Bits Bucket for March 2, 2013
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Resistor
Posted: 4:55 p.m. Friday, March 1, 2013
State geologist: Palm Beach County isn’t prone to sinkholes
By Eliot Kleinberg
Palm Beach Post Staff Writer
Sinkholes such as the one that opened up Thursday night under a home near Tampa, leaving one person missing, just don’t happen in Palm Beach County, Florida’s state geologist said today.
“The geology beneath Palm Beach County is different than (in) other parts of the state where sinkholes are more prone,” Jonathan Arthur of the Florida Geological Survey said.
Sinkholes, he said, form when rainwater and groundwater, and the low levels of acid they contain, work over the course of thousands of years to dissolve underground rock.
“In Florida’s case, that’s limestone,” Arthur said.
In central and west Central Florida, where the historic sinkholes have formed, the limestone often is just a few dozen feet below the surface, and generally very thick, Arthur said.
“It naturally dissolves cavities underground; when those get big enough, and under certain conditions, the roof collapses and you have a sinkhole,” he said.
That’s what caused the granddaddy of Florida sinkholes, the Great Winter Park Sinkhole, which appeared in May 1981 in the Orlando suburb. The maw expanded to 350 feet across, swallowing a house, five sports cars, a municipal swimming pool and parts of two businesses.
But, Arthur said, in Palm Beach County and the rest of southeast Florida, the limestone is hundreds of feet below the surface, and protected from erosion by various levels of sand and clays.
Sooner or later, he warned, the process could — could — eventually wear down this region’s limestone as well, and cause big sinkholes. But probably not for thousands of years.
To avoid the risk that a giant sinkhole will form directly under the bedroom in the house you own and suck you into the earth, JUST DON’T BUY.
Fla. sinkhole that swallowed man grows deeper
7:37a.m. EST March 2, 2013
A Florida sinkhole swallowed Jeff Bush, 37, while he was in his room on Thursday. Engineers say his whole house may be swallowed soon.
florida sinkhole
(Photo: Chris O’Meara, AP)
Story Highlights
Sinkhole is estimated at 20 feet across by 20 feet deep
House may have to be demolished
Two houses have been evacuated with more evacuations possible
SEFFNER, Fla. (AP) — Engineers worked gingerly to find out more about a slowly growing sinkhole that swallowed a Florida man in his bedroom, believing the entire house could eventually succumb to the unstable ground.
Jeff Bush, 37, was in his bedroom Thursday night when the earth opened and took him and everything else in his room. Five other people were in the house but managed to escape unharmed. Bush’s brother jumped into the hole to try to help, but he had to be rescued himself by a sheriff’s deputy.
Engineers were expected at the home to do more tests after sunrise Saturday. They spent the previous day on the property, taking soil samples and running various tests — while acknowledging that the entire lot was dangerous. No one was allowed in the home.
“I cannot tell you why it has not collapsed yet,” Bill Bracken, the owner of an engineering company called to assess the sinkhole, said of the home. He described the earth below as a “very large, very fluid mass.”
“This is not your typical sinkhole,” said Hillsborough County administrator Mike Merrill. “This is a chasm. For that reason, we’re being very deliberate.”
…
Map of States that are Prone to Sinkholes
http://www.katu.com/news/local/Sinkhole-science-How-prone-is-the-Northwest-194408731.html - -
It’s the disaster risk overlay that should concern you:
FL: Sinkholes, tornadoes, hurricanes
CA: Fires, floods, mudslides and earthquakes
PNW: Volcanic lahars (scroll down), giant (8.0+) earthquakes, tsunamis (coastal areas, only)
Midwest: Ice storms, blizzards, tornadoes, earthquakes, sinkholes
It’s a dangerous world out there, so be careful, AND DON’T BUY A HOUSE IN THE PATH OF A FUTURE DISASTER!
Arizona is pretty much on the safe side. Nevada has toxic dirt in some areas from nuke tests. Perhaps NM too. Maybe parts of Utah. I will take heat of the Sonoran desert.
haha I think rentals won’t be immune from sinkholes
“haha I think rentals won’t be immune from sinkholes”
Do you get your security deposit back if your rental gets swallowed by a sinkhole?
well it is uninhabitable….and in most states the LL must put it in a separate bank account earning interest……and if you have renters insurance your stuff should be covered too.
How do I sell an unrepaired sink hole home? - Trulia Voices
http://www.trulia.com/voices/Home_Selling/how_do_I_sell_an_unrepaired_sink_hole_home_-345368 - 101k - Cached - Similar pages
True, but unless one swallows up your bedroom and sucks you into the earth, which presumably doesn’t happen all that often, you can move away and leave your landlord holding the bag on a worthless house.
We told our landlords about the termite exterminators who showed up to work on the other half of the duplex from the one we rent, which they don’t own, and suggested they consider having an inspection done.
They opted not to, reasoning that the exterminators are probably only showing up to scam our neighbor into paying for unnecessary work and to try to get them to pay for an inspection. I guess they will deal with a termite problem when and if it becomes obvious, not before.
And I’m fine with their approach. If termites show up here, it will only serve to reduce the market value of their property, having no financial effect on us. It would also decrease their scope for selling the place or raising our rent before we decide to move on.
Buy now and be sucked into the center of the earth!
“Buy now and be sucked into the center of the earth!”
Being underwater is one thing, now we have homeowners who are underground.
Is there a government program for that?
HARG?
The HARG Program will pay the actual mortgage payment for a homeowner if he or she finds themselves underground through no fault of their own.
HUGO
Help for
Under
Ground
Owners
The HUGO Program will pay the actual mortgage payment for a homeowner if he or she finds themselves underground through no fault of their own.
I recall an automobile dealership’s building settling on one side introducing a moment great enough to cause stuck doors and windows. An elevation survey and geotechnical investigation concluded that a nearby farm was lowering the water table with its irrigation pumps.
This was in San Luis Obispo, CA.
San Luis Obispo use to be a quant nice “happening” walkable retail town, and then they suburbanized it. (University-SLO)
There was a mom & pop bookstore full of really neato inventory. Last time we drove through there, we were bummed, it changed.
Ohio Sinkhole Devours Four Football Fields Of Land, Stretch Of State Highway 516 Near Dover
Posted: 11/30/2012 11:03 am EST
Now that the election is over, things are getting back to normal in Ohio.
It took only a few minutes for a massive sinkhole to devour several acres of land and a stretch of State Highway 516 on Wednesday, WHYC reports.
The hole, spanning the area of roughly four football fields, collapsed near a lake where the Newton Asphalt Company has spent years dredging for sand nearly 50 feet below the surface, according to Fox Cleveland.
“I’ve worked for the [Ohio Department of Transportation District] 16 years and I’ve never seen anything of this magnitude,” District 11 Director Lloyd McAdam told First Coast News. “It’s very unusual that something like this would happen.”
http://www.huffingtonpost.com/2012/11/30/ohio-sinkhole_n_2218187.html - 323k -
The biggest stink hole is located at 1600 Pennsylvania Ave. Washington, D.C.
I would’ve said 1000 Massachusetts Avenue N.W. DC 20001
Entropy just isn’t what it used to be.
Right?
Realtor speaking to a group of Boomerang buyers who had been through foreclosures or short sales 3 years ago.
http://www.youtube.com/watch?v=HecfVtICs2U - 200k -
hilarious!
Boomerang buyers making a comeback
Published: Feb. 15, 2013 Updated: Feb. 20, 2013 11:23 a.m.
By JEFF COLLINS / ORANGE COUNTY REGISTER
Andreea Stucker thought she made a good investment when she bought a Huntington Beach condo with her boyfriend in December 2005.
But then…. (Fill in the blank and bring your Kleenex, you know the rest of the stories. Only now they are writing in a Happy ending for the army of re-beats)
http://www.ocregister.com/articles/years-496154-stucker-loan.html - 137k -
“Andreea Stucker thought she made a good investment when she bought a Huntington Beach condo with her boyfriend in December 2005.”
But then….
For those who do not want to read the story, I`ll just flip to the last page….
and they lived happily ever after.
“Andreea Stucker with her dog, Gus, and her new home in Huntington Beach. She previously lived in a condo that she sold as a short sale.”
“Three years later, Stucker has mended both her heart and her credit score. She has a new husband and, “miraculously,” a new house.”
She’ll lose both, again, and the FHA is backing a “hat-trick.”
At least Gus made it.
Foreclosed Pets
Shelters are overflowing with homeless animals from owners who have lost their homes.
With families hurting from the mortgage crisis, home foreclosures and tough economic times, shelters are reporting a surge in homeless animals–including beloved family pets. Realtors and rescue groups say they have even found terrified animals, chained without food or water, on foreclosed properties.
http://www.iams.com/pet-health/dog-article/foreclosed-pets - 52k -
No Paws Left Behind - Home
http://nopawsleftbehind.org/ - 14k -
hazard
Thanks for the morning tears. How cr*appy of the humans who make no effort to secure a new life for their pets.
Our new home was a former breeder’s home to 26 dogs. Get a real job people.
“How cr*appy of the humans who make no effort to secure a new life for their pets.”
I don`t think you are allowed to bash Robo signed victims like that. I am sure one way or another leaving these domesticated animals to fend for themselves was not their fault. How do you guys say it, snark off?
It`s good to be a Consultant.
“more than a year into the foreclosure review _ lenders had already spent $2 billion on consultants for reviews,”
Borrowers get $9.3 billion in housing help under revamped federal plan
Posted: 4:38 p.m. Thursday, Feb. 28, 2013
By Kimberly Miller
Palm Beach Post Staff Writer
Tens of thousands of Palm Beach County homeowners are eligible for cash or other compensation under a re-worked federal agreement with banks that replaces the failed Independent Foreclosure Review.
Beginning this month, nearly 4.2 million homeowners nationwide who were in some stage of foreclosure during 2009 and 2010 will receive letters with payment details from Minneapolis-based Rust Consulting, Inc., which also has a Palm Beach Gardens office.
According to agreements released Thursday between the Office of the Comptroller of the Currency and 13 financial institutions, $3.6 billion in cash will be put into a fund in the next two weeks for distribution to homeowners. Another $5.7 billion in mortgage relief, such as principal reductions or short sale approvals will also be doled out by the lenders.
The Office of the Comptroller of the Currency program is part of an agreement reached in April 2011 by bank regulators and mortgage servicers after revelations that deficient foreclosure documents were used to repossess homes. It is separate from the $25 billion attorneys general settlement reached in February 2012.
Awards to homeowners under the plan range from between several hundred dollars to $125,000 depending on the foreclosure offense committed, but even people who did not suffer harm because of an error in their foreclosure will get some of the money.
That’s because federal regulators say it will take too much time and money to pinpoint and quantify the exact harm committed against each borrower. In November _ more than a year into the foreclosure review _ lenders had already spent $2 billion on consultants for reviews, yet no money to homeowners had been awarded, said Thomas Curry, Comptroller of the Currency.
At the same time, an extensive $35 million advertising campaign to get homeowners to apply for the foreclosure review garnered few takers. About 500,000 borrowers nationwide had applied by Jan. 1 _ a deadline that had been extended twice before.
As of late September, just 3.8 percent of Floridians who were sent letters about the foreclosure review had applied. In Palm Beach County, 50,599 residents were sent letters explaining the program, with just 1,954 responding.
Eligible borrowers must have loans serviced by a participating lender
Aurora
Bank of America
Citibank
Goldman Sachs,
HSBC
JPMorgan Chase
MetLife Bank
Morgan Stanley
PNC
Soverign
Sun Trust
U.S. Bank
Wells Fargo
One death is a tragedy, a million deaths is a statistic.
Maybe the Republicans in CONgress aren’t as dumb as they’ve been made out to be. Looks like they’re doing their best to get Obama to own the economy, starting with da sequester. Interesting.
From here I suspect the sequestration bargaining game is heavily dependent on whether the effects turn out as bad as advertised. If sequestration turns out to be relatively benign compared to the advertisement, the Republicans can claim the upper hand in future deliberations. A relatively unpleasant way forward should play into the hands of Democrats, who can say “I told you so” about their dire warnings.
The other big issue is, when two parties in negotiation both dig in their heels and refuse to budge, whose fault is it that no compromise was reached? It takes two to #####.
Let’s just raise taxes to 60% and get it over with! Then we can get back to paying taxes!
Of course it isn’t going to be as bad as advertised. But most people aren’t paying any attention to the “ads,” so, for some limited number of people it will be worse than they expect because they won’t expect anything. Those of us paying attention probably have a good idea of how it will impact us.
People who are going to be directly impacted through their jobs know (or can guess) what is going to happen. The most direct of the secondary impacts (for example, people who sell lunch food to folks who are going to get furloughed) can guess the direction if not the amount of the impact. They are all paying attention at some level.
The question is everything else - regular air travelers, people who need passports renewed, people who need applications for whatever processed, people who sell stuff in communities that will be more impacted by furloughs than they realize, etc. I don’t expect to see the high end retailers in my neighborhood to close up shop immediately, but the bar that has live music on Thursdays during the summer might be a little less busy, and their wait staff might get less tips, and so on.
But advertising is advertising. Buying cars doesn’t get you laid or send you on really cool vacation trips, either, but that is what the ads would have you think.
Just what I expected from Ohbewanna Middle Finger management style …. hurt as many small people as you can…..don’t ya love it!
Of course it isn’t going to be as bad as advertised
Then why all the hype? I guess it’s okay to lie if your motive is seen as good.
I hope those hyping will enjoy the credibility hit.
But they will try their hardest to make it as bad as advertised….or else they will be harassed into quitting their job.
“Then why all the hype?”
Because it is going to be bad for some people. A few very motivated people are very important politically. They are trying to get the information out to people who aren’t directly impacted (a lot of those have already received information about what it going to happen) but care enough about others to get incensed about it.
Some people whose kids don’t get Head Start do care about the program because they used to know someone or think that preschool is important or are kindergarten teachers or other reasons. Some people travel enough that they care about security lines. Some people are aware that there are a lot of civilian DoD employees in their area. Etc.
Also, the whole thing is tailor made for the media. It is a federal government thing, but the impacts are nice and local. Most local reporters and journalists don’t get to talk about federal policy as often as they like. They are stuck going to local zoning board meetings. Much easier job to get info about federal stuff. They put it all on the internet. You can write up your copy in your pjs and only go on location to interview the food truck guy who is worrying about people doing more brown bagging.
Every cut is going to be bad for someone. Cut the military, that hurts someone. Cut social programs, the same. Let’s not ever cut anything. Just keep giving more and more money to a bloated bureaucracy.
So the sky is not falling despite all reports to the contrary from the heads of all these ox gored federal agencies over the last few weeks.
There is a compromise position that could have avoided this. It’s called, okay, don’t like these cuts, here make what cuts you like that comes to the same total. That has been and still is on the table. It is constantly rejected by the reply, “but we need more tax money to go with the cuts.” No, you don’t, you just need to identify better cuts and make those, new revenue is a seperate issue and a red herring.
I spoke to a friend of mine who works for a state agency. I asked what his biggest surprise was in working for the state. He said that his biggest surprise was how many people were afraid to make decisions…and so they didn’t. Because it was so hard to get fired, they simply showed up and did NOTHING.
He is a hardcore Democrat…it was interesting to hear this from his mouth.
My comment…it’s interesting how people assume that a cut to a program…assume that none of the cuts will be at the administration level. I guess it’s not possible that those administering the program can do the same work with fewer people.
I know for a fact (because we’ve done it before) that if our team of <10 were to be required to cut a single person, that we would still make it work. Yes, the rest of us would need to work harder, and find ways to be more efficient, but we would make it work.
I would think that it being so hard to get fired would make it easier to make decisions. It’s when a wrong decision will get you fired that people kick the can or ignore the problem.
Many state and local workers have been doing the furlough thing for years. The world didn’t end. Now it’s finally hit the Feds. I’ve known it was coming for years. There is no money. The economy is a pumped up fraud running on stone soup economics.
“Many state and local workers have been doing the furlough thing for years. The world didn’t end. Now it’s finally hit the Feds.”
The states and counties usually have better health insurance for much less per month, and they typically have dental and vision plans too. I know some states folks, and you’re correct regarding the furlough days. The feds have had their pay frozen for three or four years, IIRC. The power utilities and health care providers are where the COLA increases still outpace the government’s published numbers. Unions.
The economy is a pumped up fraud running on stone soup economics.
Beautiful.
February 26, 2013
U.S. Economic Confidence Wobbly as Sequester Approaches
Economic confidence worsened at the end of the week ending Feb. 24
by Alyssa Brown
WASHINGTON, D.C. — Gallup’s Economic Confidence Index was -13 in the week ending Feb. 24. That compares with the previous week’s -11 and reflects a decline in Americans’ confidence from the five-year weekly high of -8 during the week ending Feb. 3.
…
Remember when Democratic Presidents used to say “The Buck Stops Here?”
What do we have for leadership in the White House now?
“Nothing is my fault”
It just gets so old.
Technically, if the people you are negotiating with proverbially stuck their fingers in their ears, shut their eyes, and shouted “Nanny-nanny-nah-nah” instead of having a civilized discussion of the issues, wouldn’t that make it the counterparties’ fault if negotiations failed?
Sigh. Being prezzy is SOOOO penny-ante! Just not global enuf.
Well then - the President needs to become a LEADER.
The democrat controlled senate has not produced a budget in FOUR YEARS.
Obama is on the CAMPAIGN trail blaming everyone but himself.
Since obama took office we have added $6 Trillion in new deficits - more than ALL the other presidents COMBINED (adjusted for inflation)
Leadership - go google it.
I suppose it’s natural for the bitter, elected-out Republicans to dig in their heels in any negotiation in order to prove that Obama is a bad leader.
Except that one gets the sense that there are Demos who are all too happy to let Obama twist in the wind of a Republican fart. I really don’t hear much of a chorus from the dems in support of their guy. In fact, the silence is deafening.
I’ll bet Obama does go on to be head of the UN.
So deafening, in fact, he was reelected by 303-203 electoral votes. What a looser.
Technically, if the people you are negotiating with proverbially stuck their fingers in their ears, shut their eyes, and shouted “Nanny-nanny-nah-nah” instead of having a civilized discussion of the issues, wouldn’t that make it the counterparties’ fault if negotiations failed?
In your echo chamber it would. How many times has Obama said “I won’t compromise”? He states how things are going to be and then your liberal press says the republicans won’t negotiate (which means they won’t give Obama everything he wants) and you and your ilk lap it up. Somehow in your twisted mind this is normal negotiating and he’s a great negotiator! In your mind it’s only the republicans that are at fault. I truly feel sorry for you. You’re the biggest partisan hack I’ve ever seen. Your hypocrisy and self-righteousness know no bounds. Abre los ojos.
You have just described yourself. Hypocrisy. You are living it.
Ad hominem attacks are a time-tested propaganda tool which you use to discredit me with nauseating predictability. How well do these Republican propaganda hack jobs pay, anyway?
Ad hominem attacks are a time-tested propaganda tool which you use to discredit me with nauseating predictability. How well do these Republican propaganda hack jobs pay, anyway?
You discredit yourself. Pot, meet kettle:
Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 15:13:11
I guess hoping for a rational answer from a died-in-the-wool
RepublicanDemocratic party propaganda tool was asking for a bit much.As someone who generally views both the Democrat and Republican party platforms as systemically destructive, and takes interest in partisan politics primarily for entertainment value, I find it amazing that my comments can be construed by anyone as pro-Democrat.
That said, I can understand why Republican propagandists suffering from a terminal cases of black-and-white thinking* would easily confuse my one man War on Stupidity with ad hominem attacks on themselves.
You seem to be quite outspoken on the anti-R side. Maybe it is in response to 2banana because you both post so frequently (keep it up both of you btw).
What’s the worst three things on the D side?
“You seem to be quite outspoken on the anti-R side.”
I feel like somebody ought to hold up the other end of the argument from the Republican propagandists who post here.
“What’s the worst three things on the D side?”
1. Free stuff for everyone
2. Pretending that nobody has to pay for it
3. Fixation on issues that should not be part of the national political debate, such as gay rights and abortion
(Not sure those are really the worst three…just the first three that popped into my head)
Actually the poster child for failed Democratic party programs is the disaster which “affordable housing” turned out to be. Somehow, it became a priority for Democrats to hand $700,000+ in mortgage proceeds to California households with less than $30,000 in annual income, because everyone deserved to be a home owner.
Once the scheme blew up, and many of the low-income households the Democrats tried to help ended up financially ruined, the party tried to shift the blame for their own policy debacle on to the banking sector, and came up with every imaginable flavor of “Save Our Homes” bailout program to try to repair the damage their own failed policy created.
All told, “affordable housing” has been a major Democratic-party-sponsored cluster-fork, and their role in its creation remains chronically under-appreciated.
P.S. Don’t be at all surprised if Alpha-Sloth pipes up to argue with me on the above points. It turns out that Democratic party propagandists also dislike what I have to report here.
All Da King’s Men
Statism Means Never Having To Say You’re Sorry
By David King
Published: February 19, 2013
Even though the 1999-2007 housing bubble and subsequent housing meltdown/financial crisis/recession was a monument to government stupidity and interference in the market, the statist backlash from it was a call for yet more government interference (and likely more stupidity) in the market. This is somewhat akin to hiring Charles Ponzi to fix your financial portfolio, but this is how statists roll. When their interference fails, they think they just haven’t interfered enough. To illustrate the point, the aftermath congressional legislation to allegedly fix our financial situation was championed by Barney Frank (D-VT) and Chris Dodd (D-CT), two guys who were up to their eyeballs in the original housing mess, two guys who headed their respective banking committees in the House and Senate as the problem grew, two guys who denied there was a problem until the whole thing blew up in their faces, two guys who then blamed everyone but themselves. Then those same two foxes were charged with guarding the new legislative henhouse. Go figure. Their incompetence was rewarded with more responsibility. You couldn’t make this stuff up, nobody would believe it.
…
I feel like somebody ought to hold up the other end of the argument from the Republican propagandists who post here.
You like to say this kind of thing and argue that you’re in the middle. Why don’t you point to all your posts where you hold up the other end of the argument from the democrat propagandists who post here? Could it be because you think there aren’t any democratic propagandist posters here? Could it be because when you aren’t posting useful links you’re posting democratic propaganda?
Does Michael Viking ever stop blathering nonsense?
The Dems and Republicans agreed to have the sequester (indiscriminate cuts to programs both thought were important) if they couldn’t come to an agreement on $1.2T of deficit reduction.
The Dems and Republicans failed to come to an agreement on how to cut $1.2 Trillion, and so we have the sequester, which was agreed to only include cuts.
Why are people surprised that Republicans are not willing to change the “cut only” sequester to something that includes revenue?
The Republicans DID however, offer to allow Obama to rearrange the cuts as he saw fit…an offer that Obama rejected.
Obama doesn’t have the political courage to publicly save some programs at the expense of others.
The Democrats and Republicans didn’t have the political courage to put their name on deficit reduction measures (thus the failure of the supercommittee).
If the sequester is the only way to have cuts while allowing everyone to save political face, so be it.
‘If the sequester is the only way to have cuts while allowing everyone to save political face’
I think that is pretty close to what happened. Everybody can blame the other “side”.
Incredibly masterful if truly distributed equally.
Please take it from me equally!
“Nothing is my fault”
Unless of course the seas part, the heavens shine and there’s world peace, prosperity and brotherhood. THEN the One is happy to take ownership, you betcha!
In any two-player negotiating game, each party always has the option to adopt the Luther* bargaining position.
It just so happens that the Republican leadership in Congress ROUTINELY adopts that position — kinda dumb when you think about it…
Hic-hic, hic hic hic.
-palmetto
It just so happens that the Republican leadership in Congress ROUTINELY adopts that position — kinda dumb when you think about it…
That’s one principle I won’t compromise on. - Obama
“I won’t compromise on taxes” - Obama
Good to know Obama is part of the republican leadership adopting in the Luther bargaining position.
Doof bleibt doof, da helfen keine Pillen.
You’d think the Republicans could take a hint from their inability to win a national election that perhaps their bargaining positions are too far right of center.
But I suppose my optimism is unrealistic…
Both parties seem to have more luck with just waiting for the other party to drive the center back into their arms.
It just gets so old ??
Maybe he should mix it up a bit and start a war…
Again?
Op-Ed Contributor
Singing the Sequester Soap Opera
By JOE SCARBOROUGH
Published: March 1, 2013
THERE are cracks in time when history bends and for an instant it seems as if the world itself stops turning, from that Sunday afternoon when our parents learned Pearl Harbor had been bombed to the football drill I was in the middle of coaching in Pensacola, Fla., when I first got the news that the Challenger had exploded. We may not agree on many things in this era of reflexive polarization, but here is one: nobody will remember where they were and what they were doing when the Great Sequester of 2013 kicked in.
Despite the rhetoric from the White House, years from now, historians will not be sifting through the cultural wreckage that is America and discover the remnants of what some in both parties see as some cataclysmic fiscal event. Alan Jackson need not begin to tune his guitar to ask us all again where we were when the world stopped turning.
Americans who endured the grimmest warnings from President Obama and his administration need not fear that the cuts will jeopardize military readiness; limit our nation’s ability to forecast hurricanes; compromise food safety; lead to outbreaks of E. coli; undermine airport security; and cause older Americans to go hungry.
This “meat-cleaver approach,” we were warned, would kill jobs and compromise national security. Pentagon officials’ warnings were especially dire. Leon E. Panetta, the former defense secretary, spoke of a “doomsday mechanism,” while his deputies talked of “fiscal castration” and “assisted suicide.”
Since today’s Republican Party knows a thing or two about assisted suicides, you would think its leadership would have taken to heart Mr. Obama’s warnings and struck a deal before their abysmal approval ratings sank even lower. Should the G.O.P. enter into yet another budget showdown with Mr. Obama in which they appear to be intransigent, eager to slash spending programs for the poor and determined to secure tax breaks for the rich? My theory: perhaps, in spite of the president’s best efforts to frame the debate in that way, Republicans are finally on the winning side of a fight.
…
Hmmm, okay I’m getting a Prop 13 vibe out of this sequester thing now.
Gah.
Interesting, pls explain
Keep your powder dry.
What if you already blew all your powder buying an overpriced money pit?
Then you have a problem….. a very serious problem if you paid these massively inflated prices for what is always a depreciating asset.
Live from China! It’s Saturday Night!
http://www.latimes.com/news/nationworld/world/la-fg-china-execute-20130302,0,7551692.story
Proving that mankind has really not progressed much since the days of public hangings, putting people in the stocks, setting out Christians for the lions in the Coliseum etc. Still a form of entertainment, It’s just more, uh, global. Mark my words: lethal injections will go the way of the buggy whip, because it’s just not exciting enough.
We should combine our execution with that old Junkyard Wars show… teams of engineers compete to build the most spectacular execution machine.
Why does this bother you?
The neat little packages of meat we buy in supermarkets came from living sentient creatures, you know? If one supports state execution, what is the point of sanitizing it? If the point is deterrence and assertion of state power, why not show the consequence of flouting its policies? Or do you think Bradley Manning deserves to be locked up for the rest of his life for exposing American military atrocities, too?
In this particular case, the executed were drug traffickers who ambushed and murdered thirteen innocent fishermen so they could steal their boat. Pirates.
Is it possible to have bubbles in a bunch of asset classes except for one specific close substitute asset class (e.g. equities)?
Raise your right hand if you recall when the Fed boldly announced there was no housing bubble.
Fed Focus
Bernanke: There is no stock bubble
By Annalyn Kurtz @CNNMoney February 26, 2013: 3:18 PM ET
Federal Reserve Chairman Ben Bernanke said he doesn’t see any evidence yet of a stock bubble.
NEW YORK (CNNMoney)
Stocks have recently been hovering near a five-year high, but Federal Reserve Chairman Ben Bernanke says a stock market bubble is not in the works.
“I don’t see much evidence of an equity bubble,” Bernanke told the Senate Banking Committee in his semi-annual testimony on Tuesday.
Yes, stocks are high. The S&P 500 (DIVD) and Dow have recently been trading at levels not seen since 2007.
But Bernanke thinks the gains are warranted, given strong company earnings recently.
The Fed’s stimulative policies are meant to spur spending. Bernanke pointed to stronger housing and auto sales recently as proof that his plan is working.
The Fed’s recent policies, which have kept interest rates near zero since 2008, have a secondary effect of driving investors away from low-yielding bonds, in search of higher-yielding assets like stocks.
Related: How banks could get blown away by bond bubble
Observers, even including some Fed officials, have recently argued that the “reach for yield” could be fueling a bubble in bonds, farmland and other assets.
Bernanke admitted that low interest rates “could encourage excessive risk-taking,” but he assured lawmakers that he’s closely watching for bubbles.
…
Doesn’t lowering interest rates necessarily encourage risk-taking, and raising interest rates necessarily discourage risk-taking, ceteris paribus?
So why did he say it?
Bernanke “didn’t see signs” of a housing bubble when strawberry pickers were buying $750k houses with zero down liar loans. He is an absolute ignoramus and should be publicly humiliated before being fired.
He can’t be fired and his bully pulpit pretty much precludes public humiliation.
So good luck with that plan.
the new economies backbone is based on asset bubbles. we just rotate around to different ones when one pops.
We have a winner.
the bubble was transfered from Housing to Treasuries
treasuries are the new bubble 1% intrest on bonds that can’t possible be paid back except by even more debt
if Treasuries are in a bubble does that mean the dollar is also
RE Gold Stock market are all acting uneasy these days
Americans see biggest monthly income drop in 20 years
By Annalyn Kurtz @CNNMoney March 1, 2013: 10:59 AM ET
NEW YORK (CNNMoney)
Feeling poorer?
Americans saw their income drop so dramatically in January that it marked the deepest one-month decline in 20 years.
Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That’s the most dramatic decline since January 1993, according to the Commerce Department.
…
Isn’t there a snowstorm or something to blame it on?
Yeah, never mind the lack of raises and jobs being offshored over the last 30 years.
“…for January, Ricardian equivalence was mostly confirmed.”
What on God’s earth did he mean by that?
Here is an economic theory: When people are broke, they save little.
US savings rate falls to housing bubble lows
The US savings rate fell from 6.4 percent to 2.4 percent in January, and it will take a few months to see if it recovers to normal levels.
By Stefan Karlsson, Guest blogger / March 1, 2013
A customer counts his cash at the register while purchasing an item at a Best Buy store in Flushing, New York. The US savings rate fell dramatically in January 2013, but it may be in relation to December 2012, when savings were boosted in anticipation of higher tax rates.
The U.S. savings rate fell dramatically in January, from 6.4% to 2.4%. This mostly reflected the fact that income and savings was temporarily boosted in December by advance salary and dividend payments in anticipation of higher tax rates, but it also seems that for January, Ricardian equivalence was mostly confirmed.
Indeed, one could argue that it was entirely confirmed as spending didn’t fall at all, while the savings rate fell sharply not only from the December level but also from the levels earlier in 2012. However, as some of the salary and dividend payments that were made in advance in December would have normally been made in January, it would seem that underlying income (and therefore also savings) was probably somewhat higher than formal income. We will have to wait a few more months to see if the savings rate recovers.
If it doesn’t, then it is at a ominously low level, as the household savings rate was 2-2.5% during the housing bubble, the same level as in January.
…
Theory?
At least the 1% have a stellar savings rate!
CHART OF THE DAY: Rich People Really Love To Save Their Money
Sam Ro| Mar. 1, 2013, 1:40 PM
In a new note to clients, UBS’s U.S. economics team led by Maury Harris and Drew Matus includes a chart breaking down the savings rates of Americans in various income levels.
As expected, people making more money save a bigger chunk of their paychecks.
Harris and Matus argue we should take note of this because they believe this buffer will blunt the impact of recent tax hikes.
“We believe that the recently legislated higher household sector taxes in 2013 considerably overstate the related negative consumption impacts,” they write. Here’s more:
…
“Higher Federal income taxes on relatively wealthy taxpayers should be accompanied by a drop in savings that limits the negative near-term consumer spending impact.”
I’ve read this sentence ten times and I still cannot make any sense out of it.
“… a drop in savings that limits the negative near-term consumer spending impact” means … what? Does it mean that the drop in savings will produce more spending by those “relatively wealthy taxpayers”?
A drop in savings, in this case, does not mean the wealthy will spend more because the drop in savings in this case will be the result of higher taxes being paid out by the wealthy.
Does anybody here think that if people are taxed more they will spend more?
The government will spend it for them… and then some.
If earned money is taxed and saved money is not taxed then the incentive is to convert as much earned money into saved money as possible.
If taxes are raised on earned money then the incentive to save more of this earned money increases because while the taxes on earned money increases the tax on saved money remains the same - as in zero.
To convert more earned money into saved money in a tax-raised environment means one has to decrease his expenses.
And decreasing expenses means decreasing spending.
saved money is subject to the inflation tax
can you save money faster than the rise in RE that is going on now ?
Oh, please, if you are going to present me with an inflation tax don’t use the rising price of RE as an example.
“saved money is subject to the inflation tax”
Many corporations are sitting on piles of cash, IIRC.
BTW, how’s the current hyper-inflation in wages working out for everybody?
Oh, please, if you are going to present me with an inflation tax don’t use the rising price of RE as an example.”
I am guessing you are older and have fixed RE costs so how about higher Medical costs ?
I think they are basically just saying that wealthy people have a set spending level that they prefer. It is not even close to being constrained by their after tax income, which results in a very high savings rate. The assumption is that they will retain their preferred spending level even if their after tax income goes down, which will result in less savings, just because that is the only other bucket (taxes, spending, savings) left.
I tend to agree. I’m not doing this at anything like a 1% level of income, but I have my preferred spending level and you would have to cut my after tax income a lot for me to give it up. For now, cuts are going to eat into my savings level. Now if the cut was enough that I couldn’t fully fund my retirement accounts and at least have some more savings in addition to that, I might have to make a serious cut like looking for a cheaper apartment, but the tax law changes aren’t going to do that to someone whose preferred spending level leaves them saving 51% of their income.
^This.
As long as people can vote with their feet.
Why the USSR put up fences to keep people IN.
Why Detroit, Philly, Camden, Cleveland, etc. lose population decade after decade.
———————————————-
The Democratic Majority Is Doomed: The entitlement mentality can’t survive a weak economy.
Wall Street Journal | 03/01/2013 | Pete Du Pont
Many argue the coalition that elected and re-elected Barack Obama represents a long-term shift in the electorate that will determine elections and public policies for generations. Some of commentators think conservatives have lost their relevance, and the Republicans are about to go the way of the Whigs.
But the primary reason today’s liberal Democratic coalition will fade is because the very policies it pushes sow the seeds of its own destruction. The coalition can survive over time only by allocating slices of our nation’s economic pie in a way that favors and placates its constituent members. But people, being human, will continually want larger slices of our economic resources, so continued success in placating those members, while at the same time adding the necessary new members, requires a continuing and ever-growing economy. A flat or shrinking economy will never generate the resources needed to feed the coalition.
Instead of pushing policies that spur innovation and risk-taking, the left advances policies that discourage them. Instead of lower marginal tax rates and less complication in the federal tax code, we see higher rates and more complication. We see new taxes in ObamaCare and the partial expiration of the Bush cuts. California’s new tax on millionaires brings the state rate to more than 13%, and the combined federal and state rate to almost 52%.
Instead of thinking of the government’s role in the economy as one of providing the minimum rules for fairness, ensuring those rules are enforced, and then getting out of way, we see efforts to push federal bureaucrats—and their ever-expanding government programs, regulations and mandates—into more and more facets of the world in which we live and work.
The toll on the economy is real. According to a report by Sentier Research released last fall, inflation-adjusted median household income has fallen more since the end of the recession in mid-2009 (down by 4.8%) than it did during the actual recession (2.6%).
Without economic growth, other means are needed to mollify the coalition. So we see warnings of disaster if the left’s policies are not pursued. We see over-the-top claims about the damage to be caused by having to cut federal spending in sequestration—by less than 2.5%. We see attempts to gin up phony wars against women and minorities. We see efforts to come up with even more groups that are labeled as “victims” in need of the federal government’s help. The coalition is fueled by a growing sense of entitlement. But without robust economic growth, this very same sense of entitlement will drive the coalition’s decline.
Ultimately, the coalition will collapse under its own weight. Such shifts take time, and conservatives and Republicans can, and should, do what they can to hasten the collapse. They need to advocate more effectively a set of policies that will reverse America’s decline—and do a better job of explaining the benefits for individuals, families and businesses that come when we have lowered tax rates instead of increased them; the benefit of the independence that comes from a smaller federal government instead of a larger one; and the overall well-being and safety our nation enjoys when our economy is strong.
How does adopting propaganda-based policy measures to favor an ever-increasing share of American wealth in the hands of the 1% promote a strong, safe nation?
I’m missing it. All I see are a bunch of Republican greed pigs who are trying to further enrich themselves when many of them are already richer than Croesus.
I’m missing it. All I see are a bunch of Republican greed pigs who are trying to further enrich themselves when many of them are already richer than Croesus.
You really are missing it. In your partisan hackery you conveniently leave out that 7 of the top 10 richest members of congress (as of sometime last year) are Democrat. In your partisan hackery you imply that democrats aren’t greed pigs and are dirt poor, like Al Gore, Bill Clinton, Obama and John Kerry are. There isn’t any difference between the two, the difference is in you. Abres los ojos.
We are talking about policy, not people. And people who vote against their own personal best interests for the good of the country are admirable.
The Greatest Trick the Devil Ever Pulled Was Convincing the World He Didn’t Exist.
Actually g-d’s biggest joke was putting 3 major religions fighting over the same piece of property
and the stupid humans fell for it!
“3 major religions fighting over the same piece of property”
…who all claim to worship the One True God (Jehovah, Allah, Jesus, etc)…
“In your partisan hackery…”
Strawman Republican propaganda technique numero uno: Accuse anyone who doesn’t kowtow to your extremist positions of engaging in your own propaganda tactics.
Is this the same Pete DuPont who ran for President in 1988 and Poppy Bush ridiculed as “Pierre?”
I still have (on VHS tape no less) the SNL skit that mocked the 1988 presidential campaign debate before the New Hampshire primary. Dan Aykroyd played Bob Dole (always referring to himself in the 3rd person) and kept reminding the other participants that Dupont’s real name was Pierre.
“The entitlement mentality can’t survive a weak economy.”
Generation entitlement will be the last folks to be cut loose.
The Republican Party is far more doomed than the Democrat Party. However I think by winning on this sequester thing, they may recover. I think the economy will not go into the toilet, like Maxine Waters predicted, or her ilk predicted.
IOW, when the Republicans hold their ground, which is a very are opportunity, on economic issues, they win big. They win respect. It has been the Republicans who have compromised with the champions of big government, not the Democrats comromising. This is why government has morphed into thugernment since GHB became President. The reason Republicans lost a lot of their vote base is their wussiness, which is their operating style. The GHB style.
I have not been won over. Far from it. I wan a much smaller government, an end to TSA, an end to the so-called “patriot act,” an end to us being world cop and an end to the endless wars. There is nothi g wrong about working in defense. Everyone needs defense, whether individual or national. But with a president able to assassinate any American and to spy on people in America with drones is very quite the opposite of what national defense was about in the 1980s.
I predict American government will be forced by public sentiment to stop this overreaching power, within ten years.
“I think the economy will not go into the toilet, like Maxine Waters predicted, or her ilk predicted.”
That’s a very safe prediction, as you have to be extremely math-challenged to entertain a predicted number of job losses that exceeds the size of the U.S. work force.
That said, sequestration job losses could be more significant than many Republican apologists seem willing to acknowledge. I also doubt many of the Republicans in Congress understand economic multiplier effects, though I suspect they are soon to receive a real world education on the subject. But maybe if they play their customary “crash the economy, then blame Obama” card, it won’t hurt them politically.
US faces huge job losses as Obama orders $85bn cuts
President says middle classes will suffer most and that Republican stance on taxation is ‘root cause’ of crisis
Paul Harris
The Observer, Saturday 2 March 2013 12.16 EST
Obama speaks about the sequester in Washington
President Obama called the act ‘not smart’ the morning after the cuts became government policy. Photograph: Kevin Lamarque/REUTERS
Barack Obama warned on Saturday of a “ripple effect” through the US economy that would cost hundreds of thousands of jobs after he reluctantly signed an order to begin a huge $85bn (£56bn) programme of government cuts.
The president even called the act “not smart” on the morning after the cuts officially became government policy, in a move that has been dubbed “sequestration” and has plunged Washington into another political crisis.
“The pain will be real. Many middle-class families will have their lives disrupted in a significant way,” Obama said in his weekly address. He added that up to 750,000 jobs could be lost and half a percentage point knocked off America’s economic growth this year. “This will cause a ripple effect across the economy. Businesses will suffer because customers will have less money to spend … These cuts are not smart. They will hurt our economy and cost us jobs,” he said.
…
“The Republican Party is far more doomed than the Democrat Party.”
I dunno. Maybe between now and 2016, they will somehow overcome their self-destructive obsession with God, guns and gays for long enough figure out how to field a presidential candidate who is not so far off in right field that he has zero prospects of winning an election.
Miracles do happen, you know…
Hopefully they will give up on their self destructive issues of god and gays. RKBA would be something they need to be in favor of to get people swayed out of the Feinstein gun grabber party.
No infringement on 2A is a good political thing to back. I don’t know about you, but I have been reading all sorts of blogs. Many liberals are against infringement and have awakened to political activism. I became very active and even applied for CCW, took training. My permit should be arriving in a few days if not today.
In fact, I think Carl wrote a reply a few weeks back saying I could buy guns from a dealer in Arizona without registering them or getting them into a database. He is right. That is exactly why I took the CCW class. I will be ahead of FrankFeinstein. I will buy with cash.
“No infringement on 2A is a good political thing to back.”
I’m not a guns guy, but I am sufficiently paranoid about the risk of demagoguery which would arise if everyone was forced to give up their guns to agree with this concern.
In fact, I think Carl wrote a reply a few weeks back saying I could buy guns from a dealer in Arizona without registering them or getting them into a database. He is right.
Couldn’t have been me, I don’t know anything about Arizona law.
Hmm…someone else then.
Higher Tax Rates Destroy Personal Income and Savings (but Not Spending — Yet) in January
March 1, 2013 at 8:55 am
Personal income tanked in the month of January while spending maintained a narrow 0.2% gain. Today’s report from the Commerce Department showed that income was down by a whopping 3.6% as higher tax rates kicked in. Dow Jones was calling for a drop of 2.5% in income and Bloomberg was calling for a drop of only 2.1%. This was the largest one-month drop that most workers have seen in their careers.
What lies ahead is the key question. Consumers may continue to dribble off on their spending, and the income drop should start to normalize in the months ahead. The dilemma is that if spending remains higher when take-home pay is lower, then that means you can kiss any broad savings goodbye. As proof, the personal savings rate fell to 2.4% in January from 6.4% in December.
…
All you have to do is extend those loan repayments and everything will be just fine. 10 year auto loans, coming right up!
2 months is not a trend.
“At the moment it’s a seller’s market again,”
Welcome to the obama housing bubble v2.0
———————————
Home Buyers Are Back, but Where Are the Houses?
CNBC - By Diana Olick - March 02, 2013
The first official day of Spring may still be 20 days away, but the Spring housing market is already underway. Buyer traffic is rising along with home prices, but one traditional Spring phenomenon is sorely absent: rising supply. The raw number of homes for sale is now at its lowest level in over 13 years, according to the National Association of Realtors, and the numbers continue to fall.
“Some listings are vanishing from a strategic decision of waiting for an even a higher price later. Some are due to few newly built homes available to trade-up to, hence some current existing home owners are unwilling to list. Some could be related to fear of being unable to buy after selling,” says Lawrence Yun, chief economist for the National Association of Realtors.
Supplies are down across the nation, not just in the former crash markets, like Phoenix and Las Vegas, where investors decimated inventories of distressed homes in bulk purchases. Listings are down 31 percent in Seattle from a year ago, down 32 percent in Denver, down 20 percent in Houston, down 37 percent in Boston, according to local Realtor associations.
“At the moment it’s a seller’s market again,” said David Fogg, a real estate agent in Burbank, CA. “Very low inventory, very low interest rates, almost no bank inventory of homes, it’s crazy out there. Every good property I’ve listed this year has brought 10-50 offers and sales prices 10-20 percent over comps. Cash is King.”
Nearly one third of all existing home sales in January were paid for in cash, and not just by investors, who are making up a shrinking share of the market. Fierce competition is forcing buyers to use every advantage, given that so many are going after so little.
In California’s San Fernando Valley there are usually over 9,000 homes for sale this time of year, according to real estate agent Billy Wynn. Today there are just over 1,400.
“Realtors are getting so many offers they are taking the homes off the market and not accepting additional offers before any offer is even accepted,” said Wynn. “This is real estate bubble 2.0 on steroids.”
It is a puzzling situation, given all the warnings of a tsunami of so-called “shadow inventory” that was supposed to be flooding the market right now. As it stands, fewer distressed properties are coming to the market.
“The ticking time bomb of shadow supply has been diffused by a combination of foreclosure processing delays in judicial states, legislation slowing down the foreclosure process in non-judicial states, foreclosure prevention programs and initiatives encouraging short sales,” said Daren Blomquist of RealtyTrac. “Notably, in 2012, was the National Mortgage Settlement, which both encouraged foreclosure prevention and short sales as an alternative to foreclosure, and the loosening of short sale guidelines by Fannie Mae and Freddie Mac in November.”
As a result, short sales, where the home is sold for less than the value of the mortgage, are rising as a share of total distressed sales, while bank-owned home sales are falling. Investors are now competing for such little supply that they are ironically pricing themselves out of the market.
I am actively watching Craigslist rentals, and there is an absolute mammoth oversupply of rental houses in the areas where investors went on buying binges.
yes many more rentals showing up compared to last year
rental prices are higher than last year
Ventura Co CA
A mammoth oversupply results in higher prices?
Please send me some of that good stuff you’re smoking.
It’s massive demand stimulus and artificial inventory (supply) restrictions which result in higher prices.
A mammoth oversupply results in higher prices?”
yes indeed rental prices SHOULD fall and all these new landlords including Blackrock may get squeezed
I bet they then “try Rent to own” or some other scam to raise rents
I bet they then “try Rent to own” or some other scam to raise rents
I’ve always thought rent-to-own was going to be the end result. It’s a great scheme: if something breaks- hey, they own the house, it’s their problem. Conversely, if they don’t pay the rent, they’re out, just like in a rental.
Rent-A-Center nation.
I really didn’t expect such a fast return to the bubble days
last time early 1990’s in CA it took 10 years to break even and the mania didn’t start until after that
its not 2016 yet so whats up ?
We didn’t let it actually go down to where it wanted to go. So don’t expect the up-cycle to act the same as it did back then either.
“We didn’t let it actually go down to where it wanted to go.”
I came to the realization that TPTB were not going to let that happen about a year ago. In the areas I was looking they applied the brakes and essentially stopped the price declines in 2009, held it there and managed to get prices rising again in the last year or so by holding the supply of houses on the market down to nothing.
Then they parked all those houses on the Fed’s balance sheet, where they’ll stay and rot. What shadow inventory?
Might as well start building more. Those no longer exist for our purposes…we’ll see how this all works out. Meanwhile it’s another month, another $300 around here…
“…they applied the brakes and essentially stopped the price declines in 2009, held it there and managed to get prices rising again in the last year or so by holding the supply of houses on the market down to nothing.”
Which ‘they’ did this? Is there a way to get a transcript from the Fed or wherever this policy arose to document how it was decided and executed?
“Which ‘they’ did this?”
I got nothin else to call it. If you have a better name than ‘they’ I am all ears. Now my ears did not tell me this happened, my eyes did.
“Is there a way to get a transcript from the Fed or wherever this policy arose to document how it was decided and executed?”
That would be cool but I think where that was decided by someone or something was at a level above the freedom of information act reaches.
“Is there a way to get a transcript from the Fed or wherever this policy arose to document how it was decided and executed?”
They’re making the rules as this unfolds. The only reason you are not building pyramids is because TPTB stand to gain more with you doing what you are able to do. Later they will inflate away your promised retirement. In this sense the members of a lower rank in a cast system are blessed — they don’t waste their time “trying.”
Furthermore, while saying the federal deficit does indeed need to be curtailed, Mr. Bloomberg argued the United States could owe “an infinite amount of money” and there is no specific amount that would cause the country to default.
“We are spending money we don’t have,” Mr. Bloomberg explained. “It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money. … Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.”
http://www.politicalforum.com/current-events/291734-idiot-mayor-bloomberg-says-federal-governmet-can-borrow-infinite-amount-money.html - 60k -
“The trouble with socialism is that eventually you run out of other people’s money.”
And, yes, we are rapidly reaching that point.
And it will be infinitely more painful than the 2% cuts like we have in the sequester.
“Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more.”
I always thought that was called throwing good money after bad.
And it will be infinitely more painful than the 2% cuts like we have in the sequester ??
As Sarah would say, You Betcha…Except that it has nothing to do with socialism 2-fruit and everything to do with crony capitalism starting with the Pentagon…How many states do we have in the union ?? Why does Virginia receive a huge disproportionate share of military spending ??
2banana, agreed. Which is why I do like movable and hidable alternate currency that withstood millennia - gold.
If I had a crystal ball in 2001, I would have sold everything and converted to gold then. At $270 per ounce it would be reasonable to be 100% in gold currency. But my average cost is more like $1100 per ounce. So i Have to be invested in other asset classes.
The trouble with crony capitalism is that you run out of customers.
“And that’s a problem for the lenders. They can’t stop lending us more money.”
And this is a problem for the borrowers, they can’t stop borrowing more money. And since money - borrowed or not - is a claim on assets then these borrowers can’t stop selling off claims on their own assets.
Problem is, they have no real assets left. So we pump up the theoretical value of their house so that we can pretend they still have an asset.
“Problem is, they have no real assets left.”
If you are talking about individals then the assets they have left is in the form of future income.
If you are talking about a country then the assets that are left is in the form of real estate, corportions, etc.
“If you are talking about a country then the assets that are left is in the form of real estate, corportions, etc.”
Even if said assets are sold off to foreign investors?
World
Chinese Buyers Snapping Up U.S. Real Estate
Chinese buyers are pouring more money into the U.S. real-estate market. Sotheby’s Angela Wong tells the WSJ’s Deborah Kan who these Chinese property buyers are and where their money is going.
2/26/2013 11:03:07 PM
Possession is 9/10 of the law…and I don’t see those foreign investors anywhere.
Possession is 9/10 of the law…and I don’t see those foreign investors anywhere.”
visit Santa Clara CA you’ll see them
“Problem is,”
There are no problems, only bailouts.
For every problem there is a bailout.
One problem with the bailout is one has to be a member of the club.
It’s a private club and if you aren’t a member then you don’t get a bailout.
‘So we pump up the theoretical value of their house so that we can pretend they still have an asset.”
Doesn’t this pretty much summarize the Fed’s economic recovery plan?
Best part is it’s working flawlessly. Happy days are here again.
Friends just put an offer on a short sale house, waiting for bank to accept. They already own one underwater house in another state and a condo bought about a year ago that they’ll now have to rent out. I know there aren’t huge assets socked away and their incomes aren’t astronomical. Both have their current jobs for about a year or less. How on earth are they getting another loan for yet another property?
No wonder things are so screwed up.
Bigguy
Buy and Bail is illegal, but I believe it’s a state level thing, but maybe not. Find new friends, these people aren’t a good “flavor”.
They aren’t buy and bailing. They are keeping all 3, but renting one at a loss, likely will be doing the same with the condo. My issue is a bank allowing them to take on this additional risk of a third property when any new downturn could easily collapse the whole house of cards.
How does this get approved? I’m pretty close to positive there isn’t any shenanigans on the loan app involved.
I’d like to know how they are getting approved as well.
I suspect we won’t like the answer.
60 Minutes - Interviews, Profiles & Reports - CBS News
http://www.cbsnews.com/60-minutes/ - 98k - Cached - Similar pages
13 hours ago …Is China’s real estate bubble about to burst?
If federally guaranteed mortgages provide such great protection against boom-and-bust, how do you explain the massive bust that resulted when the housing bubble popped? Weren’t a large share of the mortgages that blew up federally guaranteed?
What does this writer see that I am missing?
Op-Ed
When the government backs mortgages
Federal backing inoculates us against the perils of boom and bust.
Federal guarantees have been a part of the U.S. housing finance system since the New Deal. (Nam Y. Huh / Associated Press)
By David Min
March 1, 2013
How should we reform our broken housing finance system? To what extent should the federal government continue to provide guarantees for mortgage financing, such as the ones it provides for Fannie Mae and Freddie Mac? With Fannie and Freddie in a federal conservator ship that has already cost taxpayers more than $140 billion, it’s politically popular to suggest that the answer is “not much.”
But policymakers should be wary of that consensus. Historically, government-backed mortgages are closely linked with stability in housing finance, an inoculation against the otherwise chronic cycle of boom and bust.
Federal guarantees have been a part of the U.S. housing finance system since the New Deal. Before then, mortgage markets were extremely unstable, experiencing a financial crisis every decade or so. This constant volatility was a major barrier to economic growth and the development of U.S. capital markets.
The problems in pre-New Deal private housing finance culminated in the banking crises of the early 1930s, in which roughly half of all banks failed, triggering the Depression. Policymakers at the time responded by broadly introducing federal guarantees into mortgage finance, administered through newly created institutions and programs including the Federal Housing Administration and federal deposit insurance. Several decades later, federal guarantees were introduced for the mortgage-backed securities issued by the government-sponsored enterprises Fannie Mae and Freddie Mac.
Beginning in the 1940s and continuing until the early 2000s, such federal guarantees existed for roughly 70% of all housing finance in this country. Importantly, the onset of these guarantees coincided with an unprecedented period of financial stability. From the 1940s until the 2000s, unlike in any other period in our nation’s history, the U.S. did not experience a major systemic financial crisis. (The savings and loan debacle in the early 1990s was not a financial crisis, nor was it systemwide.)
But by the early 2000s, the share of mortgages financed by federally guaranteed sources of funds experienced a steep and sudden decline as Wall Street’s securitization of mortgages grew at a stunning rate, from 12% of the market in 2003 to nearly 40% of all mortgages originated in 2005 and 2006. The sharp increase in home prices that constituted the housing bubble was almost exactly contemporaneous. Of course, the bursting of the housing bubble led to the 2008 financial crisis. In short, it was only when government guarantees declined precipitously that we saw a return of the financial instability that had been absent since the 1930s.
So why the close historical correlation between government guarantees and housing finance stability? One important factor may be the role of government guarantees in promoting affordable and consumer-friendly home loans, specifically the 30-year fixed-rate mortgage that we take for granted today.
…
Beginning in the 1940s and continuing until the early 2000s, such federal guarantees existed for roughly 70% of all housing finance in this country.
Sure was a long successful run until it all went wrong. Right after repealing Glass Steagall, by amazing co-inkydink.
Glass Steagall pretty much bracketed the golden age of America.
“One important factor may be the role of government guarantees in promoting affordable and consumer-friendly home loans, specifically the 30-year fixed-rate mortgage that we take for granted today.”
Thirty years is too long to be making mortgage payments for parents who are raising children. The thirty year mortgage is a symptom of LBJ’s Great Society, IMHO. Someone had to pay for the entitlements, and that would be the two income household.
Sequestration jeopardizes federal government help for troubled though responsible homeowners!
Looming Sequestration Cuts Will Hit D.C. the Hardest
By Roy Oppenheim
March 1, 2013
With so many federal workers living in and around our nation’s capitol, those federal spending cuts will eventually translate to job cuts and unpaid mortgages.
The dreaded sequestration deadline has arrived, and with it $85 billion in automatic spending cuts that could plunge the nation’s strengthening economy back into the depths of recession.
(For some light reading on the topic, check out the 394-page Office of Management and Budget report.)
But contrary to many media reports, the majority of spending cuts will be felt most acutely in the federal government’s hometown: Washington, D.C., a region that, ironically, suffered the least in the economic downturn.
While most of the rest of the country’s housing market suffered during the recession—with foreclosures becoming the rule instead of the exception—the Beltway has had one of the strongest housing markets in the country.
Having visited the area during the economic crisis, it always struck me as odd how little suffering there seemed to be there compared to the rest of the nation, and in particular Detroit, Arizona, Las Vegas, and of course Florida.
But with so many federal workers living in and around our nation’s capitol, those federal spending cuts will eventually translate to job cuts, unpaid mortgages and … well we all know how that story has gone.
In short, there’s some belt tightening on the way for many of those inside the Beltway.
That’s not to say others around the country won’t be impacted. Earlier this month, HUD Secretary Shaun Donovan warned if the cuts go forward, the Federal Housing Administration won’t be able to help those trying to dig their way out of foreclosures, purchase a home, and generally stabilize the housing market.
…
HUD is THE most corrupt of all the fed agencies.
“HUD is THE most corrupt of all the fed agencies.”
+1 And a morally bankrupt mission too; lots of decent neighborhoods ruined for good by this agency.
And don’t forget the millions of lives destroyed by “Government Knows Best Bureau of Housing”.
I guess nobody is listening to Double Barell Joe Biden. I just checked Sportsmans Guide and all the 7.62×39 and .223 ammo is sold out while everything they have in 12 gauge is available. 9mm is pretty slim pickins.
The rational people know they don’t need more than half a dozen shotgun shells to defend their home.
“The rational people know they don’t need more than half a dozen shotgun shells to defend their home.”
The rational people? LMAO
Joe Biden Has More Gun Advice: ‘Just Fire the Shotgun Through the Door’
Here’s a partial transcript of the interview via Field and Stream:
F&S: What about the other uses, for self-defense and target practice?
BIDEN: Well, the way in which we measure it is—I think most scholars would say—is that as long as you have a weapon sufficient to be able to provide your self-defense. I did one of these town-hall meetings on the Internet and one guy said, “Well, what happens when the end days come? What happens when there’s the earthquake? I live in California, and I have to protect myself.”
I said, “Well, you know, my shotgun will do better for you than your AR-15, because you want to keep someone away from your house, just fire the shotgun through the door.”
http://www.theblaze.com/stories/2013/02/27/joe-biden-has-more-gun-advice-just-fire-the-shotgun-through-the-door/ - 213k -
“the rational people…” oh cut the shinola. You lost your assertion with those three words.
I once read in Soldier of Fortune magazine- of all places- an article on the best guns for home and personal defense. The choice of a panel of soldier-of-fortune type ‘experts’? A pump shotgun for home defense, a .38 S&W airweight revolver for personal protection.
The beauty of a pump shotgun is that a) it’s a formidable looking weapon with a loud intimidating cocking sound (both deterrents in themselves) b) it’s easy to aim and hit a target with it in a stressful situation, and c) after you shoot the intruder, the bullet doesn’t continue through the wall and into your sleeping kid in the next room. Or into your neighbor’s house and his sleeping kid. Something even the gung-ho soldier-of-fortune types were aware of and concerned about (as professionals will be, unlike the wanna-bees who have to own the latest biggest assault rifle).
(The beauty of the S&W .38 Airweight was its small size/weight, stopping power, and ease of use, always important in a stressful situation.)
The AR15 bullet can:
Far too powerful and long-range for a rational person to use for home defense.
‘Far too powerful and long-range for a rational person to use for home defense.’
These are best used on would-be tyrants and their assassins.
These are best used on would-be tyrants and their assassins.
That is more or less their purpose. Not home defense in an urban or suburban area. For that a shotgun is by far the best weapon.
With DHS buying huge quantities of rounds, the rational people need more than a shotgun to defend their homes. As Ben poste, the defense is not only against garden variety thugs, but also tyrants.
Molon labe.
Here we have more “rational people” at DHS and in Law enforcement that are using “NO MORE HESITATION” targets of pregnant woman in her nursery and Grama in her kitchen holding guns. I have not seen an explenation on what would cause them to go into the pregnant womans nursery or Grama`s kitchen but evidetaly when they get there they won`t have any hesitation.
Law Enforcement “Requested” Shooting Targets of Pregnant Women
DHS supplier responds to outrage over “no hesitation” targets which include children
Paul Joseph Watson
Infowars.com
February 20, 2013
Law Enforcement Targets, Inc., a provider of shooting targets to the Department of Homeland Security, has admitted that targets depicting pregnant women were “requested” by law enforcement agencies.
Cooper also makes reference to the DHS’ purchase of 2 billion bullets, “enough rounds to kill every citizen of the United States five times over.”
The representative also claims that the targets could be used for “don’t shoot” training, which is somewhat dubious given that they are called “no hesitation” targets and every single one of them is described as a “threat” target in the product description.
The shooting targets, intended to “help the transition for officers who are faced with these highly unusual targets for the first time,” include “pregnant woman threat,” “older man with shotgun,” “older man in home with shotgun,” “older woman with gun,” “young school aged girl,” “young mother on playground,” and “little boy with real gun.”
Our story yesterday about the targets caused outrage, crashing Law Enforcement Targets, Inc.’s website and leading the company to release a statement on Facebook inviting comment and criticism about the products.
LET Inc brags on its website that it is a full service provider of training targets for the DHS, the Justice Department and thousands of law enforcement agencies throughout the country. The company has has racked up $5.5 million worth of contracts with the federal government, with almost $2 million dollars coming from Homeland Security.
Another customer who called the company claims he was told that the targets were, “strictly for Department of Homeland Security and other law enforcement agencies.”
http://www.infowars.com/law-enforcement-requested-shooting-targets-of-pregnant-women/ - 128k -
Well, that story has made Infowars and the Washington Times. I’m gonna need a little more verification before I get too concerned.
‘the DHS’ purchase of 2 billion bullets’
Since the recent mass shootings and subsequent furor about guns, the citizens have spoken. They purchased millions of firearms and who can say how much ammo. So if the Feds want a war, they’ve got one.