlaze only that, “The LAPD put out a request that a lot of the stuff be redacted.”
David Grossman, a former U.S. military psychologist who helped develop programs to train new recruits to become more effective killers, said that the key to military training lies in breaking down the natural human aversion to killing in a process he calls “disengagement.” Once this aversion has been removed, it never comes back, and can make it easier for former soldiers to become murderers.
“The ability to watch a human being’s head explode and to do it again and again — that takes a kind of desensitization to human suffering that has to be learned,” Mr. Grossman said yesterday.
In earlier wars, many soldiers were psychologically unable to shoot anyone. In order to increase the “trigger-pull ratio,” the United States changed the basic training offered to all recruits and draftees so they would be aggressively desensitized to killing.
Some observers believe this may be why mass murders have become far more common in the past 50 years.
In the 1970s, some observers believed that the humiliation and social opprobrium caused by the Vietnam War, led many former soldiers to become mentally unstable, and potentially to become killers.
Mike Ruppert, a former LAPD cop, often accused of being a conspiracy nut is not buying the official story. He writes:
“Chris Dorner could possibly break down all of law enforcement in SoCal and also foment internal revolts inside law enforcement.
He is a supremely-skilled warrior and living proof of the psychosis that comes from training warriors, telling them they are honorable, and then tasking them to kill women and non-combatants exactly as he is now doing here at home. He apparently has a little more control of his ROE than US personnel have used in combat in Iraq and Afghanistan….”
-As quoted in a thoughtful essay by Danny Schecter.
Chris Dorner sounds like an ill- considered mainstream liberal to me. A heavily-armed, po’d mainstream lib. He’s not fighting the US government, which he says he “supports 100%”. He’s going after the corrupted “brotherhood” of the LAPD/LA court/media system– which is strongly-to-radically conservative.
My bet is he’s in Jamaica by now, biding his time and negotiating with Charlie Sheen for the screen rights.
Chris Dorner sounds like an ill- considered mainstream liberal to me. A heavily-armed, po’d mainstream lib. He’s not fighting the US government, which he says he “supports 100%”. He’s going after the corrupted “brotherhood” of the LAPD/LA court/media system– which is strongly-to-radically conservative.
Maybe you’re right. When I read his manifesto I got the vibe that he’d been screwed over by the LAPD but as a commissioned officer hadn’t ever been screwed over by the military in the same way. And that if he had, then he’d have the same feelings about them, too, and maybe appreciate the 2nd Amendment a little more than he seems to in the manifesto.
I can sympathize with urban and suburban cops wanting to limit access to firearms of all sorts — within their municipality.
Rural sheriffs deputies, however, have an entirely different perspective, I.E.; “When the nearest substation is an hour-and-a-half away, the helping hand you need is at the end of your arm.”
This is the basic division a one-size-fits-all federal gun policy cannot address, and is the source of much of the contention.
“I can sympathize with urban and suburban cops wanting to limit access to firearms of all sorts — within their municipality.”
Probably pistols and revolvers not “assault rifles” with “high capacity” magazines.
“96% of the firearm murder victims in Chicago were killed with handguns”
http://www.justfacts.com/guncontrol.asp - 479k -
FBI: Hammers, Clubs Kill More People Than Rifles, Shotguns
January 3, 2013 2:44 PM
WASHINGTON (CBS DC) – Annual FBI crime statistics show that more people are killed with clubs and hammers each year than by rifles or shotguns.
In 2011, there were 323 murders committed with a rifle but 496 murders committed with hammers and clubs. There were 356 murders in which a shotgun was the deadly weapon of choice.
http://washington.cbslocal.com/2013/01/03/fbi-hammers-clubs-kill-more-people-than-rifles-shotguns/ - 85k
Sen Robert Byrd would speak to an empty Senate chamber on the dangers of the Patriot Bill.
“In the early 1940s, Byrd recruited 150 of his friends and associates to create a new chapter of the Ku Klux Klan.”
He knew what it was like to be on a list.
He admitted he was wrong about all that later in life.
Hey this is just a gen. 2.0 Iraq IED. The insurgents just used cell phones to fire them…
How wonderfully creative! I hope they can be deployed by drone.
The XM-7 Spider is a so-called “man-in-the-loop” networked anti-personnel “munitions system” — a.k.a. a land mine — developed jointly between Alliant, Textron and General Dynamics. It consists of a remote-control station, or RCS, controlling up to 84 MCUs, which in turn contain six grenades each — meaning each system can contain more than 500 munitions.
Through use of the RCS, a controller alerted that an MCU has been “tripped” can choose to detonate all, some, or none of the MCU’s grenades. The RCS can also be used to detonate MCUs after the end of hostilities, eliminating the threat that unexploded landmines will remain in a country after the conclusion of a war. An MCU’s grenades can contain lethal ordnance, or non-lethal.
This could be the next big thing in personal defense. Should be fun to change the batteries
EMP anyone? Beam an EMP down onto the land where these IEDs are located and the IEDs electronics will go poof.
For an interesting read Wiki-up “electromagnetic pulse”.
As will the infrastructure that the PTB needs. Would work in the middle of no where but not in the urban environment.
The “EM” part of EMP stands for electromagnetic such as visible light is electromagnetic, and just as visible light can be focused these longer wavelength pulses can be focused.
You don’t have to take out everything electronic in an area unless that is something you choose to do.
For various articles about this subject google-up “focused emp”.
Doesn’t that imply that they know where to aim the focused EMP? If you know where the traps are, they aren’t going to catch you by surprise, will they?
Direct the EMPs in the places you want to go.
You don’t have to know where all the IUDs are, you just need to know where you want to go.
“IUDs” = “IEDs”
You make it sound like a pulse EMP is a fire hose. I kind of doubt that.
I like it better Combo before you change it.
“You make it sound like a pulse EMP is a fire hose. I kind of doubt that.”
It’s anything you want it designed to be.
Wiki-up “high-gain antenna” for some info about focusing and directing various radio signals.
EMPs are easy to circumvent.
To create your own Faraday cage, take an old microwave oven, unplug it and put your cell phone in it.
But the idea of using a cell phone to trigger your IED is to call it. If you have your cell phone shielded then you won’t be able to call it.
EMP also knocks out vehicles, so it could only be used a certain amount of time prior to troops moving thru the area, so quickly setting up IEDs would be a work around (or the EMP could itself be used to set off a IED if the vehicles are shielded).
Friday, Feb 8, 2013 05:17 AM PST
Ban the credit ratings agencies!
Firms like Standard & Poor, charged with fraud by the DOJ, are criminally incompetent and serve no public purpose
By Marshall Auerback
Is Eric Holder’s “See No Evil, Hear No Evil” Department of Justice finally getting serious about investigating fraud on Wall Street? At first glance, it would seem so, given the news that the Department of Justice has filed civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.
On the one hand, there is no question that without the credit rating agencies the Wall Street guys would not have been able to pull off this colossal heist against the American people, and the ratings agencies cannot be excused. In fact, Standard & Poor’s employees openly joked about the company’s willingness to rate deals “structured by cows” and sang and danced to a mock song inspired by “Burning Down the House” before the 2008 global financial collapse, according to the DOJ lawsuit. On the other, the ratings agencies are simply the gift wrappers. DOJ has yet to go after the banksters who created these packages in the first place and who seem to be in the clear as a result of a series of unconscionably low settlements recently reached with the Justice Department.
I suppose we ought to be grateful for these baby steps in the right direction. The ratings agencies themselves have admitted to US government enquiries recently that they took money in return for ratings that were not based on any fundamental assessments other than the cash they were being paid. They have lied about the risk of default in many corporate cases and then marked down debt when the game was up further destabilizing the financial system. Hence, to say that their behavior was at the heart of the great crisis is absolutely correct.
Of course, that inevitably begets the obvious question: what took you so long and why leave it at S&P? As early as September 2004, the FBI warned that there was an “epidemic” of mortgage fraud and predicted that it would cause a financial crisis if it were not stopped. It was not contained. Everyone agrees that the mortgage fraud epidemic expanded massively after the FBI warning and still not one Wall Street figure of any note has gone to jail.
Under Treasury Secretary Geithner, and the Keystone Cops of the Department of Justice, led by Eric Holder and Lanny Breuer, we established a doctrine of “too big to jail” for the very institutions which perpetrated massive frauds on millions of Americans. Those who called for regulations that would take even that most minimal of steps necessary to reestablish the rule of law and restore our nation’s democracy and financial stability were essentially ignored. Geithner’s express rationale was that the financial system’s extreme fragility made vigorous investigations of the elite frauds too dangerous, in effect giving the banksters a get-out-of-jail-free card and in effect enshrining crony capitalism and imperiling our economy, our democracy, and our national integrity.
So what’s changed? Well, obviously one has to ask if the departure from Treasury of Mr. Geithner, along with the ignominious resignation of the odious Lanny Breuer at the DOJ heralds a new approach, or are there are other motives in mind?
Saturday, Feb 9, 2013 06:00 AM PST
Monopoly turns us into capitalist vultures
In its original version, players could pay their rent to a common pool. Today, the game celebrates ruthlessness
By Jock O’Connell
Monopoly has been much in the news lately—not because the Obama Administration has suddenly assumed the guise of a vigorous anti-trust cop (fat chance!), but because the toy company Hasbro is making a conspicuous change to its flagship board game. In a contest held on Facebook over the past month, Hasbro invited the public to decide the fate of one of Monopoly’s classic tokens—the little metal figurines that represent each player on the game board. After more than 10 million votes poured in from fans in 120 countries around the world, the firm announced yesterday that, by will of the people, the old flat iron would be replaced with a new token in the form of a cat.
Pacific Standard But what does Monopoly actually mean to all those millions of voters, aside from being a perennial diversion for families forced to endure rainy summer days indoors? Last fall an article in Harper’s magazine by Christopher Ketcham examined the peculiar history of Monopoly, a game that has, over the past 110 years, been periodically repurposed to teach a number of often conflicting lessons about economics.
As Ketcham explains, the earliest version of Monopoly was designed in 1903 by a Maryland actress named Lizzie Magie as a vehicle for popularizing the ideas of Henry George, a now largely forgotten 19th century political economist whose thoughts on remedying inequality in an industrial society were embraced by such contemporaries as Mark Twain, John Dewey, and Leo Tolstoy. In the game’s original version, players could choose to behave like monopolists and drive their adversaries to financial ruin—an outcome whose perniciousness Magie took to be self-evident—or they could agree to cooperate with each other, pay rent into a common pool, and achieve an arguably happier shared prosperity. Monopoly was deeply anti-monopolist.
As the game evolved, though, subsequent iterations cast aside the communitarian cooperative option.
When I was a college student in Vienna in the late 1960s, my friends and I played a German edition of Monopoly that was of post-World War II vintage. In lieu of Park Place and Boardwalk, the game featured properties ranging from the proletarian Badstrasse to the plutocratic Schlossallee. From time to time, you’d be unlucky enough to draw a card bearing the stern order: Gehen Sie in das Gefängnis (Go to Jail).
What was especially intriguing about this version of the game was a twist in the rules that made it singularly conducive to rampant inflation. By collecting rents and other cash awards (such as for merely passing “Los”), some players inevitably amassed huge fortunes, enough to dry up all the available Deutschmarks.
To continue playing, it became necessary to convert smaller bills into much larger units of currency in order to maintain liquidity. One-mark notes would be re-denominated into scrip as large as 100,000 marks. In effect, the bank lost control of the money supply. It was Weimar all over again.
Memo to Republicans: Call president’s sequester bluff
Charles Krauthammer Opinion
5:26 a.m. EST, February 10, 2013
WASHINGTON - For the first time since Election Day, President Obama is on the defensive. That’s because on March 1, automatic spending cuts (”sequestration”) go into effect — $1.2 trillion over 10 years, half from domestic (discretionary) programs, half from defense.
The idea had been proposed and promoted by the White House during the July 2011 debt-ceiling negotiations. The political calculation was that such draconian defense cuts would drive the GOP to offer concessions.
It backfired. The Republicans have offered no concessions. Obama’s bluff is being called and he’s the desperate party. He abhors the domestic cuts. And as commander in chief he must worry about indiscriminate Pentagon cuts that his own defense secretary calls catastrophic.
So Tuesday, Obama urgently called on Congress to head off the sequester with a short-term fix. But instead of offering an alternative $1.2 trillion in cuts, Obama demanded a “balanced approach,” coupling any cuts with new tax increases.
What should the Republicans do? Nothing.
“Do nothing”, as I have said for months. As painful as a maybe for many in the end we will have as much defense as we can afford. Better to cut what we can now and go after the other programs when you can. There are at least some real cuts in the other programs.
It could end up costing them the house. Sure, people want spending cuts, as long as its the other guy’s ox that gets gored. If their cheese is taken away, they won’t be happy.
I agree I think that is the reason you have a liberal administration working so hard to avoid defense cuts. However, when you still have around a 850 billion dollar deficit after the cuts, we certainly need to do particularly since the CBO never gets it right. Since a lot of defense spending goes to high paying people I think the cuts will end up cutting revenue so every one billion in cuts may mean only a 700 million dollar cut in the deficit since 30 % of the pay probably comes right back to the government.
This country’s economy IS its defense industry. If it goes out of business, so does the country. Plus they’re armed….
“This country’s economy IS its defense industry.”
Maybe for the engineers and scientists.
Most of the Joe Sixpacks out there buying junk they don’t need accounts for roughly 70% of our economy, IIRC.
this is what they are currently doing, going on 6 yrs… nothing.
they complain about programs, yet offer no ideas to improve them.
Tom Cole: ‘Absolutely’ no new revenues in sequester deal
By REID J. EPSTEIN |
2/10/13 10:17 AM EST
House Republicans will accept no new revenues as part of a sequester deal, Rep. Tom Cole (R-Okla.) said Sunday.
“Absolutely not,” the deputy House Republican whip said on ABC’s “This Week.”. “The president accepted no spending cuts back in the fiscal cliff deal 45 days ago, so you get no spending cuts back then, then you’re going to get no revenue now.”
This drew a spirited response from Rep. Keith Ellison (D-Minn.), who blamed Republicans for the sequester because they refused in 2011 to increase the debt limit without corresponding spending cuts.
Allowing the sequester to go forward, Ellison said, would put 600,000 people out of work.
“It’s going to do everything opposite from what your party says that they want,” he said. “It’s going to increase unemployment, its going to increase uncertainty … its going to be a problem.”
Will you buy the dip if the sequester goes through?
Damn the Sequester—Full Speed Ahead (With Stocks)
Published: Sunday, 10 Feb 2013 | 8:13 AM ET
By: Matt Twomey
Whether the “sequestration” happens or not, money is flowing into the stock market and likely will continue to do so this year, say analysts who spoke recently to CNBC.
Robert Luna of SureVest Capital Management says the quick flow of money into stocks may already be cause for concern — even without the automatic spending cuts sets to kick in March 1 — but other good options are scarce.
“January was an outstanding month for the S&P 500, so even without the sequestration the market’s a bit vulnerable here,” he said. “But we have to place people’s money where it can get a return. Sitting on cash is not going to do it. Government bonds — you’re already seeing people lose money there this year. The money has to flow back into equities.”
The more cautious view is held by Michael Farr, president of investment management firm Farr, Miller and Washington, who sees a sequester-triggered $1 trillion in cuts over the coming decade causing the market to pull back as much as 10 percent, and quickly.
Still, he says: “I think you’ll see investors come in and buy the dips, and perhaps longer-term they should. Look at P-E ratios and other metrics. Stocks are not wildly overvalued.”
“Look at P-E ratios and other metrics.”
Check out the PE move from 1966 through 1982 if you want to see where this market is headed. And I note that we are currently in the same Operation Twisted interest rate regime the U.S. found itself in during the early-1960s, just before the big 16 year PE slide to the bottom.
I will add that my father loaded up on stock market mutual funds in the early-1960s, on the eve of the big long slide to the PE bottom…
I wonder what the graph would look like if they overlaid interest rates…in other words, if prime is way north of 10% (early 80’s), doesn’t it stand to reason that people are going to be demanding a much higher return on equity (much lower PE)?
If you instead express PE as the inverse, so a 5 PE equals 20% EP, when compared to interest rates at the time, how does that compare to a 20 PE (5% EP) compared to interest rates then?
The spread between the EP and risk-free rate would be interesting to track…the wider the spread, the more pessimistic people are about the future (paying a lot more for safety as compared to taking risk)…the narrower the spread, the more optimistic (not paying very much for safety as compared to risk).
The Sequester and the New Washington Reality
By Ben Domenech - February 8, 2013
President Obama insists that he’s prepared for a fight over the sequester with House Republicans. But his remarks read less like a politician scrapping for a fight than one who’s had a troubling moment of clarity: this was a trap, and he walked into it. Senate Democrats are scrambling to come up with an alternate plan. But those working in the Defense industry increasingly expect these cuts are coming, and that Republicans will heed Charles Krauthammer’s words: “The political calculation was that such draconian defense cuts would drive the GOP to offer concessions. It backfired. The Republicans have offered no concessions. Obama’s bluff is being called and he’s the desperate party. He abhors the domestic cuts. And as commander in chief he must worry about indiscriminate Pentagon cuts that his own defense secretary calls catastrophic. So Tuesday, Obama urgently called on Congress to head off the sequester with a short-term fix. But instead of offering an alternative $1.2 trillion in cuts, Obama demanded a “balanced approach,” coupling any cuts with new tax increases. What should the Republicans do? Nothing.”
Why did the White House walk into this trap? How did Obama and the Democrats get themselves in this box? Simple: they assumed the Washington Republican elite still represented the dominant paradigm in policy on the right.
Who needs war when we have drone strikes?
Hopefully not in your nor my backyard.
Memo gives basis for drone strikes vs US citizens
The Associated Press
FILE - This Oct. 2008 file photo by Muhammad ud-Deen shows Imam Anwar al-Awlaki in Yemen. A Justice Department document says it is legal for the government to kill U.S. citizens abroad if it believes they are senior al-Qaida leaders continually engaged in operations aimed at killing Americans. (AP Photo/Muhammad ud-Deen, File)
February 06, 2013 6:00 am • By Greg Miller and Karen DeYoung Washington Post
WASHINGTON • President Barack Obama’s plan to install his top counterterrorism adviser as director of the CIA has opened the administration to new scrutiny over the targeted-killing policies it has fought to keep hidden from the public.
The administration’s refusal to provide details about one of the most controversial aspects of its drone campaign — strikes on U.S. citizens abroad — has emerged as a potential source of opposition to CIA nominee John Brennan, who faces a Senate confirmation hearing scheduled for Thursday.
The secrecy surrounding that policy was punctured Monday with the disclosure of a Justice Department “white paper” that spells out the administration’s case for killing Americans accused of being al-Qaida operatives.
The timing of the leak appeared aimed at intensifying pressure on the White House to disclose more-detailed legal memos that the paper summarizes — and at putting Brennan on the defensive for his appearance on Capitol Hill.
Administration officials sought Tuesday to play down the significance of the disclosure, saying they had already described the principles outlined in the document in a series of speeches.
“One of the things I want to make sure that everybody understands is that our primary concern is to keep the American people safe, but to do so in a way that’s consistent with our laws and consistent with our values,” Attorney General Eric Holder said in response to questions about the document.
Originalism and Drone Strikes
With drones strikes on U.S. citizens in the news (and see here for Jonathan Adler’s roundup of commentary), below is the latest version of my originalist assessment of the matter. (An earlier version, focused on the al-Awlaki episode of 2011, is here, via the Harvard Journal of Law and Public Policy (HJLPP)).
(1) The core constitutional provision at stake is the due process clause of the Fifth Amendment: “No person shall be … deprived of life, liberty, or property, without due process of law.” As Nathan Chapman and Michael McConnell explain in their comprehensive 2012 article Due Process as Separation of Powers,
By the time the Fifth Amendment was enacted, everyone agreed that due process applied to executive officials and courts. It meant that the executive could not deprive anyone of a right except as authorized by law, and that to be legitimate a deprivation of rights must be preceded by certain procedural protections characteristic of judicial process: generally presentment, indictment, and trial by jury. . . . [D]ue process has from the beginning been bound up with the division of the authority to deprive subjects of life, liberty, or property between independent political institutions. In modern parlance, due process has always been the insistence that the executive – the branch of government that wields force against the people – deprive persons of rights only in accordance with settled rules independent of executive will, in accordance with a judgment by an independent magistrate.
Or, as Chapman and McConnell say elsewhere in the article, the English understanding of due process was a “guarantee of judgment by an independent institution according to procedures designed to take the case out of the hands of the king.”
In an ever-changing battlefield, America’s perpetual war
Kailani Koenig-Muenster, @kailanikm
10:01 AM on 02/10/2013
Next month marks the ten-year anniversary of the war in Iraq. In only a decade, the military maneuvers and the battlefield on which America fights has shifted considerably.
This week’s exclusive report by NBC News’s Michael Isikoff detailing a confidential Justice Department memo on drone strikes shows that while our technology and tactics have moved forward, much of the policy has endured. The documents outline the Obama administration’s justification for using drones to kill American citizens suspected of terrorism. The papers maintain that the U.S. government has the authority to kill citizens they believe are terrorist leaders, without pressing charges, and even if those individuals aren’t known to be actively involved in a plot to attack the country.
“For the most part, boots on the ground have been shipped home in favor of lean, special forces teams backed up by drone strikes,” said MSNBC host Melissa Harris-Perry. “The perpetual war state ignited in response to the Sept. 11 attacks has become an institutionalized apparatus that needs no particular provocation.”
Many people in America were tired of these wars when GWB was President, like early into his second term. Now about eight years later, nearly two years after the U.S. officially declared Obama dead, we still are world cops. I don’t see the protestors against war. They stopped protesting when O became Pres. Why?
I admit in 2001 I accepted Bush’s promise to take the war on terror into 60 nations and it will be a long war. That was 2001. I assumed this war would end when Bin Laden would be captured or killed.
Now I think the government just is using terror and the war on drugs as an excuse to violate our liberties at home. I became a hawk in 2001. I was not hawkish under Clinton or GHB. Now I am not hawkish once again.
So, if a bankster retains his citizenship, but moves to the Middle East to continue “economic terrorism”, the boyz flying the Predators can still zap them.
You guys are looking at this policy as a bad thing…….
If they can kill you overseas then the next step will be killing you at home. And they won’t need to follow due process or even need evidence. And if they goof all they have to do is say “oops! we got the wrong guy”
“nearly two years after the U.S. officially declared Obama dead”
Was that a Freudian slip or what?
Now I think the government just is using terror and the war on drugs as an excuse to violate our liberties at home.
That was painfully obvious way back when the Patriot Act became law.
You are more likely to be killed by a falling television than terrorism.
we broke it, we buy it.
I have said this for months. But if you want to see a black swan developing chew on this numbers from China:
I have been short China all year, lost almost 28%. but starting to move back in my favor. Luckily it was a small gamble.
If the sequester’s inevitability is common knowledge, why would its predictable occurrence lead to a stock-market correction?
And btw, I am missing the point of the war over whether to include tax increases in a deal, given the availability of tax-giveaways to the wealthy, such as the mortgage interest deduction, that could be eliminated without the need to raise taxes.
Feb. 10, 2013, 1:12 p.m. EST
Tax rift hardens as ‘sequester’ nears
Sen. Durbin, Rep. Cantor dig in as Obama prepares for major speech
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — A rift over how to replace the automatic budget cuts known as “sequestration” hardened on Sunday, as Democratic and Republican leaders clashed over including tax increases in any proposal to replace the looming spending reductions set to kick in on March 1.
Appearing separately on NBC’s “Meet the Press,” Sen. Richard Durbin, an Illinois Democrat, and Rep. Eric Cantor, a Virginia Republican, laid the groundwork for another intense week of debate over the sequester, which would slice $85 billion from domestic and military programs in 2013 alone.
Durbin, the Senate’s No. 2 Democrat and a close ally of President Barack Obama, insisted that replacing the automatic cuts must be “evenly split between revenue and cuts.” In recent days, Senate Democrats have been closing in on a plan that would put off sequestration with a combination of increased taxes on oil and gas companies and hedge-fund managers and spending cuts to defense and even farm programs. Read more on Political Watch blog.
Cantor emphatically rejected including tax increases and laid blame for what he called a federal spending problem at the feet of Obama and Democrats.
“We’ve got a spending problem, everybody knows it,” Cantor said. Referencing the beginning-of-the-year deal to avert the so-called “fiscal cliff” of tax increases and spending cuts, Cantor said Obama “just got his tax hike on the wealthy. And you can’t in this town every three months raise taxes. Again, every time, that’s his response.”
Obama is almost certain to use his Tuesday night State of the Union address to urge a resolution to the sequester, which grew out of the 2011 agreement to raise the U.S. debt ceiling. Sen. Marco Rubio of Florida, a rising Republican star, will give his party’s response. Read more about GOP response.
A majority of investing professionals surveyed recently by Potomac Research Group believe there won’t be a deal to avert the automatic spending cuts, leading 51% of them to say that the Dow Jones Industrial Average would take a drop of 5% or more.
Apparently the San Diego housing market returned to normalcy last year, as buyers snapped up properties at the highest rate since 2006.
Here is a little prediction: With 30 percent of 2012 San Diego home sales due to absentee buyers, another leg down lies in store. Many in this group will turn out to have bought for short-term gains, and will suppress future appreciation when they try to unload their speculative gambles over the next half-decade.
This article subtly suggests the return of bid wars is a sign that the San Diego housing market is back to normal again. However, my impression is that the bid wars were an anomaly of the mania which erupted over the 1997-2006 period, which are only now resurfacing due to the massive Fed-funded housing stimulus in the form of $40 bn / month in QE3 MBS purchases.
Which is it, folks? Are bid wars something you remember from when your parents bought their first home? All I can recall is a lot of hand wringing over the difficulty of coming up with a downpayment, and that’s what I recall from when my wife and I bought homes in the early- to mid-1990s. My impression is these bid wars are a transient symptom of the housing bubble which will disappear when the mania and the easy-money loans which fuel it ultimately die off.
SALES HEAT UP AGAIN MORE SCARCITY, BIDDING WARS SEEN INVESTORS TAKE BITE OUT OF MARKET
40,000 properties sold last year in San Diego County, the highest volume since 2006
By Lily Leung & Michelle Gilchrist • U-T 12:01 a.m. Feb. 10, 2013
Updated 6:59 p.m. Feb. 8, 2013
If you’re talking San Diego County real estate, 2012 was the year of the home sale. It was also an atypical year.
Homebuyers snapped up more than 40,000 properties last year, the highest volume since 2006, when about 44,500 homes were sold, according to numbers from real estate tracker DataQuick.
Old trends were tossed out. Typically, sales rev up in the spring and summer, and hunker down in the later months. But last year, they flamed through the winter holidays as first-time buyers to seasoned investors kept scouting for homes from a limited supply.
Inventory, now at least at a three-year low; record-low mortgage rates; and the inability for many underwater homeowners to sell have pushed home prices up to a 4 1/2-year high.
“It’s a strange market,” said SDSU real estate professor Michael Lea.
“On one hand, we definitely see an improvement in the market, as prices are moving up and transaction volume is moving up … But we’re also seeing the effects of the bursting of the market. … There still are a lot of people who have negative equity and that has manifested in our lowest levels of inventory.”
In 2011, homebuyers chased value. That didn’t change in 2012, but it became harder to do as more affordable properties began to grow scarce and multiple-bid wars surfaced.
Buyers concentrated mainly on the entry-level range of $200,000 to $400,000, much like in the past five years. But a change set in last year: Activity in the move-up market, from $400,000 to $800,000, and higher began to tick up. Home sales that were at least $401,000 totaled 15,253 last year, up 24 percent from 2011.
Last year’s total for that section of the market is much lower than the peak of 42,461 set in 2005, but 2012 marked the first double-digit increase in that price range post-recession.
Price increases also can be tied to a major drop in foreclosure resales, which tend to carry a higher discount. Still, even foreclosures on the market aren’t as heavily discounted these days. University of San Diego real estate professor Norm Miller said the average discount for a foreclosure compared to a regular sale in 2012 was 14 percent. In 2008, it was 35 percent.
Real estate investors continued to have a strong presence in the local housing market, stimulating housing sales and providing headaches to less-equipped traditional buyers.
The share of all homes that were bought by absentee buyers, mainly investors and second-home buyers, peaked at 30 percent in February 2012 and continued to linger near that level for the rest of 2012.
The prices are back into the upper 600’s. People who had income to buy got demonized for having too much money. Meanwhile, if you apply for a home loan they have so many regs. Oh, solar roofs and 3.8 % obamacare tax when you sell. What a mess! I’m thinking Prescott!
“…3.8 % obamacare tax when you sell…”
This is complicated stuff, which is part of why it’s so easy to misunderstand. So follow along with this illustration: Let’s say that Don and Donna bought a home in Southern California in 1965 for $50,000. Today, the home is worth $650,000. If the couple sold the house, their profit would be $600,000 (for now, we’ll ignore the costs of selling and home improvements, which typically would reduce that number).
The first $500,000 of that profit would be tax-free, thanks to a federal law that went into effect May 6, 1997. The remaining $100,000 would be subject to a capital gains tax rate of up to 20% (the maximum capital gains tax rate is currently 15%, but that’s scheduled to rise in 2013). It might also be subject to the 3.8% tax.
If I understand that passage, then the first $500,000 in housing capital gains are still tax-free, and the 3.8% Obamacare tax (and others) would only apply to gains north of $500,000.
Congratulations to anyone who is fortunate enough to face this problem.
Taxation is theft.
I think that taxation for the sake of transferring wealth from one party to an other is theft. Taxation for the purpose of providing roads, schools, police, national defense etc. is the price you pay for a civilized society, however, more and more spending is the former and not the latter.
So why don’t you guys move to a country with no income taxes? There are plenty of them. Might it be because in spite of those onerous taxes that you pay that you live like a king in this country while you’d be a incomeless pauper in those “tax free” havens?
Sorry, through most of America’s history we had the governmental philosophy that I expressed. It was based on the experience with democracy the world had that democracy did not last long once the wealth of the state could be used to buy votes. We would not be in debt as a nation had we restricted government to its core functions and the de-industrialization of the U.S. would not have occurred since without transfer payments the people would not have stood for the process.
“Taxation for the purpose of providing roads, schools, police, national defense etc. is the price you pay for a civilized society, however, more and more spending is the former and not the latter.”
How do those who subscribe to the ‘taxation is theft’ ideology propose to pay for public infrastructure improvement and maintenance?
Or for federal defense contractors, for that matter?
“Taxation is theft.” huh???
The GOP had no problem spending all the money, now they run from the bill.
Don’t waste your time.
It’s always “the government buying votes/gives money to the takers”……
Or “I don’t think I need to pay any taxes, because the government spends a few million/billion bucks on something I totally disagree with”
What it comes down to is they think they will be winners in a laissae-faire, no rules, everyone for themselves, Ferengei-World.
At least they are honest about it up front, unlike the typical die-hard Red State Republican, who believes the same thing, sabotages the efficient operation of government at every turn, then says “government never works”…..unless of course, we are talking about US military spending/operations/organizations.
“The wealth of the State” has ALWAYS been used to “buy votes”.
That’s the whole point of it.
Many of the peopls who benefit from those roads, schools, etc. don’t pay any taxes themselves. So I’m sure that many taxpayers would claim that wealth (or at least income) is being transferred from them the taxpayers to non-taxpayers when taxes are spent on those things.
CBIT, I said right in the post that infrastructure spending and defense spending was legitimate spending. Only about 20% of the stimulus spending went to infrastructure. The program would have been much more useful if a higher percentage was infrastructure.
FDR created the WPA and CCC where society received some benefit from the government expenditure. Obama fights for extended unemployment benefits and easier access to food stamps with no work requirement and I think that is a problem both from a constitutional perspective and a practical perspective.
“I said right in the post that infrastructure spending and defense spending was legitimate spending.”
And my question was not aimed your direction…
You have to read the bill to find out what’s in it. I thought that was olde news. I’ll go look.
Obamacare (far from perfect, I wish they would work on it, instead of whining) saved consumers $1.5 billion in one year!
Blue Crass/Anthem just raised my private-payers premium by ANOTHER 22% — after raising it 27% last year. Hurrah for the free market!
Women save more than men due to the law ending the policy of charging women more for health insurance then men.
Please explain how we “save” when we were being ripped off in the first place. I was still being charged for maternity benefits at age 59.
Insurance costs are killing America, something must be done. O’s plan was butchered, they need to keep working on it. But we all know Insurance co’s control more of congress then we the people.
O has been there over 4yrs? Where are the tweaks to O-care??? anything??? Boehner???
Prescott, only if you like the 3 R’s:
and they are running out of ground water.
Think NM. Better weather, amazing mtns, cool people.
It’s pretty much true of all of AZ, not just Prescott. But, to be fair, AZ doesn’t only have those three Rs. There are also a lot of illegal aliens in the state to add some diversity.
Arizona is nothing like you describe. Get a clue. Although, if that is the common viewpoint shared by global progressive haters, perhaps it will keep them from moving here.
I almost moved to Prescott< AZ in 2003. I talked to many, many locals, did my due diligence, then opted for NM. NM is a great place, but if you are born in CA, you miss the weather.
The 3 R’s line was from a local, I did not make it up.
Nick: Your name implies that you’re an Italian-American. I happen to be half Italian myself and I’ve got the olive, Mediterrean complexion typical of southern Italians. I can’t tell you the number of time that people in this state have said things like, “You don’t look like you’re from here. Where did you come from originally?” When you here that sort of thing enough, it makes you think that you’re living in a very redneck state.
Sorry Mike, there are plenty of people from all races in Arizona, the press gives us a bad name. I mean for crying out loud, there is a communist bisexual woman elected as my congresswoman.
Thanks Avocado, but somehow I think you think I am the exception.
I lived an hour north of you for 6 years, fished the Pecos and skied like crazy. Great place! I even ran into Val Kilmer more than once.
I left, because the public schools are awful. Cheaper to live back in CA in a great district, then pay private tuition.
Hi. Who are the bigger fools in this story? A HOA spends $400K on legal fees and goes broke. The issue: the size of a political yard sign.
White people problems.
My brother owns a condo and pays HOA dues. If he BBQs salmon a complaint for smell and smoke is filed by a neighbor. Steaks? No problem apparently.
There are so many horror stories, of HOA’s and co-ops….only reason to pay full price is if you win the lottery….. otherwise offer 20% and lower and all this over a sign…
HOA Rules: What You Must Know About Flag Restrictions
Why Now’s the Time to Kill the Mortgage Interest Deduction
By The Motley Fool in News
Published: February 7, 2013 at 11:49 am
The fiscal-cliff compromise on New Year’s Day made substantial changes to existing tax law and permanently implemented a number of decade-old tax breaks for the vast majority of taxpayers. Yet even though some lawmakers have argued that the tax increases they agreed to marked the full extent to which they were willing to concede for the sake of higher government revenue, many believe that further revenue-generating measures may come in future battles over sequestration, the debt ceiling, and the passage of a federal budget.
One place that many policymakers have looked to as a potential source of revenue is to eliminate the mortgage interest deduction. With the housing market having suffered so greatly in the past five to seven years, fears that taking away the deduction would lengthen housing’s decline deterred lawmakers from seriously considering cutbacks on mortgage interest. But if there were ever an ideal time to get rid of the deduction, it’s now, because a number of factors are lining up perfectly to make its disappearance as painless as it’s ever going to be.
If they eliminated the mortgage deduction, would home price come on down? Wish I could deduct rent.
u can deduct some rent.
One has to wonder how much of the multinational profits and CEO pay are based on this third world accounting. My guess is it is not insignificant. I’m sure it’s why globalization is so important to the elite. What better way to surf the world for the proper venue to avoid taxes and fleece stock owners.
Can anyone explain to me how reduced GDP can be raised by a reduced trade imbalance, when the trade quantum goes down?
How can they say the December -.001% will go to +.006%.
I think this is important because of possibly having two negative GDP quarters = recession.
GDP = C + I + G + (EX - IM), where
C = consumption
I = investment (e.g. in plants, equipment, houses, etc)
G = government spending
EX = exports and
IM = imports.
Other things equal, an increase in exports which more than offsets any increase in imports (such as I believe we have seen in the U.S. since 2009), also known as a reduction in the trade imbalance in the U.S. case, causes net exports (EX - IM) and GDP to increase.
Here is an idea for folks who struggle to start their days:
Tina and Mike are “addicted” to coffee enemas.
Couple injects bucket full of fresh-brewed joe into their colons up to 100 times a month
Science Recorder | James Fluere | Sunday, February 10, 2013
In what might be the most head-turning episode of TLC’s “My Strange Addiction” yet, a Florida couple has admitted to being “addicted” to coffee enemas. Mike and Trina, who declined to give their last name, need coffee enemas on a daily basis to function normally. Without irrigating her colon with a bucket full of fresh-brewed joe, Trina ends up in the emergency room with kidney stones. The couple reportedly gives themselves a coffee enema up to four times a day and up to 100 times a month.
Trina recently told ABCNews.com that she started the coffee enemas because she was suffering from digestive problems. She said that injecting the bucket full of fresh-brewed joe into her colon gives her a sense of “euphoria,” which would make sense given the number of capillaries and blood vessels in the lower intestine.
Teen births continue to decline in U.S
By Genevra Pittman
NEW YORK | Mon Feb 11, 2013 12:44am EST
(Reuters Health) - The number of U.S. babies born to teen mothers dropped to record lows in 2011, according to new data from the Centers for Disease Control and Prevention.
Fewer women also gave birth in their 20s than in prior years, researchers found - but the birth rate increased for those in their late 30s and early 40s.
“The economy has declined, and that certainly is a factor that goes into people’s decisions about having a child,” said CDC statistician Brady Hamilton, lead author of the new report.
“Women may say to themselves, ‘It’s not a particularly good time right now… let’s wait a little bit,’” he told Reuters Health.
Older women, however, are typically more secure in their employment, he said - and understand that they don’t have as long to wait if they want to get pregnant.
Will your house pay for your retirement?
February 7, 2013, 2:50 PM
By Matthew Heimer
You sell your home at a huge profit, then use the proceeds to upgrade your golden years from comfy to plush. That scenario, which might have seemed realistic when the housing boom was at a full-throated roar, seems a little starry-eyed today with home values still depressed. But according to a survey released this week by Ameriprise Financial, 47% of people aged 50 to 70 “expect to use their home equity to help fund their retirement.” The pollsters say that share appears to have risen significantly since before the recession, even though housing prices declined in the interim.
The findings are particularly interesting because this survey group isn’t exactly crying poor. The average respondent in the survey had $700,000 in investable assets, not including real estate, and 78% had at least $250,000 saved for retirement. (The minimum for participation was $100,000.) In a conversation with Ann Carrns of the New York Times Bucks blog, Ameriprise executive Suzanna de Baca speculates that the rising expectations for home equity might reflect the lingering effects of the stock market crash: “Despite the fact they have reduced home equity, the shortfall between what they’ve saved and what they need is greater.”
Some folks will probably be successful at making their homes work for them, of course—and for boomers who’ve been staying put for quite a while, the prospect is more realistic. Prices nationally are still down about 27% from their 2006 peaks, but those who bought 10 years ago or more are likely to be sitting on some price appreciation. Those homesteaders are also more likely to have built up more equity, which will help them sidestep another obstacle facing many boomers – the fact that more are approaching retirement with mortgage debt. Among families where the head of household was between 55 and 64 years old, 54% had mortgage debt in 2010, up from only 37% in 1989.
There’s trouble in River City!
Feb. 10, 2013, 7:45 a.m. EST
At the retail level, economy could stutter
Payroll tax hike might weigh on growth in January. Trouble ahead?
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — We’re about to find out how consumers reacted to higher taxes and less take-home pay in January.
The U.S. government on Wednesday will release monthly retail sales. The result could tell us a lot about how the economy is likely to perform in early 2013.
Sales at U.S. retailers are forecast to edge up a scant 0.1%, seasonally adjusted, in the first month of the year, according to economists polled by MarketWatch. The retail report is by far the biggest economic indicator of the week.
The reason for lackluster spending: Working Americans are sending an extra 2% of their paychecks to the IRS after the end of a two-year “holiday” on payroll taxes. A bigger burst of spending, like the 0.5% gain in December, is unlikely.
“The expiration of the 2% payroll tax cut left many with smaller paychecks and tighter budgets,” economists Nigel Gault and Paul Edelstein of IHS Global Insight wrote in an email.
What’s more, the government raised rates in the highest tax bracket in a move to collect more money from the wealthiest Americans. The rich consume a disproportionate amount of goods and services compared to middle-income Americans. If they cut spending, that would also hurt retail sales.
Consumer spending usually accounts for about 70% of the U.S. economy. Retail sales are a smaller but still very large portion of that, and a good proxy for how fast the economy is growing.
Politics breeds strange bedfellows.
February 10, 2013, 12:36 PM
Sequester Politics Brings Together McCain, Pelosi
Sen. John McCain (R., Ariz.) and House Minority Leader Nancy Pelosi (D., Calif.) rarely agree. But they both say that Congress and the White House need to reach a deal to avoid a series of automatic government spending cuts currently slated to take place March 1.
In an interview Sunday with Chris Wallace on Fox News Sunday, Mrs. Pelosi said: “I think sequestration is a bad is idea all around,” adding, “We must do something to avoid sequester,” referring to the term used for the across-the-board cuts to government agencies. The cuts were part of a 2011 deal to raise the debt ceiling, although Congress pushed the previous deadline to March 1.
Neither Mrs. Pelosi nor Mr. McCain offered great detail about how they think the problem should be fixed—and their prescriptions would likely be in conflict.
Try to avoid getting yourself accused of terrorism while traveling abroad.
February 10, 2013, 11:35 AM
Lawmakers Push for Drone Oversight
Lawmakers Sunday pushed to subject the White House’s drone program to greater oversight, the latest chapter in a burgeoning public debate over the administration’s use of targeting killings as part of its counter-terrorism strategy.
The issue broke into the open last week during hearings to consider John Brennan’s nomination as the Central Intelligence Agency’s new chief.
Of particular interest to lawmakers is the legal rationale used by the White House in authorizing a 2011 CIA drone strike that killed Anwar al-Awlaki, an American-born cleric of Yemeni descent who U.S. officials accused of being a leader of al Qaeda’s Yemen affiliate.
General Atomics HQ and several of its locations are located within minutes of where we live and work. We have a number of friends who work there. I’m tempted to ask how they feel about the assassination drone strike business.
Next-gen US drone: Now equipped with ‘death ray’ laser
Published: 11 December, 2012, 00:16
Edited: 12 December, 2012, 20:58
The next generation of military drones, unveiled by a leading US manufacturer, will not just carry a limited supply of rockets – but will likely be fitted with an ultra-light laser, capable of repeatedly destroying objects at the speed of light.
“It would give us an unlimited magazine,” a person close to the High Energy Liquid Laser Area Defense System (HELLADS) program told Time magazine.
Over the past four years, the Defense Advance Research Project Agency (DARPA) has given contractor General Atomics over $60 million to develop and then scale HELLADS – a powerful 150 kW ray with a difference.
Current lasers of that strength – enough to destroy an incoming rocket or plane – are bulky, which means they can only be placed on stationary defense systems.
HELLADS, which DARPA says is in the “final development stage,” is radically lighter. It will weigh only 750 kilograms – less than a very small car.
This vastly opens up its potential uses.
“General Atomics HQ and several of its locations are located within minutes of where we live and work. We have a number of friends who work there. I’m tempted to ask how they feel about the assassination drone strike business.”
Likely an appropriate quote:
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” —Upton Sinclair
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