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 @ 1:08 am
Greece reported recently that it has reached a primary budget surplus, the Holy Grail of austerity, meaning that once you exclude interest payments on the country’s massive debts, the country is finally taking in more revenue than it spends.
This news should be worthy of a ticker-tape parade, after three years of Draconian retrenchment and a partial writedown of privately held Greek debt. Cruelly, however, the main beneficiary of a return to primary surplus may not be Prime Minister Antonis Samaras and his pro-bailout government, but the main opposition Syriza party, which is pushing for the country to refuse further austerity measures and declare a moratorium on its debt payments.
In reality, the Finance Ministry was premature with its announcement. It said the government reached a non-consolidated primary surplus in 2012 — but on a consolidated basis the country still ran a small deficit. Plus, the calculations exclude any IOUs the government has run up, of which there are many, particularly from the second half of last year when Greece waited for delayed bailout funding and had no other way to pay its bills.
The floggings will continue until morale improves.
The austerity-driven depression will continue until the debt is all repaid.
From which they’ll emerge healthier and more stable, while Bernanke pledges QE 32 and the US economy remains mired in perpetual stagnation.
NEW DELHI: Global rating agency Moody’s today warned that India’s widening trade deficit is “credit negative” for the country and also raises its vulnerability to global shocks.
At present, Moody’s has a ‘Baa3′ (lowest investment grade) rating for India with a stable outlook and any downward revision from here could pull the country’s credit rating into junk grade.
Commenting on the latest government data showing an increase in India’s trade deficit to USD 20 billion as on January 31, Moody’s said: “India’s widening trade deficit is credit negative… These rising deficits are being financed by increased foreign-currency borrowing, raising India’s vulnerability to international financial volatility.”
Home ownership is the path to massive household financial losses.
Fed Says U.S. Wealth Fell 38.8% in 2007-2010 on Housing
By Jeff Kearns - Jun 11, 2012 9:01 PM PT
The financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8 percent plunge from 2007 to 2010 that was led by the collapse in home prices, a Federal Reserve study showed.
Median net worth declined to $77,300 in 2010, the lowest since 1992, from $126,400 in 2007, the Fed said in its Survey of Consumer Finances. Mean net worth fell 14.7 percent to a nine- year low of $498,800 from $584,600, the central bank said yesterday in Washington. Almost every demographic group experienced losses, which may hurt retirement prospects for middle-income families, Fed economists said in the report.
“The impact has been a massive destruction of wealth all across the board,” said Lance Roberts, who oversees $500 million as chief executive officer of Streettalk Advisors LLC in Houston. “What you see is an economy that’s really very, very stressed for the bottom 60 to 70 percent of the population that’s struggling just to make ends meet.”
you have to know when to sell and takes profits. hogs get slaughtered. some smart people made a lot of money.
“smart” not always, but “insiders” yes!
‘The financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8 percent plunge from 2007 to 2010 that was led by the collapse in home prices, a Federal Reserve study showed.’
Wonder how renters did during the fracas?
Some better than others, apparently. I don’t envy any of those who posted here of their eviction travails with deadbeat landlords.
“Home ownership is the path to massive household financial losses.”
You better believe it Mister.
For me home ownership banked me over $200k in cash. Timing is everything.
Only the bubble buyers (bought 2002-2002) who held lost a bundle.
Home ownership is the first step in your journey to shambhala.
William H. Gross
This is the way the world ends…
Not with a bang but a whimper.
They say that time is money.* What they don’t say is that money may be running out of time.
There may be a natural evolution to our fractionally reserved credit system which characterizes modern global finance. Much like the universe, which began with a big bang nearly 14 billion years ago, but is expanding so rapidly that scientists predict it will all end in a “big freeze” trillions of years from now, our current monetary system seems to require perpetual expansion to maintain its existence. And too, the advancing entropy in the physical universe may in fact portend a similar decline of “energy” and “heat” within the credit markets. If so, then the legitimate response of creditors, debtors and investors inextricably intertwined within it, should logically be to ask about the economic and investment implications of its ongoing transition.
” One of our Investment Committee members swears he would buy land in New Zealand and set sail…”
We may have located aladinsane.
And whenever I think of that handle, I think of a certain album by David Bowie.
I know he is not on the Pimco Investment Committee, but an acquaintance has already bought land in New Zealand for which he will “set sale” upon retirement.
This is my plan for if US goes Mad Max style and the teabillies have a jihad.
If not New Zealand, then somewhere like New Caledonia.
Ich kann Deutsch besser lernen um zu Deutschland zurückgehen.
Germans won’t make anyone a citizen. And the weather is harsh. And it’s expensive. And they will NOT be accepting Americans if the SHTF.
If the US goes “Mad Max” I am staying. I was born here and I will die here. I never liked to run away from problems.
I agree. Lefties threaten to go to Canada or wherever. For those farther to the right who consider our Constitution to be relatively ideal there is nowhere else to go…
I am sure glad my people left for the coast of CA. Other people could only walk as far as Ohio.
I will run towards opportunity any day. Spin in it negative, spin it positive… too each his own.
My biggest financial mistake was not buying land in New Zealand when their dollar was worth 52 cents U.S.
Would forced modifications of prime loans and option ARMs primarily benefit wealthy coastal home owners?
The Unsinkable Edward DeMarco
in From The Orb > Blog View
by Phil Hall on Monday 18 February 2013
BLOG VIEW: There is an old joke that claims the only indestructible forces that will be able to survive a nuclear war are Styrofoam, cockroaches and Cher. I might add a fourth potential survivor to that list: Edward DeMarco, who was named to the interim post of acting director of the Federal Housing Finance Agency (FHFA) in August 2009 and has been running the agency ever since.
Nicolas Retsinas for FHFA Director!
House Democrats Obama Urged to Replace Fannie Mae Regulator
A group of House Democrats is urging President Barack Obama to nominate a permanent director for the Federal Housing Finance Agency to replace an acting chief they say is standing in the way of aid for struggling borrowers.
The 45 lawmakers led by Representative Elijah Cummings of Maryland, the top Democrat on the House Oversight and Government Reform Committee, said in a letter to Obama that FHFA Acting Director Edward J. DeMarco should be removed because of his refusal to use U.S.-owned mortgage firms Fannie Mae and Freddie Mac to provide loan modifications including principal reduction.
The letter reflects a renewed effort by Democratic lawmakers and consumer advocates to get Obama to replace DeMarco, a career civil servant who inherited the job of overseeing Fannie Mae and Freddie Mac in 2009. Senate Republicans in 2011 blocked Obama’s nominee for the post, former North Carolina banking regulator Joseph Smith.
The White House has been actively seeking potential candidates for the job in recent months.
Potential nominees for the FHA post could include administration officials such as Michael Stegman, the Treasury Department’s housing adviser, or academics such as Harvard University professor Nicolas Retsinas, former director of the school’s Joint Center for Housing Studies.
Feb. 13, 2013, 11:46 a.m. EST
Federal mortgage insurer FHA under fire
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — A federal insurer of home mortgages came under fire during a Wednesday Capitol Hill hearing, with Republican lawmakers attacking the Federal Housing Administration for shaky finances.
“The FHA is flat broke, and I fear soon that FHA will prove to be bailout broke,” said Republican Rep. Jeb Hensarling of Texas, chairman of the House Financial Services Committee. The agency is in a “dire” situation, he added.
Rep. Randy Neugebauer, another Republican from Texas, questioned whether FHA Commissioner Carol Galante understood the agency’s financial position.
“Do you actually know where you all are,” he said. “I question whether you even know what reserves you need.”
Galante defended the FHA, noting that the agency monitors its portfolio, and said she expects finances to improve during the recovery.
“The trend is much better than it was [during] the economic crisis,” Galante said.
Wednesday’s hearing, the committee’s second this Congress focusing on the FHA, was scheduled to review a recent report that showed exposure to troubled loans in recent years has taken a serious toll on FHA’s finances. Losses from loans that FHA insured between fiscal 2007 and 2009 “continue to place a significant strain” on funds used to insure mortgages, according to the report.
Indeed, the fund behind FHA’s single-family mortgage-insurance programs had a negative capital reserve ratio in fiscal 2012, meaning that reserves would be insufficient to cover projected losses. Specifically, if FHA stopped insuring new mortgages and had to cover projected losses, it would lose $16.3 billion, according to officials.
Looking to shore up its finances, FHA recently announced rules to raise annual insurance premiums for most new mortgages, and lengthen the period during which borrowers pay mortgage-insurance premiums, among other steps. These changes, along with other factors, should push the FHA fund’s capital ratio into positive territory in the near term, cutting the chances that the U.S. Treasury Department will need to step in, officials said.
FHA is an important player in the housing market. With relatively low down-payment requirements, FHA insurance helps first-time homeowners and lower- and moderate-income borrowers obtain credit. On Wednesday Galante defended FHA against Republican lawmakers who accused the agency of lax standards.
and lengthen the period during which borrowers pay mortgage-insurance premiums,
So if these rules take effect, then 20% equity is no longer going to be the magic number to avoid PMI, or am I confusing this with something else?
PMI is _Private_ mortgage insurance. The biggest issuers are MGIC and MBI.
FHA insurance is similar but separate; it is issued and administered by HUD.
Looking to shore up its finances, FHA recently announced rules to raise annual insurance premiums for most new mortgages,
It seems to me that they should raise annual insurance premiums on the pool as a whole, or better yet, on the portion of the pool that is troubled. Why should new purchasers pay higher premiums than the older purchasers, when the newer purchasers a likely LOWER risk (due to the intervening declines in housing prices) than the older purchasers?
They should raise premiums on everyone who was foolish enough to buy between 2007 and 2009, not people buying now.
Perhaps each year’s purchases should be treated as a separate risk pool, with separate risk premiums that can change over time based on the pool experience.
Senate Republicans Take a Stand Against the Public Interest
February 15, 2013
Chuck Hagel testifies during his confirmation hearing. (AP Photo/J. Scott Applewhite.)
This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).
It is bizarre that Chuck Hagel, a war hero with a long record of sensible views on the deployment of military power, gets blocked as the president’s nominee to run the Pentagon, while Jack Lew, steeped in Wall Street greed, sails through as Treasury secretary.
Those responsible for the crisis continue to be rewarded, as Timothy Geithner’s Treasury Department approves tens of millions of dollars in bonuses for Goldman Sachs executives with ties to the Obama administration.
There is, of course, nothing new about a Treasury secretary having profited from high-level Wall Street connections. After all, Robert Rubin and Hank Paulson, two former honchos at Goldman Sachs, headed the Treasury in the Clinton and Bush administrations, respectively. And Timothy Geithner, whom Lew would be replacing, was head of the New York Federal Reserve when it acted to bail out the too-big-to-fail financial hustlers led by AIG and Citigroup. The revolving door between Wall Street and the Treasury is the key cause of the Great Recession.
So, what’s the big deal that Lew ran two divisions at Citigroup for three years when homeowners were swindled out of their life savings? What’s a $2 million payout to Lew compared with the well over $100 million that Rubin got at that same bank during the years he helped steer it to disaster? In Lew’s case there was also the matter of his investing in one of Citigroup’s offshore schemes on the Cayman Islands that President Obama had roundly condemned, but the few Republicans who brought it up at the nominee’s confirmation hearing this week offered only a mild rebuke for such chicanery.
The big deal, ignored by Democrats on the Senate Finance Committee and underplayed by the Republican critics, is that the Treasury Department, under two presidents during this financial crisis, has bailed out the banksters while doing next to nothing to help the victims of those institutions. Even now, in the third stage of a “quantitative easing” that will leave $4 trillion in taxpayer debt, the Federal Reserve, with the Treasury’s blessing, continues to bail out the banks by taking toxic assets off their books while the banks refuse to undertake any serious mortgage readjustments.
“….enemies, foreign and domestic…….”
The best you are going to be able to do is find someone who is the LEAST dirty but still knows where the skelatons are buried.
But that politics in general for you.
Duh, it’s not like Hagel will be sending campaign contributions thier way any time soon.
If you pay current massively inflated prices for a house, you’re going to lose a lot of money. A LOT of money.
not if you sell it now, and don’t have something worth over 200k. Those homes are moving in less than a week; I assume in most markets. with the for rent sign showing up the next day.
Not much demand seems from end users; it seems to be mostly investors buying the low end. people who are putting an inflated price tag on their $300k, if that, homes (acquaintance put hers up at $425 for a 3/1 rancher; no bites)
Mine did not have to see the light of the MLS.
Thanks for looking out for me PW.
If you are wanting to settle down, you could buy an estate sale house at a 30 - 50% discount and pay it off in 15 years before the household formation bubble bursts.
Please note: I am NOT dead and posting from behond the grave.
Nor am I involved in any other way with estate sale houses.
Are you telling the truth? Is it because kids inheriting house want it sold yesterday so as to be done with probate or whatever? Why else the discount?
Is it because kids inheriting house want it sold yesterday so as to be done with probate or whatever?
That was the case when I bought my house. The ‘kid’ was the deceased owner’s 80-something year old brother, in town in the middle of winter to settle her estate. He clearly just wanted to sell everything quickly and get the heck back to the warmth of coastal Mississippi, where he was from ( we were in the middle of a very snowy cold snap).
He didn’t bargain hard on my offer, it was all gravy to him.
‘He didn’t bargain hard on my offer, it was all gravy to him.’
Somehow, I think that will be an ongoing thing for many heirs in the years to come. It was pointed out to me the other day, it seems so obvious now, that a woman has to have at least two offspring to cover population stability. One for her and one for the biological dad. Now, how many of the greatest generation and their progeny have carried that math forward? It is possible there is a physical housing asset windfall bubble for future heirs?
“It is possible there is a physical housing asset windfall bubble for future heirs?”
Mortgage debt far into retirement years is the norm.
Because massively inflated principal must be financed for 30 years.
Most people don’t protect the house from Medicaid liens, so a chunk of the equity in the house (or all of it) is going to go to pay back the state for those last few months (or more) in the nursing home.
Polly, what does a person have to do to protect a house from Medicaid liens?
Americans have been replacing ourselves at a ratio of about 2.1 per woman until very recently. So the household formation bubble burst that PW contends will cause prices to crater isn’t likely to happen for about 20-25 years.
And as PW says don’t buy a house if you have to finance it over 30 years.
Smarten up chump.
There are 70-80 MILLION people just starting to head to the grave leaving 35-40 MILLION empty houses.
And those 70-80 million people will leave behind 70-80 million grandchildren who will need somewhere to live.
“There are 70-80 MILLION people just starting to head to the grave leaving 35-40 MILLION empty houses.”
Most of these will be dumped on the market at fire-sale prices by heirs who are eager to settle their parents’ estates and get on with their own lives.
“And those 70-80 million people will leave behind 70-80 million grandchildren who will need somewhere to live.”
Right. Too bad, as documented elsewhere on this thread, that the grandparents lost 47 percent of their wealth in the 2007-2010 period, suggesting there will be little money to hand down to the kids and grandkids to fund future home purchases. Plus the grandkids are likely to find themselves strapped with a crippling load of student loan debt and dicy job prospects at the time they start shopping for a starter home.
Hopefully a combination of future currency devaluation plus weakened FHA downpayment and qualification requirements can make up for the negative effects of a huge drop in U.S. household wealth on future housing demand.
Medicaid only looks back 5 years to assets that the person who needs coverage has gotten rid of in the form of a gift. You basically keep a life estate in the house while gifting the right to actual possession and ownership (except for that life estate) to your heirs. If you last for 5 years after the gift was made, then the gift to your heirs isn’t part of the assets you got rid of “in anticipation” of needing Medicaid to pay for the nursing home so no lien is filed.
Please note, that Medicaid provision of long term care is meant for people who are actually broke, not people who artificially make themselves broke to get the government to pay for their care. Therefore, while this planning technique is legal, it is evil/wrong/bad/[fill in derogatory comment of your choice]. If you have a lot of money tied up in a big asset, it is right and proper for you to sell that asset and use the proceeds to pay for your long term care, assuming that you do not have enough income and/or insurance to pay for it yourself. The Medicaid rules allow for the other half of a married couple to live in the house until they die, so it doesn’t mean that long term care for one spouse makes the other homeless.
Medicaid coverage of long term care is to make sure poor people don’t have to die without the care they need. It is not meant to set up a system to allow the middle class and upper middle class to leave substantial inheritances to their heirs while making the rest of society pay for their care.
Thanks, Polly. Agree with your sentiments. My parents unfortunately are very close to legitimately qualifying for Medicaid. It’s been quite an education.
The Medicaid rules allow for the other half of a married couple to live in the house until they die, so it doesn’t mean that long term care for one spouse makes the other homeless.
So, polly, you’re ok with using this technique to protect the estate for a surviving spouse, but not ok with using this technique to protect the estate for surviving children. Did I summarize that correctly?
Transferring property to the next generation is a different beast than making one half of a married couple homeless (or at least houseless) because they can’t do the care giving themselves. Is there opportunity for abuse in the case of serial remarriages to ever younger, healthier spouses? Yeah, but that is a very, very limited risk. A wife not being able to manage taking care of her husband the last two years of his life and still living for another few years or even a decade once he passes is pretty darned common.
A lot of laws reflect that our society considers married couples as a single unit. It is all over the tax law. It is reflected in non-working spouses getting credit for their late spouses social security eligibility.
Almost any division of property is OK in a pre-nup (assuming every one knew what they were doing and had time to think about it) unless it makes one half of the couple so destitute that they become a burden on the state. I think of Medicare not getting the money until the other half of the couple dies as being similar to that rule. You don’t kick grandma out on the street just because grandpa died and he had to be in a nursing home for a while before he kicked the bucket. Vice versa for not kicking out grandpa if grandma goes first. And it is a heck of burden on gay couples as well. I’m pretty sure the partial federal financing of Medicaid (part by the states) means that they can’t recognize gay marriage for that purpose. Not sure if there is anything they can do about it at all except have long term care insurance and/or try to be rich enough to not ever need Medicare to pay for their long term care.
One way of getting assets down to the place where they are Medicaid eligible that I can’t find it in my heart to be too down on is to prepay for a funeral. At least that is allowed in Massachusetts. You should check the rules for your state and consider it. Be sure to check if there is a restriction on the amount that can be spent and excluded this way.
I’m sorry your parents are so close to the edge financially. I don’t think mine are at this time, but I can’t get them to talk about where they would move if they needed to be closer to either me or my brother or both of us if they need more help in the future. They think they have another decade before they have to think about it. I’m not so sure.
I think of Medicare not getting the money until the other half of the couple dies as being similar to that rule. You don’t kick grandma out on the street just because grandpa died and he had to be in a nursing home for a while before he kicked the bucket.
Sounds like I summarized correctly.
I agree that your position on this is an improvement over the law as currently written today. I would support a change to the law to match what you describe.
But the law as written today makes no distinction between spouse or offspring being the recipient; we could change it to do so, perhaps with a much longer look-back for offspring, and a much shorter look-back for spouses. I don’t condemn anyone for taking part in income-tax planning, estate-tax planning, etc. So neither do I condemn anyone for optimizing their medicaid eligibility in accordance with the current law.
Incentives have power. The law as currently written gives poor incentives. But I can’t blame someone for optimizing their situation as the law currently incents them to do.
Never underestimate the power of incentives…
“and/or try to be rich enough to not ever need Medicare to pay for their long term care.”
Medicaid, of course. Medicare only pays if you are recovering from an injury or illness. Though I think the rules on that may have been modified somewhat. The old rule was that you could only get nursing home care from Medicare if you were getting better. I think now, you can get it if you actually are sick enough to really need it. But “being sick” isn’t the same thing as being in a wheelchair, or needing help eating and bathing and other basic functions. You have to NEED actual nursing care for Medicare to pay. Please don’t rely on this. I haven’t reviewed the rules recently.
If you have a lot of money tied up in a big asset, it is right and proper for you to sell that asset and use the proceeds to pay for your long term care, assuming that you do not have enough income and/or insurance to pay for it yourself.
That does make sense. The problem is with how we’ve also let/caused(?) the cost of the care inflate to where you have to be Bill Gates to have anything left after a few years of such care. Such cost makes people more flexible in their ethics.
“Medicare not getting the money”
I think she meant Medicaid, didn’t you polly?
So I assume Medicaid files a lien that is not executed upon until sale of the house… So that it would better to stay there than downsize?
I think you are wrong, Prime. I think that the spouse transfer is exempted and the lien just stays on the house until the second half of the couple dies. Though, states have a lot of input on Medicaid rules, so I suppose the rules could be different, but that is a heck of a nasty move and impacts a lot of active voters (the kids who would have to take in grandma). Not a very likely thing for states to do when the feds are picking up a lot of the tab.
Are you sure you aren’t thinking about reverse mortgages? They can be written with either rule (kick out when one person no longer lives there or when neither person lives there) but a lot of people were just told to sign for the highest amount and not told that meant they would have to vacate when the older, sicker spouse died and leave the younger, healthier one with no place to go. I don’t recall hearing it about Medicaid liens.
The next cohort is half the size.
Nice try at the lie though.
“The next cohort is half the size.”
And the current cohort isn’t having kids, which is perhaps part of your point.
As U.S. birth rate drops, concern for the future mounts
Haya El Nasser
12:53a.m. EST February 13, 2013
The nation’s fertility rate has slipped below replacement levels partly because of the recession and a decline in immigration. That’s raising concern about the nation’s future.
The drop in U.S. births to their lowest level since 1920 is sounding alarms about the nation’s ability to support its fast-growing elderly population.
As public concern mounts, a growing number of books, reports and columns are laying out challenges the United States will face because of this demographic upheaval: Fewer babies are being born while the wave of 78 million older Baby Boomers have only begun to retire (the oldest turn 67 this year).
What to Expect When No One’s Expecting: America’s Coming Demographic Disaster, a book by Jonathan Last, went on sale this month. A University of Southern California study out last month reported an unprecedented decline in California’s child population that “will pose significant challenges for the state’s future prosperity.”
“The next cohort is half the size”
Why yes, humans do start out small but they grow to full size adults.
As far as demographic numbers, I think the birth rate is currently at 1.8 per woman. It only fell below 2 very recently. Someone posted statistics a few weeks ago. Why don’t you re-read them.
Why yes….. there are half the amount of people to buy 35 MILLION excess empty houses leaving 17 million extra houses.
Why don’t you get honest about housing.
I think you are wrong, Prime. I think that the spouse transfer is exempted and the lien just stays on the house until the second half of the couple dies.
Ah. Ok. I think you’re right.
But you didn’t really address my point that this is just an example of people following incentives. We should change the law if we think the 5-year look-back is insufficient, not tell people that they are “bad” if they optimize for the current law.
“We” don’t tell people they are bad. I do. That is my own critique of current law and is a personal opinion. I think it is a horrible policy and a complete boondoggle for the upper middle class. If I had the power to change it, I would. But I don’t have that power and it has been around for quite a while.
Polly wants everyone to die broke…..well Ohbewanna is doing a fine job towards that end…Whoo Hoo
So the real question is The middle class finally gets 1 good decent tax break and to pass on the house to the kids, and you want to take it away???
Sorry Polly this is offensive to me….Get your president to pass assisted suicide as a national policy so parents wont have to run up big hospital bills and there would be no need to do this for tax planning
Got any Guts Polly?
Therefore, while this planning technique is legal, it is evil/wrong/bad/[fill in derogatory comment of your choice]. If you have a lot of money tied up in a big asset, it is right and proper for you to sell that asset and use the proceeds to pay for your long term care, assuming that you do not have enough income and/or insurance to pay for it yourself
Mike, do you go to many estate sales? Look at the houses. The carpet is a hideous, outdated colors, nightmare wallpaper, outdated kitchens, etc. etc.
The better deals are if you can pay cash, but many of the houses are just outdated and should qualify for loans (if the buyer qualifies).
The carpet is a hideous, outdated colors, nightmare wallpaper, outdated kitchens
Exactly how my house was. But ripping out the poop-brown carpet revealed hardwood floors, and scraping off the velvet wallpaper (a pain in the arse) revealed plaster walls. I kept most of the outdated kitchen- I call it retro. My metal-sided formica counter is cooler than granite anyway.
Ripped out a termite infested deck only to be pleasantly surprised at the concrete patio underneath. That was a money saver. And hardwood underneath carpet is not that rare either.
I have frequented estate sales but not in the last few years. I do recall the outdated carpets etc.
And hardwood underneath carpet is not that rare either.
It’s pretty normal in any house built in the 60s or earlier around here. My parents house built in the early 70s has it. I would never assume it without checking, though.
Apparently back in the Good Old Days, oak was considered the standard flooring, even if it was going to be covered with carpet.
That’s one of the ways I think older houses are superior to newer ones. Everything wasn’t built as cheaply as possible, even if it wasn’t going to be visible to the naked eye.
And hardwood underneath carpet is not that rare either.
This was the situation with our house. And yes, it was an estate sale that the nephews (no kids in this case) wanted sold ASAP. They took $25k less than they should’ve IMO. We had been lowballing houses for more than half a year by the time we found our house. We went way low, they only made us come up a little, I was in disbelief.
The nephews live on the otherside of the bay (Eastern Shore of MD) and I don’t think they were close to the dead uncle. I also think they needed money for their own retirement (they looked to be at least 60; the man who died was 89 yrs old).
Plaster walls underneath bad paint/wallpaper; hardwood floors (perfect condtiion under carpet); cherry kitchen cabinets (would cost a fortune nowadays); expensive landscaping that hadn’t been properly maintained in 10 years.
For our oak floors, I removed the carpet and staples/tracks/padding. I rented a sander at Home Depot and skimmed off probably less than ~1/8″, then with a friend of mine we finished it to a slightly darker color (it looks like cherry now), then sealed it. I had my tile guy replace the crappy thin metal threshold strips from the carpet with marble threshold pieces going into the bathroom and out the front door.
The oak itself was in basically perfect condition, as you say.
meh, I know ours is crappy subfloor, or whatever you call it. Built in 1979.
Selling a house has nothing to do with getting the estate through a probate court. Nothing. Ok, having some cash might allow resolution of other issues dealt with in probate, but that is only relevant if there is no (or little) other cash in the estate.
Mostly I think it has to do with multiple siblings inheriting a house and one forcing a sale due to money woes.
Seen it several times.
But probate could simply result in joint ownership of a non-divisible asset. Wanting to get cash that can easily be divided up is the preference of the people involved, not the probate court. If there is some cash, other debts of the estate (an issue that is relevant to probate) can be dealt with using the other cash.
“Is it because kids inheriting house want it sold yesterday so as to be done with probate or whatever?”
You put your finger on what is going to be one of the primary forces driving down prices in the used home market over the next three decades. Geezer Boomer and his missus won’t just give away their empty nest McMansion at fire sale prices, but you better believe their kids eventually will sell as quickly as possible at whatever price is necessary to unload it in an estate sale.
Your assuming the kids aren’t living with the parents.
Kids that are living with their parents could get a good deal on the house. If they can qualify for a loan at 50% LTV the cash will go to the sibling. Or it may be even less if they’ve provided elder care. No way to guess as family dynamics will be different for different families.
As Polly mentions, there’s the medicaid angle. It may be necessary to sell to a 3rd party, I’m not an expert on that.
Geezer Boomer and his missus won’t just give away their empty nest McMansion at fire sale prices, but you better believe their kids eventually will sell as quickly as possible at whatever price is necessary to unload it in an estate sale.
That’s precisely what I’m planning to do with my folks’ place when the time comes. It needs a bit of updating and you know what? I’m not paying for it by hiring this, that, and the other remodeler. Nope, I’ll let the next owner have that thrill.
“Your assuming the kids aren’t living with the parents.”
I offered a supply side explanation of why used home demand is toast in the U.S. over the next two decades.
But this doesn’t preclude your demand-side explanation from also playing a significant role.
P.S. We have a jobless, penniless adult child living with us as I type!
“P.S. We have a jobless, penniless adult child living with us as I type!”
I think that is the crux of the problem. What would it take for your child to get a job where they could earn enough to afford a house/apartment with another employed young person?
I presume part of the answer is they would have to move out of CA.
“I’m not paying for it by hiring this, that, and the other remodeler. Nope, I’ll let the next owner have that thrill.”
That is totally the right approach, as your decision about what kind of remodel to do could not only cost you money but also limit the prospective buyer pool to those who agree with your remodeling decisions, costing you still more money in the form of a lower value of the sale after netting out remodeling costs than if you had sold as is.
I’d say there are a few “remodeling” things (mostly clean up) that could pay off before a sale. Getting rid of the furniture, closet contents and other stuff so you show it empty is one. If there are hardwood floors under the carpet, pull up the carpet at least. Repaint if you can. I don’t think staging is needed, but you should make sure that there is enough lighting so people can see the room, which could include taking down old curtains as well as a cheap floor lamp or two or just changing bulbs.
The biggest thing is getting rid of the old smells. If that is just opening the windows for a few hours, great, but it could require the curtain/carpet/whatever removal happen before showing the house. I looked at a condo about a decade ago (never bought). The layout and location was a deal breaker, but the worst think was the smell. I tried not to get too emotional about these things, but walking into a place that smelled like dog urine and bird sh-t was too much even for me to ignore - especially since the place had hardwood floors everywhere. I couldn’t tell if taking the animals away would get rid of the smells or if it was all soaked in. Kind of the inverse of baking cookies and apple pie.
Especially in a sparsely populated area like upstate PA.
If you were talking about a house in a city or a suburb of a city, I’d say you’d be better off remodeling it along the lines of universal design these days - don’t go crazy, but do just enough so the house isn’t a disaster area that turns off too many people. People expect to do some updating, but most people don’t want to start at square 1.
walking into a place that smelled like dog urine
Yeah I love it when the Realtor pretends not to have noticed it.
‘I’d say there are a few “remodeling” things (mostly clean up) that could pay off before a sale. Getting rid of the furniture, closet contents and other stuff so you show it empty is one. If there are hardwood floors under the carpet, pull up the carpet at least. Repaint if you can.’
Totally on board with this approach, too. It’s best to
(1) not undertake any expensive remodels which might appeal to limited tastes; (2) undertake inexpensive generic steps that anyone who moved into your place would have to do for themselves, anyway, or which will put your home in a more attractive light for a prospective buyer.
We did a one-weekend paint job, stowed furniture and put a few potted plants around the place before selling our last place. It worked wonders, as we had five offers and sold in one weekend.
Whad’ya know: Pushing on a string works no better in the present episode than it did back in the Great Depression.
15 February 2013 Last updated at 06:18 ET
Treasury attempts to boost lending have ‘failed’, MPs say
Bank of England There has been some debate over the effectiveness of the central bank’s QE programme
Government attempts to boost lending in the economy have “failed”, an influential group of MPs has said.
The Public Accounts Committee said the Treasury had embarked on a “series of expensive experiments indemnified with taxpayers’ money”.
It also criticised the Treasury’s understanding of the Bank of England’s quantitative easing programme.
But the department insisted it was focused on ensuring “Britain succeeds in the global race”.
The cross-party committee delivered its verdict after examining the department’s annual report and accounts for 2011-12.
It comes ahead of the Budget, which will take place on 20 March.
‘Poor decision making’
In a report, the committee said: “The lending schemes have failed to significantly increase lending.
“The Treasury has limited understanding of its role in these measures. It has not set out its goals and intended outcomes, and it has limited management information to help it monitor progress.”
The committee also expressed concerns that the Treasury was not aware of “either the risks it has taken on by indemnifying the Bank of England against losses on Quantitative Easing or the expected economic benefits”.
The committee’s chairman, Labour MP Margaret Hodge, said: “Some £375bn has so far been injected into the economy as an ‘experiment’ but the department could not explain to us what the effect has been on the whole economy or on different parts of society.”
She added: “The Treasury’s attempts to stimulate economic growth through new lending have, so far, not been successful. The National Loans Guarantee Scheme achieved just 15% of its intended take-up.”
MPs also rebuked the department for not getting a grip on spending across Whitehall, and “impenetrable” book-keeping.
“The Treasury acts as both the finance ministry and economic ministry,” said Mrs Hodge. “But it appears to neglect its role as finance ministry.
“Its own accounts are impenetrable and this committee keeps seeing instances of poor decision making by departments, which the Treasury could and should have prevented.”
Treasury attempts to boost lending have ‘failed’, MPs say
This calls for extreme measures. Time to stop funnelling money to their financial companies through a myriad of back channels. Instead it’s time to just start cutting them checks for however much they think they are entitled to.
LUETKEMEYER: Following Japan on disastrous quantitative easing policy
Time to reverse course before it’s too late
By Rep. Blaine Luetkemeyer
Friday, February 8, 2013
This week, Ben S. Bernanke announced that the Federal Reserve would continue its misguided quest to ease our financial woes with purchases of $85 billion per month in mortgage-backed securities and Treasuries. This follows years of quantitative easing that has loosened our grip on sound monetary policy and created what many believe to be an artificial recovery.
What few in the Federal Reserve are discussing — but what everyone else seems to understand — is that continued quantitative easing comes with very real risks, including a dramatic increase in inflation rates, asset bubbles and long-term economic stagnation. Additionally, given the low rate of success that similar plans have had in other countries, it seems the Fed’s current program will pose significant dangers to the U.S. economy in the long run.
While many in Washington continue to focus on the economic crisis facing Europe, it is equally important to look west and examine the eerie similarities between Japan’s monetary policy and our own.
If we are going to catch up with Japan we better hurry:
The interest rate on Japan’s ten-year government bonds is now less than 1% – the lowest in the world, despite a very high level of government debt and annual budget deficits. Indeed, Japan’s debt is now roughly 230% of GDP, higher than that of Greece (175% of GDP) and nearly twice that of Italy (125% of GDP). The annual budget deficit is nearly 10% of GDP, higher than any of the eurozone countries. With nominal GDP stagnating, that deficit is causing the debt/GDP ratio to rise by 10% annually.
“The interest rate on Japan’s ten year government bonds is now less than 1%…”
“Indeed, Japan’s debt is now roughly 230% of GDP…”
If the interest rate is ever allowed to rise then Japan is hosed.
They’ll have plenty of company, which is why I think it won’t happen for a long time.
“If the interest rate is ever allowed to rise then Japan is hosed.”
Doesn’t that depend on the duration of the debt they have issued? For instance, if the duration is skewed towards the long term, then it is investors in Japanese debt who are hosed, not the issuer.
I have mentioned this before regarding Japan…
What one forgets is that Japan practices lifetime employment - think corporations and govt. And their salaries have not decreased -not in line with the deflation that is touted. In fact salaries have gone up just like in the US,1~2% p.a. The monetary policy has, to be certain, given rise to inflation in food, clothes and energy. Things that the common man needs on a daily basis. Even with importing clothes and vegetables from China, the cost of meal is higher in Japan than the US.
From yesterday’s posting by frankie, the min. wages in Japan have gone up nominally from about $6.5 to $9.5 in 4 years. This is a huge increase. But all these gains are eaten by the higher increase in food and clothes.
So where is the deflation? My take on this is that, productive capacity for building and making goods was exceeded in the late 80’s when the Japanese real estate bubble popped. The result is that there was no rebalancing in the economy. The people with lifetime employment (think seniors 55 and above) bought all the houses they could and then some, there was excess capacity. The houses are still over priced, contrary to falling prices in real terms. This is where the deflation scenario is touted. If you look at all high end goods in Japan such as washing machines, TVs, cars, etc. the cost has gone up. It is just that there are no permanent jobs for a new graduate with a 4 year degree. So even if they are employed part time, and staying with parents, the salary is just not there to afford the luxury items.
For the central bank economists and beancounters, the fact that the economy is not growing faster than 1% constitutes deflation.
It will be the same here in the US. As long as the vested interests do not allow for normal boom-bust cycles, it will be a drag on the economy.
I thought Japanese companies routinely kicked their people downstairs at 55 or so…to become doormen or whatever.
Coming to a sky near you:
Drones over U.S. get OK by Congress
By S. Smithson
The Washington Times
Tuesday, February 7, 2012
U.S. Customs and Border Protection uses qualified pilots to operate Predator drones for surveillance along the border. Under the FAA Reauthorization Act, drones eventually could be used by police agencies and private companies across the U.S. (Associated Press)
Look! Up in the sky! Is it a bird? Is it a plane? It’s … a drone, and it’s watching you. That’s what privacy advocates fear from a bill Congress passed this week to make it easier for the government to fly unmanned spy planes in U.S. airspace.
The FAA Reauthorization Act, which President Obama is expected to sign, also orders the Federal Aviation Administration to develop regulations for the testing and licensing of commercial drones by 2015.
Privacy advocates say the measure will lead to widespread use of drones for electronic surveillance by police agencies across the country and eventually by private companies as well.
“There are serious policy questions on the horizon about privacy and surveillance, by both government agencies and commercial entities,” said Steven Aftergood, who heads the Project on Government Secrecy at the Federation of American Scientists.
In a country where so many people are avid practitioners of their Second Amendment rights, I can’t help thinking that there will be a new kind of target practice. Y’know, for when sporting clays are no longer sporting enough, try taking out a drone!
Do 2nd Amendment rights extend to shoulder-launched anti-aircraft missiles?
No more than a canon was considered an “arm” by the founding fathers.
Yeah, and my Nikons are legs.
The Continental Army _did_ have artillery. So I’m pretty sure the founding fathers would have been in favor of cannon being maintained by the well-organized militia.
That’s what I thought at first, but I think modern drones fly far too high to take out with small arms fire.
I think modern drones fly far too high to take out with small arms fire.
No, they’ve got all types, it looks like little 4-rotor helicopters are the choice for private/civilian use. You can fly them at any height, land them almost anywhere. I suspect they would be difficult to shoot down, though. Maybe with a shotgun and buckshot:
The AR.Drone remote-control quadricopter is a groundbreaking device combining the best of many worlds, including modeling, video gaming, and augmented reality. The AR.Drone is remote-controlled by an iPhone and features a number of sensors, including a front camera, vertical camera, and an ultrasound altimeter. The AR.Drone can also be used in video games, such as AR.FlyingAce, a dogfight between two AR.Drones. A groundbreaking device combining the best of many worlds, including modeling, video gaming, and augmented reality.
The AR.Drone remote-control quadricopter is a groundbreaking device combining the best of many worlds, including modeling, video gaming, and augmented reality. The AR.Drone is remote-controlled by an iPhone and features a number of sensors, including a front camera, vertical camera, and an ultrasound altimeter. The AR.Drone can also be used in video games, such as AR.FlyingAce, a dogfight between two AR.Drones. A groundbreaking device combining the best of many worlds, including modeling, video gaming, and augmented reality.
No, they’ve got all types, it looks like little 4-rotor helicopters are the choice for private/civilian use.
I was aware of those, but I’m not really worried about them. I’m talking about the ones with missiles.
how about a tethered “blimp” in the shape and color of the moon?
How many people would know its not the real moon?
“How many people would know its not the real moon?”
I think enough people would notice that the moon is not where it should be. Not everyone of course, but enough to make it widely known very quickly.
‘In a country where so many people are avid practitioners of their Second Amendment rights, I can’t help thinking that there will be a new kind of target practice. Y’know, for when sporting clays are no longer sporting enough, try taking out a drone!’
There might be a rogue reality show based upon it too. Johnny Knoxville could be in it.
Wait till someone hires a drone to keep an eye on the police.
You could imagine neighborhood watches buying a drone to patrol their hood.
Farmers using them to check their fields or look for predators.
Hunters using them to track, even kill their prey.
Voyeurs using them to scope girls/guys on the beach, or watch them in the changing room, or their backyard pool.
Spouses checking on each other, checking on the kids playing at the playground.
Drone pizza/mail delivery?
The paparazzi using them.
It’s gonna get pretty crazy.
The way you put it, this could be the growth industry that the US as country is looking for to get unemployment under control!
When it comes to big game hunting there are already strict laws about flying over the area within 24 hours of hunting. As soon as drones are commonly available I’m sure there will already be similar laws for them.
there are already strict laws about flying over the area within 24 hours of hunting
Doesn’t Sarah Palin hunt wolves from a helicopter?
That’s not big game hunting. Unless they actually had a wolf season she was participating in, that was pest eradication and the laws are totally different for that.
that was pest eradication
You say putater, I say puttado.
But we’re talking about laws here. Hunting laws are much different for animals that the lawmakers want to conserve versus animals the lawmakers would like to significantly reduce in population or even eradicate. So Sarah Palin eradicating pests from a helicopter (whether you agree with it or not) is in a totally different category from big game hunting, where you’re not allowed to even be in a helicopter in that area for 24 hours before you begin hunting. At least in Wyoming anyway…
Hunters Hit men using them to track, even kill their prey.
A $30,000 drone surveilling 100 miles of border 24/7 for three years plus batteries, or three Border Guards on 8-hour shifts plus vehicles, and bennies at 130K/yr/person? Let’s see, folks…
Drones don’t get drunk, sick, or foment inter-agency spats
Drones aren’t susceptible to bribes or selective brutality
Drones don’t have drone unions to demand “insane pensions”
Drones don’t have duel loyalties
You’re already being spied on by your television, your computer, your banks, your grocery store, your kid’s school, your insurance company, your “health provider”, your cell phone, your traffic signals, your car, your credit cards, your utility company, your….
You want “secure” borders, or do you just want to whine about “government waste”?
Being a drone means never having to say you’re sorry.
ahansen, it’s not that much cash savings. You still have to have two ground crew to drive and monitor, and current regs state that they can’t drive and monitor more than one drone apiece.
You’re right about containing the interagency spats, drunkenness, potential payoffs and participation in drug trade, etc. though. Two drone tenders completely focused on avoiding other flying objects and focusing the video feeds don’t have the extra bandwidth to do much else.
Poll: Do you think Congress will step in and save the military from the looming sequester cuts?
depends on how many checks come in from donors.
Cut it 90% and let them hold bake sales.
Okay, HBB Cooking Club, let’s have some recipes for the bake sale! My home-made spaghetti sauce:
Tomatoes in cans from the food co-op
A touch of mesquite flour for sweetening
Add to whole wheat spaghetti and chow down!
1 bucketful of depleted uranium scatter shot
1 perchlorate polluted aquifer
Mix thoroughly with $722 soup ladle, cover with pallets of $100 bills and wait until it falls apart.
Serve cold. Garnish with colorful ribbons and shiny medals.
2/3 of respondents voted No. Do they know something Wall Street traders don’t?
IIRC, even more voted no on the bank bailouts.
Yes. Too many chickenhawks like Sen. Ted Cruz (D-ExxonMobil). They want to “cut the debt” but they are also obsessed with “keeping America strong” and possibibly fighting new wars. They get big campaign contributions from energy corps and defense contractors.
when the military budget includes mailing millions in cash to Iraq then losing it, it is worse than welfare.
at least food stamps (can) help small biz.
Dr Doom says quantitative easing will create zombie banks, firms and borrowers
Nouriel Roubini said at Davos that central bankers risked saddling the economy with debt-burdened QE addicts
Heather Stewart in Davos
The Guardian, Wednesday 23 January 2013 14.37 EST
Nouriel Roubini has warned of the dangers of too much QE. Photograph: Keith Bedford/REUTERS
Nouriel Roubini, the economist dubbed “Dr Doom” for predicting the credit crunch, has sounded a stark warning about the long-term effects of relying on quantitative easing to keep crisis-hit western economies afloat.
At a lively debate in Davos, Roubini, who runs a New York-based consultancy, said central bankers risked saddling the economy with debt-burdened banks, businesses and consumers that should have been allowed to go bust.
“Over time, you get zombie banking, zombie corporates, zombie households, which is damaging in the long term,” he said. The phrase “zombie banks” was coined in Japan, to describe insolvent lenders propped up by cheap cash.
Roubini stressed that “QE” had been critical in fending off a new Great Depression after the collapse of Lehman Brothers in 2008. But, asked to argue against the motion, “The short-term benefits of QE outweigh the long term risks,” he offered nine reasons why such unconventional monetary policy could damage the economy in the longer term.
Roubini went head to head with Adam Posen, the outspoken former member of the Bank of England’s monetary policy committee, who pushed for an extension of QE during his time in Threadneedle Street.
Posen said central bankers should be “humble” about what they can achieve but there was no evidence from the past five years that QE was sowing the seeds of a future crisis. And in response to the increasingly widely aired argument that QE could lead to a Japanese-style economic stagnation, he said: “If you look accurately at the data, being Japan wasn’t so bad: in the five years to 2007, per capita growth in real GDP was higher than anyone else in the G8.”
Instead, Posen said opposition to QE in the current circumstances could only come from a “deep spiritual belief that somehow this must create inflation”.
Criticism of ‘quantitative easing’ intensifies ahead of G20 meeting
Anthony Halley | February 9, 2013
Critics of central banks’ massive stimulus programs (’quantitative easing’) are on a media blitz ahead of the G20 finance ministers’ meeting in Russia next week.
Famous commodities investor Jim Rogers says that now is the time to bet against long term US treasuries, bond market guru Bill Gross warns of ‘inflationary dragons,’ and US Congressman Ron Paul is staying on message, lambasting central banks in Europe, Japan and the US for their excessive monetary expansion.
Paul told Bloomberg today that whilst quantitative easing may be intended to stimulate growth, the policy amounts to currency debasement. This will end badly, said Paul, as public faith in fiat currency will eventually match the declining value.
Having a weak currency is tempting because it will often boosts exports, one of the main drivers of economic recovery. But having so many countries simultaneously engaged in aggressive devaluation is causing international tensions.
Developing nations, and in particular Brazil, have repeatedly voiced their concerns about expansionary monetary policy in the developed world. Many emerging economies depend on export competitiveness to sustain their development paths.
Next week, at the G20 finance ministers and central bankers meeting in Moscow, currency exchange rates and monetary policy will surely top the agenda.
Kumbaya, my Lord, Kumbaya…
February 17, 2013, 10:35 p.m. ET
G-20 Moves Toward Common Ground on Currencies
By IAN TALLEY
MOSCOW–The world’s largest economies took a step toward common global guidelines for exchange-rate policies with a pledge Saturday to refrain from targeting their currency policies to gain a competitive trading advantage.
The pledge, in a statement produced by finance ministers and central bankers from Group of 20 industrial and developing nations following two days of meetings here, marked the first time the group had agreed to such an explicit guideline on the issue. It came as officials sought to defuse global tensions over volatile exchange rates.
Members also promised that those with tightly managed currencies–largely a reference to China–would move more rapidly toward market-determined rates, although there was no specific timeline. At the same time, the group said it would seek a clearer understanding of the ways in which members can cope with the effects of each other’s actions.
Germany’s central bank president, Jens Weidmann, said it was clear at the meeting that G-20 members agreed that “politically driven devaluations can’t sustainably improve competitiveness, don’t solve structural problems and produce backlash reactions.”
Veterans of G-20 gatherings said the meetings Friday and Saturday marked a step forward in the task of building trust among a large number of nations with widely differing economies.
“I’ve been here for five years and the subject of market-based exchange rates has been discussed in one way or another over that period and rarely have I seen as much agreement around a proposition as I saw today,” said Australian Treasurer Wayne Swan.
A U.S. administration official said that as the vows taken Saturday are implemented, the world will increasingly have a broader set of countries that adhere to the same set of parameters for exchange-rate policies.
Screw the G-20.
No. G20 screw YOU!
(and the rest of us as well)
Members also promised that those with tightly managed currencies–largely a reference to China–would move more rapidly toward market-determined rates,
Keep your pledges and promises in one hand, and spit in the other, and see which one fills up faster.
Indeed, like they are going to admit in public that their monetary policy will be to “beggar thy neighbor”.
What I do know is this, other countries:
Want to be net exporters
Want to grow their job base
Guess how they plan to accomplish that?
It’s a currency printing cartel.
Unless they put in place punitive measures to rein in rogue countries that try to use the printing press to gain unfair export advantage, the predictable results will be “beggar-thy-neighbor.” But the major players are certainly well versed in cartel theory.
Feb. 18, 2013, 7:03 a.m. EST
First rule of currency war: Don’t say currency war
Analysis: Focus on growth could create virtuous circle
FRANKFURT (MarketWatch) — The Group of 20 has spoken, and it has effectively proclaimed that it’s more afraid of stalling economic growth than overheated rhetoric about the threat of a so-called currency war.
The U.S. dollar has jumped more than 15% versus the yen over the last three months.
In the statement issued Saturday, G-20 finance ministers and central bankers effectively told Japanese Prime Minister Shinzo Abe to go ahead and pursue policies that will result in a weaker currency — provided that he doesn’t actually talk about the level of the yen. See The Tell: What the G-20 likely implied with its silence on the yen.
Call it a bargain. The G-20 is willing to tolerate a much weaker yen if it helps restore growth to one of the world’s major economies.
But the weaker yen — or a weaker dollar or a weaker pound or even a weaker euro, for that matter — must result from growth-oriented policies. A weaker currency can be a means to an end but not the end in itself.
`Conundrum is clear’
As Kit Juckes, head of foreign exchange at Société Générale, put it in a note early Monday: “The conundrum is clear — the world’s leaders from G-7 to G-20 approve of policies to boost growth, while disapproving of policies to boost growth at the expense of others.
“So while currency manipulation is bad, zero rates and [quantitative easing] are good in times of trouble. And if those policies happen to cause a currency to weaken, well, that’s OK” in the eyes of the G-20, Juckes said.
“Currency war” is a term that was coined in 2010 by Brazil’s finance minister in response to the U.S. Federal Reserve’s quantitative-easing strategy.
“beggar thy neighbor”
Another more likely way forward is a loosely-coordinated joint devaluation among G-20 countries, with extra latitude for countries like Japan who need QE stimulus to cope with a recession. In this case, the bag holders would be creditors owned money in the currencies subject to coordinated devaluation, while the winners would be debtors in the devalued currencies.
Why would a bunch of finance ministers gather, hold hands and sing “Kumbaya,” only to collectively shoot each other in the foot?
Because they’re posturing?
Cooperation is in their mutual interest. That is no guarantee it will happen, as anyone who understands the Prisoner’s Dilemma game can explain.
I could see this coordinated devaluation working out very well for investors in gold, real estate and other hard assets.
And I disagree with the writer of this article, who seems to miss the likely prospect of a coordinated devaluation.
February 18, 2013, 6:46 a.m. ET
G-20 Brings Currency War One Step Closer
By NICHOLAS HASTINGS
Unleash the dogs of war.
That is what the finance ministers and central bankers from the Group of 20 industrialized and developing countries appear to have done with their anodyne statement over the weekend in which all the G-20 members did was pledge to “refrain from competitive devaluation.”
Given that they were also urged to pursue monetary policies aimed at “domestic price stability,” members were essentially given the green light to let their currencies continue sliding.
For Japanese Prime Minister Shinzo Abe this was music to his ears.
Japan had been in focus ahead of the meeting as the yen plunged to a near three-year low against the dollar as Mr. Abe’s new government prepared to adopt a more aggressive easing of monetary policy.
The country had widely expected to be singled out for criticism at the meeting in Moscow.
In the event, however, the G-20 decided to side step the issue given the number of other countries that continue to pursue polices that will ultimately weaken their currencies too.
By failing to address the issue, though, the G-20 may have opened the gates to just what the group was hoping to avoid–a currency war or competitive currency devaluations by any other name.
The recent all-cash investors in U.S. real estate must be licking their chops over the prospect of a coordinated G-20 currency devaluation.
Sorry to Grandpa and Grandpa Sixpack in Flyover Country who were hoping to get by for another two decades on their fixed-income pension.
G20 Leaders Pledge To Avert Currency War
by Kirk Siegler
February 18, 2013 2:04 AM
1 min 50 sec
A meeting of finance ministers from the 20 leading industrial and developing nations wrapped up over the weekend in Moscow. The nations agreed to not to target the exchange rates of their respective currencies amid concerns that competitive devaluation could spark a currency war.
Feb. 17, 2013, 10:42 a.m. EST
Stock market wild card: big spending cuts
Year’s rally largely intact as sequestration deadline looms
By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — With a deadline nearing in the latest battle over the U.S. budget, a key question for equity investors in the next week is whether the likelihood of federal spending cuts will spur a correction in a market that’s sitting at multiyear highs.
March 1 is when $85 billion in reductions to defense and domestic programs through the fiscal year ending Sept. 30 will go into effect unless Congressional leaders and the White House work out a deal to replace the automatic budget cuts. The pending cuts are part of a larger program known as sequestration, aimed at slicing federal spending by roughly $1 trillion over nine years.
March 1 is when $85 billion in reductions to defense and domestic programs through the fiscal year ending Sept. 30 will go into effect
The Fed is already printing up $85 billion per month; perhaps they could just double-down and print $170B/mo instead to make up the difference for Uncle Sam?
Way ahead of you. Just relax and buy a house.
Why Now’s the Time to Kill the Mortgage Interest Deduction
By Motley Fool, February 07, 2013, 11:28:03 AM EDT
The fiscal-cliff compromise on New Year’s Day made substantial changes to existing tax law and permanently implemented a number of decade-old tax breaks for the vast majority of taxpayers. Yet even though some lawmakers have argued that the tax increases they agreed to marked the full extent to which they were willing to concede for the sake of higher government revenue, many believe that further revenue-generating measures may come in future battles over sequestration, the debt ceiling, and the passage of a federal budget.
One place that many policymakers have looked to as a potential source of revenue is to eliminate the mortgage interest deduction. With the housing market having suffered so greatly in the past five to seven years, fears that taking away the deduction would lengthen housing’s decline deterred lawmakers from seriously considering cutbacks on mortgage interest. But if there were ever an ideal time to get rid of the deduction, it’s now, because a number of factors are lining up perfectly to make its disappearance as painless as it’s ever going to be.
But it stays for corporations, right?
But if there were ever an ideal time to get rid of the deduction, it’s now, because a number of factors are lining up perfectly to make its disappearance as painless as it’s ever going to be.
Given how the end of the partial SS tax holiday has made Walmart and other retail management soil its collective underpants and is probably going to send us into a recession, I doubt congress will have the stomach to repeal the MID anytime soon.
We went out to eat this past Saturday at a popular area restaurant, Sammy’s Woodfired Pizza, at the peak dinner hour (6pm-ish). I was expecting a long wait on a table for five, but was pleasantly surprised on our arrival to see plenty of open space in the restaurant — something I haven’t seen since the darkest days of the Great Recession over the 2008-09 period.
I mentioned to my daughter’s boyfriend, who was out to eat with us, the possible link to the payroll tax increase. He works at an affordably-priced Chinese restaurant in our area, Pei-Wei, and reported that they saw a big drop off in business after the first of the year. He added that the payroll tax hike had hit his own wallet pretty hard as well.
I have gone to restaurants in Ontario for the past four days on business and with my family. Only one would take a reservation. All others there was at least a 90 minute wait (60 “plus error or estimate”). They were located in three different major cities.
They are jam packed here and I have no idea why. When I was told up to two hour wait at one I said “thank goodness for the recession”.
A waitress with her Masters (Soc) hasn’t been able to find a job and has been serving for eight years - like so many others I have talked with. Before you needed to be a university student to get a wait job. Now you almost need a degree !
Patrick, it was just like that here in San Diego before our bubble popped. The good news is that once the Canada real estate bubble pops, you are likely to have far more favorable wait experiences at any restaurants you frequent which do not go out of business.
Generally speaking, I have not experienced long waits at San Diego area restaurants since 2007.
Have you seen the recent NAR ad, the one with the dragon attacking home sweet home? And the voice over equating the dragon to eliminating the mortgage deduction, which will make homes (even) more unaffordable. As many of you’ve said all along, the mortgage deduction gets factored into “justifying” higher home prices, higher RE commissions, higher taxes.
“Given how the end of the partial SS tax holiday has made Walmart and other retail management soil its collective underpants and is probably going to send us into a recession, I doubt congress will have the stomach to repeal the MID anytime soon.”
There seems to be a disconnect here, as the Walmart shoppers feeling hammered by the SS tax hike are not the millionaire home buyers who disproportionately benefit from the MID.
Congress cant even agree on getting rid of the penny which saves taxpayers $100 mil a year. Canada figured it out before us? WHat does that say about the condition of the USA?
Canada: “It costs the government 1.6 cents to produce each new penny,” the budget says, adding the government will save about $11 million a year with its elimination.
USA it cost nearly .03 cents to make a single penny.
According to Citizens for Retiring the Penny, each person spends around 2.4 hours a year in some penny-related activity - be it fishing around for pennies to pay at the till, waiting in a queue whilst someone else does so, or trying to dispose of them. It estimates the cost to the US economy in “wasted time” at around $10bn (£6.4bn) a year.
Happy George Washington’s Birthday! They call it President’s Day, but today I commemorate Washington, thank him for his courage, and apologize for what this country has become.
I am sorry, General. I wish I could have done more for the country. But you never know, maybe I will yet.
but today I commemorate Washington, thank him for his courage, and apologize for what this country has become
FWIW, the country he gave us had legalized slavery. I wouldn’t be proud of that.
“FWIW, the country he gave us had legalized slavery. I wouldn’t be proud of that.”
And we still have Racist Sports Illustrated Swimsuit models to this day.
Sports Illustrated Called Racist For Using ‘Exotic’ People In Swimsuit Issue (PHOTOS)
The Huffington Post | By Meredith Bennett-Smith Posted: 02/15/2013 2:02 pm EST
http://www.huffingtonpost.com/2013/02/15/sports-illustrated-racist-exotic-swimsuit_n_2696162.html - 266k -
‘Sports Illustrated Called Racist For Using ‘Exotic’ People In Swimsuit Issue (PHOTOS)’
Oh, PHOTOS! The huffington post will do anything. What’s next?
“KKK naked female mudwresting called racist! PHOTOS”
Wow…. thanks for the link. Sue Peterson(3 of 52) is(was) pretty hot….. for a blonde.
Find Alana Blanchard. She’s a surfer. But the pictures seem to be not of her bottom turn; but of her bottom. Pictures of her cutback; yes but they of her “cut” back.
I am not complaining but she is “overexposed”
Surfing photo coverage is sexist more than racist.
“In contrast, cover model Kate Upton, photographed in Antarctica, has penguins in her background.”
Are penguins Racist?
Kate Upton, photographed in Antarctica, has penguins in her background.”
Her grandfather was a penguin.
I just remembered why I loved the 80s.
Cameron Russell admits she won “a genetic lottery.”
“Sports Illustrated Called Racist For Using ‘Exotic’ People In Swimsuit Issue”
Maybe next year they should avoid the controversy and just have some baby seals being clubbed to death with the swimsuit models.
You can leave any time you want.
I’ve had a good life here, I’m grateful for what the General gave me.
You are of Latino heritage, are you not? Want to go into the horrors of all the sins of that past? No, I didn’t think so.
Washington let his slaves go.
Just pointing out that your romanticizing of our past might be misplaced.
And why should I leave? You seem to be the one who hates what the country has become. Maybe you should seek greener, more libertarian pastures elsewhere.
Romanticizing the past frequently is misplaced. But I think Washington deserves a lot of credit and respect even if he didn’t make everything perfect before he voluntarily left office when he could have easily been reelected again and again.
Oh please. People in Canada live better than we do.
“Oh please. People in Canada live better than we do.”
But that country had legalized slavery.
Slavery in Canada
From Wikipedia, the free encyclopedia
Slavery in what now comprises Canada existed into the 1830’s, when slavery was officially abolished. Some slaves were of African descent, while others were aboriginal (typically called panis, likely a corruption of Pawnee). Slavery within Canada’s current geography was practised primarily by Aboriginal groups. While there was never any significant Canadian trade in African slaves, native nations frequently enslaved their rivals and a very modest number (sometimes none in a number of years) were purchased by colonial administrators (rarely by settlers) until 1833, when the slave trade was abolished across the British Empire.
A few thousand African slaves were forcibly brought as chattel by Europeans to New France, Acadia and the later British North America (see chattel slavery) during the 17th century. They were house servants and farm workers. There were no large-scale plantations in Canada, and therefore no large-scale plantation slave work forces of the sort that existed in most European colonies in the Americas, from Virginia to the West Indies to Brazil.
Because early Canada’s role in the trans-Atlantic slave trade was so minor, the history of slavery in Canada is often overshadowed by the more tumultuous slavery practised elsewhere in the Americas - most famously in the American South, and infamously in the colonial Caribbean. Afua Cooper states that slavery is, “Canada’s best kept secret, locked within the National closet.”
Oh please. People in Canada live better than we do.
I didn’t have to pay $900k for a small condo, so I think I live better than Canadians comparable to me do.
I won’t argue against that the bubble has hosed Canada. But prior to the bubble insanity most of Canada was very affordable, if a bit cold in the Winter.
How do we go short the Canadian disaster?
Washington let his slaves go
Nope; he lied to his slaves and Martha that they would be freed when he died.
His will said they would be freed when she died.
On the advice of an attorney, Martha freed them so they would stop staring at her without saying anything…
Washington had white slaves as well(indentured servants).
His will did provide for all slaves he owned to be freed upon his death, but Martha choose to keep them another 12 months(and he could not legally free the slaves Martha owned prior to their marriage).
“… Martha freed them so they would stop staring at her without saying anything…”
“Washington let his slaves go”
He let his teeth go too.
Washington’s “Not-So-Wooden” Teeth
Each year, when Dr. Joel visits area schools in February to commemorate National Children’s Dental Health Month, he tells the story of George Washington’s teeth, long thought to have been carved out of wood. It’s amazing how this legend has survived. Here’s the true story:
President Washington lost his teeth at a relatively early age. He suffered from poor dental health throughout his younger years. He had two sets of false teeth (dentures) made by the most prominent American dentist of his day, Dr. John Greenwood. They were carved from the finest hippopotamus ivory and gold. One of the sets was donated to the University of Maryland Dental School in Baltimore, the oldest dental college in the world. The dental school in turn loaned one of the dentures to the Smithsonian in 1976 for a bicentennial exhibit. The denture was stolen from a storage area of the Smithsonian (presumably for its gold content) and has never been recovered.
For me, the most interesting part of the story about George’s teeth is the mechanism of their fabrication. The upper and lower gold plates were connected by springs which pushed the upper and lower plates against the upper and lower ridges of his mouth to hold them in place. Washington actually had to actively close his jaws together to make his teeth bite together. If he relaxed, his mouth would pop open. There is speculation that this is the reason that the Father of Our Country always looks so stern in his portraits. Take a look at a dollar bill. George isn’t upset - he’s just trying to keep his teeth in!!!
President Washington’s other denture owned by the University of Maryland Dental School and numerous other dental artifacts are on permanent display at the Dr. Samuel Harris National Museum of Dentistry in downtown Baltimore. The exhibits, many of which are interactive, are really something special – fun and educational.
Washington had white slaves as well(indentured servants).
That’s a practice that is still in wide-spread use today.
We just changed the name, and liberalized the terms a bit. Today we call it debt.
But it’s really partially-indentured service. Some are 10% indentured. Some are 100% indentured.
Not sure it makes sense to judge actions 200 years ago by today’s standards. Anyway he was greatly concerned about slavery. Foresaw the “mischief” it would cause. Freed his slaves in his will.
Foresaw the “mischief” it would cause.
He saw firsthand its role in the creation of the ineffective (states rights) Articles of Confederation, then its role in creating the various undemocratic oddities in the Constitution- such as the electoral college, the make-up of the Senate, the 3/5ths compromise, etc.
I had a shirt made with this picture before zazzle started making them.
What would the founders think of us now?
Good one, SV guy. The founders were prescient in some ways. Ben Franklin’s famous retort to the lady who asked what sort of government they had come up with:
“A Republic, if you can keep it”.
Apparently we can’t.
“But you never know, maybe I will yet.”
Good luck with the effort!
“Give me liberty, or give me another pint!”
Sam Adams- patriot/alcoholic
My republican friend got into fight with his liberal neighbor. The liberals have an 18 y.o. who has moved out and and is drawing UE. This makes my repub friend mad as this is an able bodied kid who could work for the republican at his landscaping business.
I used UE for a few months once when between jobs. I also used SNAP and Oregon Health Plan for the kids and have received EITC for years.
Now that my wife has a job; kids will go on her insurance, SNAP will go by-by; and we will make too much money to claim EITC. But those are programs extending help to those who need it; at least having low incomes.
But by moving us into that first tax bracket I as our income should soar up above 41k/yr; we will not get $7000 eitc or $6000 in food stamps. Or free health care for our kids. Plus we will have to pay income tax. Wife will make 15k gross more than she was as lunch lady. It does hardly pay to go to work but “pride goeth over the falls” meaning the ability to say we did it on our own will be worth it. We don’t want our republican friends mad.
So for 1200 extra hours of work/yr. on my wife’s part, the net gain for our bottom line will be negative, as the benefits no more plus the taxes add up to 19k. So belt tightening will need to occur as we will be making do with 4k less while making 15k more. Is that why some folks just don’t work but collect handouts for life?
But not draining on the taxpayers (no more taking the dole), feels so worth it.
What’s that old saying?
There isn’t one single job in this country that an American won’t do… if the pay is right.
That’s what I tell my wingnut aquaintances who complain about UEI and SNAP.
“There isn’t one single job in this country that an American won’t do… if the pay is right.”
You’re spot on. $$$ is the great motivator. And add a performance bonus at the project level and watch the completion date come in early and not marginally early either.
Right on! There’s nothing like $$$ to motivate good ole Slim to do some work instead of posting to this darn HBB.
“$$$ is the great motivator.”
Lack of $$$ also works great.
The more extreme the lack of $$$ the more extreme is the motivation.
I was never motivated by low wages.
I don’t work hard to be poor. That’s just stupid.
Is it stupid to take on full time work when it means you will end up taking home less money due to no longer qualifying for govt handouts?
It could be considered short-term non-optimal.
But the options for moving up are better from where you will be, rather than where you were.
Posted: 5:41 p.m. Sunday, Feb. 17, 2013
Obama, Tiger Woods play golf on second day of president’s Treasure Coast visit
By Carlos Frias
Palm Beach Post Staff Writer
PALM CITY —
Take the traveling circus surrounding the president of the United States and team it with the perpetual buzz around the world’s greatest golfer and what you get stops traffic — on land, sea, air and Internet.
President Barack Obama might have envisioned this visit to the Treasure Coast as just a three-day “boys’ weekend” golfing in Palm City as the first lady took the first daughters on a Colorado ski trip. But the sections of Martin and St. Lucie counties surrounding the posh Floridian Yacht & Golf Club turned into a virtual “no-anything” zone when the president invited Tiger Woods to play for the first time.
The two met the weekend Obama was inaugurated in 2009, but they had been trying to set up this golf summit ever since. And what you got between Secret Service agents and the ultra-private Woods was this, outside the closed gates of the private club:
• In three days, F-16s intercepted three planes that drifted into the temporary no-fly zone imposed around the Floridian.
• The news media including the regular White House press corps were kept outside the gates during the president’s golf weekend and housed all the way up in Port St. Lucie.
• And you think street traffic is bad when the president comes to town? Even the website for the Floridian crashed because of all the traffic, instead displaying a “Bandwidth Limit Exceeded” message as the server went down.
The president’s foursome teed off around noon, according to Golf World senior writer Tim Rosaforte, who tweeted from the course. Obama went out with Woods, Floridian owner Jim Crane — who also owns the Houston Astros and is a major Obama supporter — and outgoing U.S. Trade Representative Ron Kirk, according to a White House statement.
On Saturday, the president got one-on-one tips from Woods’ former swing coach, Butch Harmon, and played another 27 holes with the group of Crane and Kirk.
“The president said to Tiger, ‘The last tournament you played was fun to watch. It’s good to see you play well again.’ You could tell he meant it,” Harmon told Golf Digest. “It just wasn’t a throw-it-out compliment.”
All the while, quiet Palm City became an impromptu fortress. F-16s and Coast Guard helicopters beat the air with thunderous patrols, and two 45-foot Coast Guard vessels circled the inlet, a spokeswoman said.
On Sunday morning, a Cessna ventured into restricted airspace and was met by fighter jets. It was the third small plane to fly where it shouldn’t during the president’s visit.
The plane was intercepted about 9:30 a.m. near Port St. Lucie and landed at Okeechobee Airport, where the pilot was met by local authorities, said Army Lt. Col. Mike Humphreys of the North American Aerospace Defense Command.
The Federal Aviation Administration said it is investigating the incident, since pilots who follow proper procedure and check FAA notices before taking off would be aware of the restrictions, Humphreys said.
The first plane to fly astray was a Cessna 152 intercepted near Palm City about noon Saturday. The Cessna 152 “violated the temporary flight zone and it was escorted until it landed,” Humphreys said. The plane landed at its original destination at Stuart’s Witham Field, according to the FAA, which did not have information on where the flight originated.
At about 5 p.m. Saturday, a smaller two-seater Lancair wound up in no-fly sky. According to the FAA, that flight originated in Boca Raton and ultimately landed in DeLand after being escorted out of the restricted airspace.
The FAA is investigating these incidents as well.
http://www.palmbeachpost.com/news/news/national-govt-politics/obama-woods-play-golf-on-second-day-of-presidents-/nWRZn/ - 94k
Thank you for reading my stuff. And when you disagree you don’t pile on the hate, I appreciate it.
I know I am verbose and it does scream newbie what with the walls of text.
As for my having the kush; you got that right. Just can’t use it as my pain management doc won’t permit it because the feds don’t recognize MJ’s benefits just yet. And there are other meds (opiods) that are much more important to my being able to work. Did successfully give up the name brand nerve med that is for fibromyalgia. Nothing under the sun will get them to cover the med that they target people like me with their advertising. which I helped pay for. Have a buddy who gets it for 20 bucks. Glad to be dependent on one less drug though.
I was motivated to quit taking it because the price went up from $300/month(should have pulled the plug on it years ago in hindsight) to $670/month here in 2013.
After my doc appt, where since last year sometime, I get to pee in a cup for the doc, I will indulge in some Chem Dawg brownies. Or maybe some Jack Herer. Don’t smoke anymore but edibles are abundant here in Bend and I enjoy those effects much more as smoking leads to some negative side effects; which is why I quit 15 years ago. Plus the tar in smoke can’t be too good; vaporizing is also an option if I want. BTW, Pot is 1/2 the price I than it was in college back in 1986.
The war on drugs, particularly pot, is revolting.
I am not sure why people can’t see the parallels between marijuana and alcohol (Prohibition). Especially combined with the fact that marijuana helps fund real terrorism (not the imaginary, far-off kind) here in the US and destabilizing countries south of our borders, thus leading to illegal immigration.
I never really smoked weed much in college, but I can see times in my life now where weed might be quite beneficial. And down the road, I’d much rather use a natural substance than use Rx drugs if I get chronic pains down the road.
I am not sure why people can’t see the parallels between marijuana and alcohol (Prohibition).
I suspect a bunch of people see it but don’t care. If they don’t drink they might have been happy to continue Prohibition as well despite its costs.
Some here would prefer that I just STFU permanently. Joe Smith, you have helped me not quit this blog; that and Bjones not banning me just yet. People who attack you don’t deter you from commenting on the issues at large. Or posting from your experiences/POV regardless of likely sentiments being hurled at you in a mean way. I know I have thrown a couple at you.
I respect your attitude because the larger conversation is more important and we should not be letting the jabs get in the way. It is not our real names are out there, so it is easy to “drive-by” post knowing it will incite some . I commend you for taking mean comments and letting them roll off you. I am guilty of inciting PW just for giggles; but that does not add to the conversation; unless he pulls something original like the good post he made last week about if the HBB was a physical place. I liked that one even though I would not be safe at his HBB.
I may be able to avoid going back for my masters if I follow plan B and open a small business. I could still work 1/2 time as a substitute teacher if I only ask for a substitute license. Then the other 1/2 of the time I could work on a new venture. Another option besides teaching would be to go to law school with same pile of money to start. But that option would include going into debt.
I am looking at buying a small established business to replace the rental house income. Looking for advice I know local artisans who make cheese, beer, etc. I also know how to find high quality organic produce from years in the industryI also have lots of connections from CA so could be offering things just not available here in Bend.
Major problem would be shipping veggies from Central California to Central Oregon. I can get boxes to SF at 1.00 per box. I could get them sent on the train to Chemult; one hour south of here. Not sure the cost of the train shipping method. Or I could modify the plan and not carry veggies from CA. But heirloom tomatoes sound lucrative and they are high dollar items which would help on the shipping. Assuming it Costs two dollars to ship a 12 dollar box of lettuce; it would also cost a dollar to ship a 40 dollar box of tomatoes. Need to find a way to use soft tomatoes; when I managed a store the losses of perishables were big.
Downsides: losing my shirt on the business.
You’re a realtor troll.
I am looking at buying a small established business to replace the rental house income. Looking for advice I know local artisans who make cheese, beer, etc. I also know how to find high quality organic produce from years in the industryI also have lots of connections from CA so could be offering things just not available here in Bend.
If you sold heirloom tomato seeds, I would SO be buying them. Especially for cherry tomatoes.
Need to find a way to use soft tomatoes
Artisan BBQ sauce! Artisan spaghetti sauce! Artisan salsa!
Did the back injury suddenly go away?
Surfing is good for your back.
I did not surf from 2003-2008. Could not fathom it. Says alot because I was hardcore for 20 years plus open ocean swimming, mt biking, etc. Wife said I went from extreme sports to walking, if that, overnight. Got back into biking first with hi-rise bars so I did not have to look up.
At least with cervical pain one can still walk. My buddy has lumbar pain and he has not been able to walk more than a couple blocks for the last two years. Yet he can still surf(barely). When he can get from car to water.
Slowly I have dipped my toes back in as soon as I could get in and out of the thick rubber suit. I go maybe 20 days/year, down from 180+ when I was a Californian.
Doctor tells me those patients who stay active have better long term outcomes than those who wind up sedentary.
I also use modified equipment (swim fins/kneeboard) which feels a little “kooky” for a surfer to not look like everyone else. But less taxing on the neck.
Doc says go for it! But he does not want me hucking boxes.
For the record, I enjoy your colorful posts, though I confess to not envy your various real estate investing plights.
CIBT upthread you are agreeing with PW saying sell now or lose. I execute that exact plan and it is a plight? Granted the house I sold was not leveraged, so maybe that changes the sell order in my case? But somehow my selling of my home at breakeven(after the closing costs it will be approx $2000 loss) after receiving rents for three years is a plight? Please enlighten me how. Having lost out bigtime on one investment makes me happy to sell this one without taking a bath. I am free to start a business or finally look elsewhere for a return on capital.
Seperate from the losses I incurred on two other homes; granted I f’ed up buying condo using leverage. How is this decision to preserve the capital (I feel strongly strength in the market is a dead cat bounce and I am in over my head in housing and am therefore getting out)
I could get more for the house but transaction fees and vacancy would eat that $$. As I am not paying 6% realtor fee.
Without real estate I would have spent the 60k that I had put down on my first home long ago. My experiences are slightly atypical as I used leverage to buy housing only twice; the first house that I intended to stay in forever but sold (due to not being able to continue working) when it was worth 860k(oh the plight) went up and a condo that my wife financed that went down(yes we bailed; I would do it again only sooner next time). Not a corporation(person) in the world would consider paying double($2000/mo. for a house I could rent for $1000) to stick with a plummeting investment.
I learned that I got lucky the first time and was stupid to finance a home the second. Live and learn. Plight as it may be things have been getting better for us; not worse.
Getting hurt, losing one’s income and going to 20 doctors and having 4 surgeries is a plight. I am dealing with that and grateful that I am still here. Sure, I wish I still had my original house and job, but life sometimes throws curveballs.
Our kids had both parents in the home for the most part. I think that was better than preschool for them. We read them to sleep every night and took them to pools and parks every day. I see plenty of K students who are seeing their first book at school. Our kids’ parenting was not “outsourced” to daycare or preschool like many seem to recommend these days. That would not have happened had I been able to continue working 60 hr weeks as I liked to.
To this day I work in their classrooms; see parts of their lives that most parents have no clue about. I see that as fortunate. Same as my wife being a lunchlady at their school for the last few years. Now they are old enough to not relish the thought but even “unwelcome”; we need to keep our eyes on our kids. The parents of my kids friends sure appreciate the extra input about how their kids are at school. Some have no idea how their kids comport themselves while they are not watching.
BlueSky: My back injury has not gone anywhere. My kids are able bodied to heft boxes. I did farmer’s markets with my boss’s kids and they did great; they were running their own by the time they were 16. But it could be the dealbreaker nonetheless. As I just can’t work harder, or do more labor myself to make things work if need be. It is a strong argument for me to stay away from selling vegetables. Unless I learn to delegate effectively. Pain is funny; you tend to forget how awful you felt when an episode passes. Thanks for the sobering reminder.
I would love to give my kids the opportunity to work. That is the main reason I am interested in trying my hand at small business. Not being able bodied is a major problem as I would not have a lot of fat to hire muscle.
Funny thing about giving your kids a chance to work, it may only be you that wants whatever it is in particular. Then you’ll have to lift things yourself or see it all go down the drain.
Bingo. That’s what is giving me pause. I always worked harder MYSELF when I needed to make money hucking veggie boxes. Darned kids will not be so motivated, true
You’re a drama queen and realtLiar.
Dump your dump and do it soon.
“But somehow my selling of my home at breakeven(after the closing costs it will be approx $2000 loss) after receiving rents for three years is a plight? Please enlighten me how.”
I’d call that astoundingly good luck, aided and abetted by myriad hair-of-the-dog stimulus measures in DC.
Soft tomatoes=heirloom tomato bisques, heirloom tomato pastes.
Contact regional high-end restaurants and offer to procure small-batch, obscure crops for them on a seasonal basis to highlight on their menus. (Mushrooms, herbs, heirloom tomatoes, weird varietals they can’t buy anywhere fresh and don’t need in bulk (fraises du bois, for example, or tarragon and cardoons.) Then contract with local specialty farmers who have a little extra space and a reliable track record. Have the farmers let YOU know what they have available at any given time, and broker the shipment.
At first glance I thought that said……
I think because my field of view was picking up…..
Contact regional high
MIB’s obvious solution to his ills is to get his grower’s license and organize a local coop, teach organic/hydroponic farming classes, organize a distribution network, and broker the sales.
Then we could all have an HBB meetup in Bend(t) Oregon.
For the recipes and the selling to restaurants idea. There is a a fresh salsa business in Bend that could do an organic heirloom salsa quite well. I did quite a bit of restaurant sales when I was involved with “flipping” veggies. With the heirlooms and the distance I am concerned with turned to mush tomatoes. The store I am interested in already does daily soups and such so it would not be a stretch to process and sell from stuff I was accostomed to throwing away(composting). That would be integral to be able control shrink.
I am quite excited about the prospects of getting back into natural foods. Mostly because I want to provide afterschool/weekend work for my kids. Nervous because I could always move the boxes myself and I do need to be careful to not push myself too hard or too fast. That is why I stopped selling veggies in the first place….But ya gotta quit whining and function in life right. I remember you telling me that once and it did stick with me.
I can also get dory caught or deep sea seafood right off the boat and into Bend 4 hrs later…
Locally sourced will be a problem at our elevation and latitute. Practically all one can farm here is LLamas or Ostriches. Any stone or tree fruit is too likely to have its blossoms frozen off in May or June. But Mt.Hood has really good apples and Kimberly has really good peaches.
But we are so remote getting the goods here is likely prohibitively expensive. The train only goes thru to Chemult which is an hour’s drive away. I could do that. I can also use Mountain People’s Warehouse; but I would rather go straight thru my old boss if possible. I know he ships to the East Coast its funny Bend is almost more difficult. I have certainly seen my ex-boss’s boxes here so it must be doable.
I have a buddy in Palm Springs who does medjools(sp?); and has been growing mushrooms of late. Thinking of letting him make the pallets up for me; adding his stuff and other farmers market goodies plus what my old boss grows at the truck farm.
You can’t grow too much on the high desert. We do have the Willamette valley which is good stuff in season. Thinking about CA produce for times like now plus early entry into summer crop market like the heirlooms, summer squash, cukes, etc. Stuff you just can’t get here now.
But the shipping costs are gonna be dear. Not too easy getting pallets past SF. I could do buying trips to SB but my truck is not refrigerated and the gas alone would be $600 plus three days time plus wear and tear. That would get old real fast. Yes, local suppliers would be key and I do know who and where they are just from experience in the industry. But they don’t have things in winter.
(farmers market stuff my friend could help augment my weekly? shipments: honey, peaches, cherries, oranges pistachios, almonds, yogurt coated almonds, other nut goodies, date bars, dates, etc.)
Besides heirlooms my supplier of choice carries boutique items: green beans, sugar snap and snow peas, corn, cabbages, lettuces, baby spinach and salad mix, carrots, beets, kohlrabi, daikon, parsnips, radiccio, kales, chards, broc plus almost year round regular tomatoes, heirlooms, strawberries, zukes and cukes the whole nine yards. No way there is money in some of those unless my boss would sell me mixed boxes(possible but he’s kind of a prick to deal with). There’s got to be a way to capitalize on their growing season down south versus our lack of one up here.
I like your inputs. Things to think about, giving up the income from rental house and wanting to use what $$ I have to make $$. The food store is across the street from our school, convenient to where I usually work days and the kids could alternate evenings working. The store has been there for decades. Of course they are selling because it does not make them money though…
One word for you:
Unless someone is obstructing the blog or ruining it for everyone else, why would you be banned or quit posting? You have an interesting perspective. I would much rather hear the story of how housing decisions or one’s personal health influence a life trajectory than read more debates about whether housing will crash by 25%, 65% or 99%.
I post like an idiot a lot. My writing style changes depending on where I am. When I’m posting from the MARC train, it’s either news or poking fun at the news. When I’m posting from work, it ranges from vicious to mean - - I have a real keyboard in front of me which makes it easier to put my foot in my mouth, so to speak . And when I’m thinking about this stuff in passing while biking or running errands or gardening, I think about what Oxide said to me once, that someday “I’ll get mine” meaning I’ll get sick or someone in my life will get sick or something really financially bad will happen. And I know it’s true so it’s humbling.
I’ve often wondered why some emphatic (but still thought-provoking and generally civilized) posters get banned here while other intentionally divisive ones post with seeming impunity. Over the years we’ve lost some (I felt) useful (if obnoxious) perspectives and resources because of it.
But keep in mind three things:
1. IT’S BEN’S BLOG and he gets to edit it as he pleases.
2. He can’t monitor it 24/7 (thus sometimes missing contextual subtleties)
And most importantly:
3. He often DOES monitor it 24/7, and is kind enough to pull the rabid, blithering rants, tantrums, and personal attacks before we’re subjected to them.
Accordingly, we can’t know what sort of verbal abuse and psychotic drivel he has had to put up with from some of us before reaching that point where it’s just easier to push the “zap” button and be done with posters who try to hijack the conversation and discredit the public record he’s put his name to and works so tirelessly to maintain.
If you’ve concerns, why not write to him off-line and let him know about them? In my experience, he’s always been more than fair in his response.
I wasn’t complaining about the moderation at all. I was just saying that sometimes I say stupid things. Many of us do.
Sometimes the people that are “picked on” are the ones we should be listening to. We pick on them sometimes because we sense something similar within ourselves and we dislike it.
I don’t have any concerns, really.
And I run off at the mouth.
Hello to you Joe.
I am missing Rio wondering if folks are being run off by bullies.
And I make Mr. Jones peeved and he has told me he does not care if he sees another post outta me. Maybe I fit in better elsewhere. I am not a blog facebook guy except for here….I don’t want to quit posting but don’t like getting beat up or called a lying realtor. But yet I persist, for now and for folks like you who give me positive feedback.
Polly saved my bacon when I was faced with a misdemeanor for instance; telling me to suck it up, pay a fine rather than risk a crime on my record(if I ever wanted to be a teacher). Allena told me to suck up my pain and get on with my life and I have been trying to do that. Constructive criticism is aight by me, yet some persist on calling me a lying realtor troll. It’s just a little perplexing. But I care more for my flesh and blood and peeps at home than any keyboard warrior so I take it with a grain of salt.
@Allena, Do you mean a medical MJ coop? I know some providers and they all farm for a few patients and then make $$ selling extra to people without cards on the DL. Risking lockup in the federal pen.
There are currently not any dispenseries per se in OR like in Cali. Not seeing the angle. Teaching greenhouse gardening; sure. I do a bit of that in the summers on a volunteer basis at a kids summer program at the coast. We do lots of blueberries/blackberries (mostly just picking and making either jam or cobbler) as, so long as you share with the bears, they are plentiful.
But there must be an angle as a grower that my friend gets his Chemdog from said that he would give him a free OZ per month if he gets his card and designates him the grower. Tell me how that would help his bottom line?
Also @ Allena; I know you know some MDs. Doc wants my daughter on Prozac for 6 mos minimum as she has inherited some anxiety and depression from dear old dad currently manifesting itself with panic attacks, mood swings, bad sleep cycles, low energy, and, damn that M Manson,cutting herself. Does not want her on Ativan as needed as thats a “rescue pill”. Just take the Prozac(can’t stop it at will either without discontinuation issues, so how is it better than “rescue pill” benzos?) so I guess I just don’t understand why Drs hand out Prozac to teen girls what with increased suicide risk; when the adults with chronic anxiety get stuff like Klonopin? I self medicated with weed as a kid but the weed started giving me anxiety eventually so I discontinued for years. Just now my friends are giving it to me; wonder if it could help my precious daughter. I know the side effects are less than Prozac. I tried antidepressants and HATED them(frowny face); so I am hesitant to hand them to my daughter.
He did prescribe better sleep and exercise which I agree with completely.
Just wanted to mention that I agree with the doc on being careful with the benzos. It makes sense to have some in case of emergencies, but they can get really difficult to wean back off of if taken regularly. And that happens a lot because in cases of anxiety and depression it feels so good to take one rather than work on root causes. I don’t think it’s that hard to come off of anti-depressants.
Jeez, dude. You’ve been fighting drugs all your life; now you want your kid on them too?
Do the research. Prozac is largely ineffectual in all but a tiny subset of those it’s prescribed to and is particularly ineffectual in teen girls with concurrent substance (ab)use issues. Get your daughter on a sports team, take her surfing, put her on a horse, teach her to garden and cook what she grows, send her to Europe on exchange for the summer, encourage her to write, let her move in with a relative in New Mexico, or SOMETHING. And get a second opinion from another doc if you’re skeptical.
You might also investigate the effects of vitamin D deficiency on hormonal mood swings. You’re in OR; is she sun-deprived?
“…In the current study, designed to assess the efficacy and tolerability of fluoxetine in adolescents aged 12-17 years who were diagnosed with depression and a substance use disorder, Dr. Robert L. Findling and his colleagues at University Hospitals Case Medical Center, Cleveland, showed that the effect of treatment with the selective serotonin reuptake inhibitor was comparable with placebo in alleviating depressive….”
NOTE: I am not an MD, nor do I play one on TV, but instead of taking up Ben’s bandwidth with personal issues, pls write to me off site? Leave a message on my book’s FB site and they’ll let me know your address. (Search: my name plus “Chomp”)
Be VERY careful as a buyer. 75% of the time the buyer loses. Make the seller carry a loan, so he has skin in the game.
Thx–that is on offer from the owners and as I am used to go cash on the barrellhead not one I was considering; but I understand your logic.
Their being financially interested in my success is a darned fine idea. If I go thru with it at all. And their price is too high so it is set up to favor the seller already. Lowball if at all!
Allena–We used cheapie PVC arches covered in plastic greenhouse tunnels in Santa Barbara to beat other farmers to the zuke/cuke/tomatoes. They go from $3.00 a pound to “cant give them away” in the span of a month. But the idea was good enough that the niche got filled by other farmers. Then went to heirlooms; other farmers followed suit.
so it goes. A good rain in Watsonville can double the wholesale price of organic strawberries overnight. Boss would be ready with all the crops and just till em back in when the price didn’t pay for the pick. And make $$ on oddball items when nobody else had ‘em
I was reading about the meteorite in Russia and I learned something I didn’t know. All the gold we have, and that is available in the upper earth’s crust, is from meteorites. The gold present when the earth was formed is near the core, due to its density.
So a piece of gold is a meteorite. Makes me kind of like it more.
Conversely, maybe someday alien gold miners will stop by and crack us open like an egg, extract our core gold and leave. Probably serve us right.
I suspect that what you learned is likely incorrect.
Maybe he is a Scientologist?
Most of the Earth’s gold lies at its core, the metal’s high density having made it sink there in the planet’s youth. Virtually all of the gold that mankind has discovered is considered to have been deposited later by meteorites which contained the element, with the asteroid that formed Vredefort crater being implicated in the formation of the largest gold mining region on earth – Witwatersrand basin.
Wiki has lots of posts, but they do not necessarily impart basic understanding. Neither do the supposed experts have a clue what is at the core of the earth. One guesses, ignores a lot of stuff, then declares TRUTH. Apparently the ones you cite have no concept of solubility either. It is a force to be reckoned with.
We’re practically back to the time you told me I was a dolt for saying that oil has solubility in water.
Dense gravity at the core, LOL!
Sure are a lot of footnotes in there for it to be so wrong.
Any possibility you might be wrong?
Yes of course. No need for you to give it any thought.
100,000 state foreclosures cleared in six months! Well this shouldn`t take any longer than 20 years.
More than 100,000 state foreclosures cleared in six months
by Kim Miller
Florida’s overwhelmed court system cleared 105,020 foreclosure cases between July and the end of December as additional judges and case managers worked to clear a stubborn backlog.
Despite the number of foreclosures taken out of the system, an additional 98,432 new cases filed during the same time period means pending cases at the end of December were still at a whopping 371,119, according to the most recent Office of the State Courts Administrator foreclosure report.
That’s a net clearance of just 6,588 cases statewide. Also, of the cases disposed during the 6-month period, about 42 percent were dismissed. Depending on the type of dismissal, those cases could be filed again.
Palm Beach County courts cleared 8,403 cases between July and December, but with 7,104 new cases added, there remains a backlog of 31,678.
On average, Palm Beach County cleared 1,051 foreclosures per month. December marked the highest number of cleared cases at 1,526.
You should go buy a house and not make the payments.
I have been thinking about this.
It’s mighty tempting, but I have this nagging fear that the rules that allow people to ‘own’ rent-free forever will change the day after I buy a place and stop making payments.
Colorado, last time you mentioned it your house was valued at what $350k. Has it gone up?
I doubt it. The market in that price range in my burg has been very quiet. Though some smaller houses, in the high 200K range have sold in the nabe.
There was a foreclosure a few blocks away. Smaller house that has been a rental for a few years. First the “papers” appeared, taped to the front door. Then a few weeks later a mountain of junk appeared on the driveway. A week later a dumpster appeared and few days later it and the junk vanished. Another week later a For Sale sign sprouted up on the front lawn.
This one has an “under contract” sign:
This one just went on the market. Smaller than the nabe average, it’ll probably sell quickly given the 200K price tag.
Submitted by Tyler Durden on 09/13/2012 11:13 -0400
Finally, what hasn’t declined, is the number of people who now and going forward will live completely mortgage free just to perpetuate the illusion that “housing has rebounded.” Consider them sunk costs in this latest attempt to reflated housing. Also, thank them if suddenly that home you have wanted to buy is once again just out of purchasing reach.
As for those who have a mortgage, and are wondering if they should continue paying it or not: why pay? It is now not only the administration, but the banks who are effectively handing out free housing.
Remember: in this New Socialist Normal, “just say no” when asked to pay for anything.
http://www.zerohedge.com/news/foreclosure-stuffing - 239k -
‘Finally, what hasn’t declined, is the number of people who now and going forward will live completely mortgage free just to perpetuate the illusion that “housing has rebounded.”’
Are these the smartest guys in the room when it comes to obtaining affordable housing?
Follow-up from yesterday.
Comment by In Colorado
Whatever Exxon, GE, AIG get in “handout” pales compare to what they pay in taxes
You mean like the zero income tax bill that GE pays, in spite of making billions in profit every year?
Taxes are for the little people.
GE might not pay income tax. But it does collects billions in payroll, excise, property, etc.. Shareholder pay on dividends.
I say collect because businesses unlike the government can’t just print money. The taxes are overhead like raw materials, rent, utilities and as such get added to the price of every gallon of gas, loaf of bread, or pair of shoes. Politicians love having businesses collect taxes because they’re somewhat hidden. And naïve people think that the business is paying. If you feel better paying taxes built into the cost of everything you buy so be it. Saying that businesses pay taxes is like saying that the seller pays the real estate commission. Who brings the money to the table?
Good points. They do indeed collect taxes… from everyone but themselves.
“collect taxes… from everyone but themselves…”
Just who are these “selves” if not the people who derive an income from being part of the company?
Does everyone have at will acces to XYC Corp bank accounts?
That “self.” The one named XYZ Corp.
Or were you just being obtuse on purpose?
I worked for XYZ Corp. There was no one there but the employees, shareholders, & etc. I meant that a company is a group of people.
Well … I pay “other” taxes too. Shouldn’t that exempt me from paying income taxes?
It amazes me how some people let big biz off the hook, yet they get mad if a single mom buys a t-bone with her food stamps.
It’s not necessarily good or bad that they do/don’t pay certain taxes.
What matters is: Does the process by which they lessen or avoid taxes distort the economy? Does it originate from transparent legislation that is in the national interest? Or does it result from set-asides, special “incentives”, lobbying, lawyering, and reclassification of income and expenses?
I see the latter used all the time, but it is both legal and in our clients’ interests.
There could be cases where a company really is undertaking something socially important where the voters and their representatives would want to incentivize the behavior or lessen the tax burden.
For the most part, though, the biggest tax benefits go to the corporations who can afford the “best” lawyers and accountants. And who have the capital to create “structures” to keep profits overseas, to incur a lot of “accelerated depreciation”, and so forth. Moving things on or off a balance sheet is fairly easy. Why do you think a company like GE has (literally) thousands of subsidiaries, some of which only exist to move money around or incur “losses”? Most of our clients have dozens/hundreds of subsidiaries as well.
Let me repeat who brings the money to the table? Not realizing that business’ customers pay all the costs including taxes is like believing that the seller pays the real estate commission. Where the seller get the money? From the buyer.
Speaking of which… see my post far below.
Kate Upton is a penguin lover.
I’m looking forward to a version of Adobe Creative Suite that runs with the Ubuntu interface. I think that’s Linux. Feel free to correct me if I’m wrong.
News to me, but about time if so.
Bloomberg is reporting that Facebook has managed to parlay a billion-dollar profit for 2012 into a tax refund of US$429 million.
Damn unions and overtaxed corporations!
They built a data center in Prineville, OR
In exchange for no city taxes for 15 years.
How come financial journalists aren’t required to at least pass a first college course in economics?
Could China ride to gold’s rescue this week?
February 18, 2013, 10:05 AM
Gold (GCJ3 -1.59%) could get a break this week, maybe, in the form of China.
That country is back from the Lunar New Year’s holiday and gold bugs will be scanning the horizons for signs of a pickup in physical buying demand and anything that could put a floor on recent gold selling. Getting lots of people nervous, gold dipped below that psychologically important support level of $1,600 an ounce on Friday.
“What can and will probably make a dent in the recent downward direction is the opportunistical buying to take advantage of the sharp recent price decline,” says Frederic Panizzutti, senior vice president at MKS Finance Geneva. “All factors that led gold toward higher levels over the last 3 years are still intact and we would see no reason why the medium term trend would have changed.”
You do know that many have their jobs through nepotism, right?
No, but it makes perfect sense, given how lame much of their writing is.
The classic conceptual error is to suggest that a drop in the price of a commodity will lead to an increase in demand — as the article above suggests. In fact, a lower price with no change in supply is prima facie evidence of a drop in demand. So far as I am aware, demand cannot rise and fall at the same time, but maybe these financial journalists know of some new theory of price that explains this.
Here is another variant on financial journalist nonsense: “Stocks will go down for a few weeks, then they will go up for a while, then they will go down again, then…”
Stocks may pause then rise
Merrill Lynch stock strategists are suggesting a cautious stance on U.S. stocks for the next three to six weeks, even as they upgrade their “core view” to bullish over a longer period. (The Tell)
Beware of geeks bearing grifts.
Feb. 18, 2013, 3:15 p.m. EST
Beware the Great Rotation
Commentary: It might be time to pull back from stocks, not dive in
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — The most cited bullish argument these days, at least among the couple of hundred investment advisers I monitor, is that the stock market will “melt up” as investors sour on bonds and transfer the trillions they have in fixed-income mutual funds into stock funds.
I suppose it is conceivable. But a careful review of historical fund patterns doesn’t provide much support for this so-called Great Rotation argument.
Consider the share of all mutual-fund assets (excluding money-market funds) that are allocated to either stocks or bonds. According to data provided by the Investment Company Institute in Washington, the equity share at the end of 2012 stood at 65.7%. That is only marginally lower than the 71% average of all comparable monthly readings since 1970.
Given that pattern, it is difficult to make the case that average fund investors are allocating an abnormally low share of their assets to stocks — or that they are about to increase that share.
Other mutual-fund data cast doubt on the Great Rotation as well
Consider 1987, arguably the period over the past three decades most relevant to the Great Rotation argument today. Then, as now, a bull market was getting long in the tooth. Beginning in April of that year, following more than 60 months in which fund investors had invested an average of nearly $4 billion a month of new money in bonds, they reversed course in a big way. Over the next six months, according to the ICI data, fund investors withdrew an average of $3 billion a month from bond funds.
As market historians recall, the stock market that year topped out in August, four months after that trend reversal. And the 1987 crash — the worst one-day drop in U.S. stock-market history — occurred two months after that. Far from inaugurating a new bull market for stocks, that reversal in fund investors’ opinion about bonds came right before a major stock-market top.
Another reason to question the Great Rotation argument is that any positive impact on the stock market is likely to be short-term at best. That, at least, is the finding of a study, “Measuring Investment Sentiment with Mutual Fund Flows,” published last May in the Journal of Financial Economics.
The authors found that even though the stock market often rises as investors shift assets from bond funds to stock funds, almost all of that increase is reversed within four months’ time.
The Great Rotation stock-market melt-up hypothesis also would have to fly in the face of well-documented seasonal trading patterns. A study presented in December at the Australasian Finance & Banking Conference in Sydney, “Seasonal Asset Allocation: Evidence from Mutual Fund Flows,” found that U.S. fund investors on average transfer assets from stock to bond funds during the winter months — and do just the reverse in summer.
As followers of the famous “Sell in May and Go Away” seasonal pattern will recognize, the implication of this new research is that the stock market on balance has performed better when the direction of fund flows between stocks and bonds is in precisely the opposite direction of what’s presumed by the Great Rotation argument.
You think your rents are high?!
$1650 for JUST the master bedroom: http://santabarbara.craigslist.org/roo/3611880514.html
It seems like only the Master BR is your own area, but you have access to the rest of the house and to the backyard/pool.
I definitely saw weirder postings on CL when I was looking for housing while a student.
This is common. The home owner then gives you the stick-eye when you leave your bedroom.
What is the stick-eye?
Is it like the evil eye?
A dirty look?
I know a guy who when he comes into a small amount of money says….. better than a poke in the eye with a sharp stick.
I need glasses for my eye(s) and thinner fingers.
Schiff: Gold always goes up, in the long run.
Schiff on Gold’s Holding Pattern in 2013
Euro Pacific Capital’s Peter Schiff on the stagnation in the precious metals market.
Date Feb 18, 2013
Originally published February 16, 2013 at 6:22 PM | Page modified February 17, 2013 at 3:42 PM
Misstep in gun bill could defeat the effort
One of the major gun-control efforts in Olympia this session calls for the sheriff to inspect the homes of assault-weapon owners. The bill’s backers say that was a mistake.
By Danny Westneat
Seattle Times staff columnist
Forget police drones flying over your house. How about police coming inside, once a year, to have a look around?
As Orwellian as that sounds, it isn’t hypothetical. The notion of police home inspections was introduced in a bill last week in Olympia.
That it’s part of one of the major gun-control efforts pains me. It seemed in recent weeks lawmakers might be headed toward some common-sense regulation of gun sales. But then last week they went too far. By mistake, they claim. But still too far.
“They always say, we’ll never go house to house to take your guns away. But then you see this, and you have to wonder.”
That’s no gun-rights absolutist talking, but Lance Palmer, a Seattle trial lawyer and self-described liberal who brought the troubling Senate Bill 5737 to my attention. It’s the long-awaited assault-weapons ban, introduced last week by three Seattle Democrats.
Responding to the Newtown school massacre, the bill would ban the sale of semi-automatic weapons that use detachable ammunition magazines. Clips that contain more than 10 rounds would be illegal.
But then, with respect to the thousands of weapons like that already owned by Washington residents, the bill says this:
“In order to continue to possess an assault weapon that was legally possessed on the effective date of this section, the person possessing shall … safely and securely store the assault weapon. The sheriff of the county may, no more than once per year, conduct an inspection to ensure compliance with this subsection.”
In other words, come into homes without a warrant to poke around. Failure to comply could get you up to a year in jail.
“I’m a liberal Democrat — I’ve voted for only one Republican in my life,” Palmer told me. “But now I understand why my right-wing opponents worry about having to fight a government takeover.”
He added: “It’s exactly this sort of thing that drives people into the arms of the NRA.”
I have been blasting the NRA for its paranoia in the gun-control debate. But Palmer is right — you can’t fully blame them, when cops going door-to-door shows up in legislation.
Later, a Senate Democratic spokesman blamed unnamed staff and said a new bill will be introduced.
http://seattletimes.com/html/localnews/2020373291_westneat17xml.html - 77k -
I saw that. Seems like a simple case of letting somebody on the fringe write the bill and not taking the time for somebody with common sense to review it before making it public. Happens on the right too, I’d assume.
I don’t usually get an 3r3ct!0n lasting more than four hours but when I do, I go to this web site. Be safe, my friends!
“O Sh!t” moment approaches in San Diego on sequestration:
Officials Sound Alarm Over U.S. Budget Cuts
By Gene Cubbison | Monday, Feb 18, 2013 | Updated 3:52 PM PST
San Diego’s economy is now on the verge of what officials say could be a real downturn, if Congress doesn’t quickly head off a round of automatic cuts to the federal budget.
Those across-the-board cuts, under the legislative euphemism of “sequestration”, are scheduled to take effect March 1. One in four jobs throughout the region, the world’s largest military-industrial complex, is tied to federal spending.
A ten percent hit could have a harsh ripple effect on jobs and commerce.
In case all this is lost on the respective parties’ leaders on Capitol Hill, one of two freshmen in San Diego’s five-member Congressional delegation is speaking out publicly to get their attention, in hopes they’ll reach a last-ditch compromise.
“We can solve these budget problems over time,” Rep. Scott Peters (D-52nd District), said during a Monday news conference at the Tenth Avenue Marine Terminal. “But the whole notion that you have to solve them with this meat axe today is really misguided — and really threatens the recovery that we’ve spent so much time achieving, as slow as it’s been.”
Peters expressed frustration that Congress is not in session this week, leaving only for (SIC) days next week to pull avert the cuts: “The (members of Congress) who were elected for the first time in November — and there’s 85 of us — all heard the same message — which was ‘Stop fighting and start fixing.”
Happy George Washington Day. We are having Family Day here.
The USA battled for it’s freedom (the first), and because they did, Canada was able to negotiate (the first) ours.
Slavery in Canada was almost never present, even though it was legal for a while in the beginning. We did operate the underground railway terminals here and received many persons who became very productive citizens.
I used to own a building beside Lake Erie and the history of it showed where they would come across in row boats only to have to take shelter underneath the house’s crawl space (about 18″) to avoid detection from Buffalo’s slave hunters. Once the coast was clear they went on to places like Hamilton, Toronto, etc.
From reading about the General I admire him very much. But I also admire those citizens who braved 20 miles of open water of Lake Erie just to get their freedom too.
Blue Skye can tell you how treacherous that lake’s waves can be.
Freedom Road, I hear, often led to a ship bound for England and a return to slavery. So say some of the locals in Upper Canada. Have you ever heard anything similar?
No, I have never heard of such an occurence.
We did ship French citizens to New Orleans and Australia back about 1760 though.
And we received United Empire Loyalists (UEL) during and after the American Revolution.
Dumb question of the day: Are any San Diegans sufficiently brave or foolish to be in the market for a home in the face of the looming sequester?
Is the sequester going to make home prices go down? That would be great!
this is nothing new, and it did not change behaviors last time in was looming.
most people ignore politics.
You may recall that the last time a debt ceiling agreement was in jeopardy, in August 2011, the debt ceiling was raised at the 11th hour, 59th minute. A similar resolution was reached on the fiscal cliff, which was averted a minute before midnight on New Year’s Eve 2012.
My scenario is that of a sequester with a 10% across-the-board federal spending cut whose impact would all land on the second half of FY2013, making it feel like a 20% cut while it is in effect. One idea under discussion is Friday furloughs for the entire civilian federal workforce from April through September, with a commensurate 20% reduction in pay.
If this goes through, I’d like to compare notes with you again as of the end of September on whether or not the San Diego regional economy, and particularly the housing market, experienced a hit.
I agree hits are coming, sequester in 3 weeks or not.
Debt is debt, gotta pay for it sooner or later.
What’s really going on in CA
California imposed a new law on banks innocuously called “Homeowners Bill of Rights” which forces banks to switch over to a judicial foreclosure process, which they can opt to do on their own, but takes a year or more to renegotiate contracts and compensation structures for the foreclosure law firms who do all the leg work for the banks. And while those changes are being made… it makes it appear that foreclosures have slowed down dramatically in the state.
Defaults (undeclared) are spiraling upward that yet have to pass through the foreclosure pipeline.
California is still the highest foreclosure state in sheer volume and percentage.
Resale housing is still massively overpriced as a result of unprecedented interference by individual states and the federal government. The market distortions will be removed and the down draft will continue allowing the market to correct.
If you play with fire, you will get burned.
“Resale housing is still massively overpriced as a result of unprecedented interference by individual states and the federal government. The market distortions will be removed and the down draft will continue allowing the market to correct.”
Once again assuming my accustomed Devil’s Advocate role, what would prevent the CA state and federal governments from continuing with unprecedented interference in the normal operation of the housing market forever, or at least until a goodly proportion of the housing stock has sat empty long enough until it is rotting away and useless without major investment in expensive renovations?
I’m reminded of what my college Russian teacher, who was, proverbially speaking, ‘right off the boat,’ said about housing in America. Her observation was that there was plenty of good housing, though much of it was falling apart due to a lack of maintenance.
I could see this happening to vast swaths of recently built California McMansion tract homes, rather than ever allowing market forces to adjust the price down to the market-clearing level. And I don’t expect the behind-the-scenes market manipulators to ever come clean on their crimes, either.
Go ahead folks….. take a look around Zillow…. and you’ll uncover some truth there. You’ll find houses for sale that aren’t listed on MLS yet they have an MLS number. You’ll find a lot of them.
There is a deliberate effort to deceive the public about the number of houses for sale.
Here is yet another reason why the Fed can never, ever again allow interest rates to rise off the floor.
February 18, 2013 4:54 pm
Fears at Fed of rate payouts to banks
By Robin Harding in Washington and Tom Braithwaite in New York
US Federal Reserve officials fear a backlash from paying billions of dollars to commercial banks when the time comes to raise interest rates.
The growth of the Fed’s balance sheet means it could pay $50bn-$75bn a year in interest on bank reserves at the same time as it makes losses and has to stop sending money to the Treasury.
Officials at the US central bank fear it could create a public-relations nightmare after the Fed was lambasted for rescuing banks during the financial crisis. It is one factor prompting some inside the Fed to reconsider the eventual “exit strategy” from easy monetary policy.
In an interview with the Financial Times, James Bullard, president of the St Louis Fed, said: “If you think of the profitability of the biggest banks, if you’re going to talk about paying them something of the order of $50bn – well that’s more than the entire profits of the largest banks.”
Mr Bullard said that neither interest paid to banks nor possible losses on exit made any difference to the substance of monetary policy.
“I think it’s more just a question of the optics, and how you’re going to play the optics,” he added, referring to the perception of losses by the central bank. “And since it shouldn’t matter in a monetary policy sense you might as well play the optics in a better way than the one we’ve got planned.”
January 8, 2013 5:07 pm
Fed injects new sell-off risk into Treasuries
By Michael Mackenzie in New York
Bond investors have endured the worst start to a year for US Treasuries since 2009. As debt worries in Washington have receded with a deal on the fiscal cliff and the Federal Reserve looks to trim its heavy bond-buying, the question is whether the sharp jump in yields – and fall in prices – has further to run.
The game-changer has been twofold. First, came the mini-deal on the cliff that hit the Treasury market particularly hard because it did not saddle the US economy with the kind of tax hikes and spending cuts that would merit a 10-year note as low as 1.50 per cent.
This was followed by minutes of the Fed meeting in December, in which several officials expressed concern at the open-ended nature of the central bank’s current round of quantitative easing, dubbed “QE3”. The minutes pointed to a split in the Fed over whether it should continue buying $85bn a month of US Treasury and mortgage debt for most of the year.
The upshot has been a rise in the 10-year yield, which moves inversely to prices, towards 2 per cent, a level not breached since April, from 1.70 per cent in a matter of days. While the market has stabilised this week, the selling has shaken the view that yields can stay this low indefinitely.
The Fed, the biggest buyer in the market, has been the driver of artificially low Treasury yields. Lacklustre economic growth, accompanied by the recent gridlock in Washington over the fiscal cliff, have also kept yields low. The Fed’s policy stance is therefore of huge importance to the market’s direction. A shift could have wide repercussions.
“We began 2013 with the Fed minutes adding a new element of risk and uncertainty for the bond market,” says William O’Donnell, strategist at RBS Securities. The big risk for the bond market, he says, is that the Fed could pull back from its bond-buying sooner than many expect, leading to higher yields later this year.
No surprises here, but the writers for the Financial Times completely miss the echo bubble and its causes…
February 18, 2013 7:11 pm
Housing: The long climb back
By Shahien Nasiripour and Robin Harding in Washington
Investors made a killing after the US bubble burst, but for average Americans the recovery is likely to be gradual
To the Green brothers, everyone seemed to be getting rich off the great Florida housing boom of the last decade except them. Their fledgling construction company couldn’t compete with cash-rich rivals who had been building houses in Cape Coral, a city carved out of a mangrove swamp on the Gulf Coast.
By 2008, the Greens were in trouble. “Our margins were razor-thin and we were constantly being outbid on jobs,” says Bill Green, a bearded former construction worker with a degree in real estate from Florida State University.
They had borrowed from friends and family, and their savings were nearly depleted. It was becoming obvious that the downturn in housing was less a dip than a disaster. As the crisis spread and banks began to foreclose on houses in Cape Coral, the Greens changed tack. Instead of building houses, they would buy them.
The Greens bought a foreclosed house for about $31,000. They renovated it, rented it out – and discovered a successful new business model. Today they own 76 homes, most of them painted with a signature blue front door.
“Our farming upbringing of being frugal with our money and hard work got us through a very rough period, for us and for Lee County,” says Ben Green, the clean-shaven accountant of the pair, of the housing crash. “But it presented a great opportunity for us”.
Now the Greens have a different problem: there are no cheap houses left to buy.
The nature of the recovery in Cape Coral and similar areas is bringing back bad memories: it is bubbly, driven by financial investors, and focused on the same “sand states” as the last boom. In Cape Coral, one of the hardest-hit markets in the country, prices are up by 13 per cent on a year ago; in Phoenix, Arizona, they are 24 per cent higher.
But this is not the start of a new US housing bubble, nor is one likely for years to come. After five years in free fall, US houses are now at something like fair value, and new regulation means there is little mortgage helium to inflate prices again.
More likely, the US housing market is in the first, volatile stage of a return to normality, with gently rising prices and the return of new construction. That should support growth in the US economy – but not dominate it like a decade ago. This means Americans still hoping to build most of their wealth from their houses – a persistent notion even after the experience of the past five years – are likely to be disappointed.
A stable housing recovery can only happen if prices really are back to normal. The six-year bubble upset all notions of what a house is truly worth. Sleepy little bungalows in Florida doubled in price; your house, suddenly, could make you rich.
There is no good way to define fair value for houses, says Robert Shiller, a Yale professor who warned of both the internet and housing bubbles. Today, he says US home prices are close to their long-run trend. The median sale price for an existing home was $178,900 in the fourth quarter of 2012, according to the National Association of Realtors, up 10 per cent on a year ago.
The US has plenty of land, so outside big cities the main cost of a house is construction, and the main cost of construction is labour. That means that in the long run, house prices should track rising wages – but not run ahead of them.
“House prices have gone up a little bit since 1890 in real terms,” says Mr Shiller. With prices about right relative to history, there is no reason to expect big moves up and down over the next decade or two.
Another requirement – absorbing unwanted houses built during the boom – also seems to be met.
Although the US housing crash evokes an image of endless stretches of unwanted houses in a desert, over-construction was only a small part of the US housing bubble from 2003 to 2006. In fact, new building never matched its 1970s peak.
“I think the excess was in terms of home price appreciation and the excess was in terms of home ownership,” says Michelle Meyer, a housing economist at Bank of America Merrill Lynch in New York.
The slump in building during the credit crunch, however, was prolonged, extreme and spread across the whole country. Even today, construction is barely above the lowest levels of past slumps. “We’ve more than offset any overbuilding that we’ve seen,” says Ms Meyer.
With prices about right relative to history, there is no reason to expect big moves up and down over the next decade or two.
Yeah I can’t think any of any reason why they should overshoot to the downside for a while…
Easy money mortgage lending standards, here we come again…
And since the loans are federally guaranteed, all Americans will have the privilege of helping to provide for easy money lending to “responsible” borrowers.
February 18, 2013 10:34 pm
Obama echoes calls to ease mortgage rules
By Shahien Nasiripour
Move to more stringent regulation could be reversed
In his State of the Union address to Congress last week, Barack Obama, US president, indicated that a post-crisis lurch to more stringent mortgage regulation could be reversed.
“Right now, overlapping regulations keep responsible young families from buying their first home. What’s holding us back? Let’s streamline the process, and help our economy grow,” he said.
Mr Obama’s words echoed a chorus from policy makers and housing industry executives who have argued that regulation is choking credit.
Most of the debate surrounds two new but little-known provisions. These regulate, first, what kinds of loans will grant legal protection to lenders if borrowers in default sue to stop home repossessions. Second, they determine which loans will be exempt from new risk-retention requirements.
The so-called “qualified mortgage” provision, known as QM, seeks to gauge borrowers’ ability to repay housing loans by setting caps on the ratio of debt to income. In return, lenders that make these loans are granted protections against borrowers in default who wish to stop home seizures.
QM was finalised in January. Its companion rule is the “qualified residential mortgage”, or QRM. This creates a class of home loans that are exempt from a requirement of the Dodd-Frank banking reforms that financial groups issuing mortgage-backed securities should retain a 5 per cent slice of the loans they bundle and resell.
US financial regulators had proposed in 2011 that loans with large downpayments would meet the QRM criteria and be exempt from risk retention mandates.
That proposal will probably be retracted, regulators say, and reformulated so it is more focused on debt-to-income ratios and thus better aligned with QM.
Housing industry executives have spent three years trying to persuade regulators and lawmakers that the rules could restrict credit. In the case of QM, their protestations succeeded. The industry praised the provision after regulators gave them enhanced protections against lawsuits and allowed for loans sold to US-backed mortgage financiers Fannie Mae and Freddie Mac to qualify as QM loans.
Don’t forget to include an offer to feed the squirrels.
Buying a home? Turn in a cover letter
By Lily Leung
4:24 p.m.Feb. 18, 2013
A neighborhood in Carmel Valley. — Howard Lipin / Union-Tribune staff
Linda Lee, president of the San Diego Association of Realtors, is the author of this guest post. The U-T San Diego will periodically feature real estate advice columns from the association in this blog.
It is hard not to feel like you’re just part of the crowd if you are looking into purchasing a home these days.
Home sales were surprisingly high in December, considering the holiday season and total home sales have increased 13.5 percent since last year. The market’s upward turn and the lower-than-normal inventory throughout San Diego County is creating a seller’s market and a large number of investors and cash buyers are taking advantage.
So how do you make your offer stand out from competitive bids of investors and those willing to pay with cash?
Include a cover letter.
I’ve seen well-written cover letters close deals and save buyers $5,000, $10,000 or even $25,000 on the final sale price. There is, of course, a difference between a cover letter saying, “We’d like to buy the house for X because that’s what we want to spend,” and a letter stating the exact reasons behind your offer.
The clincher is including your personal story. How long have you been looking for a home? What is it you love about this house? Why is it so perfect for you and your family? A powerfully written cover letter will not only help you negotiate the price of the home you are trying to purchase, but it will also give you a face as a person, not just a buyer.
I tell my clients, “You wouldn’t send your resume to a potential employer without introducing yourself, so why not include a personal letter with your offer? It could land you your dream home.”
“Don’t forget to include an offer to feed the squirrels.”
Purchasing a home used to be serious business. This piece is more proof that we are near the end game. Desperate folly.
Feb. 18, 2013, 12:03 p.m. EST
U.S. stock futures edge up as yen falls
Year’s rally largely intact as sequestration deadline looms
By Kate Gibson and Carla Mozee, MarketWatch
NEW YORK (MarketWatch)—U.S. stock-index futures on Monday tilted slightly higher in limited trade, with U.S. markets shut for Presidents Day; European shares and industrial metals fell on concerns about the global economy, in particular the euro zone, with Italian elections adding to investor uncertainty.
The yen (USDJPY -0.34%) continued its decline against other currencies, including the U.S. dollar, after leaders from the world’s 20 largest economies vowed not to devalue their currencies to bolster exports and bypassed criticizing Japan for indicating its expansionist monetary policies would continue.
Worries about an unclear outcome in Italian elections held Sunday and Monday hit European equities, with yields on Italy’s 10-year government notes climbing above 4%.
Futures for the Dow Jones Industrial Average rose 6 points to 13,954. Those for the Standard & Poor’s 500 gained nearly 1 point to 1,517.90. Futures for the Nasdaq 100 rose 3.25 points to 2,764.50.
Crude futures for March delivery fell 31 cents to $95.56 a barrel in electronic trade in New York. The more active April contract declined 34 cents to $96.07 a barrel.
And, with a deadline in the battle over the U.S. budget just 11 days away, equity investors are considering whether likely federal spending cuts will spark a market correction from multiyear highs.
March 1 is when $85 billion in reductions to defense and domestic programs through the fiscal year ending Sept. 30 go into effect unless congressional leaders and the White House cut a deal to replace the automatic cuts.
Part of a larger program known as sequestration, the cuts aim to trim federal spending by roughly $1 trillion over nine years.
Feb. 19, 2013, 12:18 a.m. EST
China, Japan stocks fall as rest of Asia wavers
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — Chinese stocks slipped Tuesday, with casino operators skidding in Hong Kong and property stocks falling on the mainland, while Japanese blue chips also lost ground in a mostly range-bound session for Asian markets.
“Investors [are] struggling to rediscover the bullish tone that has pushed many regional indices to multiyear highs,” said Perpetual Investments investment market research chief Matthew Sherwood.
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