"That's why you can expect the government to eliminate cash sometime soon. Drive everything to electronic debit and credit cards in an attempt to stifle the underground economy."
Cash serves no purpose to the powers that be. It only accounts for a tiny percentage of transactions nowadays, and any preponderance of printing will be very obvious, and their game would more closely resemble what went on in Mexico in the 1970's to 1990's, when the Peso not being backed by anything, went from:
12.5 Pesos to the $ in 1975
to
over 10,000 Pesos to the $ in 1992
The Hyperinflation devaluation next door that nobody ever talks about...
Imagine you were a middle-class Mexican with 100,000 Pesos in the bank in 1975?
1975 Value in USD $8,000
1992 value in USD $10
Why do you think there are so many "illegals" in our country the past 25 years?
The entire country (save those that had non-Peso assets) got wiped out.
The Mazda dealership here must be desperate. I just recieved a five thousand dollar check from them, redeemable if I buy a vehicle and they will give me 100% of the Base manufacturers retail price for my trade in. There is an adjustment for mileage on it though. Considering the price of the new cars, they'd end up owing me money as my Murano was 32K new and I own it outright...hmmmm
Arbitrage_Macht_Frei (profile) wrote on Thu, 5/14/2009 - 11:45 am reply Ignore user
Why do you think there are so many "illegals" in our country the past 25 years?
The entire country (save those that had non-Peso assets) got wiped out.
Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in.
Capital One Financial Corp. announced the pricing of a public offering of 56 million shares of its common stock at a public offering price per share of $27.75.
"With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.""
My neighbor's one of those. Since she doesn't react well to disagreement, I forbore telling her what I thought. She'll find out.
So, what stage of grief is the mortgaged American homeowner in? Are they still at Denial, or did they go straight to Bargaining without stopping at Anger?
Capital One Financial Corp. announced the pricing of a public offering of 56 million shares of its common stock at a public offering price per share of $27.75.
24.76
+0.80 (3.34%)
Real-time: 2:56PM EDT
How many people bit on this one?
The fact that it didn't hold the offering price after a day is not a good sign.
I don't think it's remarkable that a significant number of people who are visiting a real estate sales web site are interested in selling their real estate.
I have been an expat living in Mexico since 1994. I lived through the peso devaluation of '94, losing all of my US assets and credit in the process.
Mexico used to be an all cash country. EVERYTHING was paid in cash, even commercial transactions. Since 95, the government has been slowly working to move more and more transactions towards debit cards, and eliminate cash transactions. The motivation has been to increase the tax base, and eliminate the informal economy. I can see the US government doing the same thing as the underground economy grows. It's only a matter of time.
No broward, that is in addition to the full price on the trade in, like I said, desperation. I'm happy with my Murano though and am a firm believer there is always a catch...
hopeinsd writes:
"Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in."
I saw that in Peru as well. Down there they told me it was because the government taxes you at a higher rate if your building is completed versus if it is still under construction.
I'll bet that is overstated. If prices rose, I'll bet a lot of people change their mind and decide to ride it out for more gains.
For example, how many retail stock market investors bought at S&) 850, when the S&P hit 666, were saying "if the market just got back up to 850 I will sell", but then it goes through 850 and they hold on for more gains?
Greed and fear drive people. What we have now is an abundance of fear in the housing market. That can turn to greed quickly. Just like the stock market.
"Most U.S. homeowners think a bottom has been reached: However, in the well documented "all children are above average" syndrome, 60% of the respondents thought their home price had declined in the last 12 months, when in fact 80% of homes lost value."
ghost, the housing market isn't as liquid as the stock market plus the transaction cost of selling a house is high, usually 6% or more of a very large sum.
""Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in."
Yeah, that's what many illegals here send their money home for. Though the family back home would often spend the money on something else. Got so bad that Cemex, the Mexican building materials co., made it possible for Mexicans in this country to order and pay for building supplies here. Cemex would then deliver back home in Old Mexico. Removed temptation for the stay-at-homes.
insightful comment. I can not tell from the survey details how the people were selected, but I suspect they were self selected by visiting Zillow and choosing to participate in the survey, and thus the 31% number is far in excess of reality.
When you 'withdraw' funds from the ATM, it prints out a message saying 'out of cash, your withdrawal is deducted from your debit card'. If you deposit cash/check, it says 'added to your debit card'. $20.00 bills disappear from circulation, and later all paper currency, followed by coins.
No different from now, except the wallet cash is gone.
"Argentina may be forced to import wheat and beef as soon as 2010 as a result of the deteriorating investment climate in Argentina coupled with the worst drought in 50 years, Mercopress reported May 13, citing an internal paper from the Argentine Agriculture Ministry."
You unlock this door with the key of fiscal imagination. Beyond it is another dimension - a dimension of unsound lending, a dimension of slight overvaluations, a dimension of mind over matter. You're moving into a land of both shadow and substance, of things and ideas. You've just crossed over into the Zillow Zone.
"Paper money will go the way of "King Korn" stamps within a decade. "
I hope not. Telecom and the Internet went down for a day here a few weeks ago, and commerce was basically crippled -- no credit cards, no ATMs, even the banks wouldn't dispense cash. And all those college kids running around with two bucks in their pocket, a useless BofA credit card, and a dead cell phone. The big food stores with modern cashiering systems continued to take cards, storing the transactions for later transmission. But what if things had gone south for three days?
I am not a survivalist, but if we went all electronic on money II would acquire and store a year's supply of everything. There are no disasters greater than the ones we set ourselves up for...
I'm seeing a ton of SFR rentals now here in LA (WEHO and west...). Most are overpriced (rents are falling) and sitting empty. I'm sure it's all folks waiting for the market to come back. Thing is, people here firmly believe it will. There are still houses (the very few that are reasonably priced) selling with multiple bids, and the REIC kool aide still flows. There actually appears to be a bit of a spring bounce this year, and relitters take every opportunity to point that out. LA is "special". Everyone is rich. Everyone wants to live here. etc. etc. . . However, there is an enormous amount of overpriced, stale listings. One of these days reality will set in. People are stuck in the 2006-7 mindset here. It's surreal... :-/
Just caught this over on Nathan's blog. GS paying up in Mass. for predatory lending although no wrongdoing admitted and no suit ever filed...CYA GS CYA...
If survival calls for the bearing of arms, bear them you must. But the most important part of the challenge is for you to find another means that does not come with the killing of your fellow man.
Bob Dobbs (homepage, profile) wrote on Thu, 5/14/2009 - 3:20 pm
I am not a survivalist, but if we went all electronic on money II would acquire and store a year's supply of everything. There are no disasters greater than the ones we set ourselves up for...
Bob,
Most people kept King Korn stamps stuffed away in drawers for years 'just in case."
Same thing will happen with cash, but at some point down the road if will probably be obsolete.
Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites. Stocks still face deflationary collapse: Prechter
| Reuters
The tools of conquest do not necessarily come with bombs and explosions and fallout. There are weapons that are simply thoughts, attitudes, prejudices -- to be found in the minds of men. For the record, prejudices can kill and suspicion can destroy, and a thoughtless, frightened search for a scapegoat has a fallout all its own -- for the children and the children yet unborn. And the pity of it is that these things cannot be confined to the Twilight Zone.
Jim, It cost the retailer out the kazoo to process cc transactions,like 2.75 per every dollar, and when you give out cash, it cost you 2.75 for every dollar, adds up.
JBR, I agree - it's people trying to generate some income while they try to wait this out.
So many are vacant because they do not understand how crazy their wishing price is, and are basing their asking rent on either their wishing price or their monthly nut to service their underwater loan.
We'll see how long it takes them to run out of money and thus time to let these SFHs sit on the market empty.
It is an old maxim and a very sound one, that he that dances should always pay the fiddler. Now, sir, in the present case, if any gentlemen, whose money is a burden to them, choose to lead off a dance, I am decidedly opposed to the people’s money being used to pay the fiddler…all this to settle a question in which the people have no interest, and about which they care nothing. These capitalists generally act harmoniously, and in concert, to fleece the people, and now, that they have got into a quarrel with themselves, we are called upon to appropriate the people’s money to settle the quarrel.
Is the percentage of underwater mortgages also now around 20%? Makes for an interesting correlation to the 20% waiting for an uptick in price to dump that sucker. If house prices continue lower, I'd have to think that 20% also becomes likely to very likely to at least consider ruthless default.
Everything the FED has done from lowering rates to buying treasuries to extend lending had has diminishing returns. Eventually the FED will be helpless to control the market.
There is a version of this in Greece as well I think, where you get assessed the social security benefits owed on the hypothetical construction price of your house even if you build it yourself! The equivalent of the FICA here with combined employee and employer contribution is over 40 %! This includes retirement contributions to the national health and retirement plan.
Many folks seem to file a plan for a three-storey place that gets built to two or some variant thereof, so they do not have to pay.
The economy is still very largely cash, cars and even houses here.
That confirms what I suspected about the northeast - though prices were certainly overvalued, they won't come down as quickly as in California, Florida, etc. because there hasn't been as a severe of a foreclosure problem. However, it seems clear that it will take a long time to clear the inventory and that prices will not recovery for some time.
Concrete has high compression strength but low tensile strength so rebar takes the tensile load, which, even without earthquakes, is smart to prevent frost heaves from badly cracking foundations.
May 14 (Bloomberg) -- The U.S. Federal Reserve may revise rules that currently favor Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, Fed Chairman Ben S. Bernanke said in a letter released today by Connecticut Attorney General Richard Blumenthal.
The Fed is “conducting a broad review of our approach to using rating agencies,” Bernanke said in an April 13 letter written in response to a complaint from Blumenthal that the central bank’s rules unfairly favor the companies that helped cause the financial crisis.
“That review encompasses the ratings of securities of all types accepted as collateral at all our recently established credit facilities as well as collateral accepted to secure regular discount window loans,” Bernanke wrote.
the Fed actually does have to undergo notice and comment before changing a substantive regulation. whether it listens to the comments is a different matter.
"These folks are smart; getting out while they can still negotiate a short sale."
That's the problem. they can't negotiate the short sale. Only the loss mit dept. at the lender can do that, and they have little incentive to do so and lots of bureaucracy. Only about 25% of them ever close before going into foreclosure.
"The U.S. Federal Reserve may revise rules that currently favor...."
They don't favor, they require. The rules require the SELLER of a security to pay a rater to rate it so that gov't regulated investors can buy it and book it as a certain asset.
This model is very useful to used car salesmen, however, the law doesn't require you to use the used car salesman's mechanic...unfortunately for the used car salesman.
It's important to bear in mind the classes of loans which have failed to date and, especially, those with accelerating defaults today. To my mind, it's an empty exercise debating the timing of geographical downturns. Seattle was somewhat late to experience a falling market as was the area around Charlotte, NC. Contributors here who are from those areas submitted comments all but identical to yours - but they wouldn't do that now.
Indications are that falling prices are affecting every stratum of RRE, that every socioeconomic class used the same faulty assumptions when agreeing to their mortgage contracts or indulging in equity extraction.
How much confidence do you have that, for example, Option-ARM recasts won't spike the foreclosure numbers in the Northeast? I personally wouldn't be confident.
Lucifer (profile) wrote on Thu, 5/14/2009 - 8:06 pm
Arbitrage_Macht_Frei,
No they changed it from BFF to WEF
//Moody's just dropped Ben Bernanke's rating from BBB to FFF//
I agree; I'm in the Philadelphia area and anticipate more foreclosures as job losses mount. There certainly was a bubble here; if anything I've been surprised that prices have held up as well as they have. I think this survey gives credence to the notion that many people here want to sell but are waiting for better times. They've been able to afford to hold out thus far, though I agree that probably won't last.
"the Fed actually does have to undergo notice and comment before changing a substantive regulation. whether it listens to the comments is a different matter."
Like the notice and comment before all these FLA's (four letter acronyms), where they buy anything from the banks as opposed to buying only treasuries?
and they will keep waiting. it is going to take a long long time to get back to normal. With baby boomers attempting to cash in, and middle agers with two homes, who is going to buy ?
Most homeowners - 74 percent - believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home's housing slide.
Anyone ever hear of the endowment effect? It's at work in this survey and Zillow doesn't even seem to understand it or they wouldn't have put that text in bold. Or perhaps they did in order to highlight that it still works.
Also cash will be needed for government dirty deeds, over seas transactions and so on.
Also if there is a big blow up not only will infrastructure be attacked EMP weapons certainly will be used as well
The goobermint doesn't talk much about them but these things are scary and not that difficult to make. To hard for the likes of you and me certainly but not for really bad people or a bunch of pissed off tech-kiddies. Military computers can probably handle the homemade kind but all those PC's and Main Frames that carry the E-Blips will die
In that situation it would be pretty damned hard to run a country w/o a currency. At least of you have cash you can stop gap things -- and forget scrip -- it won't work for a government that has lost legitimacy or to buy foreign goods at all.
If the fit hits the shan I expect to see 20-30% of the population flee, Mexico to collapse from a sudden influx, Canada to melt down and a 1/3 of the remaining population die of hunger or violence
While a US population around 200 million appeals to me greatly I sure as anything don't want something like that to happen -- even if somehow the only people killed were vermin I wouldn't wish that on anyone
ZAP...
There goes the next bubble
Waiting for Go Dough
I pretend to work, you pretend to pay.
"The administration also will propose long-term compensation restrictions even for companies that don’t receive government assistance, Obama said"
http://www.msnbc.msn.com/id/29003620/
The Northeast is pure boomer demographics. Want to see the future of the Northeast? Buffalo.
Ruh roh.
treasury has started printing "greater fools"
2x+ good enough stuff:
"That's why you can expect the government to eliminate cash sometime soon. Drive everything to electronic debit and credit cards in an attempt to stifle the underground economy."
Cash serves no purpose to the powers that be. It only accounts for a tiny percentage of transactions nowadays, and any preponderance of printing will be very obvious, and their game would more closely resemble what went on in Mexico in the 1970's to 1990's, when the Peso not being backed by anything, went from:
12.5 Pesos to the $ in 1975
to
over 10,000 Pesos to the $ in 1992
The Hyperinflation devaluation next door that nobody ever talks about...
Imagine you were a middle-class Mexican with 100,000 Pesos in the bank in 1975?
1975 Value in USD $8,000
1992 value in USD $10
Why do you think there are so many "illegals" in our country the past 25 years?
The entire country (save those that had non-Peso assets) got wiped out.
Don't forget the high percentage of renters waiting for these greedy homeowners (and their Wall Street and Government enablers) to lower their prices.
It's different where I live.
Woocoodanode?
Out in CA we call this OVERHEAD SUPPLY
trying to decide when to dip my toe back into SRS for some trading shares
they should be asking, how likely they would foreclose/shortsale/walkaway if they were unemployed and 50% underwater.
I pretend to work, you pretend to pay.
"The administration also will propose long-term compensation restrictions even for companies that don’t receive government assistance, Obama said"
I'm a big fan of Stalin's idea where you say that people basically don't get paid for the first 40 hours a week they work - just overtime.
It actually worked pretty well for awhile.
The Mazda dealership here must be desperate. I just recieved a five thousand dollar check from them, redeemable if I buy a vehicle and they will give me 100% of the Base manufacturers retail price for my trade in. There is an adjustment for mileage on it though. Considering the price of the new cars, they'd end up owing me money as my Murano was 32K new and I own it outright...hmmmm
In Comtemptkin America, Wall*Street is eastern front for money mafiosos
If you're not selling this year, when first time homebuyers get an $8K credit and mortage rates are below 5%, then when will you sell?
Arbitrage_Macht_Frei
Just wanted to tell you how glad I was you reclaimed your name. I never understood that moron's taking exception exception.
If you're not selling this year, when first time homebuyers get an $8K credit and mortage rates are below 5%, then when will you sell?
Next year, when they get a $16K credit and mortgage rates are below 2%.
Arbitrage_Macht_Frei (profile) wrote on Thu, 5/14/2009 - 11:45 am reply Ignore user
Why do you think there are so many "illegals" in our country the past 25 years?
The entire country (save those that had non-Peso assets) got wiped out.
Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in.
then when will you sell?
Why, when the market recovers, of course. ... Methinks that there is still a ways to go before we get to the acceptance phase of this thing.
Capital One Financial Corp. announced the pricing of a public offering of 56 million shares of its common stock at a public offering price per share of $27.75.
24.76
+0.80 (3.34%)
Real-time: 2:56PM EDT
How many people bit on this one?
"With almost a third of homeowners poised to jump into the market at the first sign of stabilization, this could create a steady stream of new inventory adding to already record-high inventory levels, thus keeping downward pressure on home prices.""
My neighbor's one of those. Since she doesn't react well to disagreement, I forbore telling her what I thought. She'll find out.
So, what stage of grief is the mortgaged American homeowner in? Are they still at Denial, or did they go straight to Bargaining without stopping at Anger?
the gap between zillow and cyberhomes in valuations is really absurd, and a national affair.
i know which one county assessors would rather use (or at least the pols that depend on the revenue)
Capital One Financial Corp. announced the pricing of a public offering of 56 million shares of its common stock at a public offering price per share of $27.75.
24.76
+0.80 (3.34%)
Real-time: 2:56PM EDT
How many people bit on this one?
The fact that it didn't hold the offering price after a day is not a good sign.
I don't think it's remarkable that a significant number of people who are visiting a real estate sales web site are interested in selling their real estate.
Is reclaiming anything like renewal?
If so, I gotta run...
"I just recieved a five thousand dollar check "
Wow, people already trying to cash in on the "Clunker Law".
Funny to see if that number grows or people just give up a year from now.
AMF,
I have been an expat living in Mexico since 1994. I lived through the peso devaluation of '94, losing all of my US assets and credit in the process.
Mexico used to be an all cash country. EVERYTHING was paid in cash, even commercial transactions. Since 95, the government has been slowly working to move more and more transactions towards debit cards, and eliminate cash transactions. The motivation has been to increase the tax base, and eliminate the informal economy. I can see the US government doing the same thing as the underground economy grows. It's only a matter of time.
Chart of KSS looks like a Physics lesson. Basel and others may know what I mean...
Kohl's Corporation - Google Finance
No broward, that is in addition to the full price on the trade in, like I said, desperation. I'm happy with my Murano though and am a firm believer there is always a catch...
These folks are smart; getting out while they can still negotiate a short sale.
14675 Quito Rd, Saratoga, CA
2005 Sale: $2M ($1.8M financed)
Asking Price: $1.78 (Supposedly Pending)
10210 Johnson Ave, Cupertino, CA
2007 Sale: $1.16M
Asking Price: $900k (Supposedly Pending)
2001 Heather Glen Dr, San Jose, CA
2005 Sale: $1.1M
Asking Price: $800k
hopeinsd writes:
"Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in."
I saw that in Peru as well. Down there they told me it was because the government taxes you at a higher rate if your building is completed versus if it is still under construction.
I'll bet that is overstated. If prices rose, I'll bet a lot of people change their mind and decide to ride it out for more gains.
For example, how many retail stock market investors bought at S&) 850, when the S&P hit 666, were saying "if the market just got back up to 850 I will sell", but then it goes through 850 and they hold on for more gains?
Greed and fear drive people. What we have now is an abundance of fear in the housing market. That can turn to greed quickly. Just like the stock market.
"eliminate cash transactions"
what is the mechanism for doing this?
"what is the mechanism for doing this?"
Guns & informers.
There's been a push for years to associate cash with drug dealing.
To quote Yves over at Naked Capitalism:
"Most U.S. homeowners think a bottom has been reached: However, in the well documented "all children are above average" syndrome, 60% of the respondents thought their home price had declined in the last 12 months, when in fact 80% of homes lost value."
It's hard to know what to make of the Zillow figures without knowing how they compare to normal levels.
How do we know if 31% is high or low?
Was this survey ever done before so we can compare?
Iceman,
Well, some people are listing but waiting -- my current favorite example in No. Cal:
131 CARMEL AVE, CA 94018
650 sq ft -- a bargain at $449k (hard to believe, but it sold for $492 in Oct 06).
It's like a cargo cult mentality -- if we just hold out, the planes will start coming again.
ghostface home prices will never go up so look for more people jumping in the "waiting to sell" category. It will be a "buyers market" for years.
ghost, the housing market isn't as liquid as the stock market plus the transaction cost of selling a house is high, usually 6% or more of a very large sum.
""Its also why if you go to Mexico, you'll see half built houses everywhere. The typical long term savings plan involves buying re-bar and cinder blocks with whatever extra cash you have until you built something your family can comfortably live in."
Yeah, that's what many illegals here send their money home for. Though the family back home would often spend the money on something else. Got so bad that Cemex, the Mexican building materials co., made it possible for Mexicans in this country to order and pay for building supplies here. Cemex would then deliver back home in Old Mexico. Removed temptation for the stay-at-homes.
Illiquid allusions still hold their illusion.
government taxes you at a higher rate if your building is completed versus if it is still under construction
Greece also either taxes less or doesn't tax properties under construction, which is why every house in Greece has an unfinished addition.
Cargo Cult - waiting for the Government Fairy to deliver the goods....
Paper money will go the way of "King Korn" stamps within a decade.
insightful comment. I can not tell from the survey details how the people were selected, but I suspect they were self selected by visiting Zillow and choosing to participate in the survey, and thus the 31% number is far in excess of reality.
WEAK
Rally
fading...
If BHO thinks his credit card bill will give consumers confidence he has another thing coming.
Paper money will go the way of "King Korn" stamps within a decade.
Somehow I doubt if the fundie types will go for it. Next step the mark of the beast.
"eliminate cash transactions"
what is the mechanism for doing this?
When you 'withdraw' funds from the ATM, it prints out a message saying 'out of cash, your withdrawal is deducted from your debit card'. If you deposit cash/check, it says 'added to your debit card'. $20.00 bills disappear from circulation, and later all paper currency, followed by coins.
No different from now, except the wallet cash is gone.
Jim, that's really gonna suck for we bartenders and servers....
"Argentina may be forced to import wheat and beef as soon as 2010 as a result of the deteriorating investment climate in Argentina coupled with the worst drought in 50 years, Mercopress reported May 13, citing an internal paper from the Argentine Agriculture Ministry."
Zillow me this:
You unlock this door with the key of fiscal imagination. Beyond it is another dimension - a dimension of unsound lending, a dimension of slight overvaluations, a dimension of mind over matter. You're moving into a land of both shadow and substance, of things and ideas. You've just crossed over into the Zillow Zone.
"Paper money will go the way of "King Korn" stamps within a decade. "
I hope not. Telecom and the Internet went down for a day here a few weeks ago, and commerce was basically crippled -- no credit cards, no ATMs, even the banks wouldn't dispense cash. And all those college kids running around with two bucks in their pocket, a useless BofA credit card, and a dead cell phone. The big food stores with modern cashiering systems continued to take cards, storing the transactions for later transmission. But what if things had gone south for three days?
I am not a survivalist, but if we went all electronic on money II would acquire and store a year's supply of everything. There are no disasters greater than the ones we set ourselves up for...
Rally ho - looks like Mr. Market still likes the 3.6 trillion budget coming down the pike...
LOL AMF its a little early but you get the Comment of the Day.
Arbitrage_Macht_Frei, Now that was funny.
I'm seeing a ton of SFR rentals now here in LA (WEHO and west...). Most are overpriced (rents are falling) and sitting empty. I'm sure it's all folks waiting for the market to come back. Thing is, people here firmly believe it will. There are still houses (the very few that are reasonably priced) selling with multiple bids, and the REIC kool aide still flows. There actually appears to be a bit of a spring bounce this year, and relitters take every opportunity to point that out. LA is "special". Everyone is rich. Everyone wants to live here. etc. etc. . . However, there is an enormous amount of overpriced, stale listings. One of these days reality will set in. People are stuck in the 2006-7 mindset here. It's surreal... :-/
Shadow is alive and well in the Zillow Zone...
AMF you do have a great wit!!!
Ouch! I just looked up what AMF stands for:
arbeit macht frei : a phrase standing on the gates of German concentration camps. Translation means "work makes free".
Just caught this over on Nathan's blog. GS paying up in Mass. for predatory lending although no wrongdoing admitted and no suit ever filed...CYA GS CYA...
Goldman Pays Greenmail to Make Snoops Go Away: Jonathan Weil - Bloomberg.com
If survival calls for the bearing of arms, bear them you must. But the most important part of the challenge is for you to find another means that does not come with the killing of your fellow man.
... Rod Serling
Bob Dobbs (homepage, profile) wrote on Thu, 5/14/2009 - 3:20 pm
I am not a survivalist, but if we went all electronic on money II would acquire and store a year's supply of everything. There are no disasters greater than the ones we set ourselves up for...
Bob,
Most people kept King Korn stamps stuffed away in drawers for years 'just in case."
Same thing will happen with cash, but at some point down the road if will probably be obsolete.
Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites.
Stocks still face deflationary collapse: Prechter
| Reuters
I thought "arbeit macht frei" was only at Dachau.
I noticed today that Whole Foods has a sign at checkout saying they no longer will give 'cash back' on credit card transactions.
Perhaps they were getting lots of send-back credit card transactions that they had already paid out cash in?
are you saying my King Korn stamps are worthless?
Apparently this is some kind of breaking news on WSJ:
Oil prices are tracking the stock market, rather than inventories.
Well duh.
You pump money into an environment of excess debt and excess capacity and this is exactly the outcome you'd expect.
i didn't know you could get cash back on CC transactions, because the interest rate differential.
I thought "arbeit macht frei" was only at Dachau.
Auschwitz also.
The tools of conquest do not necessarily come with bombs and explosions and fallout. There are weapons that are simply thoughts, attitudes, prejudices -- to be found in the minds of men. For the record, prejudices can kill and suspicion can destroy, and a thoughtless, frightened search for a scapegoat has a fallout all its own -- for the children and the children yet unborn. And the pity of it is that these things cannot be confined to the Twilight Zone.
...Rod Serling
got into SRS at 22.45
LA and Long Beach Port April stats are available
LA - 279 vs 328
Long Beach - 199 vs 280
No sign of smoke in the smoke stacks
What do people think of Prechter recommending Treasuries?
Jim, It cost the retailer out the kazoo to process cc transactions,like 2.75 per every dollar, and when you give out cash, it cost you 2.75 for every dollar, adds up.
Once the world is able to say ixnay to being chained to the greenback dollar, is when all helll breaks loose.
Regarding "half-finished" houses in LatAm with rebar sticking up...
Usually the house is finished. If the owner wants to add an additional story later, it's easy to put on, as the anchoring rebar is already in place.
It's actually intelligent planning ahead. But the house is functional, and finished.
are they selling the deflation protected securities yet?
oh, oh, the seals on the PPT pumps just burned out. Smoke in exhaust, shrieking sounds, cyclinder lockup eminent.
JBR, I agree - it's people trying to generate some income while they try to wait this out.
So many are vacant because they do not understand how crazy their wishing price is, and are basing their asking rent on either their wishing price or their monthly nut to service their underwater loan.
We'll see how long it takes them to run out of money and thus time to let these SFHs sit on the market empty.
"What do people think of Prechter recommending Treasuries?"
I think of a lion tamer putting his head into the mouth of a large, hungry lion.
Off topic, but great quote
It is an old maxim and a very sound one, that he that dances should always pay the fiddler. Now, sir, in the present case, if any gentlemen, whose money is a burden to them, choose to lead off a dance, I am decidedly opposed to the people’s money being used to pay the fiddler…all this to settle a question in which the people have no interest, and about which they care nothing. These capitalists generally act harmoniously, and in concert, to fleece the people, and now, that they have got into a quarrel with themselves, we are called upon to appropriate the people’s money to settle the quarrel.
Abraham Lincoln
I think of a lion tamer putting his head into the mouth of a large, hungry lion.
and then punching his nuts
What do people think of Prechter recommending Treasuries?
the belief is that Uncle Ben will have no choice but to announce more buybacks so as to keep mortgage rates below 5%.
his, being the lion, of course
squidward (profile) wrote on Thu, 5/14/2009 - 3:40 pm
Regarding "half-finished" houses in LatAm with rebar sticking up...
Who uses rebar in house construction?
Is that some earthquake-related building code I'm not familiar with?
USTitanic
"the belief is that Uncle Ben will have no choice but to announce more buybacks so as to keep mortgage rates below 5%."
The belief is that the lion will have no choice but to allow the tamer's head to withdraw so as to keep the food dish full.
Is the percentage of underwater mortgages also now around 20%? Makes for an interesting correlation to the 20% waiting for an uptick in price to dump that sucker. If house prices continue lower, I'd have to think that 20% also becomes likely to very likely to at least consider ruthless default.
Cinder block & rebar is the rule, not the exception down under.
Who uses rebar in house construction?
standard practice in concrete block buildings (unless you don't expect ever to have an earthquake.)
broward et al.
Everything the FED has done from lowering rates to buying treasuries to extend lending had has diminishing returns. Eventually the FED will be helpless to control the market.
My foreclosees know that their house prices have dropped.
BankUnited, saved for another week.
AAAaaaarrrrhhhh!!!!
There is a version of this in Greece as well I think, where you get assessed the social security benefits owed on the hypothetical construction price of your house even if you build it yourself! The equivalent of the FICA here with combined employee and employer contribution is over 40 %! This includes retirement contributions to the national health and retirement plan.
Many folks seem to file a plan for a three-storey place that gets built to two or some variant thereof, so they do not have to pay.
The economy is still very largely cash, cars and even houses here.
Speed, sorry I did not see your post when I posted later.
That confirms what I suspected about the northeast - though prices were certainly overvalued, they won't come down as quickly as in California, Florida, etc. because there hasn't been as a severe of a foreclosure problem. However, it seems clear that it will take a long time to clear the inventory and that prices will not recovery for some time.
Concrete has high compression strength but low tensile strength so rebar takes the tensile load, which, even without earthquakes, is smart to prevent frost heaves from badly cracking foundations.
The latest from Reuters:
Coca-Cola (NYSE: KO) announced Thursday it will test a new plastic bottle in North America that's partly made from sugar cane and moasses [sic].
Do you think they meant "molasses"?
Ha ha ha! Nice proofreading there!
May Revise.. why "May"?
Bernanke May Revise Fed Rules Favoring Moody’s, S&P (Update1)
Bernanke May Revise Fed Rules Favoring Moody’s, S&P (Update1) - Bloomberg.com
By Michael McDonald
May 14 (Bloomberg) -- The U.S. Federal Reserve may revise rules that currently favor Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, Fed Chairman Ben S. Bernanke said in a letter released today by Connecticut Attorney General Richard Blumenthal.
The Fed is “conducting a broad review of our approach to using rating agencies,” Bernanke said in an April 13 letter written in response to a complaint from Blumenthal that the central bank’s rules unfairly favor the companies that helped cause the financial crisis.
“That review encompasses the ratings of securities of all types accepted as collateral at all our recently established credit facilities as well as collateral accepted to secure regular discount window loans,” Bernanke wrote.
Only the shadow knows.
I wonder how many people are shadow employees?
Samdog, maybe soylent green is bottles...just saying...
"Coca-Cola (NYSE: KO) announced Thursday it will test a new plastic bottle in North America that's partly made from sugar cane and moasses [sic]."
If they want to improve sales, they might think about sweetening it with substances partially made from sugar cane.
Lucifer (profile) wrote on Thu, 5/14/2009 - 7:57 pm
May Revise.. why "May"?
To prevent transparency and the rule of law, of course.
May Revise.. why "May"?
the Fed actually does have to undergo notice and comment before changing a substantive regulation. whether it listens to the comments is a different matter.
I thought "arbeit macht frei" was only at Dachau.
I'm pretty sure I saw it in Auchwitz too.
Moody's just dropped Ben Bernanke's rating from BBB to FFF
Don Adams voice: "Ah, the old starving the lion, sticking your head in its mouth, and kicking it in its nuts investment strategy."
"These folks are smart; getting out while they can still negotiate a short sale."
That's the problem. they can't negotiate the short sale. Only the loss mit dept. at the lender can do that, and they have little incentive to do so and lots of bureaucracy. Only about 25% of them ever close before going into foreclosure.
"The U.S. Federal Reserve may revise rules that currently favor...."
They don't favor, they require. The rules require the SELLER of a security to pay a rater to rate it so that gov't regulated investors can buy it and book it as a certain asset.
This model is very useful to used car salesmen, however, the law doesn't require you to use the used car salesman's mechanic...unfortunately for the used car salesman.
srvbeach21:
It's important to bear in mind the classes of loans which have failed to date and, especially, those with accelerating defaults today. To my mind, it's an empty exercise debating the timing of geographical downturns. Seattle was somewhat late to experience a falling market as was the area around Charlotte, NC. Contributors here who are from those areas submitted comments all but identical to yours - but they wouldn't do that now.
Indications are that falling prices are affecting every stratum of RRE, that every socioeconomic class used the same faulty assumptions when agreeing to their mortgage contracts or indulging in equity extraction.
How much confidence do you have that, for example, Option-ARM recasts won't spike the foreclosure numbers in the Northeast? I personally wouldn't be confident.
Arbitrage_Macht_Frei,
No they changed it from BFF to WEF
//Moody's just dropped Ben Bernanke's rating from BBB to FFF//
Lucifer (profile) wrote on Thu, 5/14/2009 - 8:06 pm
Arbitrage_Macht_Frei,
No they changed it from BFF to WEF
//Moody's just dropped Ben Bernanke's rating from BBB to FFF//
From BBB to WTF.
I love that, we can't get sugar cane in the actual drink because of the corn lobby but the bottle will be made of sugar cane. nice.
"Do you think they meant "molasses"?"
Nope. I used to work for the outfit, and I'm sure they meant "more asses". They've got plenty of them at North Avenue.
burnside:
I agree; I'm in the Philadelphia area and anticipate more foreclosures as job losses mount. There certainly was a bubble here; if anything I've been surprised that prices have held up as well as they have. I think this survey gives credence to the notion that many people here want to sell but are waiting for better times. They've been able to afford to hold out thus far, though I agree that probably won't last.
Basel Too wrote:
"the Fed actually does have to undergo notice and comment before changing a substantive regulation. whether it listens to the comments is a different matter."
Like the notice and comment before all these FLA's (four letter acronyms), where they buy anything from the banks as opposed to buying only treasuries?
and they will keep waiting. it is going to take a long long time to get back to normal. With baby boomers attempting to cash in, and middle agers with two homes, who is going to buy ?
This line in the press release cracks me up:
Most homeowners - 74 percent - believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home's housing slide.
Anyone ever hear of the endowment effect? It's at work in this survey and Zillow doesn't even seem to understand it or they wouldn't have put that text in bold. Or perhaps they did in order to highlight that it still works.
You want to see the future of Southern California, try T.J.
Spot on Bob.
Also cash will be needed for government dirty deeds, over seas transactions and so on.
Also if there is a big blow up not only will infrastructure be attacked EMP weapons certainly will be used as well
The goobermint doesn't talk much about them but these things are scary and not that difficult to make. To hard for the likes of you and me certainly but not for really bad people or a bunch of pissed off tech-kiddies. Military computers can probably handle the homemade kind but all those PC's and Main Frames that carry the E-Blips will die
In that situation it would be pretty damned hard to run a country w/o a currency. At least of you have cash you can stop gap things -- and forget scrip -- it won't work for a government that has lost legitimacy or to buy foreign goods at all.
If the fit hits the shan I expect to see 20-30% of the population flee, Mexico to collapse from a sudden influx, Canada to melt down and a 1/3 of the remaining population die of hunger or violence
While a US population around 200 million appeals to me greatly I sure as anything don't want something like that to happen -- even if somehow the only people killed were vermin I wouldn't wish that on anyone
Getting rid of cash will be the ultimate form of government control. There is of course a good chance that it will happen eventually.
Hopefully it will not happen in my lifetime.
On there other hand, a total economic collapse could weaken central authority and take us back to a barter economy in some regions.