Bits Bucket for April 29, 2014
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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Visitors by plane to the sandwich isles down 5% yoy in March; visitors by cruise ship down 50% yoy.
C’mon haoles, all I heard this whole winter was how cold it was on the mainland and yet no one booked a trip and brushed up on their hula! I got ukuleles and slippahs to sell hea!
Let’s see.
Food prices are up.
Energy prices are up.
ObamaCare and medicine are up.
Taxes are up.
Education prices are up.
Salaries are down.
Whoopie! Let’s go on a cruise!
Why not liberate some of your home equity wealth gains to pay for the trip?
You only live once!
janet yellen thinks rising prices are good! she thinks they show a ‘heating’ AKA ‘improving’ economy. of course yellin is keynesian, so just about everything she believes regarding economics is bass ackwards.
Book a trip on the Norovirus Express? You can keep your poi — in fact, the cruise ship probably would.
oxide,
Is there a flu-like virus going around your office? I woke up this morning with a temp over 101 and feeling like I had been run over with a steam roller. I was wondering if you had a take on how long this one is going to last. Thanks.
I’m not Oxide but I got the flu anyway, and for me it lasted for a day-or-so.
If it only lasted a day-or-so, you most certainly didn’t have the flu, aka influenza…
All depends if you got the Tamiflu quickly…in which case, you might just be back on your feet faster than you think (speaking from experience).
No flu viruses that I know of, but if I am correct, my office is a long way from yours.
Viruses run around this town like nobody’s business. If anyone in your office has young kids or uses public transportation, the stuff from DC will get to you eventually. Just curious if there is something with known parameters making the rounds.
Get well soon!
Thanks, Slim. I’m trying.
Visitors by plane to the sandwich isles down 5% yoy in March
What is the breakdown on Asian vs. North American visitors? Which one declined the most?
Are you worried about the Chinese economy?
Survey: Chinese economy worrisome
By Associated Press
Published: April 28, 2014, 4:57 PM
WASHINGTON — Just as the global economy has all but recovered from debt-fueled crises in the United States and Europe, economists have a new worry: China. They see a lending bubble there that threatens global growth unless Beijing defuses it.
That’s the view that emerges from an Associated Press survey this month of 30 economists. Still, the economists remain optimistic that Beijing’s high-stakes drive to reform its economy — the world’s second-largest — will bolster Chinese banks, ease the lending bubble and benefit U.S. exporters in the long run.
“They’ve really got to change the way they do business,” said William Cheney, chief economist at John Hancock Asset Management. “But they have a good track record of doing just that. I’m an optimist about their ability to make this transition.”
The source of concern is a surge in lending by Chinese banks. The lending was initially encouraged by the government during the 2008 global financial crisis to fuel growth. Big state-owned banks financed construction of homes, railroads and office towers. But much of the lending was directed by local officials for pet projects rather than to meet business needs.
On Monday, the International Monetary Fund issued a warning about China’s private debt. It released a report citing “rising vulnerabilities” in China’s financial system, including lending outside traditional banks. Lending by that “shadow” banking system now equals one-quarter of China’s economy, the report said.
The IMF also pointed to recent defaults in credit card and other debt sold to investors by banks and heavy debts owed by local governments.
If it continues, “this could spark adverse financial market reaction both in China and globally,” the IMF said.
The bubble has caused land prices in China to double in five years, according to an estimate by Nomura, a Japanese bank. Outstanding credit surged from 130 percent of the economy in 2008 to 200 percent in 2013, according to Capital Economics, a forecasting firm.
When debt has built up that fast in the past — as in the United States during the housing bubble — financial crises have typically followed.
“That should be setting alarm bells off,” said Mark Williams, chief Asia economist at Capital Economics.
When debt finances excessive building, eventually too few people or companies are willing to buy all the houses, apartments and offices. That can send prices sinking and trigger loan defaults by developers and property owners. Banks typically then curtail lending, thereby slowing growth.
Most economists think China’s government would bail out its state-owned banks and provide enough money so they could continue lending. It would also support any companies whose bankruptcy would threaten growth.
“I don’t think anybody important is going to be allowed to go broke,” Cheney said.
…
“….China. They see a lending bubble there that threatens global growth unless Beijing defuses it.”
Defuse it? That ship sailed in 2008. The only thing they can do now is hold onto the side railing and make ready the life rafts.
‘ “I don’t think anybody important is going to be allowed to go broke,” Cheney said.’
The laws of financial gravity don’t apply in China? They probably think “Shadow Banking is Contained”. Just like “Subprime is Contained”
The question I have is how will this impact the world markets and more importantly, the U.S. market?
“The question I have is how will this impact the world markets and more importantly, the U.S. market?”
Look no farther than the all-cash Chinese investors who recently snapped up Sacramento investment properties at a premium. Do you expect them to stick around once China’s economy is in a full-blown meltdown?
No. Why should I be?
“No. Why should I be?”
+1 Ditto.
“No. Why should I be?”
+1 Same.
No. Why should I be?
Because it could precipitate a global economic crisis?
Don’t get me wrong, I would love to see China get some comeuppance for its “growth at any cost” policies. But there is no way we won’t be affected.
In March, the Bank of England published an excellent, very clear paper titled Money Creation In The Modern Economy.
It explains how, contrary to what people might think, a bank doesn’t make loans, by taking the deposits of a client and then lending those deposits out. Instead, the bank creates money out of thin air. If you want to get a mortgage for a house, and the bank deems you to be credit-worthy, it puts the amount of money you need into an account. That money in your account becomes a liability for the bank. And the mortgage it now owns is an asset of the bank.
http://www.businessinsider.com/where-does-money-come-from-2014-4
Are you Darrell in Phoenix?
Uh-oh. Here comes the Ghost of Darrell…
Buying a house today will be the worst mistake of your lifetime. Don’t do it.
When should a person buy a house? 2015? 2020? Should I wait 30-years? I could buy house all cash, debt free in 30-years if I saved up enough money.
The choice to live within one’s means or beyond is available every day, until the day you sign a 30 mortgage.
BTW, are those 4% loans on your 6 supposed houses GSE guaranteed?
Why does he always run away when I ask that question???
That’s what frauds do when confronted.
When?
When prices stop falling.
even worse than getting married goon
Which still isn’t as bad as having children.
“Love: a temporary insanity curable by marriage” — Ambrose Bierce
“How to be married: find a woman you hate and buy her a house; because that’s how it will end up anyway.”
— one of my instructors
Ox, nobody really gets married to a woman……but you really do get married to your dog.
Some of my best moments are watching the married people walk their dog at 6am in a blizzard…..then take pictures and post it on FB….Its hilarious!
“How to be married: find a woman you hate and buy her a house; because that’s how it will end up anyway.”
— one of my instructors
Sounds like someone went through the divorce court meat grinder and lost his shirt.
I think it’s actually a Rod Stewart quote.
Hey Carl, yesterday we had a conversation about wages in China. How well are workers paid? Who can afford houses/apartments at $740/sq ft?
I think it’s actually a Rod Stewart quote.
I’m sure that old Rod lost a few houses along the way.
Hey Carl, yesterday we had a conversation about wages in China. How well are workers paid? Who can afford houses/apartments at $740/sq ft?
Saw your comment there this morning. Posted the following:
Sorry, having a hard time keeping up over the weekend and spilling into Monday. We tried to ask some of the people we worked with down there about these sorts of things, but we didn’t get far. The language barrier didn’t help. So the article actually answered some of my questions. I was at a QSMC factory just down the road from a Foxconn factory. Our building did not have any nets.
The workers I saw seemed very young on average, even taking into account that our brains associate smaller size with youth. The environment was mildly military in nature to me. But the average worker seemed pretty happy to be there. What I didn’t understand is that all those young single people together…I thought it would be a meat market. But they seemed to mostly be trying to stay single and make money and marry someone from the hometown when they were done.
Carl wins the internet:
http://www.brainyquote.com/quotes/authors/r/rod_stewart.html
Whoohoo…a mind for useless trivia finally comes through for me.
What I didn’t understand is that all those young single people together…I thought it would be a meat market. But they seemed to mostly be trying to stay single and make money and marry someone from the hometown when they were done.
Tribalism is strong. I once worked with a gal from S Korea. She told me that there was a great deal of distrust between people from Eastern and Western South Korea. She was from the west and her husband from the east. Her father (a General) had the Korean CIA equivalent do a background check on him. The dude has a PhD from MIT, and he barely made Dad’s cut.
Had Dad said “no” and has she gone and married him anyway, she would have been disowned.
I imaging similar issues exist in China.
A realtor recently stated;
“Why bother buying a house at these prices when you can rent it for half the monthly cost”
“Dallas-area home prices are still rising at double-digit rates – up 10.1 percent from a year ago.
Nationwide prices were up 12.9 percent – surprising some analysts who had predicted more moderate annual price increases this year.”
http://bizbeatblog.dallasnews.com/2014/04/case-shiller-dallas-area-home-prices-are-up-10-1-percent.html/
Exactly. That’s why housing demand has collapsed to 20 year lows.
Back to the realtors point…“Why bother buying a house at these prices when you can rent it for half the monthly cost”
Your thoughts?
Crime is falling on airstrip one according to the government; mean while in the real world
Police officers despise fiddling crime statistics, says expert
Criminologist says many officers in England and Wales scandalised by widespread manipulation of figures
http://www.theguardian.com/uk-news/2014/apr/12/police-officers-fiddling-crime-statistics-england-wales-figures
and from my own perspective my son has had a motor bike nicked and I’ve had my car go astray (and it’s still straying) in the last three months.
Well, heck, they’re way too busy arresting people like Paul Weston for quoting Winston Churchill in public to worry about actual crimes.
http://vladtepesblog.com/2014/04/27/this-is-the-first-interview-paul-weston-gave-after-his-release-from-jail-on-a-uk-speech-crime/
I understand now why Obama sent that bust of Winston Churchill packing.
The happiest day of Winston Churchill’s life was December 7, 1941.
Whew, really. And if people don’t think England still calls the shots for the US…
Deep down, way deep down in the British psyche we are thought to be colonial subjects.
Spend some time with and ex-pat Brit and you will gain an understanding of what I mean.
“Spend some time with and ex-pat Brit and you will gain an understanding of what I mean.”
I have, and it was a most interesting experience. Especially when you’ve got some Irish blood.
Many English have Irish ancestors, but the real kicker is actually we are the same.
Britain and Ireland are so thoroughly divided in their histories that there is no single word to refer to the inhabitants of both islands. Historians teach that they are mostly descended from different peoples: the Irish from the Celts, and the English from the Anglo-Saxons who invaded from northern Europe and drove the Celts to the country’s western and northern fringes.
But geneticists who have tested DNA throughout the British Isles are edging toward a different conclusion. Many are struck by the overall genetic similarities, leading some to claim that both Britain and Ireland have been inhabited for thousands of years by a single people that have remained in the majority, with only minor additions from later invaders like Celts, Romans, Angles , Saxons, Vikings and Normans.
The implication that the Irish, English, Scottish and Welsh have a great deal in common with each other, at least from the geneticist’s point of view, seems likely to please no one.
http://www.nytimes.com/2007/03/05/science/05cnd-brits.html?pagewanted=all&_r=0
I don’t think it is a matter of genetics, I think it is a matter of attitude, a matter of caste. Something like: Either you are a Brit or you are not.
It’s a private club and either you are a member or you are not, and one cannot choose to be a member because becoming a member or not is something that is determined at birth.
Lol, well, the NYT would certainly HOPE this would please no one, because that would mean people would get along peacefully and there’d be nothing to stir up.
I’ve never quite understood why England and Ireland started going at each other to begin with.
I do, however, have a great grandmother who was an Irish schoolteacher and got caught teaching kids and for that was stripped to the waist and scourged by English soldiers. My father always proudly remembered the weals on his grandmother’s back.
I like looking at the town names on maps of England and Ireland. You can almost exactly see the limits of the A-S invasions.
and from my own perspective my son has had a motor bike nicked and I’ve had my car go astray (and it’s still straying) in the last three months.
Just out of curiosity, how much does auto insurance cost in the UK?
It depends the eldest was quoted over £4000 to ensure a car but he is under 21and it was their way of saying don’t bother. Mine was just over £300 I fear it will increase as they have told me my risk has increased
The Push for CNG: Full Steam Ahead by William Tucker, Fuel Freedom
The effort to substitute compressed natural gas for foreign oil in our gas tanks is moving ahead on all fronts across the country, in scores of municipal departments that are converting their fleets, in new gas stations that are opening and with entrepreneurs who are looking for ways to speed up the conversion.
But much of Clean Energy Fuels’ real success is coming from the fleet conversion for major shipping firms that rely heavily on truck transportation. The company has had particular success with UPS.
.One of the first to take advantage is Houston-based Waste Management, which received an $806,000 grant from the State Department of Community & Economic Development to switch 25 of its waste and recycling collection vehicles to CNG. Pennsylvania-American Water Company has also announced plans to convert its fleet with a $315,000 state grant. American Water, the largest water utility in the state, operates out of Scranton.
For what it’s worth, CNG is probably going to be a major transportation fuel in the future, but why does the government give them $32,000 per vehicle to switch?
I don’t know, Blackhawk. I’m still skeptical about CNG from the peak-CNG side of things. Maybe a-dan would know this but if, say, half the cars switched to CNG tomorrow, including refueling infrastructure, how many years of CNG supply are there?
Many many years. I’ve read that there’s so much natural gas and the prices are so low, that oil companies aren’t even trying to develop new sources.
There are problems with infrastructure, conversion and mileage per full tank but these can all be managed I suppose.
I’ve been told that the mileage per full tank isn’t comparable to gasoline cars. Who knows? Maybe things have to get worse before they get better.
“if half the cars switched to CNG tomorrow, including refueling infrastructure, how many years of CNG supply are there?”
Not the 100 that we are estimating now. But if CNG is thought of as a bridge between what he use for fuel now and how we do it in the future, it’s a great investment.
And it’s quite possible that the “100 years worth” of natural gas is too low, as new extraction techniques are invented. That one’s a big maybe, but it wouldn’t surprise me at all.
How well-educated is your home county?
“The suburbs of Denver, Boston, Philadelphia and San Francisco are home to the highest percentage of college graduates in the country, while fewer than one in eight residents of large swaths of Appalachia and the rural South have attained college degrees.”
http://www.washingtonpost.com/blogs/govbeat/wp/2014/04/29/how-well-educated-is-your-home-county/
lol, and look what all that higher eddication has done for the country.
Gimme the South.
It’s been all downhill since they started letting blacks and women learn to read.
Well, of course the elitist journal of record would dump on the South. The South is everyone’s favorite whipping boy for the racial ills of the country, isn’t it? And yet African Americans are moving back to Dixie in droves.
Who owned the slaving ships that brought Africans to the US? Ah, yes, those intrepid New England merchants.
How many people owned slaves in Southern US back in the day? I don’t know the actual count, but there can’t have been more than 500 wealthy plantation owners (who were supplied their labor by Nawthern elites and those fine ships of theirs.)
There’s something a bit insane about forcing an entire swath of the US to pay for the sins of a relative handful of folks who have been dead over 150 years.
The “real journalists” will construct the narrative to frame the correct attitude about the South, thank you.
And if you disagree, you are racis.
I’ve often wondered why we don’t shove slavery right up the posteriors of England, France and Italy. England with its sugar plantations in the Caribbean, France in Haiti and Rome had the most extensive and sophisticated system of slavery in history, not to mention the longest lasting.
I mean, as long as we’re going to hold the present day people of an area accountable for sins committed by a handful centuries ago.
Africans enslaved plenty of other Africans in Africa.
Domestic imperialism is hardly limited to the United States.
That’s unpossible, because whites are “ice people” and Africans are “sun people”. I wrote my thesis for my M.A. in Obama Studies on this topic if you’d like to know more.
http://en.wikipedia.org/wiki/Leonard_Jeffries
I mean, as long as we’re going to hold the present day people of an area accountable for sins committed by a handful centuries ago.
No one is doing this.
“No one is doing this.”
Sez you, High and Mighty. The NYT has a piece about Donald Sterling peppered with references to the South and plantations, trying to conflate him with that part of the country and by extension, its inhabitants.
Comment by MightyMike
2014-04-29 07:53:01
I mean, as long as we’re going to hold the present day people of an area accountable for sins committed by a handful centuries ago.
No one is doing this.
___________________________________________________
You sure about that
Caribbean nations prepare demand for slavery reparations
• ‘Our aim is to open a dialogue with European states’
• Wide range of support sought from former slaving countries
http://www.theguardian.com/world/2014/mar/09/caribbean-nations-demand-slavery-reparations
the new york times and washington post will decide what you’re allowed to think, peasant…
Sez you, High and Mighty. The NYT has a piece about Donald Sterling peppered with references to the South and plantations, trying to conflate him with that part of the country and by extension, its inhabitants.
Do you have a link for this? Does the text actually attempt to “hold present day people of an area accountable for sins committed by a handful centuries ago” as you wrote above?
Look it up yourself, High and Mighty. It’s there, complete with the plantation similes and everything. You know how to do it, doncha? All you have to do type 3 Ws and then New York Times and then “dot.com”. Or you can just do a google search.
And then you can draw your own conclusions, which I can assure you, won’t agree with mine, but then again, I’m not on here to sniff your butt.
There are a couple of mentions of plantations but nothing blaming anyone for things that happened over a century ago. That’s not a conclusion. That’s the text that’s out there.
Only a couple of mentions, huh.
I also see the NYT has an article saying Rio Summer 2016 Olympic prep is terrible and they might not be able to pull it off. Paging Dr. Lola.
Donald Sterling sure thinks so. But as long as the women put out and the blacks can jump and bounce a ball, life’s good.
You two guys, hit the showers.
Never trust a woman by the name of Vanessa. (With apologies to Redgrave).
And beware of “models”. Unless the person in question actually gets paid for fashion runway or magazine work.
Stiviano blew it. Pun intended. You have to put up with a lot if you’re going to be a kept woman, much of it unpleasant. But them’s the breaks. Well, she can always go into porn for a couple of years or so.
When I heard the ex-wife had commented, I figured she’d said the usual things to defend him “I know him and he’s not like that yadda yadda” but she threw him right under the bus:
I laughed. These people…he (or she) must be a piece of work that even after divorce she’s still trying to stab him.
In other words, move to the south. There is less competition there.
“When is housing massively overpriced? It’s quite simple. When the price of the house is in excess of the cost to build (lot, materials, labor and profit), less depreciation for a used house.”
Exactly. No need to confuse it. Our cost to build a SFR is right around $55/sq ft, with profit.
Not sure what your labor costs are as part of that equation, but in my (limited residential) experience, I can get solid, dependable contractors for $25/hr and that as a percentage of the job, labor tends to run about 50-60% of the job. This is in high-cost Massachusetts…
Regarding that Toyota HQ moving out of California. I know very well the location in Torrance, because I worked in that area for many years.
Honda is also in the neighborhood, although a smaller site.
According to the guys on KFI 640 as I was driving home from work yesterday, 1,000 people are moving to Texas. 4,000 people either do not want to go there or were given the heave ho.
But 5,000 people moving out of that area near 190th and Western in several buildings. The radio announcers say that no one is going to replace those 5,000 people anytime soon. Moreover, California is so anti business that Toyota did not even give California a chance to negotiate.
I guess it would not be as big a punch in the gut if Toyota moved to Illinois. But moving to Texas is a big statement.
I read somewhere for every engineering job, there are two more jobs created. Well I’m not sure those 5,000 people are engineers, highly doubt it. But it probably would be safe to say there is one job created for every Toyota job. The reversal is also true. Gardena’s Artesia Blvd has all kinds of restaurants feeding hungry Toyota employees. Old Torrance is a smaller place and will certainly suffer, although they get most of their business from Honda employees.
My former client is vacating the offices they had for many years - in that area closer to Honda. At its peak in 2006 there were about 250 of us there in four buildings. We dropped down to two buildings by 2012. Now they are moving to El Segundo at the end of this week.
So in that area, perhaps 10,500 jobs will vanish …POOF! It is already a grimy area. You can bet the lease costs will be pressured down. Housing costs in the Torrance area will plummet. Gardena is already grimy and could go the way of Inglewood.
Welcome to progressivism.
“I guess it would not be as big a punch in the gut if Toyota moved to Illinois. But moving to Texas is a big statement.”
I wonder how many other Asians and Asian companies will take this as their cue to leave California.
Yes, that pretty much sends a powerful message. I personally wouldn’t want to live in Texas, but I’ve always found the people from Texas that I’ve dealt with personally to be absolutely delightful: intelligent, gracious, forthright, etc. Almost without exception.
Remember what Gen. Sherman said about the choice between living in hell vs. Texas. He said he’d prefer to live in hell and rent Texas.
Sherman didn’t have A/C.
Is Texas turning into California?
I could probably list at least ten relatives or personal acquaintances who have moved from California to Texas in the past five years, but none going the other direction. And I believe this reflects a broad demographic trend, not just my personal experience.
My progressive boss reminds me when I boast of Arizona low taxes and gas priced 70 cents per gallon less that I am higher paid in California. He is right on that. And a larger company bought my boss’ company. We were told yesterday we will be better paid. We are all cautiously optimistic. Staying in Irvine for the time being.
“I am higher paid in California.”
I said this before: One should earn and save in a high wage/high cost state then after his earning days are over move to a low wage/low cost state.
Or a country. If you are from, say, the Philippines you can come here and make/save some very big bucks and then you can move back home and live like a king.
You should be in high paid jobs in low cost areas and save everything.
Welcome to the Boulder trailer court. Sort of. There are higher paying areas of course. But it’s not bad. The “save everything” part is the bigger challenge.
Dolly is right. California wages are not high enough for a California resident to save appreciably.
“Dolly is right. California wages are not high enough for a California resident to save appreciably.”
Depends on what jobs. Computer software developer pay is still going strong, and it has since the early 80s. So I’m good for now. Assuming I get a 10% increase in my salary with the new company, I’m $7,000 away (not counting paid vacation and paid for health care) from the total hourly my “pimp” at the ol job shop offered on my next gig. And hourly rates in consulting jobs are going down (except for the single case of J-J-J-joe)
I could probably list at least ten relatives or personal acquaintances who have moved from California to Texas in the past five years, but none going the other direction. And I believe this reflects a broad demographic trend, not just my personal experience.
What you need is for 10 million people to leave. That would help with the drought problem.
At least we agree on that. While we’re at it, wouldn’t hurt my feelings if about 50 million left the US and returned to their home countries, like those South of the border, in Asia, Middle East, etc. Too many people. Waaayyyyy too many people. And why we have to have a majority that favor off the hook breeding is beyond me.
That might cause a drought problem in Texas.
Is it really a trend to move from CA to Texas? I’ll ask the good old U-Haul index, 26-foot truck:
Torrence, CA to Fort Worth, TX: $2541.
Fort Worth, TX to Torrence, CA: $1225.
Well, SOMEBODY has to drive those trucks back to CA!
Who says that free-market incentives don’t work?
Yeah, but those 10 million will come to AZ and we’ll have to deal with them.
We also left California, but Texas was not on our short list of places to go. Its harsh weather was simply unappealing to us. Ditto Nevada, Arizona and the hot, humid south.
I read somewhere for every engineering job, there are two more jobs created. Well I’m not sure those 5,000 people are engineers, highly doubt it.
Right…it’s not a perpetual motion machine :-).
Worthless housing…. worthless worthless housing… it’s worth less and less with each passing day.
Have others recently experienced a significant deterioration in the quality of their HBB reading and posting experience. Within the past few days I suddenly find it takes far longer to post comments, then get back to reading other posts, due to a far longer delay while waiting for the screen to refresh.
I am wondering whether the HBB is under attack from real estate cyber terrorists?
My posts appear swifter as of late. I posted this at 11:03 AM EST.
I haven’t noticed any deterioration in performance.
Have others recently experienced a significant deterioration in the quality of their HBB reading and posting experience.
Ye — oh wait, you mean technical issues?
Still blinded by your empty purse?
It isn’t empty. It has hay in it.
BWHAHAHAHAHAHAHA!!!
I had some issues this morning, it wouldn’t load, but other sites would. A few hours later it was fine.
http://www.downforeveryoneorjustme.com/www.thehousingbubbleblog.com
Oh, and thanks oxide! You’re a peach!
The markets are not rigged, it says so right here:
http://finance.yahoo.com/news/us-sec-chair-congress-markets-152320290.html
I think I’m gonna go buy a new Toyota.
I think I’m gonna go buy a new Toyota.
Soon to be designed in Texas… and if it’s a Tundra, manufactured in Texas.
In that case I think I’ll wait.
Would you like to buy my 15 year old Honda? In today’s red hot market (the spring selling season is here!) its value is going up at least $1000 a week. Buy it now or get priced out forever!
Gee…. that sounds like a great idea! How much?
Pa. judge upholds sale of widow’s home over $6 tax bill
by Michael Winter,
USA TODAY
April 29, 2014
A Pennsylvania county judge has again ruled against a widow who lost her home because of an unpaid $6.30 interest charge for paying her school taxes late.
Beaver County Common Pleas Judge Gus Kwidis ruled that Eileen Battisti, of Aliquippa, was properly notified about the September 2011 tax sale of her home, which was valued at about $280,000 and sold at auction for $116,000. The decision last Tuesday followed an evidentiary hearing ordered by a higher court, which last April overturned his earlier ruling upholding the sale.
Battisti, who still lives in the house, told the Associated Press on Monday that she would appeal.
“I paid everything, and didn’t know about the $6.30,” she said. “For the house to be sold just because of $6.30 is crazy.”
Her attorney told the Beaver County Times that it was ” something out of the ordinary” for a home to be sold for such a small tax claim.
Beaver County’s top solicitor defended the decision.
“The county never wants to see anybody lose their home, but at the same time the tax sale law, the tax real estate law, doesn’t give a whole lot of room for error, either,” Joe Askar told AP.
http://www.usatoday.com/story/news/nation/2014/04/28/pennsylvania-widow-loses-home-6-tax-lien/8432411/
Last paragraph is amusing. Bank of America is “negotiating” with the Justice Department over penalties. But, this woman comes up 6 bucks short - a pack of cigarettes - and she loses her house.
The public keeps voting for the people who make this happen.
“The public keeps voting for the people who make this happen.”
People are smart.
The reason the middle class gets squeezed is because they are easy to squeeze. The living-off-capital-gains wealthy - enough money to buy politicians. The poor - they don’t have much to be taken. Middle class - that’s where the money is. And so easy to shake down.
And take the unfortunate in this story. Loses his house to local government for 134. Why? Because they can.
Left With Nothing
By Written by Michael Sallah, Debbie Cenziper, Steven Rich
September 8th, 2013
Washington Post
On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.
Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.
All because he didn’t pay a $134 property tax bill.
http://www.washingtonpost.com/sf/investigative/2013/09/08/left-with-nothing/
Left With Nothing
and he probably doesn’t know why it all happened.
when he was in the marines he would have probably bet his life that it never would happen to him.. here, in his own great country..
“But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.
“As the housing market soared, the investors scooped up liens in every corner of the city, then started charging homeowners thousands in legal fees and other costs that far exceeded their original tax bills, with rates for attorneys reaching $450 an hour.”
Note: The $134 tax bill didn’t stay at $134, it grew into thousands. And because there was no way Bennie Coleman could raise thousands he ended up losing his home.
If there was a way for him to raise these thousands then Bennie Coleman would have been able to keep his home and the investors, who paid $134 for the tax lien, would have turned their $134 into the thousands that Bennie Coleman would have handed over to them.
So, really, it was a no lose situation for the investors: They either get their enormous return on their $134 investment directly via cash that Bennie Coleman hands over to them or they get their enormous return on their $134 investment by taking possession of the house.
Is this a great country or what?
The trick, the key, to making all this work is pumping up the $134 tax bill way up to an amount that becomes unpayable.
If the tax bill was kept at a manageable $134 then Bennie would have been able to keep his home because, even for someone like Bennie, getting hold of $134 is doable. But getting hold of thousands is not doable.
In the game of “Gotcha” he who makes a slip, no matter how small the slip, loses to those who know how to work the game.
Plus, the game works best when their are no other liens against the house - no mortgage, no nuthin’ - only the tax bill. In such cases settling the tax bill alone gets the investors the house.
Which means those who do all the right things MOST of the time (i.e. paying off their mortgage) are MOST vulnerable to getting hosed if they happen to make a slipup somewhere, in this case a slipup of not paying a tax bill.
And if they never get the tax bill in the mail in the first place, perhaps the tax bill gets “lost” in one manner or another before it gets to them? What then?
The beauty of the situations in this case is they were both paid off houses.
Votes aren’t cheap. State and local politicians need cash too. They can’t print money. So they gotta get it where they can.
I own a house free and clear. I didn’t get a tax bill for two years. I called every county department I could think of to get the bill. They would all refer me to some different department. Some of them had an incorrect address for me. I gave them all my correct address, but they never would fix it in their system. I know this because I would call back a week later, and they would still have the incorrect address on file.
So, after never sending me a bill and resisting all my attempts to correct the situation, they turned my tiny tax bill into a lien and sold it without ever notifying me. I somehow got an accidental notification from one of the departments that apparently was not fully in the loop on their little scheme.
I was told by the county tax assessor that there is no law stating that my property tax bill must be mailed to me. As long as they post it on a stump in the middle of town, then I am “notified”.
I told them I would hire a lawyer, and (voila) I got the full accounting in my mail box a few days later. I was able to pay the fines. I’m pretty sure it’s a racket.
I got revenge by putting their phone number up on one of those random “prank call this number” sites. Several commentators purport to have pranked them. I think one of them pretended to be a pirate. Hah.
Mr. Banker, this is beautiful.
MOAR please…
We’ve finally confirmed that Liberace is none other than the internet folk hero of the 1990’s, the one and only Goatse.
He’s still recovering from C.LA.W. last weekend.
http://www.clawinfo.org/
And his wife thinks he was in Cleveland for work…
Goon, sorry but could you warn us before posting adult links? Or not post them at all? I clicked out as soon I saw the warning, but now I fear to see what sort of ads the Almighty Flying Google Monster will cook up for me.
“This Site Contains Adult Content For A Mature Leather Oriented Audience”
That wasn’t warning enough for you? You just had to click past the intro page to see what it was. I only know about this “event” from my landlord when I was in grad school. One time I went downstairs to pay my rent and he was in the middle of dyeing his chest hair, old bears don’t want to look too old when they’re chasing young cubs like Downlow Joe
So it’s a site for people who are so old that they are now leathery? Do they sell sunscreen or something? I didn’t click in.
if I see any kind of warning, I’m not going to “click past” to see if they are kidding. I get the hell out of Dodge.
He practices on his harpsichord when he’s not at his $200 per hour job.
So, I heard a claim today that was attributed to Jonathan Gray (Blackstone):
26 times in the last 50 years, the 10-year treasury yield has gone up, including last year. In every one of those 26 years, home prices have also gone up.
If true (and it could be easily confirmed), does this make home prices generally the lagging indicator for economic cycles?
If the economy turns south, people flee to treasuries (driving yields down), and they stop buying homes and start defaulting on mortgages. When things get better, capital generally leaves treasuries (seeking risk assets, yields go up), people start to buy, stop defaulting, etc.
If true (and it could be easily confirmed), does this make home prices generally the lagging indicator for economic cycles?
Hmm … the thing is in the past they didn’t have housing bubbles like we do now around the globe.
Whatever the view (that it’s “different now” or just a different version of another economic cycle now), it does seem to call into question the view that rising interest rates directly, negatively, and immediately impacts home prices.
At a minimum, if there is such an effect, it occurs with a lag.
That depends. Is there a credit-fueled debt bubble, resulting in prices that are disconnected from all fundamentals, and unsustainable? If so, then the old mechanisms just might not apply to the current situation.
Is it “different” during a bubble? Well yes, it is different from stable. The reasons, timing, and geographical eccentricities may even differ from bubble to bubble. However, if there is a credit-fueled debt bubble right now, then it will probably exhibit similar behavior to the credit-fueled debt bubble that we thought was dead just a few years ago.
It’s a logic trap. House prices ALWAYS go up.
Not according to Case Shiller.
I think that there was a period in the mid-1990s in California when houses prices were falling even though the economy was doing pretty well and unemployment was falling. Whac-a-Bubble might remember that time.
The rock bottom housing prices in Southern California the last 25 years was 1997.
Unemployment was declining during the previous few years, true. If you were not a California home moaner, you were in fat city.
I dunno, 26 out of 50 sounds like too much of a correlation. More likely the Treasury is a measure of inflation, and house prices follow inflation.
Perhaps.
I do find it interesting that there isn’t a single example in the last 50 years where the 10-year yield rising in a year corresponded with a national fall in home prices that same year.
So, I’ll ask a question that I’ve asked before.
What matters more to the housing market:
Sentiment?
or
Interest Rates?
What matters most to any market is sentiment. If the sentiment is right you will get a market dominated by tulips or Beanie Babies or comic books.
And the other side is true: If the sentiment is not there then the market is not there. The Roaring Twenties was a market driven by sentiment and then - suddenly - the sentiment vanished and when the sentiment vanished the market vanished and the Roaring Twenties turned into the Great Depression.
Oh lord, don’t even get me started on the whole “perception is reality” bit. If your perception differs greatly from reality, then you will either learn or become irrelevant.
Prices have already started to drop. A better question would be what happens historically in years after prices have jumped in amounts like they did in the past two years?
1 in 4 homeowners regrets buying a house
By Mandi Woodruff
3 hours ago
Yahoo Finance
When Jennifer Berry, 41, purchased a home in Grand Rapids, Mich. with her husband in 2001, they had a simple plan: live there for 10 years or so, cash in on the equity and upgrade. Thanks to the financial crisis, things didn’t quite go as planned. Her husband’s business failed, they separated and she was forced to sell the home at a loss.
“Instead of gaining equity, [our home] actually lost equity and I ended up literally paying someone to buy it just so I could get out from under it and save my credit score,” says Berry, who now rents her home. “I’m looking at retirement in 20 years and thinking about having to take out a 30-year mortgage now and worry about [the upkeep] drives me crazy.”
Berry isn’t the only one suffering from homebuyer’s remorse. One out of four homeowners admit they wouldn’t buy their home again if they had the chance, according to a recent survey by real estate brokerage Redfin.
The biggest factor contributing to homebuyers’ remorse appeared to be affordability. Nearly one-third of homeowners who reported a household income of less than $100,000 said they were unhappy with their decision. In contrast, just 14% of homeowners who earned more than $100,000 said they were unhappy, according to the survey.
Younger homeowners were also more likely to have regrets. About 28% of homeowners under 65 said they regretted buying their home, compared to 14% of senior homeowners. And one in five homeowners with kids still living at home said they regretted their home purchase as well.
http://finance.yahoo.com/news/homeowners-regrets-buying-a-house-redfin-163113390.html
1 In 4? So many people are in CRATER denial…
One out of four homeowners admit they wouldn’t buy their home again if they had the chance, according to a recent survey by real estate brokerage Redfin.
I regretted buying my house within a month of buying it. But finally gathered enough $ to pay someone to buy it from me, in essence, six years later. I was 31.
The worst thing I ever did in my life was buy that house in 1990.
The Real Unemployment Rate: In 20% Of American Families, EVERYONE Is Unemployed
Michael Snyder
American Dream
April 29, 2014
According to shocking new numbers that were just released by the Bureau of Labor Statistics, 20 percent of American families do not have a single person that is working.
So when someone tries to tell you that the unemployment rate in the United States is about 7 percent, you should just laugh. One-fifth of the families in the entire country do not have a single member with a job. That is absolutely astonishing. How can a family survive if nobody is making any money? Well, the answer to that question is actually quite easy. There is a reason why government dependence has reached epidemic levels in the United States. Without enough jobs, tens of millions of additional Americans have been forced to reach out to the government for help. At this point, if you can believe it, the number of Americans getting money or benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million.
When I was growing up, it seemed like anyone that was willing to work hard could find a good paying job. But now that has all changed. At this point, 20 percent of all the families in the entire country do not have a single member that has a job. That includes fathers, mothers and children. The following is how CNSNews.com broke down the numbers…
A family, as defined by the BLS, is a group of two or more people who live together and who are related by birth, adoption or marriage. In 2013, there were 80,445,000 families in the United States and in 16,127,000—or 20 percent–no one had a job.
To be honest, these really are Great Depression-type numbers. But over the years “unemployment” has been redefined so many times that it doesn’t mean the same thing that it once did. The government tells us that the official unemployment rate is about 7 percent, but that number is almost meaningless at this point.
A number that I find much more useful is the employment-population ratio. According to the employment-population ratio, the percentage of working age Americans that actually have a job has been below 59 percent for more than four years in a row…
That means that more than 41 percent of all working age Americans do not have a job.
When people can’t take care of themselves, it becomes necessary for the government to take care of them. And what we have seen in recent years is government dependence soar to unprecedented levels. In fact, welfare spending and entitlement payments now make up 69 percent of the entire federal budget. For much more on this, please see my previous article entitled “18 Stats That Prove That Government Dependence Has Reached Epidemic Levels“.
And what is even more frightening is that more families are falling out of the middle class every single day. As a recent CNN article explained, approximately one-third of all U.S. households are living “hand-to-mouth”. In other words, they are constantly living on the edge of financial disaster…
About one-third of American households live “hand-to-mouth,” meaning that they spend all their paychecks. But what surprised the study authors is that 66% of these families are middle class, with a median income of $41,000. While they don’t have liquid assets, such as savings accounts or mutual fund holdings, they do have homes and retirement accounts, with a median net worth of $41,000.
“We don’t expect them to be living paycheck to paycheck,” said Greg Kaplan, study co-author and assistant professor of economics at Princeton University.
The American Dream is rapidly becoming an American nightmare.
When I was growing up, I lived in a pretty typical middle class neighborhood. Everyone had a nice home, a couple of cars and could go on vacation during the summer. I don’t remember ever hearing of anyone using food stamps or going to a food bank. In fact, I can’t even remember anyone having a parent that was unemployed. If someone did leave a job, it was usually quite easy to find another one.
But today, the middle class is being ripped to shreds and according to one new report there are 49 million Americans that are dealing with food insecurity in 2014.
How can anyone not see what is happening to us? America is in the midst of a long-term economic decline, but the mainstream media and most of our politicians seem to think that things are better than ever. They continue to try to convince us that “business as usual” is the right path to take.
But one-fifth of the families in the entire nation are already totally unemployed.
At what point will we finally admit that what we are doing right now is simply not working?
30 percent of all families unemployed?
40 percent?
50 percent?
If we stay on the road that we are on now, things are going to continue to get worse. Millions more jobs will be shipped overseas, millions more jobs will be replaced by technology and crippling government regulations will kill millions more jobs. The middle class will continue to shrink and government dependence will continue to rise.
Most people just want to work hard, put food on the table, pay their mortgages and provide a nice life for their families.
But the percentage of Americans that are successfully able to do that just keeps getting smaller.
Wake up America.
Your middle class is dying.
This article was posted: Tuesday, April 29, 2014 at 6:04 am
So, my parents and inlaws are retired and have no one working in their households…are they counted in this 20%?
What does the number look like if you exclude households where everyone is over the age of 65 (don’t count them in the numerator or denominator)?
What did this same number look like in the past?
“A number that I find much more useful is the employment-population ratio. According to the employment-population ratio, the percentage of working age Americans that actually have a job has been below 59 percent for more than four years in a row…”
“That means that more than 41 percent of all working age Americans do not have a job.”
As I wrote below, those 59% number includes retired people. It’s hard to find what the statistic for all working age people, say 18 to 64. For some reason, the statistic for the 25 to 54 age group is used a lot. That number is around 81%. Its peak value was around 84% in the late 1990s.
http://1.bp.blogspot.com/-zH2ZCco9yKU/UxnWUrh8J-I/AAAAAAAAeNs/5KvLzoOXy_8/s1600/EmployPop2554Feb2014.jpg
I’m tired of this “wake up America” crap. Wake up and do what? Vote for Republicans who FILIBUSTERED an anti-outsourcing bill? Go to marches and rallies? Like Occupy Wall Street did? Go to marches and rallies on the other side, like the Tea Party did? Looking at the 1% meme? I think Americans are plenty awake. The only solution is to get the money OUT of politics and good luck with that.
A number that I find much more useful is the employment-population ratio. According to the employment-population ratio, the percentage of working age Americans that actually have a job has been below 59 percent for more than four years in a row…
If you do a little googling, you will find that that 59% statistic includes everyone over the age of 16. In other words it includes a lot of senior citizens, not just people of working age. The other part of this little excerpt about 20% of families not having a job also probably includes retired people over 65.
I’m pretty sure that it used to be lower than 59%, since women didn’t often work outside the home until like the mid-eighties or nineties. I saw the post-WWII historical average somewhere, but I can’t remember it. Basically, we have more people in our society earning wages now than throughout most of our history.
Yeah, if you look at the graph that I linked to above at 2014-04-29 16:40:58, you can see that phenomenon.
You point also ties into the theme of the lame article that phony posted, which is the decline of the middle class. Some of the big changes took place during the 1970s. That was a decade of high inflation and the salaries of many men did not keep pace with that inflation. That, in turn, forced a lot of housewives to hang up their aprons and join the paid workforce.
Of course you find “employment” statistics more useful than the government manipulated “unemployment” numbers. There is an ocean between the tow. Supposedly in the 1930s unemployed meant working age and not having a job. 25% is a number I’ve seen. I’ve no idea if there was a top age cutoff on that. Hard to google up now compared to 5 years ago for some reason!
Even if you take 10% out for too-old -to-work from your 41% number, we seem to be above the rate of nonworking of the Great Depression.
Supposedly in the 1930s unemployed meant working age and not having a job
As Uncle Fed and I discuss above, that would only apply to men.
craitar
Because Obama
Always because Obama…
Everything was smooth sailing under GWB, but since this Obama, I tell ya…
Tucson posts a clipping with picture of a black man facing manslaughter for an accident while he was intoxicated, killing a 90 year old lady in the other card.
Now that’s racis. You hardly ever see any skin color ID in print of suspects, let alone their photos, unless they are white.
http://azstarnet.com/news/blogs/police-beat/tucson-man-facing-manslaughter-in-fatal-crash/article_4d648c0e-d003-11e3-9d4e-001a4bcf887a.html