When I first told some people I knew that banks will have to forgive credit card debt on a massive scale they thought I was nuts, especially after the 2005 act.
In retrospect I should have posted my prediction on some blog instead of just lurking around for years
It's often overlooked that Texas did not allow home equity loans until about 1998 and 2004 for some types. We had to pass a few constitutional amendments to make it legal. Everyone was like a kid in a candy store and pulled everything out since it was "new" and marketed heavily. It was "the smart thing to do."
It would be interesting to see how bad Texas is because of it being late to the home equity game.
Another prediction- the US healthcare system will undergo changes that will make the stuff on wallstreet look small. All the people in the service and billing side of that industry are in for a very rude awakening. They will resist, but ultimately it won't matter.
Just knew the thread would move on, here's my last from previous.
OT but, y'know:
Comrade Counterpointer writes:
Broward - you get me wrong. What I'm saying is that the internally consistent reason set of sociolinguists like Chomsky and Lakoff, which can be argued on their merits, is less applicable and far more controversial, and justifiably so, when the extension comes. The extension is taking a theatre of language beyond its inherent analysis, and even its baseline epistemology, to broaden it out to theories or commentaries about social life or politics. Worse when done en bloc. Broad-banded political messages cannot be derived from socoilinguistics.
This is just bad dumb and wrong on so many counts, philosophically, professionally and practically. The equivalent is the Sapir-Whorf hypothesis that that the poor and undereducated could not conceive of that which they had no learned word for, or that language begets mind. Again, rubbish.
I'll put this idea up again, for a market to work efficiently, everyone needs to speak the same language, the stakes must be real and transparent, the mechanism design of trades needs to be efficient, and there need to be obvious and clear ways to open and close from the market.
What I've said previously on this board and will now repeat is that in sociolinguistic terms this market has suffered a comprehensive conversational failure. And will continue to do so. Conversational failures impact confidence, which impact willingness to be part of failed conversations.
The numbers simply follow the conversational failure. And compound.
Comments welcome.
CC
Comrade Counterpointer | 10.30.08 - 10:07 pm | #
It's hard to believe that Washington, D.C. and Maryland are ranked as low as they are. While D.C. and Maryland weren't the top bubble regions, I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value. Anybody else surprised?
Better look at the cool java crap at Waveyard. The pull down menu has way cool icons embedded with cool surfers and symbols which make me supportive of a giant tsunami of cheap and easy credit in the southwest desert. Yippie.
"During a tense conference call late Wednesday, analysts peppered Hartford executives with questions about its capital position.
The slump in equity markets, along with much wider spreads in the credit market and increased volatility, make it "extraordinarily difficult" to estimate how much of a capital cushion Hartford will have at the end of 2008, said Greg McGreevey, the insurer's new chief investment officer, during the conference call.
Despite not giving an estimate, Chief Financial Officer Liz Zlatkus said that Hartford is comfortable with its capital level.
That didn't wash with several analysts, including Edward Spehar of Merrill Lynch.
"I don't understand how you can say you feel comfortable with your capital position, and yet you say you can't give us any idea what the number is," he said. "At this point, it's impossible to say those two things."
Maybe we should use TARP to drill for water in nevada and turn it into an oasis with movie stars, swimming pools, etc?
See: Elly May
Elly May was a strong, capable girl. She could throw a fastball as well as "rassle" any man to a fall. She could be as tender with her friends, animals and people, as she was tough with Jethro or anyone else she was rasslin'. She said once that animals could be better companions than people, but as she grew older she saw that, "fellas kin be more fun than critters." Elly was squired about by eager young Hollywood actors with stage names like "Dash Riprock" and "Bolt Upright".
We Floridians are voting like crazy. Watch out for us, we are the great election screwers-up. I am pro O, but hope whoever wins here does so decisively.
That's pretty amazing that Oklahoma - my former home state - is near the middle. I still have family in Tulsa and they did not have a bubble. The median house price increased by about 35% nominally over 10 years, price/rent ratio relatively low, same with median income/median price, very sprawling, economy not in the dumps, etc.
I wonder what this graph would look like if homeowners with no mortgage were subtracted? New York may be on the right side of the scale because the owners are older. Also, what about second homes or flippers.
Nope, no feel for snowbirds. All the Florida neigborhoods I've lived in solely contained all year rounders. And I never run up against snowbirds in the way of practicing law, either. Illegals are all year rounders, right?
I'll put this idea up again, for a market to work efficiently, everyone needs to speak the same language, the stakes must be real and transparent, the mechanism design of trades needs to be efficient, and there need to be obvious and clear ways to open and close from the market
That is very interesting. I agree about the same language. We're currently on a path of destruction by allowing multiple languages to co-exist and multiple. This is work I've done regarding what I call the "cultural diffusion". Language differentation is one aspect of it.
It's an informal proof but good enough for me. One of my "specialities" in software is business differentation. Almost all business would like software which, at its core is common, but has the ability to minor differentation across business units, partners, etc.
There's a cost trade-off which is often unrecognized, particularly by younger people. Commonality is the most visibly efficient, but correct differentation gives you broader market access. And excessive differentation gives you increasingly higher costs with diminishing returns.
For most environments there's an optimum operating point which balances common versus different.
It's a fascinating topic for me, I've done a lot of work with it in thte past few years, mapping it into other areas and concepts.
it is the gambling meca of the world and so, once and a while, craps is possible
speaking of craps...post gold rush re in SFO dropped 90% for years. just finished a good book that talked to the desperation of the times quite frightening...
A couple points on NY. Upstate, house prices have been pretty flat. And there's some sort of tax on mortgages, so refinancing there is more expensive and people weren't doing it as often as elsewhere. My brother had a ranch in a suburb of an upstate city. He had it about ten years and sold it two years ago for slightly more than he paid for it.
The City and LI are a different story and prices still have a lot to fall there.
Bloomberg story on mortgage fraud. Interesting story - yet maybe a little run-of-the-mill and ho-hum for all you CR junkies. Apologies if already posted.
"Maid-turned-Realtor Ran Vegas Mortgage Scam, Prosecutors Say"
"I don't understand how you can say you feel comfortable with your capital position, and yet you say you can't give us any idea what the number is," he said. "At this point, it's impossible to say those two things."
They can't say what their capital position is because that could be a lie and somebody would go to jail.
But they are comfortable with it because...it could get a lot worse.
sorry Comrade Counterpoint, the esoteric phraseology just struck me the wrong way. I'm sure it has merit. I'm simply frustrated with the gyrations in the market. Apology tendered.
But they managed to lose a bunch of ballots on a recount, in ummm, Palm Bch County, on a close local primary election. The hub says that a lot of them (not all) were found in a closet somewhere. Appeared to be stupidity, not maliciousness.
A person I know, who is by no means stupid, probably got the chad thing wrong, not punching all the way through. In 2000. Not a Bush voter.
As to DC, I suspect the outermost suburbs will take a hit, especially in light of the oil/gas runup.
Closer in should probably survive without catastrophic problems, especially since there's usually turnover as new admin personnel come in. At least, that's what we learned from locals when we lived there. And given the philosophic bent of the probable incoming administration, there'll be a real demand for housing closer in to the DC Metro system.
Sold our Silver Spring, MD home in late '97 for about $155K (two story 4 BR in decent neighborhood); out of curiousity one night in late 2005, did some online research and found that neighboring houses (across and down the street) went in summer 2005 for $450K.
"I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value."
I have tracked this weekly by neighborhood for 2.5 years. The outer burbs, like Manassas, are worse then anything in CA. The inner counties are down maybe 10%. The closest, rich people zones (like McLean) are actually up.
were you not pimping target in a REIT leaseback spin off the last two nights?
cracker,
I follow retail closely. It's often difficult for me to connect with many the real estate centric and bond centric discussions here. The TGT REIT offered an opportunity for common discussion.
I wouldn't call it pimping. I was asking for input, but got few takers.
The City and LI are a different story and prices still have a lot to fall there.
Westchester is already a train wreck, including some of the nicest suburbs like Scarsdale and Larchmont.
At least, the train is wrecking right now.
Scarsdale is probably the most expensive suburb in the NY metro area in terms of real estate, taxes, food, whatever. But you always could live in Scarsdale for 20% less than a comparable lifestyle in NYC. And it's 25 minutes away by train.
We are coming to the point that even normal people know the game is up. A person at my work today, that I have never talked about financials with, asked me what I thought about he whole Volkswagen thing (Porsche buying more than the float). I tried to explain about paper stocks and mythical leverage, and my coworker said "How is that even possible?"
We are close to a run on the shadow finacial system, plan accordingly
popeye - dude, it's just a different training language.
Most of this board seems to have started in economics or finance, I started in sociolinguistics and arrived in finance and economics through a series of flukes. Jus tryin to fit it together, and if it's new and wacky, great - perhaps we need a bit of that right now?
In the 1930s it was trade that was singled out. Maybe the zeal of US bankers and financiers created the new opportunity:
The overwhelming majority of Germans would welcome nationalisation of large segments of the economy, according to an opinion poll that underlines the strength of popular opposition to free-market liberalism in Europe's largest economy
I second CR's surprise about Iowa. I'm a native Iowan and I never noticed RE prices changing by much if at all when I'd go back for visits. Given that prices never ran up that much to begin with, I don't see how so many people can be underwater there.
I'm all for shorting NYC but if you think NY is in for a big crash I beg to differ.
Other than NYC we never went up much (aside from Saratoga and some other upstate areas) and there isn't too much to go down
I tried to close an $85K HELOC on my house recently. the house is worth around $500K at the low end. The bank lost the paperwork, i guess, as it is still open. I'm thinking of maxing it out and shorting this mess. $85K in EEV today is a tempting offer.
You're right, the derivatives failure is a communication failure.
It's proof of my "cultural diffusion" theory and I didn't even recognize it because I wasn't expecting a systemic failure but a gradual degradiation in communication which would eliminate information / IT expense on the periphery.
I am astounded right now.
It's frkcing proof. Differentiation in informaton context and belief creates a net benefit at first but eventually reaches a point of increasing cost for diminishing return, and then there's a snap-back, a reversion back to a better cost point.
Very, very interesting to me.
Awesome.
I have a whopper headache right now which is rare and I'm off to play some pool.
Couple months from now, you gonna need a taller chart.
Why@ ZIRP | 10.30.08 - 10:45 pm | #
We'll need something that looks like that loveable loser, Albert Gore's global warming chart. The only thing is, we need it to descend 20 feet into the ground.
Back on topic for a quick moment, please indulge a question-
I can't really understand how Texas could have 18% of its homes underwater. Case Shiller shows Dallas at around a 3% drop in value.
Assuming Dallas is pretty representative of the Texas Metro markets, doesn't that require 18% of homes in Texas to have been financed on a 100% LTV basis within the last 3 years?
rich writes:
"I don't understand how you can say you feel comfortable with your capital position, and yet you say you can't give us any idea what the number is," he said. "At this point, it's impossible to say those two things."
They're comfortable with it because it is not expected to negatively impact management bonuses.
It reminds me of the joke about the guy who goes to his doctor and the doctor tells him, "I've got good news and bad news. Which do you want to hear first?"
"The bad news," the man replies.
"You've got an incurable disease and only have six months to live," the doctor tells him.
"My God," the man says, shaken. "What's the good news?"
The doctor replies excitedly, "Did you see my new secretary? I'm screwing her!"
been reading the posts for a while and had a laugh or two and as this is my first post please be kind. lol
I think we are about to see a huge problem that cannot be solved unless someone has an idea how to.
banks will not lend to banks,right, so 1st of all the bankers cannot trust others books. the goverment is forced to lend to the banks but where the heck is it getting the money? printing ? ok , so it lends to the banks to keep them solvent as their loans are making them call in good assets as bad ones increase, hence the stock market sell off. now you have a rally as the fed pours money in to shore up the banks letting them stop selling good assets for the time being till again bad loans make them insolvent again and another loan is needed.
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
if the usa is up their eyeballs in debt and can only rely on others to back the currency to keep the lending going when this gets deeper will not the lenders to the usa run out of money to lend sooner or later? or is everyone creating money out of thin air to prop the dollar and keep the borrowing going.
in the book make germany the usa and the usa every other solvent nation. the book really copies what is happening now and is pretty interesting half-way in.
if I have the basics to this then by talking about markets every day is like talking about the size of the sand pile that is holding up the rock in the rain, it does not really matter much as sooner or later the sand will be gone and off goes the rock.
how in the heck do you keep an economy going if you are still borrowing more and more which creates more and more debt. these bubbles i fear were the last gasp of the ponzi scheme.
we all have to stop now and start saving and halt and I mean halt goverment borrowing or worse is to come and if you say you cannot halt the debt spiral then I rest my case and the rock will continue down the hill with only the sand to stop it every now and then.
sorry if this to simple or in error, just a gasfitter from canada saying my two cents. and I really enjoy this blog.
we dont have housing problems here in south louisiana, so they are not everywhere. When Katrina displaced New orleans residents, it caused a housing shortage around here that still exists to some extent.
Yes prices are inflated to me, but they are not dropping much. I have a residential lot I own that still appreciated by local prices last yr. I have had 4 people in the last yr contact me to purchase it, I think its about time to sell it.
The problem that does exist though, is that it now costs more to build a house than to buy one. Builders who were in short supply after katrina havent come to grip with reality yet and are still attempting to charge too high prices for a market that is beginning to decline
(bonus points to anyone that gets that reference)
Erm Das Boot?,
B_H,
It's proof of my "cultural diffusion" theory and I didn't even recognize it because I wasn't expecting a systemic failure but a gradual degradiation in communication which would eliminate information / IT expense on the periphery.
I am astounded right now.
It's frkcing proof. Differentiation in informaton context and belief creates a net benefit at first but eventually reaches a point of increasing cost for diminishing return, and then there's a snap-back, a reversion back to a better cost point.
Its anchor theory. There is no anchor. Not since Nixon closed the Glod window. Information flows many ways.
Baltic Dry Index, that follows shipping of grain and other commodities down from 12,000 in June to 885 today...yep, I think you could say there is a little problem with grain shipments..
I think you could fill these empty container vessels with really fat people that airlines no longer want to carry and charge by the ton...
"we all have to stop now and start saving and halt and I mean halt goverment borrowing"
timbo
Yup ur probably right but 70% of the US economy is the consumer going out and buying trinkets...do without the trinkets? sure. but economy is not sustainable. tinkets = tulips, imho
Why isn't the media talking about that? People are going to starve overseas if that doesn't get fixed. It's not as if it's fluffy stupid Chinese toys that's not being shipped.
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
So you think that the banks in canada are solvent and the government can meet it's obligations to retirees? The problem we are facing is that everyone got greedy at the same time, so no one is safe. Ironically I think that is the best way for a systemic failure to occur.
I've looked at Corelogic data before. I'm pretty sure this data only includes private label securitized mortgages. GSE's and bank held mortgages would not be included here.
Their sourcing of the caveats is poor. i would expect better from WSJ.
Thanks unsilent minority. The data doesn't seem to add up. I assume private label securitized mortgages fell below GSE guidelines. Any idea what percentage of total mortgages these represent (survey size)?
What you are saying fits better with what I've read regarding D.C. Based on the comments on this thread, I don't think anyone is convinced that these data reflect reality. Who knows what agenda these guys might have. Perhaps they're trying to unload a bunch of MBS paper backed by homes in NY
From the WSJ article --First American said it based its estimates on data for 42 million properties, accounting for more than 80% of U.S. home mortgages.
Can you comment on the workout problems of the contested foreclosures. ie inability to find out who's holding the paper etc. Throw heloc's on top of that and its a real nightmare.
YEah, this must just be the share of private label securitized mortgages that are underwater. Arkansas and Iowa probably only have a few thousand of those and most were very recent vintages.
No way in hell 40% of an entire state where there never was a bubble to begin with is underwater.
I thought the whole Baltic index was a nothingburger: The index represents the marginal cost of shipping, not the total volume. So even a slight surplus capacity results in enormous price decreases. Highly inelastic supply.
lawyerliz writes:
And isn't Iowa doing ok farm-wise?
What's going on with the grain exports? Still held up by rejected letters of credit?
Liz the typical farm in Iowa is like 2000 acres now... when I was a kid it was like 400 acres. Since they aren't making anymore land that means a lot less farmers... like one fifth as many as 40 years ago... but just as many if not a few more people. So you gots your haves & have nots there too.
Result: while farming pumps a lot of money into the state most of it is siphoned off by big agri-biz leaving the rest a bunch of poor hicks w/ underwater 'acreages'.
Nice picture of the heartland... you want it with music & pictures try this...
Now those vids are 'Texahoma'... but you get the idea.
Nobody is willing to work with any of my clients, whether the loans are sliced and diced or not. After Countrywide/BofA said they would deal, I sent some clients to call. So far, no deal. Maybe only dealing with states where the attys genl came after them.
Scratch that. One deal with a guy who had lost his job & then got another one. Not behind in a big way; could afford mtg with job. Underwater, but doesn't want to move.
from a previous thread. And for some obvious reasons, i have not been able to post lately....
Wisdom Seeker writes:
HIG is down over 90% from peak. Wow.
Wisdom Seeker | 10.30.08 - 2:54 pm | #
I am your humble correspondent on the front lines of the combat zone. Today, I almost cried at work. Now that would be WOW to anyone who knows me.
HIG and other companies have some great core busineses. Really. Any "derivitive king" who somehow convinced any of these companies to goose returns by taking on overly risky investments should be handcuffed and led away, imho, of course.
So you think that the banks in canada are solvent and the government can meet it's obligations to retirees?
I am starting to think that the system I believed in is now forced kicking and screaming to pull back the curtain. I in no way am thinking that I will be untouched by this as we are all in the same boat and a leak has popped. people up here in canada are mostly taking a causual glance south at the problem but some are awakening finally to the serious trouble ahead.
again trying to see a little in the future with no training and taking a crash course in this financial tulip bubble.
Iowans definitely aren't rich, but you can buy a pretty decent house for 100-150k in my hometown. If you only need to put together 10-20k for a down payment, it's hard to imagine there would be so much demand for exotic mortgages that could tip over after only a few percent decline.
I will add something to Comrade Counterpointer other than an attaboy.
The indexing dilemma, the part where the depth of very deep nested indicies is deeper than the length of an average brute-force search.
It applies to the ability of hierarchic structures to reconcile the various interests represented at the broad end of the pyramid through the "policy funnel" to the final decision that comes out the top.
Also applies laterally, to the ability of multi-node systems to communicate within themselves. Kind of a no-brainer -- you will learn this in project management theory about the multiplication of communication channels as stakeholders increase. What is not appreciated is that there is a finite point at which communication can no longer be facilitated efficiently.
Clapham gets at this without detailing it in his essays on state failure. Increasing social complexity increases the number in type and quantity of political goods required to sustain the system. Thresholds under which state failure occurs get considerably higher in more complex societies.
There is a society where no amount of political goods can sustain state operation. There is a multi-node communication system with a time-critical component where no amount of bandwidth can functionally permit the communication of critical messages.
IMO -- this is why a simple, formalized system of financial instruments is so important. Innovation introduces fatal levels of complexity because information propagation can't possibly happen fast enough.
Shipping is not important as long as we have roads across the ocean. I drove to Africa last week. Let me tell you, that is a long, flat stretch of boring drive.
"Misean Comrade Counterpointer- that doesn't mean sheet. Say what you mean man."
You are referencing what! This place is busy and I've commented a bit. Kinda why people include the comment they're referencing in the quote. And BTW, insulting like that is about as high school as you can get, nimrod."
You are certainly different from most Canucks on this and other blogs. Many are so wrapped up in patriotism or hubris that yet fail to see the simple fact that they are linked to this house of cards just like everyone else in this world.
"Jeff Daniels on the rocks and nothingburgers. Sounds appetizing."
Dude those nothingburgers can't compensate for the booze. Make sure you eat a REAL samich first. No need to be praying to the porcelain confessional...if you know what I mean.
You know, I think the Porsche experience is quite effective for putting fear into people who want to do naked shorts. I have the funny feeling that the federal govt might be tempted to do something like this and make a profit.
dryfly writes: Nice picture of the heartland... you want it with music & pictures try this...
Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club. Leaned up against the 2x4 railing to the stage when the band played Choctaw Bingo. One of my really good to be alive nights. Ive always liked your comments, you seem grounded.
$12 Help writes:
dryfly writes: Nice picture of the heartland... you want it with music & pictures try this...
Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club. Leaned up against the 2x4 railing to the stage when the band played Choctaw Bingo. One of my really good to be alive nights. Ive always liked your comments, you seem grounded.
$12 Help | 10.30.08 - 11:32 pm | #
I play his music on my hauls up and down I35... from DFW to Duluth MN... calling on factories 200 miles either side of the road.
"Today the Federal Reserve indicated that it would swap US dollars for Brazilian real, Korean won, Mexican pesos and Singapore dollars effectively allowing a select group of emerging economies to borrow dollars on terms similar to those available to the G-10 economies. Or almost similar terms. The G-10 central banks can currently borrow dollars from the Fed without limit; the four selected emerging market central banks can only borrow $30 billion each. But $120 billion is real money and if need be, the the size of these swap lines conceivably could be increased."
Why does that strike me as a bid to buy their vote for the Nov 15th meeting of the G20? The battle between the dollar and the Euro continues.
Sub-zeros are great because they last about 50 years. So, when your neighbor abondons his house, take the Sub-Zero when nobody is looking. Even if you already have 6.
Every time I see that Aflac duck on an ad banner I get really sad, because they ate him today. Severe recessions don't hit home until somebody eats your favorite talking animal.
... let's say that we are witnessing the two stages of a tsunami. The current disappearance of wealth in the form of debts repudiated, bets welshed on, contracts canceled, and Lehman Brothers-style sob stories played out is like the withdrawal of the sea. The poor curious little monkey-humans stand on the beach transfixed by the strangeness of the event as the water recedes and the sea floor is exposed and all kinds of exotic creatures are seen thrashing in the mud, while the skeletons of historic wrecks are exposed to view, and a great stench of organic decay wafts toward the strand. Then comes the second stage, the tidal wave itself -- which in this case will be horrific monetary inflation -- roaring back over the mud flats toward the land mass, crashing over the beach, and ripping apart all the hotels and houses and infrastructure there while it drowns the poor curious monkey-humans who were too enthralled by the weird spectacle to make for higher ground. The killer tidal wave washes away all the things they have labored to build for decades, all their poignant little effects and chattels, and the survivors are left keening amidst the wreckage as the sea once again returns to normal in its eternal cradle.
So, that's what I think we will get: an interval of deflationary depression followed by a destructive wave of inflation that will wipe out both constructed debt and constructed savings, scraping the financial landscape clean. There's no question that stage one is underway. But we can be sure the giant wave of money recklessly loaned into existence in just a few weeks time will wash back through the global economy leaving a swath of destruction....
Did anybody read Maureen McCormick's new confessional about what she and Greg did to Tiger. Really disgusting. I could see them doing that to Alice but not Tiger.
Making GMAC a bank is purely a crim'nal act. They had loan offices all over the country giving away money. And they own Ditech. Rivaled only by the Orange Man.
So, it looks like it's going to get a lot worse before it gets better. I have been following this blog for about 18 months, after the first six months of reading this blog I sold all my real esate. I don't think anyone here really thought it would get this bad, even chicken little with his tin foil hat in place.
"Every time I see that Aflac duck on an ad banner I get really sad, because they ate him today. Severe recessions don't hit home until somebody eats your favorite talking animal."
All I have to say is F**K,. You're the King. I'll just play catch up. Damn that was funny.
Nostrovia,
Comrade Counterpointer,
"All proven."
Spoken like a true idiot. Your chops are like Andrew Dice Clay's...old and forgotten.
Didn't Bush tell us to go shopping after 9/11?
Anonymous
No he said, "In Texas, we've got a saying: Wanted Dead or Alive," and then he kept saying it for several years. In fact, he is probably telling Laura it right now.
Half of Nevada mortgages underwater. LOL! You mean even that Vegas fag couple from Flip That House who tried to sell their condo flip for more than $1 million? (You know, the ones who couldn't sell so they decided to live in it until the market "returned".)
It turns out people didn't actually want to live there after all!
Lets loan billions to a bunch of cocktail waitresses, craps dealers, coked up casino execs, methed out hillbillies and pimps. That should work out great!
Hey dryfly, are you gonna be out for the American Society of Civil Engineers show?
It seems a little esoteric for ya but I figured I'd ask.
Nope - not my gig - was at MD&M in Mpls last week - went okay. No one has told biomedical the economy sucks - someday the insurers will send them a memo.
Hearing rumors of layoffs in the 'show' biz. You hearing any of that?
From the prior thread but I'll post it here anyway for controversy.
Still waiting for the bailout of people who own their homes free and clear, have no credit card debt, no auto loan, no student loan, no liens, no unpaid taxes, no unpaid bills, and have returned at least 50% percent of the tools they borrowed from the guy next door.
It's gotta be coming soon, right?
In order to allow this to unwind in a defensible fashion without having huge losers and winners, I believe that we will see across the board devaluation, i.e. a G20 agreed upon money supply multiplier. How about this for controversy?
Discount Deparment store chain Value City has filed BK and will close 66 remaining stores letting go more than 4,500 employees.They had already closed 75 stores in the last year.
It turns out people didn't actually want to live there after all!
Der Kommandant Weather Helm | 10.30.08 - 11:51 pm | #
LOL. You don't know how true that statement is. I lived there from 1992 to 2001 and could not wait to get of there, but I do feel bad for what happened as I do know a lot of good people who live there. Funny how they won't talk to me after hearing that I sold my house last year though.
RE, I've been wondering about that too (coordinated global devaluation). So if it happens, what do they decree w.r.t. precious metals prices, if anything?
Does anyone else agree that much of the legislation that's being passed is either making the problem worse or simply delaying the process?
Loan modificatios appear to be a slippery sloap. Shevy Akason from Evergreen realty is surveying homeowners, legislators, attorney's, perspective homeowners, and others to see if there is support and to gain feedback regarding legislation that provides tax incentives to those that purchase and stay in their homes. The bill will allow prospective homeowners to put money into a designated HEA (Home equity account). Money placed into this account will be deducted from their tax returns for income tax purposes, similar to a SEP ira. Example: If a perspetive homeowner has $100,000 saved to buy a home and they place it into this account and purchase a home within the designated period of time they will be refunded $30,000 (if they are in the 30% tax bracket) This money must be used for the down payment or closing costs on a primary residence. In addition, this legislation will allow current homeowners that have less than 50% equity to place money into an HEA account designated for homes they purchased after January 1, 2000 and before Jan 1, 2009 or 180 days after this legislation takes affect, whichever is later. Finally, it allows current homeowners that participate in this program and remain current on their mortgage to go back as far as 2000 and claim an income tax deduction on any money paid toward the principle of their home including their original down payment. To participate in this program homeowner must be in or re-finance into a fully amortized fixed rate 1st mortgage. The legislation should take affect immediately upon passing and be limited to 360 days with options for extensions.
This is only a proposal and we are looking for support, sponsors, and for people to share this with others.
Hearing rumors of layoffs in the 'show' biz. You hearing any of that?
I'm a local contractor so not too in on the kick-up part of the biz.
The eshow people indicated that things were looking a little thin at MS&T but I didn't think they had really caught the smell of smoke yet.
MS&T had good numbers although the show's administration was wanting -- the consortium that was running it dumped the whole show on some late 20s / early 30s junior mgr and then wanted 9 contradictory things from her, and constant updates too.
Haven't seen my friends from EPIC lately so no word from that quarter.
I know for ASCE the staffing seems VERY thin but it could be a tiny show or they might be providing a lot of their own capacity. I think they are kicking it up themselves so you just can't tell til it happens.
PeakVT writes:
Entirely OT: Does Roubini only have one outfit? He's wearing the same thing in every video on his blog.
PeakVT | 10.31.08 - 12:17 am | #
I know sales guys who have something like five 'pairs' of almost the same identical suit - all the same shade of gray. Makes dressing & packing pretty easy.
Wouldn't surprise me that NR does the same identical thing.
Comrade Yossarian writes: Holy crapola, Batman!! I thought the IEA group was the optimists!
Seems like we are pretty steeply post-peak, yes. Horizontal drilling, take a bow.
Then again, they could just know their master's voice and be responding to the urgings of the day.
Still, interesting counterpoint to the "soon we'll have 30 dollar / bbl oil! It was all hype!" you hear from here.
One of the interesting things the FT article brings up is that this running orthogonally to the Great Deleveraging means that the vast capital investments needed to squeeze out additional production just won't happen for years.
My take (also somewhat of a bug) is that the rulemakers will themselves need an out, so we don't have to worry about bans on gold ownership or the like. And I have a hard time imagining any investment other than precious metals that does well in a coordinated inflation. Maybe TIPS.
Having said that, I think a truly global coordinated devaluation will be difficult, but not impossible, to pull off. Nobody sitting on bonds will want it.
One of the interesting things the FT article brings up is that this running orthogonally to the Great Deleveraging means that the vast capital investments needed to squeeze out additional production just won't happen for years.
Byzantine_Ruins | Homepage | 10.31.08 - 12:36 am | #
Especially if you measure that investment in actual activity & resource inputs and not just in dollars... it is going to require a lot of 'work' to offset those declines either in additional oil discoveries & extractions or alternative energies.
As a result of scarcity energy will likely be one of the first commodities to bounce back from the 'deflationary pressures'. But that still might take a while.
Having said that, I think a truly global coordinated devaluation will be difficult, but not impossible, to pull off. Nobody sitting on bonds will want it.
I agree but there will have to be some unpleasant realities in order to keep the ship afloat. Otherwise there will be even more chaos with piecemeal inflation resulting in a slow road to death for bondholders. I think that enough folks will remember January 1934 and then reflect.
As to PMs I mean less controlled. In this environment controlling the gold price for appearances sake simply becomes a nuisance.
dryfly: As a result of scarcity energy will likely be one of the first commodities to bounce back from the 'deflationary pressures'. But that still might take a while.
Yeah, it's a big question mark in the future, particularly given the potential in the mid-term future for severe oil extraction infrastructure disruption due to resource interdiction warfare, and large population die-offs due to that or other essential services disruptions.
It could either be really scarce or really stupidly plentiful per capita to the surviving population. Possibly both.
Personally I don't see how a coordinated devaluation 'helps' unless it results in a whole lot more fiat - a 'coordinated release' if you will - that is the only way a lot of that debt gets 'paid off'. But that too is in effect a 'stealth default'.
I don't see the bond holders worldwide being too happy about that. I don't see how they will consider it better than an actual default.
Personally I don't see how a coordinated devaluation 'helps' unless it results in a whole lot more fiat - a 'coordinated release' if you will - that is the only way a lot of that debt gets 'paid off'. But that too is in effect a 'stealth default'.
That is in essence what happened in 1934. A 40% devaluation of the dollar against gold. I agree that it is a default. I think it may be somewhat early for such a radical proposition but I believe it is one that could lead us out of this mess. The Chinese and Japanese would not be thrilled but I'm convinced that certain special concession could be made.
The alternative is risking systemic breakdown either via deflation or the more likely event of default via runaway inflation after initial deflation.
RE yes, big changes a-coming in any case. It seems like currency (or money supply) manipulations should be zero-sum, resulting in some kind of prudent versus imprudent fight. But maybe the imprudent vastly outnumber the prudent, so it's just a worldwide wealth redistribution. Get your real assets now.
California said Thursday that it plans to cut water deliveries to their second-lowest level ever next year, raising the prospect of rationing for cities and less planting by farmers.
The Department of Water Resources projects that it will deliver just 15 percent of the amount that local water agencies throughout California request every year.
Since the first State Water Project deliveries were made in 1962, the only time less water was promised was in 1993, but heavy precipitation that year ultimately allowed agencies to receive their full requests.
The reservoirs that are most crucial to the state's water delivery system are at their lowest levels since 1977, after two years of dry weather and court-ordered restrictions on water pumping out of the Sacramento-San Joaquin Delta. This year, water agencies received just 35 percent of the water they requested. ...
Cathy-
Appraisal fraud was huge in Texas because for the 80% rule. Brokers would find someone to appraise a house 30% above market so their "client" could get more money out. Another scenario is the builder over valuing the home to cover the cost of the down payment assistance.
We're about 12 months behind the curve on this but I believe in some ways Dallas (and many other parts of Texas) will be worse off than the rest of the country. In Big D everyone lives beyond their means, more so than almost any other area in the USA. The don't call Dallas the home of the thirty thousand dollar millionaire for nothing.
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
CD- The FDIC providing gaurantees to encourage lenders to modify loans is not the answer, in fact it will only add to the problem.
Loan modification is a slippery slope that has potential to exacerbate the current economic crisis.
Example: Homeowner A and B are paying their mortgage. However, homeowner B calls his mortgage company requesting a loan modification. The mortgage company explains that he is not in default and therefore they will not complete a loan modification. Homeowner B quits paying his mortgage and calls the mortgage company back and gets a $100,000 principle reduction. Homeowner A expresses to homeowner B that he is upset that his home is worth $100,000 less than he paid for it, however B then explains that he received a $100,000 principle write down by not paying his mortgage and negotiating a loan modification. This encourages homeowner A to stop paying his mortgage and the problem grows.
Example two, perspective homeowner A and B both earn $100,000/year, have 20% to put down, have dreamed of owning a home and are actively looking in 2005. Perspective homeowner A and B both like the same neighborhood and look at two neighboring and identical homes, one home is for sale for $550,000 and the other is for lease for $2000. Perspective homeowner A, realizing that he would have to take an exotic mortgage and that his payment would be over twice as much as it would be if he leases chooses to submit an offer for $500,000 so that he can take a 30 year fixed fully amortized loan while perspective homeowner B knows that there are others interested in the home and offers $600,000 and takes an exotic loan knowing thats the only way he can afford it. Perspective homeowner B gets the property and tax write off and other benefits that come with home ownership. As a result of the inflated prices perspective homeowner B, frustrated that even though interest rates are historically he cant take advantage of them and is forced to rent, as prices have become too inflated, and rents the home next door for $2000.
Homeowner B, pays twice the taxes as A as he waits for prices to come down. In 2008 prices are coming down but still not affordable and the legislation that helps A to stay in his home through principle write down is passed and essentially makes homeowner B pay for it. Homeowner B is left wondering whos looking out for him, it seems no one.
If you're talking about New York State please remember that upstate New York has nothing to do with the "Zoned Zone." Nor did large parts of upstate New York experience any sort of bubble whatsoever.
I honestly can't figure out why upstate NY's experience was so different from Michigan's. Michigan's economy is even worse than upstate NY's so why is their housing market going into the crapper now?
"It's hard to believe that Washington, D.C. and Maryland are ranked as low as they are. While D.C. and Maryland weren't the top bubble regions, I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value. Anybody else surprised?"
It is particularly curious in since Maryland, a sleazy condo or falling apart, WWII-era shoebox house costs about 5 times your income. We are full of $400,000+ "affordable, entry level townhouses" and so on. I can only assume that the relative lack of collapse is caused by 2 things: 1) most people took out Alt-A or Option-Arms vs. subprime (since "everyone is rich in Maryland because of DC"), and 2) I live here, so housing will never be affordable here.
I find it interesting that if you look at the top 10 in that list, based on current polls 5 of them are projected to switch from red in the 2004 election to blue in the current election (FL, OH, NV, IA, CO). Two more (AZ, GA) are remarkably close to toss-up territory. Coincidence? Methinks not.
We're doing fine here in TX. Lot's of oil and gas drilling. I live in a naffluent area and home prices haven't dopped (yet) although I'm sure it might eventually be felt in newer tract developments.
IMHO Dallas is in denial. Many older neighborhoods have become "tract developments" with all of the tear downs. The median home price in the Park Cities has jumped from 500k to 1.2mil. Tons of 30 somethings "spent" future bonus checks on new homes and now they won't see those checks like they planned. The Park Cities will see 30% declines before this is over. I've seen it happen twice in my lifetime and I'm only 34.
The bright side is that this will hopefully return my home town to an affordable neighborhood that isn't concerned with home prices. We used to argue our valuations lower to reduce our taxes, not try to get the value pumped up. As a third generation resident of the Park Cities I'm hopeful this mess will push the new money (aka debt) out.
"Bob_in_MA writes:
A couple points on NY. Upstate, house prices have been pretty flat."
Spoken like a true RealTurd. Prices doubled at a minimum in all counties in upstate.
Folks, don't engage in this deluded talk. What this guy is saying is best described as DEEP DENIAL and clearly has a reason to get you to believe there was never a bubble in upstate NY. The bubble blew hard there and now it is collapsing.
Michigan is coming back soon, baby!
second
How do you need a submarine in a desert?
Silver.
Nostrovia,
dp,
Thlllllpt! Ack!
Nostrovia,
Can someone talk about the impeding credit card debt problem ?
When are slackers in the north east going to join the party?
Can someone talk about the impeding credit card debt problem ?
Don't worry about that. There is already a group assembling to organize government credit card debt relief and forgiveness.
The CC problem will merely go away.
No worries there.
When are slackers in the north east going to join the party?
New York is so screwed it's not even funny.
Hell, the Fed is just gonna start issuing credit cards. No credit check, no income verification, .5% rates forever.
Go Christmas shopping!
Nostrovia,
New York is in the best shape? Huh?
But there's only about 38 people that live in Nevada. So, does it matter that much? Of course Michigan is a different story
When I first told some people I knew that banks will have to forgive credit card debt on a massive scale they thought I was nuts, especially after the 2005 act.
In retrospect I should have posted my prediction on some blog instead of just lurking around for years
Michigan is coming back soon, baby!
Jeff Daniels keeps reminding me of that fact.
BTW, just read an article on the Porsche/VW drama. German engineering at its finest. Wonder who's holding the bag on those losses?
Hmmm, looks like Alabama (I live in Mobile) is doing much better than I expected. Interesting.
comrade misean is dope,
That was my other prediction.. The fed will have to directly lend to average people.
NV and FL had real estate bubbles.
NY had a mortgage broker bubble.
The RE bubble popped two years ago but the mortgage broker bubble only popped last month. Give it time.
Basel Too,
"Jeff Daniels keeps reminding me of that fact."
Dude it's Jack Daniels.
Nostrovia,
It's often overlooked that Texas did not allow home equity loans until about 1998 and 2004 for some types. We had to pass a few constitutional amendments to make it legal. Everyone was like a kid in a candy store and pulled everything out since it was "new" and marketed heavily. It was "the smart thing to do."
It would be interesting to see how bad Texas is because of it being late to the home equity game.
"Jeff Daniels keeps reminding me of that fact."
Dude it's Jack Daniels.
Jeff Daniels the actor keeps doing the annoying "Michiganders" commercial that seemingly airs seemingly 10K/day.
NY had a mortgage broker bubble.
I'd say NYC is on the tail end of a job bubble.
banks will have to forgive credit card debt on a massive scale
It's getting to be one big game of Bailout Bingo.
Today's winner: High credit card debt, low ability to pay. If you have that box on your card, you're a winner!
Yesterday's winner: High bank losses, low capital. If you have that box on your card, you're a winner!
Tomorrow's winner: High mortgage, low ability to pay. If you have that box on your card, you're a winner!
And if you haven't won yet, just stay tuned for next week's game of Bailout Bingo!
lucifer,
"hat was my other prediction.. The fed will have to directly lend to average people."
Well who else is going to loan to these asshats.
Oh wait...YOU???!!!!
If you're not loaning to them, then...
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!
Nostrovia,
just imagine what would happen if all those people knew they had no equity, rather than the state of denial they live in now.
Boy could I use some Jeff Daniels.
Water whiners all over the place in the SW! Nevada simply needs a big water park and some TARP funding!
Water Q&A
Waveyard will be in the middle of a desert.
So, is recreation a responsible use of water?
Absolutely.
The Waveyard Project
fat bottom goils are in Oregon..
best of the bunch.
Another prediction- the US healthcare system will undergo changes that will make the stuff on wallstreet look small. All the people in the service and billing side of that industry are in for a very rude awakening. They will resist, but ultimately it won't matter.
Pardners,
My state of New MExico is 8th best..almost like trying to be first with Nemo..and ending up 8th!
Giddyup!
Outsider,
"It's getting to be one big game of Bailout Bingo."
Bingo?...No...Whack a Mole...or squirrel if you prefer.
Nostrovia,
Ah fak...
Just knew the thread would move on, here's my last from previous.
OT but, y'know:
Comrade Counterpointer writes:
Broward - you get me wrong. What I'm saying is that the internally consistent reason set of sociolinguists like Chomsky and Lakoff, which can be argued on their merits, is less applicable and far more controversial, and justifiably so, when the extension comes. The extension is taking a theatre of language beyond its inherent analysis, and even its baseline epistemology, to broaden it out to theories or commentaries about social life or politics. Worse when done en bloc. Broad-banded political messages cannot be derived from socoilinguistics.
This is just bad dumb and wrong on so many counts, philosophically, professionally and practically. The equivalent is the Sapir-Whorf hypothesis that that the poor and undereducated could not conceive of that which they had no learned word for, or that language begets mind. Again, rubbish.
I'll put this idea up again, for a market to work efficiently, everyone needs to speak the same language, the stakes must be real and transparent, the mechanism design of trades needs to be efficient, and there need to be obvious and clear ways to open and close from the market.
What I've said previously on this board and will now repeat is that in sociolinguistic terms this market has suffered a comprehensive conversational failure. And will continue to do so. Conversational failures impact confidence, which impact willingness to be part of failed conversations.
The numbers simply follow the conversational failure. And compound.
Comments welcome.
CC
Comrade Counterpointer | 10.30.08 - 10:07 pm | #
triple ell,
check out the hawaiian tail.
Time to stop paying the mortgage, no reason to be responsible.
It's hard to believe that Washington, D.C. and Maryland are ranked as low as they are. While D.C. and Maryland weren't the top bubble regions, I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value. Anybody else surprised?
Hey Misean,
Better look at the cool java crap at Waveyard. The pull down menu has way cool icons embedded with cool surfers and symbols which make me supportive of a giant tsunami of cheap and easy credit in the southwest desert. Yippie.
All the LV casino's are underwater!
Comrade misean,
I made that observation in 2006. People thought I was nuts, just like when I said wachovia would make enron look good.
Comrade Counterpointer writes:
Comments welcome.
significant waste of broadband.
ok, ok, the lesbian and bruddah were me.... Im long housing in both, but I lives in oregon.
almost time to mothball and jump the shark.
I'll check it out Doc.
Nostrovia,
From the yahoo board...can anyone confirm
"During a tense conference call late Wednesday, analysts peppered Hartford executives with questions about its capital position.
The slump in equity markets, along with much wider spreads in the credit market and increased volatility, make it "extraordinarily difficult" to estimate how much of a capital cushion Hartford will have at the end of 2008, said Greg McGreevey, the insurer's new chief investment officer, during the conference call.
Despite not giving an estimate, Chief Financial Officer Liz Zlatkus said that Hartford is comfortable with its capital level.
That didn't wash with several analysts, including Edward Spehar of Merrill Lynch.
"I don't understand how you can say you feel comfortable with your capital position, and yet you say you can't give us any idea what the number is," he said. "At this point, it's impossible to say those two things."
I have a strong feeling that NY will be moving up the ranks...
cracker,
That was weird,
lucifer,
I understand. But if you ain't offering cheap loans for souls now, we're in deep shite.
Nostrovia,
But, there's no water in Nevada. How can they be underwater?
Maybe we should use TARP to drill for water in nevada and turn it into an oasis with movie stars, swimming pools, etc?
See: Elly May
Elly May was a strong, capable girl. She could throw a fastball as well as "rassle" any man to a fall. She could be as tender with her friends, animals and people, as she was tough with Jethro or anyone else she was rasslin'. She said once that animals could be better companions than people, but as she grew older she saw that, "fellas kin be more fun than critters." Elly was squired about by eager young Hollywood actors with stage names like "Dash Riprock" and "Bolt Upright".
Beverly Hillbillies - Cast Ad #05 - Winston Cigarettes
YouTube - Beverly Hillbillies - Cast Ad #05 - Winston Cigarettes
Gosh Florida is merely 5th. Just a flesh wound.
We Floridians are voting like crazy. Watch out for us, we are the great election screwers-up. I am pro O, but hope whoever wins here does so decisively.
So to hell with it.
Jubilee for credit card debt?
Feds going to rework millions of mortgages? Check.
Am I in that box? Nope.
Feds/banks going to work out cc debt jubilee on trial basis? (then move onwards...) Check.
Do I keep a balance? Nope.
I'm going to let my eldest get a card and run the shit out of it.
Why not? This just sucks.
lawyerliz,
FL is the place where double voting comes from. I'll bet snowq birds vote twice. Any feel on them?
Nostrovia,
That's pretty amazing that Oklahoma - my former home state - is near the middle. I still have family in Tulsa and they did not have a bubble. The median house price increased by about 35% nominally over 10 years, price/rent ratio relatively low, same with median income/median price, very sprawling, economy not in the dumps, etc.
I wonder what this graph would look like if homeowners with no mortgage were subtracted? New York may be on the right side of the scale because the owners are older. Also, what about second homes or flippers.
homedad43,
Why not.. As a country we reward shysters. If you cannot beat them, join them.
Liz:
Come vote for me.
I've no clue who I'm going to vote for anymore.
Teddy roosevelt ain't runnin', so what's teh point?
I Am Not My Bankers Keeper --it was written about today in one of the papers, can't remember which
Regarding my point on Washington, D.C. and Maryland, visit the site below and compare the graph in the current thread with this interactive map.
here
Well, only if they only vote here once!!
Nope, no feel for snowbirds. All the Florida neigborhoods I've lived in solely contained all year rounders. And I never run up against snowbirds in the way of practicing law, either. Illegals are all year rounders, right?
I'll put this idea up again, for a market to work efficiently, everyone needs to speak the same language, the stakes must be real and transparent, the mechanism design of trades needs to be efficient, and there need to be obvious and clear ways to open and close from the market
That is very interesting. I agree about the same language. We're currently on a path of destruction by allowing multiple languages to co-exist and multiple. This is work I've done regarding what I call the "cultural diffusion". Language differentation is one aspect of it.
http://www.realmeme.com/roller/page/realmeme/?entry=the_cultural_diffusion_resurrected
It's an informal proof but good enough for me. One of my "specialities" in software is business differentation. Almost all business would like software which, at its core is common, but has the ability to minor differentation across business units, partners, etc.
There's a cost trade-off which is often unrecognized, particularly by younger people. Commonality is the most visibly efficient, but correct differentation gives you broader market access. And excessive differentation gives you increasingly higher costs with diminishing returns.
For most environments there's an optimum operating point which balances common versus different.
It's a fascinating topic for me, I've done a lot of work with it in thte past few years, mapping it into other areas and concepts.
You should email me -
broward@realmeme.com
It is ironic to use the term "underwater" for Nevada. I think the term "in a shallow grave in the middle of the desert" might be a better term.
We Floridians are voting like crazy.
Floridians are already crazy voters. Hence all that with the recounts and chads (?).
I'm a former Floridian, so I can criticize freely.
wheres CSC?
I never see mp post anymore, is conjure dead?
This article says the 'Hope Now' program has only helped 79 people - it's supposed to help 400,000 people by years end.
But these mortgages take 60 days to close at least. What a scam!
No Hope for Homeowners – Foreclosure Prevention Program Falters « Your Mortgage or Your Life…
and this should be of interest? why?
it is the gambling meca of the world and so, once and a while, craps is possible
speaking of craps...post gold rush re in SFO dropped 90% for years. just finished a good book that talked to the desperation of the times quite frightening...
popeye - I make serious money from this. Identifying the info breakdowns is key to my upside future.
CC
That's the "Hope for Homeowners" program that sucks that bad. The other ones just suck regularly.
A couple points on NY. Upstate, house prices have been pretty flat. And there's some sort of tax on mortgages, so refinancing there is more expensive and people weren't doing it as often as elsewhere. My brother had a ranch in a suburb of an upstate city. He had it about ten years and sold it two years ago for slightly more than he paid for it.
The City and LI are a different story and prices still have a lot to fall there.
popeye,
were you not pimping target in a REIT leaseback spin off the last two nights?
I also find it intersting to note that Washington DC is now a state. Cool. 51, baby.
So was Lex Luthor TOO successful in his scheme to turn Nevada into beach front property? I thought Superman thwarted his nefarious plot.
THE GREATEST REAL ESTATE MOVIES OF ALL TIME. | Environment & Natural Resources > Land Use & Development from AllBusiness.com
Bloomberg story on mortgage fraud. Interesting story - yet maybe a little run-of-the-mill and ho-hum for all you CR junkies. Apologies if already posted.
"Maid-turned-Realtor Ran Vegas Mortgage Scam, Prosecutors Say"
Maid-Turned-Realtor Ran Vegas Mortgage Scam, Prosecutors Say - Bloomberg.com
They can't say what their capital position is because that could be a lie and somebody would go to jail.
But they are comfortable with it because...it could get a lot worse.
I also find it intersting to note that Washington DC is now a state. Cool. 51, baby.
State of mind?
State of panic?
sorry Comrade Counterpoint, the esoteric phraseology just struck me the wrong way. I'm sure it has merit. I'm simply frustrated with the gyrations in the market. Apology tendered.
No more chads; chads all gone.
But they managed to lose a bunch of ballots on a recount, in ummm, Palm Bch County, on a close local primary election. The hub says that a lot of them (not all) were found in a closet somewhere. Appeared to be stupidity, not maliciousness.
A person I know, who is by no means stupid, probably got the chad thing wrong, not punching all the way through. In 2000. Not a Bush voter.
As to DC, I suspect the outermost suburbs will take a hit, especially in light of the oil/gas runup.
Closer in should probably survive without catastrophic problems, especially since there's usually turnover as new admin personnel come in. At least, that's what we learned from locals when we lived there. And given the philosophic bent of the probable incoming administration, there'll be a real demand for housing closer in to the DC Metro system.
Sold our Silver Spring, MD home in late '97 for about $155K (two story 4 BR in decent neighborhood); out of curiousity one night in late 2005, did some online research and found that neighboring houses (across and down the street) went in summer 2005 for $450K.
And now,for the kid's credit card application...
"I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value."
I have tracked this weekly by neighborhood for 2.5 years. The outer burbs, like Manassas, are worse then anything in CA. The inner counties are down maybe 10%. The closest, rich people zones (like McLean) are actually up.
where are the dakotas & wyoming?
they a place to move to?
ARUGAAH ARUGAAH ARUGAAH
(bonus points to anyone that gets that reference)
cracker writes:
popeye,
were you not pimping target in a REIT leaseback spin off the last two nights?
cracker,
I follow retail closely. It's often difficult for me to connect with many the real estate centric and bond centric discussions here. The TGT REIT offered an opportunity for common discussion.
I wouldn't call it pimping. I was asking for input, but got few takers.
Westchester is already a train wreck, including some of the nicest suburbs like Scarsdale and Larchmont.
At least, the train is wrecking right now.
Scarsdale is probably the most expensive suburb in the NY metro area in terms of real estate, taxes, food, whatever. But you always could live in Scarsdale for 20% less than a comparable lifestyle in NYC. And it's 25 minutes away by train.
I foresee mass migration from city to burbs.
The television show "Emergency"?
So would the arbitrage be "buy NV short NY"? Can you do that w/ Case-Shiller futures?
We are coming to the point that even normal people know the game is up. A person at my work today, that I have never talked about financials with, asked me what I thought about he whole Volkswagen thing (Porsche buying more than the float). I tried to explain about paper stocks and mythical leverage, and my coworker said "How is that even possible?"
We are close to a run on the shadow finacial system, plan accordingly
popeye - dude, it's just a different training language.
Most of this board seems to have started in economics or finance, I started in sociolinguistics and arrived in finance and economics through a series of flukes. Jus tryin to fit it together, and if it's new and wacky, great - perhaps we need a bit of that right now?
CC
Jeff Daniels and Coke would be ideal right about now...
I started in residential construction. Picking up trash on the job site in Austin Texas.
Just another casualty of the S&L scandal. Hey, last framer leaving Austin, turn out the lights.
In the 1930s it was trade that was singled out. Maybe the zeal of US bankers and financiers created the new opportunity:
The overwhelming majority of Germans would welcome nationalisation of large segments of the economy, according to an opinion poll that underlines the strength of popular opposition to free-market liberalism in Europe's largest economy
FT.com / UK - Poll reveals Germans would like return to nationalisation
CR,
Couple months from now, you gonna need a taller chart.
Chill Bear - Breeders, no?
Note: there is no data for ... Vermont ...
Shame. Data is pretty scarce up here. The state realawhore association is lame, so no spiffy reports like the DC area parasites used to put out.
I second CR's surprise about Iowa. I'm a native Iowan and I never noticed RE prices changing by much if at all when I'd go back for visits. Given that prices never ran up that much to begin with, I don't see how so many people can be underwater there.
I'm all for shorting NYC but if you think NY is in for a big crash I beg to differ.
Other than NYC we never went up much (aside from Saratoga and some other upstate areas) and there isn't too much to go down
I tried to close an $85K HELOC on my house recently. the house is worth around $500K at the low end. The bank lost the paperwork, i guess, as it is still open. I'm thinking of maxing it out and shorting this mess. $85K in EEV today is a tempting offer.
Gerald, thanks.
If HIG cannot state their capital position as per the conference call then they are gpoing to zero tomorrow.
And isn't Iowa doing ok farm-wise?
What's going on with the grain exports? Still held up by rejected letters of credit?
Maybe people just don't want houses anywhere?
Thoughts on tomorrow's dynamics with year-end for MFs/HFs & the need to settle redemption requests?
CC,
Holy Cow.
You're right, the derivatives failure is a communication failure.
It's proof of my "cultural diffusion" theory and I didn't even recognize it because I wasn't expecting a systemic failure but a gradual degradiation in communication which would eliminate information / IT expense on the periphery.
I am astounded right now.
It's frkcing proof. Differentiation in informaton context and belief creates a net benefit at first but eventually reaches a point of increasing cost for diminishing return, and then there's a snap-back, a reversion back to a better cost point.
Very, very interesting to me.
Awesome.
I have a whopper headache right now which is rare and I'm off to play some pool.
You made my year, man.
Why@ ZIRP writes:
CR,
Couple months from now, you gonna need a taller chart.
Why@ ZIRP | 10.30.08 - 10:45 pm | #
We'll need something that looks like that loveable loser, Albert Gore's global warming chart. The only thing is, we need it to descend 20 feet into the ground.
Iamnotmybankerskeeper- here is the link to FT
FT.com / Companies / Insurance - Hartford plunges on big loss
Well, a hole can be dug. Very symbolic.
Back on topic for a quick moment, please indulge a question-
I can't really understand how Texas could have 18% of its homes underwater. Case Shiller shows Dallas at around a 3% drop in value.
Assuming Dallas is pretty representative of the Texas Metro markets, doesn't that require 18% of homes in Texas to have been financed on a 100% LTV basis within the last 3 years?
What about other insurers? We have some paid up whole life. Groan. Anticipated huge fight with the hub.
FL is the place where double voting comes from. I'll bet snowq birds vote twice. Any feel on them?
And if they are snowbirds from Chicago - early AND often as the good mayor directs them to do. Civic duty.
I'm just eyeballing the graph to get that 18% figure.
rich writes:
"I don't understand how you can say you feel comfortable with your capital position, and yet you say you can't give us any idea what the number is," he said. "At this point, it's impossible to say those two things."
They're comfortable with it because it is not expected to negatively impact management bonuses.
It reminds me of the joke about the guy who goes to his doctor and the doctor tells him, "I've got good news and bad news. Which do you want to hear first?"
"The bad news," the man replies.
"You've got an incurable disease and only have six months to live," the doctor tells him.
"My God," the man says, shaken. "What's the good news?"
The doctor replies excitedly, "Did you see my new secretary? I'm screwing her!"
been reading the posts for a while and had a laugh or two and as this is my first post please be kind. lol
I think we are about to see a huge problem that cannot be solved unless someone has an idea how to.
banks will not lend to banks,right, so 1st of all the bankers cannot trust others books. the goverment is forced to lend to the banks but where the heck is it getting the money? printing ? ok , so it lends to the banks to keep them solvent as their loans are making them call in good assets as bad ones increase, hence the stock market sell off. now you have a rally as the fed pours money in to shore up the banks letting them stop selling good assets for the time being till again bad loans make them insolvent again and another loan is needed.
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
if the usa is up their eyeballs in debt and can only rely on others to back the currency to keep the lending going when this gets deeper will not the lenders to the usa run out of money to lend sooner or later? or is everyone creating money out of thin air to prop the dollar and keep the borrowing going.
this reminds me of something i read
http://www.mises.org/books/bubbleworld.pdf
in the book make germany the usa and the usa every other solvent nation. the book really copies what is happening now and is pretty interesting half-way in.
if I have the basics to this then by talking about markets every day is like talking about the size of the sand pile that is holding up the rock in the rain, it does not really matter much as sooner or later the sand will be gone and off goes the rock.
how in the heck do you keep an economy going if you are still borrowing more and more which creates more and more debt. these bubbles i fear were the last gasp of the ponzi scheme.
we all have to stop now and start saving and halt and I mean halt goverment borrowing or worse is to come and if you say you cannot halt the debt spiral then I rest my case and the rock will continue down the hill with only the sand to stop it every now and then.
sorry if this to simple or in error, just a gasfitter from canada saying my two cents. and I really enjoy this blog.
we dont have housing problems here in south louisiana, so they are not everywhere. When Katrina displaced New orleans residents, it caused a housing shortage around here that still exists to some extent.
Yes prices are inflated to me, but they are not dropping much. I have a residential lot I own that still appreciated by local prices last yr. I have had 4 people in the last yr contact me to purchase it, I think its about time to sell it.
The problem that does exist though, is that it now costs more to build a house than to buy one. Builders who were in short supply after katrina havent come to grip with reality yet and are still attempting to charge too high prices for a market that is beginning to decline
Actually, how could Nevada reach 50% on underwater houses. Half of EVERYBODY bought or re-fied after 2005? Seems impossible.
Caution on the EEV!
Chill Bear Dope,
ARUGAAH ARUGAAH ARUGAAH
(bonus points to anyone that gets that reference)
Erm Das Boot?,
B_H,
It's proof of my "cultural diffusion" theory and I didn't even recognize it because I wasn't expecting a systemic failure but a gradual degradiation in communication which would eliminate information / IT expense on the periphery.
I am astounded right now.
It's frkcing proof. Differentiation in informaton context and belief creates a net benefit at first but eventually reaches a point of increasing cost for diminishing return, and then there's a snap-back, a reversion back to a better cost point.
Its anchor theory. There is no anchor. Not since Nixon closed the Glod window. Information flows many ways.
Nostrovia,
Lawyerliz - I've got the same problem with Texas. Makes me think this chart refers only to mortgages closed since 2005
Lawyer Liz:
Baltic Dry Index, that follows shipping of grain and other commodities down from 12,000 in June to 885 today...yep, I think you could say there is a little problem with grain shipments..
I think you could fill these empty container vessels with really fat people that airlines no longer want to carry and charge by the ton...
Bloomberg.com:
Personal Finance
Could this data be for a single year or range of years? It would make more sense that way.
"we all have to stop now and start saving and halt and I mean halt goverment borrowing"
timbo
Yup ur probably right but 70% of the US economy is the consumer going out and buying trinkets...do without the trinkets? sure. but economy is not sustainable. tinkets = tulips, imho
Why isn't the media talking about that? People are going to starve overseas if that doesn't get fixed. It's not as if it's fluffy stupid Chinese toys that's not being shipped.
timbo from canada,
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
Sisyphus,
Nostrovia,
timbo from canada,
So you think that the banks in canada are solvent and the government can meet it's obligations to retirees? The problem we are facing is that everyone got greedy at the same time, so no one is safe. Ironically I think that is the best way for a systemic failure to occur.
Timbo. You do have to consider the velocity of money and all the debt destruction that has happened that cancels out some of this.
[Barley writes:
Caution on the EEV!]
Yeah, Russia & Brazil are coming back to life. Too bad I'm a holder overnight which is something I rarely do...
Comrade Counterpointer:
Comments welcome.
Interesting stuff.
Sisyphus had to push the rock back up again.
"People are going to starve overseas"
lawyerliz
Your point is what?
Some of (no, a lot of) Africa is starving yet the US is better off paying for a war in where, for what?
... and every two years people think that they can vote in change.
Tantalus
I've looked at Corelogic data before. I'm pretty sure this data only includes private label securitized mortgages. GSE's and bank held mortgages would not be included here.
Their sourcing of the caveats is poor. i would expect better from WSJ.
bearly - a good time was Oct. 05-12
Now it way dangerous...
I meant people who are not normally in the starving category. Not that we should be unconcerned with Africa.
People who thought they could afford the grain and provided the lcs.
Thanks unsilent minority. The data doesn't seem to add up. I assume private label securitized mortgages fell below GSE guidelines. Any idea what percentage of total mortgages these represent (survey size)?
@Plantagenet
What you are saying fits better with what I've read regarding D.C. Based on the comments on this thread, I don't think anyone is convinced that these data reflect reality. Who knows what agenda these guys might have. Perhaps they're trying to unload a bunch of MBS paper backed by homes in NY
Broward - have some cool pool. It'll be the same tomorrow.
Misean - that doesn't mean sheet. Say what you mean man. Clearly, no spinny.
Man those left coasters are parochial. Major national problems. As if.
CC
From the WSJ article --First American said it based its estimates on data for 42 million properties, accounting for more than 80% of U.S. home mortgages.
Nevada Has Highest Percentage of 'Under Water' Households - WSJ.com
lawyerliz
Can you comment on the workout problems of the contested foreclosures. ie inability to find out who's holding the paper etc. Throw heloc's on top of that and its a real nightmare.
YEah, this must just be the share of private label securitized mortgages that are underwater. Arkansas and Iowa probably only have a few thousand of those and most were very recent vintages.
No way in hell 40% of an entire state where there never was a bubble to begin with is underwater.
Any comments on Charlie Gasparino today and the merrill thing?
YouTube - Charlie Gasparino
lawyerliz,
The single biggest issue for the US might soon be a radical and bankrupt government in Pakistan "loosing" it's nuclear weapons.
I thought the whole Baltic index was a nothingburger: The index represents the marginal cost of shipping, not the total volume. So even a slight surplus capacity results in enormous price decreases. Highly inelastic supply.
amen to that Lucifer
lawyerliz writes:
And isn't Iowa doing ok farm-wise?
What's going on with the grain exports? Still held up by rejected letters of credit?
Liz the typical farm in Iowa is like 2000 acres now... when I was a kid it was like 400 acres. Since they aren't making anymore land that means a lot less farmers... like one fifth as many as 40 years ago... but just as many if not a few more people. So you gots your haves & have nots there too.
Result: while farming pumps a lot of money into the state most of it is siphoned off by big agri-biz leaving the rest a bunch of poor hicks w/ underwater 'acreages'.
Nice picture of the heartland... you want it with music & pictures try this...
Now those vids are 'Texahoma'... but you get the idea.
Gerald,
Can anyone confirm that there is a total of 52.5 million mortgages in the U.S.? (42 is 80% of 52.5)
Nobody is willing to work with any of my clients, whether the loans are sliced and diced or not. After Countrywide/BofA said they would deal, I sent some clients to call. So far, no deal. Maybe only dealing with states where the attys genl came after them.
Scratch that. One deal with a guy who had lost his job & then got another one. Not behind in a big way; could afford mtg with job. Underwater, but doesn't want to move.
from a previous thread. And for some obvious reasons, i have not been able to post lately....
Wisdom Seeker writes:
HIG is down over 90% from peak. Wow.
Wisdom Seeker | 10.30.08 - 2:54 pm | #
I am your humble correspondent on the front lines of the combat zone. Today, I almost cried at work. Now that would be WOW to anyone who knows me.
HIG and other companies have some great core busineses. Really. Any "derivitive king" who somehow convinced any of these companies to goose returns by taking on overly risky investments should be handcuffed and led away, imho, of course.
lucifer,
So you think that the banks in canada are solvent and the government can meet it's obligations to retirees?
I am starting to think that the system I believed in is now forced kicking and screaming to pull back the curtain. I in no way am thinking that I will be untouched by this as we are all in the same boat and a leak has popped. people up here in canada are mostly taking a causual glance south at the problem but some are awakening finally to the serious trouble ahead.
again trying to see a little in the future with no training and taking a crash course in this financial tulip bubble.
The US has no economic plan. Really? News Flash?
Why America Needs an Economic Strategy - BusinessWeek
Will Iceland be on this chart next year? And, rhetorically, won't about 100% be under ice by then?
I hope the shipping thing is a nothingburger Eric.
Iowans definitely aren't rich, but you can buy a pretty decent house for 100-150k in my hometown. If you only need to put together 10-20k for a down payment, it's hard to imagine there would be so much demand for exotic mortgages that could tip over after only a few percent decline.
I will add something to Comrade Counterpointer other than an attaboy.
The indexing dilemma, the part where the depth of very deep nested indicies is deeper than the length of an average brute-force search.
It applies to the ability of hierarchic structures to reconcile the various interests represented at the broad end of the pyramid through the "policy funnel" to the final decision that comes out the top.
Also applies laterally, to the ability of multi-node systems to communicate within themselves. Kind of a no-brainer -- you will learn this in project management theory about the multiplication of communication channels as stakeholders increase. What is not appreciated is that there is a finite point at which communication can no longer be facilitated efficiently.
Clapham gets at this without detailing it in his essays on state failure. Increasing social complexity increases the number in type and quantity of political goods required to sustain the system. Thresholds under which state failure occurs get considerably higher in more complex societies.
There is a society where no amount of political goods can sustain state operation. There is a multi-node communication system with a time-critical component where no amount of bandwidth can functionally permit the communication of critical messages.
IMO -- this is why a simple, formalized system of financial instruments is so important. Innovation introduces fatal levels of complexity because information propagation can't possibly happen fast enough.
Shipping is not important as long as we have roads across the ocean. I drove to Africa last week. Let me tell you, that is a long, flat stretch of boring drive.
The Harvard Business School competitiveness guru offers his prescription for long-term prosperity
No point in reading that.
Comrade Counterpointer,
"Misean Comrade Counterpointer- that doesn't mean sheet. Say what you mean man."
You are referencing what! This place is busy and I've commented a bit. Kinda why people include the comment they're referencing in the quote. And BTW, insulting like that is about as high school as you can get, nimrod."
Lawyerliz,
Sisyphus had to push the rock back up again.
Yes...I think that was my point.
You got a confuser at home now ll?
Nostrovia,
timbo,
You are certainly different from most Canucks on this and other blogs. Many are so wrapped up in patriotism or hubris that yet fail to see the simple fact that they are linked to this house of cards just like everyone else in this world.
"Pakistan "loosing" it's nuclear weapons."
Wow. Losing them is scary enough, but flat out loosing them. That's bad.
Jeff Daniels on the rocks and nothingburgers. Sounds appetizing.
Nothingburgers aren't filling unless you cover them with alot of gov't cheese. Then you need your own plunger.
YouTube - Jeff Daniels on Michigan
Plantagenet,
Read a little about the radicalisarion of their previously westernized army. You will realize that loosing is just more apt that losing.
The sad reality is that those weapons could slip out through sympathetic officials.
Texican, that is about right, with 82 or 85 million homes total (30-33 million paid off entirely).
Very funnny Elvis.
"Any comments on Charlie Gasparino today and the merrill thing?"
What's the frequency, Charlie?
BDI equals builders/developers going under.
If you build it they will ship. HAHAHAHA
Never Forget,
"Jeff Daniels on the rocks and nothingburgers. Sounds appetizing."
Dude those nothingburgers can't compensate for the booze. Make sure you eat a REAL samich first. No need to be praying to the porcelain confessional...if you know what I mean.
Nostrovia,
I wonder if Jeff Daniels ever read 'Rivethead'?
Nitey nite all.
Ok Misean, move on dude, you have opp cost in dwelling.
CC
Elvis got there first.
DAMN YOU ELVIS!
Nostrovia,
I wonder if Jeff Daniels ever read 'Rivethead'?
dryfly
I wonder if Jack Daniels could even read.
You know, I think the Porsche experience is quite effective for putting fear into people who want to do naked shorts. I have the funny feeling that the federal govt might be tempted to do something like this and make a profit.
dryfly writes: Nice picture of the heartland... you want it with music & pictures try this...
Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club. Leaned up against the 2x4 railing to the stage when the band played Choctaw Bingo. One of my really good to be alive nights. Ive always liked your comments, you seem grounded.
Is this percentage of homeowners or homeowners with mortagages?
After all about 29% (or something like that) or homeowners do not have any mortgages.
"I have the funny feeling that the federal govt might be tempted to do something like this and make a profit."
I don't think that the words federal gov't and profit can actually coexist in the same sentence.
CC,
"Comrade Counterpointer writes:
Broward - have some cool pool. It'll be the same tomorrow.
Misean - that doesn't mean sheet. Say what you mean man. Clearly, no spinny.
Man those left coasters are parochial. Major national problems. As if.
CC
Comrade Counterpointer | 10.30.08"
You wrote that WTF are you referencing?
Nostrovia,
"Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club."
Was he reading Lonesome Dove or Comanche Moon?
Chirp. Chirp. Honk. Slow down you stupid SOB. Chirp. Chirp.
Misean:
You wrote that WTF are you referencing?
Wasn't this is conversation about conversational breakdown?
Daddy wern't there. Kid's gotta make it on their own. specially now days.
Elvis,
""Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club.""
No man he was reading a manual...on sub-zero refrigerators. They have internet access now.
Nostrovia,
$12 Help writes:
dryfly writes: Nice picture of the heartland... you want it with music & pictures try this...
Damn! Drove 4 hours in sub-zero last January to see McMurtry in a small club. Leaned up against the 2x4 railing to the stage when the band played Choctaw Bingo. One of my really good to be alive nights. Ive always liked your comments, you seem grounded.
$12 Help | 10.30.08 - 11:32 pm | #
I play his music on my hauls up and down I35... from DFW to Duluth MN... calling on factories 200 miles either side of the road.
Someday I'm going to see him live.
The problem with seting all kids free to make it on their own, is who will mow my lawn?
"Today the Federal Reserve indicated that it would swap US dollars for Brazilian real, Korean won, Mexican pesos and Singapore dollars effectively allowing a select group of emerging economies to borrow dollars on terms similar to those available to the G-10 economies. Or almost similar terms. The G-10 central banks can currently borrow dollars from the Fed without limit; the four selected emerging market central banks can only borrow $30 billion each. But $120 billion is real money and if need be, the the size of these swap lines conceivably could be increased."
Why does that strike me as a bid to buy their vote for the Nov 15th meeting of the G20? The battle between the dollar and the Euro continues.
Brad Setser: Follow the Money » Blog Archive » At this rate the world’s financial architecture will have been remade before November 15th
Thoughts on tomorrow's dynamics with year-end for MFs/HFs & the need to settle redemption requests?
A low volume of very desperate sellers will find even less buyers.
Or not.
But I can confidently predict that something unpredictable will happen after 3pm.
Sub-zeros are great because they last about 50 years. So, when your neighbor abondons his house, take the Sub-Zero when nobody is looking. Even if you already have 6.
B_R,
"You wrote that WTF are you referencing?
Wasn't this is conversation about conversational breakdown?"
OK Zep:
Communication Breakdown:
YouTube - Led Zeppelin - Communication Breakdown (Live Video)
Nostrovia,
Crap, Barley...if a majority of Germans want nationalization of major sectors...that's what Hitler gave them.
All proven.
CC
Give GM their money NOW! I'm bleeding out over here
Every time I see that Aflac duck on an ad banner I get really sad, because they ate him today. Severe recessions don't hit home until somebody eats your favorite talking animal.
Ow:
Clusterfuck Nation by Jim Kunstler
... let's say that we are witnessing the two stages of a tsunami. The current disappearance of wealth in the form of debts repudiated, bets welshed on, contracts canceled, and Lehman Brothers-style sob stories played out is like the withdrawal of the sea. The poor curious little monkey-humans stand on the beach transfixed by the strangeness of the event as the water recedes and the sea floor is exposed and all kinds of exotic creatures are seen thrashing in the mud, while the skeletons of historic wrecks are exposed to view, and a great stench of organic decay wafts toward the strand. Then comes the second stage, the tidal wave itself -- which in this case will be horrific monetary inflation -- roaring back over the mud flats toward the land mass, crashing over the beach, and ripping apart all the hotels and houses and infrastructure there while it drowns the poor curious monkey-humans who were too enthralled by the weird spectacle to make for higher ground. The killer tidal wave washes away all the things they have labored to build for decades, all their poignant little effects and chattels, and the survivors are left keening amidst the wreckage as the sea once again returns to normal in its eternal cradle.
So, that's what I think we will get: an interval of deflationary depression followed by a destructive wave of inflation that will wipe out both constructed debt and constructed savings, scraping the financial landscape clean. There's no question that stage one is underway. But we can be sure the giant wave of money recklessly loaned into existence in just a few weeks time will wash back through the global economy leaving a swath of destruction....
Elvis writes:
Every time I see that Aflac duck on an ad banner I get really sad, because they ate him today...
When he hobbles aroung on one leg you know it's bad. You don't eat your pet or your mascot all at once
I haven't been seeing that big AIG Gorilla recently. Or was that AXA
Did anybody read Maureen McCormick's new confessional about what she and Greg did to Tiger. Really disgusting. I could see them doing that to Alice but not Tiger.
I think people here might like this. Really solid alt-country.
Sixteen Horsepower, "Black Soul Choir"
YouTube - 16 Horsepower - Black Soul Choir
Making GMAC a bank is purely a crim'nal act. They had loan offices all over the country giving away money. And they own Ditech. Rivaled only by the Orange Man.
So, it looks like it's going to get a lot worse before it gets better. I have been following this blog for about 18 months, after the first six months of reading this blog I sold all my real esate. I don't think anyone here really thought it would get this bad, even chicken little with his tin foil hat in place.
Didn't Bush tell us to go shopping after 9/11?
Elvis writes:
Did anybody read Maureen McCormick's new confessional about what she and Greg did to Tiger.
What did they do?
The Financial Times has leaked the results of the IEA's long-awaited study
of the depletion profiles of the world's 400 largest oilfields, indicating that,
"Without extra investment to raise production, the natural annual rate of
output decline is 9.1 per cent."
2005, the industry spent 270 billion to raise output 1%.
Elvis,
"Every time I see that Aflac duck on an ad banner I get really sad, because they ate him today. Severe recessions don't hit home until somebody eats your favorite talking animal."
All I have to say is F**K,. You're the King. I'll just play catch up. Damn that was funny.
Nostrovia,
Comrade Counterpointer,
"All proven."
Spoken like a true idiot. Your chops are like Andrew Dice Clay's...old and forgotten.
Nostrovia,
Didn't Bush tell us to go shopping after 9/11?
Anonymous
No he said, "In Texas, we've got a saying: Wanted Dead or Alive," and then he kept saying it for several years. In fact, he is probably telling Laura it right now.
Half of Nevada mortgages underwater. LOL! You mean even that Vegas fag couple from Flip That House who tried to sell their condo flip for more than $1 million? (You know, the ones who couldn't sell so they decided to live in it until the market "returned".)
It turns out people didn't actually want to live there after all!
@ Hank Roberts | 10.30.08 - 11:46 pm | #
That is how I see it happening... hope I'm wrong but that is my expectation.
It's a conspiracy to squeeze out the remaining family farmers.
Good night now. Long day tomorrow. It takes awhile in makeup and costume to pull off a believable Bill Gross look. That poor bastard.
Misean:
Spoken like a true idiot. Your chops are like Andrew Dice Clay's...old and forgotten.
You loved him as a loser, but now you're worried that he just might win. =)
Hey dryfly, are you gonna be out for the American Society of Civil Engineers show?
It seems a little esoteric for ya but I figured I'd ask.
Lets loan billions to a bunch of cocktail waitresses, craps dealers, coked up casino execs, methed out hillbillies and pimps. That should work out great!
B_R,
"You loved him as a loser, but now you're worried that he just might win. =)"
You dissin' me?
Man I thought you had my back.
Nostrovia,
Naw, just being amused by the interplay of communication breakdown, which is a lot more amusing with a certain amount of MGD onboard. =) Bedtime soon.
me thinks Comrade Misean is Dope and
Elvis got some motion goi
Hey dryfly, are you gonna be out for the American Society of Civil Engineers show?
It seems a little esoteric for ya but I figured I'd ask.
Nope - not my gig - was at MD&M in Mpls last week - went okay. No one has told biomedical the economy sucks - someday the insurers will send them a memo.
Hearing rumors of layoffs in the 'show' biz. You hearing any of that?
Barley,
Bwahahahahahaahahahahahahhahahahahahahahhahahahahahahahha!
I have nothing to that.
Nostrovia,
I'm with B_R time to go. ya'll have fun now...See you in the am.
Nostrovia,
Hearing rumors of layoffs in the 'show' biz. You hearing any of that? - dryfly
Iffen you mean "professional conferences" yeah. Psychological overreaction to perceptions of the general economic condition IMO.
From the prior thread but I'll post it here anyway for controversy.
Still waiting for the bailout of people who own their homes free and clear, have no credit card debt, no auto loan, no student loan, no liens, no unpaid taxes, no unpaid bills, and have returned at least 50% percent of the tools they borrowed from the guy next door.
It's gotta be coming soon, right?
In order to allow this to unwind in a defensible fashion without having huge losers and winners, I believe that we will see across the board devaluation, i.e. a G20 agreed upon money supply multiplier. How about this for controversy?
A BW3 with added features...
Discount Deparment store chain Value City has filed BK and will close 66 remaining stores letting go more than 4,500 employees.They had already closed 75 stores in the last year.
It turns out people didn't actually want to live there after all!
Der Kommandant Weather Helm | 10.30.08 - 11:51 pm | #
LOL. You don't know how true that statement is. I lived there from 1992 to 2001 and could not wait to get of there, but I do feel bad for what happened as I do know a lot of good people who live there. Funny how they won't talk to me after hearing that I sold my house last year though.
RE, I've been wondering about that too (coordinated global devaluation). So if it happens, what do they decree w.r.t. precious metals prices, if anything?
Entirely OT: Does Roubini only have one outfit? He's wearing the same thing in every video on his blog.
Does anyone else agree that much of the legislation that's being passed is either making the problem worse or simply delaying the process?
Loan modificatios appear to be a slippery sloap. Shevy Akason from Evergreen realty is surveying homeowners, legislators, attorney's, perspective homeowners, and others to see if there is support and to gain feedback regarding legislation that provides tax incentives to those that purchase and stay in their homes. The bill will allow prospective homeowners to put money into a designated HEA (Home equity account). Money placed into this account will be deducted from their tax returns for income tax purposes, similar to a SEP ira. Example: If a perspetive homeowner has $100,000 saved to buy a home and they place it into this account and purchase a home within the designated period of time they will be refunded $30,000 (if they are in the 30% tax bracket) This money must be used for the down payment or closing costs on a primary residence. In addition, this legislation will allow current homeowners that have less than 50% equity to place money into an HEA account designated for homes they purchased after January 1, 2000 and before Jan 1, 2009 or 180 days after this legislation takes affect, whichever is later. Finally, it allows current homeowners that participate in this program and remain current on their mortgage to go back as far as 2000 and claim an income tax deduction on any money paid toward the principle of their home including their original down payment. To participate in this program homeowner must be in or re-finance into a fully amortized fixed rate 1st mortgage. The legislation should take affect immediately upon passing and be limited to 360 days with options for extensions.
This is only a proposal and we are looking for support, sponsors, and for people to share this with others.
RE: "G20 agreed upon money supply multiplier. How about this for controversy?
A BW3 with added features..."
Between now and mid-Nov, I can think of no other topic that would inspire more worthwhile thinking than this.
Both by investors and policy makers.
Instead, people are obsessing over Barry O'Palin.
.
OT-my bad if repost...
Treasury, FDIC Said to Consider Guarantees to Stem Foreclosures
Treasury, FDIC Said to Consider Guarantees to Stem Foreclosures - Bloomberg.com
more details..the way the media is pushing this, it's a done deal....
I would be fired up..
any ideas on unemplymnt number tomorrow?
Entirely OT: Does Roubini only have one outfit? He's wearing the same thing in every video on his blog.
PeakVT | 10.31.08 - 12:17 am |
I can't speak to the pants, but he parties in a black shirt. : )
Hearing rumors of layoffs in the 'show' biz. You hearing any of that?
I'm a local contractor so not too in on the kick-up part of the biz.
The eshow people indicated that things were looking a little thin at MS&T but I didn't think they had really caught the smell of smoke yet.
MS&T had good numbers although the show's administration was wanting -- the consortium that was running it dumped the whole show on some late 20s / early 30s junior mgr and then wanted 9 contradictory things from her, and constant updates too.
Haven't seen my friends from EPIC lately so no word from that quarter.
I know for ASCE the staffing seems VERY thin but it could be a tiny show or they might be providing a lot of their own capacity. I think they are kicking it up themselves so you just can't tell til it happens.
Chill Bear Dope writes:
ARUGAAH ARUGAAH ARUGAAH
(bonus points to anyone that gets that reference)
Costanza's boss at Kruger Industrial Smoothers, imitating the sound of the old car horns.
So if it happens, what do they decree w.r.t. precious metals prices, if anything?
I have a biased view as I have been in the free gold camp for years. Therefore, I think PMs will get even freer than before.
"Without extra investment to raise production, the natural annual rate of
output decline is 9.1 per cent." Oil Equations
Holy crapola, Batman!! I thought the IEA group was the optimists!
"But, there's no water in Nevada. How can they be underwater?"
It's not called a "mirage" for nothing.
arugaahhh arugaahhh arugahh
Would that be the sound of the pink submarine before diving in Operation Petticoat?
I used to love sitting in my dad's lap as a little girl on saturdays and watch those old movies.
PeakVT writes:
Entirely OT: Does Roubini only have one outfit? He's wearing the same thing in every video on his blog.
PeakVT | 10.31.08 - 12:17 am | #
I know sales guys who have something like five 'pairs' of almost the same identical suit - all the same shade of gray. Makes dressing & packing pretty easy.
Wouldn't surprise me that NR does the same identical thing.
Comrade Yossarian writes:
Holy crapola, Batman!! I thought the IEA group was the optimists!
Seems like we are pretty steeply post-peak, yes. Horizontal drilling, take a bow.
Then again, they could just know their master's voice and be responding to the urgings of the day.
Still, interesting counterpoint to the "soon we'll have 30 dollar / bbl oil! It was all hype!" you hear from here.
One of the interesting things the FT article brings up is that this running orthogonally to the Great Deleveraging means that the vast capital investments needed to squeeze out additional production just won't happen for years.
Still, interesting counterpoint to the "soon we'll have 30 dollar / bbl oil! It was all hype!" you hear from here.
I don't think oil will be the only commodity that will present a conundrum. Watch Argentina and then food prices.
I think PMs will get even freer than before.
Hmm, freer as in less controlled, or less costly?
My take (also somewhat of a bug) is that the rulemakers will themselves need an out, so we don't have to worry about bans on gold ownership or the like. And I have a hard time imagining any investment other than precious metals that does well in a coordinated inflation. Maybe TIPS.
Having said that, I think a truly global coordinated devaluation will be difficult, but not impossible, to pull off. Nobody sitting on bonds will want it.
One of the interesting things the FT article brings up is that this running orthogonally to the Great Deleveraging means that the vast capital investments needed to squeeze out additional production just won't happen for years.
Byzantine_Ruins | Homepage | 10.31.08 - 12:36 am | #
Especially if you measure that investment in actual activity & resource inputs and not just in dollars... it is going to require a lot of 'work' to offset those declines either in additional oil discoveries & extractions or alternative energies.
As a result of scarcity energy will likely be one of the first commodities to bounce back from the 'deflationary pressures'. But that still might take a while.
Having said that, I think a truly global coordinated devaluation will be difficult, but not impossible, to pull off. Nobody sitting on bonds will want it.
I agree but there will have to be some unpleasant realities in order to keep the ship afloat. Otherwise there will be even more chaos with piecemeal inflation resulting in a slow road to death for bondholders. I think that enough folks will remember January 1934 and then reflect.
As to PMs I mean less controlled. In this environment controlling the gold price for appearances sake simply becomes a nuisance.
dryfly:
As a result of scarcity energy will likely be one of the first commodities to bounce back from the 'deflationary pressures'. But that still might take a while.
Yeah, it's a big question mark in the future, particularly given the potential in the mid-term future for severe oil extraction infrastructure disruption due to resource interdiction warfare, and large population die-offs due to that or other essential services disruptions.
It could either be really scarce or really stupidly plentiful per capita to the surviving population. Possibly both.
Personally I don't see how a coordinated devaluation 'helps' unless it results in a whole lot more fiat - a 'coordinated release' if you will - that is the only way a lot of that debt gets 'paid off'. But that too is in effect a 'stealth default'.
I don't see the bond holders worldwide being too happy about that. I don't see how they will consider it better than an actual default.
Someone enlighten me.
dryfly,
Personally I don't see how a coordinated devaluation 'helps' unless it results in a whole lot more fiat - a 'coordinated release' if you will - that is the only way a lot of that debt gets 'paid off'. But that too is in effect a 'stealth default'.
That is in essence what happened in 1934. A 40% devaluation of the dollar against gold. I agree that it is a default. I think it may be somewhat early for such a radical proposition but I believe it is one that could lead us out of this mess. The Chinese and Japanese would not be thrilled but I'm convinced that certain special concession could be made.
The alternative is risking systemic breakdown either via deflation or the more likely event of default via runaway inflation after initial deflation.
RE yes, big changes a-coming in any case. It seems like currency (or money supply) manipulations should be zero-sum, resulting in some kind of prudent versus imprudent fight. But maybe the imprudent vastly outnumber the prudent, so it's just a worldwide wealth redistribution. Get your real assets now.
Got food...
Calif. to cut water deliveries to cities, farms
Yahoo! 404 - Page Not Found
California said Thursday that it plans to cut water deliveries to their second-lowest level ever next year, raising the prospect of rationing for cities and less planting by farmers.
The Department of Water Resources projects that it will deliver just 15 percent of the amount that local water agencies throughout California request every year.
Since the first State Water Project deliveries were made in 1962, the only time less water was promised was in 1993, but heavy precipitation that year ultimately allowed agencies to receive their full requests.
The reservoirs that are most crucial to the state's water delivery system are at their lowest levels since 1977, after two years of dry weather and court-ordered restrictions on water pumping out of the Sacramento-San Joaquin Delta. This year, water agencies received just 35 percent of the water they requested. ...
I'm wondering how many illegals there are in Nevada? It's always the #1 state in donation on NumbersUSA | For Lower Immigration Levels - For Lower Immigration Levels
That says something.
Calif. to cut water deliveries to cities, farms
just ask the fed to print more water ...
The counterpoint never sleeps Misean. Or if it does it's in a timezone not of your choosing.
No cohens around here.
CC
I don't think this chart is correct. I live in Texas and there is simply no way that 22% of homes are underwater or near underwater because:
I'm not saying Texans wouldn't have dug ourselves into a debt pit if we could have, we just didn't have much opportunity to.
Other half under indictment!(or should be)
Cathy-
Appraisal fraud was huge in Texas because for the 80% rule. Brokers would find someone to appraise a house 30% above market so their "client" could get more money out. Another scenario is the builder over valuing the home to cover the cost of the down payment assistance.
We're about 12 months behind the curve on this but I believe in some ways Dallas (and many other parts of Texas) will be worse off than the rest of the country. In Big D everyone lives beyond their means, more so than almost any other area in the USA. The don't call Dallas the home of the thirty thousand dollar millionaire for nothing.
Comrade Misean is Dope writes:
timbo from canada,
this is like trying to hold a 5000 lb rock from tumbling downhill with sand dunes placed every 20 feet and its friggen raining. drop stop drop stop.....
Sisyphus,
Nostrovia,
Comrade Misean is Dope | Homepage | 10.30.08 - 11:05 pm | #
Yes, but Camus said that we must imagine Sysyphus happy
CD- The FDIC providing gaurantees to encourage lenders to modify loans is not the answer, in fact it will only add to the problem.
Loan modification is a slippery slope that has potential to exacerbate the current economic crisis.
Example: Homeowner A and B are paying their mortgage. However, homeowner B calls his mortgage company requesting a loan modification. The mortgage company explains that he is not in default and therefore they will not complete a loan modification. Homeowner B quits paying his mortgage and calls the mortgage company back and gets a $100,000 principle reduction. Homeowner A expresses to homeowner B that he is upset that his home is worth $100,000 less than he paid for it, however B then explains that he received a $100,000 principle write down by not paying his mortgage and negotiating a loan modification. This encourages homeowner A to stop paying his mortgage and the problem grows.
Example two, perspective homeowner A and B both earn $100,000/year, have 20% to put down, have dreamed of owning a home and are actively looking in 2005. Perspective homeowner A and B both like the same neighborhood and look at two neighboring and identical homes, one home is for sale for $550,000 and the other is for lease for $2000. Perspective homeowner A, realizing that he would have to take an exotic mortgage and that his payment would be over twice as much as it would be if he leases chooses to submit an offer for $500,000 so that he can take a 30 year fixed fully amortized loan while perspective homeowner B knows that there are others interested in the home and offers $600,000 and takes an exotic loan knowing thats the only way he can afford it. Perspective homeowner B gets the property and tax write off and other benefits that come with home ownership. As a result of the inflated prices perspective homeowner B, frustrated that even though interest rates are historically he cant take advantage of them and is forced to rent, as prices have become too inflated, and rents the home next door for $2000.
Homeowner B, pays twice the taxes as A as he waits for prices to come down. In 2008 prices are coming down but still not affordable and the legislation that helps A to stay in his home through principle write down is passed and essentially makes homeowner B pay for it. Homeowner B is left wondering whos looking out for him, it seems no one.
If you're talking about New York State please remember that upstate New York has nothing to do with the "Zoned Zone." Nor did large parts of upstate New York experience any sort of bubble whatsoever.
I honestly can't figure out why upstate NY's experience was so different from Michigan's. Michigan's economy is even worse than upstate NY's so why is their housing market going into the crapper now?
"It's hard to believe that Washington, D.C. and Maryland are ranked as low as they are. While D.C. and Maryland weren't the top bubble regions, I've read numerous articles suggesting that the outer burbs surrounding D.C. have been hard hit by loss of home value. Anybody else surprised?"
It is particularly curious in since Maryland, a sleazy condo or falling apart, WWII-era shoebox house costs about 5 times your income. We are full of $400,000+ "affordable, entry level townhouses" and so on. I can only assume that the relative lack of collapse is caused by 2 things: 1) most people took out Alt-A or Option-Arms vs. subprime (since "everyone is rich in Maryland because of DC"), and 2) I live here, so housing will never be affordable here.
I find it interesting that if you look at the top 10 in that list, based on current polls 5 of them are projected to switch from red in the 2004 election to blue in the current election (FL, OH, NV, IA, CO). Two more (AZ, GA) are remarkably close to toss-up territory. Coincidence? Methinks not.
We're doing fine here in TX. Lot's of oil and gas drilling. I live in a naffluent area and home prices haven't dopped (yet) although I'm sure it might eventually be felt in newer tract developments.
IMHO Dallas is in denial. Many older neighborhoods have become "tract developments" with all of the tear downs. The median home price in the Park Cities has jumped from 500k to 1.2mil. Tons of 30 somethings "spent" future bonus checks on new homes and now they won't see those checks like they planned. The Park Cities will see 30% declines before this is over. I've seen it happen twice in my lifetime and I'm only 34.
The bright side is that this will hopefully return my home town to an affordable neighborhood that isn't concerned with home prices. We used to argue our valuations lower to reduce our taxes, not try to get the value pumped up. As a third generation resident of the Park Cities I'm hopeful this mess will push the new money (aka debt) out.
"Bob_in_MA writes:
A couple points on NY. Upstate, house prices have been pretty flat."
Spoken like a true RealTurd. Prices doubled at a minimum in all counties in upstate.
Folks, don't engage in this deluded talk. What this guy is saying is best described as DEEP DENIAL and clearly has a reason to get you to believe there was never a bubble in upstate NY. The bubble blew hard there and now it is collapsing.
Texas is real I bet.
I can rent for 1/2 what I can buy for.
HALF.HALLLLLLF.....
Students of history please chime in...whiiiisstlllleeee...wweeeeee! pfffff!
Should read:
"Almost half of Nevada homeowners are illegal aliens."