just trying to be first:)
I recently placed an offer on a single family house in South NJ but when listing agent said that there are multiple bids, I backed out. But when the house sold, it was 10k below listing price. The prices are down around 30 to 35% from peak.
Why are you bothering playing this game? You know there weren’t “multiple bids”. You know you’re getting ripped off at current inflated prices. Don’t you?
just trying to be first to post
I recently placed an offer in south Jersey for a house. But when listing agent said that there are multiple bids, I backed out. But when the house finally sold it was 10K under the listing price. The prices are down 30 to 35 % down from peak.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 09:01:40
Interesting, there are some nice areas there. My parents looked at Washington Township down in South Jersey when I was a wee lad but we ended up not moving. I like some areas of central NJ like Lawrenceville but that’s a bit further from Philly.
when the house finally sold it was 10K under the listing price ??
Possibly a cash deal…Seller willing to take less with no contingencies…You should be able to do a little research and see if there was a mortgage recorded at the close…You could also ask the listing agent…Since the transaction has closed and it is now public record, he/she should not have any further fiduciary duty to withhold that information…
After it closes, if the state has open
records, Redfin is a great place to search.
Check the sold box, put in the
address and view the sold details.
Ours said Buyer Financing: cash
Neighbor’s deal said : FHA
It is $85B per month. The confusion result from the fact that only $40B is going toward purchase of MBS, with the remainder presumably going toward purchase of Treasuries.
in order to sell those treasuries and mbs to the FED the 21 primary dealers first have to acquire them.
They can buy treasuries in open market or even directly from uncle sam I believe.
Even though the FED is spending 85 billion a month it not like that amount is going into the market. I’m sure the primary dealers are making a profit but not sure how much.
I think the biggest impact of QE is basically allowing the govt to borrow more money (via Treasuries) to keep the economy afloat.
The most important concept in my marriage, imparted to me in a relationship communication class:
“Do I want to be right, or do I want to be happy?”
They are not always mutually exclusive, but it taught me not to press the issues, just to be “right”, since I would rather be happy and would rather my family and friends be happy too!
the target market for floors like this is dink couples or couples who only want 1kid and want to live in the city.
Obviously the market is crazy and that sale price is too high. I’m posting this just as a point of reference. Notice all the listing-unlisting-relisting prior to the eventual sale. Houses similar to this one go for twice as much in the next neighborhood over (canton) and 3x as much in fells point or federal hill.
With three full bathrooms? The target market for that is a single person who is planning to take in a roommate to make the payments. Each one gets her own bath with her bedroom upstairs and there is still one downstairs for the person crashing on the sofa.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 08:14:56
I’m sure it’s 2.5 BA. The main floor has a 1/2 bathroom. I know that neighborhood very well. Just a lying realtor saying it is 3 BA.
The 2nd floor bedroom is huge in that house, they took out the middle upstairs bedroom and made it into a walk-in closet and used the rest of the space to expand the BA.
I don’t know why people are so in love with bathrooms but they are.
Reality is in one’s mind and all the rest is an illusion. When people say I am right and you are wrong they are merely suggesting they are a better perceiver.
Thank you Buddha, for your perfect wisdom… That statement is such obvious and abysmal horseshit that it should be tattooed into your forehead. Then you can explain to others how it is not really there- its just their perception.
“he lost at least $150,000 in equity he had built in the house”
Foreclosure Settlement Checks Significantly Smaller Than Regulators Forecasted: Homeowners
Ben Hallman
Posted: 05/01/2013 12:45 pm EDT
Adam Crain reckoned he was due $125,000. That amount would come as compensation for losing his Oak Harbor, Wash., home to foreclosure while he was serving aboard a naval vessel in the Middle East. He calculated that sum using a table distributed by federal regulators as part of a $9.2 billion settlement with mortgage companies over a wave of improper foreclosures.
Federal law offers special protections from foreclosure to military personnel, especially those receiving hazard pay, as Crain was at the time.
But last week, when Crain opened the envelope and removed his check, he was horrified by the amount his bank, Wells Fargo, had determined he was due: Eight hundred dollars was all he received.
“This is what happens when there is no oversight,” Crain said.
For people expecting a large check, and who feel their loan was not properly evaluated, there is little recourse. Payment decisions can’t be appealed. Some borrowers, like Ernie Dobson, said they are now considering private legal action, which is not precluded by cashing the check.
Dobson lost his San Diego home to a foreclosure sale even as he was making agreed-upon payments under a trial plan, he said. He said he lost at least $150,000 in equity he had built in the house, which he had purchased after putting down a large down payment.
Dobson said he was crushed when he received his check last week. It was for $800.
“It is less than it cost me to move out of the house that they foreclosed on illegally,” he said.
He might not be as rich then (or even alive still) but I doubt he’ll be “broke”, unless that beachfront property, his Hawaiian islands, his Oracle stock, etc. become worthless.
Carbon Beach washes completely into the Pacific Ocean about once every thirty years. (I’ve seen it happen twice) The last time it did so (taking all the nascent spec houses on it into the briny deep) was about 30 years ago. It was awesome.
One good fire season followed by one good winter rain and one year-end high tide…and so long 10B worth of “real” estate.
UN Agenda 21/Sustainable Development is the action plan implemented worldwide to inventory and control all land, all water, all minerals, all plants, all animals, all construction, all means of production, all energy, all education, all information, and all human beings in the world. INVENTORY AND CONTROL.
European Commission to criminalize nearly all seeds and plants not registered with government
Monday, May 06, 2013
by Mike Adams
(NaturalNews) A new law proposed by the European Commission would make it illegal to “grow, reproduce or trade” any vegetable seeds that have not been “tested, approved and accepted” by a new EU bureaucracy named the “EU Plant Variety Agency.”
It’s called the Plant Reproductive Material Law, and it attempts to put the government in charge of virtually all plants and seeds. Home gardeners who grow their own plants from non-regulated seeds would be considered criminals under this law.
The draft text of the law, which has already been amended several times due to a huge backlash from gardeners, is viewable here.
“This law will immediately stop the professional development of vegetable varieties for home gardeners, organic growers, and small-scale market farmers,” said Ben Gabel, vegetable breeder and director of The Real Seed Catalogue. “Home gardeners have really different needs - for example they grow by hand, not machine, and can’t or don’t want to use such powerful chemical sprays. There’s no way to register the varieties suitable for home use as they don’t meet the strict criteria of the Plant Variety Agency, which is only concerned about approving the sort of seed used by industrial farmers.”
Customer Reviews
BEHIND THE GREEN MASK: U.N. Agenda 21
198 Reviews
its not theory…its fact, a must read, April 17, 2013
By maria pecore -
id recommend this book to every citizen and especially those involved in local gvt… we all need to know how this is being used to get the public to go along with feel good terms like Sustainable development, green growth etc. We’re being guided like hapless sheep into turning over the future of private land ownership to those who think they’re smarter and know better whats good for us. Individualism is a poison word to them.
Look up CITES Some seeds many plants are banned for export or import
However Look on Ebay hundreds of CITIES “rare” cactus sell each year exported to Europe and Asia pulled out of the ground in W. Texas where they don’t give a s$%t a about Cites or the US federal government regulations.
“Ariocarpus” very slow growing very CITES protected very poached and sold all over Ebay all day long ALL.DAY.LONG
If they catch you they will fine you maybe throw you in Jail. look it up. I have
All ABOUT THE New EU Seed Law
as laid before EU Commissioners on May 6th
Updated Monday May 6th …
NEW EU PLANT LAW DIMINISHES SEED SUPPLY FOR HOME GARDENERS, RESTRICTS FARMERS’ CROPS
On Monday May 6th a draconian new law was put before the European Commission, which creates new powers to classify and regulate all plant life anywhere in Europe.
The “Plant Reproductive Material Law” regulates all plants. It contains immediate restrictions on vegetables and woodland trees, while creating powers to restrict all other plants of any other species at a later date.
Under the new law, it will immediately be illegal to grow, reproduce or trade any vegetable seed or tree that has not been tested and approved by a new “EU Plant Variety Agency, who will make a list of approved plants. Moreover, an annual fee must also be paid to the Agency to keep them on the list, and if not paid, they cannot be grown.
Following a huge outcry and intense lobbying from consumer groups, small-scale farmers, genebanks, and even some member-state governements, a few last-minute alterations were made, which while not perfect, have reduced the impact quite a lot.
The key last minute concessions that were made - and this really was only due to public pressure, because they were not in the draft just 3 days previously - are as follows:
Home gardeners are now permitted to save and swap unapproved seed without breaking the law.
Individuals & small organisations can grow and supply/sell unapproved vegetable seed - as long as they have less than 10 employees.
Seedbanks can grow unapproved seed without breaking the law.
There could be easier (in an unspecified way) rules for large producers of seeds suitable for organic agriculture etc, in some (unspecified) future legislation - maybe.
But the rest of the law is still overly restrictive, and in the long run will make it much harder for people to get hold of good seeds they want to grow at home. There are also clauses that mean the above concessions could be removed in the future without coming back to the Parliament for a vote.
We are checking out what the next step is. It appears that next it must go to Parliament for modification or approval, so there is still the chance of changes for better or worse. We must all campaign to make sure only improvements are made!
Ben Gabel, vegetable breeder and director of The Real Seed Catalogue, says:
“The draft law was truly awful, and it is good to see that the Commission have responded to the hundreds of thousands of citizens who raised their voices against it. They have made important concessions for home growers and small farmers, though it is a shame they did not think of them in the first place.”
“However, it will still have negative consequences. It will halt the professional development of vegetable varieties for home gardeners, organic growers, and small-scale market farmers.
This is because the main registration system is no good for home gardeners -varieties suitable for home use don’t meet the strict criteria of the Plant Variety Agency, which is only concerned about approving the sort of seed used by industrial farmers.
Because of this, seed companies used to be able to register and sell ‘Amateur’ varieties that didn’t pass the tests, for home growers. Under the new system, they are now called ‘Niche’ varieties and there is no testing or registration at all, but there is a big catch: any company with more than 10 employees is now banned from producing them.
So new varieties for home growers can only be developed by tiny organisations, and they may not have the resources to do it well. There will be very little professional development of varieties for home gardeners or small-scale sustainable agriculture. ”
NOTES TO EDITORS
Plant Reproductive Material Law was before the EU commissioners on May 6th 2013
Law drafted by DG SANCO (consumer affairs), internally opposed by DG AGRI & ENVI (agriculture & environment)
Executive Summary of Law does not reflect stricter reality of the actual articles in the law
Law will effectively kills off professional development of home-garden seeds in the EU
Huge public opposition: over 200,000 signatures to the Arche Noah petition
Media contact: Ben Gabel, The Real Seed Catalogue: ben@realseeds.co.uk
Does it say anything about Joshua trees? I think everyone should have a baby Joshua tree in their plant nursery, don’t you?
Comment by ICLEI
2013-05-07 11:57:00
INVENTORY AND CONTROL.
Comment by cactus
2013-05-07 12:47:31
Under the new law, it will immediately be illegal to grow, reproduce or trade any vegetable seed or tree that has not been tested and approved by a new “EU Plant Variety Agency, who will make a list of approved plants. Moreover, an annual fee must also be paid to the Agency to keep them on the list, and if not paid, they cannot be grown.”
Is there a good reason for this ?
Comment by HBB_Rocks
2013-05-07 14:44:37
Is there a good reason for this ?
——-
it’s pretty common to either ’soft outlaw’ or hard outlaw plenty of invasive species (of plants and animals) that are not suited for local environments.
Some local examples from my area:
nutriea
pampas grass
cedar trees
zebra mussels
Some cities near me outlaw ‘cool season grasses’ and a friend was in a fight with his local city government over having the wrong type of grass planted. This is not some part of a new Agenda. The ‘cool season grass’ law my friend is violating has been around for 15 years.
Yesterday, Measton posted that the republicans have introduced a bill changing labor law to allow for comp time in lieu of cash OT. They claim it is for the good of families ( more time off etc.) My question is; why not change labor law to mandate minimum vacation requirements? Two weeks/year sounds reasonable. Most industrialized nations have minimum vacation time. Europe, GB, Aust/NZ require 3-4 weeks. Is this bill really for the American families?
Of course it’s not for the families. I’d bet money that if you looked closely at the bill, there is a way for employers to wiggle out of both time off and overtime.
The American worker has the least annual time off and the highest productivity in the world.
The American worker not being able to compete is the biggest lie ever swallowed by J6P.
Of course it’s not for the families. I’d bet money that if you looked closely at the bill, there is a way for employers to wiggle out of both time off and overtime.
Even if there’s not, I’m sure they can put it off forever. So it just becomes a new form of mandated layoff compensation once they’ve used you up. And that will be paid under someone else’s watch, so it’s all good.
American labor cost is much higher than in many parts of the world. You measure competitiveness in cost. An India who earns a $1 per hour and producing 5 units per hour is more competitive than a gringo earning $20 per hour and producing 20 units per hour.
Berkshire Profit Advances 49% on Buffett’s Derivatives
By Noah Buhayar & Zachary Tracer - Mar 1, 2013 6:37 PM ET
Buffett’s biggest takeover, railroad Burlington Northern Santa Fe, was completed in 2010 in a $26.5 billion transaction. The business contributed $932 million to quarterly earnings, compared with $909 million a year earlier. An increase in shipments of construction products and petroleum helped mitigate the impact of fewer coal shipments.
Profit from utility unit MidAmerican Energy Holdings Co. fell to $294 million from $316 million a year earlier. The business, which sells electricity to homes in the U.S. and U.K., has been expanding its renewable-energy portfolio by buying solar and wind projects.
Every morning I wake up and thank my lucky stars that the super rich are distracted by their incredible wealth so they don’t have time to make our lives even more depressing and pointless. What if they get bored just making money and decide to actually make us suffer?
I’m not sure about that. I’m happy the really poor and desperate don’t firebomb the trappings of the wealthy (that the middle class are employed at) on a daily basis. That they’d rather ‘work it out’. Man if the lower class ever got pissed, working in a bank lobby, downtown office tower, or at a fancy restaurant could get real dangerous real quick.
“Comment by Ben Jones
2013-05-06 16:53:31
‘I’m not allowed to ask [about fixed PITI vs pick-a-pay].
You can ask all you want. But since you seem so interested in this question, why not spend a few hours on the internet researching it (or make phone calls) and let us know?
————-
Many of the news stories posted here are about squatters and old MBS. But that is all cleaning up after the old loans. Well, yes, the old loans failed. The loans were set up to have a grace period of low monthly nut. FB’s knew that they “had” to sell before the payments jumped. But then the grace period was up, there was no one left to sell to, FB’s rates or PITI jumped, FB’s missed payments and had to foreclose or accept short sales which dropped comps. Banks didn’t care about income documentation because they had already sold the loan to Fannie/Freddie, or got a bailout. This is ancient history.
Would we have had the same crash if PITI had been fixed-interest fully amortized from the beginning so PITI never went up? No grace period, no I/O, no neg-am, no teaser rates, and at least a cursory look at income? My guess is no. I don’t think we would have had as much of a bubble. We certainly wouldn’t have had as many J6P buyers in CA, NV, AZ. The bubble would have deflated in 2003 instead of 2007, at much lower price levels.
So do the new loans have the built in preventions to at least slow the next bubble? Fixed PITI and income requirements? I find it depressing that on a housing blog, I seem to be the only one to be interested in this.
FHA seems to require a DTI regardless of FICO (i.e. “pushing subprime” isn’t going to work.)
HARP requires some documentation of income.
Navy Federal does offers no money down loans and they mention ARMs. But all Navy Federal applicants must supply:
—–
1.Purchase price and loan amount
2.Estimated homeowners/condo association dues on property
3.Payment instructions for appraisal fee (please provide account numbers)
4.Social Security number
5.Date of birth
6.Navy Federal share savings account number/access number
7.Two-year address history
8.Two-year work history
9.Gross monthly income to be used for qualifying
10.Other income to be considered for qualifying (if any)
11.Account/asset information (held by financial institutions OTHER than Navy Federal) to be considered for qualifying
12.Current tax, homeowners/condo dues, insurance and lien information (balances, monthly payment and mortgage company/lien holder name) for all real estate owned.
———–
Does this sound like 2006-era no-doc to you? It doesn’t to me. I tried to find data on what % of originations are actually fixed PITI, how many are ARMs, etc, and there is very little available. Any tracking info is limited ot paid reports. All I could find was that 75% of new originations are refinances.
Sure, there will always be ads of outfits “offering” crazy loans, but I’d like to see someone post who is actually approved and signing at the closing table, and just what kind of loans these are. If they were actually interested.
“Stated loans” will make a comeback IF and ONLY IF the originating banks can sell those loans up through the secondary market to Fannie and Freddie. You think a bank would hold even 5% of that POS loan by themselves? Hell no, they want 100% pass-through for fees. Can’t say I blame ‘em.
And yeah, a couple weeks ago I also asked about the secondary market. Because, no secondary market, no stated loans. But no one was interested in that question either.
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Comment by azdude
2013-05-07 08:13:10
so when will the democrats give the ok to fannie and freddie so everyone can own a home?
Comment by michael
2013-05-07 08:14:00
“And yeah, a couple weeks ago I also asked about the secondary market. Because, no secondary market, no stated loans. But no one was interested in that question either.”
What types of agency MBS will the Desk purchase?
Agency MBS purchases will likely be concentrated in newly-issued agency MBS in the To-Be-Announced (TBA) market because these securities have greater liquidity and are closely tied to primary mortgage rates. The Desk may purchase other agency MBS if market conditions warrant. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for purchase. These eligible assets include, but are not limited to, 30-year and 15-year securities of these issuers. Ineligible assets include CMOs, REMICs, Trust IOs/Trust POs and other mortgage derivatives or cash equivalents.
These have been back for a couple of years with the HARP, etc, loans. I’ve read they don’t even bother stating anything, or doing an appraisal. And it gets looser all the time.
Comment by azdude
2013-05-07 08:21:19
Thats true. I guess that qualifies as a refinance?
What does it tell you about the casino like atmosphere in our home and stock market? I think there is a big message within that.
Comment by oxide
2013-05-07 10:25:54
In order for the Fed to buy the MBS from Fannie, Fannie has to buy the MBS from somebody. And at least in my own experience, Fannie ain’t takin’ no-doc loans.
Ben, HARP is a bad example. My post referred to new loans. HARP is a refinance program for loans originated prior to Jun 2009.. which were already bought by Fannie and Freddie.
Comment by polly
2013-05-07 10:45:17
There is nothing particularly wrong with doing a refi on a loan that the government ALREADY guarantees as long as the following are all true:
No additional cash out
The payment is lower than it was before
Seriously. If the government is already on the hook for guaranteeing the entire loan amount, and they change it from a loan on which the payment is $2000 a month to a loan on which the payment is $1200 a month, then there is some chance that the lower payment will keep the borrowers paying. The bond holders have to swallow their biond being paid off earlier than it otherwise would have been, but that is always a risk on asset backed securities. The guarantee is on return of the principle.
Comment by michael
2013-05-07 11:10:49
“In order for the Fed to buy the MBS from Fannie, Fannie has to buy the MBS from somebody. And at least in my own experience, Fannie ain’t takin’ no-doc loans.”
so let’s get this for the record…the federal reserve prenting $ 40 billion a month to purchase MBS from the GSEs who purchase them form banks who make taxpayer backed loans with a 48% DTI requirment and 3.5% or less down is great public policy and will have no adverse consequences in the long run to the U.S. taxpyers present or future?
and that you whole heartedly support and promote this policy?
Comment by oxide
2013-05-07 11:35:48
48% DTI requirment and 3.5% or less down
…and a fixed PITI. Do NOT forget that fixed PITI.
…also, I think 48% might be too high, but I’ll support a DTI requirement.
Is it “great” public policy? Well it’s better than sitting back and letting all these folks get shut out of the market and be forced to pay increasing rent to Blackstone for the next 50 years.
Will it have no adverse consequences? There are always going to be defaults, and I’m sure you’ll be the first to skewer me with some anecdotes from the Palm Beach Post. But those consequences will be no worse than a nation of elderly who don’t own a paid off house and can’t afford rent. Or a nation that pays higher and higher rent. Or lives in the boxes under the bridge.
You’ve posted the 3.5% down a few times yourself. We can be broken records together.
As for this post, I suggest you read it. Someone posted that there may be zero-down loan “yesterday”? I posted it JUST NOW.
Navy Federal does offer no money down loans
It’s FHA that requires 3.5% down, but they also want 48% DTI.
But for the Navy, it appears that if the income underwriting is good enough, you don’t need even 3.5% down.
I believe the Navy on this one. You know why?
Because RENTERS don’t have to come up with 3.5% down, yet theystill seem to keep up with the rent — rent which is the same or close to PITI — month after month after month. For one of my apartments, I had to make 4x the monthly rent. And they called my employer to confirm.
I’m going to repeat that so you don’t miss it.
RENTERS don’t put 3.5% down, yet they keep up with rent payments for months… because they have the INCOME.
RENTERS don’t put 3.5% down, yet they keep up with rent payments for months… because they have the INCOME.
—————
Many (most? - every place I ever rented) required a security deposit that was at least equivelent to 1 month of rent. Kind of the same thing.
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Comment by Happy2bHeard
2013-05-07 21:57:09
Not even close.
If 1 month’s rent is roughly equivalent to half of the mortgage payment, then it is about 1/180th of a 30 year mortgage (1/2 of 1/(30*12) = 2/360). About .55% down.
“Because RENTERS don’t have to come up with 3.5% down, yet theystill seem to keep up with the rent”
and when the spigot is turned off and the “value” of the home the home debtors bought with no money down drops 40% what do renters do?
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Comment by oxide
2013-05-07 10:39:27
If the renter gets kicked out the house, he has to find another house — and he doesn’t put 3.5% down there either.
And what “happens” if the value of the house drops 40%? Generally, nothing. If he has a regular fixed-rate fully amortized mortgage, then his PITI doesn’t change. He doesn’t have to pay more after a 3 year grace period. He doesn’t have to refinance. He doesn’t have to sell. He doesn’t have to walk. In fact he doesn’t even have to know that his house value dropped. As long as he keeps his job and income — there’s that pesky “income” again — he just keeps making that same payment.
Comment by Housing Analyst
2013-05-07 11:09:09
What happens? Someone’s loses grow dramatically. This is the end result of paying a massively inflated price for a depreciating asset.
Just like your situation.
Comment by "Uncle Fed, why won't you love ME?"
2013-05-07 12:43:59
Oxide:
You bought a house, and now you are psychologically addicted to the notion that renting will always make you poor, and that owning will always make you rich. Do yourself a favor and sell at the top of the rebubble, K? I’m worried you will join the “this time is different” crowd. You alluded the other day to the “new normal” in America, when all of us poor cave-dwellers would be living in boarding houses, while our wealthy overlords ate steak and lobster in their mansions every night. Well, I am exaggerating what you actually said, but it was something very similar to the reasoning I was subjected to almost daily during the last housing boom.
An asset boom is merely the anterior end of a boom-and-bust cycle. There is no way to get around that. The United States is not Europe, Canada, or any other place. While the socialists have created a taxpayer-funded bubble that has not yet popped, we capitalists will not and cannot do so. Do yourself a favor and play the volatility when you get the opportunity.
Comment by oxide
2013-05-07 12:55:08
Always?
Comment by "Uncle Fed, why won't you love ME?"
2013-05-07 14:19:45
Oxy:
Yes, asset boom. Always. I am not referring to something like “peak oil”, where you can actually run out of the resource, and there is no competitive alternative. I am talking about the ratio of fundamental value vs. market value.
In this particular case, I am talking about land ownership in the United States. There is ALLOT of unoccupied land in this country. More land than everyone can use. There is not enough water, but that’s another issue.
As long as investors cannot reap competitive returns on rents at market prices, then the prices will come down. Builders can do things (such as building) that would counteract overheated demand. Sometimes builders DO build things, which is why you see something like “normal” prices over very long periods of time. You see it allot.
Oxide, you seem to be focusing on the idea that negative amortizing loans or interest only loans are solely responsible for the bubble and its burst. But what percentage of loans were toxic like this? I’d guess less than 20%.
My guess is more loans defaulted because of job losses/transfers, then later came the strategic defaults.
Were a lot people really stupid enough to sign up for a no-doc fixed payment loan they knew they couldn’t afford?
The Navy’s problem is that its bases and ports are mostly located along expensive coastal regions. A recently retired Coast Guard petty officer told me that his housing allowance in Alameda, CA was something like $2800/month, IIRC.
‘there will always be ads of outfits “offering” crazy loans’
Not if the regulators are doing their job. Which highlights the fact that the subprime “crisis” was largely a regulatory failure. I’ll make this brief:
When I stumbled upon subprime loans in 2004, I discovered that these loans exploded in 2003, just as prime lending dropped by a large amount. I suspected the industry needed a new pool of buyers. I looked into subprime. It had been a small % of loans 1 or 1.5% that defaulted at 10-14% in the first 5 years. They were, you could say, “designed to fail.” For profit companies didn’t want to make these loans and keep them - it was too risky. These were usually for special groups, like veterans, who the government wanted to help out. So they would back them knowing a lot would fail.
When the industry needed buyers (profits) in 2003, they started going in this direction. Seeing that the regulators did nothing, it continued. Countrywide didn’t invent most of the loan “innovations”. A competitor would and Countrywide would match it to “maintain market share”. This would mainstream the practice and later be called the race to the bottom; culminating with Fannie and Freddie diving into subprime expressly to “maintain market share”.
Of course, these loans failed at a much greater rate than 14%. And soon, some types of prime loans in this period were failing at a rate higher than 14%.
This all happened as the FBI watched, as the SEC watched, and even congress. It was a regulatory failure. Now we have the White House pushing subprime loans with the exact wording we read in 2005; help these poor people/minorities “get in” on the action.
Where will it lead? I don’t know. But if it ends badly it won’t be called regulatory failure. It will be reckless policy bordering on criminality, IMO.
“It will be reckless policy bordering on criminality, IMO.”
There is a good chance the responsible parties will be long-gone from public office when the SHTF. Note that although people still grumble about folks like Franklin Raines, who never faced any serious consequences or culpability for his role in setting the stage for the first leg down in the housing collapse.
‘Citadel Loan Servicing Corp. of Irvine, a new subprime lender launched by industry veteran Dan Perl, funded its first loan last week, and is getting a barrage of telephone calls from potential borrowers to its headquarters in Southern California. “We’re getting 25 to 30 inquiries a day,” Perl told Inside Mortgage Trends. The firm is in the process of evaluating between $1.5 million and $2 million in residential loans. The first mortgage it funded was for $315,000 on a home in Orange County, CA’
‘Yet there are signs that the politicians have failed to learn that lesson. Beyond the Fed, the Washington Post reported last week that “the Obama administration is engaged in a broad push to make more home loans available to people with weaker credit.” The government is pressing banks to press borrowers to take advantage of FHA guarantees and other federal subsidies. That’s the same thinking that gave us the Fannie Mae-Countrywide Financial subprime loan machine, the subprime bust and the $187.5 billion failure of Fannie and Freddie.’
‘With prices rising again, now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing. In some areas of the country Fan and Fred still back mortgages of more than $600,000, while the FHA backs loans of more than $700,000. Reform-minded lawmakers may not be able to stop Fed Chairman Ben Bernanke from dropping money from helicopters, but they can begin reducing the conforming loan limits at Fan, Fred and FHA to put some guardrails around Washington’s reckless credit policies.’
Everybody should be fighting this, IMO. It’s disgraceful and could harm millions of borrowers. Where are all the posters who decried wall streets greed and reckless lending? I don’t care if this guy is a Democrat; now is the time to make it clear we don’t want to return to the disaster that was subprime.
‘now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing’
————-
“We very rarely transfer our servicing of your mortgage payment.”
“We do have some very basic criteria to determine qualification. Chief among those items are the ability to repay the loan, previous credit history, occupancy, as well as the equity in the property that is being offered as collateral for the loan. Life altering events including change in or loss of a job, divorce, death in the family and the like are generally not of consequence.”
————
And from the supposedly non-public(?) broker page:
———-
“Loan Type: Adjustable Hybrid Rate and Fixed Rate terms varying from 7 years (with 23 year adjustable) to 15 year due in 15 year fully amoritzed depending on the loan and property type.”
First Mortgages:
Minimum Base Rate: 7.950% for Residential 1-4 Units
Minimum Points/Fees: 1% plus $750 Loan to Value: 75% LTV / Owner Occupied SFR
Second Mortgages:
Minimum Base Rate: 9.95% for Owner Occupied LTVs <50.00%
Minimum Points/Fees: 2% plus $500 for Owner Occupied
Loan to Value: 70% LTV / Owner Occupied SFR
———————
So let’s see: they make their own decisions and keep the servicing in-house. They don’t care about FICO or a job as long as you have a pile of cash and the ability to pay even more cash (from somewhere) at a ridiculously high interest rate. Who are they targeting? Mexican/Chinese drug lords?
I don’t think this is what Obama is pushing.
Comment by Whac-A-Bubble™
2013-05-07 12:11:40
‘now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing’
AKA time to take away the punch bowl before someone gets plastered, drives drunk, and causes a major pileup.
Comment by cactus
2013-05-07 13:14:55
Citadel Loan Servicing Corp. of Irvine, a new subprime lender launched by industry veteran Dan Perl, funded its first loan last week, and is getting a barrage of telephone calls from potential borrowers to its headquarters in Southern California.”
Unbelievable its starting all over again remember these guys ?
” New Century Financial Corporation was founded in 1995 by a trio of former managers at Option One Mortgage, including former CEO Brad Morrice and is headquartered in Irvine, California. New Century Financial Corporation was a real estate investment trust that originated mortgage loans in the United States through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation.
As of January 1, 2007, New Century had approximately 7,200 full-time employees[1] and a market capitalization of $1.75 billion. FY 2005 net income was $417 million.[2] New Century was formerly listed on the New York Stock Exchange and is now trading on the over the counter pink sheets. By March 14, 2007, the day after the New York Stock Exchange delisted New Century Financial Corporation, the market capitalization value of its stock was less than $55 million.
It is neither kind nor right nor vaguely intelligent to hang out on a website dedicated to the investigation/documentation of a housing bubble and then attempt to pimp real estate. It is however, both ridiculous and foolish.
This statement is such obvious and abysmal horseshit that it should be tattooed into your forehead. Then you can explain to others how ridiculous and foolish you sound
Wow! That is original! Just like the rest of your idiotic tripe! Or is that just my perception? Hmmmm… Maybe you could step out in front of a bus and test your theory of reality vs perception?
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 06:50:58
Today’s dispatch from the world of private contracting… Air Force outsources work to private contractors, evaluates bids, awards contract. Immediate result: Twelve (12) protests at GAO. One was dismissed this morning but 11 remain. LOL!
This is not uncommon. And by the time this is sorted out, alot [sic] of time is lost and the expenses to the government and the contractors (which drives up their cost of actually performing the contracting and thus their reimbursement from the gov’t) is incalculable. And if protests are lost at GAO, there is always the option of taking your case to the Court of Federal Claims. Private contractors for the gov’t have even more rights than private businesses have than when dealing with each other. They usually treat the government (their client) as an adversary that they can push around using lawyers. Which is obviously the opposite of how a federal employee would behave in this situation.
But hey, at least the private contractors don’t count as evil gov’t employees! Thus helping us have a smaller, leaner government. LOL!
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 07:02:39
Costs for the Air Force, GAO, and the winning bidder are going to go sky high trying to keep this contract moving. It’s an IDIQ (indefinite delivery, indefinite quantity) contract valued at $6.9 B (which is the max for an IDIQ contract). Baker Hostetler, Jenner & Block, Crowell & Moring, Sheppard Mullen and those are just the names I’ve seen so far. These are all very expensive firms that will each rack up bills into the 8 figure range.
ROFL @ our “cut the military, cut fed employees, use the free market” contracting system.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 07:30:00
The agency’s website about this program (the public details, anyway) is here: http://netcentsii.com/
The other great thing I find about programs like this are that it’s the federal gov’t using private contractors to do IT intelligence work. The kind of program Bill in LA would love to do because at the end of the day he could just “ignore” the creepy aspects.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 12:36:10
It’s up to 14 protests now (13 active, 1 dismissed).
I bet the agency will take corrective action and reopen bidding rather than get bogged down with this many protests. Of course, doing this means they’ve lost time and money in the process, whereas letting the GAO decide this means it will be over in 3 months.
The surprisingly positive April employment figures likely didn’t mean the local factory added a shift last month.
The manufacturing sector failed to add any jobs last month after a meager 2,000 increase in March payrolls, a black spot on the otherwise rosy jobs report. Those numbers add to other economic data showing that demand for factory goods is falling and the sector is seeing a broad slowdown this spring. And that spring swoon could turn into a summer slide.
The auto industry, rebounding from bankruptcies during the financial crisis, has been a main driver of manufacturing growth, accounting for a third of all new jobs in the industry since the recession ended.
But with car sales slowing and dealer inventories climbing, the auto industry growth is likely to ease. “Of particular concern for the overall economy is auto manufacturing, which appears to be ripe for a correction in the months ahead,” said Scott Anderson, chief economist for Bank of the West.
Vehicle sales peaked in November and have fallen in four of the past five months but auto production continued at double-digit year-on-year rates through March, he said. That disconnect could result in longer summer shutdowns or slow down at some factories, robbing manufacturing of one of its growth engines.
If the auto sector is starting to sputter, the defense industry has stalled. Military factory orders plunged 34% in March, the month across-board-government cuts backs known as the sequester began. Defense spending has been volatile in recent months, but is down 25% from a year ago.
In addition to the direct impact of military cutbacks, some fear the curtailing of government budgets, including spending on roads, schools and infrastructure, could hamper demand for other factory goods.
“We are a long way from a true resurgence in American manufacturing,” said Scott Paul, president of the Alliance for American Manufacturing trade group. “We strongly believe that we won’t see real growth in manufacturing jobs without the right policies from Washington.”
No, BS, the right policies would include the American school of economics (which requires tariffs), rather than the British school of economics (which is globalism).
MassPrivateI: Watertown, MA residents speak out about police … http://massprivatei.blogspot.com/2013/05/watertown-ma-residents-speak-out-about.html - 170k
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After looking at these pictures it is no wonder why the DHS market survey indicates they are interested in purchasing ammunition that will safely fragment when fired against an armor steel plate, or a car, or the side of a house or a wall. This ammo is good self defence ammo for these reasons, it will take out a soft target (human with no body armor) but break up hitting something hard. It is also very expensive.
Big Sis And DHS, Seeks Millions More Rounds of Ammunition (Video)
Sunday, May 5, 2013 20:09
With the DHS already having committed to purchasing over 1.6 billion bullets over the course of the last year, a “request for information” on “reduced hazard training ammunition” posted on the FedBizOpps website quizzes bullet manufacturers on how fast they can supply large quantities of ammo;
- Are you capable of producing large quantity orders of any training caliber specified with a short turnaround time of 30-60 days?
- What would your lead time be for an order of 2 million rounds of a single type Listed Above?
Gold - Electronic (COMEX) Jun 2013
Market open $1,444.60
Change -$23.40 -1.59%
Volume 132,677
May 7, 2013 11:33 a.m.
Previous close $1,468.00
Day low $1,440
Day high $1,470
Open: $1,469.10
52 week low $1,322
52 week high $1,803
There are many reasons NOT to buy a house right now.
1) Prices are massively inflated
2) Rental rates are half the cost of buying at current inflated prices
3) The cost of new housing is a fraction of resale housing in $/square foot.
4) $/square foot prices are falling
…. and most importantly… You’re going to lose alot of money if you buy a house now. ALOT of money.
‘Fannie Mae creates single-class MBS that represent beneficial ownership interests in a pool of mortgage loans secured by single-family (1-4 units) residential properties.
Creating a Single-Family MBS begins with a mortgage loan. The loan is made by a financial institution or other lender to a borrower to finance or refinance the purchase of a home or other property with 1 to 4 residential units. These loans are made to borrowers under varying terms (e.g., 15-year, 30-year, fixed-rate, adjustable-rate, etc.); during the life of the loan, the balance is generally amortized, or reduced, until it is paid off. The borrower usually repays the loan in monthly installments that typically include both principal and interest.
We pool single-family loans that generally conform to our standards and issue Single-Family MBS backed by those loans. A Single-Family MBS may be backed by fixed-rate mortgage loans or adjustable-rate mortgage loans but will not be backed by both fixed-rate and adjustable-rate loans. When a Single-Family MBS is issued, we guarantee to the MBS trust that we will supplement amounts received by the trust as required to permit timely payment of principal and interest on the MBS certificates.
Single-Family MBS may be placed into Megas, REMICs, SMBS, or other Structured Transactions mortgage-related securities.
Additional data related to Single-Family MBS can be located via the tools on the right and via additional links outlined below:’
single-family loans that generally conform to our standards
And those standards would beee… ???
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Comment by ICLEI
2013-05-07 11:44:33
oxide
Is your real name Richard?
Comment by oxide
2013-05-07 12:29:34
No, but I dated a couple of Richards.
Comment by "Uncle Fed, why won't you love ME?"
2013-05-07 13:12:58
“When a Single-Family MBS is issued, we guarantee to the MBS trust that we will supplement amounts received by the trust as required to permit timely payment of principal and interest on the MBS certificates.”
Who is this “we” they keep talking about, anyway?
Oxide: As long as F&F knows it has Uncle Sam in its pocket, then F&F will continue to degrade their standards along with the market. Privatize the gains; socialize the losses. As this bubble heats up, F&F will get more and more reckless (just like last time).
I just wonder whether or not the government cookie jar is empty.
We are now moving into a target region that I provided over a year ago when we were trading within the 1250-1300 region. While I was not positioned long in the S&P 500 for the move this week, I have said before that I am willing to sit out this rally, unless a low-risk entry developed, as the downside now seems to be of greater risk than missing some of the upside. However, I do not see the top as being in place just yet, and it may take several more weeks until this wave is completed.
With the move up we saw this past week, it made it clear that the last pullback was a more shallow corrective wave than I wanted to see in order to enter a safer long in this market. But as I have been saying in our trading room over the last week, the drop on April 23 has given me issues with how to appropriately count this last structure, and has made me much more uneasy about trading the upside.
As many of you know, I get much more conservative when I do not have a count upon which I can confidently rely, especially if that is within a 5th wave, and would rather sit out a market move in that case. While that may anger some, I would rather remain in cash and miss a final move than be positioned wrong and lose money, especially since there is always another bus coming if we miss the current one. In fact, there are many traders that only wait for a larger degree 3rd wave to trade, and sit out a 5th wave entirely.
…
as long as everyone is talking about a crash it usually wont happen. just wait till the bears are ran out of town and give it some time. when nobody sees it coming sh@t will hit the fan.
Everyone is talking about how smart they are with their stock investments again. Even msft is showing signs of life.
Everyone was talking about a correction awhile ago. I have to admit the bears have been going away slowly. Theres a few left like peter shiff. We are getting closer to the correction.
“Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.”
Ruh-roh…
May 7, 2013, 11:38 a.m. EDT Gold futures fall more than $20 an ounce Gold ETF outflows continue to concern investors
By Myra P. Saefong and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures lost more than $20 an ounce Tuesday as outflows from gold exchange-traded funds continued to weigh on sentiment.
Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.
Gold for June delivery (GCM3 -1.61%) fell $20.90, or 1.4%, to $1,447.10 an ounce on the Comex division of the New York Mercantile Exchange.
“There’s a lot of betting against gold going on,” said Ben Traynor, chief economist at BullionVault.
“Professional money managers have built up a sizeable short position,” he said. Short positions are essentially bets for a fall in prices.
“At the same time, the ETFs continue to lose metal, which makes would-be gold investors circumspect,” Traynor wrote in emailed comments.
Outflows from commodity exchange-traded funds continued in April. Data suggested a record month of withdrawals, totaling $7.8 billion, including about $7.3 billion of net redemptions in the largest physical gold ETFs — the iShares Gold Trust (IAU -1.55%) and SPDR Gold Trust (GLD -1.63%) according to a note from Citi Research dated Monday.
The sum “far exceeds the prior monthly record for physical bullion redemptions just last quarter in February of $4.1 billion,” Citi said, adding the year-to-date net outflows across listed commodity ETFs are now north of $14.6 billion, compared with $3.8 billion of net inflows during this time last year.
…
ft dot com
April 16, 2013 6:00 pm
Gold’s fall costs Paulson $1.5bn this year
By Dan McCrum in New York
John Paulson of Paulson & Co
John Paulson has taken a bold bet on bullion and allows his clients to denominate their holdings in gold, rather than US dollars
The tumbling gold price has personally cost billionaire hedge fund manager John Paulson at least $1.5bn so far this year, as a decline in the price of the metal turned into a rout.
The estimated losses for Mr Paulson, who has made and lost more money on gold than almost any other hedge fund manager, reflect a bold all-in bet on the precious metal.
While many investors hold some gold in case of financial calamity or a return of the rampant inflation of the 1970s, since 2009 Mr Paulson has allowed clients of Paulson & Co to denominate their holdings in gold, rather than US dollars.
Mr Paulson enthusiastically embraced the option, according to people familiar with the situation, and has about 85 per cent of his personal capital in the firm linked to the gold price.
Mr Paulson controls a little over half of the approximately $18bn managed by his hedge funds, according to people familiar with the firm, so the more than 17 per cent drop in the gold price this year equates to paper losses of about $1.4bn. Gold on Tuesday rebounded $24 to $1,377 an ounce, recovering some of Monday’s steep losses.
At the same time Mr Paulson also controls about four-fifths of a dedicated gold fund, his firm’s smallest. This fund takes leveraged bets on gold. In the first three months of the year a 5 per cent decline in the gold price translated into 28 per cent losses for the fund, which managed about $700m at the end of March, according to people familiar with it.
…
More On this story
Gold hit by sharpest tumble in 30 years
Video Gold leads the falls
Rout pitches gold into bear embrace
FT Long Short Good as gold
In depth Gold prices
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 09:04:47
Interesting piece from the Atlantic about Public-Private Partnerships and some lesser-known consequences are discussed:
“Denver residents certainly know something about PPP controversy. They found themselves on the wrong end of it just a few years back regarding a toll road called the Northwest Parkway. In 2007, a state highway authority leased the parkway to a private consortium for 99 years. (Once again, this authority was distinct from CDOT) Before long legislators became upset to discover that the terms of the deal prevented the state from improving a public road in the same corridor, because this upgrade might draw traffic away from the parkway — and toll revenue with it.
Despite this frustration, the stipulation had been right there in the official contract, clear as legal jargon [PDF]: “… the construction of a Competing Transportation Facility shall constitute an Adverse Action.”
As it turns out, part of the reason there’s so much debate about public-private partnerships is that these “adverse action” clauses are standard operating procedure. Law professor Ellen Dannin of Penn State University recently reviewed the fine print for a number of PPP contracts and, in a 2011 paper, concluded that various provisions in road partnership contracts effectively made the public “the guarantor of private contractors’ expected revenues” [PDF]. In other words, private infrastructure investors weren’t taking nearly as much risk as they’d have the public believe.
“This is being sold as the latest, greatest thing,” says Dannin. “The more I dug into this stuff, the more I was blown away by it. It just seemed really astounding to me. These finance people know what’s going on, but the rest of us don’t.”
Dannin’s work outlined several types of PPP provisions designed to expose investors to as little danger as possible. The most objectionable of the bunch is a non-compete clause, which expressly prohibits local authorities from building more attractive transportation options — from other roads to mass transit — in the same corridor. The Northwest Parkway is one example of a non-compete unfavorable to the public, but the poster child is SR 91 in Orange County, California [PDF]. After these express lanes opened in the mid-1990s, word got out that the deal prevented officials from improving the free roads nearby until the year 2030. The ensuring uproar led Orange County to purchase the road back from investors in 2002.
Then there are compensation clauses. Though less directly pernicious than non-compete clauses, these provisions also had the power to harm the public good, writes Dannin. Take the example of new toll lanes on the Virginia Beltway. That PPP deal called for the state to pay investors whenever carpooling exceeded 24 percent of traffic (ending after 40 years or $100 million in profit). As Dannin points out, this and similar compensation clauses create a scenario in which public officials must choose between their larger responsibility of promoting more sustainable transport or forking over some cash — the very cash they hoped the PPP deal would save them in the first place.
What these adverse action clauses really do, argues Dannin, is compromise the integrity of the entire transportation network — and elected office as a whole — to ensure investors a profit. “We’re sort of selling off part of our democracy as part of the cost” of PPPs, she says. “It’s hard to put a financial tag on that.”
It isn’t the fine print. It is the definitions section. Most important part of any contract. It is ususally at or close to the beginning. Never skip it. Never.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 11:26:38
I didn’t say it was in fine print. My understanding is that the “adverse action” definition in the contract wouldn’t really alert an average person to the true scope of what the government is precluded from doing after singing away the rights to a project. The idea that allowing a private contractor to build or maintain a road would prevent the government not only from developing other roads but also adding commuter rail or express buses.
In some of these procurements, the gov’t is actually *penalized* if it encourages carpooling. The contractor loses money on tolls when people carpool, so they are allowed to do a survey and find out how many cars have multiple occupants. Then they charge the government an amount to compensate for carpooling. LOL!
What if people bicycle? Or, gasp, decide to take public transit instead?
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Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 11:54:17
Biking and public transit are OK, so long as the state doesn’t build new bike paths or upgrade bus/train service which might compete with the roads they signed away to the contractor.
Obviously this is a nasty, hidden, overlooked side to what can happen when you take public resources and put them in private hands.
Comment by polly
2013-05-07 11:55:00
The problem isn’t if people decide to do it. The problem is if the government encourages it in anyway. Like providing places to lock up your bike near the train station. Or authorizing the bike rental place to expand (requires permission because they put the stations on the sidewalk). Or anything else.
I have said it before and I will say it again. Public/private partnerships are terrible. The government has priorities. Private corporations have one priority - making money for their executives/shareholders. The two are rarely sufficiently closely alligned for final deal to be a good idea. The government gives away too much.
And Joe, you may not have said anything about fine print, but the article you cut and pasted did. Not every comment is about you in its entirety. Grow up.
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 12:33:10
Grow up? It’s a nitpick in the first place. To the average reader of that article the definitions section of a contract counts as “fine print”. And in any case, the words in a definitions section aren’t necessarily given their everyday English meanings, they are interpreted in light of many other things, including course of dealing and the history of revisions to the document. I’m in basic agreement with you, these PPPs are never as simple as explained in a 60 second segment of a news program or a 500 word article in the paper. I don’t think the average person realizes the profits that private contractors make in their dealings with the gov’t because they don’t see these things through the lens of the contract process.
Comment by "Uncle Fed, why won't you love ME?"
2013-05-07 13:27:20
Besides, how do you define a “facility”? A road is a “facility”?
I agree with both of you that public/private partnerships are a conflict of interest. The taxpayer is on the hook in the end, but we don’t get to vote for the executives of the private corporation that gets all the benefits.
Say, are Fannie Mae and Freddie Mac both private/public partnerships? I was just wondering because I think there might be a problem with those.
Comment by polly
2013-05-07 15:31:34
No, to the average reader fine print is the stuff in 4 point type you don’t read on the back of a parking garage ticket or a car rental agreement. These definitions are the second or third section of a massive agreement entered into by government officials with a giant corporation. I don’t expect people to be intimately familiar with the rights they give away when they buy a ski lift ticket, but if government officials can’t be bothered to know that renting out one road means they can’t improve or build other ones for 99 years? They deserve pretty much everything that can be thrown at them. Which I admit is very little since they almost certainly have imunity from prosecution for being dimwits in carrying out their elected positions. But just the slightest hint of a quid pro quo and prosecution followed by a very long jail term sounds like a very, very good idea. Then maybe the next half-witted politician would not enter into these partnerships.
If the corporation is willing to sign on to the agreement, then it is a bad deal for the people who live there. With very, very high confidence level.
Comment by "Uncle Fed, why won't you love ME?"
2013-05-07 16:48:42
Good point, Polly. If a company agrees to it, then they must be getting more than they’re giving. Otherwise, there would be no profit. Government services don’t work that way.
“Even in the absence of the excess empty housing inventory estimated in the tens of millions, historically housing prices fall. Why? Because houses depreciate. ALWAYS.”
Amid the incense, cheap art and herbal remedies for sale in Union Square in Manhattan on Monday, a very different kind of product was changing hands: bitcoins.
Just feet from the park’s statue of George Washington, a crowd of young men gathered on Monday afternoon to buy and sell the digital, crypto-currency.
The men – and there were only men – were brought together by an online posting from Josh Rossi, 31, a bitcoin aficionado who works in technology at the World Trade Financial Group.
One of the trademarks of bitcoins since they were created by anonymous programmers in 2009 has been that they have no physical form, and can be exchanged completely electronically, making human interactions unnecessary.
But the online venues for buying and selling bitcoins have become too expensive and time consuming, Mr. Rossi said. So he proposed what he called Project Buttonwood, a reference to the where the New York Stock Exchange had its beginning in 1792.
“If I want to buy a hamburger, I want to be able to sell my bitcoins and get my money immediately so I can buy that hamburger,” said Mr. Rossi, who wore jeans and loafers for the occasion, and smoked a cigarette while watching the proceedings.
The legality of bitcoin has been questioned by some regulators, and investors have looked on in horror in recent weeks as the price of a single bitcoin has bounced around more sharply than the most speculative stock. Mr. Rossi’s posting about the event on Reddit was sniped at by one commentator who said “you might get busted by the Feds” and another who predicted “the first bitcoin ‘gang’ fight.”
In the end, such dire predictions did not pan out. After a slow start at 4 p.m., just as trading on the New York Stock Exchange shut down for the day, the crowd grew to about 20 people. There were a few polite arguments about how the process should work, and then people began calling out prices at which they were willing to buy and sell bitcoins. Many of the young men alternated between conversation and watching the nearby skateboarders and break dancers.
The first transaction came when Mr. Rossi pulled out a $20 bill in order to buy a part of a bitcoin, at a rate of $120 for a single bitcoin. The seller was Owen Gunden, a 30-year old programmer. In order to transfer the online currency, Mr. Rossi used his smartphone to take a picture of the graphic code on Mr. Gunden’s phone, which provided access to his bitcoin account. The crowd around the men clapped.
“This is markets becoming more efficient,” Mr. Rossi said with a smile.
…
“Banks have won over investors by taking steps to make this generation of structured products safer than the last one. But with demand for these products on the rise, credit ratings agencies and regulators are warning that the additional protections are already dwindling, allowing some of the old excesses to creep back into the market.
‘The players in the business are generally the same as they were before,” said Tad Philipp, a commercial real estate analyst at Moody’s rating agency. “Because it’s the old players, they know how to push the boundaries.’”
Comment by Joe the patriotic bootstrapping IRA stuffer
2013-05-07 11:52:00
NYCDJ, have you been advising the Michigan legislature on their Bridge card program? (I ask because of the current Drudge Report headline. Yes, I am ashamed that I visited…)
This is one study you won’t see from the National Association of Realtors.
Dartmouth College’s David Blanchflower (best known for being the Bank of England member who first pressed for interest rate cuts after the onset of the financial crisis) and Andrew Oswald of the University of Warwick find that a doubling of the rate of home ownership in any U.S. state is followed in the longer run by more than a doubling of the unemployment rate.
And they say that other research conducted outside the United States suggests a similar effect, noting for example the much higher homeownership rate as well as unemployment rate in Spain as compared to Switzerland.
Went down that rabbit-hole, that was scary. Found myself right in the middle of union goons, racists, communists and civil servants. I won’t do that again anytime soon.
Is it fairly safe to say that the stock and housing markets will always go up from now on, and that if you don’t buy now, you will be priced out forever?
California is a religion. At least to those who have never lived in a red state.
Today in the lab I casually told my consultant colleagues that Real Estate is a depreciating asset. That greatly upset their religion and they ridiculed me for saying it.
We will see this new speculation bubble cave. Millions of shadow inventory pointed out by Mike Whitney - post by Housing Analyst above.
Watching the look on their face when they finally concede that houses are always depreciating assets is priceless. They must see themselves throwing good money after bad, month after month for 30 years and ending up with…….. nothing.
“That greatly upset their religion and they ridiculed me for saying it.”
You lived an experience I have enjoyed many a time since entering the Golden State. So often I have gotten into a discussion with Californians who take it as a matter of faith that buying real estate under any and all conditions is a sure path to riches that I have grown weary of challenging these fools.
CHAPEL HILL, N.C. (MarketWatch) — Stock market bulls face an inconvenient truth as they celebrate the stock market’s new all-time highs.
Inflation.
It turns out that, when you take inflation into account, the stock market is not at an all-time high. It’s not even close.
No wonder the bulls are in denial.
…
The sequester will take a bigger bite from the economy in the coming months as workers collect more unpaid leave and additional spending cuts are triggered, several economic experts predicted Monday.
A strong employment report in April that found the economy added 165,000 jobs underlined the sense that the labor market is improving, but observers warn it’s too early to declare the economy is safe from sequestration.
“The fiscal drag is going to reach its peak in the second and third quarter, and we know that’s going to be around 2.5 percent of GDP,” said Andrew Busch, a political and economic strategist who advised Sen. John McCain (R-Ariz.) in his 2008 presidential campaign.
“People who think the sequester debate’s over, it’s not nearly as bad as they thought it was — to me that’s declaring victory way too soon,” Busch said.
…
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just trying to be first:)
I recently placed an offer on a single family house in South NJ but when listing agent said that there are multiple bids, I backed out. But when the house sold, it was 10k below listing price. The prices are down around 30 to 35% from peak.
Why did you back out? Why not wait and see if your offer was accepted?
because the seller’s agent asked me to increase my offer. I have been waiting for 7 yrs and can wait more.
“because the seller’s agent asked me to increase my offer. I have been waiting for 7 yrs and can wait more.”
+1 May [the force] be with you.
Or you could have withdrawn your bid and replaced it with one that was lower.
Why are you bothering playing this game? You know there weren’t “multiple bids”. You know you’re getting ripped off at current inflated prices. Don’t you?
he got caught up in the feeding frenzy created by easy money.
imaadesi placed on offer and the house sold so somebody else must have placed an offer. That sounds like 2 offers! 2 = multiple.
Sounds like BS!
just trying to be first to post
I recently placed an offer in south Jersey for a house. But when listing agent said that there are multiple bids, I backed out. But when the house finally sold it was 10K under the listing price. The prices are down 30 to 35 % down from peak.
near the shore like Cape May or Ocean County? or more towards Philly?
I wonder how Hurricane Sandy is affecting the shore market.
It is near philly, just across the bridges.
Interesting, there are some nice areas there. My parents looked at Washington Township down in South Jersey when I was a wee lad but we ended up not moving. I like some areas of central NJ like Lawrenceville but that’s a bit further from Philly.
when the house finally sold it was 10K under the listing price ??
Possibly a cash deal…Seller willing to take less with no contingencies…You should be able to do a little research and see if there was a mortgage recorded at the close…You could also ask the listing agent…Since the transaction has closed and it is now public record, he/she should not have any further fiduciary duty to withhold that information…
maybe the house was full of termites?
http://www.oftwominds.com/blog.html
I will know the details in few weeks. It could be that appraisal was less than asking.
After it closes, if the state has open
records, Redfin is a great place to search.
Check the sold box, put in the
address and view the sold details.
Ours said Buyer Financing: cash
Neighbor’s deal said : FHA
You were first — and second as well!
I keep reading here that QE is now $40 billion a month, but I thought it was $85 billion a month.
It is $85B per month. The confusion result from the fact that only $40B is going toward purchase of MBS, with the remainder presumably going toward purchase of Treasuries.
$ 40 billion in treasuries.
$ 45 billion in MBSs.
i may have the $ 5 billion reversed…but what’s $ 5 billion really.
in order to sell those treasuries and mbs to the FED the 21 primary dealers first have to acquire them.
They can buy treasuries in open market or even directly from uncle sam I believe.
Even though the FED is spending 85 billion a month it not like that amount is going into the market. I’m sure the primary dealers are making a profit but not sure how much.
I think the biggest impact of QE is basically allowing the govt to borrow more money (via Treasuries) to keep the economy afloat.
It’s better to be kind than it is to be right.
SUGuy
People don’t like being corrected constantly. They will resent and hate you. Let people be happy with whatever they want.
The most important concept in my marriage, imparted to me in a relationship communication class:
“Do I want to be right, or do I want to be happy?”
They are not always mutually exclusive, but it taught me not to press the issues, just to be “right”, since I would rather be happy and would rather my family and friends be happy too!
So this is your latest strategy to scam the public on housing?
They’re paying you for this?
I think he is making money on his homes.
I know you think homes are overpriced but why not put your thoughts on the sideline and make some quick cash?
“homes”?? Ok Shirley. lol.
Cashflow is negative at current massively inflated asking prices of resale housing.
that is simply not true . Are you qualified as an expert?
Buy a fixer and slap some granite and tile down and flip it for quick FED reserve notes.Everyone is doing it.
Cashflow is negative.
Everyones doing it? That’s just not true. Housing Demand is at 1997 levels…. and falling.
Let people be happy with their bad real estate investment purchases, until they aren’t, at which point you should let them be unhappy with them.
Not really.
This is what the flippers do for a standard job in my area. http://www.redfin.com/MD/Baltimore/519-S-Macon-St-21224/home/10327593?utm_campaign=listings_update&utm_content=address&utm_medium=email&utm_source=myredfin
the target market for floors like this is dink couples or couples who only want 1kid and want to live in the city.
Obviously the market is crazy and that sale price is too high. I’m posting this just as a point of reference. Notice all the listing-unlisting-relisting prior to the eventual sale. Houses similar to this one go for twice as much in the next neighborhood over (canton) and 3x as much in fells point or federal hill.
With three full bathrooms? The target market for that is a single person who is planning to take in a roommate to make the payments. Each one gets her own bath with her bedroom upstairs and there is still one downstairs for the person crashing on the sofa.
I’m sure it’s 2.5 BA. The main floor has a 1/2 bathroom. I know that neighborhood very well. Just a lying realtor saying it is 3 BA.
The 2nd floor bedroom is huge in that house, they took out the middle upstairs bedroom and made it into a walk-in closet and used the rest of the space to expand the BA.
I don’t know why people are so in love with bathrooms but they are.
It’s better to be truthful than to lie.
People don’t like to be lied to constantly. They will resent you and hate you. Don’t lie to them to profit.
Reality is in one’s mind and all the rest is an illusion. When people say I am right and you are wrong they are merely suggesting they are a better perceiver.
Thank you Buddha, for your perfect wisdom… That statement is such obvious and abysmal horseshit that it should be tattooed into your forehead. Then you can explain to others how it is not really there- its just their perception.
BINGO Beer Guy.
Truth transcends all perceptions.
The truth is housing prices are massively inflated and you will never recover financially if you buy a house right now.>/b>
u need to flip a house and make bernake proud.
u need to flip a house and make bernake proud.”
yep thats what he wants
just do it
Not really, though.
“he lost at least $150,000 in equity he had built in the house”
Foreclosure Settlement Checks Significantly Smaller Than Regulators Forecasted: Homeowners
Ben Hallman
Posted: 05/01/2013 12:45 pm EDT
Adam Crain reckoned he was due $125,000. That amount would come as compensation for losing his Oak Harbor, Wash., home to foreclosure while he was serving aboard a naval vessel in the Middle East. He calculated that sum using a table distributed by federal regulators as part of a $9.2 billion settlement with mortgage companies over a wave of improper foreclosures.
Federal law offers special protections from foreclosure to military personnel, especially those receiving hazard pay, as Crain was at the time.
But last week, when Crain opened the envelope and removed his check, he was horrified by the amount his bank, Wells Fargo, had determined he was due: Eight hundred dollars was all he received.
“This is what happens when there is no oversight,” Crain said.
For people expecting a large check, and who feel their loan was not properly evaluated, there is little recourse. Payment decisions can’t be appealed. Some borrowers, like Ernie Dobson, said they are now considering private legal action, which is not precluded by cashing the check.
Dobson lost his San Diego home to a foreclosure sale even as he was making agreed-upon payments under a trial plan, he said. He said he lost at least $150,000 in equity he had built in the house, which he had purchased after putting down a large down payment.
Dobson said he was crushed when he received his check last week. It was for $800.
“It is less than it cost me to move out of the house that they foreclosed on illegally,” he said.
http://www.huffingtonpost.com/2013/05/01/foreclosure-settlement-checks_n_3193377.html - 400k
Dobson should have known better. It’s the lawyers who took the big pile of the settlement.
So he didn’t make his house payment and wanted to get a big check for doing that??
“So he didn’t make his house payment and wanted to get a big check for doing that??”
That’s the fact Jack.
But..but…he’s a VETERAN!
Larry Ellison is such a bada$$.
http://touch.latimes.com/#story/la-fi-ellison-malibu-20130505/
He just bought an entire row of about 10 beach front properties in Malibu. Probably going to demo them and go big.
Larry may be broke in less than ten years.
Google his spending habits. His accountants are barely keeping him solvent and this has been a problem for years.
This may be the straw…
it must be nice to use shareholders money to buy homes.
He founded the company.
He owns a lot of Oracle stock.
Larry may be broke in less than ten years.
He might not be as rich then (or even alive still) but I doubt he’ll be “broke”, unless that beachfront property, his Hawaiian islands, his Oracle stock, etc. become worthless.
Carbon Beach washes completely into the Pacific Ocean about once every thirty years. (I’ve seen it happen twice) The last time it did so (taking all the nascent spec houses on it into the briny deep) was about 30 years ago. It was awesome.
One good fire season followed by one good winter rain and one year-end high tide…and so long 10B worth of “real” estate.
http://www.dailymail.co.uk/news/article-2320768/Larry-Ellison-buys-nearly-TWENTY-FOUR-properties-Malibu-worth-250m.html?ito=feeds-newsxml”
24 properties these things do poorly in Winter storms
UN Agenda 21/Sustainable Development is the action plan implemented worldwide to inventory and control all land, all water, all minerals, all plants, all animals, all construction, all means of production, all energy, all education, all information, and all human beings in the world. INVENTORY AND CONTROL.
European Commission to criminalize nearly all seeds and plants not registered with government
Monday, May 06, 2013
by Mike Adams
(NaturalNews) A new law proposed by the European Commission would make it illegal to “grow, reproduce or trade” any vegetable seeds that have not been “tested, approved and accepted” by a new EU bureaucracy named the “EU Plant Variety Agency.”
It’s called the Plant Reproductive Material Law, and it attempts to put the government in charge of virtually all plants and seeds. Home gardeners who grow their own plants from non-regulated seeds would be considered criminals under this law.
The draft text of the law, which has already been amended several times due to a huge backlash from gardeners, is viewable here.
“This law will immediately stop the professional development of vegetable varieties for home gardeners, organic growers, and small-scale market farmers,” said Ben Gabel, vegetable breeder and director of The Real Seed Catalogue. “Home gardeners have really different needs - for example they grow by hand, not machine, and can’t or don’t want to use such powerful chemical sprays. There’s no way to register the varieties suitable for home use as they don’t meet the strict criteria of the Plant Variety Agency, which is only concerned about approving the sort of seed used by industrial farmers.”
http://m.naturalnews.com/news/040214_seeds_European_Commission_registration.html - -
I love this Agenda 21 stuff. Keep posting. The insanity factor is just off the charts! Better than the newspaper comics!
If you really love it, buy the book!
http://www.amazon.com/Agenda-21-Glenn-Beck/dp/1476716692/ref=sr_1_1?ie=UTF8&qid=1367940742&sr=8-1&keywords=agenda+21
Customer Reviews
BEHIND THE GREEN MASK: U.N. Agenda 21
198 Reviews
its not theory…its fact, a must read, April 17, 2013
By maria pecore -
id recommend this book to every citizen and especially those involved in local gvt… we all need to know how this is being used to get the public to go along with feel good terms like Sustainable development, green growth etc. We’re being guided like hapless sheep into turning over the future of private land ownership to those who think they’re smarter and know better whats good for us. Individualism is a poison word to them.
http://www.amazon.com/BEHIND-THE-GREEN-MASK-Agenda/dp/0615494544 - 273k - Cached - Similar pages
European Commission to criminalize nearly all seeds and plants not registered with government ”
Yea right
well maybe 1/2 true
Look up CITES Some seeds many plants are banned for export or import
However Look on Ebay hundreds of CITIES “rare” cactus sell each year exported to Europe and Asia pulled out of the ground in W. Texas where they don’t give a s$%t a about Cites or the US federal government regulations.
“Ariocarpus” very slow growing very CITES protected very poached and sold all over Ebay all day long ALL.DAY.LONG
If they catch you they will fine you maybe throw you in Jail. look it up. I have
All ABOUT THE New EU Seed Law
as laid before EU Commissioners on May 6th
Updated Monday May 6th …
NEW EU PLANT LAW DIMINISHES SEED SUPPLY FOR HOME GARDENERS, RESTRICTS FARMERS’ CROPS
On Monday May 6th a draconian new law was put before the European Commission, which creates new powers to classify and regulate all plant life anywhere in Europe.
The “Plant Reproductive Material Law” regulates all plants. It contains immediate restrictions on vegetables and woodland trees, while creating powers to restrict all other plants of any other species at a later date.
Under the new law, it will immediately be illegal to grow, reproduce or trade any vegetable seed or tree that has not been tested and approved by a new “EU Plant Variety Agency, who will make a list of approved plants. Moreover, an annual fee must also be paid to the Agency to keep them on the list, and if not paid, they cannot be grown.
Following a huge outcry and intense lobbying from consumer groups, small-scale farmers, genebanks, and even some member-state governements, a few last-minute alterations were made, which while not perfect, have reduced the impact quite a lot.
The key last minute concessions that were made - and this really was only due to public pressure, because they were not in the draft just 3 days previously - are as follows:
Home gardeners are now permitted to save and swap unapproved seed without breaking the law.
Individuals & small organisations can grow and supply/sell unapproved vegetable seed - as long as they have less than 10 employees.
Seedbanks can grow unapproved seed without breaking the law.
There could be easier (in an unspecified way) rules for large producers of seeds suitable for organic agriculture etc, in some (unspecified) future legislation - maybe.
But the rest of the law is still overly restrictive, and in the long run will make it much harder for people to get hold of good seeds they want to grow at home. There are also clauses that mean the above concessions could be removed in the future without coming back to the Parliament for a vote.
We are checking out what the next step is. It appears that next it must go to Parliament for modification or approval, so there is still the chance of changes for better or worse. We must all campaign to make sure only improvements are made!
Ben Gabel, vegetable breeder and director of The Real Seed Catalogue, says:
“The draft law was truly awful, and it is good to see that the Commission have responded to the hundreds of thousands of citizens who raised their voices against it. They have made important concessions for home growers and small farmers, though it is a shame they did not think of them in the first place.”
“However, it will still have negative consequences. It will halt the professional development of vegetable varieties for home gardeners, organic growers, and small-scale market farmers.
This is because the main registration system is no good for home gardeners -varieties suitable for home use don’t meet the strict criteria of the Plant Variety Agency, which is only concerned about approving the sort of seed used by industrial farmers.
Because of this, seed companies used to be able to register and sell ‘Amateur’ varieties that didn’t pass the tests, for home growers. Under the new system, they are now called ‘Niche’ varieties and there is no testing or registration at all, but there is a big catch: any company with more than 10 employees is now banned from producing them.
So new varieties for home growers can only be developed by tiny organisations, and they may not have the resources to do it well. There will be very little professional development of varieties for home gardeners or small-scale sustainable agriculture. ”
NOTES TO EDITORS
Plant Reproductive Material Law was before the EU commissioners on May 6th 2013
Law drafted by DG SANCO (consumer affairs), internally opposed by DG AGRI & ENVI (agriculture & environment)
Executive Summary of Law does not reflect stricter reality of the actual articles in the law
Law will effectively kills off professional development of home-garden seeds in the EU
Huge public opposition: over 200,000 signatures to the Arche Noah petition
Media contact: Ben Gabel, The Real Seed Catalogue: ben@realseeds.co.uk
http://www.realseeds.co.uk/seedlaw.html - 32k -
Does it say anything about Joshua trees? I think everyone should have a baby Joshua tree in their plant nursery, don’t you?
INVENTORY AND CONTROL.
Under the new law, it will immediately be illegal to grow, reproduce or trade any vegetable seed or tree that has not been tested and approved by a new “EU Plant Variety Agency, who will make a list of approved plants. Moreover, an annual fee must also be paid to the Agency to keep them on the list, and if not paid, they cannot be grown.”
Is there a good reason for this ?
Is there a good reason for this ?
——-
it’s pretty common to either ’soft outlaw’ or hard outlaw plenty of invasive species (of plants and animals) that are not suited for local environments.
Some local examples from my area:
nutriea
pampas grass
cedar trees
zebra mussels
Some cities near me outlaw ‘cool season grasses’ and a friend was in a fight with his local city government over having the wrong type of grass planted. This is not some part of a new Agenda. The ‘cool season grass’ law my friend is violating has been around for 15 years.
Australia is still over run by rabbits.
I wonder if it was intended to target GMO crops.
Who cares? It’s unenforceable. Everyone would ignore a law like that.
After all, how could a drone ever spot a tomato plant in someone’s backyard?
I will devise a genetically modified tomato plant that eats drones as fertilizer.
Monsanto will make sure it’s enforced.
“Monsanto will make sure it’s enforced.”
BINGO!
Yesterday, Measton posted that the republicans have introduced a bill changing labor law to allow for comp time in lieu of cash OT. They claim it is for the good of families ( more time off etc.) My question is; why not change labor law to mandate minimum vacation requirements? Two weeks/year sounds reasonable. Most industrialized nations have minimum vacation time. Europe, GB, Aust/NZ require 3-4 weeks. Is this bill really for the American families?
That’s just crazy socialist commie talk!
Of course it’s not for the families. I’d bet money that if you looked closely at the bill, there is a way for employers to wiggle out of both time off and overtime.
The American worker has the least annual time off and the highest productivity in the world.
The American worker not being able to compete is the biggest lie ever swallowed by J6P.
Of course it’s not for the families. I’d bet money that if you looked closely at the bill, there is a way for employers to wiggle out of both time off and overtime.
Even if there’s not, I’m sure they can put it off forever. So it just becomes a new form of mandated layoff compensation once they’ve used you up. And that will be paid under someone else’s watch, so it’s all good.
Check the comment sections of other news outlets carrying this story.
Denied comp time horror stories number almost 5 -1.
American labor cost is much higher than in many parts of the world. You measure competitiveness in cost. An India who earns a $1 per hour and producing 5 units per hour is more competitive than a gringo earning $20 per hour and producing 20 units per hour.
to allow for comp time in lieu of cash OT.’
they want 1:1 payout not time and 1/2
work all Sunday Take off some random Friday at the companies choosing, been there done that
“at the companies choosing”
Bingo. It is not “for the American family”. It benefits businesses at the expense of employees.
What pipeline? Crony capitalism is cool!
Berkshire Profit Advances 49% on Buffett’s Derivatives
By Noah Buhayar & Zachary Tracer - Mar 1, 2013 6:37 PM ET
Buffett’s biggest takeover, railroad Burlington Northern Santa Fe, was completed in 2010 in a $26.5 billion transaction. The business contributed $932 million to quarterly earnings, compared with $909 million a year earlier. An increase in shipments of construction products and petroleum helped mitigate the impact of fewer coal shipments.
Profit from utility unit MidAmerican Energy Holdings Co. fell to $294 million from $316 million a year earlier. The business, which sells electricity to homes in the U.S. and U.K., has been expanding its renewable-energy portfolio by buying solar and wind projects.
http://www.bloomberg.com/news/2013-03-01/berkshire-profit-advances-49-on-buffett-s-derivatives.html - 155k -
Every morning I wake up and thank my lucky stars that the super rich are distracted by their incredible wealth so they don’t have time to make our lives even more depressing and pointless. What if they get bored just making money and decide to actually make us suffer?
Somebody posted about that shipwreck and mutiny yesterday. Got me looking up what it meant to be “broken on the wheel”. Yuck. Things could be worse…
I’m not sure about that. I’m happy the really poor and desperate don’t firebomb the trappings of the wealthy (that the middle class are employed at) on a daily basis. That they’d rather ‘work it out’. Man if the lower class ever got pissed, working in a bank lobby, downtown office tower, or at a fancy restaurant could get real dangerous real quick.
You’ve just described the 1960s.
From yesterday:
————-
“Comment by Ben Jones
2013-05-06 16:53:31
‘I’m not allowed to ask [about fixed PITI vs pick-a-pay].
You can ask all you want. But since you seem so interested in this question, why not spend a few hours on the internet researching it (or make phone calls) and let us know?
————-
Many of the news stories posted here are about squatters and old MBS. But that is all cleaning up after the old loans. Well, yes, the old loans failed. The loans were set up to have a grace period of low monthly nut. FB’s knew that they “had” to sell before the payments jumped. But then the grace period was up, there was no one left to sell to, FB’s rates or PITI jumped, FB’s missed payments and had to foreclose or accept short sales which dropped comps. Banks didn’t care about income documentation because they had already sold the loan to Fannie/Freddie, or got a bailout. This is ancient history.
Would we have had the same crash if PITI had been fixed-interest fully amortized from the beginning so PITI never went up? No grace period, no I/O, no neg-am, no teaser rates, and at least a cursory look at income? My guess is no. I don’t think we would have had as much of a bubble. We certainly wouldn’t have had as many J6P buyers in CA, NV, AZ. The bubble would have deflated in 2003 instead of 2007, at much lower price levels.
So do the new loans have the built in preventions to at least slow the next bubble? Fixed PITI and income requirements? I find it depressing that on a housing blog, I seem to be the only one to be interested in this.
FHA seems to require a DTI regardless of FICO (i.e. “pushing subprime” isn’t going to work.)
HARP requires some documentation of income.
Navy Federal does offers no money down loans and they mention ARMs. But all Navy Federal applicants must supply:
—–
1.Purchase price and loan amount
2.Estimated homeowners/condo association dues on property
3.Payment instructions for appraisal fee (please provide account numbers)
4.Social Security number
5.Date of birth
6.Navy Federal share savings account number/access number
7.Two-year address history
8.Two-year work history
9.Gross monthly income to be used for qualifying
10.Other income to be considered for qualifying (if any)
11.Account/asset information (held by financial institutions OTHER than Navy Federal) to be considered for qualifying
12.Current tax, homeowners/condo dues, insurance and lien information (balances, monthly payment and mortgage company/lien holder name) for all real estate owned.
———–
Does this sound like 2006-era no-doc to you? It doesn’t to me. I tried to find data on what % of originations are actually fixed PITI, how many are ARMs, etc, and there is very little available. Any tracking info is limited ot paid reports. All I could find was that 75% of new originations are refinances.
Sure, there will always be ads of outfits “offering” crazy loans, but I’d like to see someone post who is actually approved and signing at the closing table, and just what kind of loans these are. If they were actually interested.
13. and just 3.5% (someone posted yesterday that it might be zero) down.
no one is saying it’s just like 2005…just that it’s bad policy to have taxpayers back mortgages that require little to no skin in the game.
you are sounding like a broken record.
when will stated loans make a comeback? I guess when you start to run out of buyers you find ways to get more people into the game.
This casino like atmosphere in stocks and homes is a sure sign of deperation right?
“Stated loans” will make a comeback IF and ONLY IF the originating banks can sell those loans up through the secondary market to Fannie and Freddie. You think a bank would hold even 5% of that POS loan by themselves? Hell no, they want 100% pass-through for fees. Can’t say I blame ‘em.
And yeah, a couple weeks ago I also asked about the secondary market. Because, no secondary market, no stated loans. But no one was interested in that question either.
so when will the democrats give the ok to fannie and freddie so everyone can own a home?
“And yeah, a couple weeks ago I also asked about the secondary market. Because, no secondary market, no stated loans. But no one was interested in that question either.”
What types of agency MBS will the Desk purchase?
Agency MBS purchases will likely be concentrated in newly-issued agency MBS in the To-Be-Announced (TBA) market because these securities have greater liquidity and are closely tied to primary mortgage rates. The Desk may purchase other agency MBS if market conditions warrant. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for purchase. These eligible assets include, but are not limited to, 30-year and 15-year securities of these issuers. Ineligible assets include CMOs, REMICs, Trust IOs/Trust POs and other mortgage derivatives or cash equivalents.
http://www.newyorkfed.org/markets/ambs/ambs_faq.html
‘Stated loans” will make a comeback IF…’
These have been back for a couple of years with the HARP, etc, loans. I’ve read they don’t even bother stating anything, or doing an appraisal. And it gets looser all the time.
Thats true. I guess that qualifies as a refinance?
What does it tell you about the casino like atmosphere in our home and stock market? I think there is a big message within that.
In order for the Fed to buy the MBS from Fannie, Fannie has to buy the MBS from somebody. And at least in my own experience, Fannie ain’t takin’ no-doc loans.
Ben, HARP is a bad example. My post referred to new loans. HARP is a refinance program for loans originated prior to Jun 2009.. which were already bought by Fannie and Freddie.
There is nothing particularly wrong with doing a refi on a loan that the government ALREADY guarantees as long as the following are all true:
No additional cash out
The payment is lower than it was before
Seriously. If the government is already on the hook for guaranteeing the entire loan amount, and they change it from a loan on which the payment is $2000 a month to a loan on which the payment is $1200 a month, then there is some chance that the lower payment will keep the borrowers paying. The bond holders have to swallow their biond being paid off earlier than it otherwise would have been, but that is always a risk on asset backed securities. The guarantee is on return of the principle.
“In order for the Fed to buy the MBS from Fannie, Fannie has to buy the MBS from somebody. And at least in my own experience, Fannie ain’t takin’ no-doc loans.”
so let’s get this for the record…the federal reserve prenting $ 40 billion a month to purchase MBS from the GSEs who purchase them form banks who make taxpayer backed loans with a 48% DTI requirment and 3.5% or less down is great public policy and will have no adverse consequences in the long run to the U.S. taxpyers present or future?
and that you whole heartedly support and promote this policy?
48% DTI requirment and 3.5% or less down
…and a fixed PITI. Do NOT forget that fixed PITI.
…also, I think 48% might be too high, but I’ll support a DTI requirement.
Is it “great” public policy? Well it’s better than sitting back and letting all these folks get shut out of the market and be forced to pay increasing rent to Blackstone for the next 50 years.
Will it have no adverse consequences? There are always going to be defaults, and I’m sure you’ll be the first to skewer me with some anecdotes from the Palm Beach Post. But those consequences will be no worse than a nation of elderly who don’t own a paid off house and can’t afford rent. Or a nation that pays higher and higher rent. Or lives in the boxes under the bridge.
‘it’s better than sitting back and letting all these folks get shut out of the market’
So you finally admit it.
that will do. thanks.
i plan to point out nothing more to you about the matter.
BWAHAHAHA !!!!!!!!!!! LYING PIMP…….
I can just see it. Instead of the Obama Phone lady, we’ll have Obama Loan!
I’m not a secret agent of ACORN, really I’m not. I just like the idea of a paid-off house when I retire.
I’m not really centered around Fed policy — and aren’t these $40 B/month still the same old toxic waste mortgages, not new loans, say, post-2010?
The Federal Reserve is the secondary market for MBS. It is my understanding that no-doc loans were always nonconforming.
Oxide,
wouldn’t it be easier to pay off the house if it cost 50% less in the first place..
“I’m not a secret agent of ACORN, really I’m not.”
Strawman.
What did you pay for your debt-dump? Be honest.
You’ve posted the 3.5% down a few times yourself. We can be broken records together.
As for this post, I suggest you read it. Someone posted that there may be zero-down loan “yesterday”? I posted it JUST NOW.
Navy Federal does offer no money down loans
It’s FHA that requires 3.5% down, but they also want 48% DTI.
But for the Navy, it appears that if the income underwriting is good enough, you don’t need even 3.5% down.
I believe the Navy on this one. You know why?
Because RENTERS don’t have to come up with 3.5% down, yet theystill seem to keep up with the rent — rent which is the same or close to PITI — month after month after month. For one of my apartments, I had to make 4x the monthly rent. And they called my employer to confirm.
I’m going to repeat that so you don’t miss it.
RENTERS don’t put 3.5% down, yet they keep up with rent payments for months… because they have the INCOME.
RENTERS don’t put 3.5% down, yet they keep up with rent payments for months… because they have the INCOME.
—————
Many (most? - every place I ever rented) required a security deposit that was at least equivelent to 1 month of rent. Kind of the same thing.
Not even close.
If 1 month’s rent is roughly equivalent to half of the mortgage payment, then it is about 1/180th of a 30 year mortgage (1/2 of 1/(30*12) = 2/360). About .55% down.
“Because RENTERS don’t have to come up with 3.5% down, yet theystill seem to keep up with the rent”
and when the spigot is turned off and the “value” of the home the home debtors bought with no money down drops 40% what do renters do?
If the renter gets kicked out the house, he has to find another house — and he doesn’t put 3.5% down there either.
And what “happens” if the value of the house drops 40%? Generally, nothing. If he has a regular fixed-rate fully amortized mortgage, then his PITI doesn’t change. He doesn’t have to pay more after a 3 year grace period. He doesn’t have to refinance. He doesn’t have to sell. He doesn’t have to walk. In fact he doesn’t even have to know that his house value dropped. As long as he keeps his job and income — there’s that pesky “income” again — he just keeps making that same payment.
What happens? Someone’s loses grow dramatically. This is the end result of paying a massively inflated price for a depreciating asset.
Just like your situation.
Oxide:
You bought a house, and now you are psychologically addicted to the notion that renting will always make you poor, and that owning will always make you rich. Do yourself a favor and sell at the top of the rebubble, K? I’m worried you will join the “this time is different” crowd. You alluded the other day to the “new normal” in America, when all of us poor cave-dwellers would be living in boarding houses, while our wealthy overlords ate steak and lobster in their mansions every night. Well, I am exaggerating what you actually said, but it was something very similar to the reasoning I was subjected to almost daily during the last housing boom.
An asset boom is merely the anterior end of a boom-and-bust cycle. There is no way to get around that. The United States is not Europe, Canada, or any other place. While the socialists have created a taxpayer-funded bubble that has not yet popped, we capitalists will not and cannot do so. Do yourself a favor and play the volatility when you get the opportunity.
Always?
Oxy:
Yes, asset boom. Always. I am not referring to something like “peak oil”, where you can actually run out of the resource, and there is no competitive alternative. I am talking about the ratio of fundamental value vs. market value.
In this particular case, I am talking about land ownership in the United States. There is ALLOT of unoccupied land in this country. More land than everyone can use. There is not enough water, but that’s another issue.
As long as investors cannot reap competitive returns on rents at market prices, then the prices will come down. Builders can do things (such as building) that would counteract overheated demand. Sometimes builders DO build things, which is why you see something like “normal” prices over very long periods of time. You see it allot.
Oxide, you seem to be focusing on the idea that negative amortizing loans or interest only loans are solely responsible for the bubble and its burst. But what percentage of loans were toxic like this? I’d guess less than 20%.
My guess is more loans defaulted because of job losses/transfers, then later came the strategic defaults.
Were a lot people really stupid enough to sign up for a no-doc fixed payment loan they knew they couldn’t afford?
“Navy Federal does offer no money down loans”
The Navy’s problem is that its bases and ports are mostly located along expensive coastal regions. A recently retired Coast Guard petty officer told me that his housing allowance in Alameda, CA was something like $2800/month, IIRC.
“no one is saying it’s just like 200
56″Actually Whac-a-bubble said it yesterday, but I guess I should be happy today instead of right?
basically the only thing missing is stated income loans as I see it.
3.5% down and $ 40 billion a month.
‘there will always be ads of outfits “offering” crazy loans’
Not if the regulators are doing their job. Which highlights the fact that the subprime “crisis” was largely a regulatory failure. I’ll make this brief:
When I stumbled upon subprime loans in 2004, I discovered that these loans exploded in 2003, just as prime lending dropped by a large amount. I suspected the industry needed a new pool of buyers. I looked into subprime. It had been a small % of loans 1 or 1.5% that defaulted at 10-14% in the first 5 years. They were, you could say, “designed to fail.” For profit companies didn’t want to make these loans and keep them - it was too risky. These were usually for special groups, like veterans, who the government wanted to help out. So they would back them knowing a lot would fail.
When the industry needed buyers (profits) in 2003, they started going in this direction. Seeing that the regulators did nothing, it continued. Countrywide didn’t invent most of the loan “innovations”. A competitor would and Countrywide would match it to “maintain market share”. This would mainstream the practice and later be called the race to the bottom; culminating with Fannie and Freddie diving into subprime expressly to “maintain market share”.
Of course, these loans failed at a much greater rate than 14%. And soon, some types of prime loans in this period were failing at a rate higher than 14%.
This all happened as the FBI watched, as the SEC watched, and even congress. It was a regulatory failure. Now we have the White House pushing subprime loans with the exact wording we read in 2005; help these poor people/minorities “get in” on the action.
Where will it lead? I don’t know. But if it ends badly it won’t be called regulatory failure. It will be reckless policy bordering on criminality, IMO.
“It will be reckless policy bordering on criminality, IMO.”
There is a good chance the responsible parties will be long-gone from public office when the SHTF. Note that although people still grumble about folks like Franklin Raines, who never faced any serious consequences or culpability for his role in setting the stage for the first leg down in the housing collapse.
“the White House pushing subprime loans”
Anyone find news stories of this stuff actually being approved yet?
‘Citadel Loan Servicing Corp. of Irvine, a new subprime lender launched by industry veteran Dan Perl, funded its first loan last week, and is getting a barrage of telephone calls from potential borrowers to its headquarters in Southern California. “We’re getting 25 to 30 inquiries a day,” Perl told Inside Mortgage Trends. The firm is in the process of evaluating between $1.5 million and $2 million in residential loans. The first mortgage it funded was for $315,000 on a home in Orange County, CA’
http://www.insidemortgagefinance.com/issues/imfpubs_imp/17_8/news/New-Subprime-Lender-Funds-First-Loan-1000022678-1.html
‘Yet there are signs that the politicians have failed to learn that lesson. Beyond the Fed, the Washington Post reported last week that “the Obama administration is engaged in a broad push to make more home loans available to people with weaker credit.” The government is pressing banks to press borrowers to take advantage of FHA guarantees and other federal subsidies. That’s the same thinking that gave us the Fannie Mae-Countrywide Financial subprime loan machine, the subprime bust and the $187.5 billion failure of Fannie and Freddie.’
‘With prices rising again, now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing. In some areas of the country Fan and Fred still back mortgages of more than $600,000, while the FHA backs loans of more than $700,000. Reform-minded lawmakers may not be able to stop Fed Chairman Ben Bernanke from dropping money from helicopters, but they can begin reducing the conforming loan limits at Fan, Fred and FHA to put some guardrails around Washington’s reckless credit policies.’
http://online.wsj.com/article/SB10001424127887324789504578384682292475750.html
Everybody should be fighting this, IMO. It’s disgraceful and could harm millions of borrowers. Where are all the posters who decried wall streets greed and reckless lending? I don’t care if this guy is a Democrat; now is the time to make it clear we don’t want to return to the disaster that was subprime.
‘now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing’
Oh fun fun!
http://citadelservicing.com/brokers/loan_guidelines_and_inquiry
————-
“We very rarely transfer our servicing of your mortgage payment.”
“We do have some very basic criteria to determine qualification. Chief among those items are the ability to repay the loan, previous credit history, occupancy, as well as the equity in the property that is being offered as collateral for the loan. Life altering events including change in or loss of a job, divorce, death in the family and the like are generally not of consequence.”
————
And from the supposedly non-public(?) broker page:
———-
“Loan Type: Adjustable Hybrid Rate and Fixed Rate terms varying from 7 years (with 23 year adjustable) to 15 year due in 15 year fully amoritzed depending on the loan and property type.”
First Mortgages:
Minimum Base Rate: 7.950% for Residential 1-4 Units
Minimum Points/Fees: 1% plus $750
Loan to Value: 75% LTV / Owner Occupied SFR
Second Mortgages:
Minimum Base Rate: 9.95% for Owner Occupied LTVs <50.00%
Minimum Points/Fees: 2% plus $500 for Owner Occupied
Loan to Value: 70% LTV / Owner Occupied SFR
———————
So let’s see: they make their own decisions and keep the servicing in-house. They don’t care about FICO or a job as long as you have a pile of cash and the ability to pay even more cash (from somewhere) at a ridiculously high interest rate. Who are they targeting? Mexican/Chinese drug lords?
I don’t think this is what Obama is pushing.
‘now is precisely the time to begin reducing the federal subsidies that encourage over-investment in housing’
AKA time to take away the punch bowl before someone gets plastered, drives drunk, and causes a major pileup.
Citadel Loan Servicing Corp. of Irvine, a new subprime lender launched by industry veteran Dan Perl, funded its first loan last week, and is getting a barrage of telephone calls from potential borrowers to its headquarters in Southern California.”
Unbelievable its starting all over again remember these guys ?
” New Century Financial Corporation was founded in 1995 by a trio of former managers at Option One Mortgage, including former CEO Brad Morrice and is headquartered in Irvine, California. New Century Financial Corporation was a real estate investment trust that originated mortgage loans in the United States through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation.
As of January 1, 2007, New Century had approximately 7,200 full-time employees[1] and a market capitalization of $1.75 billion. FY 2005 net income was $417 million.[2] New Century was formerly listed on the New York Stock Exchange and is now trading on the over the counter pink sheets. By March 14, 2007, the day after the New York Stock Exchange delisted New Century Financial Corporation, the market capitalization value of its stock was less than $55 million.
It is neither kind nor right nor vaguely intelligent to hang out on a website dedicated to the investigation/documentation of a housing bubble and then attempt to pimp real estate. It is however, both ridiculous and foolish.
This statement is such obvious and abysmal horseshit that it should be tattooed into your forehead. Then you can explain to others how ridiculous and foolish you sound
Wow! That is original! Just like the rest of your idiotic tripe! Or is that just my perception? Hmmmm… Maybe you could step out in front of a bus and test your theory of reality vs perception?
It’s kind of not right when you think about it.
Today’s dispatch from the world of private contracting… Air Force outsources work to private contractors, evaluates bids, awards contract. Immediate result: Twelve (12) protests at GAO. One was dismissed this morning but 11 remain. LOL!
Here’s the docket:
http://www.gao.gov/legal/bids/docket.html?openclosed=All&agency=All&snumber=FA8771-08-R-0016&protestor=&filenum=&now_sort=docdate desc,issue_date_dt desc&rows=10&searched=1&o=0
This is not uncommon. And by the time this is sorted out, alot [sic] of time is lost and the expenses to the government and the contractors (which drives up their cost of actually performing the contracting and thus their reimbursement from the gov’t) is incalculable. And if protests are lost at GAO, there is always the option of taking your case to the Court of Federal Claims. Private contractors for the gov’t have even more rights than private businesses have than when dealing with each other. They usually treat the government (their client) as an adversary that they can push around using lawyers. Which is obviously the opposite of how a federal employee would behave in this situation.
But hey, at least the private contractors don’t count as evil gov’t employees! Thus helping us have a smaller, leaner government. LOL!
Costs for the Air Force, GAO, and the winning bidder are going to go sky high trying to keep this contract moving. It’s an IDIQ (indefinite delivery, indefinite quantity) contract valued at $6.9 B (which is the max for an IDIQ contract). Baker Hostetler, Jenner & Block, Crowell & Moring, Sheppard Mullen and those are just the names I’ve seen so far. These are all very expensive firms that will each rack up bills into the 8 figure range.
ROFL @ our “cut the military, cut fed employees, use the free market” contracting system.
The agency’s website about this program (the public details, anyway) is here: http://netcentsii.com/
The other great thing I find about programs like this are that it’s the federal gov’t using private contractors to do IT intelligence work. The kind of program Bill in LA would love to do because at the end of the day he could just “ignore” the creepy aspects.
Keep up the good work, we’re counting on you!
It’s up to 14 protests now (13 active, 1 dismissed).
I bet the agency will take corrective action and reopen bidding rather than get bogged down with this many protests. Of course, doing this means they’ve lost time and money in the process, whereas letting the GAO decide this means it will be over in 3 months.
“Sparta Realtor Defrauded Bank”
http://hopatcong-sparta.patch.com/articles/sparta-realtor-defrauded-bank-prosecutor-says
nothing new here to see.
Mike Whitney nails it yet again. The money quote:
“Everything about the US housing market is fake”
http://www.counterpunch.org/2013/02/11/housing-hijinx/
From the article;
“There remain over 10 million vacant housing units” and that does not include the “shadow supply”.
Again….. if you bought a house 1998-2013, you’re going to lose a lot of money. ALOT of money.
no one cares when they are making money flipping homes. risk on!!!
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.
“Future Leg down in the Great Housing Crisis”
http://www.theatlanticcities.com/housing/2013/03/aging-baby-boomers-and-next-housing-crisis/4863/
Spring Swoon Alive and Well in Manufacturing
By Eric Morath
The surprisingly positive April employment figures likely didn’t mean the local factory added a shift last month.
The manufacturing sector failed to add any jobs last month after a meager 2,000 increase in March payrolls, a black spot on the otherwise rosy jobs report. Those numbers add to other economic data showing that demand for factory goods is falling and the sector is seeing a broad slowdown this spring. And that spring swoon could turn into a summer slide.
The auto industry, rebounding from bankruptcies during the financial crisis, has been a main driver of manufacturing growth, accounting for a third of all new jobs in the industry since the recession ended.
But with car sales slowing and dealer inventories climbing, the auto industry growth is likely to ease. “Of particular concern for the overall economy is auto manufacturing, which appears to be ripe for a correction in the months ahead,” said Scott Anderson, chief economist for Bank of the West.
Vehicle sales peaked in November and have fallen in four of the past five months but auto production continued at double-digit year-on-year rates through March, he said. That disconnect could result in longer summer shutdowns or slow down at some factories, robbing manufacturing of one of its growth engines.
If the auto sector is starting to sputter, the defense industry has stalled. Military factory orders plunged 34% in March, the month across-board-government cuts backs known as the sequester began. Defense spending has been volatile in recent months, but is down 25% from a year ago.
In addition to the direct impact of military cutbacks, some fear the curtailing of government budgets, including spending on roads, schools and infrastructure, could hamper demand for other factory goods.
“We are a long way from a true resurgence in American manufacturing,” said Scott Paul, president of the Alliance for American Manufacturing trade group. “We strongly believe that we won’t see real growth in manufacturing jobs without the right policies from Washington.”
The right policies must obviously be greater deficit spending. We’re already getting a negative return on that.
No, BS, the right policies would include the American school of economics (which requires tariffs), rather than the British school of economics (which is globalism).
Yep and how’d that work for the Brits in the end?
MassPrivateI: Watertown, MA residents speak out about police …
http://massprivatei.blogspot.com/2013/05/watertown-ma-residents-speak-out-about.html - 170k
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After looking at these pictures it is no wonder why the DHS market survey indicates they are interested in purchasing ammunition that will safely fragment when fired against an armor steel plate, or a car, or the side of a house or a wall. This ammo is good self defence ammo for these reasons, it will take out a soft target (human with no body armor) but break up hitting something hard. It is also very expensive.
Big Sis And DHS, Seeks Millions More Rounds of Ammunition (Video)
Sunday, May 5, 2013 20:09
With the DHS already having committed to purchasing over 1.6 billion bullets over the course of the last year, a “request for information” on “reduced hazard training ammunition” posted on the FedBizOpps website quizzes bullet manufacturers on how fast they can supply large quantities of ammo;
- Are you capable of producing large quantity orders of any training caliber specified with a short turnaround time of 30-60 days?
- What would your lead time be for an order of 2 million rounds of a single type Listed Above?
http://beforeitsnews.com/alternative/2013/05/big-sis-and-dhs-seeks-millions-more-rounds-of-ammunition-video-2638906.html - 37k -
http://www.picpaste.com/Patriotic-VEwwqJvg.png
http://www.miamidolphinscheerleaders.net/the-squad - 34k -
What has the gold bugs so glum this morning?
Gold - Electronic (COMEX) Jun 2013
Market open $1,444.60
Change -$23.40 -1.59%
Volume 132,677
May 7, 2013 11:33 a.m.
Previous close $1,468.00
Day low $1,440
Day high $1,470
Open: $1,469.10
52 week low $1,322
52 week high $1,803
This gold bug wanna be is happy. I can buy more quarter ounce American Eagles when prices go down!
Can you say $1200 spot price this summer? Maybe!
“The Coming Housing Collapse: The Fed, Instead Of Lehman, Owns The Mortgage Market”
http://www.forbes.com/sites/afontevecchia/2013/03/05/peter-schiff-and-the-coming-housing-collapse-the-fed-instead-of-lehman-owns-the-mortgage-market/
There are many reasons NOT to buy a house right now.
1) Prices are massively inflated
2) Rental rates are half the cost of buying at current inflated prices
3) The cost of new housing is a fraction of resale housing in $/square foot.
4) $/square foot prices are falling
…. and most importantly… You’re going to lose alot of money if you buy a house now. ALOT of money.
Will the Fed take the blame for the next leg down?
nope…they could have fixed it…had they only had more power. they were just doing the best they could do…considering their limitations.
there’s the secondary market.
‘Fannie Mae creates single-class MBS that represent beneficial ownership interests in a pool of mortgage loans secured by single-family (1-4 units) residential properties.
Creating a Single-Family MBS begins with a mortgage loan. The loan is made by a financial institution or other lender to a borrower to finance or refinance the purchase of a home or other property with 1 to 4 residential units. These loans are made to borrowers under varying terms (e.g., 15-year, 30-year, fixed-rate, adjustable-rate, etc.); during the life of the loan, the balance is generally amortized, or reduced, until it is paid off. The borrower usually repays the loan in monthly installments that typically include both principal and interest.
We pool single-family loans that generally conform to our standards and issue Single-Family MBS backed by those loans. A Single-Family MBS may be backed by fixed-rate mortgage loans or adjustable-rate mortgage loans but will not be backed by both fixed-rate and adjustable-rate loans. When a Single-Family MBS is issued, we guarantee to the MBS trust that we will supplement amounts received by the trust as required to permit timely payment of principal and interest on the MBS certificates.
Single-Family MBS may be placed into Megas, REMICs, SMBS, or other Structured Transactions mortgage-related securities.
Additional data related to Single-Family MBS can be located via the tools on the right and via additional links outlined below:’
http://www.fanniemae.com/portal/funding-the-market/mbs/single-family/index.html
single-family loans that generally conform to our standards
And those standards would beee… ???
oxide
Is your real name Richard?
No, but I dated a couple of Richards.
“When a Single-Family MBS is issued, we guarantee to the MBS trust that we will supplement amounts received by the trust as required to permit timely payment of principal and interest on the MBS certificates.”
Who is this “we” they keep talking about, anyway?
Oxide: As long as F&F knows it has Uncle Sam in its pocket, then F&F will continue to degrade their standards along with the market. Privatize the gains; socialize the losses. As this bubble heats up, F&F will get more and more reckless (just like last time).
I just wonder whether or not the government cookie jar is empty.
How can anyone fail to be bullish under the current sure-thing stock investing environment?
May 6, 2013, 11:56 a.m. EDT
Sell in June for the market swoon?
By Avi Gilburt
We are now moving into a target region that I provided over a year ago when we were trading within the 1250-1300 region. While I was not positioned long in the S&P 500 for the move this week, I have said before that I am willing to sit out this rally, unless a low-risk entry developed, as the downside now seems to be of greater risk than missing some of the upside. However, I do not see the top as being in place just yet, and it may take several more weeks until this wave is completed.
With the move up we saw this past week, it made it clear that the last pullback was a more shallow corrective wave than I wanted to see in order to enter a safer long in this market. But as I have been saying in our trading room over the last week, the drop on April 23 has given me issues with how to appropriately count this last structure, and has made me much more uneasy about trading the upside.
As many of you know, I get much more conservative when I do not have a count upon which I can confidently rely, especially if that is within a 5th wave, and would rather sit out a market move in that case. While that may anger some, I would rather remain in cash and miss a final move than be positioned wrong and lose money, especially since there is always another bus coming if we miss the current one. In fact, there are many traders that only wait for a larger degree 3rd wave to trade, and sit out a 5th wave entirely.
…
as long as everyone is talking about a crash it usually wont happen. just wait till the bears are ran out of town and give it some time. when nobody sees it coming sh@t will hit the fan.
Everyone is talking about how smart they are with their stock investments again. Even msft is showing signs of life.
msft shows life every quarter with a dividend.
so you gonna buy that broken down 90’s stock for a 2.76% yield?
Do you know how difficult it is to grow earnings when a company gets so large?
Have you heard of the law of diminishing returns?
The stock has been dead money for a decade.
Windows 8 was a disaster.
EVERY quarter.
“…as long as everyone is talking about a crash it usually wont happen.”
Marketwatch always features a representative selection of bears and bulls among its writers.
If you can find me some MSM articles warning of a coming crash, then I might agree with you.
Everyone was talking about a correction awhile ago. I have to admit the bears have been going away slowly. Theres a few left like peter shiff. We are getting closer to the correction.
“Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.”
Ruh-roh…
May 7, 2013, 11:38 a.m. EDT
Gold futures fall more than $20 an ounce
Gold ETF outflows continue to concern investors
By Myra P. Saefong and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures lost more than $20 an ounce Tuesday as outflows from gold exchange-traded funds continued to weigh on sentiment.
Prices for gold also failed to get a lift from news of another round of global easing, this time from Australia.
Gold for June delivery (GCM3 -1.61%) fell $20.90, or 1.4%, to $1,447.10 an ounce on the Comex division of the New York Mercantile Exchange.
“There’s a lot of betting against gold going on,” said Ben Traynor, chief economist at BullionVault.
“Professional money managers have built up a sizeable short position,” he said. Short positions are essentially bets for a fall in prices.
“At the same time, the ETFs continue to lose metal, which makes would-be gold investors circumspect,” Traynor wrote in emailed comments.
Outflows from commodity exchange-traded funds continued in April. Data suggested a record month of withdrawals, totaling $7.8 billion, including about $7.3 billion of net redemptions in the largest physical gold ETFs — the iShares Gold Trust (IAU -1.55%) and SPDR Gold Trust (GLD -1.63%) according to a note from Citi Research dated Monday.
The sum “far exceeds the prior monthly record for physical bullion redemptions just last quarter in February of $4.1 billion,” Citi said, adding the year-to-date net outflows across listed commodity ETFs are now north of $14.6 billion, compared with $3.8 billion of net inflows during this time last year.
…
ft dot com
April 16, 2013 6:00 pm
Gold’s fall costs Paulson $1.5bn this year
By Dan McCrum in New York
John Paulson of Paulson & Co
John Paulson has taken a bold bet on bullion and allows his clients to denominate their holdings in gold, rather than US dollars
The tumbling gold price has personally cost billionaire hedge fund manager John Paulson at least $1.5bn so far this year, as a decline in the price of the metal turned into a rout.
The estimated losses for Mr Paulson, who has made and lost more money on gold than almost any other hedge fund manager, reflect a bold all-in bet on the precious metal.
While many investors hold some gold in case of financial calamity or a return of the rampant inflation of the 1970s, since 2009 Mr Paulson has allowed clients of Paulson & Co to denominate their holdings in gold, rather than US dollars.
Mr Paulson enthusiastically embraced the option, according to people familiar with the situation, and has about 85 per cent of his personal capital in the firm linked to the gold price.
Mr Paulson controls a little over half of the approximately $18bn managed by his hedge funds, according to people familiar with the firm, so the more than 17 per cent drop in the gold price this year equates to paper losses of about $1.4bn. Gold on Tuesday rebounded $24 to $1,377 an ounce, recovering some of Monday’s steep losses.
At the same time Mr Paulson also controls about four-fifths of a dedicated gold fund, his firm’s smallest. This fund takes leveraged bets on gold. In the first three months of the year a 5 per cent decline in the gold price translated into 28 per cent losses for the fund, which managed about $700m at the end of March, according to people familiar with it.
…
More On this story
Gold hit by sharpest tumble in 30 years
Video Gold leads the falls
Rout pitches gold into bear embrace
FT Long Short Good as gold
In depth Gold prices
Interesting piece from the Atlantic about Public-Private Partnerships and some lesser-known consequences are discussed:
“Denver residents certainly know something about PPP controversy. They found themselves on the wrong end of it just a few years back regarding a toll road called the Northwest Parkway. In 2007, a state highway authority leased the parkway to a private consortium for 99 years. (Once again, this authority was distinct from CDOT) Before long legislators became upset to discover that the terms of the deal prevented the state from improving a public road in the same corridor, because this upgrade might draw traffic away from the parkway — and toll revenue with it.
Despite this frustration, the stipulation had been right there in the official contract, clear as legal jargon [PDF]: “… the construction of a Competing Transportation Facility shall constitute an Adverse Action.”
As it turns out, part of the reason there’s so much debate about public-private partnerships is that these “adverse action” clauses are standard operating procedure. Law professor Ellen Dannin of Penn State University recently reviewed the fine print for a number of PPP contracts and, in a 2011 paper, concluded that various provisions in road partnership contracts effectively made the public “the guarantor of private contractors’ expected revenues” [PDF]. In other words, private infrastructure investors weren’t taking nearly as much risk as they’d have the public believe.
“This is being sold as the latest, greatest thing,” says Dannin. “The more I dug into this stuff, the more I was blown away by it. It just seemed really astounding to me. These finance people know what’s going on, but the rest of us don’t.”
Dannin’s work outlined several types of PPP provisions designed to expose investors to as little danger as possible. The most objectionable of the bunch is a non-compete clause, which expressly prohibits local authorities from building more attractive transportation options — from other roads to mass transit — in the same corridor. The Northwest Parkway is one example of a non-compete unfavorable to the public, but the poster child is SR 91 in Orange County, California [PDF]. After these express lanes opened in the mid-1990s, word got out that the deal prevented officials from improving the free roads nearby until the year 2030. The ensuring uproar led Orange County to purchase the road back from investors in 2002.
Then there are compensation clauses. Though less directly pernicious than non-compete clauses, these provisions also had the power to harm the public good, writes Dannin. Take the example of new toll lanes on the Virginia Beltway. That PPP deal called for the state to pay investors whenever carpooling exceeded 24 percent of traffic (ending after 40 years or $100 million in profit). As Dannin points out, this and similar compensation clauses create a scenario in which public officials must choose between their larger responsibility of promoting more sustainable transport or forking over some cash — the very cash they hoped the PPP deal would save them in the first place.
What these adverse action clauses really do, argues Dannin, is compromise the integrity of the entire transportation network — and elected office as a whole — to ensure investors a profit. “We’re sort of selling off part of our democracy as part of the cost” of PPPs, she says. “It’s hard to put a financial tag on that.”
The full article is worth a read: http://www.theatlanticcities.com/jobs-and-economy/2013/05/future-public-roads-private-hands/5490/
It isn’t the fine print. It is the definitions section. Most important part of any contract. It is ususally at or close to the beginning. Never skip it. Never.
I didn’t say it was in fine print. My understanding is that the “adverse action” definition in the contract wouldn’t really alert an average person to the true scope of what the government is precluded from doing after singing away the rights to a project. The idea that allowing a private contractor to build or maintain a road would prevent the government not only from developing other roads but also adding commuter rail or express buses.
In some of these procurements, the gov’t is actually *penalized* if it encourages carpooling. The contractor loses money on tolls when people carpool, so they are allowed to do a survey and find out how many cars have multiple occupants. Then they charge the government an amount to compensate for carpooling. LOL!
What if people bicycle? Or, gasp, decide to take public transit instead?
Biking and public transit are OK, so long as the state doesn’t build new bike paths or upgrade bus/train service which might compete with the roads they signed away to the contractor.
Obviously this is a nasty, hidden, overlooked side to what can happen when you take public resources and put them in private hands.
The problem isn’t if people decide to do it. The problem is if the government encourages it in anyway. Like providing places to lock up your bike near the train station. Or authorizing the bike rental place to expand (requires permission because they put the stations on the sidewalk). Or anything else.
I have said it before and I will say it again. Public/private partnerships are terrible. The government has priorities. Private corporations have one priority - making money for their executives/shareholders. The two are rarely sufficiently closely alligned for final deal to be a good idea. The government gives away too much.
And Joe, you may not have said anything about fine print, but the article you cut and pasted did. Not every comment is about you in its entirety. Grow up.
Grow up? It’s a nitpick in the first place. To the average reader of that article the definitions section of a contract counts as “fine print”. And in any case, the words in a definitions section aren’t necessarily given their everyday English meanings, they are interpreted in light of many other things, including course of dealing and the history of revisions to the document. I’m in basic agreement with you, these PPPs are never as simple as explained in a 60 second segment of a news program or a 500 word article in the paper. I don’t think the average person realizes the profits that private contractors make in their dealings with the gov’t because they don’t see these things through the lens of the contract process.
Besides, how do you define a “facility”? A road is a “facility”?
I agree with both of you that public/private partnerships are a conflict of interest. The taxpayer is on the hook in the end, but we don’t get to vote for the executives of the private corporation that gets all the benefits.
Say, are Fannie Mae and Freddie Mac both private/public partnerships? I was just wondering because I think there might be a problem with those.
No, to the average reader fine print is the stuff in 4 point type you don’t read on the back of a parking garage ticket or a car rental agreement. These definitions are the second or third section of a massive agreement entered into by government officials with a giant corporation. I don’t expect people to be intimately familiar with the rights they give away when they buy a ski lift ticket, but if government officials can’t be bothered to know that renting out one road means they can’t improve or build other ones for 99 years? They deserve pretty much everything that can be thrown at them. Which I admit is very little since they almost certainly have imunity from prosecution for being dimwits in carrying out their elected positions. But just the slightest hint of a quid pro quo and prosecution followed by a very long jail term sounds like a very, very good idea. Then maybe the next half-witted politician would not enter into these partnerships.
If the corporation is willing to sign on to the agreement, then it is a bad deal for the people who live there. With very, very high confidence level.
Good point, Polly. If a company agrees to it, then they must be getting more than they’re giving. Otherwise, there would be no profit. Government services don’t work that way.
“Invest…In America”
jeb/hillary 2016
a win win for the ruling class, wall street banksters, and public unions…what could possibly go wrong?
if this doesn’t say status quo i don’t know what does.
oh…and i am sure all those states plan on cutting their taxes…since one of their primary responsibilities is being passed to the private sector…right?
“Even in the absence of the excess empty housing inventory estimated in the tens of millions, historically housing prices fall. Why? Because houses depreciate. ALWAYS.”
This story never stops delivering!
Venture Capital
May 6, 2013, 7:24 pm
A Push for a Bitcoin Buttonwood
By NATHANIEL POPPER
Amid the incense, cheap art and herbal remedies for sale in Union Square in Manhattan on Monday, a very different kind of product was changing hands: bitcoins.
Just feet from the park’s statue of George Washington, a crowd of young men gathered on Monday afternoon to buy and sell the digital, crypto-currency.
Related Links
Winkelvoss Twins Rule in Digital Money (April 11, 2013)
The men – and there were only men – were brought together by an online posting from Josh Rossi, 31, a bitcoin aficionado who works in technology at the World Trade Financial Group.
One of the trademarks of bitcoins since they were created by anonymous programmers in 2009 has been that they have no physical form, and can be exchanged completely electronically, making human interactions unnecessary.
But the online venues for buying and selling bitcoins have become too expensive and time consuming, Mr. Rossi said. So he proposed what he called Project Buttonwood, a reference to the where the New York Stock Exchange had its beginning in 1792.
“If I want to buy a hamburger, I want to be able to sell my bitcoins and get my money immediately so I can buy that hamburger,” said Mr. Rossi, who wore jeans and loafers for the occasion, and smoked a cigarette while watching the proceedings.
The legality of bitcoin has been questioned by some regulators, and investors have looked on in horror in recent weeks as the price of a single bitcoin has bounced around more sharply than the most speculative stock. Mr. Rossi’s posting about the event on Reddit was sniped at by one commentator who said “you might get busted by the Feds” and another who predicted “the first bitcoin ‘gang’ fight.”
In the end, such dire predictions did not pan out. After a slow start at 4 p.m., just as trading on the New York Stock Exchange shut down for the day, the crowd grew to about 20 people. There were a few polite arguments about how the process should work, and then people began calling out prices at which they were willing to buy and sell bitcoins. Many of the young men alternated between conversation and watching the nearby skateboarders and break dancers.
The first transaction came when Mr. Rossi pulled out a $20 bill in order to buy a part of a bitcoin, at a rate of $120 for a single bitcoin. The seller was Owen Gunden, a 30-year old programmer. In order to transfer the online currency, Mr. Rossi used his smartphone to take a picture of the graphic code on Mr. Gunden’s phone, which provided access to his bitcoin account. The crowd around the men clapped.
“This is markets becoming more efficient,” Mr. Rossi said with a smile.
…
BANKS REVIVE RISKY LOANS AND MORTGAGES
http://www.nytimes.com/2013/04/19/business/banks-revive-risky-loans-and-mortgages.html?partner=rss&emc=rss&_r=0
The coming second housing collapse is going to be breathtaking.
Or maybe the Fed will just have to buy more houses at the “correct” price.
This article appears to be mostly about CRE.
“Banks have won over investors by taking steps to make this generation of structured products safer than the last one. But with demand for these products on the rise, credit ratings agencies and regulators are warning that the additional protections are already dwindling, allowing some of the old excesses to creep back into the market.
‘The players in the business are generally the same as they were before,” said Tad Philipp, a commercial real estate analyst at Moody’s rating agency. “Because it’s the old players, they know how to push the boundaries.’”
OK?
The “moral hazard” and “central planning” chickens come home to roost.
I did see that. But I know little about CRE. Does it have the same taxpayer bailouts?
Oh no, of course not. F&F don’t come with taxpayer bailouts either.
NYCDJ, have you been advising the Michigan legislature on their Bridge card program? (I ask because of the current Drudge Report headline. Yes, I am ashamed that I visited…)
Why are there so many lawyers(sounds like ‘liars’) posting on housing blogs?
are you a disgruntled realtor that was sh@t canned by redfin?
You know exactly what my stock in trade is. Quit ducking and weaving and answer the question.
Data point, perhaps.
This is one study you won’t see from the National Association of Realtors.
Dartmouth College’s David Blanchflower (best known for being the Bank of England member who first pressed for interest rate cuts after the onset of the financial crisis) and Andrew Oswald of the University of Warwick find that a doubling of the rate of home ownership in any U.S. state is followed in the longer run by more than a doubling of the unemployment rate.
And they say that other research conducted outside the United States suggests a similar effect, noting for example the much higher homeownership rate as well as unemployment rate in Spain as compared to Switzerland.
http://blogs.marketwatch.com/thetell/2013/05/07/high-home-ownership-associated-with-higher-unemployment-study-finds/
THIS!….IS!……FRAUDULENT!
Remember this blog article posted last year about Portland Oregon? “80% of all foreclosure in Portland held off market”?
http://thehousingbubbleblog.com/?p=7203#comments
The word on the street is they still have them and that number has crept up to 90% and they’re ready to start liquidating.
If you’re hoping to escape from the Oregon Housing Disaster, get out now because it’s going to get alot more disastrous.
Went down that rabbit-hole, that was scary. Found myself right in the middle of union goons, racists, communists and civil servants. I won’t do that again anytime soon.
Though I walk through the valley of the shadow of the Beats, I will fear no evil: for my check register [art] with me; my paid bills they comfort me.
Is it fairly safe to say that the stock and housing markets will always go up from now on, and that if you don’t buy now, you will be priced out forever?
California is a religion. At least to those who have never lived in a red state.
Today in the lab I casually told my consultant colleagues that Real Estate is a depreciating asset. That greatly upset their religion and they ridiculed me for saying it.
We will see this new speculation bubble cave. Millions of shadow inventory pointed out by Mike Whitney - post by Housing Analyst above.
Watching the look on their face when they finally concede that houses are always depreciating assets is priceless. They must see themselves throwing good money after bad, month after month for 30 years and ending up with…….. nothing.
“That greatly upset their religion and they ridiculed me for saying it.”
You lived an experience I have enjoyed many a time since entering the Golden State. So often I have gotten into a discussion with Californians who take it as a matter of faith that buying real estate under any and all conditions is a sure path to riches that I have grown weary of challenging these fools.
S&P 500 must rally 25% to hit new high
Commentary: Next 10 years may disappoint
By Mark Hulbert, MarketWatch
May 7, 2013, 7:01 a.m. EDT
CHAPEL HILL, N.C. (MarketWatch) — Stock market bulls face an inconvenient truth as they celebrate the stock market’s new all-time highs.
Inflation.
It turns out that, when you take inflation into account, the stock market is not at an all-time high. It’s not even close.
No wonder the bulls are in denial.
…
Sequestration cuts expected to hit job market over summer
By Peter Schroeder - 05/07/13 05:00 AM ET
The sequester will take a bigger bite from the economy in the coming months as workers collect more unpaid leave and additional spending cuts are triggered, several economic experts predicted Monday.
A strong employment report in April that found the economy added 165,000 jobs underlined the sense that the labor market is improving, but observers warn it’s too early to declare the economy is safe from sequestration.
“The fiscal drag is going to reach its peak in the second and third quarter, and we know that’s going to be around 2.5 percent of GDP,” said Andrew Busch, a political and economic strategist who advised Sen. John McCain (R-Ariz.) in his 2008 presidential campaign.
“People who think the sequester debate’s over, it’s not nearly as bad as they thought it was — to me that’s declaring victory way too soon,” Busch said.
…