Bits Bucket for March 5, 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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There are some funny goings-on in my neck of the woods. I don’t live in this neighborhood but I do drive through it on a regular basis. Apparently a Japanese billionaire is buying up properties in one of, if not the richest neighborhoods in Hawaii.
He buys up these old-fashioned mansions, tears down the security fence, invites locals from.. impoverished.. Hawaiian neighborhoods on the other side of the island to come and live for free. The locals then proceed to live as they are accustomed. Meanwhile he lets the houses decay and decay to the point where neighbors freak out and sell to him.
He’s also turned many vacant lots into the tackiest collection of Japanese zen garden and Roman statues you’ve ever seen. You’ll literally see several dozen armless ladies piled into an empty lot like it’s storage for the Venetian. It’s hilarious and horrifying at the same time.
It’s kinda funny to drive through the neighborhood and see a property that was once worth 8 figures slowly falling in on itself, while the place next door has 10 pickup trucks in various stages of decay parked on the front lawn and household appliances plopped in random locations.
One of the dangers of living without an HOA, I suppose. I’m honestly not sure which is worse. Who knows what a billionaire needs with an entire neighborhood, but it sure is fun to watch.
It’s funny. As I was writing this I googled him to find out what was new and it turns out he was just arrested. You can’t make this stuff up.
http://www.hawaiinewsnow.com/story/21500384/exclusive-billionaire-investor-genshiro-kawamoto-arrested-on-tax-evasion
“The locals then proceed to live as they are accustomed. Meanwhile he lets the houses decay and decay to the point where neighbors freak out and sell to him.”
There is a reason for zoning laws.
But this sounds like a great come-uppance for policymakers who encouraged foreign investors to come in and snap up U.S. residential investments. What say ye, oh wise ones?
The system requires suckers. Remember our japanese suckers from the 1980’s? The schooling of speculators is going to be stunning this time around. Meting out losses for a span of years like 1995-2013 will be a sight to behold.
Keep your powder dry.
“The locals then proceed to live as they are accustomed. Meanwhile he lets the houses decay and decay to the point where neighbors freak out and sell to him.”
————————————–
This sounds like the version of “blockbusting” where the developer moves black people in while making LOW offers to white people to sell.
They over charge black people and under pay white people; and laugh all the way to the bank.
Johns Hopkins has been accused of doing this to help it acquire land around its main hospital campus. People are always surprised to see that on one block there are brand new hospital towers and within 3 blocks there are houses that are about to fall down.
Third worlders are just honest about it. They let the poors develop their shacks and shanty towns in the river banks and never set a foot there.
Hopkins, on the other hand, took money from Sheik Zayed (founder of the United Arab Emirates) and from NYC Mayor Bloomberg (a Hopkins alum) to build two new 12-story towers to specialize in cardiovascular and neurological care. I was inside the Zayed facility a few months ago when my father in law got a check up - it looks and feels like an art project. A very, very expensive art project with an attached parking garage and various gardens around the building.
There are some crumbling houses a matter of blocks away in any direction.
On the other hand, Union Memorial Hospital is in one of the nicest neighborhoods in the city and is right across from Hopkins’ undergrad campus. So I am forced to conclude that JHU Hospital purposefully builds these state of the art facilities in downtrodden areas to get the land cheaply.
‘ JHU Hospital purposefully builds these state of the art facilities in downtrodden areas to get the land cheaply.’
Just doing business?
Last I was in Washington, D.C. (a decade ago), things looked the same way.
Square blocks with money directly adjacent to square blocks in depravity. Rinse, repeat several times over.
Fancy that.
I wonder what the percentage of cities decay in this manner versus decay essentially in a wave (i.e., in one overall longitudinal or latitudinal direction).
Third worlders are just honest about it. They let the poors develop their shacks and shanty towns in the river banks and never set a foot there.
Not really:
In Nigeria’s Largest City, Homeless Are Paying the Price of Progress
Government backhoes came in and plowed through Mr. Momoh’s simple wooden dwelling and some 500 like it last Saturday, instantly making homeless perhaps 10,000 of Lagos’s poorest residents and destroying a decades-old slum, Badia East. For days, residents wandered the chaotic rubble-strewn field, near prime Lagos real estate.
I know of a neighborhood where a millionaire bought houses and let them deteriorate as a purpousful plan to buy the other houses for cheap. Sort of like blockbusting with PWT. It hasn’t worked, thank goodness, the neighbors are a resilent bunch.
“Good fences make good neighbors”
Good genes make the best neighbors?
( Im sorry, I’ll get my coat)
Classic example of blockbusting.
And your HBB Librarian recently read a book called Some of My Best Friends are Black which describes how the blockbusting process worked in Kansas City and other places. Author’s name is Tanner Colby.
I wonder if block busting has ever been used on a such a wealthy neighborhood. One of the problems the neighbors are having is that there is a maximum limit for code violations that’s somewhere around $500/month. This guy just eventually pays the fine and fixes the code violation, then continues to get away with whatever else he can.
You’d figure these millionaires would have enough political pull to stop him. As of now they’ve only attracted the attention of one TV station.
Good morning everyone, I’m on the train headed to Craterton, d.c.
Remember, don’t by now. Be patient, there is still time for most of us to wait for the bottom to drop out of real estate. At which point buying might still be a bad idea.
G.d. Swype… “buy” not “by”
“Be patient, there is still time for most of us to wait for the bottom to drop out of real estate.”
Not in this Florida town. “CRATERRRRRRRRRRRRRRRRRRR!!!!”
Second sinkhole in Seffner, Florida, about three miles away from sinkhole that killed Jeff Bush
Posted: 5:50 AM
Last Updated: 8 minutes ago
By: Holly Yan and Catherine E. Shoichet, CNN
(CNN) — A sinkhole opened up Monday afternoon about three miles from the Bush home. The hole was between two houses, one of them vacant, and caused no structural damage, Hillsborough County Fire Rescue said.
The hole measures 12 feet across and four to five feet deep, said Puz, the county spokesman. He said there is no reason to believe the holes are related.
http://www.wptv.com/dpp/news/state/second-sinkhole-in-seffner-florida-about-three-miles-away-from-sinkhole-that-killed-jeff-bush -
The sinkhole must be a democrat. He’s eating up the Bushes.
I did a double swallow with my coffee on this . I think it’s Jeb Bush that is the brother of our former Leader, though not quite sure this early in the AM. In Florida Politics almost anything goes , but this would be a new low.
Remember there is a storm coming. Buy toilet paper. Buy eggs. Buy milk. Buy bread. When the snow flakes fall, DC makes french toast (and has gastrointestinal problems).
The losses in DC, Maryland, Virginia will be incalculable:
“The Snowquester is coming with its fervent attempt to make a dent in our snow deficit. This is easily the biggest snow threat we’ve seen over the past two winters. The main precipitation starts tonight as a rain/snow mix in most areas which transitions to a heavy, wet snow from west to east early Wednesday. Significant snow accumulations of 3-8 inches are likely (and even more, 6-12 inches, west of the Beltway). Snow ends Wednesday night with a gradual warming trend Thursday into the weekend.”
Biggest snow threat in 2 year, eh?
LOL we haven’t gotten any real snow in that time period. The last decent snow storm was 3 years ago.
Those Beltway Feds are all sissies. We had 10+ inches of snow on February 24-25 and our office still opened on Monday at 10am.
One day of snow, and then 50° F for days afterward. Yup, I’m shaking.
One day of snow, and then 50° F for days afterward. Yup, I’m shaking.
We just experienced 54 degrees, and now it’s rain and snow mix.
Cue up the sound of my mother, heading to the store before the storm hits suburban Philadelphia.
Chinas workforce topped out in 2010 but they’re still insisting on building more housing. Because, you know, the cause of their rising housing prices is lack of inventory. This is laughably stupid.
http://www.forbes.com/sites/gordonchang/2013/03/03/chinas-property-sector-just-before-the-crash/
“If they continue to increase completions at the current rate, they will be finishing 19 million units a year in five years…”
What’s in YOUR shadow inventory?
One might think that a hundred million or two excess houses would last them for a while. I suspect though that there isn’t enough coin left in the world to make it possible.
Who’s in your wallet?
The Ongoing, Hideous Lie About ‘Victimized’ Mortgage Holders
RCM ^ | 03/04/2013 | John Tamny
On its most recent magazine cover with the “The Great American Housing Rebound” as the title, Bloomberg BusinessWeek featured characters that, as the New York Post put it, were “drawn to look like minorities.”
Perhaps eager to make a lot of noise, Ryan Chittum of the Columbia Journalism Review responded that “minority borrowers were disproportionately victimized in the bubble. But BusinessWeek here has them on the cover bathing in housing-ATM cash, implying that they’re going to create another bubble. That’s not okay.”
Though it apologized for the alleged offense, Bloomberg BusinessWeek should have stood firm. It did nothing wrong. Though the cover would have likely been more accurate had it included people of all races, the notion that those who borrowed to buy houses they couldn’t afford were the ones victimized is laughable, and it’s Chittum who should apologize for promoting such an offensive falsehood.
Considering the individuals who bought houses they couldn’t afford with the money of others, they were the self-destructive victimizers. In most instances well aware that they were taking on mortgages they couldn’t afford, they with great dishonesty accepted the loans on the assumption that, if they couldn’t make regular payments on them, it would be easy to pay them off in full by virtue of selling the underlying home for an amount greater than the purchase price. Far from deserving our sympathy, these people deserve our disgusted scorn.
Importantly, the true victims of their recklessness are many.
First off, for individuals to borrow irresponsibly such that they’re unable to make their payments, there’s logically another set of individual savers victimized by their wasteful profligacy.
(Excerpt) Read more at realclearmarkets.com …
I think that all this homebuilding is their equivalent of digging holes and filling them in again, just to keep people working and too physically exhausted to revolt. If it turns out that they need the housing, great, they have it. If they don’t need the housing, at least they averted revolution, and they can harvest and repurpose the raw material. If they need the housing later but it decays in the meantime, fixup is just more jobs for the masses to do.
they can harvest and repurpose the raw material.
I’d like to see that. I think it’s a lot more likely that it all becomes landfill.
Posted: 4:25 p.m. Monday, March 4, 2013
International investment firm to buy 1,000 South Florida homes
By Kimberly Miller
Palm Beach Post Staff Writer
International investment firm Colony Capital plans to buy an estimated 1,000 South Florida homes to rehabilitate and rent, a relatively new business model for large investors that is attracting several companies to the Sunshine State.
The privately held Colony Capital, which has committed $2 billion nationwide to purchase and lease single-family homes, began buying in South Florida last month, said Justin Chang, CEO of subsidiary Colony American Homes.
“We’re really building a business for the long term,” he said. “Homes have never been more affordable, but it’s hard in a lot of cases for a homebuyer because there isn’t credit available.”
Colony Capital CEO Thomas Barrack, who served as deputy undersecretary of the Department of the Interior under President Ronald Regan, said last month on CNBC’s Halftime Report that the company has about 8,000 homes nationwide. In addition to Florida, Colony is buying homes in California, Arizona, Texas, Georgia, Nevada and Colorado.
While buying and renting homes is a good investment, it’s also a challenge, Barrack said. He likened the acquisition process to “Jurassic Park.” Purchases are typically made one at a time, and it’s not always clear what kind of repairs will be necessary.
“The difficulty has been harvesting, which is the barrier to entry,” Barrack said on the show. “Why isn’t everybody doing this? Because it’s a nightmare.”
“…to rehabilitate and rent, a relatively new business model for large investors that is attracting several companies to the Sunshine State.”
What do large investors see in renting residential real estate to Lucky Ducky that I am missing?
Too much money at hand? Easy to enter in the business…don’t need to spend any money in R&D or infrastructure. The same reason Social Networking companies are doing great. Being a landlord will be tough, they will learn lessons the hard way. Their only hope is that they can make some cosmetic changes to houses and offload to some FB’s. I doubt it will happen. They are stuck with cratering assets!
I was thinking maybe they were hoping a share of BB’s $40 bn / month in MBS purchases might trickle down in the form of capital gains on their residential investments?
The ‘Yet-To-Be-Named’ Real Estate Bubble
Mar 4 2013, 10:49
By Ramsey Su
The country is spending more than it makes, to the tune of over $1 trillion per year for the last four years and the foreseeable future. Households are spending more to keep up a lifestyle supported by borrowed money. To treat an addict who is using borrowed money to support the drug habit, lowering the borrowing cost so the addict can buy more drugs is not the answer. We are still on drugs. That is why real estate is in a bubble. Here are the specifics:
QE~ (Infinity)
The first part of QE~ is the purchase of $45 billion of treasuries each month. To put this in perspective, the sequester in the news is $85 billion for this year and $1.2 trillion over 10 years. The sequester is less than what Bernanke finances in 2 months. Why worry about the sequester? Bernanke can just add $7 billion a month to the $45 billion and the debt would be covered.
The second part of QE~ is the purchase of $40 billion of agency MBS. The entire mortgage market is originating approximately $1.5 trillion loans per year, out of which about 70% are refinances, or $450 billion of new loan originations. Let us assume 90% of all originations are agency loans, then Bernanke is purchasing 100% of all agency originations and still has $75 billion left over, per year. Maybe he can just use that to offset the sequester.
The Fed already bought $1.2 trillion of agency MBS before QE~. The underlying mortgages are constantly prepaid via foreclosures, sales or refinances. Bernanke is replacing these prepayments with new purchases. Combined with the $40b per month under QE~, the Fed is purchasing at the rate of $16.8 billion per WEEK or $873 billion per year. Does that seem like a pretty large number to you?
…
Being a landlord will be tough, they will learn lessons the hard way.
I still think they’ll go the rent-to-own route.
What’s the market share of lease-to-own cars? Not much. Same fate awaits here.
Rent-to-Own??
WTF is that? It downplays the whole psychology of owning? People like to “own” things. There’s a pride in saying, I am a home “owner” and I “own” that thing and that’s all mine.
How are they going to introduce themselves now, Hey I am a Renter-To-Owner? It’s never going to catch on, not for few decades anyway.
How are they going to introduce themselves now, Hey I am a Renter-To-Owner?
Rent-to-owners think they are owners, just like those with mortgages do. They have the responsibilities of an ‘owner’- ie if the toilet backs up, they pay to fix it- but they don’t have the same rights as owners. That’s the beauty of it.
A couple of years ago, the owner of the rental house behind me tried the R2O route. And failed. It was his third attempt to sell the house, which he’d purchased as an investment back in 2006.
Methinks that I live directly in front of a failed landlording experiment.
How are they going to introduce themselves now, Hey I am a Renter-To-Owner? It’s never going to catch on, not for few decades anyway.
It’ll probably be presented as “owner financed” rather than “rent to own”. So they can feel like real owners as they do all the maintenance. There will just be something in the finance contract that makes it easy to walk away or get repo’ed.
Rent to own is a bad deal for renters good for landlords. landlord gets higher payments ( rent plus equity ) and knows that most of these rent to own people will fail, landlord keeps extra “equity” .
I expect many of the professional property buyers know this.
Social networking is another way of saying “people with too much time on their hands.” With high unemployment and under-employment, you’ll see a lot of people socially networking with others. And, when the economy picks up, those social companies will…
…crater.
Why? Because those company computers probably block Facebook, Twitter, and LinkedIn.
Employees will just check Facebook and Twitter during working hours from their smartphones instead of their home laptops.
Employees will just check Facebook and Twitter during working hours from their smartphones instead of their home laptops.
Yup. And not all employers block that stuff. Just like personal email years ago and personal phone calls before that, it just ends up not being worth the hassle to monitor in many cases.
Social networking is another way of saying “people with too much time on their hands.”
HBB is social networking….
He likened the acquisition process to “Jurassic Park.” Purchases are typically made one at a time, and it’s not always clear what kind of repairs will be necessary.
How is that like Jurassic Park?
The difficulty has been harvesting, which is the barrier to entry
Can someone translate that one, too?
You can not apply logic to a mania.
Maybe it’s like Jurassic Park because the eggs (houses) hatch one at a time, but you don’t really know how that little dino-house is going to turn out. It could be a cute baby bronto, or a cute baby raptor, oops.
I don’t see how any type of harvesting can be likened as a barrier to entry. Barriers are a beginning process, harvesting is a result.
I think they interviewed him after happy hour.
It’s a reap what you will sow later world.
Hmmmmm Maybe this is the way the Chinese will buy up America?
It would be political suicide to offer to buy them from Freddie and Fannie….but a hedge fund?
Trade a decade of cheap crap for the kitchen from Wallyworld for a new Chinese landlord.
No one would agree to trade a $14.99 coffee maker for a Chinese landlord.
But would they trade an iPhone?
plans to buy an estimated 1,000 South Florida homes to rehabilitate and rent
Report: Arkansas Law Imprisons Those Who Fail To Pay Rent
Under a state law in Arkansas, renters can be imprisoned for failing to pay their rent. According to a report by Human Rights Watch, titled “Pay the Rent or Face Arrest: Abusive Impacts of Arkansas’s Criminal Evictions Law,” hundreds of tenants each year are taken to court, fined and jailed under the state’s “failure to vacate” law.
Fun times ahead?
Can you blame the Germans for not wanting to pay for their neighbors’ profligacy? It’s a story as old as time, which every child knows.
Silly Symphony - The Three Little Pigs
Uploaded on Jun 10, 2008
A Walt Disney classic Silly Symphony the Three Little Pigs. An amazing peice of animation!
To an extent the crisis traces back to germans wanting a single currency and less trade barriers within Europe. You can’t usually get that upside without a downside. The real question is who parts for any losses. Hanz6pack or the banks?
“Hanz6pack”
Wahr das.
HanzSteiner expects JoseWineskin to pay.
“Hanz6pack or the banks?”
Its before my time, but wasn’t a big part of the troubles 80 or so years ago over there, that hanz6pack was given some peculiar ideas about the ethnicity of the bankers and the solution to that particular financial problem?
Hopefully that all won’t start up again, although central bank hyperinflation does have a pretty disturbing historical trend of that kind of thing resulting.
I would go long defense stocks Next Time you see Germans with wheelbarrows full of paper money. And that is unfortunately becoming more likely each day.
I’m not too worried about joe6pack being poor because he’s a wimp who’s always been easily distracted by TV etc. And Juan6pack and Xian6pack have always been poor so being poor isn’t exactly new or unusual. But when Hanz6pack gets his economy ruined, 10 years later he’s marching down the streets of Paris (again!). So that kinda sucks. Hopefully I’m too old to be in the fight and my kids are too young, although with kick the can down the road they might be in prime draft age when it inevitably hits the fan, which sucks.
I would go long defense stocks Next Time you see Germans with wheelbarrows full of paper money. And that is unfortunately becoming more likely each day.
If we had to print actual dollars to buy the debt I would agree with you. We’d probably already be in the situation if the Bernanke had to print actual, physical dollars to buy the debts they’re buying. But he doesn’t. He types some numbers into a computer and all of a sudden there’s unrest somewhere as the dollars flow there, outside of the country.
Without printing actual money, we’ll never see this situation. It won’t be possible for anybody to gather a wheelbarrow full of money - at least not very many people. Virtual dollars won’t fill up a wheelbarrow.
Well, disagree partially if you’ve seen how bad consumer inflation currently is, just hyper it up a bit, but how about when there’s as many unemployed young men in Berlin as are currently in Greece?
Hordes of unemployed very angry draft age young men … wonder what happens next?
Actually it doesn’t even need to “start” in Germany, it just needs to take hold once it starts elsewhere. “It” will probably start in a place thats more screwed up. Lets say hordes of starving unemployed angry young greek men burn every German bank building and every EU building to the ground in Athens this spring. It could happen. In fact it sounds fairly realistic. The response, in Germany, full of angry newly unemployed young men is…
“…hanz6pack was given some peculiar ideas about the ethnicity of the bankers and the solution to that particular financial problem…”
Coincidentally, many bankers then and now just so happen to be Jewish. Note that one of Shakespeare’s most heinous characters, Shylock, who demanded a pound of flesh as payment, was a Jewish money lender.
And contrary to modern banking theory, where borrowing and lending is a win-win, much of practical banking appears to rely on scamming party A and robbing from party B so that the middleman banker can make a bundle of money off both of them. But I am sure this has nothing to do with whatever set the Nazis off on their killing spree.
Hanz6pack
Hans und Jutta 6pack
Straw hut and sticks hut pig were lucky enough to get bailed out by brick house pig, especially since before the big bad wolf showed up at their door, they were able to live a life of fun and frivolity while brick house pig worked hard night and day to prepare himself.
I like The Three Little Bops better. The three pigs are cool jazz musicians and the Big Bad Wolf is a square who keeps blowing down their clubs because they won’t let him play in their band. A Looney Toons classic.
http://www.supercartoons.net/cartoon/731/three-little-bops.html
EU Opens Way for Easier Budgets After Austerity Backlash
By James G. Neuger & Svenja O’Donnell - Mar 5, 2013 2:23 AM PT
European finance ministers opened the way for looser budget policies after a backlash against austerity thrust Italy into political limbo and shattered months of relative stability in European markets.
Italy’s deadlocked election, France’s refusal to make deeper budget cuts and protests against the shrinking of the welfare state across southern Europe escalated the rebellion against the German-led prescription for fighting the debt crisis.
Economic strains “may also justify in a certain number of cases reviewing deadlines for the correction of excessive deficits,” European Union Economic and Monetary Commissioner Olli Rehn told reporters late yesterday after a meeting of euro- area finance ministers in Brussels.
The euro-zone economy will shrink 0.3 percent in 2013, making for the first annual back-to-back contraction since the currency’s birth in 1999, the European Commission forecast last month. The currency-bloc prediction masked a widening north- south divide, with growth in countries like Germany, Finland, Belgium and Luxembourg set against dwindling output in Italy, Greece, Spain and Portugal.
France is straddling the middle, set to eke out a 0.1 percent expansion after the economy stagnated in 2012, according to the commission. Deeper budget cuts are out of the question, French Finance Minister Pierre Moscovici said.
‘Right Rhythm’
“We do not want to add austerity to recession,” Moscovici said. “If our rules are intelligent, they are also flexible. We have to find the right rhythm and the right balance without weakening the little growth left.”
France is counting on estimates that it has made sufficient reductions in the “structural” deficit — a figure that factors out the effect of the economic cycle — to escape a European order to cut more.
French President Francois Hollande became a spokesman for southern European opposition to belt-tightening last year after ousting Nicolas Sarkozy, who toed German Chancellor Angela Merkel’s anti-crisis line.
“The cure is not working, and there is no hope that it will — that is, without being worse than the disease,” Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist, said in a posting on Project Syndicate. “Germany has consistently rejected every policy that would provide a long- term solution. The Germans, it seems, will do everything except what is needed.”
…
Is Germany still laboring under the delusion that people with no money are going to pay them back?
Washington Post is running an on-line chat about navigating the DC real estate market this afternoon at 1:00. Link here:
http://live.washingtonpost.com/navigating-the-housing-market.html
They get to pick their questions, but, if anyone wants to spam them with questions about the market cratering or ask pointed questions about how prices can go up if interest rates increase and median salaries stay the same or go down, please feel free. I don’t think you need to be registered to submit questions/comments, but if you do, it is free.
I am going to watch this and laugh. I just need to find some boxes of docs to review for an hour. Shouldn’t be to hard.
Believe it or not, we still deal with a lot of paper. Relativity is only good for certain types of reviews, but what i mostly look at is one or two peoples emails for a certain time period, so it might be a couple thousand emails, not a large universe. And relativity isn’t good at coming up with reasons not to produce.
I am surprised you don’t have those boxes converted into a database. Must be a legal thing?
They start off in a database (Relativity for us, usually), but they ultimately use the database to create subsets and a lot of the subsets still get printed. There might be 1000 emails from Person X in a requested time frame or related to X project but we need to find reasons to not produce as many as possible. When you have a paper copy of things partners can mark them up and they like doing that.
In some cases we have to produce unredacted copies to the government but also redacted copies to the Relator (such as in a qui tam action). This is to cover up things like prices, specs, proprietary info, etc. Technically this could all be done by turning everything into PDFs and then using Adobe Professional to create the “window” feature for proposed redactions (you can see the proposed redactions but you can mouse over it to see what it will look like when redaction is applied). But in reality, it’s easier to use an old fashioned red pen or highlighter. Partners don’t want to go in and out of different computer programs and after 2-3 years, associates really can’t bill the client for any time spent screwing with technology (billing rate gets too high).
“…how prices can go up if interest rates increase…”
Clearly there is no need to worry about higher interest rates, as the Fed has put itself into a place where it will be unable to increase rates for a very, very long time.
Buffett sees ‘hair trigger’ when Fed ups rates
Ray Goldbacher, USA TODAY
3:12p.m. EST March 4, 2013
(Photo: Nati Harnik, AP)
Billionaire investor Warren Buffett said on CNBC Monday that many money managers will be selling some investments when the Federal Reserve stops pumping extra money into the economy.
The chairman and CEO of Berkshire Hathaway says stock prices have gotten a boost from low interest rates engineered by the Fed’s stimulus efforts, and it will be a “very interesting day” when it becomes clear the Fed has reversed direction.
Global markets, he said, are on a “hair trigger,” looking for any sign the central bank may start raising rates.
“I think the Fed will try to give little signals here and all of that. But in the end, there are an awful lot of people who want to get out of a lot of assets if they think the Fed is going to tighten a lot,” he said on CNBC.
He said there’s no question that stock prices are higher than they would be otherwise, because interest rates are essentially zero.
…
Then on the other hand…
March 5, 2013, 8:54 a.m. EST
Treasury yields rise to highest since Feb. 27
By Saumya Vaishampayan
NEW YORK (MarketWatch) — Treasurys fell on Tuesday, pushing yields to the highest level since Feb. 27, ahead of the ISM non-manufacturing data release at 10 a.m. Eastern. Yields on the benchmark 10-year U.S. Treasury note 10_YEAR +0.96% rose 2 basis points to 1.9% in morning trade. Yields move inversely to prices and one basis point is one one-hundredth of a percentage point.
‘He said there’s no question that stock prices are higher than they would be otherwise, because interest rates are essentially zero.’
We’ve seen this movie before.
If people believe in an efficient market, shouldn’t the probability of future rate rises already be priced in?
I always wonder now what a high-rising market portends. There is a coincidental chance that good times will be ahead.
I posted a question. So far they haven’t addressed it.
They did answer this softball question, though:
————
price reduction
How long should one wait before reducing the price on their property, particularly if you are not getting any offers?
– March 05, 2013 12:38 PM Permalink
A.Marjorie Dick Stuart :
Properties priced at market are typically selling within two weeks. If they are not getting offers and lots of showings in that time period it is time to seriously evaluate what needs to be done to get increased activity and or an offer. Sometimes it is price and sometimes it is a combination of price and other factors such as the condition of the property, the availability when a buyer wants to see the house, and marketing activities. The changes should be made immediately so the listing does not become stale. All feedback from buyers and agent should be considered when making this change.
I’ve posted 5, no answers yet. And I kept it polite.
They answered my question. I was going to toss in the word Crater, but decided they’d never answer something inflammatory.
I asked a simple question on why I find people in this area making up their own square footage (much larger than what’s found on the deed with no changes to the property) and why when $200 a SqFt is selling they would list for $350 a SqFt and up. No response yet.
And the chat is over. What a terrible waste of bandwidth. God do I hate Realtors! The gall that they actually DO something is amazing. They are used car salesmen without the horrible TV ads!
making up their own square footage
The square footage is wrong for my property at the tax database. Or is square footage only “finished” square footage? In any case, I don’t especially want to correct the taxing authority.
Also, they’ve answered 14 questions in 90 minutes, taking 6 and a half minutes for each question with no response longer than 40 or so words. Realtors really are “slow”
SHE ANSWERED MY QUESTION…. WITH LIES!
The link –> http://live.washingtonpost.com/navigating-the-housing-market.html#question-9
Q.
I have heard that now is a terrible time, that I should wait and buy later for significantly less money. I currently live in Bethesda, where we are renting since moving down from New York. I’m looking in the $800k-1MM range, specifically at Cleveland Park. Do you think I’d be better off waiting?
– March 5, 2013 1:36 PM
Permalink
A.Marjorie Dick Stuart :
No, you are not better off waiting. I specialize in Cleveland Park and currently there are very few properties for sale which is consistant with the record low inventory throughout the Metro area. If anything, this will cause prices to increase not drop.
Someone else asked this question after me:
Q.looking in Arlington
My family is expanding and we should start looking to buy a house. We currently live in Arlington and would like to stay there because it splits my commute evenly with my husband’s, and because of good schools and quality of life. My husband and I are not wealthy but make good salaries (just under $200k/year) and we rent our home though I own a small condo in DC. We live frugally but pay a nanny for childcare. I guess my question is, is it possible for us to buy a house in our area? What is the best way to start? Whenever I look at real estate listings, I don’t see much of anything under $800K which I think is crazy. We don’t need a huge house but I don’t particularly want to buy a condo because I like to garden and have outside space.
– March 5, 2013 1:40 PMPermalink
A.Marjorie Dick Stuart :
I think a good place for you to start would be to contact a local lender to get prequalified. See what these all time low interest rates will mean to you in a monthly payment and price range. Once you figure that out find a real estate agent who knows the area and can look at your wish list and help you figure out where those houses are likely to be which meet your criteria.
– March 5, 2013 1:51 PM
LOL, the realtard is recommending the question-asked become part of the “howmuchamonth” crowd.
Did you see this little snippet?
“My definition of staging is clean with clean windows, one to three items on any surface, fresh light paint (taupe-like color) current looking furniture and light fixtures, fresh looking kitchens and baths with new appliances and nice countertops.”
That’s not staging, that’s a facelift. Not a single house that I looked at was staged, btw. In fact many were lived in.
To be fair, she’s in Cleveland Park so it’s probably worth staging. And people will overpay to get into Cleveland Park. Not that it’s smart, but it’s a luxury most of those buyers have. The funny thing is when she acts like people in Arlington (etc) should operate this way. Or acts like someone should hurry up because “prices will only rise” (or whatever she responded to me).
The Cleveland Park bit was something I tossed in to get her to take a bite - how could she turn down a question from someone allegedly considering her area of “expertise”?
Oxide, another thing is, I think realtors often do the staging. Realtors on million dollar houses are much more likely to lay out the money, whereas houses in 500k and below aren’t worth it.
Wow. She’s quite a liar. Is there anything a realtor won’t lie about?
At least for a traditional home loan, what is wrong with being part of the howmuchamonth crowd?
Howmuchamonth got people in trouble when they took out a “risky” loan like an ARM or a neg-am ninja where the howmuchamonth went up within a year. Howmuchamonth got people in trouble when they chose an F-250 for 72 months rather than a Corrolla for 36 months.
But for a house where terms are almost always 30 years and rates are almost always fixed, howmuchamonth actually may be the correct line of thought. It’s especially true at the low interest rates, btw. For example, if interest rates rose to 7%, the price of my house would have to craaaater 30% (i.e. 55% down from peak) for the 7% howmuchamonth to match the howmuchamonth I pay now.
And anyway, every single renter is part of the howmuchamonth crowd.
howmuchamonth is a bad idea when: a) your job isn’t that secure (umm sequester anyone?) b) you try to spend as much as possible to “afford” to meet some aspirational standard of housing c) you could hold off and buy for a lesser total price in the future or d) you might want to take a job in the future.
As we’ve discussed w/r/t “d”, for the D.C. area, maybe you are working in downtown DC and then get transfered out to Fairfax county. Or you’re working in Silver Spring and get moved to Alexandria. Even a few miles one way or the other can be a nightmare. But if you buy a house, you are locked in.
howmuchamonth is a bad idea in a low interest rate environment. If interest rates rise, the next guy in line (the one you’ll sell to), does the same howmuchamonth calculation, and determines that he needs to pay much less than you did (more of his payment goes to interest). That leaves you upside down, holding the bag for the price drop.
howmuchamonth makes good sense in a high interest rate environment. If/when interest rates drop (assuming you stay), you can refinance- to a smaller payment. The uncertainty is all up-side. You hope interest rates are low when you sell- so your buyer (doing a howmuchamonth) calculation pays a higher price putting cash in your pocket.
There’s no upside to a howmuchamonth calculation in a low interest rate environment (like today). Focus on price.
At least for a traditional home loan, what is wrong with being part of the howmuchamonth crowd?
What you’re really saying is “what is wrong with over paying by 200%. You just don’t know it or can’t admit it.
Howmuchamonth got people in trouble when they took out a “risky” loan like an ARM or a neg-am ninja where the howmuchamonth went up within a year.
No. You/ howmuchamonth got in over your head when you overpaid for housing.
Howmuchamonth got people in trouble when they chose an F-250 for 72 months rather than a Corrolla for 36 months.
No. You/Howmuchamonth are in over your head because you have no idea of the value of a dollar. You/Howmuchamonth are fodder for the system.
But for a house where terms are almost always 30 years and rates are almost always fixed, howmuchamonth actually may be the correct line of thought.
A self-endorsement of what we know is a tragic error you made says what about you?
It’s especially true at the low interest rates, btw. For example, if interest rates rose to 7%, the price of my house would have to craaaater 30% (i.e. 55% down from peak) for the 7% howmuchamonth to match the howmuchamonth I pay now.
Yet you continue the ruse by confusing and conflating. A rental house is 50% less the monthly cost per square foot cost of buying at current inflated asking prices of resale housing.
And anyway, every single renter is part of the howmuchamonth crowd.
And your costs are twice that of “every single renter”.
You’ll continue to make the same financial errors over and over again.
every single renter is part of the howmuchamonth crowd
I thought rent was free?
It is in your corrupt empty skull.
Redrum, I know what you’re saying. I used to sing that song on HBB too. Interest rates were going to go up, prices were going to go down, we could buy at 30% off, and then we could all refinance the low price to a low interest rate, and unicorns would crap rainbow-colored marshmallows. I sang that tired song until 18 months ago.
And then I watched what was REALLY happening:
1. Housing was being taken advantage of as a “needs” industry. That is, people were getting used to housing being a much higher % of income than in the past. Prices rise to what the market will bear because you have to live somewhere. (and why not? In parts of the world, food is 30% of the budget, because you have to eat something.) Applebees and JCPenney will suffer before house prices do.
2. The government, through one program or another, was allowing banks to keep homes; that is no fire sales, market forces were not working.
3. Ben Bernanke made hints that interest rates were not going to rise until mid 2013…. well, maybe late 2013… hmm, early 2015… well, when unemployment is 6.5%. That is, your scenario interest rates rising is YEARS away, possibly 10 years or more.
4. Even if interest rates do rise, house prices may not respond for a couple years after that. And even if prices do drop a little, the hedge funds will show up to buy the houses at those prices and stop the drops. Repeat for another 5 years. By then, inflation takes over, and basically, house prices won’t drop at all!!
4. Meanwhile, my rent was rising 7-15% a year. How are people paying this high rent? By packing 2-3 incomes into one household. Rent will never go down, because you have to live somewhere, just like in #1.
The trends defied classic econ, but guess what, it’s a real trend no matter what the textbooks said. I began to ask HBB… WHEN was this magical craaater going to occur? Because if it’s 7-8 years, I could easily spend $200K in rent waiting for the damn craaaater. I would be better off buying, even WITH a craaater. At least I’d be on my way to owning outright when I retired.
The only answers I received to my “when” question was that it “was gunna” happen sometime. In other words, HBB’s gurus were useless. Thanksgiving 2011, I called a realtor.
LOL
Using CIBT’s demographic analysis, the crater is going to happen about the time the household formation age population declines- which is 15-25 years from now.
It could be sooner if there are no jobs for the millenials.
Washington DC is a toilet.
Keep telling yourself you have to be there because “that’s where the jobs are”, meanwhile the rest of us enjoy a quality of life that spends less than one weekday hour total commute time.
Loosers!
“the time the household formation age population declines- which is 15-25 years from now.”
Don’t lie about it.
Household formation is at 50 year lows.
Yes, there is a shadow inventory of wannabe household creators living in their parents’ basements.
You lied.
March 5, 2013, 8:01 a.m. EST
Sequester is much ado about nothing
Day four of the sequester and the earth is still turning
By Irwin Kellner, MarketWatch
PORT WASHINGTON, N.Y. (MarketWatch) — Have you felt the effects of the sequester yet? Neither have I, although to listen to the administration and its agencies you would have expected doomsday to be well underway by now.
Let’s run through our checklist to see what I mean:
* Our military is still the best in the world;
* Our economy is still growing — albeit at a glacial pace;
* Unemployment hasn’t suddenly soared;
* Federal benefits are still being paid;
* Air traffic may be a hassle, but no more so than usual;
* No food shortages are apparent from a lack of federal inspectors;
* Teachers are still teaching;
* Researchers are still in their labs.
Here’s why nothing has changed: $85 billion may be big bucks to you and me, but it is only a rounding error in a budget of $3.5 trillion. Indeed, according to the Congressional Budget Office, the actual cuts this year will amount to only $42 billion if the sequester is allowed to run the full year.
…
Even WITH the sequester - the US government will spend more in 2013 than it did in 2012.
Wow - such austerity…
Does “reverse housing improvement” mean “improvement in housing affordability”?
Me confused.
Bernanke: Quickly as you can, snatch the pebble from my hand.
[Young Cantankerous Intellectual Bomb Thrower tries to do so and fails]
Bernanke: When you can take the pebble from my hand, you will know what “reverse housing improvement” means.
Sequester Call: Sell Home Builders, Hang On To Retailers
March 04, 2013 12:21 PM
By Kevin Donovan
We have been accused of being a perma-bull, and not without reason. After all, last year we recommended home-building stocks in anticipation of healing in the housing sector, and we also thought selected retailers would do well as consumers grew more confident that the economic expansion was secure.
In the aforementioned, we hit the sweet spot. Pulte Homes (PHM : 19.72, 0.47) is up 102% and D.R. Horton (DHI) has gained 29% since we recommended purchase in May (see here). A month later we added Lennar (LEN) to our list. Its shares are also up 29% since that call.
Our retail calls were mixed. Macy’s is our big winner, up 23% since we recommended purchase on July 5 (see here). But our calls on specialty clothiers haven’t played out as well. Gap Stores is down 15% since we recommended the stock in August and Rue21 is flat. And our recent recommendation on Penney’s (JCP : 16.74, -0.95) shows a 15% decline. OOPS!
However, our non-clothing retail pick, Barnes & Noble (BKS : 16.46, 0.83), is up 10% since our advice to buy in mid-December.
Believers as we are in the revolutionary investment theory of buy low-sell high, we would take profits on the home builders and hold on to the retailers. This is a bit counterintuitive, given our outlook that the sequester is a bigger deal than the market thinks.
…
homes builders are cyclical and retailers are not I guess?
Like medical and cigarettes verus oil and construction
so they see a slow down ahead because of sequester
yea maybe I still expect a deal no way government can cut spending no way
I expect less benifits for social security and medicare which is kind of a spending cut more like we can’t skim the surplus so what good is it anymore
Because a 70% consumer economy doesn’t need consumers:
“Americans spent $782.5 billion for recreational goods, vehicles and services — including sporting equipment and amusement parks — in January on a seasonally adjusted annualized basis, representing 6.9 percent of total personal consumption, based on data from the Commerce Department. The share nearly matches the average since the 18 month slump ended in June 2009. In the three years before the recession, the average was 7.4 percent.
Consumers are suffering from the “overhang of a frugality psyche” that’s making them either unwilling or financially unable to allocate the same amount of their budgets to these goods and services, said Stuart Hoffman, chief economist at PNC Financial Services Group Inc in Pittsburgh. The result is a “lasting legacy of the severity of the recession.”
Amid rising costs for basic necessities, “consumers are still budgeting for recreational activities as though there’s been no improvement in the economy,” (um, because there hasn’t been, except for the 1%) Hoffman said.
http://mobile.bloomberg.com/news/2013-03-05/frugality-psyche-restrains-u-s-recreational-spending-ecopulse.html
The one percent have no clue. They see money being churned and profits being made and they think some that trickle down is working it’s magic and delivering benefits to the worker bees.
Like I keep saying, Marie Antoinette didn’t get it either.
Feds keep hiring with sequesters in place: 400 jobs posted on first day back
By Stephen Dinan
The Washington Times
Monday, March 4, 2013
The sequester cuts are now officially in place, but many government agencies appear to be hiring freely anyway.
The U.S. Forest Service on Monday posted help-wanted ads for a few good men and women to work as “recreation aides” this summer, the Internal Revenue Service advertised for an office secretary in Maryland, the U.S. Mint wanted 24 people to help press coins, and the Agriculture Department said it needs three “insect production workers” to help grow bollworms in Phoenix.
Monday marked the first regular workday under sequestration, and federal agencies posted more than 400 job ads by 6 p.m.
“Every position you don’t fill that isn’t absolutely necessary is one less person that needs to be furloughed,” said Steve Ellis, vice president at Taxpayers for Common Sense — though he said some positions that people leave need to be filled in order to meet agencies’ core missions.
Part of the problem is it’s often unclear exactly what those core missions are, said Paul C. Light, a professor at New York University who has studied government organization extensively.
“When you say mission critical, it’s a phrase without meaning,” he said. “Everything’s mission critical. Therefore, we have no way of knowing what would be mission critical in a job description versus what is not.”
He said agencies become “very artful” in writing job descriptions to justify why they are hiring.
At the Homeland Security Department, which just days ago announced it was releasing some low-priority illegal immigrants from jails to await removal, the agency in charge of deportations advertised for an assistant to help with deportations.
The annual salary for the job is $60,765, enough to detain one immigrant for about 500 days.
But the Obama administration also faces a decision about how painful it wants the cuts to be. Ahead of the sequesters, when the White House was still hoping for a deal, officials painted the most dire picture possible. Now that the cuts are a reality, the administration must grapple with the possible downside of cutting something critical while spending on something that voters might see as less important.
When it comes to furloughs, Mr. Light, the NYU professor, said it would make sense to use job appraisals to decide which employees to furlough — except that the appraisals aren’t particularly useful anymore.
http://www.washingtontimes.com/news/2013/mar/4/feds-keep-hiring-with-sequesters-in-place/
We are currently hiring private-sector, government contractor, analyst staff.
Wear Sunscreen
http://www.youtube.com/watch?v=sTJ7AzBIJoI
Another failed charter school closes midyear.
“It was clear to teachers at the Einstein Montessori School in Orlando that something was very wrong when school opened for business last fall.
There were no computers for student use. And although the school focused on students with dyslexia, there were no reading texts.”
http://www.orlandosentinel.com/features/education/os-failed-orlando-charter-einstein-montessori-20130304,0,6769366.story
When was the last time a public school closed due to failure to teach…?
When was the last time you volunteered at a public school?
But, since you asked (you live in New York, yes?):
http://www.nydailynews.com/opinion/schools-closed-kids-saved-article-1.1235933
Philadelphia, New York, Washington, and Baltimore have all closed schools and proposed closures for schools that are underperforming or underutilized. Michelle Rhee was called racist for this. Dr. Alonzo in Baltimore has a detailed 10 year plan to close a few schools a year and focus on improving schools that are best suited to upgrades and expansion. Several of the lowest performing schools were charter schools, FWIW.
This has less to do with ineffective schools and everything to do with underutilization. Municipal facilities across the northeast are being mothbolled, demo’ed and abandonded. Services are getting shared between municipalities and towns. Regions are hiring consultants to coordinate it all.
Now you can all deny this demographic reality but the truth of it is playing out. And it’s going to accelerate. Depopulation and the resultant cratering demand of everything is a reality.
I’m not denying the demographic shifts nor the underutilization of buildings in certain areas (almost always 90%+ african american areas that have been permitted to deteriorate). There is a big overlap between underutilization and poor performance, i.e. once a school starts to perform poorly (after the surrounding area has gone downhill), everyone but the poorest of the poor finds a way for their kid to go to the next school to the south or east or whatever.
I don’t know how this plays out in suburbia, but that’s what it’s like in the city. It’s only worth updating/expanding schools that have a decent reputation and test scores, which tend to be fairly full to begin with.
Why expand anything when demand is falling?
There may be a glut of housing in some places, but in San Francisco they need to build more, and they are.
The cranes are everywhere these days.
Unfortunately, the very same folks who decry the high price of housing are also the NIMBYs who fight against development.
Hard choices ahead for growing S.F.
Combined with the Association of Bay Area Governments’ estimate that San Francisco’s population will soar from the current 812,000 to at least 964,000 by 2035, it’s clear that great change is ahead for the city.
When suckers are willing to pay me $300+/square foot for $60/square foot of work, I’ll have every lattice boom crawler and sign crane I can find out working. Every. Single. Time.
But we don’t expect suckers who’ve already been scammed to be honest.
The truth?
There are 12,000 defaulted properties in SFC alone. And as SF enters its’ price decline phase, expect that number to triple.
Enjoy your reading.
http://www.realtytrac.com/map/ca/san-francisco-county/san-francisco/#cp=37.78742204650367;-122.42335510253905&lvl=10&sty=r&srange=3&page=1&sort=featured,asc&tabs=PreForeclosure,Auction,LiveAuction,OnlineAuction,BankOwned,REO,GovernmentOwned,Resale,FSBO
It looks like Florida’s TEA party Governor is… evolving.
In Turnaround, Governor Wants to Spend in Florida
By LIZETTE ALVAREZ
Published: January 31, 2013
“MIAMI — Up for re-election in 2014 and still deeply unpopular, Gov. Rick Scott announced the largest proposed budget in Florida history on Thursday — $74.2 billion, or $4 billion more than last year — and said he wanted to sharply increase education spending.
As his budget centerpiece, the governor proposed raising teacher salaries across the board by $2,500 a year and dedicating $1.2 billion more to public schools. The increase would give Florida schools the largest budget ever, the governor said. Mr. Scott said his other priority was to spur manufacturing jobs by eliminating a sales tax on equipment.
Underscoring his transformation from Tea Party booster to political realist, Mr. Scott, a Republican, also proposed budget increases for the environment and the state’s university system.”
“the largest proposed budget in Florida history…Underscoring his transformation….to political realist…”
Really?
Sure, why not?
http://www.cnbc.com/id/100522542
Everybody is rich, why not invest in the kids, infrastructure, the environment? These are all the things we share – they also help the rich get really rich. That’s a smart investment, no?
A rising tide lifts all boats, or something like that.
When was the last time a public school closed due to failure to teach…?
Happens all the time. Kids and teachers get shuffled around but the root causes of failed schools never really gets addressed.
Hint: find me an under-performing school that has a majority of middle class students.
http://sanfrancisco.cbslocal.com/2011/05/27/school-closes-in-san-franciscos-bayview-neighborhood/
Einstein Montessori? They named the school after a guy who had all sorts of problems with formal education?
Yeesh.
They named the school after a guy who had all sorts of problems with formal education?
They probably did it on purpose, to illustrate the idea that Montessori isn’t formal education, and is the kind of environment where Einstein would have thrived.
Montessori isn’t considered formal education. Certainly not in the rigid Grade 1 2 3 public school sense.
But it is not a spending problem.
Only higher taxes can save us and make things more fair…
————————-
Sisters make $540,000 babysitting their own kids from welfare
breakingworldnewstoday.com | January 16, 2013 | Ryan Lee Hall
If you want to know why the U.S. Government is going broke look no further.
A four-month investigation of the $340 million taxpayer-funded “Wisconsin Shares” program of childcare welfare found that the program is riddled with abuses and loopholes.
In one case, the investigation carried out by the news media found that four sisters with 17 children between them racked in $540,000 in taxpayer dollars since 2006, just by staying home and babysitting each other’s children. The most impressive of this all is that it is perfectly legal.
“It’s a loophole,” said Laurice Lincoln, administrative coordinator for child care in Milwaukee County Department of Health and Human Services. “We are not worried about that? Yes, it can be a problem. But if allowed, it is permitted. There is really not much we can do.” There’s more.
The Wisconsin Shares program also allows parents to work in child care centers where their children attend. In one case, the newspaper found an employer and a team of parents accused of defrauding taxpayers more than $360,000.
Part of the problem is that the care of children in Wisconsin Shares subsidy program has wide parameters of what the state considers “work”. For example, the research found that mothers who “claimed to work for a man ironing shirts, drying fruit and selling works of art made during art class,” all received checks funded by taxpayers.
“In one case, the investigation carried out by the news media found that four sisters with 17 children between them racked in $540,000 in taxpayer dollars since 2006, just by staying home and babysitting each other’s children. The most impressive of this all is that it is perfectly legal.”
Some business school should award those women honorary degrees!
For earning less than $20,000 a year babysitting?
“The most impressive of this all is that it is perfectly legal.”
Unethical but perfectly legal? Ah, the good ol’ Mittens Method (TM).
In one case, the newspaper found an employer and a team of parents accused of defrauding taxpayers more than $360,000.
The truth must be somewhere in the middle. If it’s all legal, why this:
In one case, the newspaper found an employer and a team of parents accused of defrauding taxpayers more than $360,000.
defrauding certainly sounds illegal.
This has nothing to with taxes and everything to do with oversight and quality control.
Drudge will define the meme, not you.
those are some nappy headed keynsians.
March 5, 2013, 7:24 a.m. EST
Stock futures track global markets up; ISM ahead
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Gains for overseas markets gave U.S. stock futures the needed traction to move higher, pointing to more gains for Wall Street on Tuesday. More support for stocks could come if a report due later in the day shows continued growth for the U.S. service sector.
…
Buy some more aapl and FB?
Goldman said its not too late to get in on the moves higher. CNBC wheeled out warren buffet yesterday and he says he says value, lmfao.
The banks need to unload all the stock they have bought with bernake bucks. problem is retail investors arent buying into the game.
How long before the banks start hosing each other?
At the risk of seeming like a Debbie Downer, didn’t the Dow hit an all-time high just before the Great Crash of 1929?
‘At the risk of seeming like a Debbie Downer, didn’t the Dow hit an all-time high just before the Great Crash of 1929?’
Hater.
It will end badly and nearly everybody knows it — perhaps even the folks at the Fed who are keeping the party going as long as possible on the pretext of jobs creation.
It’s a question of when, not if.
Bulletin
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Druckenmiller says ‘it’s going to end very badly’
March 5, 2013, 9:25 AM
Hedge-fund legend Stan Druckenmiller suggested Tuesday that the market’s current surge could continue for a while, but is likely to end — and end badly.
Druckenmiller, appearing on the business-news channel CNBC, said in an interview that “the party is going on, and money is being pumped in.”
The Dow closed Monday just a few points below its record closing high of 14,164.53, set in October 2007, and surged past that level and the all-time intraday high of 14,198.10 in the opening moments of Tuesday’s session.
Druckenmiller went on to suggest that stocks could continue to rise in the near term. “The party can continue for awhile,” he allowed. “I don’t know when it’s going to end, but my guess is it’s going to end very badly.”
And he added a word of caution for investors only just being drawn into the markets after years of holding back: “If you’re going to play… for God’s sake play in liquid instruments.”
– Tom Bemis
Thanks to the HBB, I pulled most of my long-term money out of stocks back in 2008. Before the crash.
Thought I’d picked up one of the Jesus channels by mistake. Wow.
According to Fidelity, the average 401(k) balance at the end of 2012 was $77,300.
The 1% and the 0.1% are the real beneficiaries of the alleged recovery.
It looks quite likely those 401(K)s are in for another flushing some time soon, right about the point when average middle-income investors are finally lured back from the sidelines into the market.
Lather, rinse, repeat…
Anybody else hear that Baby Boomer investment story on NPR this morning? Complete with a financial adviser trying to sweet-talk people back into stocks?
It was so nauseating that I turned off my radio.
At the risk of seeming like a Debbie Downer, didn’t the Dow hit an all-time high just before the Great Crash of 1929?
In my opinion 2008 was 1929. This is just 1932 or whenever it was that it got back to about 80% of it’s former high before going way way down. We’ve just interfered enough to get it all the way to 100% before the trip down. And we may even force it a bit higher first.
Eat, drink, and be merry today, for tomorrow you die.
3 HOURs ago
WSJ.com
New Dow Highs Usually Spur More Buying
When the Dow industrials reach record territory, everyone wants a piece of the action.
By E.S. Browning
The Dow Jones Industrial Average is back in record territory, and now everyone wants a piece of the action.
Stockbrokers say clients are phoning in orders. Mutual-fund data show investors buying U.S.-stock funds, which they had fled for years.
This is classic investor behavior. History shows that investors typically get excited and jump into stocks when indexes are hitting records. They also tend to sell when indexes are down, which means they sell low and buy high. No wonder they have so much trouble matching index gains.
In all but one of the past six bull markets, investor purchases of stock mutual funds picked up right after the Dow’s first new record, according to Ned Davis Research. In the six months after that first record, the median flow of money into stock funds, in percentage terms, was three times as strong as in the six months before.
Unfortunately, bull markets tend to be getting long in the tooth by the time they hit record territory. There were exceptions, but the median bull market had less than two years to go after that first record.
…
No cratering just yet…
March 5, 2013, 8:30 a.m. EST
U.S. home prices extend gains in January
By Steve Goldstein
WASHINGTON (MarketWatch) — U.S. home prices advanced by 0.7% in January to stretch the year-on-year advance to 9.7% — the largest year-on-year gain since April 2006, according to CoreLogic. “With these gains, the housing market is poised to enter the spring selling season on sound footing,” said Mark Fleming, CoreLogic chief economist, in a statement. From the peak, prices nationally have shrunk by 26.4%, or a 19.9% when distressed transactions are excluded. All but two states, Delaware and Illinois, are experiencing year-over-year price gains. Arizona led the way with a 20.1% surge. CoreLogic’s pending home sales rise forecasts a 0.3% decline in February but a 9.7% year-on-year gain.
according to what I read there is another housing boom taking place in s. california.
This time low interest rates are fueling the fear of being left behind.
More than just low rates. Inventory is …. missing??? In the coastal (up to 15 miles inland) areas, houses under say 750k are just .. not there. over 1.25 mill there are hundreds. Inland in el cajon and escondido there is inventory in the 200-500k range, not a lot, but some, and IMHO overpriced still.
For ABQ Dan:
“New national science standards that make the teaching of global warming part of the public school curriculum are slated to be released this month, potentially ending an era in which climate change skepticism has been allowed to seep into the nation’s classrooms.
The 26 states that helped write the standard are expected to adopt them. Another 15 or so have indicated they may accept them — meaning climate change instruction could make its way into classrooms in 40-plus states.
Texas, one of the country’s largest textbook buyers, is among the few states that don’t plan to adopt the science standards anytime soon.
Many teachers have been skipping the subject altogether to avoid confrontations with conservative administrators or parents. Others teach it as a controversial theory, either because they don’t understand the evidence for global warming or because they reject it”
http://mobile.bloomberg.com/news/2013-03-04/climate-change-science-poised-to-enter-nation-s-classrooms.html
Science is godless commienism!
The Pagan religions do not embrace dissent any more than the Theistic ones.
Great article. Facts. Figures. Timeline. Cause and effect.
Against everything American stands for????
The free sh*t army has no shame.
And no - the auto industry leaving Detroit was not the cause of the downfall of Detroit. It was a symptom of all that is wrong with the leadership and direction of this city for the last 50 years.
————————–
How the Democrats Destroyed Detroit
March 4, 2013 - Arnold Ahlert Comments - http://frontpagemag.com
Democratic politicians and civil rights organizations in a city where the population is 82.7 percent black were far less sanguine. “For one individual to be able to wipe out the duties of our duly-elected officials, that’s more or less a dictatorship, and it’s against everything that America is supposed to be about,” said the Rev. Wendell Anthony, president of the local NAACP.
What prosperity? Detroit’s downward spiral has been legendary. Once the fourth largest city in the nation, and home to its largest industry, Detroit’s population has been cut in half, from 1.5 million in 1970, to less than 700,000 in 2012. Median household income is $27,862 compared to the state median of $48,669. The poverty level is 36.2 percent compared to a statewide level of 15.7. The murder rate is 11 times that of New York City, and the unemployment rate is above 18 percent, more than double the national average. Detroit Public Schools (DPS) have been under emergency management since 2008. In late February, the state review board revealed that the city faces a short-term cash $327 million budget deficit and an estimated $14 billion in long-term debt, primarily driven by unfunded pension and retirement health care obligations.
As a result, the city can’t provide basic services. The Detroit Fire Department is so short of critical resources, rotating ”brownouts” of fire companies are required. Forty percent of the city’s street lights are broken. For the past two years, the Bing administration has slowly adopted a city “triage” system, best described by the Detroit Free Press. “Infrastructure improvements, demolition activity, outdoor maintenance and development incentives will henceforth be concentrated in a relatively small number of neighborhoods that boast the high numbers of owner-occupied homes and little evidence of residential and commercial blight,” it reports.
To accord with this plan, the city’s 139 square miles have been broken down into four categories by Detroit’s Planning and Development Department: “steady,” as in little blight and a high number of owner-occupied homes; ”transitional,” as in a neighborhood on its way up or down; “varied” as in some streets are stable and others are not; and ”distressed” as in large amounts of blight, and few amenities, such as grocery stores.
Detroit residents have responded in kind. A staggering 47 percent of the owners of Detroit’s 305,000 properties didn’t pay their property taxes in 2012. Homeowner Fred Phillips illuminated the frustration many of those residents feel. ”Why pay taxes?” he asks. “Why should I send them taxes when they aren’t supplying services? It is sickening….Every time I see the tax bill come, I think about the times we called and nobody came.”
Yet it’s even worse than that. Detroit has some of the highest big city property taxes in the nation, and property assessments remain overly inflated, amounting to as much as ten times the market price of the property, according to recent research compiled by two Michigan professors.
This has led to another phenomenon. Property owners are allowing themselves to be foreclosed upon, and then re-buying the same property at a reduced price, legally eliminating their outstanding debt in the process. Six hundred properties were repurchased in this manner in 2012, triple the number that occurred in 2010.
In short, Detroit is a city on the brink of ruination. At the center of that ruination is 50 years of Democrat rule. The last Republican Mayor the city had was Louis C. Miriani, who lost his reelection bid in 1961 and ended up spending 10 years in prison for tax evasion. Incoming mayor, Democrat Jerome Cavanagh, brought the “Model City” program — fashioned after Soviet Union centralized efforts to transform entire urban areas at once — to a nine-square-mile section of the city. Using a commuter tax and a new income tax as his vehicle, Cavanagh promised residents “the rich” would pay for it all. Yet because people were being told by government how to run their businesses and their lives, in exchange for government goodies, the program ended up failing spectacularly.
An unbroken series of Democratic mayors followed, all of whom had a hand in implementing the full panoply of progressive policies, highlighted by the giveaways to public service employees. Their outlandish salaries and benefit packages, coupled with highly inefficient work rules, killed the golden goose: the auto industry, and its attendant industrial community headed South, where lower taxes and right-to-work rules kept their businesses afloat.
The same swath of progressive policies destroyed the public school system as well. Perhaps nothing illustrates the corrupting influence of those policies better than the Detroit Federation of Teachers’ success in scuttling a $200 million offer by businessman and philanthropist Robert Thompson to build 15 charter schools in the city in 2003. Ten years later, the Detroit Public School (DPS) system remains a cesspool of failure, corruption and bankruptcy, all of which is chronicled here.
All of these polices and politicians have had their effect. In 2012, Forbes Magazine rated Detroit the most dangerous city in America. A Detroit News poll revealed that “Detroit’s crime crisis” has gotten so bad, a staggering 40 percent of its residents intend to leave the city within five years. Another two-thirds say the city is on the wrong track. The poll also found that all of Detroit’s public officials were held in low esteem, except for Police Chief Ralph Godbee–who retired due to a sex scandal after the poll was taken.
Now one might think that those living in the epicenter of Democrat-inflicted misery for fifty years might consider changing course. One would be completely wrong. On Nov. 6, Barack Obama received 98 percent of the vote. On the same night Detroit voters elected a convicted felon, Brian Banks, to serve in the state legislature. Other election results show overwhelming margins of victories for Detroit Democrats as well.
Gov. Snyder frames the issue correctly. ”There’s probably no city that’s more financially challenged in the entire United States,” he said. “We need to start moving upward with the city of Detroit.” Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, put it even more bluntly. ”The city could stop doing all of its current operations today–no more police and fire, no more garbage collection, no more street lights–and the city would still have billions of dollars of debt and promises made for future payments that it would have to pay.”
“And no - the auto industry leaving Detroit was not the cause of the downfall of Detroit”
Yes. Yes it was.
Fun fact: one of the wealthiest suburbs in the entire US is one next to Detroit.
Grosse Pointe?
Sorry, I was drawing a … blank.
Mostly everyone I know from Michigan is either from Grosse Point or Bloomington Hills.
That sounds really, really white.
”There’s probably no city that’s more financially challenged in the entire United States,”
The Three Vertically Challenged Pigs (audio story) Politically …
http://www.youtube.com/watch?v=YTDNEmCQEpg - 146k - Cached - Similar pages
Jul 30, 2012 … Politically Correct Bedtime Stories: Modern Tales for Our Life and … Here, the story of three vertically challenged pigs is retold by J. Lange.
Hope and Change
“New Jersey’s public pension deficit swelled 13 percent to $47.2 billion in fiscal 2012 as the state continued to make partial contributions to its retirement plans.
The system had about 64.5 percent of assets needed to cover promises to current and future retirees as of July 1, 2012, compared with 67.5 percent a year earlier, when the gap stood at $41.7 billion, according to data posted on the state Treasury Department’s website.”
http://mobile.bloomberg.com/news/2013-03-04/n-j-unfunded-pension-deficit-rises-to-47-2-billion.html
A staggering 47 percent of the owners of Detroit’s 305,000 properties didn’t pay their property taxes in 2012.
I don’t get the conservatives’ argument on this? Rich people pay less taxes or not pay at all, that’s a good thing, right? When the poors do the same, somehow it’s a problem?
Why can’t we accept this development as win for the conservatives?
Because many of these people are black?
And therefore not “Real Americans”
Spin-Spin-Spin
Jon Stewart made a similar point: When a corporation avoids taxes by taking advantage of a loophole, it’s “good business.” When a poor person in the 47% avoids taxes by not making enough salary, it’s “leaching.” Why is that?
So far, no one has provided a good answer for Stewart.
Class warfare is the only song on your jukebox, apparently.
When we had our rally on the National Mall, we left it cleaner than when we got there. Nobody got raped, nobody overdosed.
When you and your Occupiers set up your urban Woodstocks, they turned into cesspits of lawlessness, filth and debauchery.
Au contraire.
Here in Tucson, when the Occupiers had to leave Armory Park in a hurry due to a police order to vacate, they cleaned it up. Spotless. In just a couple of hours.
OTOH, after El Tour de Tucson, which also used the same park, the place was in shambles for days. A point which the local Occupiers gleefully made on their blog.
But nice try on the name calling.
when a corpoation takes advantage of a beneficial tax regulation it’s called cheating…when a low wage earner fradulantly claims excessive EIC it’s called fair.
this is fun.
when a low wage earner fradulantly claims excessive EIC it’s called fair.
By whom?
- the irs no longer releases fraud statistics in the program.
- democrats always talk about paying one’s fair share but never criticize the massive fraud in the EIC program.
- when i was working as a tax accountant in the south i was at a tax seminar where a senior IRS agent was speaking. when questioned about the massive fraud he said the IRS is aware of it but we are told not to pursue it as policy. clinton was president.
i will revise my statement:
“when a low wage earner fradulantly claims excessive EIC it is ok.”
Wall Street Journal - Young Adults Retreat From Piling Up Debt:
“Young people are racking up larger amounts of student debt than ever before, but fresh data suggest they are becoming warier of borrowing in general: Total debt among young adults dropped in the last decade to the lowest level in 15 years.
A typical young U.S. household — defined as one led by someone under age 35 — had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data.
In addition, fewer young adults carried credit-card balances and 22% didn’t have any debt at all in 2010 — the most since government tracking began in 1983.
While less debt is generally a good thing, since it means young adults aren’t biting off more than they can chew, the implications for the economy at large could be problematic. Less spending could hamper growth over time, as consumer spending accounts for roughly two-thirds of demand in the economy.”
http://m.wsj.com/articles/a/SB10001424127887323293704578334761823150672?mg=reno64-wsj
Warier?
More like CAN’T get approved.
+1.
Also have you seen the APR in new cc offers? I get one or two offers every week in the mail. The APR ranges usually from teens to mid twenties and I have an excellent credit score.
Remember, there is no such thing as usury of it’s legal.
Remember, there is no such thing as usury of it’s legal.”
haha that’s right and people fall for it all day long
Yet they overwhelming voted for an administration that has racked up more debt in the last five years than ALL the previous presidents combined (adjusted for inflation).
Yet they overwhelming voted for an administration that now borrows 46 cents of every dollar it spends.
Well, it is easy to spend other people’s money…
http://cnsnews.com/news/article/obama-has-now-increased-debt-more-all-presidents-george-washington-through-george-hw
“But we have to pass the bill so you can find out what is in it”
They’ll have more money to spend in the long run because they aren’t paying interest to banker parasites.
But we need their money to get us re-elected!
http://mobile.bloomberg.com/news/2012-04-30/tea-party-congressmen-accept-cash-from-bailed-out-bankers.html
And you’ll notice its the parasite class complaining about it, not the actual producer / importer / retailer class complaining. For example, in the very long run, Home Depot will make more money off people who spend money at their store rather than making New York bankers even richer.
Another important quote, as we watch more and more news articles about student debt, etc.:
“Most of the nation’s student-loan burden, moreover, is concentrated among a small number of borrowers: Roughly a quarter of young-adult households held nearly 80% of the entire young-adult group’s debt in 2010, Pew said.”
That seems to reflect that only about 25% of the population actually goes to a 4 year college.
The question is what percent of young-adult households have at least one person who have gone to college. That number is clearly higher than 25%, even if you restrict it only to those who have degrees, and also higher even if you restrict it only to those who have Bachelor Degrees or better.
As of 2012, per Census:
Percent of those 25-34 years old that have an Associate Degree or better: 44%
Percent of those 25-34 that have Some College, but no degree: 19%
Percent of those 25-34 that have no college: 37%
And before you start bagging on Associates Degrees, that represents 10% of the total (10 points of the 44%, so 34% have Bachelor degrees or better).
http://www.census.gov/hhes/socdemo/education/data/cps/2012/tables.html
Table #1, All Races.
30%? Good to know.
The last number I saw was years ago and it was about 25%.
25% may be right for the overall population, but the trend has been for more and more younger folks to seek education after HG. Something like 70% of current HS graduates at least start some kind of schooling after HS.
And again, while I can see that most college graduates flock together (ie. marry one another), there are plenty of examples where a college graduate marries/lives with someone without a college degree.
In that regard, the percentage of HOUSEHOLDS with at least one adult with a college degree is going to be higher than the percent of the population with a college degree.
Nevertheless, the facts are the same, while student debt is in the press and awful lot these days, it seems to be impacting a relatively small segment of households.
Forward
“An average of more than 50,000 people slept each night in New York City’s homeless shelters for the first time in January, a record that underscores an unsettling national trend: a rising number of families without permanent housing.
More than 21,000 children — an unprecedented 1% of the city’s youth — slept each night in a city shelter in January, an increase of 22% in the past year, the report said.
“New York is facing a homeless crisis worse than any time since the Great Depression,” said Mary Brosnahan, president of the Coalition for the Homeless.
New York City has seen one of the steepest increases in homeless families in the past decade, advocates said, growing 73% since 2002. The surge was accelerated by the financial crisis and mortgage meltdown, which put many lower-middle class families out of their homes, economists have said. And even though New York City has regained all of the jobs it lost in the recession, economists have said they are lower-paying ones.”
http://m.wsj.com/articles/a/SB10001424127887324539404578340731809639210?mg=reno64-wsj
I have to ban 2 liter soda first. That will take care of all the homeless problems we have. - Napolean Bloomberg
“And even though New York City has regained all of the jobs it lost in the recession, economists have said they are lower-paying ones.”
Again.
Of the 1%, by the 1%, for the 1%.
Until we get another R president we’re not going to hear a lot about this. Then we can focus on it.
Until we get another R president we’re not going to hear a lot about this. Then we can focus on it.
Same story with this type of thing: Coalition will no longer publish attack figures
Multi million dollar homes selling down here (SE Florida) to people from California and Connecticut. Why?
No income tax?
“No income tax?”
That`s what one of them told me.
Sinkhole? I can’t see that there are that many sinkhole loving millionaires in CA and CT?
“Sinkhole? I can’t see that there are that many sinkhole loving millionaires in CA and CT?”
In SE Florida they probably have “thousands of years” before they have to worry about that.
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.
Yup!
ADVICE NEEDED!!!
I guess I never updated y’all on my housing situation.
1. I didn’t buy in ATX
2. I found a slightly older condo DT for $500 less than my older place.
Before I moved out, the landlord indicated she wanted to replace the carpet with hardwood floors, and said not to worry about the carpet.
I moved out last week on the 27th leaving behind two boxes of books behind; I went back on the 28th and her contractor had already entered the property without my permission and removed all the carpet.
Anyways, I get an email yesterday morning saying:
“I went by the condo this morning because the leasing agent and contractor noticed a problem with the granite countertop. I’m attaching the pictures they sent on Friday for reference. In addition to the chips, the two slabs of granite are no longer even. Unfortunately we’ll need to take the cost of the repairs out of your deposit.”
1. There are two pieces of granite that form an L-shaped countertop; the chips are located where the two surfaces meet and create a gap. Something I never noticed myself:
http://imageshack.us/a/img841/2663/imagezcmd.jpg
2. Uneven slabs? Really? This sounds more like poor installation or shifting? How could I possibly be blamed for this?
What do you guys think I should do?
When I was a renter this happened sometimes.
Landlord takes a portion of the security deposit for some made up damage.
Usually it was for a few hundred bucks and I just didn’t fight it.
You can take them to small claims court to try to get back some of what they took. It is a pain in the neck.
My lesson learned was that I photographed and documented EVERYTHING before I move into a place and the day I leave. I send a copy of my “report” to the landlord. Never had any trouble after that.
^This
I told my landlord that I was using my deposit as my last month’s rent - sent that letter in with a copy of an email from the former tenant about how the LL had kept the entire deposit on trumped up damages.
My deposit was 3K, so not chump change.
LL was spitting mad, and sent a letter tabulating 10K in damages. Weird, insane stuff. (uh, $200. to change the locks for the new tenants?, rot under the wood porch that I recommended she repair 5 years ago?).
I ignored her. She hasn’t contacted me since (it’s been 5 months), but that’s probably because she is now getting $1,000 more per month for rent from her new tenants.
I had the same thing happen to me in 2007. Luckily I was on HBB and my mom let me contact her lawyer. My landlord was a skank. Hope she doesn’t come after you.
“What do you guys think I should do?”
Pay a lawyer to write an appropriately nasty letter in reply.
Please ignore the claims that it’ll cost $3251551 in total legal fees to take it all the way thru the legal system including all appeals to the federal supreme court so don’t bother doing anything. I clearly specifically suggested “write an appropriately nasty letter” which is pretty cheap, not take it all the way thru the legal system. A good diplomacy technique is escalate the absolute minimum possible each step, nuke them from orbit just to be sure usually doesn’t work as a first step.
Depending on local tenant protection laws, if any, you might run a healthy profit if you can get a triple penalty plus expenses. Or maybe you live somewhere with no legal protection at all. Surely your lawyer will advise you of that as he customizes his nasty form letter to your specific case.
Use some gambling sense. They probably do this to all tenants because the risk to them was a piece of paper and a stamp and the reward is a relatively high chance of keeping the whole deposit. So risk about fifty cents and ten minutes work to make hundreds of dollars, maybe a thousand something almost every time, not bad. Suddenly presenting a credible threat of them having to pay a lawyer and certain loss of at least a couple days productive labor, well, those odds aren’t so good anymore and a check might (or might not) rapidly be produced.
Ask your lawyer if the landlord claims its obviously unfit for habitation, perhaps you deserve back rent roughly equal to your security deposit (or slightly more) because you were paying at a “fit for habitation” rate.
You guys are a ray of sunshine
Step #2352 remember to post in the HBB how it turned out in the end and if you get a fat stack of cash out of it, throw some dough Ben’s way.
I don’t want any $$$
What I don’t want is a landlord trying to take my $$$
I take full responsibility over things I could have damaged, but I refuse to pay for construction issues
whoops actually I screwed up I see they emailed you instead of snail mail. So from a gambling sense they didn’t risk the cost of paper and a stamp, they risked the certain wear and tear on a computer keyboard vs likely hundreds or thousands of your dollars. How often does that kind of bet have to pay off for them to run a profit? That gives you an idea how often they do this. Its a business model much like email spam, and equally respectable. Frankly I’d be angry enough to grind them into the ground, even at a modest financial loss to myself. A nasty letter from a lawyer is a perfectly civilized and appropriate way to inform them of that.
That granite countertop doesn`t look like it had “actual abnormal damage” looks like it had “normal” settling to me.
Tenant Rights
The relationship between Texas landlords and their tenants is governed by several statutes, particularly Chapter 92 of the Texas Property Code, and by various court rulings. However, the most important source of information about your relationship with your landlord is your rental agreement, whether it is written or oral.
Deductions for damages. Under Texas law, you must give the landlord a forwarding address and the landlord must return the deposit — less any amount deducted for damages — within 30 days. If the landlord withholds part or all of your deposit, he or she must give you an itemized list of deductions with a description of the damages.
Normal wear and tear. The landlord may not charge you for normal wear and tear on the premises and may only charge for actual abnormal damage. For example, if the carpet simply becomes more worn because you and your guests walked on it for a year, the landlord may not charge you for a new carpet. If your water bed leaks and the carpet becomes mildewed as a result, you may be charged.
Tenant rights - Texas Attorney General
http://www.oag.state.tx.us/consumer/tenants.shtml - 25k - Cached - Similar pages
Mar 23, 2011
She hasn’t mailed me anything on paper; I will wait for my deposit minus deductions and see if she includes a list of itemized deductions.
I will then reply using verified mail contesting the charges.
Just email her that link. She probably thinks your a noob and don’t know your rights.
Yes ^
There is no love here. Push back now.
That joint looks like cr@p to begin with. “poor installation or shifting?” Probably both.
Bingo Jethro.
And the notion that the tenant is responsible is hilarious.
I believe the Pimp. This is his area.
Brett’s gains in small claims court will be incalculable.
Have you calculated your losses yet?
Incalculable?!
Never mind that Brett, it’s an obscure joke.
IMO, chips on the joint as seen in the fuzzy picture would most likely be from the installation, not from abuse by the cook. The landlord is scamming you. How could the tenant cause the countertop to be not level? Ridiculous.
I agree too; however, I am fairly positive she will reject my complains and will charge me for the repairs. She’s got $2k of my money as deposit.
Apparently, I must wait until I get my deposit balance and a list of deductions. Them, I should send a letter disputing the charges and wait for a response. If the response is unreasonable, file a lawsuit… I am not sure how this process works or how likely it is that I would win in court.
“Apparently, I must wait”
Now would be an excellent time to research statute of limitations related issues. Probably the best advice you could get would be from a lawyer. You know, the guy who could draft a firmly worded letter to head all this off at the pass.
There is a possible issue that a construction failure making the granite slabs slightly misaligned would probably be laughed out of court, so you may wish to encourage the crook, err, I mean landlord to continue on that idiotic path. Otherwise the crook, err, I mean landlord, might try something a little more conventional and believable like carpet damage or itemize you $150 per nail hole in the wall or something. Even better yet if the guys installing the hardwood floor F it up, they can blame you for their mistakes, etc. So maybe letting the crook stick for now with what sounds like an idiotic claim is a great idea. I’m sure your lawyer will advise you properly.
If there is a landlord tenant office for your county, call them and ask them how to do it. Tell them that you only have an e-mail so far, nothing in writing. You may or may not want to follow their advice, as I imagine that the office is very landlord friendly in Texas, but you might find out what the proper procedure is.
E-mailing back with the link to the part of the code that eco pointed out and stating that you believe any chips or settling is due to installation issues and has nothing to do with abnormal damages isn’t a bad ploy to try, but be very careful not to admit to ANYTHING. Not even breathing hard on the counters. A lawyer can wait.
Did you buy the older condo downtown or are you renting it from an FB?
I’m renting… As y’all can see, I actually listen to y’all’s advice!
Good man.
All this talk of sh#tty LLs reminded me of my last one and an
Eddie Murphy skit from long ago.
To anyone who might be monitoring this blog. This is a joke, cut and pasted from the internet. I do not even have a landlord anymore nor do I harbor any bad feelings for the last 2 I had who collectively put over $100k in their pockets without paying their mortgages (you can tell your IRS buddies that) you all work for the government, right.
Images by Tyrone Greene
Performed by Eddie Murphy (date unknown)
Dark and lonely on a summer’s night
Kill my landlord
Kill my landlord
Watchdog barking
Do he bite?
Kill my landlord
Kill my landlord
Slip in his window
Break his neck
Then his house
I start to wreck
Got no reason
What the heck
Kill my Landlord
Kill my landlord
C-I-L-L
my l a n d l o r d
If it’s an older condo, the owner might not be a FB. It could be almost paid for, or owned by a syndicate.
Oxide, you are a scientist. Maybe you can build Brett a time machine so he can go back 25 years and buy some Austin RE at dirt cheap prices.
Who needs a time machine when prices are already falling and have much further to fall?
One would need a Wait Machine, which Oxide sent to the scrap yard.
LMAO!
Thats what landlords do you can have lawyer write them a letter thay probably will ignore it.
renting sucks like that I know they won’t replace the granite for that minor blemish
In CA after 2 years landlords can’t ding you for paint of carpet but try to anyway.
I guess they figure most renters will just roll over and most do
When my parents moved out of a retirement community, the business office tried to charge them to replace the carpet. I sent a sternly worded letter informing them that their own advertising says they always replace the carpeting and it was already priced into their lease. Never heard another word about it.
If the LL is refusing to refund a significant part of your deposit I might get a lawyer to write them. But it can’t hurt to write them on your own asking exactly how it is possible for a tenant to re-align granite slabs unless they were improperly installed. And then suggest small claims court to resolve the dispute.
Landlord nickel and dimes your security deposit for $300.
Hiring a lawyer to write a letter (that the landlord will just ignore) is another $300.
Why not just cut your losses instead of doubling your losses?
If you have the time and energy - yes, take them to small claims court. You do NOT need a lawyer in smalls claims court.
Her obvious lack of honesty that upsets me the most.
I haven’t acted in bath faith, and she is obviously trying to take advantage of me.
I am a very honest person, and can’t stand people abusing their position and power to affect me negatively.
Shes a landlord and a realtard too?
Restore Our Future:
“An escort who appeared on a video claiming that Sen. Robert Menendez (D-N.J.) paid her for sex has told Dominican authorities that she was instead paid to make up the claims and has never met or seen the senator, according to court documents and two people briefed on her claim.”
http://m.washingtonpost.com/politics/escort-says-menendez-prostitution-claims-were-made-up/2013/03/04/31299fe2-8514-11e2-999e-5f8e0410cb9d_story.html
I posted that beaut last night.
These distractions obscure and provide cover for the corrupt duopoly.
Whats more likely, he paid her for sex or paid her to say he didn’t have sex? Or, most likely, both at the same time? Was it Charlie Sheen who said something very similar to you don’t pay to have some fun, you pay to have some fun and then leave you alone, or something like that?
Also it’s 3rd world. The cops say “say what we told you to say or we beat your elderly mother” So who’s more likely to be corrupt, our congress or their cops, that’s 50:50 for sure. Way down at the bottom its hard to say who’s worse than who.
The only surprising part of the story is he’s not a neocon and she’s a she and not a he. That was my initial assumption on hearing about yet another senatorial sex scandal, which neocon got caught with a boy this time?
SOLD! …to the highest bidder.
Paid by whom? That is the answer to all the riddles.
Brilliant prostitute. Dumb media. Shot themselves in the foot again. I can’t believe people will run with a story like this. Absolutely absurd, where are the unbased editors… you know, the actual journalists?
The story initially circulated on the Drudge Report, Washington Times, Daily Caller, et cetera. The libtard bedwetter media wouldn’t touch that story.
Libtard bedwetter. Now, there’s a name-calling meme that hasn’t been seen around here for a while.
Are you going to call us public union goons too? How about lazy grifters? Or tax-eating mooches?
AZ Slim, that’s “goon squad” using a new name, I’m pretty sure.
Also, why *would* the “bedwetter” media want to touch the story? It seems like if they asked a few follow up questions it would become completely obvious that it is a made up story.
It seems like if they asked a few follow up questions it would become completely obvious that it is a made up story.
That’s apparently what ABC did, and therefore passed on the ’story’. Tucker Carlson and the Daily Caller took it and ran with it.
The coastal elitist libtard bedwetters let their children wear Goodnite pullups for their bedwetting until they are in their teens. “Real Americans” grab their kids by the neck and push their face into the p*ssy mattress to learn the error of their ways
“…where are the unbased editors… you know, the actual journalists?”
Gone since the MSM mergers and colidations of the 1980s.
Actual journalists tend to ask very uncomfortable questions which get people arrested.
Consolidations
(my hands are cold)
Actual journalists tend to ask very uncomfortable questions which get people arrested.
Which is the only thing that actually deserves to be called journalism.
watched the documentary “end of the road” on netflix streaming…very interesting.
Looks interesting. I haven’t seen it yet.
Citizens should demand the government force banks to separate consumer deposits from the bank betting operations. While consumer deposits are commingled with Wall Street betting operations, Wall Street will continue to have a firm grip around the balls of the country.
ISDA Plans Biggest Overhaul to Credit Derivatives Since 2003
By Abigail Moses - Mar 5, 2013 10:54 AM ET
Bloomberg
The International Swaps & Derivatives Association is planning the biggest overhaul of the $24 trillion credit derivatives market since 2003.
New York-based ISDA is seeking feedback from market participants on a set of possible changes to the standards governing credit-default swaps, including plans to ease settlement of contracts triggered by a sovereign debt exchange, according to Mark New, the organization’s assistant general counsel in the Americas.
http://www.bloomberg.com/news/2013-03-05/isda-planning-biggest-overhaul-to-credit-derivatives-since-2003.html
Wasn’t there some regulation about that at one time?
The Glass something Act?
Oh, that law. It only worked until it was repealed.
And, point of history, it was repealed during the Clinton years.
Yep. Dumbest move he ever made.
Besides not vetoing NAFTA, but have a feeling both of those were already baked in from his predecessor.
Dumbest move he ever made.
Really? Maybe you’re right. There were a lot to choose from. But that did have some really long reaching implications.
“but have a feeling both of those were already baked in from his predecessor.”
Nope.
You can thank Citi for breaking the law by buying Travelers (1998), their lobbyists for getting the government to give them a free ride on it, and Larry Summers for giving Clinton a big thumbs-up in 1999.
This all happened at the end of Clinton’s term, not on the heels of Bush I.
90% of Foreclosed Properties Held Off the Market
http://realestate.aol.com/blog/2012/07/13/shadow-reo-as-much-as-90-percent-of-foreclosed-properties-are-h/
They’re still there. 20-30 MILLION of them. Disposition: Excess empty inventory.
pssst…… If you think a 20 year old ranch is worth more than $50/sq ft, you’ve been lied to.
Thanks for posting this.
You’re welcome.
And yes….. they’re worth less with each passing day. Just like ALL houses.
“Releasing REOs onto the market also chips away at home prices in general, depressing the value of the homes of other customers — who could already be teetering on the brink of foreclosure — and the additional REOs that lenders hold on their books.”
Is there a category for those who are teetering on the brink of foreclosure?
We must save the teeterers!
Stay back! I`m teetering! If the value of my house drops another $10k I`ll jump! I swear! I`m not kidding, I`ll do it.
We must totter the teeterers!
Pimp,
What do you think about the inflation that will soon be making its way into the market… While 65% declines in *real prices* are baked in, do you think inflation will start ramping up (even further) to bite into that figure in nominal terms? What tipping point do you see?
Not inflation adusted. Nominal declines of 65%.
And what is this “inflation” you speak of?
Do you really expect wages to rise 3x to meet massively inflated housing prices? Hardly. Housing prices will continue to erode to meet wages like prices ALWAYS do. Of course the nar consultants on this site do everything to detract from it but it is reality nonetheless.
just because wages don’t rise doesn’t mean inflation won’t happen = definition of stagflation. worst possible economic situation. You are absolutely correct that this doesn’t mean prices of houses will continue to decline… But other needs will continue to inflate, like food, energy, clothing, etc…
And guess what happens in the case of “stagflation”? That market experiencing it collapses.
And, as everyone knows, nothing improves with age. Including empty houses.
Where I live, the land that a 20-year-old ranch sits on is worth a lot more than $20 per sq ft. Cuz ya know they aren’t making any more land!
“where I live”
LOLZ
Uh huh.
You know nothing, Pimpster.
Are ‘they’ gonna keep those dumps off the market until they fall apart, or what?
Is this even fawkin’ legal? (I doubt it…)
Ding ding ding!
DOW CLOSES AT RECORD HIGH!
Recession over for the 1%. The rest of you can eat cake.
Hugo Chavez is dead. No coincidence.
Only the 1% obviously hold equities. You say I am far from 1%, yet my NW jumped by $21,000 today.
Please don’t forget to let us know how far it drops the next time there is a 10% correction (coming soon, since the Fed is already pedal-to-the-medal / all-in at this point)…
KEYRAAAAAAAAAAAAAAAAAAAAASH!
That was the inevitable sound of housing prices cratering in your neighborhood.
Good riddance.
BREAKING NEWS
Hugo Chavez has died, says Venezuelan vice-president Nicolas Maduro
He went to Cuba for treatment didn`t he.
Hmmmm
We are supposed to love collectivist health care.
In this event only, I love collectivist health care!
Couldn’t take the news that Rodman’s new bff is Kim Jong-Un.
Shouldn’t Chinese stimulus news be good for China’s stock market more than for the U.S. market?
Dow hits record high as markets are undaunted by tepid economic growth, political gridlock
By Jia Lynn Yang, Updated: Tuesday, March 5, 4:14 PM
The benchmark Dow Jones industrial average reached an all-time high Tuesday, underscoring the contrast between corporate America’s rapid recovery since the financial crisis and the rest of the country’s ongoing struggle to regain its footing.
More than four years later, the crisis seems a distant memory for a number of big U.S. companies that are reporting record profits, even though many Americans remain jobless, wages have stagnated and Washington remains paralyzed in the face of the country’s tepid economic growth.
At closing, the Dow was up 125.95 points, or 0.89 percent, to 14,253.77, breezing past both the intraday and closing records that were set in October 2007, just before Wall Street nearly imploded and dealt a serious blow to the U.S. economy.
It was also notable that after days of flirting with the all-time high, the Dow surged past its record largely because of news from China, where leaders said they would maintain a growth target of 7.5 percent this year and pledged to plow more money into the country’s economy. By contrast, forecasters expect the U.S. economy to grow just over 2 percent, with some warning that the across-the-board budget cuts known as the sequester could further dampen growth.
…
http://news.yahoo.com/rich-venezuelans-hunt-luxury-overseas-homes-flee-chavez-000244544.html
LONDON (Reuters) - The number of Venezuelans hunting for luxury homes around the world jumped by a greater degree than any country last year as political uncertainty escalated in the South American state, a report from property consultant Knight Frank shows.
The 123 percent increase of searches from Venezuela was ahead of Brazil in second place with an 81 percent increase, according to the company’s Wealth Report, which for the first time tracked users of its website, where homes can cost up to 100 million pounds ($150.7 million).
Knight Frank has 1.2 million visits to its website each month and the share of traffic from South America grew by 178 percent between 2011 and 2012 though the region still represents less than 10 percent of the total, the company said.
President Hugo Chavez’s 14-year socialist rule has polarized Venezuela and he has not been seen in public for almost three months as he struggles to recover from cancer surgery after being re-elected for a six-year term last year.
While he is adored by many of the poor for his humble roots, earthy rhetoric and oil-financed welfare policies, he is a hate-figure for opponents who view him as a dictatorial leader who stamps on opponents and is ruining the economy, prompting thousands to leave the country.
“The statistics are no surprise at all,” said Diego Moya-Ocampos, a Venezuela political risk analyst at IHS Global-Insight. “Venezuelans perceive there will be more of the same after Chavez as polls indicate vice president Nicolas Maduro will be his successor.”
“The other reason is the country is now the single most murderous in South America and the kidnap rate is high,” he said, naming Miami, the Dominican Republic and Spanish capital Madrid as popular destinations for Venezuelans buying abroad.
“Our experience is that whenever we see a spike in web traffic then actual sales follow with a three to six month lag,” said Liam Bailey, head of residential research at Knight Frank.
“Venezuelans are showing strong interest in Madrid, and the Brazilians in the U.S. We’d expect a noticeable uptick in sales in 2013 from South America,” he said.
Some 40.4 percent of Venezuelans were internet users in 2011, up from 37.6 percent in 2010, according to World Bank data, a smaller percentage point jump than that in Argentina, Brazil, Britain or the United States.
South America saw the biggest jump in web traffic by region as fast-growing consumer markets and natural resource wealth has boosted fortunes throughout the area in recent years.
WEALTHY SEEK REAL ESTATE HAVENS
Forbes recently estimated that Brazil has minted 19 new millionaires per day since 2007 and the number of Brazilians on its 2013 billionaires list grew by more than 25 percent.
Concerns about inflation and local currencies have also encouraged elites in Brazil and Argentina to invest in foreign real estate.
“One of the biggest trends in the past 12 months has been the growth of Latin American wealth moving into global property assets,” Bailey said. “Brazilian wealth leads with significant money being invested in Miami and New York.”
In one of London’s biggest property deals last year, Brazilian billionaire Moise Yacoub Safra paid about 500 million pounds ($756 million) for the Plantation Place office building in the British capital’s financial district.
Elsewhere, political uncertainty in north Africa and the Middle East drove money into Dubai and pushed up prices for the best homes by 20 percent, helping the emirate recover from a property crash that struck at the end of 2008.
The jump placed it third on a list of global price rises for high-end homes headed by Jakarta (38 percent) and Bali (20 percent) in Indonesia, a country experiencing a commodities-driven wealth boom.
The list accounts for the top five percent of homes by value in most of the housing markets tracked, Knight Frank said.
“Arab Spring money led the way in Dubai,” said Helen Tatham, a director or residential at Knight Frank in Dubai. “Money has flowed in from Afghanistan, Syria, Egypt and Bahrain.”
Monaco retained its crown as the most expensive place per square foot to buy a home, followed by Hong Kong and London. Buyers would get more than five times as much floor space for the same money in Mumbai, India, as Monaco and more than 10 times more in Cape Town, South Africa.
($1 = 0.6614 British pounds)
(Reporting by Tom Bill; Additional reporting by Andrew Cawthorne in Caracas, Alejandro Lifschitz in Buenos Aires and Brad Haynes in Sao Paulo; Editing by Jon Hemming)
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.
…
http://www.usnews.com/news/blogs/home-front/2013/03/01/looming-sequestration-cuts-will-hit-dc-the-hardest
As the next leg down resumes in cities like DC, NYC and Boston, watch for the DebtorDeniers and others who have a stake in the direction of prices come out of the wood work with their elaborate lies.
Hey, b*tch. We’re hiring
One of my ex-coworkers (on Obama / Bernank-Bux contract) who is getting laid off this month just got an offer to come over to our shop.
Gubmint contractors gonna bleed you dry
‘Hey, b*tch. We’re hiring. Gubmint contractors gonna bleed you dry’
You’re proud of that huh? I’d bet you wouldn’t say that to a taxpayers face, or my face. You guys are tough all anonymous. Really, what’s your name? Where do you live? Who do you work for? If you can talk that tough, surely you aren’t afraid to let us know who you are?
Candy crappin’ stock market
Pundits are searching high and low for an explanation. Zandi sez it’s cause U.S. companies are doing so fantastic. Kai Rysdal thinks there is a mysterious disconnect between the real economy and the stock market.
I propose a much simpler explanation. The plunge protection team has to be in a state of high alert, due to the possibility the sequester will sink the recovery. Rather than allow that to happen, suppose they flooded the stock market with liquidity, driving the DOW to its new record. Wouldn’t this fit the situation of a rocketing stock market against a tepid recovery that just got slammed by sequestration?
Occum’s Razor, baby…
Updated 1997 by Sugihara Hiroshi.
Original by Phil Gibbs 1996.
What is Occam’s Razor?
Occam’s (or Ockham’s) razor is a principle attributed to the 14th century logician and Franciscan friar William of Ockham. Ockham was the village in the English county of Surrey where he was born.
The principle states that “Entities should not be multiplied unnecessarily.” Sometimes it is quoted in one of its original Latin forms to give it an air of authenticity:
“Pluralitas non est ponenda sine neccesitate”
“Frustra fit per plura quod potest fieri per pauciora”
“Entia non sunt multiplicanda praeter necessitatem”
In fact, only the first two of these forms appear in his surviving works and the third was written by a later scholar. William used the principle to justify many conclusions, including the statement that “God’s existence cannot be deduced by reason alone.” That one didn’t make him very popular with the Pope.
Many scientists have adopted or reinvented Occam’s Razor, as in Leibniz’s “identity of observables” and Isaac Newton stated the rule: “We are to admit no more causes of natural things than such as are both true and sufficient to explain their appearances.”
The most useful statement of the principle for scientists is
“when you have two competing theories that make exactly the same predictions, the simpler one is the better.”
…
Buy now, before a crazed swarm of retail investors piles back into stocks!
Financial Times
Last updated: March 5, 2013 9:24 pm
Dow milestone may lure retail investors
By Michael Mackenzie and Arash Massoudi in New York
The Dow Jones Industrial Average rose to a record high on Tuesday with the US market barometer finally surpassing the peak set in 2007 before the onset of the financial crisis.
The Dow, the oldest and most recognisable US market gauge, rose as much as 1.1 per cent to 14,286.37, eclipsing its October 2007 closing high of 14,164.53 and its intraday high of 14,166.97. The Dow closed up 0.9 per cent at a new record close of 14,253.77, pushing its gain for the year to 8.8 per cent.
“It is certainly a milestone given the broad scepticism that exists among many investors regarding equities,” said Jack Ablin, chief investment officer at Harris Private Bank.
The benchmark is made up of 30 famed blue-chip groups such as ExxonMobil, IBM, Microsoft, JPMorgan and General Electric.
This exclusivity and the fact that the DJIA is price-weighted rather than based on the market capitalisation of its member companies means that professional investors follow the much broader S&P 500 index. Since the DJIA bottomed in March 2009 at 6,547.05 it has subsequently risen nearly 120 per cent, buoyed by aggressive US Federal Reserve bond purchases that have suppressed borrowing costs and helped stabilise the housing sector.
The DJIA carries an average dividend yield of 2.48 per cent, above the 10-year Treasury yield of 1.9 per cent, and the benchmark trades at 12.7 times 2013 expected earnings, historically on the lower side.
That compares with 17.1 times in 2007 and 25.9 times when the benchmark peaked in January 2000 at 11,722.98.
While professional money managers follow the broader S&P 500, many retail investors are more familiar with one of Wall Street’s oldest benchmarks, founded in 1896.
Funds that are directly indexed to the DJIA total $27.5bn – or a fraction of the $1.3tn for the S&P 500 – according to S&P Dow Jones indices. Money managers also benchmark $5.5tn in actively managed funds against the performance of the S&P index, and do not track the price-weighted DJIA.
…
March 5, 2013, 4:20 p.m. EST
New Dow high: Rally point or new ceiling?
Record levels could spark retail interest; Fed, D.C. are worries
By Wallace Witkowski, MarketWatch
SAN FRANCISCO (MarketWatch) — It took more than five years, but the Dow Jones Industrial Average finally closed at a record high after hitting a new intraday high just after the open. So now what?
There’s the school of thought that stocks still have room to grow. This optimism holds that bull markets “climb a wall of worry.” Concerns about U.S. budget cuts hitting the economy, among other fears, are taking up a fair piece of real estate in investors’ minds.
And there’s considerable concern that once the Federal Reserve starts to rein in its extraordinary stimulus programs, which have coincided with the 118% rally off the March 2009 lows, stocks will lose their most important support.
On Tuesday, the Dow industrials shot up nearly 160 points to a new intraday high of 14,286.37, to close at a new high of 14,253.77 following data showing continued improvement in the services sector. Read more on U.S. stocks.
The Dow’s previous closing high was 14,164.53 on Oct. 9, 2007, and its previous intraday high was 14,198.10, set on Oct. 11, 2007.
…