Bits Bucket for May 28, 2013
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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So what percentage of mortgages are higher than their property values today?
The improving home prices observed by brokers and lenders nationwide have been a boon for a large number of homeowners who previously owed more on these properties than they were worth, but after even those increases millions are still struggling with negative equity, according to the latest Negative Equity Report from real estate tracking firm Zillow.
In all,?more than a quarter of homeowners nationwide had underwater mortgages at the end of the first quarter, amounting to about 13 million people. However, there is another group of people who are considered to have “effectively” negative equity, the report said. These people are not technically underwater on their home loans, usually due to rising prices bringing them back out from under the thumb of this condition, but they also do not have enough equity to move at this time. Altogether, these people and those who are dealing with actual negative equity account for 43.6 percent of current homeowners, totaling 22.3 million across the country.
http://www.avantus.com/blog/2013/05/24/negative-equity-still-affecting-millions-nationwide.shtml
Where “effective negative equity” is < 20%.
This figure is the source of RAL-Pimp’s oft-repeated “25 million empty homes” mantra. (Of course the homes are not empty.)
And where did you get this notion Debt-Donkey?
Fewer hee-haws and a little bit of truth would do wonders for you.
according to the latest Negative Equity Report from real estate tracking firm Zillow.
Is Zillow using their inflated “zestimates” to arrive at their statistics?
http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
Take a bite out of crime! Throw realtors off 10 story buildings.
Uh what about savings? guess you are supposed to finance a move on your appreciation….and they have a job writing this?
—–but they also do not have enough equity to move at this time
I don’t think it refers to the cost of a uhaul. I think they are alluding to those nasty transaction costs of selling, like Realtor’s fees. They can’t afford to sell, so they are really underwater in their debt donkey prison, not just sort of.
They’re talking about the cost of the uhaul and the cost of a realtor, and all sorts of other costs incidental to moving.
Realtors take 6% max, so you wouldn’t need 20% equity to pay that.
The 20% includes the down payment (10% I guess?) on the next house.
10% I guess?) on the next house…
Once a home “owner” always a home owner? Doomed perhaps.
“Realtors take 6% max,”
Who pays 6% anymore? Most will take 4%, especially on a more expensive house.
Doesn’t matter.
What does matter is that housing prices are rapidly inflating towards ZPUW* levels.
* ZPUW = zero percent under water
If Larry Summers is the next Fed Chairman this will get even worse and people will be begging to have Ben B back.
In fact, even if it isn’t Larry, I’m sure the next Fed Chairman will be even more aggressive than Ben.
A good question is, how do we prepare for this?
Stay in cash and ignore overpriced assets. One day, one day, cash will be king again.
“If Larry Summers is the next Fed Chairman this will get even worse and people will be begging to have Ben B back.”
Larry Summers couldn’t do any worse than Henry “starvation” Morgenthau, and he personally crushed Brooksley Born, chairperson of the Commodity Futures Trading Commission, without any remorse.
How about a gentile as the next Fed Chairman?
Joe, seriously are there rumors of Summers going to the Fed?
I doubt that he could manage the drive-thru at McD’s, and yet they’re still finding high-level positions for him to turn to sh!t. Gotta wonder what he’s got on people.
What does matter is that housing prices are rapidly inflating towards ZPUW* levels.
Your Mileage May Vary. Maybe in Rancho Bernardo. Flyover? Not so much.
Ahhh…..back to the permanently high plateau?
Yup. And pay no attention to that crack we just had to jump over.
My time for being first passed a long time ago…oh buy a house save the economy
Wages and Salaries as a percentage of GDP
http://research.stlouisfed.org/fred2/graph/?g=2Xa
This graph demonstrates just how massively inflated current asking prices of resale housing is.
This graph demonstrates just how massively inflated current asking prices of resale housing is.
Yeah, when I first saw that graph recently, my immediate thought was: “Wow, housing really should have been trending down in price rather than up in price for the past 40yrs.”
At the end of the day, debt service doesn’t get easier when your economy is being hollowed out.
Even if it were flat, houses would trend down anyways as houses depreciate.
Om mani padme hum…
oh money pad me wallet
“debt service doesn’t get easier…”
In a credit expansion, you can just borrow more to take care of the debt service. Wages don’t matter.
“Yeah, when I first saw that graph recently, my immediate thought was: “Wow, housing really should have been trending down in price rather than up in price for the past 40yrs.””
As I was saying, J6Ps income hasn’t kept up with real costs for decades.
RE speculation became the substitute.
As I was saying, J6Ps income hasn’t kept up with real costs for decades.
That graph doesn’t say anything about costs; but it does say VERY clearly that the American worker has been getting a smaller and smaller share of the productive output of the country for the past four decades.
I totally believed that previously, btw—but it still shocked me how clearly that one graph showed it.
As I was saying, J6Ps income hasn’t kept up with real costs for decades.
RE speculation became the substitute.
Exactly. It became painfully obvious that putting in a full day at the office wasn’t going to get one all those well deserved luxury cars, expensive vacations and boob jobs. You had to be a “savvy house flipper” to get the Escalade.
A full day at the office barely pays the bills for most people.
Not really. People’s expectations have dramatically changed. People now think middle class = luxury car, 3500 sq ft house and trip to Hawaii every year. Back in the “good old days” middle class meant 1800 sq ft house, Honda Accord and trip to Florida every year.
It’s not that the middle class is poorer than “back in the good old days”. It’s that the middle class now expects to live an upper middle class lifestyle and is disappointed it’s only middle class.
Your ignorance is staggering, Slithers.
“People’s expectations have dramatically changed.”
I agree with Smithers on this. If you go back to the 50s, you can see the lower middle class lifestyle in The Honeymooners and the middle-middle class in I Love Lucy and Leave it to Beaver. Middle-middle class houses had a one car garage and one and a half baths. Lower middle class houses had a carport and 1 bath. Family rooms were upper middle class.
72 million people, almost half the 156 million workforce, make $500 per week or less.
A house isn’t even in their vocabulary.
There was a huge gap between The Honeymooners and Leave it to Beaver. There were probably very few families that could purchase and furnish a house that the Cleavers had in the ’50s. What might not be remembered is that there was strong economic growth in ’50s and ’60s which was widely shared among all classes, so that a much larger number of Americans could afford a house like that by 1970.
On the other, Ralph and Alice could have afforded a better apartment. I was discussing the show with my uncle a few years ago. He was born in 1951 in Queens in NYC and thought that a city bus driver could have actually afforded a pretty good standard of living, including an apartment that was much better than what was depicted in the show.
Also, I don’t think that the Honda Accord was available in the ’50s and ’60s.
No, but people heartily enjoyed what was available at the time. Progress was quick and it was definitely considered “good enough”.
“could have actually afforded a pretty good standard of living, including an apartment that was much better than what was depicted in the show.”
Jack Lemmon had a great $60/month Manhattan brownstone apartment in the movie The Apartment (1960)
“72 million people, almost half the 156 million workforce, make $500 per week or less.
A house isn’t even in their vocabulary.”
But it is in the other 84 million vocabulary.
And your 72M includes teenagers, college students, retirees who work part time who have no business buying a house.
And you forget that two people “only” earning $500 a week combined earn $50,000 a year. A couple earning $50K a year does indeed have the world house in their vocabulary.
when I first saw that graph recently, my immediate thought was: “Wow, housing really should have been trending down in price rather than up in price for the past 40yrs.”
Really? My immediate thought was : “Wow, joe6pack sure has been getting skrewed by the 1% for the past 40 years”.
Well of course you would AlWog…… You have a stake in the direction of housing prices.
Learn to tell the truth.
Do you have a B side to that record?
Better yet, one that isn’t broken?
Really? My immediate thought was : “Wow, joe6pack sure has been getting skrewed
Ok, that was my first thought. The implications for housing prices were my second thought.
Though to be fair, I tend to think that this is the natural consequence of a growing pool of global labor that is willing to work for peanuts; it is hard to compete against that and maintain anything like our previous standard of living.
Don’t forget that the banking sector % of GDP has risen steadily all this time.
So I did some research and learned that the Subchapter “S” Corporation came into being in 1958.
IIRC Shareholders in S-Corporations don’t pay Social Security taxes on their share of corporate profits. (They do pay on their wages, but my experience many moons ago was that they reported wages as low as possible. I think that’s also true for most LLC’s. I think General Partners pay SS on their incomes. It’s been awhile.) I don’t know much that accounts for the decline in “wages.” Ditto with the hedge fund managers today. I don’t think there are relatively more dollars in sole proprietors/independent contractors today than there were before 1958. A lot more people get 1099’s today, but 30 years ago there were more sole proprietors, barbershops, auto parts stores, retailers, where that labor today gets a wage.
Buy a house today and have instant equity tomorrow.
stocks and homes will take you to the glory land
Buy stocks and houses and take it in the glory hole.
“With 25 million excess empty houses, housing demand at 17 year lows and falling, housing prices have a very long way to fall. A very long way.”
Sorry sweetcakes, I beat you by almost five minutes.
And your losses staggering already.
How much did you pay for your debt-dump?
You are light years ahead in your journey.
90% of All Foreclosures Held Off Market ……..…. And There Are MILLIONS of Them
http://realestate.aol.com/blog/2012/07/13/shadow-reo-as-much-as-90-percent-of-foreclosed-properties-are-h/
“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.”
“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.
Is Peter Schiff a macroeconomist?
no
As a noted housing analyst stated;
“Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.”
“What can be said about housing? Houses are depreciating assets year after year until they end up right back in the ground right where they came from. Thus it is wise to limit your exposure to anything related to housing unless you want to be in enslaved to losses from which you will not recover. Current asking prices of resale housing are massively inflated far far above replacement cost.
The increasingly distorted residential real estate market will result in a much larger implosion than anyone imagined. Being locked in to the housing market is something you’re going to regret.”
“The Housing Market Recovery Is ‘A Complete Hoax’”
http://www.truthdig.com/eartotheground/item/the_housing_shell_game_20130503/
Afterall, a “housing recovery” is dramatically lower prices by definition.
If you bought a house 1998-current, you’ve already lost alot of money. And the losses will continue to grow.
Beware.
@ Prime_is_Contained
Prime, i made a series of mistakes in my posts to you yesterday and i have to apologize.
1. one of my responses was meant for alpha, but the copy of his response to me didn’t take and i pasted your last answer to me instead.
2. i didn’t notice my mistake until after i’d already answered you again. by that time you were a little angry and i don’t blame you.
3. i assumed that you’d see that i answered one of your responses twice and that you’d know that i had screwed up one of my posts. later, i realized that you had no way to put that together.
4. although i apologized to you when i noticed the mistake, i didn’t do a good job of explaining what happened.
it was really a bad accident on my part. i apologize for causing a bad exchange. and i’m sorry i didn’t explain what happened better than i did. looking back, i don’t blame you for being angry at all.
i’m sorry..
No hard feelings, tj; accepted… As soon as you said it was a cut/paste error, and meant in response to alpha, I wasn’t worried about it. No big deal.
That said, I still disagree with your premise that monopolies are self-limiting; I think there is plenty of evidence against that position, and little-to-none that supports it.
The ability of a large, entrenched company with DEEP pockets to squash smaller competitors is well demonstrated by the historical record. Investors would have to be a little crazy to face off against someone like Standard Oil—e.g. very deep pockets with a demonstrated record of playing dirty to destroy competitors. Unless the new entrant’s pockets are equally deep, you are destined to lose the war. In the event that the upstart competitors pockets are equally deep, then we are likely just to exchange once monopolist for another.
thanks for accepting my apology.
yes, we still disagree on the issue.
The ability of a large, entrenched company with DEEP pockets to squash smaller competitors is well demonstrated by the historical record.
a big company will only buy a small competitor if the competitor has invented some new technology. what you state is widely believed. but a company would be faced with buying out many smaller companies if what you state were true. it would be a losing proposition. i used to believe the same thing myself.
Investors would have to be a little crazy to face off against someone like Standard Oil—e.g. very deep pockets with a demonstrated record of playing dirty to destroy competitors.
actually, if standard oil bought every start up competitor, just for the reason that they were a competitor, they’d rapidly be losing money. and it would be profitable for start-ups to just spring up and then sell to standard oil. it just doesn’t happen that way. it’s like the myth of controlling the price of stocks with big money. it just doesn’t happen, yet the myth persists. ask just about any stock professional and they’ll tell you it doesn’t happen. but it’s easy for the rest of us to believe, because we don’t know the system works..
Unless the new entrant’s pockets are equally deep, you are destined to lose the war.
if you are profitable, why not sell to standard oil? or if you don’t want to sell, keep making a profit. anything they do to stop you would lose them money. if you’re not profitable, you’ll have to close. of course you can always blame standard oil for the failure..
In the event that the upstart competitors pockets are equally deep, then we are likely just to exchange once monopolist for another.
in a free market, once someone starts to make money, someone else will try to copy you thinking they can do it better, or at least get a little of your market share. it’s the nature of the beast.
if at&t’s prices got out of line, someone would have competed against them. but their product was too good. others couldn’t compete, so they whined and campaigned to have the government break it up.
the bottom line is that in a free market, anyone can start a business to compete with another at any time. the question always is.. is the risk worth the reward?
but a company would be faced with buying out many smaller companies if what you state were true.
Who said anything about “buying” the competition? I said bankrupt them. That is frequently much cheaper.
Standard Oil was famous for bankrupting competitors, not buying them. They would drop prices down to a very low level in their stations that were nearby a smaller competitors’ stations; the competitor would either have to drop their prices (down below the point where they could make money), or watch all of their customers defect. Standard Oil could afford to do this, because it could spread the cost of these anti-competitive actions across a much large installed-base of stations. It was a VERY effective strategy.
Why spend good money buying the competition when you can bankrupt them more cheaply?
selling gas below cost? i don’t believe that happens.
i used to believe that a carburetor was invented that would give great gas mileage, but the oil companies bought it up. years later i figured out that it just wasn’t true.
sure, some of standard oil’s competitors have gone bankrupt. but i don’t think it was because anyone was selling gas below cost. i know loss leaders happen in stores all the time. but gas stations have only one main product and a few lesser ones. they don’t sell gas at a loss.
profit margins are so thin that there’s a huge disincentive try this.
selling gas below cost? i don’t believe that happens.
How old are you? It was a long time ago…back when Standard was a monopoly. Lots of stuff we say now is based on examples of what happened a long time ago. Yes, it doesn’t happen now…because we had to interfere in the “free market” in that case.
How old are you?
old enough to know a childish deluded post when i see one.
It was a long time ago…back when Standard was a monopoly.
it wasn’t a monopoly unless it had the protection of some outside authority, like the government.
Ever heard of “Wiki” tj?
“Standard Oil dominated the oil products market initially through horizontal integration in the refining sector, then, in later years vertical integration; the company was an innovator in the development of the business trust. The Standard Oil trust streamlined production and logistics, lowered costs, and undercut competitors. “Trust-busting” critics accused Standard Oil of using aggressive pricing to destroy competitors and form a monopoly that threatened consumers.”
“it wasn’t a monopoly unless it had the protection of some outside authority, like the government.”
Does your definition of monopoly include outside protection? Standard Oil and similar companies were the reason for the Sherman Anti Trust act.
Stable markets favor the formation of monopolies. In stable markets, the only way to grow a company is to grow market share.
Markets where conditions are rapidly changing favor new competitors - conditions like expanding demand or rapid technological change. Large companies have trouble keeping up with the pace of change due to their entrenched bureaucracy.
Capitalism, with its bottom up organization, is more adaptable than centrally planned economies. That is its strength. It tends to trample on individuals that lack the ability or desire to be competitive. We either have to accept its Darwinistic effects on individuals or mitigate them.
it wasn’t a monopoly unless it had the protection of some outside authority, like the government.
You seem to be attempting to reason from an initial point that is a tautology.
Union Pacific, Standard Oil, Ma Bell, Microsoft, and soon, Monsanto…. The ultimate denouement of free-market capitalism is monopoly, which if left unchecked leads to fascist dictatorship. At least it does in the real world.
Corollary: Wall Street dictates the economy and arguably our politics. Ditto the MID. (And up until the advent of the internet, Big Media.)
High priced oil = bad for economy = drill baby, drill for lower prices = still high prices = oh well, oil boom is producing jobs = high priced oil is good for economy = drill baby, drill and export = what happened to price declines due to increased domestic production = you didn’t give us Keystone pipeline = higher prices..
How far down is the price bottom for housing?
When will housing prices hit bottom?
Repost from yesterday. Note that this under the business section titled “$mart”, because like Ditech said, people are smart.
http://www.denverpost.com/smart/ci_23318311/homebuyers-sweetening-offer-writing-letters-sellers
If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.
“Debt is bondage.”~ Suze Orman, May 11, 2013
“Realtor charged with theft from homes he claimed to be showing”
http://www.voiceonline.com/realtor-charged-with-theft-from-homes-he-claimed-to-be-showing/
“Realtor accused of soliciting hooker”
http://www.wdtn.com/dpp/news/local/montgomery/realtor-accused-of-soliciting-hooker
Hey Realtor, go Realtor, soul Realtor, go Realtor
Hey Realtor, go Realtor, soul Realtor, go Realtor
He met Marmalade down in Montgomery
Struttin’ her stuff on the street
She said, “Hello, hey Realtor
You wanna give it a go?”
Mmm, gitchi gitchi ya ya da da
Gitchi gitchi ya ya here
Mocca chocolata ya ya
Creole Lady Marmalade
Voulez-vous coucher avec moi, ce soir?
Voulez-vous coucher avec moi?
Now he’s at home doing 9 to 5
Living his brave life of lies
But when he turns off to sleep
All memories keep more, more, more
Gitchi gitchi ya ya da da da
Gitchi gitchi ya ya here
Mocca chocolata ya ya
Creole Lady Marmalade
Voulez-vous coucher avec moi, ce soir?
Voulez-vous coucher avec moi?
Voulez-vous couchez avec moi, ce soir?
Voulez-vous coucher avec moi?
“Local realtor charged with threatening property owner”
http://www.thepeterboroughexaminer.com/2013/05/22/local-realtor-charged-with-threatening-property-owner
Mark Carney is leaving the Bank of Canada (central bank) and moving to the Bank of England. Some regarded him as a hero for avoiding the economic woes faced in other parts of the world, but he only delayed them.
http://www.spectator.co.uk/features/8915931/why-mark-carneys-canadian-success-story-may-be-about-to-fall-apart/
Another Goldman plant.
This blog has turned into the Drudge of Real-estate.
Doom and Gloom everywhere. Trust no one.
The Case-Shiller index of property values increased 10.9 percent from March 2012, the biggest 12-month gain since 2006.
The number of houses on the market remains near the lowest level in a decade.
Lets say you own a asset like stocks or R-E is now the time to sell? Stocks seem to be telling us there is more up side so why not R-E? Yes it defies your gut feeling that housing is over priced but maybe that’s because we have fallen victim to a mis-reading of history? We all thought that low wages would hold prices in check but what happened was that non-wage investments filled in the gap and that helped the consumer to keep buying stuff. If nothing else history would have told us that the FED could not do what they have actually done. They pushed on a string and the string moved!
http://www.bloomberg.com/news/2013-05-28/home-prices-in-u-s-rise-in-year-ended-march-by-most-since-2006.html
“mis-reading of history….”
Sometimes it is better to take the high road.
“We all thought that low wages would hold prices in check but what happened ”
Wages are not low. That’s the fly in your ointment. Everyone on HBB thinks we live in Dickensian London.
http://www.washingtonpost.com/blogs/post-partisan/wp/2013/05/09/the-insiders-the-obama-economy-has-delivered-for-the-1-percent/
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/29/chart-median-household-incomes-have-collapsed-during-the-recession/
http://mobile.businessweek.com/articles/2013-03-01/for-recent-grads-student-loan-delinquencies-reach-35-percent
http://www.nytimes.com/2013/05/07/opinion/a-rise-in-suicide-among-baby-boomers.html
Median HH Income:
2011 $48,152
2010 $47,425
2009 $47,915
2008 $48,395
2007 $48,332
2006 $46,348
2005 $44,565
2004 $42,653
2003 $41,690
2002 $40,772
2001 $40,610
2000 $40,418
1990 $27,922
1980 $16,200
http://gawker.com/tag/hello-from-the-underclass
You do realize you’ve just shown that after 30 years, J6Ps wage has been stagnate.
48k for two workers, generally.
Fine for flyoverland, but that ain’t gonna cut it where people actually want to live.
Wasn’t it about 1980 that gasoline broke the buck? What more basic reference point for standard of living in this energy based society?
Oh Eddie!!! EddieTard…. EddieTard Slithers…..
You’re being disingenuous again.
Aggregate wages have been falling for decades now.
http://research.stlouisfed.org/fred2/graph/?g=2Xa
Anyways….. how are things in Applebee’s lately?
Applebee’s
http://www.youtube.com/watch?v=IHJ3Ro-2LNY
Smithers, you need to find a version of that data series that adjusts for inflation.
hello-from-the-underclass
Who will be our Dostoevsky and write “Notes from the under
groundclass?”Who will be our Dostoevsky
Honey boo-boo?
Not only adjusts for inflation, but adjusts for the fact that in 1980 one breadwinner per household was still the norm. (42% of women employed in part time or full-time capacity in 1980 vs 54% in 2010.) Add in inflation, and income per household has dropped precipitously since then.
You guys are hilarious. Median income has been steadily going up for 30 years. Sure a couple blips during recessions. But overall up up up. Even adjusted for inflation. And yet you all act like everyone’s starving. And then you wonder how in the world can starving people buy houses? Here’s a hint: things aren’t as dire as you think.
Eddietard Slithers,
Housing demand is at 1997 levels. Aggregate wages are at 1969 levels.
Now back to your gyrations. You dance fabulously.
Wages are not low.
Isn’t it funny how if a corporation doesn’t have steady income growth it’s a disaster, but when it happens to workers it’s A-OK.
commie
“Doom and Gloom everywhere”
A collapse resulting in dramatically lower and more affordable housing prices is bullish optimism and will accelerate the economy.
Pick yourself up off the floor and cheer.
I just heard that today the 10 year bond yields more than the S&P 500 dividend. Even at that it’s only 2.10%. You want to piss in Bernanke’s cereal bowl then short treasuries.
‘As legendary hedge-fund manager Leon Cooperman of Omega Advisors told Barron’s this month:
‘Everyone is in the process of moving up the risk curve. We have an investor who put all of his money in T-bills when he retired, because he didn’t want duration risk or credit risk. So for the guy who bought T-bills, he can’t get any return anymore, so he migrated to T-bonds. The guy who bought T-bonds has migrated into industrial credits. The buyers of industrial credits have migrated into high yield. The high-yield buyers have migrated into structured credit, where we are now in our credit exposure at Omega, and the structured-credit people are increasingly looking at equities.’
‘And the equities people, you ask? They’re funding biotech start-ups (see the third sign below).’
‘The Financial Times is reporting today that fixed-income investors, desperate for yield, are forgoing traditional protections on loans to high-risk companies. Indeed, “the proportion of so-called ‘cov-lite’ loans has soared to more than 50 per cent of all leveraged loan issuance so far this year, twice the level seen during the credit boom in 2007.” “Cov-lite loans” are loans issued without covenants that may require borrowers to maintain a certain level of profitability or constrain their ability to take on additional debt. As one strategist commented, “This is a new market, and this is a new norm.” All this talk of “new” reminds me of another concept that ended tragically for investors: the “new economy.”
http://www.fool.com/investing/general/2013/05/28/3-signs-irrational-exuberance-is-back.aspx
Maybe we will finally see some R-E owner financing soon! By owner financed I’m talking about the original owner. I don’t recall seeing any statistics on that sector of the market.
Quantitative Easing Explained - YouTube
http://www.youtube.com/watch?v=PTUY16CkS-k - 234k -
Update at the bell, the 10 year bond just reached a new high yield of 2.18%.
Biggest one day loss in the treasury market in years. Just think about how many trillions of bonds just got repriced with a one day loss of 2.5%, adding to the 7% lost this month already. Do you hear me China? I’m looking at you!
How high till the market cracks? 2.5%, 3%? Just consider that only a small fraction of the bond market actually trades each session so it’s kind of like a tail waging the dog.
…”If nothing else history would have told us that the FED could not do what they have actually done. They pushed on a string and the string moved!”
No it didn’t. We all know that its not possible to push on a string and make the other end move. You need to remember that ‘magic’ only LOOKS like magic- it is really just a trick that temporarily fools you. Its a falsehood. A lie. An elaborate deception perpetrated by someone with the resources to do so. Don’t believe me? Answer this question: ‘Where are all the jobs that will enable people to service debt at these levels?’ What logically justifies the increase in house prices and the parabolic rise in the stock market? What you also need to ask is, ‘Why?’ ‘Why, now, is it SO critically important that the government must break even its own rules to make people believe that ever-increasing amounts of debt are sustainable?’
“Why, now, is it SO critically important that the government must break even its own rules.”
Well all governments break their own rules. When they get called out for it they just pass new laws so it’s not illegal anymore. Even when it’s against the constitution the Supreme Court can give them a pass with a favorable ruling (see Obamacare).
The biggest thing holding back low income wages is productivity. You won’t get better wages until there is a big general strike. Somehow I get the feeling you wouldn’t be the type to support labor strikes.
The increase in the stock market is just a reflection of how well off the uber rich are doing. If you’re smart or lucky you’ll get dragged along for the ride.
Here is yet another way to keep the supply of available houses low and thus, justify their escalating prices:
http://www.latimes.com/business/money/la-fi-mo-banks-foreclosure-halt-20130517,0,4350791.story
“Sales of homes in foreclosure by Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. ground nearly to a halt after regulators revised their orders on treatment of troubled borrowers during the 60 days before they lose their homes.
The banks said they paused the sales on May 6 to make sure that their late-stage foreclosure procedures were in accordance with the guidelines. The banks wouldn’t say exactly which issues had been under scrutiny…”
Californians should thank the rest of America for their generous contributions to the ever-increasing value of single-family homes priced north of $500,000. America’s generosity is California’s home equity wealth!
CNNMoney
America’s Debt Challenge
Where the mortgage deduction really pays
By Jeanne Sahadi @CNNMoney
May 10, 2013: 6:19 AM ET
NEW YORK (CNNMoney)
The mortgage interest deduction is one of the most expensive tax breaks on the books, but its benefits are distributed unevenly across the country, according to a new report by the Pew Charitable Trusts.
In 2010, the year that Pew analyzed, the mortgage deduction resulted in $80 billion of forgone revenue to the federal government. Over five years, the tax break is expected to reduce revenue by about $380 billion.
The deduction is claimed by fewer than a third of federal tax filers and less than half of homeowners. Only those with mortgages who itemize their deductions, rather than claim the standard deduction, can benefit from it.
As Congress starts to pursue tax reform, who benefits from the deduction and how it affects different states will be a factor in any discussion about changing it.
“[F]ederal taxes could increase in some areas and decrease in others. These results could, in turn, affect economic activity both across and within states,” the Pew report noted.
Generally speaking, Pew found that states on parts of the East and West Coasts had the highest number of people filing for the mortgage deduction and also claiming the highest average amounts compared with states in the South and Midwest.
Minnesota is an exception: It had a high percentage of filers using the deduction and claiming relatively high average amounts.
Within states, filers in large metropolitan areas were most likely to claim the deduction and to claim higher amounts.
More specifically, Pew found that California took the No. 1 spot in a few categories: It had the most tax filers in the country (16.7 million). It also had the highest number of mortgage deduction claims (4.6 million). And in aggregate the state claimed the highest number of mortgage deduction dollars (nearly $72 billion).
But when it came to averages claimed among filers, California actually took a backseat to Maryland. Among all federal filers in California, the average mortgage deduction claimed was $4,311, whereas among all Maryland filers it was $4,580, or more than 1.5 times the U.S. average of $2,713.
When calculated just among filers who actually claimed the mortgage deduction, however, California retains its top-dog position. Its average deduction was $15,755, which is about 50% higher than the U.S. average of $10,640 and more than double the lowest average, $7,177 in Iowa.
North Dakota had both the lowest number of claims (50,000), and the lowest average deduction of $1,192 across all filers. Other states with relatively low numbers of claims and low averages include West Virginia, Mississippi, Louisiana, Arkansas and South Dakota.
No one has seriously proposed getting rid of the mortgage deduction altogether. It’s very popular and eliminating it entirely might disrupt the housing market.
But if lawmakers choose to reform the mortgage break, many experts say it should be rejiggered so it does a better job of promoting homeownership, while not disproportionately benefiting high-income households anymore.
“The mortgage interest deduction should be restructured, with more of the subsidy directed to low- and middle-income taxpayers who are more likely to be deciding whether to own or rent,” Eric Toder, a co-director of the nonpartisan Tax Policy Center, said at a hearing of the House Ways and Means Committee last month.
One proposal would convert the deduction to a credit equal to a percentage of interest one pays, and capping how much interest is eligible. For example, a taxpayer could take a credit for 15% on no more than $25,000 in interest.
That would broaden the reach of the break, since all homeowners with a mortgage could claim it, regardless of whether they itemize.
And it would no longer skew the benefit in favor of higher-income homeowners.
Here’s why?
Currently, the deduction reduces tax liability by a percentage equal to one’s top tax rate. In other words, the higher your income, the higher your top rate, and the bigger your deduction.
By contrast, a tax credit is a dollar-for-dollar reduction of the taxes your owe. And capping it at a given level — say 15% of mortgage interest paid — means everyone gets the same break regardless of income.
Other ideas include further limiting the size of the loan eligible for the interest tax break, and allowing the break only for loans on principal residences. Right now, homeowners may deduct interest on second homes as well as principal residences so long as the combined amount borrowed doesn’t exceed $1 million, and they may deduct interest on home equity loans up to $100,000.
…
Related: Homebuyers clueless about mortgages
Most MID flows to a relative few states - California, New Jersey, Connecticut, Maryland, Massachusetts, New York. It’s perverse.
The MID advantages also often go to people who really do not need the tax break. Remember, there is no cap on MID, so it helps people with 10 MM houses vastly more than it helps median-earner J6P with his wife and 2 kids who probably get no benefit from MID since they probably don’t really pay income tax anyway (although they do pay payroll taxes).
Liberace…. where did you gig this weekend?
http://www.paddlesnyc.com/
http://www.eaglenyc.com (when in new york, obvi)
http://www.clubhippo.com (actually very close to the symphony hall, how convenient)
joe smith did you get into the Lindsey Graham VIP room? Or are you considered too old to be in Lindsey’s twink entourage?
I think the benefit of the MID is overstated. No one talks about how bad the AMT is, but on average, it is a much bigger issue than the MID.
Example:
In 2010, CA paid $6 Billion in AMT, out of the total AMT paid in the entire US of $27.5B. Average AMT per return? $8,100.
Average MID claimed per return in CA per Pew? $4,311 (the deduction claimed, not the tax savings…the $8,100 per return above is actual tax).
If they were to ever get rid of the MID, now is the time to do it when interest rates are so low.
When all else fails, eat the young.
7 million students brace for surge in loan rates
By Jennifer Liberto @CNNMoney May 28, 2013: 7:59 AM ET
Subsidized student loan rates likely to double to 6.8% on July 1, but Washington leaders are working on a longer term solution.
WASHINGTON (CNNMoney)
On July 1, the interest rates on student loans subsidized by Uncle Sam will most likely double to 6.8%.
Congress and the White House agree that something should be done to prevent that. They don’t agree on what.
The Republican-controlled House passed a bill last week that would stop the rates — lowered by Congress six years ago — from doubling now, but would allow them to rise later. However, President Obama vowed to veto it, calling it the “wrong approach.”
So the odds are about 7 million students taking out subsidized loans for the next school year will face bigger balances when they start paying off their loans after graduation.
“Nothing will happen. They won’t agree,” said Matthew Chingos, an education policy fellow at the Brookings Institution. “And the rate will sunset back to 6.8%”
…
So on the one hand low interest rates are bad because they will lead to inflation. So I read here every day. And low interest rates also allows college to charge more. And that’s bad too.
OK, so interest rates for student debt are increasing. That’s good right?
No, it’s also bad. Low rates and bad, high rates are bad. Everything is bad. Always.
You sound very confused today Mr. EddieTard Slithers.
A society with a policy of victimizing its young people is truly depraved.
Advertising sugary cereals and fast foods to them. Joe Camel. Credit cards targeted at young people. No financial education (without advocacy from the financial sector or survivalists). Finally, for the opus, saddling them with school debt.
It’s a troubling pattern.
It’s a troubling pattern based on increased power of mass marketing, breakdown of the family (from economic and cultural forces), and reduced emphasis and prioritization of education at the lower end. K-12 is clearly more important than college/grad school for a functioning society, but the “real money” is all spent/consumed in the college/grad school market. Very wasteful for society.
commie talk
“Advertising sugary cereals and fast foods to them. Joe Camel. Credit cards targeted at young people.”
Parents don’t have to buy sugary cereals and fast food, all of which in moderation are fine if you are an active kid.
As for Joe Camel, you have to be 18 to buy smokes, and once you are old enough to die for your country, I say smoke away if you choose.
I agree with you on lack of financial education.
The same society that promotes all manner of stupidity “for the children?”
Labor big a real heavy sleeper
By RICH CALDER
Posted: 1:31 AM, May 28, 2013
Union fat cat Mark Rosenthal spends more time sleeping at his desk than organizing labor, a series of damning photos reveals.
The 400-pound president of Local 983 of District Council 37 — the city’s largest blue-collar municipal-workers union — often downs a huge meal, then drops into dreamland in the early afternoon, members of the union’s executive board told The Post.
“He eats lunch when he arrives at work at 2 p.m. Then, like clockwork, he goes to sleep with a cup of soda on the table and the straw in it,” said Marvin Robbins, a union vice president.
“Then he wakes up, looks at his watch and says, ‘I have to get out before the traffic gets bad.’ He’s usually out by 4 p.m. after being at the office two hours.”
Rosenthal is a former Parks Department employee who rose to power campaigning to rid the union of corruption in the late 1990s.
He last made embarrassing headlines in 2009, when he inspired a City Council bill requiring jumbo-size ambulances for morbidly obese patients after he had a stroke at City Hall.
Since then, he hasn’t been making much of an effort to give the city’s ambulances a break and slim down. Union officials say he racks up $1,400 in monthly food bills on the union dime.
Much of the 5-foot-7, 400-plus-pound Rosenthal’s food tabs are for catered union events and meals he writes off as “union business,” board members claim.
They say he significantly overorders at eateries like Dallas BBQ, the Stage Door Deli and Pine Restaurant in The Bronx, a hangout for local politicians, and takes the extra food back to his Bronxdale apartment.
“He’s always walking off with a doggie bag or extra boxes of food,” said another executive board member.
Rosenthal, who earns $156,000 annually, yesterday denied being a free spender— and insisted he works “12-to-14-hour days.”
He says the allegations are “part of a smear campaign” by a faction trying to get another Local 983 vice president, Joseph Puleo, elected president in a June 5 showdown.
He said it’s normal for executives to take “power naps.”
He also blamed his meetings with the sandman on the effects of pain medication he takes for backaches he has suffered since he fell through a chair at a McDonald’s last year.
“The chair broke because I’m big,” Rosenthal said.
“I’m 60 years old, so if I eat during my lunch hour and take a little medication, can’t I close my eyes?” he said outside his apartment complex. “Is it so outrageous?”
http://www.nypost.com/p/news/local/labor_big_real_heavy_sleeper_jl3C7gI710FI3XqpEl5o3O - - Cached - Similar pages
Bbbbbbut bbbbbut unions have us the weekend and 40 hour work weeks. How dare you question the sanctity of a union? You must be a Koch Brother.
How dare he indeed! Because we all know using one anecdote makes an entire database!
$12/hour union janitors are bankrupting this country
Hey, I just liked the pictures of the 400 lb. dude snoozin at his desk with a Big Gulp in NYC. I didn’t care if he was a Union Boss or not. A star is born.
falling through his chair at mcdonalds was pretty epic.
Hey, I just liked the pictures of the 400 lb. dude snoozin at his desk with a Big Gulp in NYC. I didn’t care if he was a Union Boss or not. A star is born.
Given his morbid obesity, he’d best retire soon. Time isn’t on his side.
Given his morbid obesity, he’d best retire soon. Time isn’t on his side.
Is it time for him to start taking it easy?
If you carried that massive pillow with you everywhere, you’d get sleepy too.
Union Boss or not, any dude that can make a chair at McDonald’s explode just by sitting down for a couple of super-size meals is OK in my book. A star is born.
Not to mention how he inspired a City Council bill requiring jumbo-size ambulances for morbidly obese patients after he had a stroke at City Hall. I mean come on, how can you not love a guy like that?
Why I bet next hockey season in the Garden they will be chanting……
Let’s go Rosenthal! Clap, clap, clap clap clap
Smithers, if you’re one of those people who think that union goons are ruining, you should be pleased about this article. Let him spend the whole day asleep at his desk. That would be much better than if he were to spend his work days working hard for his membership.
this article fails to support the drudge report talking point narrative, if rosenthal was such a ‘goon’, why would he still be working at age 60? wouldn’t he have retired at age 39 with a $250,000 annual pension, like all those rich retired union janitors?
LOL! Good point.
“why would he still be working at age 60?”
Double-dipping labor leaders stand to reap millions
October 12, 2011|
By Jason Grotto, Tribune reporter
At least eight Chicago labor leaders who are eligible for inflated city pensions also stand to receive union pensions covering the same work period, thanks to a charitable interpretation of state law by officials representing two city pension funds, a Tribune/WGN-TV investigation has found.
By double and even triple dipping on pensions, these union officials stand to reap millions more in retirement while thousands of rank-and-file union members face hard times and city pension funds stagger toward insolvency.
http://articles.chicagotribune.com/2011-10-12/news/ct-met-pensions-double-dip-20111012_1_pension-fund-pension-plan-city-pension - 47k
12 News Investigates: School administrator says paychecks, pensions not double-dipping
UPDATED 10:39 PM CST Jan 31, 2013
RACINE, Wis. —A WISN 12 News investigation in November 2012 uncovered Milwaukee County retirees coming back on the job and collecting both a pension and a paycheck.
In November, WISN 12 News reporter Colleen Henry investigated Jon Priebe, a fiscal administrator at the Milwaukee County Sheriff’s Office. County records showed that Priebe retired in August 2012 with a lump sum payout of $611,000 and monthly pension of $5,000. But now he’s back on the job, earning $42.50 an hour.
After that story was broadcast, Henry received several emails about other double-dipping cases across southeast Wisconsin, including one involving the Racine Unified School District.
Dr. Ann Laing worked as a key policy-maker in the district for decades. After 40 years with the district, she retired in 2007. But her retirement was short-lived.
“The district asked me to come back,” she said. “I wasn’t intending to come back because I was 65 years and 6 months old at the time.”
She returned to work for the district six years ago. She now serves as the district’s superintendent of schools.
The job carries an annual salary of $160,000, which she now collects alongside her pension check.
“It’s not double-dipping,” Laing said. “Double-dipping is being paid two different salaries for the same work. That’s not what retirement is compared to current salary.”
The Legislative Audit Bureau released a report in December trying to quantify the scope of double-dipping. It identified more than 5,300 Wisconsin retirees who were rehired between 2007 and 2012 by local or state agencies who were simultaneously collecting paychecks and pensions funded by taxpayers.
http://www.wisn.com/news/12-News-Investigates-School-administrator-says-paychecks-pensions-not-double-dipping/-/9373668/18359624/-/1544r6d/-/index.html - 171k -
You should meet some of the “double dippers” I work with. Collecting military or federal pensions, in addition to a contractor paycheck.
Every one of them voted for Romney, because Obama Phones are bankrupting this country, and those Occupiers need to go occupy a shower and get a job, LOLZ!
“You should meet some of the “double dippers” I work with. Collecting military or federal pensions, in addition to a contractor paycheck.”
Because being in the military for 20 years is JUST LIKE being a union member.
Union Thug Compensation in CA:
Food and Commercial Workers Local Union 135
Mickey Kasparian, president
Compensation from the union: $194,070
State, County and Municipal Employees AFL-CIO, Local 3930
Douglas Moore, executive director
Compensation from the union: $276,613
San Diego Education Association
Craig Leedham, executive director (no longer in office)
Compensation from the union: $239,523
And California is broke? I’m shocked. Simply shocked.
Undiagnosed sleep apnea may be contributing to his power naps. There is a correlation between obstructive sleep apnea and obesity, although there are also a significant number of people with sleep apnea that are thin. And there is some evidence that sleep apnea can cause or contribute to obesity. Untreated sleep apnea is also a factor in high blood pressure and strokes.
At his size and age, his life expectancy is severely diminished.
“At his size and age, his life expectancy is severely diminished.”
Did the census have a column for 400 lb. 70 year olds?
I stumbled on this today:
http://www.npr.org/blogs/health/2011/04/27/135775849/new-clues-to-why-gastric-bypass-surgery-cures-type-2-diabetes
Does anyone else have an add at the top of the page with a picture of Obama dressed as a doctor putting a plastic glove on asking….
Are you ready for your audit?
The IRS is coming to HEALTH CARE.
obamacare is not the same thing as single payer health care.
health care is 18 percent of usa gdp. countries with single payer get better results at half the cost.
http://news.yahoo.com/unitedhealth-ceo-compensation-4-percent-194515857.html
Please when you post this statistic give a breakdown of what money is spent. What % of 18% is elective surgery? I spent 5k on laser eye surgery a few years ago. It was the most cutting edge procedure available for only 5k, and I now see better than 20-20. How did my elective surgery contribute to that 18% of gdp?
Also, American doctors are famous worldwide for donating time, medicine, and regrettably even their lives sometimes serving programs like doctors without borders. What portion of that 18% of our medical GDP spending is allowing these doctors to go on these trips to help people because they make a decent wage?
Finally, what portion of that 18% is spent on non-US citizens? How does that compare to foreign countries? Please include these relevant statistics when defining better care and describing the % of GDP we are spending.
Change is needed, but be careful what you wish for, or you might just get it.
Wasn’t Doctors without Borders founded by the French?
Geez I wonder why the US spends so much money on health care……
1. World’s most expensive doctors/nurses based on money spent on “education”
2. World’s unhealthiest population
3. Trigger happy doctors prescribing medicine for everything
4. World’s highest auto accidental injuries and deaths
5. World highest gun related injuries and deaths
6. Highest use of medical screenings (xrays, mri) in the world
7. World’s highest paid medical educators and administrators
8. World’s highest pupulation on anti-depressive medications
9. World’s highest population on pain killers
10. World’s highest paid CEOs of insurance/pharma/hospital CEOs.
11. A fire truck accompaning an ambulance in every 911 call
12. World’s Highest number of lawyers chasing ambulances
13. World’s Highest number of laws/regulations regarding health care
4. World’s highest auto accidental injuries and deaths
Much, if not most, of that 18% isn’t spent on actual medical care. It’s spent on something called “health care delivery”.
You forgot kind of an important metric: World’s highest cancer survival rates.
You want quality, you have to pay for it.
http://www.miaminewtimes.com/2013-05-02/news/medicare-fraud-south-florida/
and since you’re in palm beach county, a local story about the success of our ‘invisible hand of the free market’ health care system. because nobody straps boots like the bootstrappers who rip off the taxpayers.
You want a local story?
Arrests mark Memorial Day celebrations off Peanut Island
Posted: 9:25 p.m. Sunday, May 26, 2013
By Fedor Zarkhin - Palm Beach Post Staff Writer
RIVIERA BEACH —
The alcohol ban on Peanut Island did little to lessen the rowdy atmosphere offshore Sunday as crowds gathered for Memorial Day weekend parties.
Two men will be charged with aggravated battery after a fight that sent both of them to St. Mary’s Medical Center in West Palm Beach, Lt. Sean Murray of the Palm Beach County Sheriff’s Office said. One was in critical condition, but expected to survive.
“Both are suspects and both are victims,” Murray said.
One man struck the other with a broken bottle, causing the serious injury. Renee McCarthy, a Florida Atlantic University student who was dancing on the nearby sandbar, said she saw one man run after another in the water and hit him, then slash his arm with a broken piece of the bottle. Someone had to jump into the water and pick him out of it as his blood started to spread.
“The blood was, like, by our feet,” McCarthy said.
Another witness said there was so much blood it looked like a shark attack. Sheriff’s deputies broke up the fight, with one of them wielding a Taser, McCarthy said.
It was the first time Murray has seen a fight that size in his 18 months stationed with the sheriff’s marine unit. Twenty-five deputies and city police officers came to the fight scene. In the chaos, a woman threw a beer container at an officer and was arrested and charged with battery on a law-enforcement officer.
A total of ten people had been arrested by 9 p.m. Sunday. Not including the two expected to be charged for the fight, five were charged with boating under the influence, one for grand theft and two for underage drinking. One man was arrested on the island and charged with battery while standing in line for a water taxi.
Minutes before the fight that sent the men to the hospital, two men had a fistfight a few boats away on a vessel carrying at least 20 people. It rocked back and forth as all its occupants took part in the scuffle.
That fight ended with a man with a bloody face standing on the boat and threatening another man in the water, who was egging him on. As a sheriff’s vessel quietly rolled up, everyone turned away and acted like nothing had happened.
Both fights happened on boats anchored by the sandbar, about 30 feet from the island.
Peanut Island itself was calm and quiet compared with the scene on the boats and sandbar. Some of those lounging or barbecuing on the beach seemed to appreciate that the party had moved. Nobody was arrested for drinking on the island, Murray said.
Joaquin Romero, who said he goes to Peanut Island every Sunday, said all the young people are on the water now. What drinking happens on the island now is far more controlled, he said.
“Everybody drinks,” Romero said, gesturing with his plastic glass. He distinguished between what happens on the boats and what happens on the beach.
“You can come with a family here,” he said. “You don’t see people on the floor, drunk.”
As he watched the deputies load the injured man into the sheriff’s boat, Romero laughed over the drone of the helicopter circling the scene: “Somebody drink too much!”
I don’t allow jscript (sorry Ben) so I don’t get the ads. One thing you can be sure of though, if Google is feeding you anti-Obama ads then most of your search or Google News pages will just be a self re-enforcing echo chamber of stuff that amps up your confirmation bias. Do you ever try searching for news or information on how you as a consumer can take advantage of Obamacare? Like cutting your drug or co-pay tricks or ways to shift non-medical expenses to be covered by health care deductions. One warning; once Google/Bing has you pegged as right or left it becomes harder to find information that may challenge your assumptions.
“One warning; once Google/Bing has you pegged as right or left it becomes harder to find information that may challenge your assumptions.”
Pretty soon once Google/Bing has you pegged as anything but a good slave you will become impossible to find.
“Do you ever try searching for news or information on how you as a consumer can take advantage of Obamacare? ”
I didn’t know Google had a comedy section.
comedy section
Here’s a joke for you:
http://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_(PPP)_per_capita
#1 cancer survival rates in the world
If I want an operation, I get it tomorrow. If I want it in Canada maybe I’ll get it around Christmas.
And sure that means spending more. If you want quality, you have to pay for it. I don’t want to wait 6 months for an operation. Why do you?
Here’s why health care is “cheap” in Canada
“Wait times for priority medical treatments like hip and knee replacements are not going down despite concerted efforts in all provinces to improve the situation, a new report shows. Tuesday’s report from the Canadian Institute for Health Information showed that despite performing almost 21,000 more procedures in 2012 compared with 2011 — a record — the overall length of time that patients waited did not fall accordingly.
Demand for hip and knee replacements is rising at a rate that outpaces the ability of health systems to keep up. The number of joint replacements in 2012 was 15 per cent higher than in 2010 but despite the higher volume and spending, the proportion of procedures that were carried out within the recommended time — 182 days — went down four percentage points from 84 per cent to 80 per cent for hips and from 79 per cent to 75 per cent for knees.”
ONE HUNDRED AND EIGHTY TWO DAYS wait for surgery. Think about that next time you whine about how awful America’s health care system is. But what’s 182 days of pain? Small price to pay in the name social justice.
18 percent of gdp for healthcare isnt enough. we should be spending at least 25 percent. that’ll show those socialists who’s number one.
Understand this - Japan is the model. With their 200% debt to GDP, and their massive money printing operations, they are farther along than the US in this economic policy experiment.
As I’ve noted earlier, most economists agree there is a waterfall somewhere ahead, where the system breaks. The question is, how far are we from it? But we do know one thing - Japan is closer to it than we are. So if they suddenly disappear, we’ll know we’ll have to beach the craft if we can, and make a go of it in the forest.
And then there are those who think there is no waterfall. I’m thinking Krugman might be closer to this camp.
I like reading both sides of the issue, the bulls and the bears. Gives me a better sense of the argument. And Krugman does a heck of a job advocating for the current policy regime.
Japan the Model
By Paul Krugman
Published: May 23, 2013
New York Times
A generation ago, Japan was widely admired — and feared — as an economic paragon.
Then Japan fell into a seemingly endless slump, and most of the world lost interest. The main exceptions were a relative handful of economists, a group that happened to include Ben Bernanke, now the chairman of the Federal Reserve, and yours truly.
These days we are, in economic terms, all Japanese — which is why the ongoing economic experiment in the country that started it all is so important, not just for Japan, but for the world.
http://www.nytimes.com/2013/05/24/opinion/krugman-japan-the-model.html?_r=1&
I watched a video this weekend called “Oz The Great and Powerful”, a re-make of the Wizard of Oz. Moral to the story - you just got to believe and then the magic is real. Priests, shamans and central bankers have been shaping our reality for centuries.
Turning Japanese I think I’m turning Japanese I really think so
Japan has resource constraints that are much more problematic than ours. They have limited land, limited energy. On top of that, they have earthquakes that have put their nuclear energy generation into a tailspin. We may eventually see resource constraints similar to where Japan is now, but at this point our energy situation is much healthier.
They are further along the demographic curve than we are with older folks becoming a larger percentage of the population and birthrates declining. In this respect, Japan is instructive.
“Did you not know that realtors are liars and are never to be trusted?”
A Realtor® bit my sister once.
A bank is willing to lend me more than a I paid on a rent house I own. The interest rate will only be 3.75%. Is that a good deal?
One more important factoid. I think the monthly payment on the loan will be about a third of the rent I collect.
Then again, I AM borrowing money at 0% on unsecured credit cards, so maybe the mortgage is a raw deal.
Why do you want the loan? What will you do with the money?
Did YOU pay for the rental house with your own money or did you just borrow the money? So what is the delta after expenses?
Does your rental cash flow? Or are you just “living off the appreciation?”
What will you do if housing prices drop 30% in the next 6 months? Will you claim to be a victim?
Why do you want the loan? What will you do with the money?
Escalades and Boob jobs, baby!
I bought the house with cash. Maybe I’ll use the new cash to buy another house after the next crash. I dunno. I’m just wondering if it’s worth it to get a cash-flowing mortgage so I can have my principal back, even when I am already borrowing money on unsecured credit cards at 0%.
Assuming you have a productive use for that borrowed money why not? You might want to move fast since the bloodbath in the treasury market today will spill over into the other markets pretty quick. It’s like when the price of oil goes up and the gas station jacks up prices of gasoline (a down stream product) within hours.
I check the Greenwich Times a couple of times a week to see what’s going on with the local sports and to see if anyone I know has died. I about choked when I saw this on their front page. “Who Can Afford to Buy A House” In this town? You gotta work for Goldman Sachs to buy a closet. They take Southwestern Connecticut from Bridgeport (bring your AK, oh you can’t it’s in Connecticut) to a bargain in New Canaan.
Trending: Who Can Afford to Buy A House
Tuesday, May 28, 2013 by:Maggie Gordon
The U.S. Census Bureau released a new report this week called Who Could Afford to Buy a Home in 2009, which details the trend of homeownership and affordability across the country, showing a dip in the average American’s ability to afford to buy a home.
So what does it mean to be a modestly priced home in your town? Well, we culled 2009 census data to find the cut-off number for the home value of the bottom quartile of homes in every town across Southwestern Connecticut. Check this slideshow to see how much dough a”modestly priced home” is valued at in your town, and what that kind of home looks like.
No. 31: Bridgeport
In Bridgeport, you can get what the Census Bureau defines as a “modestly priced home” for $167,600. Like this three-bedroom, two-bathroom Cape with 1,491 square feet of living space, which is on the market for $164,900.
No. 3: Greenwich
In Greenwich, you can get what the Census Bureau defines as a “modestly priced home” for $778,800. Like this 999 square-foot home with two bedrooms and one bathroom, situated on 1.2 acres of land, which is on the market for $764,900.
No. 2: Darien
In Darien, you can get what the Census Bureau defines as a “modestly priced home” for $853,300. Like this four-bedroom, three-bathroom, 2,090 square-foot home on the market for $849,000.
No. 1: New Canaan
In New Canaan, you can get what the Census Bureau defines as a “modestly priced home” for $904,200. Like this three-bedroom, two-bathroom, 1,915 square-foot home on the market for $899,000.
In other words, homeownership is becoming a little less attainable for the everyman and everywoman. The census says there are four primary reasons for this: High debt; Insufficient cash for a down payment; Poor credit history; or Interest rates that set the monthly mortgage payment too high for the family to afford on its current income.
http://blog.ctnews.com/trending/2013/05/28/trending-who-can-afford-to-buy-a-house/ - -
the people who live in new canaan, darien, and greenwich are the producers.
Company that bungled foreclosure checks in charge of another $1.5 billion in housing reparations
by Kim Miller
The company accused of bungling some payouts from the Independent Foreclosure Review is also tasked with distributing $1.5 billion in checks to homeowners eligible for the National Mortgage Settlement.
Rust Consulting, which has an office in Palm Beach Gardens, is expected to begin mailing those checks mid-year, according to the National Mortgage Settlement website.
Although the amount of the checks and how many will be doled out is still unknown, it is expected the payments will exceed the original expected minimum of $840 that was noted on a homeowner claim form.
Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, said today that an update on the distribution and details on the checks is expected soon. Miller was lead negotiator in the $25 billion settlement between the nation’s five largest banks and 49 attorneys general.
About $1.5 billion from the settlement is to compensate borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.
Rust Consulting, which is based in Minneapolis, is the paying agent for the $3.6 billion in payouts going to 4.2 million borrowers nationwide who qualified for the failed Independent Foreclosure Review.
The process, which began last month, has suffered from high-profile mistakes such as early checks bouncing and the shortchanging of 96,000 homeowners who received the wrong check amounts.
Rust has since fixed both issues and sent out additional checks to homeowners who received the wrong amounts.
Florida’s share of the $1.5 billion is $170 million. About 167,400 Florida borrowers were mailed claims forms in September with a Jan. 18 deadline to apply.
When just 51 percent of eligible Florida borrowers had applied by the end of January, Attorney General Pam Bondi started drumming up publicity for the process during statewide visits and said the deadline had been extended to Feb. 15.
Greenwood said Rust was chosen by states participating in the National Mortgage Settlement through a competitive bidding process. He believes the company was hired by settlement states prior to it being hired by the Office of the Comptroller of the Currency and federal bank regulators to handle the Independent Foreclosure Review checks.
“And certainly before news reports of foreclosure review-related problems emerged,” he said.
This entry was posted on Tuesday, May 28th, 2013 at 1:11 pm and is filed under Florida economy, Housing affordability, Mortgages, Real estate bust. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One Response to “Company that bungled foreclosure checks in charge of another $1.5 billion in housing reparations”
1
SteveinWPB Says:
May 28th, 2013 at 3:48 pm
!.5 billion dollars is just a drop in the bucket for the banks who are now moving to corner our housing market.
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Does This JCPenney Tea Kettle Look Like Hitler? Many Seem To Think So…
by Andrew Kirell | 11:36 am, May 28th, 2013
JCPenney’s new billboard advertising a designer tea kettle has many California motorists seeing Nazis.
How? Because, to many, the Michael Graves-designed kettle looks like Adolf Hitler with right hand extended outward in the infamous Nazi salute.
The eerie tea kettle doppelgänger first made waves on Reddit this weekend, when a user posted an image of the billboard from the 405 Interstate near Culver City, Calif. The image soon spread all over the web. The user posted the blurred and clean image of the billboard, for effect:
http://www.mediaite.com/online/does-this-jcpenney-tea-kettle-look-like-hitler-many-seem-to-think-so/ - 112k -