I have been to Vegas a couple of times in the past year. Both times, I went through virtually empty recently built neighborhoods. It's quite an effect at night, blocks and blocks of houses with no cars in the driveways, no lights on.

When the banks give away half completed condo complexes, and the investors can get rediculous prices for constructions good and labor, how much can they charge for those condos and still make a profit? You can guarantee they will undercut any prices out there since their cost is so low. Unless of course, the banks continue to unload completed inventory for nothing because Geithner has guaranteed to replace the losses with PPIP money. This downward pressure on prices has a long way to go. You may think inflation will come to save the day, but inflation won't show up in the form of housing unless of course wages become inflated too. Afterall you have to charge higher prices to someone right? Do not think for a minute that that graph of Vegas housing prices even provide one iota of a clue when it will hit bottom. As surprised as you may have been on how prices got, you will be just as surprised at how low prices go.

I wonder if there's some way for the sand states to default selectively? We'd be a lot further along in this without Cali, Florida, Nevada and Arizona.

Lots of investor activity in my neck of the woods Lee County Florida with prices at 80% off. The new realathore scam is you have to have get into a bidding war with others and put an offer in 10% over asking price. Investors don't realize 50% of the homes are vacant or in some stage of foreclosure. No way in hell will investors win because there are no good paying jobs or enough renters to fill all their investment properties. I don't care about the investors as long as they pay the expensive property taxes we still have here from the boom years. I also think a lot of upside down homeowners are snapping up the cheep houses and are going to walk on their overpriced crap shacks they bought in the boom years, look for a shit load of new foreclosures from this kind of activity. Also a ton of 2004-2006 houses people are buying have Chinese drywall people are getting stuck with or are failing to close when discovered.

speaking of lost vegas.. I saw this earlier today YouTube - Lost Vegas: Vanguard

"I dont care about timing the bottom, "

You won't have to, it will be available for a long time.

I have never understood people who still invest in houses.

Think of this as too-good-to-be-true investment advice:

DO NOT TOUCH

Salamanders fall from storms
Charged with thunder, lightning forms
Within their tissues, do not touch
Their shining skins lest thunder rush
Propelling fire through your eyes,
Do not meddle if you’re wise

Do not touch these other beasts
That fall from thunderheaded fleece,
Frogs and kittens, puppies, mice
Commingled with a hail of ice,
Prolific are the buzzing crowds
That fall electric from the clouds

Do not come near what you have found
Till current passes through the ground,
For if there ever should be such
A fall of beasts – why would you touch?

Pavel
May 24, 2009

anyone know what the price to revenue ratio is on the sp 500?

NOT adjusted for inflation.

Shadow,
I am hearing that too, which is why I am worried about all the rentals going up in mine. Bigger picture, if we do go into depression, what happens this time? We aren't going back to the family farm this time around. Do the cities empty or do the burbs....I haven't the foggiest idea what happens this time around. I am a big Bogart fan..Treasure of the Sierra Madre keeps playing in the back of my mind: Can you help a fellow American down on his luck?

Americans are done with gambling. They are all putting their money into long term debt instruments.

I used to always think that if times got really bad that the people would come streaming out of the cities looking for food and shelter... Then came Katrina and a lot of people just sat there and waited for the good fairy to show up... and they were out of everything, but they were too lazy to walk ten miles up the interstate where they could have found help... So now I think - they will probably just sit where they are and whine until they die...

Anyone watching the Indy 500? Tony Kanaan just crashed hard - something broke on the car when he was on the straight at max speed - quite a hit... he's ok though...

You aren't supposed to be up during the day, Jim.

Wonder if CSI will start have crimes with criminals playing
hide and seek in the emply subdivisions.

I've been in Las Vegas several times this year for conventions. The empty (completed) and half-built condo towers are truly a sight to behold. Not to mention the various new hotel/commercial developments.

The conventions have been well-attended by serious visitors (people who were there to do business), but attendance was off about 15-20% by my estimation and the numbers that I saw afterward.

Looking at the chart the CR posted, it appears that the house price index has fallen back to just below the long-term trend, and is still headed straight down. I'm keeping an eye on this to see if there will be opportunities some time in the future - I don't believe that LV is going to dry up and blow away, but it obviously will go through a major reset.

The hotels are dealing, the prices are still high, but much more reasonable than they were even a year or two ago. During the conventions, I noticed that attendees were gravitating toward older, less expensive hotels (like the Sahara) rather than the newer, still expensive glitz palaces.

It looks like the City Center development will be completed in spite of all the trouble they have had with financing, so more hotel rooms and high-end commercial will be coming on line. This should make for some nice new implosions as older, dying properties are torn down. A worse outcome would be board-ups, with the relics still sitting because they can't afford to knock them down. Closer to downtown, the old single-story commercial stuff is boarded up and sitting there.

This evolution will be interesting to watch - I expect this to go on for the foreseeable future.

Those empty condos on the sand look like there should be a large body
of water within a coupla hundred feet. I gather there isn't.

I never got gambling. I have fully internalized the thing about the house
takes its cut, and you must lose in the long run, such that there is absolutely
no thrill at all. Pulling the arm of a one armed bandit for an hour seems like
paying to do an excruciatingly boring job.

"Pulling the arm of a one armed bandit for an hour seems like paying to do an excruciatingly boring job. "

What I find sad is the really old folks who do this like a job. You can spot them by the driving glove on their arm-pulling hand.

Like a golf glove.

I wonder if there are right and left handed bandits.

dafox, thanks for the link. Good show.

More info than I expected along with the usual human drama.

Wondering how Las Vegas' municipal debt load looks. Does anybody recall some kind of monorail default last year that was insured by one of the monolines?

I have been looking and screaming deals still seem few and far between at the higher end Vegas hotels on the strip. Still seeing rooms at $150-200 a night rates, which is basically the same as 2006.

Well if you have never been there, dont pass it up if you can go - it will be a lot of fun the first time... There are a lot of great restaurants and brewpubs... all over town, not just on the strip.. All of the big hotels have some attractions, and the decor and architecture are really stunning... If you like Art Deco, go see the MGM Grand - it's like a really gorgeous movie theater from the 1930's - really appropriate now... Bellagio is really something too with the dancing fountains...

Hagen Dazs

Me too!

There are a lot of people at the Indy 500, but there are also a lot of empty seats... to be expected...

Vonbek, you just described one of my childhood delights - making ice cream. Grandma used to cook a custard base on the stove and add flavorings, like fresh strawberries. Grandpa tended the machine - he packed the ice and added rock salt and made us kids crank the handle. Rather, we delighted at the chance until our arms felt about to fall off. Eventually, he upgraded to an electric motor and it was never as satisfying as having to really work for it.

Every place that sells small appliances has ice cream makers. Some are stand-alone machines. Some, unpowered, go in the freezer. The capacity is small.

Friend of mine who worked as a cocktail waitress at a casino told me: always make sure to sanitize any chair at a gambling table before you sit down. People regularly stay there so long, they crap their pants.

I used to always think that if times got really bad that the people would come streaming out of the cities looking for food and shelter... Then came Katrina and a lot of people just sat there and waited for the good fairy to show up... and they were out of everything, but they were too lazy to walk ten miles up the interstate where they could have found help... So now I think - they will probably just sit where they are and whine until they die...

shadow, most of the people who stayed in New Orleans had no transportation, though many were promised public transit for evacuation. A number of motor coaches were dispatched from nearby states, but were turned back - weren't permitted to enter NO. Those who attempted to leave the city after the storm weren't permitted by law enforcement to leave - in particular those who had exactly your idea of proceeding on foot via I-10. People who had no wish to do so were made to abandon midtown hotels and forced (not too strong a word) to move into a sports arena where there were no provisions completed for their care. Would you have faced down armed guardsmen to leave the city? State militia? County sheriffs? City police? All giving contradictory instructions and all carrying weapons?

Now explain to me about the part laziness played.

I never heard that people were forced to stay in NO... I remember seeing the school buses under water... Lot of bad decisions there...

How about this - the guy running 3rd in the Indy 500 is named Will Power...

The only housing still going up in America are tents.

burnside;

Did they ever clean up the city, county, and state government after Katrina? It seems that was where most of the problem was, other than the obvious problem of the city's location and circumstances.

shadow,

There were overlapping jurisdictions and contradictory directives. And a near-complete absence of coordination at all levels. Everyone was boss.

I don't think the residents really stood a chance. What sensible work did get done meant telling some constabulary type to make himself useful or get out of the way.

It was awful.

sm landlord,

Well, no not really. Murky gov't has the cachet of tradition in NO and environs.

I have no idea why we ever bothered to rebuild New Orleans.

It's losing ground on both ends. Losing acres of coastline across the gulf every day, sea level rising, the city itself sinking. There's some geology professor with a hard-on for this topic that I found very convincing. He paints a picture in 2070 of a city a mile out in the gulf, surrounded by 80' seawalls, where the first Cat 4 hurricane turns it into Atlantis. Given that there's been a Cat 4 hurricane an average of every 12 years, the odds are simply against it.

It's unfortunate that the port is exactly, precisely where it must be.

ZackAttack wrote on Sun, 5/24/2009 - 12:08 pm
Wondering how Las Vegas' municipal debt load looks. Does anybody recall some kind of monorail default last year that was insured by one of the monolines?

I think that was a Simpson's episode?
YouTube -
apologies for the sound quality.

Zack, I hear that idea a lot, too.

But really we never did rebuild the city. Plenty of money was promised, but arguments ensued. And turf wars. If your home or business was damaged or ruined and is now restored, you did it yourself, pretty much.

That doesn't make headlines, so I think the country at large thinks the American taxpayer picked up the tab. Nope.

You know, the day of the hurricane was the day gold did its breakout above the 440 level and I bought my first big gold position. I wonder if those two were a coincidence.

When we lived in SF, we had an earthquake disaster plan - we had a food and water stash and we planned to lock ourselves in the apt for at least a week until the rough stuff was over, then we had a place to go inland if the utilities were still off... We went over this with our relatives and friends so they would know what to expect if something happened... I've always been big on contingency planning though - we still have a plan in case everything breaks down... it might be out the window on the first day, but at least we have thought about it and have made some preparations.. We are not survivalists though - I expect that in the worse case the military will put down any anarchy and get things moving again...

Thanks for the trip down memory lane, Vonbek. Between ice cream handles and rowboat oars, we kids had Popeye muscles every summer. Oh, how we complained about the work we were made to do! And oh, how well we slept, safe, bone-tired, happy, and loved.

People regularly stay there so long, they crap their pants.

I've heard folks say that about this blog.

There is a tv show called Survivorman - if you havent seen it, it's pretty good

there is an actual survivorman episode where he deals specifically with an urban type disaster like Katrina. kinda cool, because he does scenarios from different areas.. like a home or an office building. its usually replayed on discovery or science channel ...

I've heard folks say that about this blog.

LOL

Vegas real estate stats: http://www.lasvegasrealtor.com/stats/statindex.htm

What would explain a sales history like that, peAk? Two of those transactions are very questionable.

Public transportation is nothing but another AmTax.

re: Vegas stats

Pretty soon you'll be able to put a condo on a typical credit card.

The SFRs are getting almost reasonable as well, but you definitely want an access-controlled location. There's a lot of desperation, and a lot of real low-lifes wandering around town. I was visiting a friend that lived in a gated community on a golf course last year, and they were real serious about security. And after experiencing the aggressive panhandling in the parking lot of a nearby restaurant, I can certainly see why.

Lobbist
Transit is necessary in many urban areas. Don't throw out the baby with the bathwster

ackAttack (homepage, profile) wrote on Sun, 5/24/2009 - 3:52 pm

I have no idea why we ever bothered to rebuild New Orleans.

It's losing ground on both ends. Losing acres of coastline across the gulf every day, sea level rising, the city itself sinking. There's some geology professor with a hard-on for this topic that I found very convincing. He paints a picture in 2070 of a city a mile out in the gulf, surrounded by 80' seawalls, where the first Cat 4 hurricane turns it into Atlantis. Given that there's been a Cat 4 hurricane an average of every 12 years, the odds are simply against it.

It's unfortunate that the port is exactly, precisely where it must be.

I recently visited N.Orleans for the first time and had an opportunity of discussing its problems with a well informed person involved in the reconstruction. Prior to that I felt the way you do- I no longer do.

First and foremost - the problems from Katrina were entirely an engineering problem. Two examples. There was some water that came over the top of the levies- which in of itself would not have been a problem but the water coming over top eroded the bank (which was earthern) which in turn caused the levy to fail. That problem could have been fixed (and has) by building a 3-5ft concrete foot path on the dry side of the levy. The industrial canal which lead to a lot of the flooding essentially had funnel that was exposed to surge and acted as hydraulic system. Again a problem that could have been avoided by installing flood gates as they have done in now. To suggest that we can't engineer correctly therefore should abandon NO goes against everything we normally do- e.g. flying on an airplane. BTW the Netherlands is also below sea level and they have quite successfully built the appropriate seawalls. I haven't heard people suggest that we should abandon the West coast because of earthquake risk. Simply put we have the engineering capabilities to live in certain areas if we do it right.

Secondly, it is the problem of the disappearing wetlands that is NO problem. Proper flood management and appropriate rebuilding of the wetlands would protect NO from most storms. Contrary to public perception NO is not on the Gulf and in fact is quite far inland. Katrina caused minimal wind damage to NO and in fact was a level 3 hurricane when she passed over NO.

Lastly, there are vast amounts of NO that were unaffected by Katrina so the idea of abandoning a city because parts of it were built in areas with insufficient and faulty engineering.

All UNLV needs to do is to stop spending money on the "amateur" athletics programs and sell off the stadiums. But I'm sure they will want to keep that stuff and cut the educational side of the operation.

BTW, the banksters are taking it in the *** on the Strip developments, if that helps.

Not much demand for the Nano econobox.... people want a/c & cupholders...

‘Luxury’ Tata Nano’s Success Helps Avoid Price War (Update2) - Bloomberg.com

Govt Motors - take a clue....

...Fort Hood is in central Texas, UH-60s were put on alert and were ready to be used almost immediately after the hurricane hit for search and rescue. After a day, no orders came down. Fort Hood put in a request for orders, were told LA governor had to put in a request to the Feds before units could be assigned. After second day, someone at Ft. Hood said screw the bureaucrats, and the blackhawks started flying east... Vonbek777
Likewise the Coast Guard. They were pulling people off rooftops within hours -- once the winds were down enough to let their choppers fly. I'd driven my aged parents (79 & 81) and five year old daughter out that Sunday, heading north in the contraflow. If even 10% of the people who actually lived down there were as feckless as ShadowInventory would like to imagine the death toll would have been ~ an order of magnitude higher. People who still spout that self-serving rot ('bout all them lazy nigras) are lying to themselves about their own foresight, capability and survival craft. (P.S. the most likely available way to start a fire if you are truly say, stranded near a suburban vehicle after spinning out on black ice, is to find the ancient bags of Doritos you or your children left behind the back seat. The transfats in those chips + the cornmeal make excellent tinder. Lay them in with some paper & cardboard or paper toweling + toilet paper and you should be able start a fire if you have dryish feed material. That's a more realistic scenario for most suburban ladies than anything Survivorman will ever show you.)

or
4. The land collapsed under the house.

I guess Nevada had better start prospecting for some more silver mines.

Or they could open the waste repository on the condition that they get to tax the waste on its way in.

At peak bubble it is really hard to tell fraud from non fraud. For the only mildly fraudulent.

It got to be very well known that if you paid for 6 months out of your ill-gotten extra proceeds, the
lenders would leave you alone as that was over the boundary for early default investigations.

The extremely fraudulent, where you were getting 100k out of a transaction, of course is more
obvious. But in my tax appeal, all the prices on all the properties were extravagant. I can't
tell just looking at the info I have, which was foolish and which was purposeful fraud.

Well the consumer is gotten wrong, wrong, wrong.

Liz, no one in their right mind would let that Laguna Beach property go for $50,000. Unless there is a building moratorium of some kind, the land is still incredibly valuable. A $50,000 conveyance doesn't pass the smell test.

lawyerliz
How about we break it down into fraud by circumstance (comparable houses were selling for that much), and fraud by initiative (mortgage broker lying about a $100k per year income when the person was unemployed)

The charts that RE posted are making my stomach hurt.

Robert J. Samuelson

Solving Social Security and Medicare.

Let Them Go Bankrupt, Soon

Why Social Security Should Go Broke Faster | Newsweek Newsweek - Robert J. Samuelson | Newsweek.com

OH HERE WE GO !

TRILLIONS FOR WAR ...

TRILLIONS FOR BANKSTERS ...

SORRY ... NO MONEY FOR OLD AGE OR HEALTH !!!!!

Do we have any unemployment wonks here? Would love to see some good U3 & U6 chart porn spanning the decades.

Samuelson ~

" And the most plausible means of compulsion would be for Social Security and Medicare to go bankrupt: trust funds run dry; promised benefits exceed dedicated payroll taxes. The sooner this happens, the better."

Yet we prop up the banks and have 800 foreign military bases ...

I paid into Social security for 35 years ...

Now their telling me I paid for Reagonomics tax breaks

and the money is all gone ... !

"Jobs really aren't plentiful anymore and will get even more scarce."

Once again, that's the credit cycle at work.
There's a fixed cost for materials and work in products.

Most of the current problem is in real estate costs & taxes because those two items are designed to get income from future generations and put it into the hands of the current generation in retirement.

Well, and also productivity.
The more you produce, the less work there is.

"I didn't see this coming, and when it hit it hit virtually overnight."
Is much better than bullshit nuance
Nuance Is Fine Until It’s a Flip-Flop - NYTimes.com

....Due to the FedGov owning most of the State, Federal PILT Funds (Payments in Lieu of Taxes) are given to most Counties that more than makes up for property taxes (with maybe exception of Clark & Washoe Counties - Reno & Vegas) had there been development. As our County Treasurer said yesterday, the PILT money has only been used for Capital Improvements, NOT operating or administration expenses. The counties in trouble are the big ones that tend to spend more "freely".

This seems an appropos spot for Ben to sacrifice his goat, no?

YouTube - Ghostbusters II - River of Slime - Alternate Grading

Cut in half all retail, services, professional, and administrative including employment. Take the best half and close down the rest. That's the new business plan.

"The counties in trouble are the big ones that tend to spend more "freely"."

~~~~

LoL ... the "big counties" have infrastructure needs that all big cities have ...

Imagine Las Vegas using septic tanks ... out houses ...

Sorry, the cost of civilization is infrastructure and yes those dreaded social programs ...

It's not an insolvable problem.

No, it is not. It just about begs for a different political system. I personally don't expect the powerful few to be so generous with the many.

Fluffy the Obese Persian Cat,

nice post. The Coast Guard distinguished themselves again in Katrina...their work was heroic.

"The Coast Guard distinguished themselves...."

They typically do. I see Sector Saint Petersburg in action every day, and they're an amazing team of professionals.

Sitting Pretty: Most top-paid CEOs take more in '08 despite the economy and public outrage.

Sitting Pretty - Los Angeles Times

my gripe is that bubbles/instabilities are hugely important to everything. optimal use of resources, long term investments, society, culture, ... yadda yadda

But scroll through the list of courses available for undergraduate economics and there's nothing


There's the Minsky crowd, but what dominates the field is that "oh, interest rates were too low for too long, that caused the bubble". Which misses the point entirely. Because these bubbles are built on ponzis, they can afford a higher interest rate than any other part of the economy -- because they never pay off the loans.

As a central bank or regulator, they need to be wary of giving a ponzi criticial mass (eg an instant wave of deregulation, using high inflation to scare every out of bonds, etc) and they need to keep an eye out for when they do inevitably build so that they can fight back with accounting standards, or better tracking, or improved compliance procedures, or peon remuneration, etc... (well with existing tools anyway, a smart central banker would look at other mechanisms for feedback)

I lived in New Orleans for 20 years but left over ten years ago. A friend who grew up there, has family there and who goes there frequently says that the rebuilding continues, unemployment is low, and many more whites returned after Katrina than blacks. Houses are being rebuilt but not low income public housing (at least not near the more affluent areas).

There is an interesting housing program available to pre-Katrina New Orleans homeowners which I don't fully understand. Apparently if you repair your damaged house to the pre-Katrina condition , the program will somehow compensate you for pre-Katrina assessed value of your home. Maybe someone who understands the program can explain it. The person who was trying to explain it to me thought she was going to receive $100,000 and still own her house...

You can in part thank the waco econazi for the debacle in New Orleans. Early on it was proposed to have a sea wall not unlike in Holland to protect the city. Please see:
A Barrier That Could Have Been

The problem in neoclassical economics is that it was automatically assumed the economy was in a nice steady state equilibrium.
That, and you have to suspend most basic laws of physics.
Expanding indefinitely in a finite world will not work.
Ask any smart 10 year old. He or she can explain it to you.

So the US has about 5 trillion more it can borrow without major financial repo's. That is the clues that I have been getting from the puppets on the string in government. Basically if that isn't enough, the endgame comes.

Next 1-2 years will be interesting.

C'mon.....blaming Reaganomics?

~~~~

Yep ...

Without the bubble state programs wouldn't have grown out of hand ...

Without sending jobs overseas, we would have more jobs ...

Without lowering tax rates on the already wealthy we would have

the taxes needed to fund our government ...

Medicare will be phased out with Health Care Reform, which is coming. Follow the Business trails on that one.

SS ain't going anywhere. Overstated problems, quite easy fixes.

Your political ideology makes your opinion worthless.

Geithner Fails to Correctly Describe Causes of Bubble

Well, my optimism has been battered lately, but I still believe in some things, even the banksters can't tolerate.

mmckinl, we'll probably never agree on this.

Black Star, once again you are spouting biases. The fact is, your ideology blinds your view. You view dependence differently than I do. I think you are interdependent on your ideology which is a form of dependency of itself. Herbert Hoover's papers after the depression are absolute reads for anybody when dealing with poorly organized governments in the frames of a market economy and how FDR basically reworked the government for a industrial society thus laying the groundwork for the post-war boom.

I have read mmckini over several "blogs" and he speaks just about as much truth as there is. Oh yeah nationalizing the FED into UST is a absolute necessity. Sadly that will never be done.

As to being "blinded by my ideology", I don't understand what you mean by that.

"Point of view is worth 80 IQ points" -- Alan Kay