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 @ 1:01 am
Euro falls as German, French economies disappoint
By Marc Jones
LONDON | Thu Feb 14, 2013 4:56am EST
A woman looks at an electronic board showing Japan’s stock price index at the Tokyo Stock Exchange in Tokyo February 6, 2013. REUTERS-Toru Hanai
Stock Exchange in Tokyo December 28, 2012. REUTERS-Kim Kyung-Hoon
People stand on the balcony above the DAX board at the Frankfurt stock exchange January 9, 2013. REUTERS-Remote-Lizza David
(Reuters) - The euro dropped and European shares fell on Thursday as growth data from the region’s two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.
The German economy, Europe’s largest, contracted by 0.6 percent in the final quarter of 2012, marking its worst performance since the global financial crisis was raging in 2009.
Worryingly for Berlin, it was export performance - the motor of its economy - that did most of the damage. France’s 0.3 percent fall was also a touch worse than expectations.
The figures suggest the euro zone could remain slumped in recession in the first quarter of this year and pushed down the euro 0.5 percent to a session low $1.3382.
“This is major data, so it’s dampening sentiment,” said Anita Paluch, sales trader at Gekko Capital Markets.
“It is kind of disappointing that Germany, which had shown so much resilience, is now showing signs of suffering from the debt crisis.”
shrank…more than expected…imagine that.
“you mean it shrinks…huh”
like a frightend turtle
The Handwriting on the Wall
1 Belshaz’zar the king made a great feast to a thousand of his lords, and drank wine before the thousand.
2 ¶ Belshaz’zar, while he tasted the wine, commanded to bring the golden and silver vessels which his father Nebuchadnez’zar had taken out of the temple which was in Jerusalem; that the king and his princes, his wives and his concubines, might drink therein.
3 Then they brought the golden vessels that were taken out of the temple of the house of God which was at Jerusalem; and the king and his princes, his wives and his concubines, drank in them.
4 They drank wine, and praised the gods of gold, and of silver, of brass, of iron, of wood, and of stone.
5 ¶ In the same hour came forth fingers of a man’s hand, and wrote over against the candlestick upon the plaster of the wall of the king’s palace: and the king saw the part of the hand that wrote.
6 Then the king’s countenance was changed, and his thoughts troubled him, so that the joints of his loins were loosed, and his knees smote one against another.
Last updated: February 14, 2013 5:36 am
GDP data reveal Japan mired in recession
By Jonathan Soble in Tokyo
Japan remained mired in recession in the last three months of 2012 as the economy defied experts’ expectations for a mild rebound, a development that could help insulate Tokyo against criticism over stimulus policies that have shaken up global currency markets.
Government data indicated that Japanese gross domestic product fell 0.1 per cent between October and December, or 0.4 per cent on an annualised basis, the third contraction in as many quarters. That compared with a median forecast of 0.4 per cent annualised growth in a survey of economists by Bloomberg News.
Japanese policy makers are girding themselves for a meeting of G20 finance ministers and central bankers in Moscow beginning on Friday, at which efforts by the country’s newly elected government to revive the economy will be central to a debate over global currency policy.
The government’s measures – namely, increased public spending and pressure on the Bank of Japan to adopt a looser monetary policy – have boosted the stock market and should help return the economy to growth this year, economists say. They have also had the effect of significantly weakening the yen, to the delight of Japanese exporters and the irritation of some of Japan’s trading partners.
The currency has fallen by more than 15 per cent against the dollar since November, when the election that brought the government to power was called. That has prompted officials in Europe and Latin America, in particular, to warn that a “currency war” could develop if other countries seek to devalue their own currencies to keep their economies competitive.
Japanese leaders argue the yen’s fall is a side effect, not a goal, of its new policies, and that in any case a revived Japanese economy would benefit the world.
Japan is traditionally an export powerhouse but it has fallen in to persistent trade deficits as a result of what had been a relentless five-year appreciation of its currency.
Thursday’s data, which are preliminary and may ultimately be revised, showed the worsened trade position and a slump in business investment were responsible for extending the recession, the country’s fifth in 15 years.
The eurozone recession deepened in the final three months of 2012, official figures show.
The economy of the 17 nations in the euro shrank by 0.6% in the fourth quarter, which was worse than forecast.
It is the sharpest contraction since the beginning of 2009 and marks the first time the region failed to grow in any quarter during a calendar year.
It followed news that the economies of Germany, France and Italy had all shrunk by more than expected.
A recession is usually defined as two consecutive quarters of contraction. In the first three months of 2012 the eurozone economy failed to grow, but then in the second quarter of the year it contracted by 0.2% and it shrank by 0.1% in the third quarter.
and marks the first time the region failed to grow in any quarter during a calendar year ??
Marks the “first time”….Is that place ready to implode financially ?? If Germany continues to contract, that could be the primer that sets it off…
Eurozone recession deepens as Germany falters
(AP) – 3 minutes ago
BRUSSELS (AP) — The recession across the economy of the 17 European Union countries that use the euro deepened in the last three months of 2012 as Germany faltered in the face of anemic demand across the debt-ridden region.
Eurostat, the EU’s statistics office, said Thursday the eurozone economy shrank by 0.6 percent in the final quarter of 2012 from the previous three-month period. The decline was bigger than the 0.4 percent drop expected in markets and represented the biggest fall since the first quarter of 2009 when the global economy was in its deepest recession since World War II.
The eurozone has now contracted for three straight quarters — a recession is officially defined as two quarters of negative growth. It’s not alone in struggling to post growth — figures earlier showed Japan in recession too and the U.S. economy has shown signs of faltering, with its economy flat in the final quarter of 2012, according to Eurostat.
The worry for European policymakers is that it’s not just the supposedly weaker debt-laden economies such as Greece and Spain that are posting declines in output. Germany, Europe’s biggest economy, shrank by a quarterly rate of 0.6 percent in the fourth quarter as demand for its exports fell. France, Europe’s second-biggest economy, also saw output drop by 0.3 percent.
In total, the Eurostat figures show that seven euro countries are in recession — Greece, Spain, Italy, Cyprus, the Netherlands, Portugal and Finland.
This is definitely bullish for crude oil.
It seems there is a problem here with oil prices. Why is it that our domestic oil is trading at a 15% discount to the world price? All this at the same time our gasoline prices are pushing toward record highs AND our total miles driven are declining? This price gap is costing Canada $30+ million a day in lost income from their tar sands oil. This story from Canada covers most of the issues.
“Canada produces 2.7 million barrels a day, and exports 2 million of them — almost all to the U.S. About 300,000 barrels flow through the Kinder Morgan pipeline to the west coast, where they’re exposed to world prices.
But most of the rest flows south to inland facilities, such as the huge Cushing oil terminal in Oklahoma and other hubs in the western states.
Those Canadian exports are due to increase, swiftly and dramatically, because of booming production in Alberta’s oil sands.
CAPP’s latest projections show the current 2.7 million barrel-a-day production rate growing by a third, to 3.6 million barrels a day, by 2015, and soaring to 5.4 million barrels a day by 2025. Most of that will continue to flow into the U.S. market.”
Good article. One note, the first nation(s) is mostly one and is being heavily financed by US environmentalists.
I get the feeling the oil co’s are trying to get as much as they can now ($) as they see the writing on the wall. The USA is actually trying to get off mid east oil and use its nat gas.
Heck the USA spends 12% of it energy on lighting. Imagine if we all used LED’s? or at least CFLS? could cut that to 4%. Then give every home owner a tube of caulking and a stick of incense and go seal up those homes… easy fixes… if anyone cared.
Forget incense - the easiest way to find air leaks is to depressurize the house by placing a big fan in the window facing out, with cardboard beside it. In an old house the leaks will come from surprising places. Don’t forget to check abov/around the door trim.
NEW YORK (TheStreet) — Apache Corporation (NYSE:APA) is trading at unusually high volume Thursday with 5.9 million shares changing hands. It is currently at two times its average daily volume and trading down $2.60 (-3.1%) at $81.73 as of 2:55 p.m. ET.
Down 4 at close this is an oil driller
Recession-hit Greeks stripping train lines for scrap metal
Protest in front of Greek parliament
11/02/2013 - 17:07:53
Greece has been hit by an unprecedented wave of metal thefts as its recession-hit people turn to crime.
Train lines, bridges, cables and even cemeteries have all been targeted for scrap to feed a market driven by China and India.
Police now arrest an average of four metal thieves every day, compared to a few cases every month before the crisis started in late 2009.
The profile of the metal thief is also changing, authorities say, from gypsies and immigrants living on the margins of society to mainstream Greeks who have fallen on hard times.
As European countries dip in and out of recession, global demand for metals has remained high due to the industrial rise of emerging powers, making stolen cables and metal used in infrastructure a growth market worldwide.
Some 3,635 people have been arrested in Greece for metal theft between the start of 2010 and August 2012, according to the public order ministry.
The robberies are becoming both more frequent and more brazen, a sign of the desperate times.
Athens’ nine-year-old light rail system has been a prime magnet for metal robbers, with at least five major disruptions reported in the past six months due to cable theft that forced passengers to hop on and off trains as diesel replacements were needed.
The trend has had lethal consequences: In early January, the body of a 35-year-old man was found near Athens beside the tracks of a suburban rail system that services the capital’s airport.
He had been electrocuted while cutting live cables.
I had no idea Greece had a problem with tweakers.
They’re not tweaking. They’re hungry.
The banksters are winning. Or have they already won by now? (I long ago lost track of the score…)
Angelo Mozilo is laughing at you. All of you. LOOSERS!
Ever heard of the Medici’s?
They won centuries ago.
AZ Slim, take note:
Torture, Medici Fool Inspired Machiavelli: Manuela Hoelterhoff
By Manuela Hoelterhoff - Jul 28, 2011 4:00 PM PT
In 1513, a depressed bureaucrat sat down to write the most famous job application in history.
From his farm outside Florence, Niccolo Machiavelli (1469- 1527) could see the great city’s roofs and fancy himself back in the palace, whispering advice into Medici ears.
Enlarge image “Machiavelli: A Biography”
The cover jacket of “Machiavelli: A Biography,” by Miles J. Unger. Source: Simon and Schuster via Bloomberg
Enlarge image Miles Unger
Miles Unger, author of “Machiavelli: A Biography.” Photographer: Emily Unger/Simon and Schuster via Bloomberg
“I am so desperate,” he cried to a friend, “I would roll stones.”
Miles J. Unger starts his smartly entertaining biography in the dusty village of Sant’ Andrea in Percussina with the frantic scribe draped in threadbare robes filtering his acidulous views on statecraft into the tutorial he titled “The Prince.”
Utterly enjoyable in its secular, cynical and anticlerical world view, “The Prince” brought him fame everlasting (but sadly no job).
Machiavelli’s quirky character, intellect and charm are vividly described by Unger. By the time Machiavelli dies, perhaps of a broken heart because of his bad luck with jobs, we’ve met a complexly layered Florentine who was also a patriot, diplomat, battle strategist (amusingly bad at this), playwright and wit.
Studying the simple footgear of Franciscan monks, he pronounced them members of “the republic of clogs.”
He couldn’t stand the pious. Catching a sermon by monk superstar Savonarola, who preached a message of misery and privation, Machiavelli got so depressed that he canceled a date with his favorite courtesan.
The banksters won when Hank Paulson stood next to George Bush and announced that the American people would be paying for the banksters reckless bets.
The German and French economies both contracted in the final three months of 2012, official figures have shown.
Germany - the eurozone’s largest economy - saw its gross domestic product (GDP) shrink by 0.6% as exports declined.
That was the deepest contraction since the first three months of 2009 - the height of the financial crisis.
The French economy shrank by 0.3% in the fourth quarter, while Italy showed 0.9% contraction for the period.
In Europe we are busy going nowhere.
In USA we are going everywhere but reaching nowhere.
That’s the US in nutshell
…and going there faster than ever!
Yes we all seem to be impersonating the Oozlum bird.
Greek unemployment hits new record of 27 pct in November
ATHENS | Thu Feb 14, 2013 5:08am EST
Feb 14 (Reuters) - Greece’s jobless rate scaled a new record of 27.0 percent in November from a revised 26.6 percent in October, the country’s statistics service ELSTAT said on Thursday.
Greek unemployment was more than double the euro zone’s average rate of 11.7 percent in November as a crippling, austerity-fuelled recession continued to take its toll on the labour market.
Gotta wonder what honest UE really is, maybe twice that?
a new record of 27.0 percent in November from a revised 26.6 percent in October ??
Its getting worse….
Is it really necessary to include that third significant digit when more than 1 in 4 people are unemployed?
Depression level non-employment for years now, and it is still party on in DC.
Wonder if the Spaniards are taking notes?
Behold the handwriting on the wall, America.
February 14, 2013
The Greek Trap
Costas Lapavitsas: Lower wages, austerity, high unemployment creating situation like 1930’s with a dangerous rise of the right
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore. And welcome to The Lapavitsas Report on Economics with Costas Lapavitsas, who now joins us from London.
Costas is a professor in economics at the School of Oriental and African Studies at the University of London. He’s a member of Research on Money and Finance, and he’s a regular columnist for The Guardian.
Thanks for joining us.
COSTAS LAPAVITSAS, PROF. ECONOMICS, UNIV. OF LONDON: Thank you, Paul.
JAY: So what is happening in Greece?
LAPAVITSAS: Three things really stand out the last week or so. The first is it’s become quite clear that the membership of the Eurozone, the question of the membership of the Eurozone has actually gone onto the backburner. The immediate pressure of the crisis has subsided. Greece will not be exiting the Eurozone in the next few months. So that’s the first thing.
Second thing that’s become clear is that the fiscal deficit of the government is actually slowly coming under control. So it will come under control in the next few months.
The third thing that’s also become clear—it’s connected to the other two—is that the recession in the country’s getting deeper and deeper. And this is now mutating into a major social and humanitarian crisis.
In a nutshell, this is what’s happening in Greece.
The reason why fiscal accounts are getting under control and the recession is getting deeper is of course the same. The government has slashed public expenditure, destroyed public expenditure, including public investment, and it’s imposed huge new taxes.
The tax intake is proving problematic. The government is failing to take in the taxes that it planned to take. Quite naturally, because the economy’s in recession, people are actually either evading tax or cannot pay it.
But by slashing expenditure, the government is reducing its deficit. Two and two make four. If the government is slashing expenditure, it’s destroying demand. And that’s what’s been happening in the economy—demand’s been destroyed, consumption is declining, investment is at extremely low levels, exports are not doing anything very much, and the country is trapped in a huge depression, basically, with unemployment going through the roof. This is now creating a gigantic social crisis…
BUt corp profits in AMercia are at all time highs. Is it time to stop the handouts for oil co’s and use that money to invest in America’s infrastructure?
“The No. 1 U.S. oil company posted full-year earnings of $44.9 billion. While that was up 9% from 2011, it was about $300 million below the all-time annual earnings record for any company, the $45.2 billion Exxon Mobil earned in 2008.”
Jan 25, 2013 – Samsung recorded a record profit of $6.54B.
Did any Americans recently notice a loud popping sound from the north?
Why a ‘soft landing’ for housing could still hurt the economy
Special to The Globe and Mail
Published Tuesday, Feb. 12 2013, 5:00 AM EST
Last updated Tuesday, Feb. 12 2013, 5:35 AM EST
It’s been interesting to watch the view on the Canadian housing market become progressively more negative. Eighteen months ago, the consensus was that the Canadian housing market was well supported by underlying fundamentals. A year ago, we were headed for a soft landing with flat prices. By late 2012, the consensus view was best summed up by TD economist Craig Alexander, who in November suggested that house prices in Canada would likely retrench on the order of 10 per cent nationally.
The current consensus is that we are not headed for a U.S.-style correction and that the economy will only be moderately affected by a housing slowdown. While I agree that a U.S.-style rapid plunge seems unlikely (CLICK!), those calling for a painless soft landing have a few difficult questions to wrestle with:
More Related to this Story
BEN RABIDOUX Five reasons not to buy a Toronto condo
Canada’s home builders scale back
Building permits values drop 11.2 per cent in December
Are Canada’s housing market economics experts as dumb as their American counterparts?
Canada’s housing market getting worse?
By Jennifer Kwan | Balance Sheet – Tue, 12 Feb, 2013 1:46 PM EST
Reuters - A “for sale” sign is seen outside a home in New York June 19, 2012. REUTERS/Shannon Stapleton
“As housing goes so goes the economy,” is one economist’s assessment of the latest batch of worst-than-expected housing construction data.
Canadian housing starts plummeted nearly 19 per cent in January, suggesting that new construction this quarter “may be losing momentum faster than even we had anticipated,” said David Madani, an economist at Capital Economics.
Even though it’s possible those figures are so-called statistical noise, other recent data may support a worsening scenario.
“Coupled with the corresponding slump in building permits over the past couple of months, however, it is clear this is no statistical fluke, but rather the start of a severe downward trend. With pre-construction condo sales in Toronto falling by almost 50 per cent late last year, the drop in construction activity is going to get a lot worse,” Madani said in a note on Monday.
The seasonally adjusted annualized rate of housing starts dropped nearly to 160,577 units in January, down from 197,118 in December, the Canada Mortgage and Housing Corp. said late last week. The reading was weaker than the 195,000 starts the market was expecting.
CMHC also said starts in Canada were trending at 203,208 units in January. The trend is a six-month moving average to account for swings in monthly estimates, it says.
Immediately after, other economists suggested one month’s data is not enough to spark a trend and that the housing market is undergoing a gradual cooling.
January 17, 2013
Canadian Housing Edition
How Central Banking Works
by MIKE WHITNEY
“Back in 2009, our hot housing market acted as a life preserver in a sea of economic uncertainty. Now it feels more like a cinder block tied around our necks.”
– Chris Sorensen, “The Great Canadian Real Estate Crash of 2013″, Macleans
“Back in 2009, our hot housing market acted as a life preserver in a sea of economic uncertainty. Now it feels more like a cinder block tied around our necks.”
– Chris Sorensen, “The Great Canadian Real Estate Crash of 2013″, Macleans
Canada’s housing market is in the opening phase of a historic collapse. According to the Canadian Real Estate Association (CREA) sales of existing homes dropped 17.4 percent year-over-year in December, while sales in Vancouver plunged an eyewatering 31 percent in the same period. While prices have held firm so far, it’s only a matter of time before droopy demand leads to an excruciating correction. Sometime in the next 12 months, prices will follow sales down the plughole wiping out a sizable chunk of the equity people were counting on to feather their retirement nesteggs. Despite the media’s braying about a “soft landing”, the sharp decline in sales suggests that Canada will face a catastrophe very similar to the one in the US, the only difference being that Canada will not suffer a financial crisis at the same time.
Is Canada talking itself into a housing crisis?
Special to The Globe and Mail
Published Tuesday, Jan. 22 2013, 4:00 AM EST
Last updated Tuesday, Jan. 22 2013, 6:49 AM EST
Little was heard of housing bubbles in Canada up to about a year ago. Now, predictions of crashes are on the front cover of Maclean’s and other publications. One might wonder if we are talking ourselves into a housing miasma, even though the fundamentals don’t point to one.
Sounds like they just need more confidence.
Vancouver Housing Bubble: Home Sales Cool In January
The Huffington Post B.C. | Posted: 02/04/2013 9:16 pm EST | Updated: 02/04/2013 11:43 pm EST
Greater Vancouver recorded its second lowest January in home sales since 2001, according to a report by the region’s real estate board released Monday.
Homes sales in the region dropped 14.3 per cent compared to January 2012 and fell 18.7 per cent below the 10-year average. However, compared to December 2012 data, a 18.3 per cent increase in sales was recorded.
“Home sale activity has been below historical averages in Greater Vancouver for about seven months,” said Eugen Klein, president of the Real Estate Board of Greater Vancouver (REBGV), in a news release.
According to Klein, home sale prices have fallen about six per cent since peaking in the spring. Low demand has also prompted some sellers to pull their listings.
“It appears many home sellers are opting to remove their homes from the market rather than settle for a price they don’t want,” explained Klein.
Canada makes us look like total pikers down here in FL. Their housing bubble up there is of such an epic proportion that when it collapses (and it will) it very well may take the country with it (see, Greece/Iceland).
Every time I watch HGTV and they do something up in Canada my jaw just hits the floor when they talk prices. What the heck is the matter with them?
People around the world have been conditioned into believing that housing is supposed to be utterly unaffordable. When they see our prices, they are often shocked at how “cheap” housing is in the USA. For us, places like Silly Valley are expensive, for them, it’s just average.
I assume you’re not referring to Erik Karlsson’s achilles.
Unlikely. Reading is unamerican. Better to watch reality TV or sportz.
Pass the Brawndo, “Ow, My Balls” in on TeeVee.
“Go away! I’m batin’!”
I listen to books don’t read them. That way I can have my American cred intact.
True story: I’ve been taking acting classes. Starting with diction, and gawd, is my instructor a stickler for proper diction.
Any-hoo, I’ve developed a lifelong hatred for simple words like “and” and “twenty.” There’s a right way to say ‘em, and that’s how I’m supposed to say ‘em in class.
Or else I have to repeat them. Over and over again.
Then came that fine, wonderful day when I checked an audio book out from the library. And, guess what, the reader was using all of that proper diction which has often eluded me.
Moral: What the instructor is trying to get through my thick head is what is actually used in venues like audio book recording.
So you learned to say “twenty” as opposed to “twenny”?
Slim as the librarian have you ever read any of his books?
So you learned to say “twenty” as opposed to “twenny”?
OMG. Don’t get me started on that one.
Coach: Write this one down on your Working Words list. It’s “twen-tee.” Like “Ben-tea.”
Me. Ohhh. Kay…
The above happened more than once.
Thanks for the recommendation, deejay.
read his wiki page..yes i know him…and doing some work for him
I never really tried to fix any of that stuff, but my high school radio teacher did try to get me to think about saying “for you” instead of “fer ewe”, etc.. And about not dropping “g”s Sarah-Palin-style.
Canada needs that XL pipeline really bad to prop up their bloated resource extraction industries. What do you think will happen to Canada’s housing markets when their highly profitable energy sector sees their profit margins collapse when you put a cost of rampant CO2 emissions? There are good reasons why they just don’t pipe it out to a Pacific port too. In case you missed it there is a rebellion underway of indigenous tribes from around the arctic circle from Alaska through Canada all the way to Siberia. Go do a Google search on the “Idle No More” movement. Seems like a good time to squeeze ‘em a little on their plans to export all that carbon.
Looks like Obama has several levers he can pull to crack down on the fossil fuel industry and not just the ones here in the US.
Haha gas hit $4 here in queens….and i drive maybe 50 miles a week…
U.S. Senators Sanders and Boxer just had a press conference relating to climate change legislation. Look for this issue to go big very quickly.
We have an elephant on our Eastern door too. And our Western door. And our Northern door.
I agree C02 is a problem, but a lot of work is being done to try and control it.
Add this to the Canada articles (yes, they are LIARS too up north)
Real estate firm confesses after employees pose as buyers in news stories:
“A Vancouver real estate marketing company is apologizing for having two employees pose as prospective homebuyers in televised news segments on a supposed spike in sales around the Lunar New Year.
The two young women – presented as house-hunting sisters, whose parents would be in town from China for the New Year to help them purchase a condo – are in fact an administrative assistant and a sales assistant with MAC Marketing Solutions, president Cameron McNeill confirmed to The Globe and Mail.”
China’s Crazy Real Estate Market: Is The Bubble Bursting?
BY Michelle FlorCruz | February 01 2013 5:43 PM
Shao Tian first came to Beijing from her hometown of Nanjing in 2006 for university. After moving back home for a few years, she then moved permanently to Beijing in early 2011 to pursue a job offer from a foreign media company.
The 24-year-old went looking for a place to live that would fit within her budget. And that’s when her problems started.
While staying with a friend, Shao frantically scoured Beijing’s tough, expensive real estate market. After several visits to apartments with substandard living environments, her patience was wearing thin; the places she had seen were barely livable, and still beyond her budget. Then she decided to meet a different real estate agent from the one she was using, and settled on an apartment unit that was 500 yuan ($80) above her initial budget. But it seemed like the best she could do.
“Just when I thought I was lucky to have found this second agent and agreed on a deal with him, he started calling someone to talk about the contract, and told me that was my ‘real direct agent’,” Shao recalled.
Futures: S&P 500 -0.4% DOW -0.5% NASDAQ -0.5%
U.S. stock futures sagging before jobless-claims data
Report, Thursday’s only data point, is expected to show a slight fall. Investors continue to question whether market gains are overdone.
Ultra-low interest rate environment to continue for another four years!?
Feb. 14, 2013, 6:01 a.m. EST
The Fed isn’t helping economic growth
Commentary: Congress and the president can’t rely on Bernanke forever
By Diana Furchtgott-Roth
Federal Reserve Chairman Ben Bernanke speaks after a two-day Federal Open Market Committee meeting.
WASHINGTON (MarketWatch) — With calls for more “investment” from President Obama in his State of the Union Address, tax reform off the table in a divided Congress, and inefficient regulations discouraging investment, Federal Reserve Chairman Bernanke is left on his own propping up the economy with his generous monetary policy.
But his efforts may do more harm than good. If countries could print their way to prosperity, we’d see many growing economies.
New research shows singles have a significantly greater chance of meeting someone of the opposite sex depending on where they live. Here are five cities in the U.S. that offer the best chances for men or women to find love.
Bernanke has said that he’ll keep up the rock-bottom interest rates and bond purchases until the unemployment rate reaches 6.5%. At the current rate of 150,000 jobs created every month, and 110,000 new entrants to the labor force, that will be around January 2017.
The European Central Bank and the Bank of Japan are following Bernanke. The European Central Bank is trying to keep the euro, the 17-country common currency, from fragmenting and imploding. Japan’s Prime Minister Shinzo Abe is talking about reflation. Such currency wars will be the subject of discussion at the G-20 meetings this Friday in Moscow.
My colleague Rex Nutting says that the Fed is the only institution in Washington trying to restore full employment. Read why Rex Nutting and the CBO think big deficits are needed for the next four years.
Congress and the president should not count on the Fed to bail them out of their mistakes. Those who lobby the Fed to pump more dollars into the banking system (money the central bank lawfully creates) fail to recognize that borrowing costs are already at record lows, and that more liquidity is unlikely to impart more impetus to the sluggish recovery.
Four? Haven’t they been doing that in Japan for 20 years now?
We still have renters to thank for healthier housing market
By Nin-Hai Tseng, Writer February 12, 2013: 10:49 AM ET
Housing construction is soaring, but much of it is still going to renters.
For the past year, housing starts have risen by 37%. However, home sales haven’t kept up, rising only 9% during the same period, according to a report by Capital Economics released Monday. In December, housing starts rose at the fastest pace since the summer of 2008. But at an annualized 954,000, that was far more than the 369,000 new homes sold during the same period.
The gap doesn’t suggest that builders are overbuilding, like they did in those regrettable years when the market boomed on easy credit. They are overwhelmingly building for renters, not buyers. Which suggests that a healthy housing market may not necessarily call for more home sales, at least nowhere nearly as many as during the boom years.
http://finance.fortune.cnn.com/2013/02/12/housing-rentals/ - 42k -
Iceberg straight ahead! Housing market going to take a 65 percent hit to the starboard bow. Head for the lifeboats while you still can.
The pimps on the Denver city-data forum think otherwise.
HA! CD is really an interesting forum for local interest, but some of the peeps are off the wall. Heavily moderated, for good reason.
Moderated by real estate peeps.
the phoenix cd forums removes any negative comment about real estate, and then each thread is promptly reply-bombed with the same group of posters who love their home and are going to sell it for a gazillion dollars in a few years.
Dude, it’s 69% now. Didn’t you get the update?
I have the free beta version of the RAL app. I don’t get all the updates, unfortunately.
Luckily I have the newest version of The Chive app, though.
You should delete the app because newer apps will come out and people will leave the program…..It will be worth 69% less at some point in the future.
The loss of RAM on your cell phone will be incalculable.
You mean “infinite”
Ram bleeds….i know it sucks the life out of my netscape browsrz
Living in your empty skulls…. rent free.
A message from on high - -
The path to financial salvation in our times: renounce accumulation, embrace cultivation.
Be thee neither a gun toting teabilly nor a debt-pushing marketer/bankster/realtard.
Love thy lawyer and thy accountant like thine own children. They will cost you less and save/make you more. I your Lord will send a signal if this changes: Texas will freeze over, the Cayman islands will sink into the sea, and Washington DC will shrivel up leaving lobbyists and specudebtors to do battle with defense contractors over cratering houses.
I will reveal the rest of my message through my prophet Joe Smith in due time.
Hopefully you can decode the Seven Seals of Revelation before Janet Reno burns you and your wives and children alive.
May be safer to just move the whole operation to Guyana.
Which Guyana? (I think there are 3)
The Dutch colony between French Guiana and British Guiana was called Surinam. So you could say there were three (British, French and Dutch), but it really was only two since the third one didn’t use the same naming convention.
Rubios speech the other night was reworked george w bush -onomics.
Don’t tax the well off, don’t cut spending. Just promote “growth”, since growth will solve all our problems.
I didn’t even listen. Rubio was a boob when he was in the State Legislature. When he was speaker of the house, he famously justifed his wife’s expenses on some sort of GOP credit card as necessary because she was the “First Lady of the Florida House”. Who knew there was such a thing? Many had a good laugh over it, but it should have been a red flag.
Rubio managed to win over the retired “Tea Party” vote in Florida. Made me sick to see clips of him with all these old biddies fawning all over him.
I heard an interview with him this past summer where he wouldn’t answer whether he did or did not believe in the Creation story or that God intervenes in human events. It was the weirdest thing. It was relevant to his book, which had just come out and talks in part about his “strong” (flimsy, IMO) religious beliefs. He tried to change the subject repeatedly. I didn’t see what the big deal was but he wouldn’t address the question at all. If I was asked that question, perhaps I would say “obviously no one knows for sure, but it seems likely that…” etc. And it was a long interview, not some hatchet job with sound bytes. The interviewer also talked about being moved by his story and respect for his beliefs, whatever they were.
Basically, Rubio is a throwback to the Know-Nothings. Not in the sense that he’s stupid, but in the sense that he is an extreme anti-intellectual.
Conveniently located to serve both John Boehner and Mitch McConnell’s constituents:
Rubio managed to win over the retired ??
Rubio is in way over his head..He is the decoy….Jeb will be the candidate IF he wants it…I am not sure he does…
so Jeb vs Hillary?
She doesn’t seem to have too may skeletons in the closet or else she is a master of disguise.
Or nobody wants to hear about the old ones any more. I wonder if she can convince me to vote for Jeb? It would take a lot…but with Bill at her side I suppose anything is possible.
Bill as the first Man? And who knows maybe Hill will get caught with her dress down with some cute pool boi!
As unlikely as that sounds, she would probably be the first president that nobody would look down on for having an affair in office :-).
Epic fail. Especially on the water drinking.
The way I’ve been trained, you’re supposed to keep your drinkie-poo where the audience can’t see it. And, if you’re on camera, wait until you are NOT recording or live before you take a swig.
John Stewart covered this all too well…again.
Expect to see more ketchup in the Geico ads.
Finally Gekko can get high on HFCS ketchup.
Makes you wonder how much money is in mundane things.
In May 2010, Hunt’s stopped using high fructose corn syrup in its ketchup products in direct response to consumer demand.
Wonder if Buffett buying Heinz is related to Kerry being sec of state?
Heinz has declined to disclose her personal tax returns, citing family trusts and privacy. She is estimated to be worth between $750 million and $1.2 billion. According to her most recently released income tax of 2003, Kerry and Heinz paid an effective federal income tax rate of 12%.
Cash out now and spend her time giving it away while he is globe trotting.
U.S. borrows 46 cents of every dollar it spends
Stephen Dinan - The Washington Times - December 7, 2012
The federal government borrowed 46 cents of every dollar it has spent so far in fiscal 2013, which began Oct. 1, according to the latest data the Congressional Budget Office released Friday.
The government notched a $172 billion deficit in November, and is already nearly $300 billion in the hole through the first two months of fiscal year 2013, underscoring just how deep the government’s budget problems are as lawmakers try to negotiate a year-end deal to avoid a budgetary “fiscal cliff.”
All sides agreed to discretionary spending cuts and automatic spending cuts last year, but have been unable to agree on ways to control entitlement costs, which are the long-term drivers of deficits and debt.
But spending is up even more — a staggering $87 billion, or 14 percent. The CBO said much of that higher spending total is due to timing of payments month-to-month. Without those shifts, spending would be up $22 billion, or 4 percent.
The agency, Congress’s nonpartisan budget scorekeeper, releases preliminary estimates of the government’s fiscal position each month. Final figures will come later this month from the Treasury Department.
The government is poised to post another $1 trillion deficit in fiscal year 2013, which would mark the fifth straight year. Before that, the record was $438 billion, which came in 2008, President George W. Bush’s last full year in office.
Housing pimps want “gifts” from The One to re-inflate the bubble:
Hope and Change
Same comment as yesterday. You can’t use stats on deficits on a partial fiscal year and expect to be taken seriously. Government revenue comes in fits and starts. For example, for some reason a lot of money comes in around April 15th. I wonder why that is?
Plus some of the new bonds are used to retire maturing bonds.
Banana boy is an all around #fail . The kind of person who was a C student in math and lacks the ability to see issues through more than one lens. Also, interestingly, the kind of person who can be subtly ripped off if he was ever to engage in business. Yet, he shills for the types who would rip him off.
Banana boy, keep in mind that a lot of people in my line of work (gov’t contracts, administrative law) would LOVE the GOP to be in control, even though we generally wouldn’t vote for this. Why? Because the GOP spends money on our clients. A LOT of money. Obama has generally been mediocre or poor for defense contractors and other big clients. We’ve stopped building billion-dollar power plants in Kuwait, Iraq, Turkey (to supply power to our occupying forces), etc. etc.
Many big contracts have been scaled back or ended. Sad.com for us
But keep railing about $200/month in SNAP cards or Obama phones for Shanika or Tyrone. If only Romney had been elected, he could “fix sick companies” and lower the taxes of Private Equity Pioneers so they would create jobs*.
* In India, China, or Vietnam.
Liberals/progressives are a funny lot.
Facts mean nothing. Only feelings and emotions. Who cares if this government program doesn’t work – it shows I care. Who cares if we are a bankrupt country? Women and children will starve if we touch one government program. And grandma will be out in the street. And Republicans want to put blacks back in slavery.
Liberals/progressives can argue all day over the failure of government programs. Because they are doing “God’s Work” and anyone opposing them is evil and must be destroyed. By any means possible. Only liberals/progressives never look down the road and see the same tactics they use on their enemies will one day be used against them.
Here are the facts that you cannot run away from.
Percent of the Federal Government Budget for entitlements: 58%
Percent of the Federal Budget for Defense: 19%
The Federal Budget borrows 46 cents of every dollar it spends.
We have had $1+ Trillion deficits for every year of the obama administration. More than double the worst of the Bush deficits.
Yet we cannot even get the liberals and progressives in power to admit that the government spends too much.
We will end up like Greece where every program will be cut to zero and liberals/progressives will say they never saw it coming.
Because they are doing “God’s Work” ??
Isn’t that what George & Dick were doing with Iraq & Afghanistan ?? If were going to go down the path of pissing it away I prefer we do it in our own country…
“Deficts don’t matter.”
- Dick Cheney
- chart source: Treasury Dept.
Speaking of which…. where ARE those WMDs?
Isn’t that what George & Dick were doing with Iraq & Afghanistan ??
The most relevant question should be what is Obama still doing in Afghani?
Withdrawing the troops and bringing them home. Rather faster than previously planned.
Stewart on Cheney–if only Banana knew the truth about his party, he might stop littering.
Withdrawing the troops and bringing them home. Rather faster than previously planned.
Oh, how conveniently you forget the expansion, the increase deaths and destruction? It’s all rosy now, right? Now that Ron Burgundy read from a teleprompter, people like you are dreaming up the utopia and the deaths and destruction never happened or doesn’t matter.
The only thing conveniently “forgotten” is that Obama is withdrawing the troops.
Don’t ask the question if you don’t like the answer.
this is why I enjoy this forum, good ol common sense!
Joe why doesn’t the ABA support gay marriage? It would be a boon for your business…that is if you need the work.
It doesn’t? Who knew.
Lots of money to be made off of gay people….if they can marry.
True, but people such as this lame-o and his wife won’t be a part of it.
“It alleges Aaron Klein refused a cake order made by Bowman’s fiancée Rachel Cryer, called the couple “abominations unto the Lord” and made other comments that reduced the fiancée to tears.”
Do you even try to research these inane questions before you pose them?
At the 2010 annual meeting, the ABA passed formal Resolution 111 urging every state, territorial, and tribal government to eliminate all legal barriers to civil marriage between two persons of the same sex who are otherwise eligible to marry.
Text of the resolution:
AMERICAN BAR ASSOCIATION
SECTION OF INDIVIDUAL RIGHTS AND RESPONSIBILITIES
NEW YORK STATE BAR ASSOCIATION
GENERAL PRACTICE, SOLO AND SMALL FIRM DIVISION
SECTION OF TORT TRIAL AND INSURANCE PRACTICE
COMMISSION ON MENTAL AND PHYSICAL DISABILITY LAW
COMMISSION ON SEXUAL ORIENTATION AND GENDER IDENTITY
COMMISSION ON WOMEN IN THE PROFESSION
ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
BAR ASSOCIATION OF SAN FRANCISCO
MASSACHUSETTS BAR ASSOCIATION
VERMONT BAR ASSOCIATION
WASHINGTON STATE BAR ASSOCIATION
NATIONAL LGBT BAR ASSOCIATION
BEVERLY HILLS BAR ASSOCIATION
RESOLVED, That the American Bar Association urges state, territorial, and tribal governments to eliminate all of their legal barriers to civil marriage between two persons of the same sex who are otherwise eligible to marry.
Geez Polly 2010 took them long enough to figure out lawyers need new clients with money. The ABA should be ashamed of itself.
Yeah better late then never…
Same sex couples trying to re-create the legal relationships that married couples make a lot more work for lawyers than married couples do. My uncle and his (now) husband needed a lot more legal documents as a committed couple with kids than they need now as a married couple with kids. Passing the resolution is advocating a position that would result in less work for attorneys, not more.
But the ABA doesn’t pass resolutions because of the work it does or does not create for attorneys. If you google the resolution you can read the paper they wrote in support of the decision. Or you can just contemplate your navel and whine about other people not doing everything you want them to do because you think it might possibly help you get a job.
Same comment as yesterday. You can’t use stats on deficits on a partial fiscal year and expect to be taken seriously.
We all stopped taking cabanaboy seriously a long time ago. Facts obviously don’t matter to him. He keeps shouting Greece!
“Before that, the record was $438 billion, which came in 2008, President George W. Bush’s last full year in office.”
That article conveniently forgets Bush’s final deficit. which Obama inherited when he was inaugurated. That one was pushing $1T. It also omits that Bush inherited a balanced budget and make BIG promises to use to the surplus to pay off the debt when he ran for prez.
I remember Bush did make some cuts:
“The first act that Bush performed as President was to veto a bill that would have increased the CIA budget by a couple of billion $. The CIA warned Bush (in writing) about possible terrorist attacks using aircraft a full month before 9/11. “
Pimping the fake Recovery®
“More American employees may voluntarily quit their jobs this year as an increase in wages and openings boosts confidence in the job market.
About 2.2 million U.S. workers resigned in December, a 7.4 percent increase from a year earlier, based on seasonally-adjusted data from the Department of Labor. These employees represent 53 percent of total separations, the highest since June 2008.”
Welcome to the recoveryless recovery:
“Weak job creation has dogged both the Obama presidency and that of his predecessor. Since the current recovery officially began 44 months ago, in June 2009, the number of private-sector jobs has grown, on average, 1.25 percent per year. These meager gains have confounded Obama’s economic advisers, whose forecasts in early 2009 show they expected a normal rebound in jobs after U.S. businesses shed nearly 9 million positions in 2008-09. But slow job growth appears to be the new norm: Over the first 44 months of the 2002-07 expansion, under President George W. Bush, private-sector employment grew even more slowly, expanding an average of just 0.72 percent per year.”
“Slow job growth” has been the norm for the last 30 years.
Who says “trickle down” failed?
The future belongs to Lucky Ducky:
“Keep in mind, that the “we must cut the deficits” mantra is a fiction invoked by right-wingers to impose austerity on working people. It has no basis in fact. The reality is the deficits are already shrinking at their fastest pace since WW2.”
Apparently some aei shill on a panel at yesterdays us postal service hearings tried to show that u.s.should privatize out mail service like new Zealand or Germany. he failed to mention that these at much smaller countries with a lot less rural areas. And germany is a socialist country with higher taxes, universal health care, superior infrastructure (inc legit high spotted rail that it’s postal carriers use for express mail), and the postal rates are much higher than ours.
It angers me that we crushed Germany in a war 60 years ago and now they are a lot better off than us. Even though Germany is full of “union goons” and German employment law is extremely favorable to employees.
high speed rail*
probably a bunch of other autocorrect/swype mistakes in there as well. oopsies.
Yeah, but they still have lousy beaches (NFSW):
This is why Germans bougth the Venizelos airport in Athens - you don’t need your own beaches if you can economically colonize those of other countries.
You ever been to Germany?
It is full of Germans.
They like to work. They like to make things better. They look down on lazy people. Really look down on them.
And their unions? They like to work too. Rarely go on strike. They understand if they destroy the company they work for they destroy themselves. They can not understand American unions (especially public unions) that bankrupt their employer and then complain why they have no jobs.
Illegal immigrants? Deported. Third generations Turks living in Germany? They don’t get German citizenship.
The German corporate tax rate? HALF of the American corporate tax rate.
You really need to look at Germany (or any country) as a whole and not cherry pick the points that you can spin.
Hey look - the former USSR has universal health care too!
My dad’s fam is from Germany, yes I have been there as well as most of Europe. A very liberal place, generally speaking. Well run government full of egg-headed, well-read classical liberals.
And no offense, but I kind of look down on you for being both intellectually lazy and financially unsuccessful. It seems your best skill is carrying water for the asset-owning classes. My parents would love you, cabana boy. (I really can’t complain either.)
Americans are generally stupid, socially prudish, and love guns more than books. We’re screwed, hence the need for aggressive measures to protect and grow assets.
Well run government full of egg-headed, well-read classical liberals.
Which ones? Outside of Czech republic, the classical-liberals are a very small minority in most countries I think. The only way they get in the government is joining the big and corrupt parties like CDs. I don’t think their bureaucrats any better than ours. If you count the EU bureaucrats, they are actually worse.
We have universal health care too. Just because they don’t have insurance, or even legal citizenship, doesn’t mean that you’re not paying for their health care, because you are!
stitches at the ER - $2500
Stitches at the locsal urgent care clinic $300
yet, we do nothing to keep the uninsured poor from using the ER.
congress is worthless.
My last trip to Germany lasted two weeks. During that time we drove from moderate Cologne to conservative Stuttgart near the Swiss border. We enjoyed the vacation despite burning through serious money. I was amazed at how few police I noticed; the airport being the exception. Great bicycle stores too!
the airport being the exception
European Airports were like that before 911 as well. I used to pity them…..now we have them beat in that matter.
As usual, we are #1!
No government contractor left behind:
“Senior Defense Department officials warned Congress on Tuesday that the looming sequestration cuts represent a dire and unprecedented threat to the U.S. military, with the potential to harm everything from combat readiness at a time of dangerous international tensions to the Pentagon’s efforts to reduce military suicide.
Automatic reductions set to kick in March 1 would force the Pentagon to cut $46 billion from its budget over the next seven months.
The automatic cuts, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, warned, could leave U.S. military forces “degraded and unready,” adding during questioning that “it would be immoral to use the force unless it’s well-trained, well-led and well-equipped.”
“The automatic cuts, Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, warned, could leave U.S. military forces “degraded and unready,”
Has the cost of anything ever gone down?
How many fewer troops in combat zones do we support now than in 2007-2008? How is it that we can’t survive on 2007 budgetary numbers?
No, the cost of ANY government program has never gone down.
Apparently rents are going to go down 65-69%.
the 2007 budget did not include the cost of the wars.
but you knew that.
Both CNN and MSNBC broadcast the first week after President Obama was sworn in that the new administration was ENDING the Bush/Cheney policy of keeping the war costs for both wars OFF the books. This meant a temporary misconception about “spending” that worked against President Obama, so adding these costs into the figures of the budget seemed like a huge “spending increase” instead of a simple reporting of the truth. Also in that first couple of weeks, President Obama CUT SPENDING from the Bush/Cheney final Fiscal Year (Oct. 1, 2008 through Sept. 30, 2009) budget by around $62 BILLION by simply canceling the Bush-ordered presidential helicopter fleet (also shown on MSNBC and CNN, but not given the applause deserved because both Boeing and Lockheed-Martin (who make these helicopters) had taken out one-time-aired ads to buy a negative slant to the coverage.
One of the few spending bills Bush cut:
The first act that Bush performed as President was to veto a bill that would have increased the CIA budget by a couple of billion $. The CIA warned Bush (in writing) about possible terrorist attacks using aircraft a full month before 9/11.
Obama Administration Tells Contractors Facing Sequestration to Not Warn Employees About Potential Layoffs
Forbes - Greg McNeal - 9/30/2012
The Obama Administration issued a memorandum (White House link) late Friday, instructing Federal contractors that they should not provide WARN Act notice to employees facing sequestration. The WARN Act is designed to protect “workers, their families, and communities by requiring most employers with 100 or more employees to provide notification 60 calendar days in advance of plant closings and mass layoffs.” This White House directive follows a July 30, 2012 guidance letter from Jane Oates an Assistant Secretary at the Department of Labor, who concluded that no notice was necessary, specifically stating “As long as the likelihood and timing of contract cancellations remains speculative, an employer is not obligated to provide WARN notifications.”
“As long as the likelihood and timing of contract cancellations remains speculative…”
And your point is…?
Bananas is having a turn around. He clearly must be praising the administration. This is an example of the government giving industry permission to ignore a burdensome regulation when the problem it is meant to solve (employees working on a government contract getting no warning when the contract is cancelled and they get let go immediately) is not a sure thing. And, in fact, since the notifications were going to go out in very early November (to give 60 days notice before the January 1st sequestration date) and the sequestration didn’t actually happen on January 1st so none of those employees needed the warning, it turned out to be exactly the correct advice to give.
I applaud bananas pointing out times when the administration properly gives job creators permission to not comply with burdensome regulations in situations where they are not needed.
The point prior to the election was that Obama was trying to avoid scaring government (Defence) contractors into voting for Romney.
After the election? Who knows? Nobody has had any contracts cancelled as of yet, so I guess it’s all still “speculative”.
And we know that the Republican leaning/Corporate MOTU, all being upstanding, play-by-the-rule guys, would NEVER start layoff rumors, in order to put pressure on Congress to keep the government cheese/ helicopter drops coming.
The “Job Creators” are fleeing Taxifornia:
And speaking of Taxifornia, here more pimping to lower tech geeks’ wages:
Another Taxifornia story. Here the Los Angeles Times pimps the fake recovery:
everyone wants to live in so cal.
no way, much rather live in sausilito and do lots of sailing and hiking. or else live in carmel/monterrey and grow my own arugala and heirloom tomatoes
….. and play your harpsichord.
I’d settle for Morro Bay or Cayucos.
Isn’t Morro Bay nearby to Craterton, California?
“I’d settle for Morro Bay or Cayucos.”
Be prepared to run the heat in the summer and dont leave anything metal outside.
4 miles in is perfect if you can swing it.
Jack LaLanne had a nice prop about 4 miles in from MB. Nice man.
“everyone wants to live in so cal.”
Nobody lives there dude. . .it’s too crowded.
Sounds like the the brew pub near our place.
That place has gotten so crowded that no one goes there anymore…..
The food is truly awful; and the portions are so small….
Thank you Yogi Berra!
California, yes, but not so cal. (south of Ventura). Although their are small pockets of good living (just dont leave): Laguna Beach, Cardiff, Pacific Palisades, Malibu, Newport Beach…
Yep. My late brother lived in some old hotel apt building in Long Beach, where the ocean breeze clears out the smog..he hardly ever left a one or two-mile perimeter. I could totally do that.
And when the last dollar/company/person leaves California, look out below.
Why buy a house now when you can rent for half the monthly cost? Buy later after prices crater for 65% less.
get on board the FEDS gravy train dude. Asset inflation is the only answer cause there are no real jobs being created. you cant buy a home workn at walmart or mcyd’s.
If you work at Costco in Albuquerque, you can probably by a small home there too. Just need that 3% down.
Rent for a fraction of the monthly cost.
not in every case. with rates at 3.5%, it can be even. do the math.
another reason why the market is crowded, people want rentals. With 20% down, many props have positive cash flow. just have to be wise.
With 20% down, many props have positive cash flow. just have to be wise.
I’m curious to know if this was always the case.
For example, the old quick test was that you needed 1% of the price paid in monthly rental income to justify paying that price. Now I’m hearing 120x the monthly income should be the price you pay, which I take to mean that it’s only AFTER the 20% down that the cash flow appears. In other words, 20% down now approximates the 1% “rule.”
So, was there always this expectation that you’d need to put 20% down to get cash flow, or is this a recent phenomenon to justify higher prices?
Cashflow is negative at current inflated asking prices of resale housing.
You’re looking at massive losses at these asking prices.
Yes, I do like the idea of buying later for 65% off.
…although, the more I think about it, there is more cash flow to be had by waiting even longer to buy at 69% off…
I could show you props that with 20% down have instant cash flow of $300+.
Search in Lompoc CA> a 3/2 is under $200k and rents for $1500 ish.
why am i helping you?
do the math:
cash flow’s easily with 20% dn.
and that is on the coast of CA, 60 miles to the most beautiful city in the USA.
You ain’t helping anyone here with your BS. Trust me.
I liked sunny Vandenberg Village much more than foggy Lompoc during my cursory observation of the area. The AFB and the prison looked to be the only real employers in the area. Not a recipe for high leverage, but that’s me too.
Lying Realtor® Liar pimps abound locally. Here they pimp condoz at $170-300 per square foot. See the post by “stellar” on page 3 of this thread:
file under: #selfpwned
“JOHANNESBURG (Reuters) - South African “Blade Runner” Oscar Pistorius, a double amputee who became one of the biggest names in world athletics, was charged on Thursday with shooting dead his girlfriend at his upscale home in Pretoria.
Police said they opened a murder case after a 30-year-old woman was found dead at the Paralympic and Olympic star’s house in the Silverlakes gated complex on the capital’s outskirts.”
“South Africa has some of the world’s highest rates of violent crime, and many home owners have weapons to defend themselves against intruders, although Pistorius’ complex is surrounded by a three-meter high wall and electric fence.
In 2004, Springbok rugby player Rudi Visagie shot dead his 19-year-old daughter after he mistakenly thought she was a robber trying to steal his car in the middle of the night.”
the world’s highest rates of violent crime
They just need more COEXIST stickers. That will solve everything.
“South Africa has some of the world’s highest rates of violent crime”
St. Louis has a murder rate just a little lower than Belize. Baltimore has a worse murder rate than South Africa and Detroit has a worse murder rate than Colombia.
A breakdown of the Chicago killing fields shows that 83% of those murdered in Chicago last year had criminal records. In Philly, it’s 75%. In Milwaukee it’s 77% percent. In New Orleans, it’s 64%. In Baltimore, it’s 91%. Many were felons who had served time. And as many as 80% of the homicides were gang related.
As David Kennedy, the head of the Center for Crime Prevention and Control, put it, “The majority of homicide victims have extensive criminal histories. This is simply the way that the world of criminal homicide works. It’s a fact.”
http://frontpagemag.com/2012/dgreenfield/america-doesnt-have-a-gun-problem-it-has-a-gang-problem/ - 100k -
Front Page Mag, seriously? David Horowitz has the nutz to challenge the Media Academia Race Hustlers Industrial Complex, but his slobbering Destroy The World To Save Israel ideology and association with Daniel Pipes and Campus Watch blow his credibility.
This SNL skit is funny:
“Front Page Mag, seriously?”
Sometimes I wonder away from the flock.
Biden: We’re counting on the ‘legitimate news media’ to help spread our message on guns
By Doug Powers • February 11, 2013 11:17 PM
During a press conference on new gun laws in Philadelphia on Monday, Vice President Joe Biden spoke extemporaneously about what President Barack Obama’s administration hopes will be a push by the media to advance new gun safety measures. He said that, in an era when a variety of new and social media outlets can disseminate misinformation, it is the job of the “legitimate news media” to cover the gun control debate and identify inaccuracies.
“The president and I are going to continue to travel the country,” Biden explained, “so that what we’re proposing can’t be misrepresented.”
“To be very blunt with you, we’re counting on you – the legitimate news media — to cover these discussions because the truth is that times have changed,” Biden added.
http://michellemalkin.com/2013/02/11/biden-legitimate-news-media/ - 74k -
Operation Mockingbird, CIA Media Control Program - YouTube
http://www.youtube.com/watch?v=kI2Zyv6msMM - 135k -
the legitimate news media
There’s a reason we call them coastal elitist bedwetter libtards.
Listening to NPR in the car this morning, they opened the story on Oscar Pistorius with something like “Amidst the ongoing gun control debate…”.
That murder happened in South Africa, not USA. Seriously, WTF? It’s exactly as Rahm Emmannuel said, “never let a crisis go to waste”.
These coastal a$$holes who’ve never set foot outside of New York City or Los Angeles think that if they just keep repeating the same memes that flyover is going to bend over and take it from f*ckers like Governor Cuomo are sadly mistaken.
This is not a R vs D debate. It’s a freedom vs tyranny debate.
NPR isn’t based in NY or LA.
NPR is based in DC. Their office is across from the convention center, off of Massachussetts Ave NW.
I ride my bike (with glittery streamers) past NPR headquarters every morning from Union Station.
And you missed the goon’s point entirely. Lawyers are truly thick.
my nose is always int he air when I listen to NPR on my way to check on my boat.
goon is just jealous of other’s success. sad face.
Add DC, Chicago, and San Francisco to that list. And every other allegedly “progressive” nest of bobos, whether on the coast or not.
Here’s a humdinger for Biden to do the moonwalk away from.
BTW, the NPR offices do appear to be mostly populated by hippies and/or reformed hippies. I always see some interesting fashion statements going into that building. The building itself is pretty interesting-looking too (very narrow, almost comes to a point on the 7th street side). Also they are not as pro-public transit as you’d think. There is a multi-level parking garage underneath NPR headquarters and I often see SUVs & full sized sedans entering/emerging.
“Lawyers are truly thick.”
My impression is that tends to be more of an acting job than underlying reality. Most lawyers I know are at least reasonably bright, though they appear otherwise when convenient to the purpose at hand.
NPR is truly racis, too. Produced by uber-educated whites for their fellow uber-educated whites. FauxNeus is more diverse (race/ideology) than NPR.
So the 4 news stories I heard this morning on NPR from around the world by and of people with very thick African, South American, Asian and native peoples accents, were white people just acting?
Thanks for the heads up.
“Produced by uber-educated whites for their fellow uber-educated whites.”
They do like to talk about how minorities have been treated and what they deserve. They just don`t want to actually live near them.
That building is weird. But they are moving their offices to NoMa (neighborhood north of Massachusetts Avenue not too far from Union Station) some time soon. The location was shown on a map of the area as the future location of NPR that was available at some cafes and places in the vicinity.
Comment by hazard
“A college education gives you the right attitude about minorities, and the means to move away from them”
That is a “bedwetter libtard” in a nutshell.
“St. Louis has a murder rate just a little lower than Belize.”
I suspect it looks much worse if you limit the scope of discussion to North or East St. Louis, as South St. Louis has traditionally had a relatively low murder rate.
Another case of an overly entitled star with a gun.
Speaking of overly entitled a$$clowns with guns, how about how the LAPD and CSHP handled the Chris Dorner manhunt?
On one video one of the cops ordered others to burn the effing house down. Just like in Waco 20 years ago. Dorner deserved death, but he deserved a fair trial and the cops did not want him to talk anymore. He’d embarrass the State.
This may interest a few people here, If it offends anyone I apologize.
Did this a couple of years ago and it took some work but makes a huge difference. Do not think I could have done it if I was cross-dominant.
Monocular and Binocular Shooting:
The Shooting Eye Matrix
The Dominant Eye
One look down the top of a gun with both eyes open like this and almost all people see your pistol and a ghost gun of it, or worse- your target and its ghost target beside it, depending on where you fixate. (I personally see vividly confusing ghosts-others claim lesser ghosts) Close one eye and the ghosts are gone. Do you have a ghost of a chance aiming and shooting at a distance with both eyes open?
The ghost buster is the dominant eye. Determining your dominant eye is achieved several ways but the two most common are to extend your arm and pick an object off in the distance. With both eyes open, either cover the object with the tip of your index finger, or make a circle with your index finger and thumb. Close your right eye. Close your left eye. Which eye misses the mark? The eye that has your target object covered by the pointing finger, or has your target inside the circle of fingers is your dominant eye. Your other eye “supports” this strong eye. Once you document which eye is the key, the next question in the equation is which if the dominant hand.
Hand domination is easy to determine for yourself. What is your writing hand, your strong, most coordinated side?
One approach commonly suggested is the use of shooting glasses. Cover the eye lens that you wish to keep open, so you may shoot with both eyes open, but actually see with one. Gradual bring the second eye into the practice. Use solid Tape, Then gel. Then tape something semi-transparent onto the lens. Clear that lens slowly and bring the open eye “in the open.” Success varies.
http://www.hockscqc.com/articles/binocular-monocular/index.htm - 54k
This may interest a few people here
Only if you are a Racist®
And besides, this kind of information will be irrelevant after Dianne Feinstein and Michael Bloomberg complete their “fundamental transformation” of USA into a gun-free socialist utopia.
Pretty interesting read on the history of the NRA: The NRA once supported gun control
I’ve seen this tidbit floating around the interwebs the last few weeks:
But no new federal gun control laws came until 1968. The assassinations of civil rights leader Rev. Martin Luther King, Jr. and Sen. Robert F. Kennedy were the tipping point, coming after several summers of race-related riots in American cities. The nation’s white political elite feared that violence was too prevalent and there were too many people—especially urban Black nationalists—with access to guns. In May 1967, two dozen Black Panther Party members walked into the California Statehouse carrying rifles to protest a gun-control bill, prompting then-Gov. Ronald Reagan to comment, “There’s no reason why on the street today a citizen should be carrying loaded weapons.”
We would never join the NRA. Why include yourself on a list that will be handed over to Feinstein’s jackbooted thugs?
Registration, confiscation, extermination.
…besides the constant barrage of junk mail.
It just proves my theory that like most things in America, gun issues are race related.
Conservatives want guns because they need guns to fight blacks/hispanics/asians in case of a race war.
Liberals oppose guns because they are also afraid of blacks owning guns.
Bet we have more “diversity” in our apartment building than any of the bedwetter libtards in Manhattan or other media centers.
F*ck New York City.
A few years back I donated regularly to GOA (Gun Owners of America) after finding that NRA was not supportive enough of RKBA.
@ Cactus Thanks for your Chiu anecdote. Wish I would have bolted too.
One whiplash injury in 1998 and I went from loading boxes, running triathlons to trying to walk down the street. Pain from this went on unexplained for years as I visited every doc under the sun. I did make it from 98 to 04 before trying the surgical option. And got thru teaching school feeling like crud. Chiu got me when I was at wit’s end.
Chiu is quite a piece of work. Funny you should know of him and his charade. Small world and all….
He did my Neck and offered to do my thoracic. Luckily I was denied coverage after the neck and I didn’t give him a chance to puncture my lung, as he offered up a thoracic job on me as well. He did not mention the risks of thoracic procedures. Just that he could fix it. Real doctors told me later that no one responsible would do a thoracic surgery on me.
2 hours after neck procedure Chiu had me bouncing my way home to Goleta; he said I could bike and surf in a month. Ill admit I was feeling pretty damned good so that’s what I did. Oops when the steroids wore off I was sorry.
Another doctor explained steroids were why I felt sooo good; then so bad. When they wore off I was f’ed. And Chiu was no help at that point; refusing even to give me more vicoden. I know how football players must feel; taking steroids to remain competitive. I pleaded with my other doc, Lagatutta, and he ordered up an emergency MRI; but he was so pissed I went to this dude! But at least he helped me. MRI confirmed that Dr. Chiu did not change my disc bulge by much at all.
Then it blew out (the disk) fully again a year later(2005). I also had rhizotomies done in the interim by another doctor (Lagatutta) on 12 levels which did little good if any in my neck and thoracic. Plus every physical therapy; accupunture endocrinologists, chiropractor, massage etc has seen me at some point. Internal medicine, Chinese medicine, UCLA specialists, the list goes on. And I hate going to the doctor; No one could help me but Chiu promised me he could. His psychology of making you wait to see him is genius. But what a predator. Learned that all docs are not the same and to get plenty of opinions before doing anything drastic.
Dr Chiu probably made the disk worse indeed as a proper fusion at c5-c6 got done a year later(2005). And recovery from this procedure took years. My dad got an implant done in his mouth and lost feeling to much of his face. Sorry about your numb foot. Dad says not feeling his mouth is a bummer. Only imagine what its like for a foot. Do you have dropfoot?
Now it is 8 years later and I do feel better having been able to take up surfing again but it was a long time to feeling better. Like years. I did dig up some of that same dirt you found out about Chiu but it was too little too late as I already paid the bastard.
The Bend team did refuse to do anything to the thoracic as they told me my lungs were too liable to get punctured to mess around on those levels. Not Chiu!
I went to real inpatient surgery then and the doctors here in Bend laughed about the laser discectomy, saying it was not sound medicine. The price of that surgery with hospital visit overnight was 18k. And my insurance covered it. Chiu found out a way to jack the bill up to 50k for a few hours. Compartmentalizing the charges. His facilities stank like an old flood/rot; he preyed on folks by keeping them writhing in waiting rooms; sometimes all day; then would come in and tell you that he could fix you. Clutching at straws; I went for it. That rat bastard! May the fleas of 1000 camels occupy his tent!
Sorry about your numb foot; at least you had the good sense to bolt from his offices.
BTW I grew up in Somis when Moorpark(spelling it backwards was the joke) was just starting to grow. Dad worked on the PMTC base working on heat seeking missles(I know that now, not a thing about it then) and mom taught math. They both have pretty good pensions. Now it seems the valley growth has connected LA with Oxnard and Camarillo. Never liked going past the Conejo grade or the grade behind Moorpark.
Best friend lived on Balcom Canyon and another on Sand Canyon . You can see his house from the highway as it is up on its own little hill. Grew up playing in Orange groves with pellet guns. Played at Indian Dunes(vroom vroom) and went to Magic Mountain. Another friend lives on Santa Rosa Rd. Went to Camarillo High(boy was I)
I think you have the best climate in the world there with just enough fog to moderate temps to the 80s most of the summer. And the seabreeze keeps the air from going valley stale. I heard there are mountains near Montrose. but you just cant see them often due to the pollution. Moorpark is so close to that yet seems to have good air for the most part. Is that still the case?
Drove by MP every Sunday for a few years on my way to Montrose, Encino, or whatever god awful valley location I sold veggies at. My classmate’s mom ran the Somis Market and I grew up on their burritos; they are worth a shot if you like authentic Mexican food. If they are still run by this lady. Chile Verde chimichanga were so good. And I don’t generally like chimichangas.
I grew up on LaCumbre road just opposite the turn towards Somis from the 118. I would love to live there again; the uncrowded beaches of Silverstrand 20 minutes away, the PCH, ability to go north to Ventura or south towards Malibu make it a perfect surfer’s location. and you can get to Santa Barbara in a little over an hour.I think the climate is maybe the best on earth. But alas, too expensive for now….and forever I assume.
Hi Mike in Bend
Drop foot a few times but not anymore
I had l5 S1 diskectomy back in 2003 or 4 ?
My neck is kinda screwed up too can’t do close up work looking through microscopes all day long anymore.
Anyway Moorpark still has nice weather kinda windy but otherwise almost perfect.
Santa Barbara is nice I think SLO is the best but probably not much work
Santa Clara is really hopping but uber expensive.
Glad to here your disks are getting better I think they shrink with age
The gist. Government monkeying with the foreclosure laws has decreased foreclosure starts in CA pretty dramatically (per Foreclosure Radar, a drop of 60% month on month, and 77% year on year for filing of NODs), meaning that it decreases the number of distressed homes clearing through the process via a foreclosure.
Time will tell whether banks make up for it by pushing more through as short sales, cash for keys, deeds in lieu, etc. The article implies that a big reason is the extra fines, etc. However, I think the bigger issue is the prohibition on dual tracking. I’m hopeful that banks are seeing short sales as a preferable alternative, and so are simply ramping up that activity further (I’ve seen some articles where people in the foreclosure department of banks are moving to their short sale side to improve the speed of the short sale approval).
But, we won’t know for a few months after we are able to see what happens with non-current loan rates in the state. If they continue to fall at a similar pace, that is good; the banks are simply taking an alternative route to getting rid of the distress…if they flatten out, that is bad–it would lead to even less inventory.
And just think of the massive wave of excess inventory hitting the market in California.
And look out below when California becomes a recourse state.
“A new law in California, the “Homeowner Bill of Rights,” makes it much harder and potentially more costly for banks to foreclose…”
Wouldn’t lenders normally respond with higher interest rates for dubious borrowers?
I keep hearing that. However, given how friggin’ hard it was to foreclose in places like FL compared to CA, were interest rates any higher there?
The reality is that in “normal” times, only about 0.5% of mortgages are in foreclosure…so even if that 0.5% costs a bit more to foreclose, it may not impact lender’s costs too much overall
Has anyone penciled out the value of BO’s proposed “refis for everyone” program, which is likely to be passed into effect by executive order since TG couldn’t get it done?
I’m thinking it would be worth hundreds of thousands of dollars for some lucky winners, and wondering who would pay for it (most likely effect: drive up home purchase prices for young families due to fewer homes on the market than there otherwise would be).
Hundreds of thousands of dollars in windfall to at least some of those who qualify, paid for by ???
Obama calls for expanded refinancing
Backers say bill would cut costs for homeowners, boost economy
By Inman News, Wednesday, February 13, 2013.
President Barack Obama urged Congress last night in his State of the Union to pass a bill that would expand and streamline homeowners’ ability to refinance at today’s low rates.
“Today, our housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in six years, home purchases are up nearly 50 percent, and construction is expanding again,” Obama said.
“But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it.”
Obama is proud of his housing bubble v2.0
Thank you big government. Thank you $6 Trillion in NEW deficits.
We are on the way to prosperity again. Only this time it is different.
The lingering notion that higher home prices are an “improvement” rather than a “decrease in affordability” is one sign the mania lives on.
And further proof that most Americans (independent of political religion) love their cheese but will never admit it, especially those crying the loudest about excess cheese being handed out.
To be fair, if the economy was really growing (as in, say, the 1960s) higher prices wouldn’t necessarily be a bad thing. They would just be a consequence of legitimate economic expansion.
I think we can all agree now that this is not the case and hasn’t been for at least 15 years.
“…Americans (independent of political religion) love their cheese but will never admit it…”
I suspect the notion that stealth intervention to prop up home prices and to hand subsidies to homeowners does enter the minds of 99.999% of Americans.
does enter never enters the minds of 99.999% of Americans.
This issue makes me too distracted to post coherently…
“Thank you big government. Thank you $6 Trillion in NEW deficits.”
Obama calls for expanded refinancing
You have to wonder why he wants to do that….
A: because he loves banksters?
My understanding is that this bill is not JUST for underwater borrowers, but for EVERYONE who hasn’t missed a payment.
So, if someone with a low mortgage balance hasn’t wanted to refinance because of the cost of refinancing, this would make it cheaper.
If someone without a W-2, but has been making payments on their 50% LTV loan hasn’t been able to refinance because they can’t prove income, this would make them able to refinance.
Some permanent stimulative effect by lowering costs, at the expense of Fannie/Freddie (the people).
I was a proponent of educating people about their refinance options…but writing checks to people to refinance is a bit much.
“So, if someone with a low mortgage balance hasn’t wanted to refinance because of the cost of refinancing, this would make it cheaper.”
Who pays for this?
A 30-year annuity on the interest spread between, say, 6% and 3.5% would be worth a fortune to an underwater CA borrower with $500K in outstanding mortgage debt.
Now you’re starting to understand why the 30-year fixed rate mortgage would likely go away in time if the GSE’s go away.
The short answer is a combination of the GSEs and the prior buyers of their paper “pay” the price for these refinances.
One major risk of an investor in mortgages, is that when rates fall, you get repaid. That’s not great…you get your money back, but you no longer get the interest, and you need to find a new place to invest, at just the time when you don’t want to get repaid (rates are lower).
The next lender steps up and provides the same principal balance for a much lower cost.
Who bears the cost? Well, the investor in the original mortgage, if they paid greater than the principal balance to get the cash flow stream, and underestimated the propensity for pre-payments. Otherwise, they simply don’t get the return they thought they would get for as long as they thought they would get it.
For refinancing, usually the cost is several hundred dollars for an appraisal, and closing costs (title fees, etc.) for a refinance. The total cost could be a few thousand dollars.
Sometimes, this cost serves as an impediment to refinancing, either for logical reasons (if it takes x years to make up the cost of the refinance in interest savings, but you are moving well before that break-even point).
Sometimes this cost is an impediment to refinancing for practical reasons…the person who wants to refinance doesn’t have the money–and can’t borrow more on the mortgage to pay the costs.
Sometimes a refinance can’t happen for what I consider stupid underwriting formalities….if you are an independent contractor and have been a good payer for 10 years on a 6% loan, and try to refinance into a new loan at 3.5%, you could be denied because you don’t have “proof of income”…even though you have a decade of evidence that you can make an even greater payment.
This initiative is meant to lower these barriers to refinancing…to benefit borrowers, costing the US government (appraisal and closing costs), at the further expense of lenders (who will get repaid sooner than they thought), and at the further expense of non-borrowers, that will see downstream effects of this that won’t be nice (fewer homes on the market on the margin, more money in the hands of consumers that will generate more demand for goods–another mini-tailwind for future inflation, and since the Fed will be buying most of the new mortgages, more money back into the market chasing yield, driving up the price of other investments, and consequently chasing their yields down).
‘The short answer is a combination of the GSEs and the prior buyers of their paper “pay” the price for these refinances.’
‘GSEs’ = U.S. taxpayers (though not explicitly included in federal budget)
‘prior buyers of their paper’ = Federal Reserve and bond market investors who compete with QE purchases
Is that about right?
“…at the further expense of non-borrowers, that will see downstream effects of this that won’t be nice (fewer homes on the market on the margin, more money in the hands of consumers that will generate more demand for goods–another mini-tailwind for future inflation, and since the Fed will be buying most of the new mortgages, more money back into the market chasing yield, driving up the price of other investments, and consequently chasing their yields down)…”
Also future home buyers will pay higher (aka ‘improved / more affordable’) purchase prices…
“Also future home buyers will pay higher (aka ‘improved / more affordable’) purchase prices…”
I was trying to get at that by noting lower inventory…I didn’t want to get skewered for saying something other than “prices are going to collapse another 65%”.
“‘prior buyers of their paper’ = Federal Reserve and bond market investors who compete with QE purchases”
Not necessarily…some of these highest interest rate loans may have been made 10 years ago or more. Just because the Fed is actively buying loans, doesn’t mean that legacy holders of the paper are selling. When these holders of paper bought, they weren’t competing with QE…now, if they were smart, they would have already sold into the QE haze.
Many of these holders may very well be institutions (pension funds, insurance companies, and the like), who’s lower yields will ultimately be borne by we, the people (through higher payments INTO the pension system, higher insurance premiums, etc.).
There are upwards of $10T of mortgages out there…the Fed buying $40B per month would take 20 years of QE infinity to own it all. In other words, there are still lots of NON-Fed holders of mortgage paper…it’s just that any new loans are having their rates artificially suppressed through the Fed purchasing program.
“…the Fed buying $40B per month would take 20 years of QE infinity to own it all.”
There is no need for the Fed to own it all. If they just snapped up all the underwater mortgages, or at least the MBS which back them, the cut-rate refi plan would only hurt the Fed’s asset portfolio. But this is really no hurt at all, as they can just print some more to make up for any losses incurred.
But this program is not just for underwater borrowers…it is for ALL borrowers…a hand-out.
And to my understanding, the Fed is not targeting underwater borrowers, but new issues (I’m happy to be shown to be wrong here if anyone has seen something contrary). I read recently that there are approximately $120 Billion of new agency backed loans sold each month, so the Fed could fill their purchase goal by buying from this pool.
NPR did a funny comparison of this year’s SOU address to last year’s. One item which was virtually unchanged year-to-year was the call to offer cut-rate refis to all “responsible” homeowners (whatever that means…).
““responsible” homeowners (whatever that means…).”
Only the focus groups that they tested it out on know for sure.
So here is an illustration, slightly oversimplified to make the point.
30-yr mortgage on a $500,000 CA ’starter home’ at 6.5% APR = $3,160.34.
Same mortgage but at 3.5% APR = $2,245.22.
Reduction in monthly = $915.12.
PV of the payment reduction (valued at 3.5% APR) = $203,791.89.
That would be an awesome windfall for a “responsible” homeowner. But who would pay for it?
And that’s just for a California ’starter home.’ Think how much underwater luxury home owners will make in windfall profits if this executive order is passed! And nobody will even complain about the government handouts to the deserving rich, as hardly anyone understands annuity calculations (but I do ).
When I refinanced from 5.15% to 3.75%, who paid for that?
That refinance was done at the expense of the holder of the 5.15% loan. Plain and simple.
Follow the dollars. Lender lends $100 at 5.15%. Interest rates move down, the market value of the $100 loan goes up (above par). After a year, the NPV of the remaining payments over the next 29 years at 3.75% is about $117, despite the principal balance being only about $98.50.
The wonders of bond investing when rates are falling.
However, any buyer of that note is at risk the loan is prepaid at par with no cost, and they only get $98.50, so the market value is going to be less than the pure NPV…an investor would rather make a fresh loan at 3.75% than buy a 5.15% at a 3.75% YTM, since the fresh loan has a far better chance of NOT being refinanced, and if it was, they would get back all of their investment.
Both though have a risk of going down in value as rates rise.
When I refinanced the loan, the owner of the previous note that had a market value of up to $117, got paid in full at $98.50. If they sold the note to another party the day before I refinanced, they could have gotten more than $98.50.
There is no logic behind a 30-year loan without prepayment penalty being widely available…except for them being made available by the GSEs, creating the market for such a thing. In other countries, a loan fixed for 30-years is rare…without GSEs, the 30-year might still be available, but would likely be much more expensive…yet another reason why there is such little support for shutting down the GSEs.
Don’t forget the effect on other risk assets…
Everytime a 6% loan is refinanced at 3.5%, there is some investor somewhere who lost 2.5% of income and is going to try to make it up somewhere.
They won’t be able to get it by buying another mortgage backed security…where will they go? Stocks? Precious metals? Real Assets? Or, screw it, accept lower yielding bonds?
At the same time though, their loss is the borrower’s gain…they get another 2.5% in their pocket each and every year, to do with what they please…spend, spend, spend.
On a related note, has anyone looked at the recent data on velocity of money? Wow…talk about falling through the floor…
Can’t say I have looked at the velocity of money as of late.
But now that I have looked at it, I will note that it is at the lowest level on record and still falling, despite the Fed’s failed effort to stimulate monetary flows by pumping QE-to-Infinity into the economy 24/7.
Such a slow rate of monetary velocity should be good for the value of the dollar but devastating to the price of gold and other inflation hedges.
Velocity of MZM Money Stock (MZMV)
2012:Q4: 1.387 Ratio Last 5 Observations
Quarterly, Seasonally Adjusted, Updated: 2013-01-30 8:01 AM CST
Can BO really override the Congress’s will by using an executive order to pass this, as he insinuated in his SOTU address? Or would the Congress have to approve the stealth wealth transfers in amounts of $100Ks to underwater borrowers from everyone else?
Obama’s 2012 State of the Union proposals: what flopped and what succeeded
Posted by Glenn Kessler at 06:02 AM ET, 02/12/2013
This idea went nowhere in Congress, and no bill was passed.
Obama: “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates.”
Congress has balked at Obama’s plan, but the White House is now considering taking action via an executive order.
Tuesday, Feb 12, 2013 10:42 AM PST
Are State of the Union addresses over-hyped?
For all the fascination, history shows the annual speech is seldom an accurate road map for the coming year
By Alex Seitz-Wald
— 2012 —
Themes ranged from education and energy, to foreign policy and financial accountability.
Mortgage help: “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates.”
– Reality: Obama’s plan went nowhere in Congress when Republicans objected to the price tag, but he’s rumored to now be considering action via an executive order, which could be announced tonight.
State of the Union 2013: FB’s remain f-d.
State of the Union 2013 sounds a bit like State of the Union 2012
Mark Wilson/Getty Images
Flanked by U.S. Vice President Joe Biden (L) and Speaker of the House John Boehner (R), U.S. President Barack Obama (C) delivers his State of the Union speech before a joint session of Congress at the U.S. Capitol February 12, 2013 in Washington, D.C.
by Kai Ryssdal
Marketplace for Wednesday, February 13, 2013
This final note today, in which we bring back our hit series from last fall, the Fiscal Cliff Time Machine.
Except now it’s the State of The Union Time Machine. You remember the rules. See if you can tell which piece of tape was this year, and which one was last year.
Topic number one: climate change. Here you go. Was choice 1 from this year, or was it choice 2?
I know! Hard, right? Wait ’til you hear this next one on housing.
[You can listen to the State of the Union Time Machine Quiz: Housing on the linked web page]
Can’t tell, can you? I wonder if you can plagiarize your own speech?
What, if anything, are the limits on executive power in the U.S.? For instance, is the constitutional system of checks and balances pretty much of a fantasy at this point?
Mortgages, gays, lesbians and green energy seems like a fairly typical mix of Dumbocratic political priorities.
Obama weighing executive actions on housing, gays and other issues
By Zachary A. Goldfarb, February 10, 2013
President Obama is considering a series of new executive actions aimed at working around a recalcitrant Congress, including policies that could allow struggling homeowners to refinance their mortgages, provide new protections for gays and lesbians, make buildings more energy-efficient and toughen regulations for coal-fired power plants, according to people outside the White House involved in discussions on the issues.
Which of the two parties sux the most: Dumbocrats or Republitards?
Those questions are why the 2nd amendment matters. It’s the check and balance of last resort when all others have failed.
Welcome to Crateron.
SOL for commodities investors:
February 14, 2013 6:51 am
Rio Tinto hit by biggest ever loss
By Neil Hume in Sydney
The new chief executive of Rio Tinto has promised a “relentless” focus on shareholder value and greater discipline and accountability after the Anglo Australian mining group announced the biggest loss in its history.
Reaffirming plans to cut costs by more than US$5bn and promising significant asset sales, Sam Walsh said he wanted to make Rio, the world’s second-biggest producer of iron ore, a more nimble and responsive company run by “business women and men”.
“Under my leadership, Rio Tinto will have an unrelenting focus on pursuing greater value for shareholders,” he said. “To do this we need to run the business as owners not managers and my immediate priority is to build more focus, discipline and accountability throughout the organisation,” he said.
Mr Walsh, former head of the company’s iron ore business, replaced Tom Albanese, a geologist, four weeks ago after Rio wrote down the value of its aluminium and Mozambique coal assets. It was the latest in a series of embarrassing charges related to bad timed or bungled acquisitions by the company.
The US$14.4bn of impairments combined with a drop in commodity prices saw Rio report a net loss of US$3bn in the year to December, down from a net profit of US$5.8bn a year ago. Excluding writedowns, underlying earnings fell 40 per cent to US$9.3bn, a result that exceeded most analyst forecasts.
Rio declared a full-year dividend of US$1.67 a share, up 15 per cent on 2012.
It also said it had appointed Andrew Harding as the new head of its iron ore division, the miner’s biggest and most profitable. This places Mr Harding in pole position to replace Mr Walsh when he steps down in three years.
Nomura analyst Sam Catalano said Mr Walsh’s rhetoric and promise to enforce greater capital discipline would be welcomed by shareholders.
“The reinforced focus on capital discipline, along with the strong cash generation we expect, should pave the way for meaningful capital returns to shareholders over the coming 12-24 months,” he said.
Gold (COMEX) Apr 2013
If gold is going down in value, does this implicitly mean paper is going up?
I thought gold always went up relative to paper…
I’m wanting to buy gold again, but just bought ten days ago. Patience!
Buy the dips, sell the rallies.
How can you lose if you follow this script?
I thought gold always beat paper…
One theory: Central bankers like stocks (risk assets) better than gold (panic assets). Thus on potentially volatile days like today, they engage in stealth intervention to sell gold and buy stocks, in order to support paper assets at the expense of investors in the shiny yellow metal.
I don’t think anyone here has ever said that gold always beats paper. But … during the past few years it sure has given paper a whuppin’
Past performance does not guarantee future results.
Just ask anyone who jumped on the gold bubble bandwagon circa 1980.
…which is why I buy periodically, rather than all at once. Imagine the sorry sap who put all his fortune in gold on January 21, 1980 when gold reached $850 per ounce! The very next day it dropped to $737 per ounce, a 15% drop! It did not get back to the $800 per ounce price or higher until around 2007, which was 27 years later!
I stole this quote from a member at ZeroHedge as the hive over there was discussing the recent ‘healing’ of the RE market and what was i the not-too distant future. I believe I’ve heard similar wisdom here as well:
“Why no real estate boom in TX? Most people remember the 1980’s bust, which didn’t end until every property that was foreclosed upon was forclosed upon a second time. I bought a second foreclosure from GE capital in 1991, which GE took a 35% bath on. My GF’s landlord offered me her condo for $9K, put it on the credit card.
Anyone to took the Fed’s bait to buy in the last two years is screwed.”
“Anyone to took the Fed’s bait to buy in the last two years is screwed.”
Oh you better believe it Mister.
reading comments over there really sucks…
It won’t be pretty in Florida if this law passes. 800+ days to foreclose is insane…NY/NJ are equally bad…
Ditto for Illinois.
the hypocrisy on both sides has no bounds.
Politics is about the lessor of 2 evils.
To think it will ever be forthright and honest is juvenile at best.
Sounds like this guys may be the LEAST of all the evils.
Not saying he is, just sounds like it.
Not “one that conveys property by lease.”
Rand Paul on DC news radio: Let the Sequester go through.
“I think the sequester has to go through,” Paul, R-Ky., told WTOP Thursday morning. “People need to realize the sequester is not really a cut in spending. It’s a cut in the rate of growth of spending.”
He adds that a new proposal by Senate Democrats to avoid sequestration with a mix of spending cuts and new tax revenue is a bad idea.
“The only real stimulus that ever works is leaving more money in the economy, which means lowering taxes,” he said.
Deficits and debt don’t matter! Look at Japan!
Hey, if people believe the currency has value, it has value. Right?
The Magical City of El Dorado exists - and it’s right below the Fed.
“Let the Sequester go through.”
Step 1: Crash the economy.
Step 2: One, two, three: IT WAS OBAMA’S BAD ECONOMIC POLICIES THAT LED TO THE CRASH!
Let’s replay history.
We need to cut the deficit. Indisputable. It wasn’t happening. Despite developing a plan to reign in the deficit (Simpson Bowles), there was no leadership on this from the White House.
Republicans used the highly controversial move of threatening default to get some spending cut.
A deal to cut $1.2T was made to raise the debt ceiling.
To determine how to cut $1.2T, a panel of hand-picked Democrats and Republicans were selected to get a plan together.
The consequence if they couldn’t agree on the cuts, was that the sequester would take hold…a meat-ax, rather than a scalpel. People thought this would be enough to bring some courage to the table (sequester would be far worse than well thought-out cuts).
Rather than make hard decisions, our leaders (R&Ds) kicked the can, and we are left with the sequester.
They have now had over a year to come up with an alternative to the sequester…nothing from Washington DC.
There is plenty of blame to go around…implying that inaction to fix the sequester is the Republican’s fault, is just as bad as implying that this is all on Obama.
Holy sufferin’ shit.
The Housing Control Authority
The Gun Control Authority
The Education Control Authority
The Savings and Interest Control Authority
Pay your pimp or get beat like a ho.
There it is.
Posted: 6:00 a.m. Thursday, Feb. 14, 2013
Florida first in foreclosure woe for fifth straight month
By Kimberly Miller
Palm Beach Post Staff Writer
Florida ranked first in foreclosure activity for the fifth consecutive month in January as new mortgage defaults and foreclosure auctions skyrocketed in Palm Beach County.
New foreclosures in the county filings were up 64 percent in January from December and saw an increase of 60 percent compared to the same time last year. Notices that a home was going to a foreclosure sale increased a whopping 105 percent from December and jumped 50 percent from last year.
Another month at the top of the foreclosure list seems to belie the consistent news of increasing home sale prices and dwindling inventory.
But Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach, said the backlog of foreclosures in Florida has yet to be released and that prices will likely dip before the market rights itself.
“Until these distressed properties are resolved, our market is not going to get healthier, and we have a couple of years left to go,” McCabe said. “I’d make a case that Florida, in this downturn, will be the first in and the last out.”
Part of the spike in January filings occurred because banks are catching up after moratoriums they put on foreclosures during the holidays, said Daren Blomquist, RealtyTrac vice president.
“Notices of foreclosure sale hit a 15-month high in Florida,” Blomquist said. “There is definitely something going on here that I think is an indication that a lot of properties we saw go into foreclosure in 2012 are being pushed through to the next step.”
Between July and December, 105,020 foreclosures have been cleared from the court system statewide, including 8,403 in Palm Beach County. But new cases are being filed nearly as fast as they’re being cleared. During the same time period, 98,432 new foreclosures entered the system, according to the Office of the State Courts Administrator.
As of Dec. 31, there were still 371,119 pending foreclosures in Florida’s courts. Palm Beach County had 31,678 pending cases.
Loan modifications and principal reductions spurred by the $25 billion nationwide mortgage settlement should keep some foreclosures from hitting the market, McCabe said, but it won’t be enough to keep distressed homes from affecting sale prices.
“I don’t think prices will plummet, but I believe the median price for both single-family and condos will go down over the next three years,” he said. “Those saying the market is getting healthier generally have a vested interest for creating that impression.”
Single-family home prices in Palm Beach County increased about 10 percent in 2012 from the previous year to a median of $212,000. Condominium and townhome sale prices were up 13 percent last year to $88,000, according to the Realtors Association of the Palm Beaches.
1300 Palmetto Ave, Lompoc, CA 93436
13 offers in first week, bank tool one and it is sold.
nah, the market is not hot… and this is Lompoc! No one wants to live in foggy, window, ghost town, for migrant farm workers and Vandenberg employees.
Not to mention the charming families of the incarcerated.
What are you waiting for?
Slow down speedy….
it is sold
You missed out. Hurry up.
Was the winning offer by an all-cash absentee-owner/investor?
All the various housing market reflation measures in play are going to give the all-cash investor crowd the chance to make lots of dough and leave some future end-user American FB holding the bag…
I remember when you could buy in the Poke for less than 100k.
Serious Jalama Beach junkie here. Recovering since 2004; still remember my bro threading some impossible left tube down at the second crack. Tarantulas point is awesome. When the spiders were crossing the road you knew the surf (impending low pressure made the spiders go for higher ground) was gonna be firing. Now I surf in Oregon when I can. Sigh I miss CA. But not Lompoc. And instead of spiders and weather radios we have web cams and accurate surf forecasts.
Spent one night in a hotel in Lompoc once. Scary town
“I remember when you could buy in the Poke for less than 100k.”
You won’t have to reminisce anymore. Prices are already rolling back.
Asia Times Online - The illusory state of the Empire:
“Barack Obama would never be so crass as to use a State of the Union (SOTU) address to announce an “axis of evil”.
No. Double O Bama, equipped with his exclusive license to kill (list), is way slicker. As much as he self-confidently pitched a blueprint for a “smart” - not bigger - US government, he kept his foreign policy cards very close to his chest.
Few eyebrows were raised on the promise that “by the end of next year our war in Afghanistan will be over”; it won’t be, of course, because Washington will fight to the finish to keep sizeable counterinsurgency boots on the ground - ostensibly to fight, in Obama’s words, those evil “remnants of al-Qaeda”.
Obama promised to “help” Libya, Yemen and Somalia, not to mention Mali. He promised to “engage” Russia. He promised to seduce Asia with the Trans-Pacific Partnership - essentially a collection of corporate-friendly free-trade agreements. On the Middle East, he promised to “stand” with those who want freedom; that presumably does not include people from Bahrain.
As this was Capitol Hill, he could not help but include the token “preventing Iran from acquiring nuclear weapons”; putting more “pressure” on Syria - whose “regime kills its own people”; and to remain “steadfast” with Israel.
North Korea was mentioned. Always knowing what to expect from the horse’s mouth, the foreign ministry in Pyongyang even issued a preemptive attack, stressing that this week’s nuclear test was just a “first response” to US threats; “second and third measures of greater intensity” would be unleashed if Washington continued to be hostile.
Obama didn’t even bother to answer criticism of his shadow wars, the Drone Empire and the legal justification for unleashing target practice on US citizens; he mentioned, in passing, that all these operations would be conducted in a “transparent” way. Is that all there is? Oh no, there’s way more…
‘Obama promised to “help” Libya, Yemen and Somalia, not to mention Mali. He promised to “engage” Russia. He promised to seduce Asia with the Trans-Pacific Partnership - essentially a collection of corporate-friendly free-trade agreements. On the Middle East, he promised to “stand” with those who want freedom; that presumably does not include people from Bahrain.’
Good thing he has an Islamic name, as otherwise he could be accused of anti-Muslim racism.
Is that asteroid gonna hit us?
Relax. If it happens, it will be over before you know it.
In the worst case, we may have a brief period of realization that the asteroid is honing in on planet earth, highlighted by teevee news stories featuring satellite images of the inexorable approach of impending doom.
Likely commentary on the asteroid’s approach:
“Nobody could have seen it coming!”
Boy, you’ll really be sorry you bought a house in that case. Total loss.
A closely-watched pot never boils over.
Feb. 14, 2013, 11:43 a.m. EST
Could sequestration cause correction?
By Michael A. Gayed
“The only defensible war is a war of defense.” - Gilbert K. Chesterton
Nouveaux Bulls continue to feel emboldened, but I continue to stress inter-market trends are behaving as if we are at the very start of a risk-off juncture given leadership in dividend sectors, weakness in emerging markets, the Aussie dollar depreciating, the euro cracking, and small-cap stocks looking exhausted.
With all of the excitement over Dow 14,000, the market hasn’t moved very much at all in the past two weeks. Talk of currency wars are heating up, and Europe’s contraction could once again help to refresh the fear independent of SuperBen and the League of Extraordinary Bankers hovering above to drop money from the sky.
The fiscal cliff has come and gone, and now comes the sequestration, which consists of automatic spending cuts should Congress not come up with a deal in the coming weeks. Many will argue that the sequestration won’t make a difference for stocks, and that may well be true. However, with markets not breaking out or breaking down despite inter-market deterioration, the question is whether it may serve as a catalyst for a correction.
Despite historically unprecedented levels of federally-sponsored housing market stimulus measures, San Diego home prices remain deeply underwater compared to the 2007 bubble peak price level, with no hope of ever recovering.
San Diego housing prices always go up — HOORAY!!!!!
January home prices, sales slip
Typical winter fallback masks evident housing recovery
By Roger Showley
Feb. 13, 2013
This Wednesday, Nov. 14, 2012, photo, shows a home for sale in Leucadia, Calif.. U.S. home prices accelerated in November compared with a year ago, pushed higher by rising sales and a tighter supply of available homes (AP Photo/Gregory Bull) This Wednesday, Nov. 14, 2012, photo, shows a home for sale in Leucadia, Calif.. U.S. home prices accelerated in November compared with a year ago, pushed higher by rising sales and a tighter supply of available homes (AP Photo/Gregory Bull)
San Diego County housing prices took their usual winter break and slipped 4.4 percent from December to January to a median $350,000, locally based DataQuick reported Wednesday.
The sales total also dropped back to 2,717 transactions, a 27.7 percent decline from December.
But year over year, both prices and sales continued their slow march back from recessionary lows. Prices on a year-ago basis were up for the 10th straight month and sales rose for 18th time in a row. It was the best January sales count in six years.
For the six-county Southern California region, DataQuick painted the same picture.
The median price stood at $321,000, down 0.6 percent from December and up 23.5 percent from January 2012. The sales count was 16,058, down 20.8 percent from December, up 10.6 percent from January last year.
“This fledgling housing recovery has momentum,” said DataQuick President John Walsh. “Already, price hikes have caused some to question whether it’s sustainable, whether it’s a ‘bubble.’ Let’s not forget, though, that we’re still climbing out of a deep hole from the housing downturn.”
And worse yet, millions of CA debtors continue to live in houses they haven’t made a payment on in 4+ years.
It’s not going to end well in CA. Beware.
So long as Save Our Homes anti-foreclosure legislation is in place to help those California home owners who never make a payment stay affordably housed, where is the problem?
Posted on Feb 14, 2013 12:32 PM EST
Foreclosures Fell 28 Percent Last Year, But Positive News Not Expected to Last for Long
Foreclosures more big
(Photo : Reuters) Foreclosures fell 28 percent from last year nationally during the month of January, reported the Lexington Herald Leader. (Reuters)
Foreclosures fell 28 percent from last year nationally during the month of January, the Lexington Herald Leader reported.
It was an 11 percent drop from December, according to RealtyTrac Inc., a foreclosure listing firm.
Fewer homes were also repossessed compared to February 2008.
California took a huge hit during the housing market crisis, since most of the housing impacted national levels. California’s foreclosures declined prominently from 75 percent to 62 percent, much awaited good news and likely a gradual step in aiding the recovering economy and housing market since California is the nation’s largest and most populous state.
What’s helped ease homeowners were the latest laws that were enforced Jan. 1, which boosted homeowner protection through allocating more time to avoid losing homes.
It stated lenders should have homeowners negotiate modification for their loans and seek alternative measures, if that doesn’t work they can sue the lenders to prevent foreclosure in return for monetary relief, reported The Lexington Herald Leader.
Nevada and Washington had comparable measures in place, too. However, home auctioning increased between last December and January for 26 states plus the capital, Washington D.C.
Florida, Illinois and Pennsylvania’s foreclosure auctions were also at an all time high.
But it’s not all good news. Maryland and Ohio are seeing homes repossessed the most. Maryland’s increased 50 percent and Ohio’s 23 percent from a year ago. Lenders are repossessing most of these homes.
“Unfortunately, down the road, we usually see a boomerang effect as some of those delayed foreclosures come back and actually end up being foreclosed-upon,” said, vice president at RealtyTrac. Daren Blomquist told The Leader.
Damn Democrats and their overreaching laws. How do these guys keep getting voted into office?
I can tell it’s ending badly for our neighbors across the street, who I sense don’t make many mortgage payments. They just had the twelfth or so garage sale since the onset of the great recession last weekend. They sold their nicest car about two weeks ago, and I just noticed a For Sale sign in the window of another car today. (I think they have maybe two cars to go after this one sells…)
Every once in a while back in my repo days I’d get an account that was an “across the country, first payment default.” It was frequently a van, but sometimes a pickup truck. The debtor had lost their job, had no savings and needed to move to where the jobs were, but they had no money. Enter the used car lot. They’d get an old pay stub, forge the date, and sign the dotted line for a used van at 23% APR. Step two, load that sucker in the middle of the night and skip on the landlord too. American underbelly.
non-current loan rate is about 7.6%, many of which are short term delinquencies.
There is a total of 4.6mm loans in entire state…7.6% of these loans is about 350,000.
Quit making sh*t up.
Will the Japanese stock market finally bottom out, now that the Souper Bowl is over?
The Japanese market has nowhere to go from here but UP. Too bad it has remained in this position for two decades and running already…
Feb. 15, 2013, 12:00 a.m. EST
Asia stocks stick to tight range, but Japan dives
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Most major Asia stock markets stuck close to the flat-line Friday, but Japan was an exception, falling sharply as the yen gained strength ahead of a meeting of top finance ministers.
South Korea’s Kospi and Australia’s S&P/ASX 200 index each traded fractionally higher, while Hong Kong’s Hang Seng Index slipped 0.1%, and mainland Chinese markets remained closed for a holiday.
But the most prominent mover in the region — Japan’s Nikkei Stock Average — dropped 2%.
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