Bits Bucket for November 22, 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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Now that the filibuster rule is changed, Watt can take over at FHFA unopposed.
Cramdowns are coming (finally!).
Why do you think cramdowns are a good thing?
A major reason for the bubble were people buying homes who should have never bought homes in the first place. They were able to do so because of ultra-easy underwriting.
If you allow cramdowns, then these folks (who should have never been “owners” in the first place), now get to be owners forever (keeping a home off the market for other potential owners).
If you don’t allow cramdowns, then these folks lose the home, and go back to being renters (putting a home back into circulation for other “owners”).
Are you thinking that cramdowns hurt banks? How much of the debt is actually held by non-banks (pension funds and other institutions who purchased RMBS)?
My personal view is that if you want to slow/stop foreclosures (ie. decrease the number of distressed sales), cramdowns (or the threat of cramdowns) is the way to go.
“Why do you think cramdowns are a good thing?”
Why do you misinterpret others’ positive statements as normative statements?
To clarify, I was merely mimicking a long-running post here. Maybe six or seven years ago, some joker who may not even be around any more used to post “cramdowns are coming” on a weekly (or more) basis. Others (notably Ben Jones) would express skepticism.
My comment was based on something the article I posted mentioned about how Mel Watt is likely to favor loan principle forgiveness.
I personally don’t see how one could do this without creating terrible incentives for household decision makers or forcing those who had no role whatever in the housing debacle to make whole others who did play a big role.
Does that clear it up?
how many years will it take for the FED to help the banks clear all the bad home inventory? Easily 5 more years imo.
25 million houses/5 years is 5 MILLION houses a year. Current sales rate is very optimistically 4 million/yr(only 10% of that is end user demand).
Double the housing supply in an environment of collapsing sales?
This will be interesting.
do you agree that the FED will keep buying all the treasuries so the banks don’t take losses?
Are you blind to the fact that current asking prices of resale housing are 220% higher than replacement cost(lot, labor, materials and profit)?
I didn’t get the reference to the earlier poster (and the sarcasm didn’t come through). That alone clears it up.
azdude
You have hit the million dollar question.
If you consider the amount of mortgages insured by F&F (I have read on HBB as much as 95%) then there should be virtually no shadow housing inventory. The banks that held the loans would just send their debts over to F&F for payout.
But with this securitization it is hard for them to present a good case of ownership and most of the non performing loans have been written off by the bag holder investors for tax savings.
However, the banks get to keep their 30 times loan to equity portfolios because these loans back up secured debt and the M1 portion is replaced with libor as required.
With the government not withdrawing funds from the banking system (QE instead) it has enabled the banks to remain solvent.
But the world is trying to get to a 17 (I think only Canada is there right now).
How many years profits will it take for the banks to erase their double exposure - investors and cash deficiency ? While passing the period of redemption on their insurance policies ?
QE is prolonging the inevitable. It is a bonus that the Fed is cashing while they balance the high wire between too much - and too much. It is a credit to the USA economy that the Fed have been able to get away with it for so long.
The Fed knows the bankers are in very serious trouble and frankly, they don’t know what to do about it.
More band aids.
Azdude - sorry I have no idea when the banks will become whole - if they ever were.
“The Fed knows the bankers are in very serious trouble and frankly, they don’t know what to do about it.”
+1 I have read that the only way out of this mess will be entrepreneurial innovation because our current economy simply doesn’t have the wherewithal to “right the ship.” The last few years of QE policy should have been interpreted as a clear signal for main street to pay-down debt as fast as possible. When the QE taper policy begins the pain will be immediate and terrible, IMHO.
Unfettered cramdowns are bad on moral hazard grounds alone.
LOL, who gets crammed? Banks don’t lose.
Ain’t life wonderful?
I think cramdowns will speed the bagholder identification process necessary for a return to a more stable real estate market. Losses will finally be finalized, even if it is the taxpayer who has to pay them.
However, from the howls I hear from the financial sector about cramdowns, perhaps it might force some discipline on their business models as they may suffer some losses as well.
Don’t get me wrong, in a less fraudulent financial world, I’d think cramdowns were wrong. But now, it’s not about justice versus injustice, it’s about more injustice versus less injustice.
It’s about economic stimulus, not market justice.
The problem is, they consistently reward people who have f••ked up, either intentionally or unintentionally. Consistently rewarding destructive and/or stupid behavior is only going to lead to further societal stagnation and decline.
Typically, the PTB directly rewarded their cronies who’d f••ked up. Cramdowns are a bit different as they reward the FB who are the fodder who feed their cronies. In the big picture, it may well encourage the FB to go into debt again, to once again feed the cronies.
Involuntary cramdowns are wrong.
Voluntary principal reductions MAY be logical, but should be VOLUNTARY.
Ocwen had a program where they would commit to write down the principal balance of the loan to the market value, and in order for the borrower to get the full write-down, the borrower needed to be current for 3 years (a third of the benefit each year for 3 years). If however, the home were sold for more than the written-down balance, Ocwen got to share in something like 75% of the upside.
That kind of structure can be a win-win, when the alternative is to kick out the occupant and sell the home at auction (on a fire sale basis at probably a discount to market value). The lender probably gets more with the voluntary write-down than with the foreclosure and sale.
U.S. Senate rule change paves way for Watt to take housing post
By Margaret Chadbourn
WASHINGTON Thu Nov 21, 2013 4:49pm EST
Representative Mel Watt testifies before the Senate Banking, Housing and Urban Affairs Committee confirmation hearing to be the regulator of mortgage finance firms Fannie Mae and Freddie Mac on Capitol Hill in Washington June 27, 2013. REUTERS/Yuri Gripas
(Reuters) - U.S. President Barack Obama’s pick for a top housing regulatory post looked poised to win confirmation after the Senate changed its rules on Thursday to make it harder to block nominees.
If confirmed to head the agency that regulates housing finance giants Fannie Mae and Freddie Mac, Democratic Representative Mel Watt could open the door for the taxpayer-controlled firms to provide greater mortgage relief, in line with White House economic goals.
The current head of the Federal Housing Finance Agency, Edward DeMarco, is a career civil servant who has knocked heads at times with the Obama administration on homeowner-relief programs as he has sought to conserve the companies’ assets.
That focus has endeared DeMarco to Republicans, who successfully blocked Watt’s nomination in a vote last month. The filibuster marked the first time since the Civil War that the Senate failed to confirm a sitting member of Congress.
The Republican action helped spur Senate Majority Leader Harry Reid, a Nevada Democrat, to push through a change in the Senate filibuster rules on Thursday.
Previously, 60 votes were needed to clear procedural hurdles in the 100-seat Senate. Now, a simple majority suffices for all but Supreme Court nominees - a change that virtually guarantees Watt’s confirmation given that Democrats control 55 votes.
Homeowner and consumer advocacy groups have lobbied hard for Watt’s approval. They argue that DeMarco, who became the FHFA’s acting director in 2009, has not implemented programs that could help borrowers who are having trouble making mortgage payments.
Analysts expect Watt to allow Fannie Mae and Freddie Mac to forgive loan principal for Americans who owe more on their mortgages than their homes are worth - a step the White House has advocated but one that DeMarco had refused to take.
…
Typical of liberals, when you don’t get your way change the rules or cheat to win. Hey all you suckers with 401k plans, the Liar in Chief will be coming after you soon to confiscate them.
I bet in 2014 we will have more “trouble” with Diebold voting machines.
For 200 years, we’ve had the right to extended debate. It’s not some “procedural gimmick.”
It’s within the vision of the Founding Fathers of our country.
They established a government so that no one person – and no single party – could have total control.
Some in this Chamber want to throw out 217 years of Senate history in the quest for absolute power.
They want to do away with Mr. Smith coming to Washington.
They want to do away with the filibuster.
They think they are wiser than our Founding Fathers.
I doubt that’s true.
-Senator Harry Reid, Floor Speech on Use of Filibuster, 2005
It is a sign of desperation and trying to change the topic from a dog getting healthcare. Which in itself is just theater because the politicians are all really on the same side.
Which in itself is just theater because the politicians are all really on the same side.
The old “both parties are equally corrupt” argument.
Tell me - then why do trial lawyers, private labor unions, public labor unions, reparation seeking minorities, environmental marxists consistently vote and give 99+% of their money to democats?
And why is it that the only party producing ANY believable fiscal conservatives (and still way too few) is the republican party?
Why did not ONE republican vote for obamacare?
So my request to you democrats who post on this blog: why don’t you just stop trying to deflect the blame that you deserve by constantly pointing the finger at the republican party whenever the depravity of the democrat party manifests itself.
2banana, do you think i’m a democrat?
here are some answers you may not have thought of..
then why do trial lawyers, private labor unions, public labor unions, reparation seeking minorities, environmental marxists consistently vote and give 99+% of their money to democats?
because democrats are a little more to the left of republicans. but not by much.
And why is it that the only party producing ANY believable fiscal conservatives (and still way too few) is the republican party?
because the tea party thought it would be easier to infiltrate the republican party due to their claim of principles they used to have. it has proven more difficult than they thought. most of them no longer have the principles they claim to.
Why did not ONE republican vote for obamacare?
because the dems made it easy for them not to vote for it. if the vote would have been close, some of the more liberal repubs would have crossed over. 90% of the republicans are liberals to various degrees.
how do they accomplish their stance on abortion? through big government. so they support big government for their own purposes. the party of small government, my butt. most of them are establishment hypocrites.
Are you saying if we went back pre-Roe v Wade where the STATES determined the limits and restrictions on abortion that is somehow showing the republicans as “big government”
supporters?
And “abortion anytime you want them for any reason to include 1 second before birth” is an argument for “smaller government” when it is really leftists shoving their “morals and values” down our throats through the force of big government.
There are so many other issue you could make that case.
But not this one.
Are you saying if we went back pre-Roe v Wade where the STATES determined the limits and restrictions on abortion that is somehow showing the republicans as “big government”
supporters?
no
And “abortion anytime you want them for any reason to include 1 second before birth” is an argument for “smaller government” when it is really leftists shoving their “morals and values” down our throats through the force of big government.
i’m making no such argument. the argument i’m making is that people of conscience will solve their own person dilemmas without the government getting involved.
There are so many other issue you could make that case.
But not this one.
what about the bigger issue i made that most republicans are liberals to varying degrees?
what about the bigger issue i made that most republicans are liberals to varying degrees?
Please re-read:
And why is it that the only party producing ANY believable fiscal conservatives (and still way too few) is the republican party?
Why is there NO fiscally conservative democrats? Not even ONE? There used to be. Now EVERY DEMOCRAT votes in lock step for every tax increase and big government program that obama proposes.
I guess they are all on “the 47% vote” re-election train.
Why is there NO fiscally conservative democrats? Not even ONE?
because the whole country has moved to the left.
Now EVERY DEMOCRAT votes in lock step for every tax increase and big government program that obama proposes.
the whole country has moved left. that includes republicans.
i ask you again.. do you agree that most republicans are now liberals to varying degrees?
Banana,
I’m not saying both parties are equally corrupt. I’m saying all politicians are corrupt. None of them are for the working man. Heck few even pretend to be.
I don’t agree that it’s “cheating.” The elimination of the filibuster is certainly Constitutional. And, just like Obamacare and just like voting in lockstep, the nuclear option was a Republican idea.
However, I thought the rule change was too nuclear. I would have liked a little more wiggle room. For example, give the minority party X number of filibusters; above that and they have to talk forever. I think that would have eliminated abuse on both sides.
This is such an obvious option, that there is NO way somebody else didn’t think of it. They must have considered it. Makes me wonder why Reid went full-on nuclear. I don’t think the reason is some vague notion of absolute power; they know full well that the Republicans will eventually have that power too.
Of course when any side controls the senate with less than 60 votes they *think* about it.
Like when the democrat minority in the Senate BLOCKED over 60 of Bush’s appointments (as compared to 16 of obama’s appointments now blocked).
The key is that the republicans did not go nuclear.
Now that the democrats have shown the way there will be payback the next time the senate is controlled by the republicans (which could be as earlier as next year).
And yes I DO PREDICT the democrats will cry like stuck pigs, complain how unfair it is, how it hurts women and minorities (and don’t forget children) and that it is racists (only if republicans do it).
You have to confirm Mel Watts to see what he will do.
Analysts expect Watt to allow Fannie Mae and Freddie Mac to forgive loan principal for Americans who owe more on their mortgages than their homes are worth - a step the White House has advocated but one that DeMarco had refused to take.”
In the future don’t you think this will make it that much harder to get a home loan?
“In the future don’t you think this will make it that much harder to get a home loan?”
No, because the Fed will simply cover that base too to keep the RE ball rolling. Don’t forget that it is just borrowed money; it’s not like it is real money.
No it isn’t. It’s not borrowed money, it
counterfeitcreated/printed money. The Fed (privately owned by member banks)counterfeitscreates brand new money from thin air. Litereally adds a zero to one of its shareholders accounts at the discount window, and real spendable money is created. THAT is the real and ultimate cause of all of our housing and other economic woes. IT may have been created to solve liquidity problems, but it’s now being used to shield bad/greedy decision makers from the consequences of their actions, the exact opposite of a free market. It’s no different than they guy doing the banking in Monopoly running some extra hundreds off on his color laser printer and slipping them to his friends while you’re off getting more cheesie poofs to eat(you being representative of the apathetic/distracted American public in this analogy). Except that it’s real actual money the Fedcounterfeitscreates. Nothing will be solved until bad decisions result in bad consequences and that won’t happen until we clamp down on the Fed. And for God sake we should at least be auditing them.Followup: Hi-Z: In case it’s not clear, I completely agree with your sentiments. I just thought it was important to make the distinction on where the money actually comes from - it makes a huge difference to all of us(stealth tax via inflation, etc).
Ian Shepherdson, Contributor
Provocative notes from the Chief Economist at Pantheon Macroeconomics
Wall Street
11/21/2013 @ 5:12PM
Housing Is Slowing In Response To Higher Mortgage Rates — And It Isn’t Over Yet
Ignore all the headlines about housing recovery and rising home prices. The market, nationally, is now in real trouble, thanks to the surge in mortgage rates triggered by the Fed’s spring musings on when it might start to slow its bond purchases. The thought that the single biggest buyer of government and mortgage securities might soon step back from the market spooked investors, both domestic and foreign, and they now demand higher rates on their investments.
This has translated into average 30-year fixed mortgage rates rising from a low of 3.59% in early May to 4.46% last week. As a result, sales of both new and existing homes have dropped, and price gains are slowing. These trends have some way yet to run, and I can’t rule out completely the idea that home prices might fall outright for a time in the first half of next year.
…
they will increase QE to get treasury yields down so housing continues on a bull run. Got EQUITY?
Sounds like some QE might wend its way into providing cramdowns. Can you imagine how many undocumented six figure helicopter drops of wealth into underwater California households might be soon to come?
inflation is low, we need to print some more.
It doesn’t do any good. Wages need to rise or price(fixing) needs to fall.
But housing resumed its collapse.
Got cash?
With respect, No I don’t think so.
Remember the banks have to reduce their risks and they only have the profit margin to help them. This is in the Fed’s hands. Low rates enforce low margins.
I agree though that banks today are not the same animal - fees !
Toronto high-rise developer thinks Dallas is ready for more condos
http://www.dallasnews.com/business/commercial-real-estate/headlines/20131121-toronto-high-rise-developer-thinks-dallas-is-ready-for-more-condos.ece
bring it on!! We need more inventory according to lawrence yun.
Janet yellen will walk on water soon. Rock star status? Maybe on the cover of time?
Yun wants more inventory so realtors can make more sales. I want to hold back so as to make prices rise. Guess which way this will go?
(Hint: The banks controls the inventory.)
paying massive amounts of interest to the banks is your only shot at some free equity. U have to pay to play!!!!
Otherwise your stuck stuffing your money into bank accounts that dwindle in value thanks to inflation. You can always throw the dice on some stocks such as twtr and FB.
Or throw cash at a gauranteed loss like a depreciating house.
At these prices, why aren’t builders raising cash and building with fat profit margins, putting more houses on the market?
Because publicly traded builders are a fraction of the market.
And in terms of construction $$$, maybe a fraction of a percent.
I mentioned a few days ago, CEO of Toll Bros. said Texas is booming…
I’m not sure why considering there are some 2 million excess empty houses in the state of TX.
OMG Stainless steel is like SOoo 2007:
http://refrigerators.reviewed.com/News/So-Long-Stainless-Whirlpool-Introduces-a-New-Finish-For-Premium-Kitchens.htm?utm_source=taboola&utm_medium=USAT%20Recirc
The stainless steel appliance hegemony has ended.
On Monday, Whirlpool introduced a new premium exterior finish that they call “White Ice.” With clean lines, silver accents and streamlined controls, the new collection’s refrigerator, range, dishwasher, and microwave are a departure from the flash and glitz of stainless steel and its many lookalikes. In fact, the combination of a white finish, stainless handles and mirrored glass appear to have a lot in common with Apple’s popular design language.
I think paper thin low grade stainless(that actually rusts) went out in 2007 along with granite.
Feds drool, contractors rule:
“In 1983, the federal government paid private contractors $159 billion for goods and services; by 2012, the figure was $517 billion, a 41 percent increase after adjusting for inflation. During the same period, the Washington-Maryland-Virginia share of that spending doubled, from 9 percent to 18 percent, according to a Washington Post analysis.
Six of the 10 richest counties in America are now located in the Washington metro area.”
http://www.washingtonpost.com/national/how-a-bright-idea-in-1983-helped-deltek-corner-the-market-in-government-contracting-services/2013/11/21/a6985eac-3c30-11e3-b6a9-da62c264f40e_story.html
Lockheed Martin - #1 US Defense Contractor
Defense contractor Lockheed Martin is cutting 4,000 jobs and closing four plants, blaming a decline in U.S. government spending for the cuts.
The company said the locations to be closed are in Newtown, Pa.; Akron, Ohio; Goodyear, Ariz.; and Horizon City, Texas. In addition it will close four buildings on its Sunnyvale, Calif., campus. Between them, those closings will result in 2,000 job losses.
Since 2008, the company has cut 30,000 positions, or about 20% of its global staff, reducing total employment to 116,000.
http://money.cnn.com/2013/11/14/news/companies/lockheed-martin-job-cuts/index.html
They fire, we hire.
For every 4,000 government contractors that get laid off, another 5,000 new government contractor jobs are created elsewhere.
Hope and Change:
“One woman was punched in the face as she crested a hill on her bicycle in Northwest Washington. Another was hit in the back of the head as she walked to a bus stop. Neither was robbed, and after one attack, the young men laughed as they made their escape.
D.C. police say the recent attacks in Columbia Heights may be part of a disturbing trend that assailants across the country call the “knockout game.” Youths challenge one another to knock out a random person with a single punch.”
http://www.washingtonpost.com/local/crime/district-police-investigating-random-attacks-similar-to-knockout-game/2013/11/21/ca9e26c2-5154-11e3-9fe0-fd2ca728e67c_story.html?tid=pm_pop
No worries, no racism involved.
obama’s sons just showing their affection…
Drudge links to a story of a Lansing, Mich. man who got jumped by these youths and pulled his CCW gun and shot one.
And here’s some of the sons and daughters of Aztlan taking their “grievances” to the lobby of Eric Cantor’s condo in Washington.
http://washingtonexaminer.com/pro-immigration-protesters-storm-eric-cantors-condo-promise-same-for-frank-wolf-bob-goodlatte/article/2539548
Apparently this is all the rage, taking their protest right to the home of the members of government. This is really a home invasion, when you think about it.
Well, I’m glad that some of these representatives get to taste the rainbow. And it’s just a small taste of things to come. This is how out of hand it’s gotten. Especially when Cantor is on their side to begin with.
But, you know, it’s kind of funny, because here they are actually doing a job Americans won’t do, because they are too apathetic and fragmented.
“An appeaser is one who feeds a crocodile, hoping it will eat him last.” - Winston Churchill
taste the rainbow
Skittles and Arizona Iced Tea brand Watermelon Fruit Punch and Promethazine with codeine?
HBB has been predicting torches and pitchforks for some time now. Well here you go.
Falling housing prices to dramatically lower and more affordable levels equals torches and pitchforks?
Silly Donkey.
“No worries, no racism involved.”
Turn the table 180-degrees, and these would be hate crimes.
these would be hate crimes? shit…just one white dude doing this to one black victim would be the major fracking newstory for 2 weeks.
No worries, no racism involved ??
Well sure there is racism involved and the little pricks need a bullet or jail….
obama’s sons just showing their affection ??
Now you show your own racism by including Obama in the mix not for actions but because he is black…You appear to be no different then the thugs on the bicycles…
Get with times.
I am just quoting your savior and leader on another thug he thought fondly of. This thug happened to be black but I am sure that fact had nothing to do with it:
————–
President Obama said today the nation needs to do some “soul searching” over the shooting death of unarmed African-American teenager Trayvon Martin in Florida.
“If I had a son, he’d look like Trayvon,” Obama said at the White House.
http://content.usatoday.com/communities/theoval/post/2012/03/obama-my-son-would-look-like-trayvon/1#.Uo-EUxBYQR0
You’re a racist.
Comment by real journalists
2013-11-21 11:04:13
Trayvon Martin was a cherubic 12 year old angel who was innocently skipping home from the candy store when blonde haired and blue eyed Klansman George Zimmerman (emphasize “Zimmerman”, it sounds more Germanic and “Master Race” that way) assaulted young Martin by rudely headbutting his face into Martin’s (clenched only in fear) tiny, pre-adolescent fist.
I am just quoting your savior and leader on another thug he thought fondly of ??
Reference noted…My apologies…
Like the financial crisis blew the curtain back to show how the society is really governed, the Zimmerman incident blew the curtain back on how the media really works.
The media’s job is like any author’s job - to sell stories. With Zimmerman, the template was “Mississipi Burning - civil rights outrage.” Except that it wasn’t. But the actual story would not have brought the eyeballs and the resulting dollars that the “southern white racist kills innocent black boy to satisfy his own racism” would. The other day, I saw a Hispanic guy sitting in a car, and he looked a lot like Zimmerman. I thought, “Who on earth would have ever characterized Zimmerman as white?”
“Who on earth would have ever characterized Zimmerman as white?”
His father is white. It’s likely that he considers himself to be white.
His father is white. It’s likely that he considers himself to be white.
Except, of course, when it comes to:
Minority only college scholarships
College racial quotas for admission
Racial set-aside job programs
Small Business minority only loans
Affirmative action programs
Special protections for not being fired
Bonus racial points for hiring for any local/state or federal jobs
etc.
Then (as we all have seen) - if you have 0.00000001% hispanic blood you are then 100% hispanic to get the government goodies…
And for some democrat senators - just the idea that you are a minority (Elizabeth Warren - native american wannabe) can open doors you solely only cracker white-ass could never hope to dream in top Universities…
You don’t understand how the terms are used in this country. This has been covered on this blog a number of times. It is possible for a person to be both white and Hispanic. From what I can recall, somewhere between 40% and 50% of Hispanic Americans consider themselves to be white. Given the backgrounds of Zimmerman’s parents, he would probably be one of those people.
It is possible for a person to be both white and Hispanic.
When I was working in Gallup NM in 1975, blacks were still considered “Anglos”.
including Obama in the mix
He should host a beer summit in the Rose Garden with the knockout youths and their victims.
where obama can tell the victims they “acted stupidly”
Nobody intended anyone to get hurt, it was all just a misunderstanding.
Now you show your own racism by including Obama in the mix not for actions but because he is black…
No, I think he was making fun of Obama for his “if I had a son, he would look like Trayvon”. IMO, he never should have injected himself into a local law enforcement matter, particularly long before the facts were in.
I got it…Noted above…
Why HARP Is Almost Dead: U.S. Negative Equity Rate Falls at Fastest Pace Ever
Confounded Interest | 11/22/2013 | Anthony B. Sanders
According to Zillow, the U.S. negative equity rate fell at the fastest pace ever in Q3 2013. That is good news … if you own a mortgage or a home. But not great news if you are one of America’s growing renters.
Leading the recovery, due to house price recovery, is California. And second is Nebraska? In general, the West which was so hammered by the housing bubble burst is recovering nicely.
So, the government’s HARP program to assist negative or zero equity homeowners has definitely run out of gas. Rising house prices have lessened the pain of negative equity and rising mortgage rates since May 1st have reduced the benefits of a HARP refinancing. Loan-to-value ratios for borrowers over 100% LTV have declined noticeably over the past year. But notice that LTVs under 100% have increased.
The incentive for borrowers and mortgage lenders to “play the HARP” is dying.
print some money and send these people who were duped by the banks a fat check.
Comment by Ben Jones
2013-11-21 08:30:04
One interesting thing; the CAR report came out mid-week. I thought by this morning there would be many reports on it. Almost nothing. But there is this:
‘At the end of the third quarter, 13.2% of homeowners with a mortgage remained underwater in the L.A. metro region, a decline from 25.9% in the same period last year, according to Zillow. Prices, however, are still below their peak during the last decade’s bubble.’
‘Those that purchased a home at what turned out to be unsustainable prices remain stuck. About 10% of underwater homeowners in the L.A. area owe more than double what their house is worth, Zillow said.’
‘The the Inland Empire has the greatest percentage of homeowners underwater in Southern California. In Riverside County, 27% of homeowners with a mortgage are still underwater. In San Bernardino County that rate rises to 29.1%.
“Many homeowners remain too far underwater for reasonable price appreciation alone to help,” said Zillow chief economist Stan Humphries.’
‘Negative equity, he said, is simply the new normal.’
Bzzz, wrong answer Stan. There is a big temptation to walk away in this situation. So while you have the government making loans at 200% LTV, etc, when it dawns on these FB’s that prices aren’t gonna make them whole, they’ll bail.
…………………………………………………………………..
HOLY CRAP! It’s almost 2014! Prices peaked EIGHT YEARS AGO. The recession ended FOUR YEARS AGO. Why is ANYONE underwater?
“Why is ANYONE underwater?”
Why wouldn’t they be?
“Why is ANYONE underwater?”
Help is on the way!
Senate gone nuclear ups chances for Watt to lead FHFA and loan limits to be frozen
November 21, 2013, 3:08 PM
The Senate’s decision on Thursday to allow simple majority votes on whether to proceed with executive and judicial nominees raises the likelihood that the president’s previously blocked pick to lead the Federal Housing Finance Agency will finally succeed.
…
“The recession ended FOUR YEARS AGO…”
That is not the same thing as a recovery. The only thing headed toward these debtors is more water.
Skakel walks:
http://nypost.com/2013/11/21/kennedy-cousin-skakel-bailed-ahead-of-new-murder-trial/
“Skakel walks:”
Money talks; ask OJ ’bout it.
Being related to the Kennedys means never having to say you’re sorry.
Are there Kennedys of any consequence still living?
Anyway, those of us old enough to have Experienced It should be reflecting on the assassination today, it being the 50th anniversary and all. Strangely I don’t remember everyone getting all reverent on the hundredth anniversary of the McKinley assassination in 2001, and he actually accomplished something (gold standard act) and had a mountain named after him. I guess he lacked that boyish charm.
I don’t remember everyone getting all reverent on the hundredth anniversary
I doubt there will be any similar reverence in 2063 either. McKinley has a sizeable & well-kept memorial in Canton Ohio.
you guys do realize that printing is the only way out of having a depression like you have never seen? It kicks the can down the road but thats what politicians like to do these days.
Until you run out of road - then the whole scheme collapses.
A plethora of example through history going back to the Romans show the obvious end game.
But not to ancient Greece. They actually never debased their currency. Even when Athens was occupied by the Persians.
But look at Greece today.
We will be lucky if that is the worst that happens to us.
ancient Greece. They actually never debased their currency.
Events debased them in other ways. Sparta ran what amounted to a theme park for Romans for a while after Greece was taken over by Rome.
you guys do realize that printing is the only way out of having a depression like you have never seen ??
I would agree with that…However, we are not doing anything to solve the problems we have as a country that would allow the printing to stop…We need lots of fundamental changes….Less Federal Government both with departments & laws…Less people riding in the wagon and more people pulling it…
Nonsense.
A “depression” is LiarTalk for deflation and a deflation is a wallets best friend.
Who doesn’t like lower prices?
First there was no seed to be had. Then nobody had any money to buy seed.
Debt deflation is a complicated phenomenon associated with the end of long-term credit cycles. It was proposed as a theory by Irving Fisher (1933) to explain the deflation of the Great Depression.[14]
Who doesn’t like lower prices?
As long as you get to keep your job and your salary isn’t reduced, deflation is great!
Everyone already lost their job my friend.
The time to remove the price fixing efforts has come.
ben bernake kept everyone out of a soup line.
How can that be considering soup kitchens are seeing the highest level of activity since the 1950s?
“ben bernake kept everyone out of a soup line.”
Bad since garbage can fires are a great place for networking.
ben bernake kept everyone out of a soup line.
the soup lines are the SNAP cards now. and their numbers are growing.
at least their bellies are full.
I thought Sweet Joey posted something here saying no one ate Campbell’s soup anymore. Maybe those free soup kitchens are why.
Common Core will set these racist peanut butter and jelly eating Fourth graders straight.
Textbook Tells Fourth Graders ‘White Voters’ Were Unlikely To Support Black President
by Mikael Thalen
November 22nd, 2013
Fourth grade students in Dupo, Illinois assigned to reading a Common Core approved biography of President Barack Obama are being told that all white voters were unlikely to vote for a black president due to racism.
“But some people said Americans weren’t ready for that much change. Sure Barack was a nice fellow, they said. But white voters would never vote for a black president,” the book reads.
The book, approved for children as young as seven years old, also goes on to specifically mention controversial comments made by President Obama’s former pastor Jeremiah Wright, while also claiming that the president has worked to bring whites and blacks together.
The book appears to follow the viewpoint that all opposition to the president is based purely on race, which has reached near-comedic levels in its absurdity. Some are now even claiming that opposition to Obamacare is pure racism, despite 55 percent of the public being opposed to its disastrous roll out as millions get dropped from their current providers.
The book raises even more questions over what exactly children are being taught through the Common Core approved curriculum, which has continued to produce inaccurate and highly questionable material.
http://www.storyleak.com/textbook-tells-fourth-graders-white-voters-unlikely-support-black-president/ -
Uh, what year is it again?
It is the year of any communist regime.
Control the education and you will eventually control the masses.
Under Bush, we were not feeling the champagne wishes and caviar dreams either. If it comes down to color of a person’s skin and not their policies, attitudes and maybe questionable arrival from obscurity, then OK, we are back in the 1960’s again and again. I think much of everything is a distraction. You only have so much attention span and money and time and care to allocate to striving for survival and good times. WE get knock-out punches all along the way, every era, every segment of society. The hell with politicians.
“Control the education and you will eventually control the masses.”
And the lunches.
Bad News: Peanut Butter And Jelly Sandwiches Now Racist…
Via Portland Tribune:
Verenice Gutierrez picks up on the subtle language of racism every day.
Take the peanut butter sandwich, a seemingly innocent example a teacher used in a lesson last school year.
“What about Somali or Hispanic students, who might not eat sandwiches?” says Gutierrez, principal at Harvey Scott K-8 School, a diverse school of 500 students in Northeast Portland’s Cully neighborhood.
“Another way would be to say: ‘Americans eat peanut butter and jelly, do you have anything like that?’ Let them tell you. Maybe they eat torta. Or pita.”
Guitierrez, along with all of Portland Public Schools’ principals, will start the new school year off this week by drilling in on the language of “Courageous Conversations,” the district-wide equity training being implemented in every building in phases during the past few years.
Through intensive staff trainings, frequent staff meetings, classroom observations and other initiatives, the premise is that if educators can understand their own “white privilege,” then they can change their teaching practices to boost minority students’ performance.
Last Wednesday, the first day of the school year for staff, for example, the first item of business for teachers at Scott School was to have a Courageous Conversation — to examine a news article and discuss the “white privilege” it conveys.
Most of the staff are on board, but there is some opposition to a drum class being offered to middle school boys of color at Scott School.
Keep reading…
http://weaselzippers.us/2012/09/10/bad-news-peanut-butter-and-jelly-sandwiches-now-racist/ - 28k -
This doesn’t even touch on the right-wing extremist chocolate milk drinkers.
Don’t even get me started on Macaroni and Cheese.
All you have to do is read this blog to know that the statement in the book is correct.
“All you have to do is read this blog to know that the statement in the book is correct.”
“But some people said Americans weren’t ready for that much change. Sure Barack was a nice fellow, they said. But white voters would never vote for a black president,”
Obama May Not Need To Repeat 2008 Support From White Voters To Win
by Frank James
October 26, 2012 6:11 PM
Still, four years ago, Obama did manage to get a very respectable 43 percent of white voters to choose him over Goldwater’s Senate successor from Arizona, Sen. John McCain.
http://www.npr.org/blogs/itsallpolitics/2012/10/26/163730734/obama-may-not-need-to-repeat-2008-support-from-white-voters-to-win
All you have to do is read this blog to know that the statement in the book is correct.
I don’t care about Obama’s skin color. If we had a libertarian-oriented conservative black, latino, or asian candidate, I would vote for him. What I care about is that Obama is a Marxist and he is destroying everything he touches.
The education secretary recently made comments along the lines of “opposition to the common core consists of white suburban moms who just discovered their child isn’t as bright as they thought and their school isn’t as good as they thought”.
Soccer moms finally get introduced to government thugs.
Have some peas with that.
And keep voting democrat.
Get the Federal Government out of the education business…Give the states the right to develop their own policies hopefully through state initiative and not legislation…
Why are spelling bees almost always won by home-schooled kids?
I thought Indians always won them.
In all the spelling bee movies I have seen - the black girl always wins.
Racis
Goon I know you’re bein’ facetious, but memorizing spelling was considered an edumacation in the olden days, just like readin ritin and rithmatickin.
Is that true though?
http://en.wikipedia.org/wiki/List_of_Scripps_National_Spelling_Bee_champions
Home schooling is not-infrequently driven by religious beliefs, and I don’t recall most of the recent winners - Indians - being home-schooled. But there is certainly a non-trivial contingent of home-schoolers who do represent in spelling bees.
Next on the obama agenda…
I predict soon that the average Venezuelan will be shivering in the dark with no food in the kitchen…
And still half the country will vote for even bigger and bigger government.
——————————–
Venezuelan president tries out new emergency powers
AFP News | November 22, 2013
Venezuelan President Nicolas Maduro exercised new emergency powers for the first time Thursday, signing decrees limiting business profit margins and tightening regulation of imports.
He acted as part of a so-called “economic war” against a crisis for which he blames the opposition “bourgeoisie” and imperialism.
Under new powers granted to Maduro on Tuesday, the two new laws aim to control prices and profits in the business sector and closely monitor imports and exports and hard currency that comes in from oil sales, Venezuela’s main source of revenue.
I predict soon that the average Venezuelan will be shivering in the dark with no food in the kitchen…
Shivering? Uh … the place is in the tropics.
Starving? Not likely, they grow their own food.
No flat panel TVs at the stores? Yeah, probably.
FWIW, I lived in Mexico City during Mexico’s most leftist years. While consumer goods (like TVs) were pricey and of poor quality, Mexicans were not hungry nor shivering in the dark.
The Mexodus really took off when the Right leaning PAN came to power. That’s also when the drug cartel violence began to spiral out of control.
Shivering? Uh … the place is in the tropics.
Ever been to Central and South America? It does get cold. Even in Venezuela. Cold to many of them is in the 70s. You can get hypothermia in the low 60s. But you are the big American who knows everything.
Starving? Not likely, they grow their own food.
So did the Ukraine until socialism starved millions
So did Rhodesia until socialism starved millions
So did Cambodia until socialism starved millions
So did North Korea until socialism starved missions
So did Cuba - they are just really hungry
etc.
No flat panel TVs at the stores? Yeah, probably.
No shoes, no electricity, no running water, no sewage, food quotas, no clothing, so transportation, etc. But at least they are “equal” in misery. TVs has a 5 year wait. A car that will break down on the way out of the dealership will have an 8 year wait.
True story. I was in Poland when it was still communism. Poland was considered an “advanced” and “progressive” state of the USSR back then. There was a crowd of well dressed women crowding a table in one of the best department stores in Warsaw. I pushed way to the front to see what could be this great deal that had hundreds of “middle class” ladies pushing and fighting each other for a chance to buy something.
It was for a box of Chinese pencils.
Socialism and communism summed up in a 5 minute lesson for me.
So did the Ukraine until socialism starved millions
So did Rhodesia until socialism starved millions
So did Cambodia until socialism starved millions
So did North Korea until socialism starved missions
true, and you can add the first colonizers of the USA. they tried ’sharing/communism’ for the first 3 years and nearly starved to death. they gave up and it became every man for himself. they never starved again.
“you can add the first colonizers of the USA”
Tis true.
Visit Jamestown colony sometime. It’s an eye opening history lesson.
It’s an eye opening history lesson.
yep, they had it rough until the rejected collectivism.
the lesson always is that socialism/communism always fails eventually. and it costs heavy in suffering while doing so.
The Mexodus really took off when the Right leaning PAN came to power.
What year was that? I read somewhere that NAFTA was a big factor. Small Mexican farms were forced to compete with giant American agribusiness. Mexican farms failed in large numbers, driving people north to the border.
The PAN wrestled control from the PRI about 13 years ago. Prior to that the PRI began to lean more to the right (Carlos Salinas, who signed the NAFTA treaty, was the least leftist PRI president), but for them it was a case of too little, too late.
After 12 years of conservative PAN rule, Mexicans restored the PRI to power, mostly because of dissatisfaction with the drug cartels and the general lack of public safety. When I lived in Mexico City in the 70’s and 80’s I felt relatively safe. These days I wouldn’t set foot in Mexico and I always discourage people from visiting Mexico these days.
Drug violence took off in Mexico because of efforts by the US Navy and Coast Guard to shut down drug running routes to the US by sea.
It had nothing to do with which direction the Mexican government in power was leaning…
“FWIW, I lived in Mexico City during Mexico’s most leftist years. While consumer goods (like TVs) were pricey and of poor quality, Mexicans were not hungry nor shivering in the dark.”
Yeah, you can get a free education and free health care in Cuba, but then what? You still live in a country with absolutely no opportunity.
Buddhist Extremists vow to unleash tranquility on West.
http://tinyurl.com/mumfqk7
Dammmit….
http://tinyurl.com/mumfgk7
The only people who seem not to get along with Buddhists…
UN tells Myanmar to quell Buddhist attacks on Rohingya Muslims
Yahoo! News · 2 days ago
Buddhist mobs attack Muslim homes in Myanmar, one dead
May 29, 2013 · LASHIO, Myanmar (Reuters)
Buddhists Attack Sri Lankan Mosque, 12 Injured
Aug 11, 2013 · COLOMBO, Aug 11 (Reuters)
LPS “First Look” came out today.
Mississippi is now the leader when it comes to non-current loans (Florida is now second). This must mean that there is more distressed housing flowing into the market in Floriday…can anyone confirm?
California is #1 in terms of delinquencies and defaults.
“California is #1 in terms of delinquencies and defaults.”
+1 California is #1 in snap and welfare too; way out front!
In connection to the posts yesterday.
UnitedHealth Group Inc. sent some New York City physicians contract amendments as recently as this month setting rates well below what doctors normally see from private insurance, including less than $40 for a typical office visit and about $20 for reading a mammogram, according to confidential documents reviewed by The Wall Street Journal.
We have 50% unemployment in lawyers and falling wages.
We have falling wages for physicians. I wonder how hard it will be to pay off those 1-200k loans making less than 40 dollars a visit, I’m assuming they have to pay for a nurse and a room with that 40 dollars. Likely making less than my mechanic.
We have 50% unemployment in lawyers and falling wages.
We have falling wages for physicians. I wonder how hard it will be to pay off those 1-200k loans making less than 40 dollars a visit
This is what happens when governments set prices that have no basis in reality. It is central planning, and it is socialist… no different than what we’re seeing in Venezuela.
These socialists and technocrats need to start hanging by the neck from sturdy-limbed trees…
Except it’s a corporation using it’s huge market presence to dictate prices so that the CEO can continue to rake in 100,000,000 a year.
Fortunately this is still a free country… As doctor remuneration for insurance patient visits declines, the doctors are free to exit the insurance contracts and switch to cash pay. Of course, this means you won’t be able to see the doctor you want using your insurance, but those doctors tend to be smart people and will probably figure out a way to get healthcare to people while still making a decent wage.
except that it’s not just the doctors fees that need to be low when people go to see MD”s who don’t accept insurance. Try buying a cardiac stent or chemotherapy or a hip prosthesis without insurance.
Crushing the pay of doctors and nurses and medical infrastrucure will have a massive effect on local economies. It is one of the ways money is distributed across the country. It is much more likely to trickle down to restaurants car dealers furniture stores etc as opposed to a bank bail out or building 100 million dollar fighter jets and fighting wars.
Nice article in atlantic on coming housing crash. Mostly focusing on demographics and complete coming collapse of suburbia.
Read it.
They’re forecasting what is already happening. Millions of expiring boomers, many with 2 or more depreciating houses, cannot find buyers.
there are oodles of buyers flush with cash. janet yellen said inflation is tame and QE is working.
How can that be when housing demand is at 1997 levels and falling?
“Nice article in atlantic on coming housing crash.”
+1 Turn to pp34, or…
http://www.theatlantic.com/magazine/archive/2013/12/the-next-housing-crash/354689/
On 22 November 1963 did somebody important die?
Amusing Ourselves to Death: Huxley vs Orwell
http://www.highexistence.com/amusing-ourselves-to-death-huxley-vs-orwell/
It’s what technology wants.
First we need comprehensive immigration reform, then we can give out a government-guaranteed basic income and that should keep the economy humming.
Giving All Americans a Basic Income Would End Poverty
By Danny Vinik
Nov. 17 2013 11:25 AM
A simple idea for eliminating poverty is garnering greater attention in recent weeks: automatically have the government give every adult a basic income.
The Atlantic’s Matt Bruenig and Elizabeth Stoker brought up the idea a few weeks ago when they contemplated cutting poverty in half, and Annie Lowrey revisited it in today’s issue of the New York Times Magazine.
Real wages have been stagnant in America for decades now and income inequality has grown immensely. In the aftermath of the Great Recession, it’s only gotten worse. The Census Bureau reported in September that the 15 percent of Americans (46.5 million) live below the poverty line. Government benefits like food stamps and TANF help lift some of them above the line, but millions still live below it.
So here’s what you need to know about it.
How would it work?
It’s exactly how it sounds. The government would mail every American over the age of 21 a check each month. That’s it. Everyone is free to do what they like with it.
http://www.slate.com/blogs/business_insider/2013/11/17/american_basic_income_an_end_to_poverty.html - 117k -
“Giving All Americans a Basic Income Would End Poverty”
Being poor isn’t about a lack of money. The additional money would only serve to increase their misery, e.g., more obese, more drug addled, etc., but a land grant subsistence farm would offer the opportunity to learn life skills. We need to think outside the box.
Government-mandated redistribution is nothing but Communism by another name. Go ahead and give everyone a “living wage” paid for by those who actually work and create value in our society and see how fast things break down.