Merced: Another Foreclosure, Right Here, Right Now
Submitted by
CalculatedRisk on Sat, 08/23/2008 - 2:49pm (158 comments)
in
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 26 members and 151 guests online.
Currently online
Recent Recommendations
FIRST!
He saves $2200 a month. he will have an extra $20,000 this year.
why are we trying to "save" people from foreclosure? that's a hefty downpayment saved.
Agreed - Walk away! Wall Street made home ownership an investment, so treat it as such. Move to the next best investment.
That cost differential is not unusual for california.If you are paying 3 times as much as a 'buyer' to live in an identical house,you have to have some incentive...
Gretchen on more complex problems re Fanny and Freddie.
FAIR GAME; What Will Mac 'n' Mae Cost You and Me? - NY Times
The longer the Treasury waits before doing something the worse things will get. As if they are not bad enough already. I think Paulson needs to make up his mind, and FAST.
Merced! Gateway to Fresno? Stockton?
This seems to be the wild-card in how big the mortgage losses will eventually become. That is, how many people will make the financially rational choice and just walk away when they are under water. Last year I heard many argue that it was immoral to default if one could still afford the payments. We hear that less as this crises evolves.
Merced as many other towns are caught in the developer trap. Their public officials are essentially developer interests. Even the recent memory of the travails of over-building does not prevent them from authorizing even more housing development. What can you say?
I'm taking bets on the likelihood of the landlord actually getting paid the $1,200.00.
Completed and totally OT, but outside my house smells like mildew. The inside is snug and dry.
The sunshine State has become the mildew state. The mosquitoes will surely swarm. This will cause hoards of ferriners to want to buy here. . .
Help!!!! Steve and Barry's - They're baaaaaaack
for $168MM. Who bought them/ Steve and Barry.
If I've read the highlighted paragraph correctly (in context), then this illustrates the benefits of Dean Baker's "Own to Rent" solution: people who are going to be foreclosed upon anyway should be given the chance to rent the house at the current going rate. This avoids all this nonsense about switching physical houses when it's the financial side taking the primary hit (both "owner" and mortgage-holder take a hit). Now - if the family couldn't afford the going rent at their previous house, that's another matter entirely.
What about the effect that the foreclosures will have on the buyer's ability to buy a house in the future. Their credit rating will be shot and they will never get a mortgage again. Seems like renting will be the wave of the future. Great, just great.
What about the effect that the foreclosures will have on the buyer's ability to buy a house in the future. Their credit rating will be shot and they will never get a mortgage again. Seems like renting will be the wave of the future. Great, just great.
Sooner or later we'll have enough foreclosees that they'll have political clout. Congress will then limit how long a foreclosure can stay on your record.
Vancouver BC makes me sad - I'm currently paying C$1410 for a bloody 2-bedroom apartment. $1200 for a 5-bedroom house would be heaven.
Dave D. --
yeah, but you'd have to live in Merced.
12th Percentile thinking
if you are responsible for any more than yourself and perhaps another income earning adult in a "i'll do the dishes so you can nap" kind of way, you are an idiot to take on a $3,400 a month payment.
side note: Jesus Jones sung "right here, right now". VH were simply "right now!"
Also, Fatboy Slim has a nice Right Here Right Now video.
If you squint you can definitely see Nouriel Roubini in it.
Just an unreal article, or maybe surreal.
lawyerliz
We had 3.5 inches of rain in 45 minutes two weeks ago. It actually overwhelmed us to the point where manhole covers got blown off by the excess storm drain flow and in one section of the city there was a two story guyser coming out of a manhole. I read you had 25 inches of rain in 24 hours down there. Yikes.
London is flooding. I live on a hill.
Tom Stone writes:
That cost differential is not unusual for california.If you are paying 3 times as much as a 'buyer' to live in an identical house,you have to have some incentive...
Not to mention more and more Californians are talking about moving out of state where a single income can support a family... Last time that happened, SoCal prices tanked.
Got Popcorn?
Neil
He saves $2200 a month. he will have an extra $20,000 this year.
why are we trying to "save" people from foreclosure? that's a hefty downpayment saved.
Gold Medal CMBX diver | 08.23.08 - 7:15 pm | #
Like I said, we need to accelerate foreclosures to get the economy moving. I thought of it as a joke, but then I realized it actually made bizarre sense; no way the house is worth it and freeing up some cash for the consumer.
12th Percentile writes:
Fatboy Slim has a nice Right Here Right Now video
There's also a version of the song someone mixed interweaving Jim Cramer's infamous "They know nothing!" rant.
Looking back just one year ago, a hell of a lot of shite has happened, and more to come.
Anonymouse, "Looking back just one year ago, a hell of a lot of shite has happened, and more to come."
I couldn't agree more!
If Ford and GM are being bailed out by our tax dollars.....Why can't the average citizen bail himself out. The contacted agreement with the bank has become null and void! Take care of Number one!!!
Now that the social safety net has been explicitly replaced with socialized financial negative risk protection the next round of financial engineering will be extreme. If millions of idjits are going to be rescued this time you can bet next time I'm gonna go Casey Serin on the lenders. I've learned my lesson. The very lesson that is being taught.
Merced! Gateway to Fresno?
Yosemite, actually.
I think Fatboy Slim's "Right Here, Right Now" video is more appropriate than Van Halen:
video.
I spend a lot of time these days thinking two things:
"Hey, i'm a hot shit investor (of MPM aka My Phuckin' Money) destroying the money managers and the hedge fund boys with my returns!"
And
"big returns are nice and you might just be getting lucky, you might not be too old to move downstate and get a job with the too big to fail even if we invest like morons, bailout my company so i can get a bonus, a bonus that is 120 times median income type bonus" folks
Ok. I lied like a CEO. All i do these days is laugh at the returns of the market and the big boyz.
Still just looking over the valley to the recovery, my well MBA'd friends?
I think i see your milkshake down there. I can't be bothered to take a walk to get it. I'm full.
Dave D. I'm a past Vancouverite. I now get to pay $3k for a small 1 bedroom (in Manhattan, though). $1400 would make me wake up in a puddle.
DaveD | 08.23.08 - 8:21 pm |
And all that for living in the crime capitial of North Amercia - woohoo lets all move to Vancouver
Somewhere a banker is chasing yield
Somewhere, money flows, where money is needed most
Somewhere, a rating agency and accounting firm are being paid to adjust the balanace to make a retarded deal look like cash flow...
Barley -Merced or Vancouver?
... is the crime capital? (sorry)
Anonymouse 8:07 pm
people who are going to be foreclosed upon anyway should be given the chance to rent the house at the current going rate.
When the fed inherits Fan&Fred they will be the landlords. Sounds just like Russia!
OT-
My bad if repost..
Go get em Buiter
Fed Attention to Wall Street `Dangerous,' Buiter Says
Fed Attention to Wall Street `Dangerous,' Buiter Says (Update1) - Bloomberg.com
DaveD writes:
Vancouver BC makes me sad - I'm currently paying C$1410 for a bloody 2-bedroom apartment. $1200 for a 5-bedroom house would be heaven.
DaveD | 08.23.08 - 8:21 pm | #
Don't be sad DaveD, take heart, every dawg has his day......
Tiny URL - create a shorter link
Tiny URL - create a shorter link
Tiny URL - create a shorter link
I think it took a bit more than 24 hours to get that much rain but who's counting.
The Kennedy Space Center has 20 gauges located here and there. The rain amounts varied between 10 and 20 inches, depending. This is a high density in a relatively small area and shows how the rainfall can vary. We live less than 5 miles south of KSC on a 10 inch hill. No flooding in the house tho the yard was a foot deep in places. As I posted it smells mildewy. Oh, well, the aquafer is busy recharging.
"Somewhere a taxpayer is recording yet another foreclosure."
Damn I'm glad I was banned by Ritholtz and graduated to CR and Tanta.
As a lurker (now) they are having a political hissy fit about some Bill Moyers (fair disclosure..I am apolitical and don't know the man) video on the vanishing middle class.
I am well aware that this is the silly season in a silly year but I do so hope and trust that this revered blog does not succumb to the twitty polemics of the election.
Politics are useless. Economics, priceless.
In closing, a Jimmy Rogers "A pox on both their houses."
Regards
You were banned because you were a twit.
If yer smart, you'll behave better here.
Too late, I already have Ross on my dipshit list.
Awfully tart and funny real estate article in the 8/25 New Yorker, "A Greenwich of the Mind."
Don't think I've seen McMansions get such a skewering anywhere - even here.
Hey Big Pic Bubba
Ritholtz is one smart guy and I appreciate his analysis. To my mind, he is a younger Jeffy Saut type that actually thinks for a living.
I was in no way slamming TBP. Merely saying that political kakaschka does not help us understand where we are and where we is goin.
Ta ta, twitty chippie.
I like italics.
Stick around, Ross. You'll be fine.
Hey, for the record, I don't see Ross as having been banned at the Big Picture.
Neil wrote:
Not to mention more and more Californians are talking about moving out of state where a single income can support a family... Last time that happened, SoCal prices tanked.
I did just that a few months ago. One of the best decisions I ever made. The stress level plummets when you move from CA to the Midwest.
Ross foolishly wrote "Politics are useless. Economics, priceless"
The decision to abolish Smoot-Hawley was political. The decision to appoint an Ayn Rand diciple as head of the Federal Reserve was political. Gramm's Commodity Futures Modernization Act of 2000 was political. The current credit crisis has its roots firmly planted in those politics. We need a sound political culture to fix this mess. Unfortunately it was created by both major parties, so it will take a new politics to solve these problems.
If you think the Detroit house sold for $1 (8111 Traverse, 48213) was cheap, how about an SUV for less than $0? Florida real estate man and lawyer Mike Morgan says:
"I recently had the pleasure of speaking with a banking executive [who]. . .was recently reviewing a portfolio of more than 1000 auto loans that were in some form of repossession or auction. He explained how the auto exposure was even more toxic in terms of loss percentages, because these loans were often going to be near-zeros and minus-zeros. Yeah, minus-zeros was the term he used. You see, you have a $20,000 car loan on an SUV that might be worth $5,000 in this market. You've got to pay legal fees and repossession fees and car-prep fees and auction fees . . . and when you get done, you have less than zero." [emphasis mine]
#
OMFG is that the real Barry Ritholtz posting in CR comments?!
Wow! The man who didn't believe in a housing bubble throughout this decade graces us with his presence.
ESAD BR
Hey Barry,
Perhaps not. But if so, you have a very big problem with your spam filter. Just for laughs I try to post from time to time and whomp, reject notice.
E-mail me. Not that my thoughts are worth a damn but I have lived through lots of cycles and old men like to tell stories.
You are a very astute man and will do well in business and life.
I have done well in life by identifing those smarter than I am and following their lead.
Best regards
Now that the social safety net has been explicitly replaced with socialized financial negative risk protection the next round of financial engineering will be extreme. If millions of idjits are going to be rescued this time you can bet next time I'm gonna go Casey Serin on the lenders. I've learned my lesson. The very lesson that is being taught.
Rob Dawg | Homepage | 08.23.08 - 8:57 pm | #
You didn't learn the ancient fable of the grasshopper, the ant, and subprime did you?
The Ant, the Grasshopper, and the Subprime Securities by Bill Walker
Another sad story of the California Housing Bust. It might be 10 years before existing homeowners re-coup the equity lost this year
Oh my dear syvanen,
Repeal of Glass Steagal (you said Smoot-Hawley) was political. It also had great economic consequences.
My point is WHO CONTROLS the politics?
My guess is monied interests.
Politics is the result of economic interests, not the other way around. Mores the pity.
Norm DePlume writes:
... is the crime capital? (sorry)
Yup on a per cap basis that city ranks tops!
Murders, B & Es, auto theft of course...
And now the gang violence I read about...people shot in the street gang style.
Ross, my error, I meant Glass-Steagel. But my point remains. I think we might agree. It will be a political struggle to reduce big finance's stranglehold on the political process.
Ahhh, wonderful - Less Than Zero!
YouTube - Elvis Costello - Less Than Zero
Hey Ed's house has been purchased but not by Trump. What a relief. We can all go to bed now and get a good night's rest.
Yahoo! 404 - Page Not Found
There were building booms in a lot of of San Joaquin Valley towns where there were even less excuse than Merced. Just out in the middle of nowhere. I'm sure no one here has heard of Hughson, "Gateway to Turlock," but there sure are a lot of foreclosed houses and abandoned developments out there.
With all of the downsizeing going on in everything,I think it is time to downsize the name Joe Sixpack,He should be down to at least Joe Fivepack by now.As things keep going down he will be Joe Fourpack and then Joe Threepack or Joe Double40oz.He will go on as Joe twopack or Joe 40oz.Then Joe Onebeer.After that Joe Nobeer.The decline of civ as we know it!
orm de plume:
If you are paying 3k for a manhattan 1 bedroom you are snobby about your location... or something
See Manhattan Rental Market Report | The Real Estate Group New York | TREGNY
You CANNOT separate politics from the current currency crises. Bernanke is a political hack that is stealing from the middle class taxpayer. Also, our politicians are debasing our currency at an unprecedented rate. The people who work and save are the real LOSERS in this mess.
Hey, for the record, I don't see Ross as having been banned at the Big Picture.
Barry Ritholtz
I thought Ross was just shilling for you - by creating a false controversy to drive traffic to one of the 3 big pictures out there
For the record - I enjoy BR's blog, and his appearences on TV. He's cool. I occasionally comment there, as I do here.
-skk
"The decision to appoint an Ayn Rand diciple as head of the Federal Reserve was political."
what's wrong with Ayn Rand. Also, where can you find an Economist who is not respectful of her ideas ?
There is one place - former Soviet Union. But than, wold you want someone raised as great equalizer to run the market economy?
"You CANNOT separate politics from the current currency crises."
Correct, as a country we have the government and the crisis that we deserve. Political, economic, and social movements are all intertwined.
Hey syvanen,
We do agree. Politicians are paid ex-facto for dancing to the money interests.
Bill & Hill went from $3mil to $60mil in eight years?
Freddie and Fannie and others reaped multi-millions as appointed hacks?
Our remuneration of elected officials is a joke. I recommend paying the bastards not to become corrupt.
Pay the congress $5million a year and the Pres. $15mil.
I personally would never trust a president that makes a paltry $500,000. Hell,I make that and more and that's just trading!
There were a lot of dollar men during WWII who ran the infrastructure and won that war. I want to see Wall Street dollar men and leaders who cannot be bought.
Corruption is subtle. Like a Bevis and Butthead replacing Wally and the Beav on prime time. No-one would ever forecast this but.... Here we are.
@sk
The only thing I have ever shilled for is my wife's Montissori pre-school and private school.
Had to put my foot down. She has lost $24,000 a year for 29 years in the name of edu-kation.
I keep telling her that it is a lost cause but she keeps sending kids to Stanford, CIT, Rice, MIT and others on full rides.
Personally I was hoping for one quarterback for OU. Damn calc.
"Politicians are paid ex-facto for dancing to the money interests"
Hank Paulson is going to set the record. I bet Hank becomes a billionaire within 5 years of leaving his money handout program.
I'm so sorry to thread hijack, but I was told the people who frequent this site are the most knowledgable......
If a person has an adjustable rate mortgage, and the rate adjusts, causing the payment to double, but the borrower continues to pay the ORIGINAL payment amount, does the lender hold the money in an account and allow the home to go into foreclosure?
yo c lo
I'm no banker, but that sounds right to me. It's a dead time of night. You could ask when the experts are around.
Bottom line though, under the contract, the reset payment is the correct amount. Anything else is a default unless the lender agrees to a workout. Defaults for a certain number of months lead to foreclosures.
Jingle mail is getting much more popular.
c lo
I'm another of the non-experts, but from reading this site for many months now I would expect that the servicing company has the right to refuse and return any amount less than that which is due. Sounds strange, but that's what has been repeated many times.
In fact, they not only have that right but it's also the norm.
I'm talking about KEEPING it, but not applying it to the loan balance in any way, and they saying "We're foreclosing".
Bernanke is a political hack that is stealing from the middle class taxpayer. Also, our politicians are debasing our currency at an unprecedented rate. The people who work and save are the real LOSERS in this mess.
I think he's just trying to keep the wheels on the cart. Not an easy job.
And as for monetary inflation, AFAICT the credit bubble 2002-2006 caused the monetary inflation, and a LOT of this money got issued as a cash asset paired with a debit asset.
The people who sold houses 2002-2006 and banked the profits hold the cash half, and the trillions of Level 3 assets and sketchy CDOs is the debit assets.
The cash will remain but the debit assets have been vaporizing at the rate of $100B/month this year.
That's deflationary.
c lo,
As much as I hate to say it, ren is correct.
If you can rent cheaper than your mortgage payment, walk away.
There will be lots of folks with great TV ads asking you to pay money to sell you a solution. Pay no heed.
Rely on your own common sense and others you can trust to make that decision.
Banks and the gummit want to keep people in their homes. It is like a debtors prison. Your payments may be adjusted and principle reduced but in the end, you must make an economic decision for your family.
One great lesson that we all are learning is that we need to save and invest. The spend and consume era is over.
Ross,
It's not me. My family kind of got suckered last year and we're in a lease in which the owner of the home we lease is getting foreclosed on. When I called her to ask about it when we first found out, she said that she's been paying, but just that she's been paying less than the amount so they didn't credit it. She actually seems like a scammer (we're the 12th property she'd let go) but we're just researching and covering our bases in the meantime...we do plan on moving soo
No question, he interrupts enthusiastically. I would never deny we all got greedy. Everyone was setting records. Nobody was there to take away the punch bowl. -- A Preperty Developer, from the NYT article
It isn't often that property developers start channeling Fed chairmen. Strange times, indeed.
Cathlene Hayes (bloomberg) interviews Glenn Hubbard (x bush adviser and a current professor at Columbia) at Jackson hole economic symposium
Clip Syndicate Video: Barack Obama
More power to him they made the loopholes and now people are exploiting him. That is why there should be no bailouts. Where is CSC???
@c lo
Well, your landlord is an interlocutor. She/he owns it in name only. Also a flipper-scammer who may or may not be paying any mortgage whatsoever.
Personally, I would not pay an indian red cent to the 'landlord' and make them do a legal eviction.
Chances are they are so jammed up in legal that they will overlook your non payment.
Live free until the sheriff knocks. Could be months and months of free rent. But be prepared to move with a weeks notice.
I do not do free advice so please send 10 farthings to your nearest Salvation Army collection kettle.
from the interview
quasi quotes from hubbard, fannie and freddie cant survive in the current half way mode... ?is the fed is out of tricks and congress and treasury need to act? hubbard responds , largely yes...its about fiscal policy now"
So anywhooo.... which wave of the credit crisis are we in now?
Ross -
Our "landlord" bought about 15-20 properties in the last 18 months, and all but ours have either been foreclosed on or are on the market, bank owned, right now. She apparently refinanced our house earlier this year, because it was the only one that didn't depreciate.
We're actually planning on leaving and so we're just researching and getting all the info we can in the event that she DOES try to take us to court.
She actually seems like a scammer (we're the 12th property she'd let go) but we're just researching and covering our bases in the meantime...we do plan on moving soon
I remember when I thought Casey Serin's 8 houses were the upper limit to individual real estate fraud.
Hey Canuk popcorn,
Bout halfway.
The whole western world finance economy has been turned on its head. It's been coming for 50 years but savants will tell you otherwise.
Why do I care? Not for me, I am the future capital flight and dodging the coming exchange controls.
I just feel sorry for my grandkids.
So anywhooo.... which wave of the credit crisis are we in now?
Fourth or Fifth inning as far as home depreciation...Some of the more affluent markets are just no being hit so we have a long way to go. Year one of a four year recession. IMO
at jackson hole
former bank of england board member w buiter strongly criticized bernanke and company for swapping treasuries for questionable mortgage backed securities, and the feathers did fly!
Ex-BOE Official Slams Fed, Sparking Hottest Jackson Hole Debate - Bloomberg.com
c lo
Your landlord is not going to sue anyone, least of all you.
They are playing an end game and just trying to leverage as much cash as they can.
Don't play. Give them zero, nada, zilch and put the ball in their court.
They are toothless tigers and only threaten like they know what's going on.
Screw them. They should be in jail in a civilized society.
c lo- Wouldn't blame you if you took Ross's advice, but it's your life; some people thrive on the legal wrangling. If you're planning on leaving I'd look to what the eviction statutes are locally. Most places take a few months (I've been on the other side of that one.) Your landlord is a piece of work and you literally can't trust anything she tells you.
BTW- kiss any deposit goodbye.
un autre Vancouverite avec pop writes:
So anywhooo.... which wave of the credit crisis are we in now?
we are approaching the 7th inning stretch...
of a twinight double header
expect extra innings during game two
so how would one get a glimpse at the guest list of attendees at the jackson hole economic symposium?
Mock Turtle,
That was a good read from the Bloomberg link. The guy makes a good point that you don't let the borrowers (IBs) determine the value of their collateral when they exchange them for Treasuries at the Fed.
O-Joe
Don
Sebastian
mailgilb
would you please explain to the chairman how wrong he is, and why...
JACKSON, Wyo. U.S. Federal Reserve chairman Ben Bernanke said Friday...
the financial crisis that has pounded the United States coupled with higher inflation is taking a toll on the U.S. economy...Although we have seen improved functioning in some markets, the financial storm that reached gale force" last August "has not subsided, Bernanke said.
financial crisis
gale force financial storm
ha, what an exaggerater.
Nova Scotia News - TheChronicleHerald.ca
sweet dreams
and dont let the "imf rogoff" get cha
(google if you dare)
soylent green
yeah this boe guy really raised a fuss and got all the three peice suit dudes all pissy and such over the swap of t bills for garbage! ha
sorry i wasnt there to hear him give em hell
Paulson will become a billionaire but only in dollars, so no real wealth.
It's true that you get what you you pay for and elected officials should have high salaries. Out of law school I worked for a 15-year veteran judge who had gone to Harvard Law and was making about the same as some of my fellow graduates. His father had been a house painter. The judge could have earned more as a private attorney but rightly believed he was more useful as a judge. Did his low wages eat him up inside? Hell yes.
Good point yogi, Comrade Paulson will have to ask for his payoff in Euros.
Buiter for FED CHAIRMAN.
expect extra innings during game two
mock turtle | 08.24.08 - 2:07 am | #
That's okay, it's a long season and we we're nearing the play-offs. After we finish this home stand we're facing the Reds and the ChiComms. Those teams from the desert areas are going to be rough too. Florida and California teams having problems of their own. Not too worried about the Indians, but you never know. Is it too early to say,"Just wait till next year!"???
This is the video you wanted...
Our Economy Right Now
.
Their public officials are essentially developer interests. Couldn't this be said of those 537 odd suck holes in DC?
Fischer said, "The central bank's performance, though not flawless, has been 'pretty good' given the magnitude of the crisis,..."
This is highly refined BS. Given that the central bank is responsible for the crisis, we should give them accolades because it is not worse?
Not that long ago Tanta wrote a great article: "Let's talk about walking away." You should read it! LOL
The transcript of Buiter's speech, courtesy of naked capitalism and WSJ is at :
http://online.wsj.com/public/resources/documents/Fed-Buiter081608.pdf
His blog is a daily must visit for me, at:
FT.com | Willem Buiter's Maverecon
-K
Barely - http://www.2ontario.com/welcome/ooql_602.asp
You might want to check your sources on Vancouver being high crime - compared to most U.S.Cities it's pretty tame.
Zendiet - If you check the avg prices:
One-Bedrooms SoHo $5,060 Harlem $1,770 . you can see I am in a pretty average area - nothing to be snobby about beleive me.
I read you had 25 inches of rain in 24 hours down there. Yikes.
I'll end up with 10-inches from this storm (assuming it ever stops raining). Some places between Tallahassee and me are up in the 15+ inches area. Lots of small creeks/rivers are beginning to fill up. All this rain is not going to be good for the peanut crop.
Buiter's "regulatory capture"
I like the ring of that, and reminds me of Patty Hearst and suchlike.
Seems pervasive.
"Hank Paulson is going to set the record. I bet Hank becomes a billionaire within 5 years of leaving his money handout program."
"Life's a bitch and then you die."
You acquire a billion dollars and then you die.
Why are our aspirations so pathetic?
As someone from the great crash said: You come into this world with no money, and you leave it with no money.
Norm DePlume
Barley is right on a PER CAPITA basis very few cities are ranked higher than Vancouver.
...and Vancouver has the most beautiful women in the world.
Next year an illegal immigrant amnesty plan will be voted into law. For an investment in a home over a certain price and financed at a higher rate through GSE's any illegal will be granted residency status. The consensus for this will be huge. Homeowners, mortgage brokers, bankers, RE agents, dem or rep will rally around this. The face of this nation will soon be changed forever.
I'm really beginning to think that we ought to be a lot more focused on the cash that is being freed up in these foreclosures. This may be the 'bloodless revolt'. Instead of political rallies (no one is listening) we just listen to jesus and render unto caesar what is his.
In my grandmother's time you spent your life paying for a house and a little bit of property and that was a big part of your retirement plan; a place to live. With the property taxes going up exponentially, a home is just a way to suck you dry. (i'm in the northeast). At this point, with 7 years to go on my mortgage, my property taxes are almost 500 more than my mortgage. Where's the upside?
Add that to the fact that some brilliant man said that buildings are a depreciating asset (which just hit wayyy too close to home when I had to pay almost 9 grand to paint the darn thing) and I am not sure at all i see the point of this endeavor.
"Somewhere a lender is recording yet another foreclosure."
What do you expect? We are dealing with people who dump their mutual fund because of a 200 dollar loss, who are now facing a 200K cut in a game where dollar cost averaging doesn't work. Yet some holier than thous expect these same people to keep their money on the table because it't the 'moral' thing to do. Even if it destroys the 'morale' of the entire country.
As far as this Rent to Own game goes, why does anyone need a middleman? If the banks were really interested in such arrangements it would have been cheaper and easier to simply apply all interest paid to date to the principal and refinance to a fixed loan if the numbers added up. But the banks would rather stick themselves with non-performing loans while selling fire sale properties to many of the same speculators that helped get us in this mess. Meanwhile, CR's little graphs continue to fall off a cliff.
Anak Krakatau writes:
Buiter's "regulatory capture"
I like the ring of that, and reminds me of Patty Hearst and suchlike.
Seems pervasive.
Anak Krakatau | 08.24.08 - 10:21 am | #
Not only pervasive but ancient as well...
Quis custodiet ipsos custodes?
This kinda of reminds me of the Goose that laid the golden eggs.
Todays version is the Banks that own the Geese(mortgages) that lay the Golden Eggs(Money). Then one day the Banks killed the Geese to get all the gold at once (meltdown) instead of waiting for payment over the years.
Moral: Greed destroys the source of good.
Michael LittleBig
YouTube - Casino Nation - Jackson Browne
you guys have to see the pix of obama/biden at Drudge
hilarious!
CN excellent video
i'll see your casino
and raise you
a war
sorry cn forgot the link
YouTube - Jackson Browne Lives In the Balance
and the fools are still gonna build more in the "Villages of Laguna San Luis".
Does anyone honestly believe that "high speed train" line is going to actually get done? CA doesn't have the money for it and you can bet the developers aren't picking it up.
there's been a lot of talk between central bankers and economists about decoupling...
every body needs to know that decoupling will not take place...
until intromission has been completed
jus sayi
jus sayin,
Drudge photos say it all
Maybe its a good idea for the people who steered the titanic into the iceberg be at the helm as the ship goes down.
Dave,
I'm tempted to turn that on its head and view high speed rail proposals as a leading indicator for economic distress.
Drudge photos, hilarious?
Oh, you mean Madonna sqatting onstage.
Because Obama is a celebrity.
Sometime Republican humor goes right over my head.
Mock: Was contemplating which of the two JB vids to post here. Looks like between us, we got them both.
Sure captures the prevailing mood.
from over at marketwatch
a snip from a speech at jackson hole giving the fed a drubbing for...
Willem Buiter, a professor at the London School of Economists and a former member of the Bank of England's monetary policy committee, complained that the Fed had not demanded any quid pro quo from Wall Street in return for the enormous amount of liquidity it provided.
CORRECT: Economist sees new, uncertain stage for financial crisis - MarketWatch
i repeat
decoupling will not take place
until intromission is complete
Maybe its a good idea for the people who steered the titanic into the iceberg be at the helm as the ship goes down
heh, that's an EXCELLENT economic metaphor.
Steering the Titanic into the iceberg would have saved it, they tried to dodge it and instead tore a gash in the hull that compromised 5 of the watertight compartments (one too many).
Japan tried to dodge its problem and ended up fatally damaged -- their debt to GDP is mind-boggling -- let's hope we don't make the same mistake.
"Thursday. GDP growth is likely to be revised up to 2.7% annual growth from an estimate of 1.9%, according to our weekly survey of economists.
Growth that strong would normally be greeted with hosannas, but this one should come with an asterisk. The growth is mostly outside the United States, not in it."
Big upward GDP revision doesn't mean economy is healthy - MarketWatch
there is no GNP
it was replaced by GDP
there is no GDP
it is being replaced by GCP
the only number that matters to our leaders
Gross Corporate Profit (f the middle class)
Troy writes:
Steering the Titanic into the iceberg would have saved it
Sometimes the way to overcome the problem is through it.
Casino Nation
i had not seen your pick before...excellent...thanks
mock turtle:
Gross Corporate Profit (f the middle class)
Only this time it may be negative GCP.
at jackson hole
w Buitner, x board member of BOE, made the point that the Fed apparently asked for nothing, in return for the liquidity and backstopping given to the Investment Banks and the Primary Dealers.
Dylan is right...
steal a little and they throw you in jail
steal a lot and they make you a king!
BB
market watch is reporting that Q2 GDP will be revised upward and attributes the increase to productivity and sales outside the US by US corporations...at least that is my inference.
I do not recall posters declaring that it is "immoral" to walk away from debt obligations. I have stated before that it is unethical which is not the same thing. I too have become inured to the idea of ruthless borrowers walking, and I think it's probably the best way to stabilize the market. HOWEVER, if people walk with the belief that they have done nothing wrong and that their behaviors have had no adverse effects, and self righteously declare that they did are doing the right thing, then that's a problem. Not for moral reasons, but because these same people probably don't have pensions, will need to save for retirement, and will need to participate in a little bit of self reflection before continuing their destructive patterns unabaited.
Criminals dumping weak US dollar for euro
Yahoo! 404 - Page Not Found
jcsc
i dont claim it to be a desirable way of the world that people should walk away from their debts, be they mortgages or otherwise.
but you must recognize that this has become a corporate world
the rule of the jungle has been dictated by corporate culture
everybody that hopes to get ahead now forms a corporation...doctors, lawyers,... heck most of the construction contractos and subcontractors who are my friends and neighbors have formed LLCs and S corps etc.
and part of that culture is the ability to walk away from debt when the balance sheet dictates
i didnt make these rules and probably neither did you...forces far greater than all of us here have shaped the economic environment we must struggle within
and now do you fault people who want to read the rules and take full advantage???
lets check the math, some family , or even some small time flipper saves 50,000 or even up to 10 times that while the big boys and girls, the top 2 percent of the population will walk away with hundreds of billions.
i dont , personally owe a dime!!! i have no skin in this debate, other than watching the society around me collapse...and i blame everybody, but mostly the powerful.
(although we could blame the powerless...heck what can they do about it anyway f em)
Ed writes:
Drudge photos, hilarious?
Oh, you mean Madonna sqatting onstage.
Because Obama is a celebrity.
Sometime Republican humor goes right over my head.
Ed | 08.24.08 - 12:24 pm | #
Drudge will be a good press secretary in the upcoming McCain administration - he has all the 'tools'. If dems were half as savvy they might have had a chance.
Wait a minute, don't corporations "walk away" from their obligations vi bankruptcy filings? They overpay for assets, overexpand and then stick it to stock and bond holders by "restructuring". If you ask me, this family "restructured" their debt and equity out of a mortgage and into a rental.
Sure, neither is ethical, but I don't see anyone picketing corporations, demanding they behave "ethically" and make good on their original obligations.
To quote Barley at the top of this thread, "Wall Street made home ownership an investment, so treat it as such. Move to the next best investment." Well said!
mock turtle writes:
BB
market watch is reporting that Q2 GDP will be revised upward and attributes the increase to productivity and sales outside the US by US corporations...at least that is my inference.
mock turtle | 08.24.08 - 12:43 pm | #
I suppose its possible. I spent all last week in aerospace plants on the plains - they told me they were all doing 30-40% OT... Even with high fuel prices & declining demand they are nothing but over-booked... the existing fleet is VERY old & VERY inefficient. The new fleet when in place will be smaller (seat mile capacity wise) and much more fuel efficient.
It was an interesting week...
Folks that say that these folks are saving thousands per month are misled. They likely never had the income to cover the fully amortized mortgage, so the difference in mortgage and rent is not savings - it's just a calculation.
Also, those outside of California are probably unaware of just how many extended families know how to game the system in a massive way. It's not just food stamps for grandma, it's managing credit ratings too. For example, brother A and cousin C default on business loans (after extracting to sister X and uncle G). Their credit is shot, so the family rotates to a couple others. Each goes BK every seven years or so. Same thing with buying a house. This family isn't screwed - one of them has bad credit. The next time they buy they'll use another relative's credit. This is not rocket science. It's cooperative economics centered around either extended family or tight community / ethnic group. And it's equal opportunity - anybody can do it.
A nice quote from Buiter (from MW):
Buiter said there was an acute concern that the Fed was subsidizing banks by taking their "pig's ear" illiquid assets at "silk purse" prices.
Walkaways will soar, as more homeowners slide into negative equity and as the stigma evaporates. This is a vicious cycle that will further depress house prices as more homeowners walk away. This is reinforced by a vicious cycle on the credit side -- as more homeowners walk away the supply of mortgage credit dries up, and tight credit drives house prices even lower.
This is bankrupting F&F as well as the Subprime and Alt-A lenders. The next victim will be the U.S. Treasury, if we are not careful.
Dang,
I am getting concerned at the lack of stories coming out of Jackson Hole.
The state of the financial system must be worse than even we think here.
I had a dream last night that I was in Costco on the last weekend they took credit cards and it was utter sheer madness.
Someday this war's gonna end...
Joliet jake
yeah,
i was in home depot last night
stepped to the counter with 22$ worth of merchandise and held out a fifty dollar bill to the cashier
he said he could not break that bill and could i pay with a credit or debit card!!!
i laughed and told him the 50 was kindova debit card...
decoupling will not take place until intromission is complete
Let's see, 3600 monthly out of pocket vs. 2200 out of pocket. Nope, no savings there. Throw in 1700 a quarter RE Tax and 1500 a year in insurance. That leaves a sizable sum to pay off credit cards, buy junk or heaven forbid, save. That beats the heck out of those 3% COLA raises employers think is compensation for a job well done.
Gosh I hope Tanta and CR didn't get swallowed up by a big Jackson Hole!
Your brain at this moment is composed of brigades of tiny Bolivian soldiers. They are tired and muddy from their long march through the night. There are holes in their boots and they are hungry. They need to be fed. They need a new post.
Mock Turtle,
I am not recommending that people stay tied to their mistakes. I am arguing that it is in folks' own best interest to acknowledge that they've made a mistake and to engage in some honest introspection regarding the nature of their actions. I am not excusing the business people who have used their corporate identity to behave like wolves. The problem that I am having is that people want to engage in destructive behavior (CEOs included) and then want to shirk the psychological consequences. ("I'm a really good person even though I just defrauded all my neighbors!") The people I know who engage in this kind of behavior are the people who make the same mistakes over and over again. Making a mistake is natural and important. Making the same mistake over and over again? Not so good.
...the tremendous prosperity that began during the Reagan years of the early 1980s has been a false prosperity built upon easy credit.
The Great Consumer Crash of 2009
Now this looks very bad, but in fact it is much worse than it looks. Why? For the same reason the rest of these charts are worse than they look - they portray averages, but not distributions.
The 2009 "Consumer Crash" Call is UNDERSTATED
In addition we are likely to see an overshoot in prices - perhaps by 1/4 to 1/2 of the "height" of the bubble.
"I had a dream last night that I was in Costco on the last weekend they took credit cards and it was utter sheer madness."
In the following dream will they take turnips and stewing hens?
Lately I've been having the feeling that if I pay in cash there must be something suspicious about me. So far, though, currency has been accepted.
Plasmas for plasma?
Rob,
You read that Amex is threatening to cut off CA employee's corp cards?
When I was a boy they started digging tunnels for the much-needed 2nd Avenue subway. Groundbreaking was in 1972, although the proposal had been approved in 1929. Then New York City ran out of money. Crime entered a bull market. Public parks were neglected. Somehow, there was a fantastic turnaround. Parks are currently safe and well-maintained. Highrise apartment buildings welcome back swarms of people. They started digging the subway again.
So sad. I'm keeping my bicycle.
Since you asked, it's a 1977 Panasonic 10 speed. Works fine, quiet, efficient, park it on the sidewalk for free. Still fun and good exercise. Will last another 30 years.
jcsc
i hear what you're saying
that whether it is fraudulent type behavior, legal or not, writ large by a few or small pieces by many, it still is sick behavior for our society
you point is well made and i hope you will forgive my strident reaction...
i feel powerless in the face of this give-away to the fat wall street investment banks.
they touted all this laissez fair market nonsense, they got up in our faces, and now they hide behind their mommy, when the piper must be paid.
and the truth is if they explode we all fall down. but somehow they must be made to hurt their fair share as the Fed and treasury et all rescue the system
If the financial storm reached gale force last August, why wasn't Bernanke talking about a coming storm 18 months ago? Last August, at the moment he now says it reached gale force, he wouldn't even acknowledge that there was a storm.
Is anybody in the financial media taking Bernanke for this bald, two-faced lie?
Should read - taking Bernanke TO TASK for this bald, two-faced lie.
tj & the bear writes:
Rob,
You read that Amex is threatening to cut off CA employee's corp cards?
Yes, they actually "warned" saying they were not exercising their right to suspend but that they were watching carefully and could exercise that right if warranted. I've been saying since May that the California budget had the potential for causing international cascade events. You should see the triple tax free muni spreads widening.
You read that Amex is threatening to cut off CA employee's corp cards?
and they are not reimbursing for state worker's use of said cards - yikes
Walk-aways are deadbeats and Un-American. Their actions should be centrally reported, and all credit provided to them should cost them dearly. Use electricity and then pay for it later --- pay double. Ditto for all credit. Deadbeats. And they should be posted on a website so that all their neighbors know they are deadbeats when they come knocking to borrow a cup of sugar. Deadbeats.