When you see someone being dragged over a cliff by an anvil around their ankle, purchasing said anvil is not considered a "move up," no matter how many gables and bedrooms the anvil has.
We are move up buyers to be. We have been for about 6 years. For half of that we never could catch up. Always behind and chasing houses that in price would leave us behind in a matter of months.
Now? Why buy and lose money? Especially having done that before.
You've mentioned a few times recently that you could see the Fed capping LT Treasury rates. I don't understand how that would work. I thought LT rates were established by the market as new supply came to auction.
Are you suggesting a hard cap, i.e. "The US Treasury will pay no more than 5% for our 30 year Treasury Bonds", or an effective cap based on more printing and buying of our own debt?
If you're talking about a hard cap, is there any precedent? I certainly hadn't factored that possibility into my strategy for navigating this mess. Thx.
The wife and I epitomize the "no move up" crowd. We bought our first house back in 2001, and we are planning to be buried in the backyard. Should some type of disaster strike and we need to move, we'll go back to renting.
The kiddos are just going to have to live with doubling up in the same room when the guests visit. Good for the old character. When I was growing up I remember having to sleep on a cot in the basement when the grandparents visited.
OT, but wanted to get it out there and didn't want it pigged - yeah, I just got on and was reviewing the last thread when this came up.
If the treasury is really about to crack - and Rich is probably salivating - then what's the effect on MM funds? I've heretofore assumed that the treasuries were the way to go for safety and split the various proceeds up amongst treasuries and MM funds.
But if the treasury market finally pukes, what's the effect on MM funds? I assume that treasury MM funds would still be alright given the exceptionally short term nature of the instuments. What about TIPS, denominated in 7 - 10 year terms?
Another problem is where the affordable housing is. I love the idea of driving for 3 hours a day. The rule of thumb a million years ago (1980's) was the house price went down 1k for every mile you moved away from the beltway.
prev. thread: "This is an "especially good year" for edible weeds, whose sales have gone up by about 25% compared with last year, he says, and he has been raising more weeds such as dandelion, purslane and amaranth.
Recall the N. Koreans eating grass? The US elite are now on that track by eating weeds.
If you cap UST's @ 5%, when hyperdevaluation rears it ugly debt and inflation runs rampant, by definition, everybody that owns em' is a certifiable bagholder.
"Historical experience tends to support the proposition that a sufficiently determined Fed can peg or cap Treasury bond prices and yields at other than the shortest maturities. The most striking episode of bond-price pegging occurred during the years before the Federal Reserve-Treasury Accord of 1951.10 Prior to that agreement, which freed the Fed from its responsibility to fix yields on government debt, the Fed maintained a ceiling of 2-1/2 percent on long-term Treasury bonds for nearly a decade. Moreover, it simultaneously established a ceiling on the twelve-month Treasury certificate of between 7/8 percent to 1-1/4 percent and, during the first half of that period, a rate of 3/8 percent on the 90-day Treasury bill. The Fed was able to achieve these low interest rates despite a level of outstanding government debt (relative to GDP) significantly greater than we have today, as well as inflation rates substantially more variable. At times, in order to enforce these low rates, the Fed had actually to purchase the bulk of outstanding 90-day bills. Interestingly, though, the Fed enforced the 2-1/2 percent ceiling on long-term bond yields for nearly a decade without ever holding a substantial share of long-maturity bonds outstanding.11 For example, the Fed held 7.0 percent of outstanding Treasury securities in 1945 and 9.2 percent in 1951 (the year of the Accord), almost entirely in the form of 90-day bills. For comparison, in 2001 the Fed held 9.7 percent of the stock of outstanding Treasury debt."
No doubt you're not the first, Byz. I was ignored by lawyers and judges when I doubted the NYPD version of the Central Park Jogger crime 20 years ago. So when it turned out I was right, not the established legal community, not the established press, and not 95% of public opinion, I promised myself never to let up the attack on people willing to trample Constitutional rights, like you.
We job relocated in 12/07 and sold in 3/08. Thought we'd "move up" within 3 months, but the correction curve in the new location looked fishy. Even though we have a relo benefit on buying, we're cutting bait -- going to get the stuff out of storage and rent a house. Thanks to this blog (and a few others), a non-MBA Jane Sixpack put together this thought experiment about a year ago. It saved us from buying "great deals!!":
People with homes
1. Bought at peak and won't want to sell for a loss. They can't "move up."
a. won't sell for a loss
b. have to sell because of mortgage problems. If so, they can only move down. Or start renting. They won't contribute much to market.
2. Some bought long ago:
a. Seniors who don't want a new house.
b. Pre-bubble buyers: Is a scary economy a good time to buy a more expensive house?
c. Left with pre-bubble buyers who make enough money/have enough savings to risk buying a more expensive house in a falling market.
First time buyers.
1. If they have the savings and credit. But if prices are dropping would you wait. And, if you're "first time," you're lower income. Do you risk buying a house in a scary economy when you could lose your low paying job.
2. Majority of homes in this market currently are not "first time buyer" homes.
3. If a seller manages to sell their first time home-- are they going to move up, move down or wait.
Investors
Wild card.
1. Are there enough of them.
2. As the market gets worse and more of them get burned, are their numbers declining.
3. Since the economy is plummeting, the timeframe for reselling at a profit is lengthening, how long is "too long."
Unseen Sellers
Seniors who want out.
People waiting for less inventory.
People waiting for prices to stabilize.
Relocation buyers.
As economy drops, layoffs increase, more companies implement "hiring freeze"-- therefore fewer relo buyers.
@broward funny but actually sobering for those in SoCal, Arizona, Southern Nevada ( Las Vegas ) parts of NM because water resources will be extremely depleted by 2020.....gee that just a decade and change away !
"Messrs Bernanke and Summers, we have identified a segment of the housing market not totally driven by free government money. It's the move-up market. We need to create new ways to soak it with a few trillions of dollar. Can you help".
"No problem. We'll go huddle right now with Barney and Chris. Tim will bring us coffee and cookies and take notes. Give us 3 months to get results. Nice talking with you. Now you remember to bring us any more problems like this right away, you understand? We don't want you being bothered by this notion that some asset prices are just way too high."
iceman, Nemo is having fun ... I came up with that move up graphic over two years ago. It was obvious this was going to happen, but I think people are finally realizing that there will be few buyers at the high end.
If people stop keeping up with the joneses in not just homes, but cars and his and hers jet skis, and gawdawful 28 foot rv's called "Wilderness" (with a trailered Lexus suv), it wouldn't be a bad thing.
If Ben tries to buy up the entire long end of the curve (and he'd have to do it to effectively cap rates), then he becomes the market. Everyone and their uncle sells into his bid, leaving him the bag holder.
What happens next is pure speculation, but I'm guessing that everyone left in shorter duration bills stampedes to the short end of the curve, blowing rates sky-high and giving the entire credit-based ponzi-conomy one big golden shower.
Anyone with graphic talents that would dare tamper with the Mortgage Pig? I'd love to see a new flipbook with sucklings Ending with the sow devouring them would be spectacular, but that is probably asking too much. Both literally and figuratively.
EXactly my thought as I read thru the speech. Realized that I'd read it before thanks to some previous link here and forgotten.
Kinda like the Gospel according to Benjamin.
That said, they cap the LT rate and there'll be no buyers. A comparison with 1950s isn't valid...we were then the currency to be held and the safest place in the world on a currency basis. Not anymore.
I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas.
CR I think we have beat this horse enough. Housing is TOAST and will be crumbs ...soon. It's over, done, finished, kaput, out, and gone. Can we have some more chart porn...please?
central_scrutinizer, the Fed will buy across the yield curve. I think you can see that simply buying Treasuries and making interest rates low is "too easy" a solution, so you're struggling to find the problem. The problem will not be that one part of the yield curve has to blow up. The problem will be higher inflation as the Fed prints money to buy all those Treasuries. It won't show up for a year or two, but it will show up with a vengeance.
//I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas.//
This photo has seemed more and more appropriate lately:
Benjamins has already stated that the majority of Americans don't travel outside of our border, so of what effect would devaluation of the dollar mean to the hoi ploy?
Juvenal Delinquent (profile) wrote on Tue, 5/26/2009 - 8:35 pm
If people stop keeping up with the joneses in not just homes, but cars and his and hers jet skis, and gawdawful 28 foot rv's called "Wilderness" (with a trailered Lexus suv), it wouldn't be a bad thing.
if people stopped keeping up with the joneses and attempting to emulate the celebrity lifestyles propagandized to them on 1/1000 the budget, the entire consumption-based economy would spectacularly collap... errr... never mind. carry on, carry on.
"Chainsaw, read this 2002 speech by Bernanke. He talks about capping rates in it."
Basically he talks about doing what he has been doing to date, though he hasn't specifically targeted rates yet.
The speech is a good read, as it does show his mindset: that deflation is something that can be solved using monetary policy alone. Note that he cites Japan (and the US in the GD) a lot.
Funny there was no mention of Argentina, or Zimbabwe, or Weimar Germany.
I dunno ... if something sounds too easy, it usually is. Nobody is bigger than the market, not even the Fed.
At a minimum, Bernanke is running increasingly reckless experiments aimed at proving his thesis. We're mostly arguing about what kind of monster (hyperinflation, dollar collapse, etc.) is born from his stupidity.
Oh, it didn't get the media coverage it deserved but in DC it was the usual Harley bikers ride in to celebrate Memorial Day and their service to our country. Lots and lots of them. It was also Black Gay Pride weekend downtown. Leather and leather did not come together...
well i was planning on being a first time home buyer within the next few months but that plan has been derailed. i had just printed up the docs from my employers credit union today to get down to business when i called my mom to see if she wanted lunch. when i met her for lunch she informed me that she was laid off on friday. now i'm back to my bunker mentality because her well being is one of my primary concerns. the mortgage docs are going into the trash. i was saving close to 50% of my net pay a month before this news, now i'm going to kick it up even more. mom is close to 60 and a little overweight.
everything is going to be alright, i kept telling her as she cried at the restaurant. it was heart breaking man.
anybody know anybody (in or near las vegas nv.) that needs a 50 something legal secretary? i'll pay you a finders fee.
SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger on Tuesday proposed eliminating welfare for 500,000 families and terminating health coverage for nearly 1 million children to help close the state's ballooning budget deficit.
The governor has said he would not support further tax hikes after agreeing to $12.8 billion in higher sales, personal income and vehicle taxes earlier this year. He said Tuesday that "if we don't make those cuts, I think we will face catastrophic consequences because the state would simply run out of money and get insolvent, which we cannot afford to do."
State Republicans also said they were not willing to raise taxes.
Hmmm I see the head in in sand approach from GOP assclowns is as good as Obama's and Dems ( in collusion with the 19 too big to fail banks that got trillions in TARP ) is to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored AND PEOPLE CAN TRADE UP TO MORE EXPENSIVE HOUSES
no wonder former GAO Comptroller General David Walker ( who was one of the good guys ) quit last year:
“The federal government’s total liabilities,” Walker explained, “translates into a de facto mortgage of about $455,000 for every American household and there’s no house to back that mortgage. In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases.”
iceman, Nemo is having fun ... I came up with that move up graphic over two years ago. It was obvious this was going to happen, but I think people are finally realizing that there will be few buyers at the high end.
:: ::
'People' as in the middle-elites who own the homes the plebes used to buy [liberating those currently holding the 'move up']. They only noticed it once THEIR homes wouldn't sell.
My impression is many McMansion owners in Florida, California and other bubble areas are now buying dirt dirt dirt cheep houses in these areas and will soon walk on their Garage Mahals, Faux Chateaus, and Hummer Homes soon leaving a dearth of real estate devastation in their paths. Anyone subscribe to this theory besides me?
My sister somehow spent $35k on a bathroom, which included a $10k crapper that flushed money down the drain quicker than any other comparable model could.
Yancey Ward (profile) wrote on Tue, 5/26/2009 - 8:48 pm
Don't you worry, Obama will start a program to get homeowners to upgrade. Can't have an economy without upgraders.
A sliding mortage interest deduction combined with the homebuyer discount would be just the trick. The longer past 2 years you own the same home, the less tax benefit you get. Alternately, real estate taxes could be set up to rise yearly. Or these methods could be combined into a federal program and given an innovative acronym. Welcome to the plantation!
So the gubernator is threatening to kill kids health care and welfare for the poorest? Sounds like he's stolen Bill Clinton's 1996 playbook.
Whenever the rabble dare to shirk their duty to pay higher taxes, clever politicians threaten to kill the most popular programs. Note that convicted felons still get free viagra and cable TV.
liz -- yeah the name is extra-snarky even though my shallow but serious study of philosophy did rob me of pretty much everything but my intense skepticism. meh...
central_scrutinizer (profile) wrote on Tue, 5/26/2009 - 8:59 pm
So the gubernator is threatening to kill kids health care and welfare for the poorest? Sounds like he's stolen Bill Clinton's 1996 playbook.
Whenever the rabble dare to shirk their duty to pay higher taxes, clever politicians threaten to kill the most popular programs. Note that convicted felons still get free viagra and cable TV.
Threatening to cut beat cops and firefighters usually creates the necessary amount of fear to keep the rabble in line. It took a few centuries of civilization, I'm sure, before it was realized that threats to cut Adminstrators didn't inspire much terror.
Tried to move up this spring. First time buyers with no money down and $8k obamination money were scooping shit up before we could even walk through the damn house. This happened a half a dozen times where we even had appointments and it got bought out from under us. There is going to be such a loud crash here when all these McMansions don't sell and the sleazy lending ends in more foreclosures. This is Oklahoma, and prices are still going up and the 3000+ sq. ft. houses are multiplying like rats. After what the gubbermint has done to the housing market and made shit so unfair I am going to wait until hell freezes over. Let them turn those McMansions into immigrant shit shacks, I don't care anymore.
"A sliding mortage interest deduction combined with the homebuyer discount would be just the trick. The longer past 2 years you own the same home, the less tax benefit you get. Alternately, real estate taxes could be set up to rise yearly. Or these methods could be combined into a federal program and given an innovative acronym. Welcome to the plantation!"
I was thinking about this issue as well. I suspect it will play out somewhat along those lines, or maybe: tax deductions for all closing costs; tax deductions for selling costs on old home (not just cap losses, but straight deductions for the 6% realtors fees, etc); and/or, very likely, the conforming loan limit will be raised to infinity, and BB will just buy all the securitized MBS.
But there is no doubt that we have not nearly seen the end of govt interference in the housing markets.
To keep the taxpaying rabble in line, they realized a threat to cut administrators would not inspire fear, so firefighters and police are always first on the chopping block.
I will be the first to call them on their threat. Go ahead, cut the police and fire budgets, see if I care.
I should mention, if you are at all eligible for a 97LTV FHA loan, and can use the 8K as the downpayment, that is a sweet deal. The value of the put option is hard to value, but it is certainly worth a lot.
My greatest regret is not getting 100LTV financing on my house in 2007. I will never make that mistake again.
re: Capping long term treasury rates Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment
,,,
re: new deductions to spur home sales
I would expect them to make impaired capital gains on a house transferrable to the buyer to cover the sale costs. I don't know why I expect that, I'm not a policy wonk. I don't know how soon they'll move to do something like that
CIA Briefers Regularly Mislead Hill Intelligence Panels, Ex-Spy Charges
By Jeff Stein | May 26, 2009 CQ Politics |
SpyTalk - CIA Briefers Regularly Mislead Hill Intelligence Panels, Ex-Spy Charges
A former deep-cover CIA operative says the spy agency's congressional briefers routinely shade the truth or hide facts altogether from congressional overseers. "They mumble, they dissemble, and there's a lot of 'on the one hand . . .'" said the retired official, who spent 25 years as a CIA operations officer but now writes blistering, unauthorized critiques of the spy agency using the pen name "Ishmael Jones."
Jones added: "It relishes this 'cowboy' image, and its greatest fear is that the taxpayer might figure out how little it actually is doing.
Now apply "the greatest fear is that the taxpayer might figure out how little it actually is doing" to most Federal and State governments like what we just saw with Schwarzenegger details $5.5B more cuts to budget Yahoo! 404 - Page Not Found and maybe just maybe revolution in this country will happen
"I would expect them to make capital gain losses on a house transferrable to the buyer to cover the sale costs. I don't know why I expect that, I'm not a policy wonk. I don't know how soon they'll move to do something like that"
"I would expect them to make capital gain losses on a house transferrable to the buyer to cover the sale costs. "
Interesting. They do have a precedent in the new Fannie/Freddie refis, in that they are ignoring the current property value and instead arguing that the previous value should be the basis for interpreting the GSE charter language.
The IRS could just do the same, use the last (previous) purchase price as the basis, not the newest one. That effectively transfers the current loss to the new buyer. If the new buyer can then take a one-time markdown, Voila, they get an instant tax credit.
This post title is mis-spelled. It's not "Dearth", it's "Death".
The move-up market is almost entirely dependent upon rolling over accumulated homeowner equity, and NEWSFLASH! there isn't any.
As CR has documented all along, despite a doubling of national home values the percentage of homeowner equity actually declined throughout the boom. IOW, everybody spent all their equity gains and their existing equity, too. Now, take away the gains from the bubble and there's nothing left... zip, zero, nada.
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
Been away from the computer till now. Did see the moon shot with the confidence number though. So a real number (Case-Shiller) that's bad gets dwarfed by a survey number that's dubious. Oil up, bond yield up, but no mention of problems these issues will cause? Seems a little rigged to me, tho my 60% cash can weather anything, my brown shorts notwithstanding.
I'd love to see Ben try & set an explicit rate ceiling.
You know that oft-imitated scene where one kid says "if you cross this line", the second steps over it, then the first kid steps back and says "well, if you cross THIS line"...
It's not that the capital loss transfer would be a good idea, but it is a publicly acceptable way of delivering money to key stakeholders. They already did it on a temporary limitless basis when Paulson brokered the sale of Wachovia to Wells Fargo. It is focussed most on those houses which are underwater. Fed likes it because it helps clear the real estate market. FHA likes it because it brings in the private capital of a buyer/the government. Banks love it because they eat a smaller loss. People won't oppose it because they just don't see any tax revenue as belonging to the government.
sneering nihilist,
you are such a good guy. I am sorry that your mom is having a hard time, but she has you as a son, so she knows what's she's doing. Once the shock is over, besides Craigslist, remind her to let all her friends, even casual ones, know she is looking. Searching for work is estimable, even if it feels difficult, and any sort of social network might kick up leads. All best wishes to both of you.
I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses. I know everyone here in freedumb's land is rolling in money (sarcasm) so I will wait for a much, much, nicer house for less $ too. I may be old and gray by then, but I'll be damned if I'll buy anything but a bank repo in 2016 now, cash.
TJ,
China is really starting to get on my nerves. If China did not exist, the US would not be having the problems we are having today. China can go suck on their drywall.
Sorry to hear the bad news. The mother of a very close friend of mine was laid off in March from her part time University job. Almost everyone is hurting this time, or knows someone that is. It will be a long hard slog for all of us. Hang in there.
norma (profile) wrote on Tue, 5/26/2009 - 7:42 pm
reply ignore user
I'm probably what they would considered a "move up" buyer, but I don't ever what to"own" a home, although I could....
If you don't buy a house (or two) the terrorists win... or is it communists? I can't remember.
in '05 i got myself worked up into a pretty good frenzy over peak oil and the housing bubble so i moved to oregon thinking that i'd be better off there. what i learned there is that i want to be close to loved ones, whatever the circumstance. i made friends quickly in oregon, but i have friends that i love here in vegas. been a best man twice, a godfather, etc... however bad(or good) it gets, i'll be with people that i care about. another good thing that happened to me when i went to oregon was the new century, nova star, and pulte leap puts that i loaded up on. best. trade. ever.
Couldn't disagree more. The US has been headed down this path for quite a while; China & Japan have simply been our best "enablers".
Frankly, I wish foreigners would stop buying Treasuries altogether. If we're ever going to get our house in order we have to start living within our means.
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:28 pm
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
yes, exactly. unless there are policies that devalue present real-estate holdings and encourage new buying (an artificial attempt to force housing turnover) people will largely be staying put, and in turn will start selecting homes on the basis of long-term value. so it will take policy action to destroy that natural response and keep the money flowing, through a combination of homebuying incentives, subsidizing mortgages to rates below inflation, and disincentives for proles to buy a house as a place to live for more than a few years before moving on and up.
Buzzsaw: I've been waiting forever to buy in OC, CA. The idiots who told me to buy in 2005 called "me" an idiot back then. Now I'm an idiot for not buying now. One of the loudest critics lost a million on his house when he sold it recently. He don't give me shit no more.
Forced housing turnover, at least in that manner, would make everyone move-down buyers. Frankly I don't see where the government's going to come up with money to incentivize anything before too long.
sm_landlord
You asked about a Canadian real estate before, finally got to look at the one you posted, ended up searching the web and came up with a neat site. House Prices Worldwide - C
It basically brings various national housing indices and puts them in one place
Chart Porn....Need Chart Porn....preferably inflation adjusted. I need the fix because when the mother f'ing crap storm called inflation hits....I want something to show my UNBORN kids that proves just how bad it really is...when I tell them that they have to share one bed, 1 meal, and one ball glove....AND LIKE IT!!!!!!
TJ, I agree. Move down buyers are the only ones who are buying . But, what do I know, I've been charged with a felony for blogging in the local paper. But then again, I live in Boise, Idaho....
ResistanceIsFeudal (profile) wrote on Tue, 5/26/2009 - 7:50 pm
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:28 pm
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
yes, exactly.
I'm suing for copyright. The few very old timers here will verify that I was preaching the demographics before even Tanta was putting me in my place.
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:52 pm
RIF,
Forced housing turnover, at least in that manner, would make everyone move-down buyers. Frankly I don't see where the government's going to come up with money to incentivize anything before too long.
Well said. But move-up or move-down matters little to the giant infrastructure that handles these flows of funds. This won't end with a homebuyer credit and unnaturally-low mortgage interest rates. The FIRE economy won't put itself out and I don't see the political will to do it either.
Money Man (profile) wrote on Tue, 5/26/2009 - 8:01 pm
reply ignore user
Increased cost of food, energy, and basic necessities appear pretty inflationary to my meager falling wages Sir........
Don't worry the theoretical decline in OER will put it back in your pocket.
Ya but corp. paper is recovering. So who cares 'bout the re market. Just GM paper is junk...saw my F paper (T series) move up from a 36 yield to just under 6..whohooo!
Been away. Busy. Miss much?
Markets are on a tear. Have doubts 'bout testing those Nov/Mar lows.
N. Korea is making things interesting. Didnt see much reaction in USD or Au...something tells me this is but a pimple on an elephants behind.
Without move-down buyers price collapse would not be as fast, in the same manner move-up buyers helped to cause price increases. Thank God for move-down buyers.
Pundits pointed to the Conference Board consumer confidence number as the driver for the stock run up today. But no one mentioned the other consumer confidence poll released today, the ABC/WaPo, which came at -47, two points below last month's -45. Which is more accurate?
"I should mention, if you are at all eligible for a 97LTV FHA loan, and can use the 8K as the downpayment, that is a sweet deal. The value of the put option is hard to value, but it is certainly worth a lot.
My greatest regret is not getting 100LTV financing on my house in 2007. I will never make that mistake again."
Ghostfaceinvestah,
Basel made the same point a few days ago, but I must be achieving peak stupidity, I can't follow this at all. Could you explain in extremely simple terms how this put option differs from simply being a knifecatcher? Many thanks.
Barley (profile) wrote on Tue, 5/26/2009 - 8:05 pm
reply ignore user
Ya but corp. paper is recovering.
That's what they want you to think. Just like the totally bogus LIBOR spread. Commercial paper spreads are just the short tail left twitching after the sheeple is mostly in the snake.
Dawg....We go back a ways...so take this nicely....I see short signs of things not looking as bad. Corp paper and the spread is real, real money following real returns.
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 8:08 pm
reply ignore user
The few very old timers here will verify that I was preaching the demographics before even Tanta was putting me in my place.
C'mon, Dawg... we were both preachin' demographics back in the early days of HBB.
Ehhh? What's that? Speak up young'n. My hearing is getting weak.
Yes, we were. Back then people didn't understand that it takes years for demographics to manifest. Now that it is happening there is renewed interest in the actual math.
/I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses./
All those McMansions are going to be shared senior homes as the boomers age. Four boomers, one cook, they all chip in and occasionally a nurse shows up to give them all an enema on a group discount.
The McMansion mushroom farms of today are the modified nursing homes of tomorrow. Just a theory. (What else are they going to do with them.)
"I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas."
Some of the Newport mansions enjoyed a second life as tourist attractions, but visits have been falling for years Considered distastefully gaudy by critics even in the Gilded Age, they can barely generate enough revenue to be preserved by non-profit groups (the Vanderbilts cashed out or took a tax loss long ago).
Most people can't think well.
This isn't even close to being over. The Shiller numbers are a strong indicator that thehousing market alone hasn't inflected yet
General Motors Corp.’s equity would be majority owned by the Treasury once the automaker’s restructuring plan is in place, said a person familiar with government discussions.
“The government has showed that it’s going to put its muscle behind this,” George Magliano, director of automotive research for IHS Global Insight Inc. in New York, said in a Bloomberg Television interview. “They don’t want a long bankruptcy. They want to get it in, get it out to minimize the impact of a long bankruptcy.”
The person, who asked not to be identified describing private talks, wouldn’t estimate the government’s ownership percentage for GM. The Canadian government also will have an equity stake, the person said.
Trying to extrapolate the Fed's ability to influence Treasury yields in the 1940's and 1950's to today requires one to ignore the differing macro fiscal environments between then and now.
In the 1940's and 1950's, we were the world's largest creditor, our competitors were flat on their backs after the destruction from a world war, and Americans were net savers.
Today, we are the world's biggest borrower, our competitors have state-of-the-art plant and equipment and our physical plant has been encouraged to degrade, and Americans are in-over-their-heads deadbeat borrowers.
Couldn't disagree more. The US has been headed down this path for quite a while; China & Japan have simply been our best "enablers".
Frankly, I wish foreigners would stop buying Treasuries altogether. If we're ever going to get our house in order we have to start living within our means.
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
Citizen Scotto - Thanks loads for putting that MIT link up on the last thread. While digging around in there I found the coolist link to Classical texts, which are a favorite pastime of mine. A very pleasant surprise.
and a gentle note to the Juvenal "D": sp. is "polloi"
MommyKnows (profile) wrote (in reply to...) on Tue, 5/26/2009 - 10:17 pm
/I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses./
All those McMansions are going to be shared senior homes as the boomers age. Four boomers, one cook, they all chip in and occasionally a nurse shows up to give them all an enema on a group discount.
The McMansion mushroom farms of today are the modified nursing homes of tomorrow. Just a theory. (What else are they going to do with them.)
Usefully repurposed artifacts from the age of conspicuous credit-fueled consumption? I like it, and it makes great economic sense. Very subversive! Of course this only applies to the McMansions still standing that weren't vandalized beyond repair and are not home to squatters.
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
Hey - I voted for no incumbants in the last election. I bet there are more like me on this board.
Dawg: 'If you don't buy a house (or two) the terrorists win... or is it communists? I can't remember. "
Perhaps you need re-education. Whoever is trying to control Afghanistan is the enemy, it being crucial to the global economy. And it should read "If you don't finance a house (or two)..."
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
maybe that was true at one time. modern election should be renamed as "selection", as what we in fact have is the freedom to do is to select between alternatives already chosen for us by the interests that financed the respective campaigns.
Barley,
No need to "pussyfoot." I agree. What I see is olden type corporate credit standards reasserted. If you "pass" everything is fine [my company 'passes'] but the other 70% are left with no options with which to roll short term debt.
Has it always been common for businesses to rely on short term debt to smooth out cash flow in the normal course of business? I hear a lot about it now, but I don't recall hearing much about it in decades past, except in family farming. Could be my ignorance, but it could also be a fundamental shift the same way that consumers rely heavily on credit cards.
Good luck "Repurposing" McMansions built the last few years profitably.I watched a lot of developments go up in NorCal the last few years and the shoddy quality of construction from site prep on means maintenance and repair costs are going to be a LOT more than historical averages suggest.And this goes for all price ranges excluding only a few custom homes.These were built to be flipped,not lived in.
ResistanceIsFeudal (profile) wrote on Tue, 5/26/2009 - 8:32 pm
mp (profile) wrote on Tue, 5/26/2009 - 10:22 pm
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
Maybe that was true at one time. modern election should be renamed as "selection",...
I am accepting applications for citizenship en Nueva California.
After the revolution I plan on using San Luis Obispo as my new Capital of El Centro de Kalifornia. Stretching from San Vincente Blvd at the base of the Pacific Palisades to my future summer Palace at San Simeon, encompassing the Santa Monica Mtns., Santa Lucia Range, San Rafael Mtns inland to as far as Taft, my benevolent dictatorship will rule in peace and prosperity. After the rotting corpses of any remaining lawyers are dealt with my first act will be to outlaw public transit except for the exclusive transport of real estate agents. My second act will be to replace all these damn compound Spanish place names. Henceforth Santa Barbara and San Luis Obispo will be simply known
as "Babs and Larry."
Kindest regards from the exile HQ in Camarillo"
I remain your,
El Supremo de Nueva Kalifornia
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
i actually have heard similar comments out of Geithner's mouth... There is this attitude from them that ultimately this crisis was not the financial system but on the american ppl being so stupid to be grifted by them....like its the womans problem for dressing 'sexually' for being raped...
sometimes i just hate these guys and hope they get there just deserts... like Louis XVI did...
She wanted to release a “concept paper” — essentially a set of questions — that explored whether there should be regulation of over-the-counter derivatives. . . . [Robert Rubin, Larry Summers, and Arthur Levitt] warned that if she did so, the market would implode and predicted tidal waves of lawsuits.
Translation: You cannot say anything that might upset the markets.
In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”
Translation: The Deputy Treasury Secretary should listen to the thirteen bankers in his office.
Dawg - shit rolls down hill. Yes I agree w/ that. While I see some not bad news some other things bother me - Why has C been so quiet? Are loan loss provisions enough to cover CC writeoffs and the up coming CRE blowoff? How many companies can stand a 17-25% reduction in sales? Once inventories levels get depleted can most companies replentish at staggered forecasts? Will unemployment become self fofiling? How will investors react once they learn that earnings are spread across a bazillion shares?
In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”
They should have let her do it. Now they have no one to blame but themselves.
Feckless, it used to be that every bank worthy of the name had a commercial loan department. Small business people had access to a form of revolving credit based on the prime rate plus. The credit line was usually secured by something: receiveables, equipment, what have you.
Many small business people now rely on credit cards. Some use a second on their home. For many, it's a short term credit problem. Figuring out how to finance receiveables.
I am being completely serious in the thread regarding McMansions. our options are refusal to participate or at least attempts to minimize our involvement, and repurposing or subverting the artifacts produced by that system to a useful purpose. that is the real "green" economy... we have tons of consumer trash with a very short life-cycle, paperboard spec housing that won't last more than 5-10 years at most, and bizarre remnants of capitalistic hubris like artificial islands in a desert. someone is going to have to either pick up the pieces and make something useful, or dispose of the waste products.that are left over. this is the real green economy and this is our actual future. I'm not saying green shoots, but opportunties will exist and the future IS going to look a lot different in some fundamental ways, even if the Galactic Federation of Planets announces itself tomorrow and there is complete recovery.
Barley,
Don't be silly, it never stops raining. There's only brief periods of daylight
,,,
O/T: I watched I.O.U.S.A. on tv. How quickly we forget, Paul O'Neill was the Treasury secretary from 2001-2002 who opposed the tax cuts. Then John Snow came in to rubber stamp everything before Paulson took the reigns
The most sensible plan would be to inoculate the important 1% and unleash a plague that would thin out about 40% of the herd in a 6 month span,thus eliminating a lot of unneeded mouths and stimulating the rest into productive and obedient behaviour.
mp - so does that mean there's been a shift away from securitized commercial lending toward unsecured? Or did all the lenders get so caught up in real estate that there was less credit available for commercial lending? Just wondering what the changes have been over the last few decades.
Barley (profile) wrote on Tue, 5/26/2009 - 8:42 pm
Dawg - shit rolls down hill.
But money flows uphill. The laws of finance have momentarily trumped physics.
While I see some not bad news some other things bother me - Why has C been so quiet? Are loan loss provisions enough to cover CC writeoffs and the up coming CRE blowoff
IMO the CC and CRE losses are the straws that break the camel. Break the camel is an interesting phrase. You don't actually break the animal, they just refuse to carry an unfair load. Likewise through the eye of the needle doesn't mean a sewing tool but rather a passage next to the city gate just large enough to allow an unladen camel to pass.
We need to throw off bad debt. Sad, unfair but necessary.
Emperor Dawg Norton - I propose that the Emperor's official vehicle should be a 1972 El Camino with a big block, 2 quad Holleys and Flowmasters all the way back.... And that that Emperor should permanently ban arugula from the palace menu... And that Botox be placed on the banned substances list...
And once in power that you go over the budget, line by line, eliminating waste, fraud, and those programs which are not effective... (I lifted that from another candidate...)
Tom Stone (profile) wrote on Tue, 5/26/2009 - 10:49 pm
The most sensible plan would be to inoculate the important 1% and unleash a plague that would thin out about 40% of the herd in a 6 month span,thus eliminating a lot of unneeded mouths and stimulating the rest into productive and obedient behaviour.
indeed! survival of the fittest... and who better than the important 1% to decide who is the important 1%?
Yes, the noises you hear are the sacred cows being put on the grill to scare both sides -- but both sides NEED to be scared into real action here. The "welfare cuts" are to scare the democrats -- let them know that one of their two core constituencies (their voting one) is about to get slaughtered. Their other constituency (the state workers unions) need to be forced to the table for contract renegotiation.
Next on the spit -- "Police and firefighter layoffs" and "releasing the rapists". Before you bleed too much for the former, they need to come to the table too -- cozy work-rules and pensions are a big reason for the fiscal crisis, esp. at the city level and prison level. Half of all pensions over $100,000k/year go to public safety workers, typically retiring in their 50's. As for the latter, too many drug offenders better treated than imprisoned feed an over-expensive system (thank the rightwing), and an unwillingness to offload illegal immigrants back onto the feds for deportation is another big chunk (thank the leftists). Retirees often take another state job, allowing double-dipping into yet another pension plan before true retirement.
When you start hearing: retirement reform; prison reform; true budget caps based on some reasonable base year and population growth; reform on Prop 13 on commercial; ban double-dipping; then you'll know they're getting serious. Sadly, it's likely too late, as no-one will believe them even if they propose such things and put them on the ballot now.
Should be interesting times for CA bondholders, such as myself!
"In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”"
And if you don't, we will cause the worst financial crisis since 1929.
ShadowInventory (profile) wrote on Tue, 5/26/2009 - 8:53 pm
Emperor Dawg Norton - I propose that the Emperor's official vehicle should be a 1972 El Camino with a big block, 2 quad Holleys and Flowmasters all the way back...
Does it help that I drove my kid back to UCLA this morning in the Civic?
If I had a choice in the field you describe I'd have the mid 80s Ford Thunderbird with the police V8 and suspension again.
Nowadays, Nueva de Kalifornia is open to corporate sponsorship.
there was an interesting article in the telegraph comparing the US/UK approach to the financial crisis (i.e. naked printing) and the austerity imposed on Eastern Europe by the IMF.
i had no idea how much much hatred many Asians have for Larry Summers. Not surprising given his deregulatory bent while at the World Bank, which set the stage for the currency crisis of the 1990s, followed by his role in the IMF "solution."
Summers replacing BB in 2010 may be an absolute disaster.
DCRogers - you exaggerate for dramatic effect. I read the state's budget analysis today. Things are serious enough - we don't need more fear-mongering.
Basel wrote: "there was an interesting article in the telegraph comparing the US/UK approach to the financial crisis (i.e. naked printing) and the austerity imposed on Eastern Europe by the IMF."
Feckless, based on my experience, it has become more difficult for small business people to obtain "reasonably-priced" credit.
Part of this, I think, is due to the consolidation trend in banking. There are far fewer community banks than there used to be, and community banks competed with each other for business. They had loan officers that specialized in serving business borrowers and they were intimately familiar with the communties in which they operated.
Believe it or not, loan officers used to call on small business people in an effort to get their business. No more.
The main change I've seen at the community level over the last thirty to forty years is a shift towards consumers (credit cards, automobile loans, etc.) and away from real estate and small business loans. Why? Well, as I said, banks consolidated. Also, it takes a lot of money and time to run a good commercial loan department with properly trained loan officers.
Banks, like everyone else, are looking for the fast and easy buck. That means they want fee business (overdrafts, etc) and they want business that doesn't require a lot of servicing, again, like small commercial.
IMO, this shift away from community level banking is one thing that is just killing small business in this country and consolidation helped bring it about.
and if you can find a factoring house, the rates are usurious.
I watched a young firm wilt from this sort of "help". They had enough cash even if 25% of receivables defaulted. They just didn't have anyone who was willing to get on the phone and work. It was sad to watch.
Dryfly and Dawg,the most important of the "C's" making someone creditworthy is character,and that is something that a megabank can not take into consideration,unlike a loan officer at a community could in the past.Can not,due to the structure of the large institution.Too bad...
dryfly (profile) wrote (in reply to...) on Tue, 5/26/2009 - 9:05 pm
Lending is always defacto unsecured - bankers just have to learn it and relearn it.
Festivus!
Seriously, you are correct. IMO the "problem" is/was that lending got too impersonal.
Believe it or not, loan officers used to call on small business people in an effort to get their business. No more.
I would change the last part from "No more" to "Rarely"... I work w/ small mfgrs too and I know at least two people [one who owns a small biz trying to expand and another trying to buy one with seed money from others on top to boot] who are actively courted by small 'local' bank loan officers. And recently too - within the last two months.
But these guys are real exceptions - both understand 'bootstrapping' as well as anyone I know. The owner of the small shop looking to expand drives a used Toyota ~8 years old. If he had the free cash to buy a nicer car... he'd buy more fixtures & tooling for the shop instead. The bankers that call on him are local & know that - walk his shop floor - they have also been providing him credit going on 20 years [before he bought & built up the current business].
But in general mp is right - and probably for good reason - most small business isn't that disciplined.
Sure. Group think has started to hit the Bears badly
Geez, if you're going to troll, at least use something original. That line was used ad nauseum here back in that very 2005-7 timeframe, but those trolls aren't around anymore because they're just as wrong as you are now.
When CR commenters turn predominantly bullish then things are turning around, not before.
Out of my way! I want to make loans that are or aren't paid back based on how many votes I've got behind me. After all, it's the patriotic thing to do.
BTW, what happened to longtimelurker/shorttimeastroturfer just when things are really getting interesting?
When CR commenters turn predominantly bullish then things are turning around, not before.
Actually, there is a "false dawn" scenario that worries me. (I was negative during 02/03, and was sure that the music had stopped for housing back then. Surprise! Greenspan pumped us to where we are today.)
Feckless Ness writes: DCRogers - you exaggerate for dramatic effect. I read the state's budget analysis today. Things are serious enough - we don't need more fear-mongering.
Not trying to monger -- would like to hear your comments, and solutions.
In the case I mentioned, they didn't need the cash. What they needed was for the folks on the payroll to do their jobs. I tried to talk sense into the ceo but all she could think of was her next 3 month vacation to europe.
I guess my point is always know your net worth, read and analyze everything before you sign, and be especially wary of mustache twiddling help.
1 currency now -yogi (profile) wrote on Tue, 5/26/2009 - 9:15 pm
Nueva de Kali will encourage an open source currency indexed to world commodity prices I assume?
A basket of Central Valley produce, linear feet of coastline and tech/biotech futures will make an excellent medium of exchange. I had a Bacon varietal Avocado with my salad this evening and the local strawberries are only 2 weeks away. We may get tired of healthy food but we won't starve.
Eras End (profile) wrote on Tue, 5/26/2009 - 11:22 pm
TJ, you cannot tell anybody they are "trolling" when nothing in my post even gave a hoot about what you think.
Listen, group think kills. Get caught in your own ideological zoo and you die. That is it and that is all it can be.
My advice is watch for the herd, they can get slaughtered and your utopian visions shattered.
I agree but we are not there yet. When MSM starts to sound like CR commentary on a particularly grumpy late night, no one will touch stocks with a ten foot pole and there are mass political demonstrations to abolish the federal reserve, taxpayer revolts and the guillotine gearing up for business, the turnaround may be near.
"I tried to talk sense into the ceo but all she could think of was her next 3 month vacation to europe."
Well, there's always those. In my experience, they either have no skin in the game, or the business was handed down to them and they're milking it for all it's worth.
In one of my previous lives I was a banker myself, so FINANCIAL CONTROLS were something that was beaten into me early on.
For as long as I can recall, so-called experts were telling me to put 20 percent of my income into the stock market (fortunately I did not). And then the experts said to buy a big house (as much as you can afford was what I recall). I did not, but instead bought a house I could afford. I remember thinking that is was an industry trying to get me to spend more money. Now, it has all been revealed to me. Its all a big scam.
About time you started noticing this trend, CR.
Does trailer to 2 BR 1 BA count?
How about basement to 1 br flat
CR's been on top of this trend for months. Once again, the MSM is only 2 or 3 months behind the curve.
Should it not be "The Death of Move Up Buyers?"
Who wants to invest in real estate? Isn't that like just another dotcom?
Sure Tim.
No move up buyers in South Florida.
My mom is selling to a "new" homebuyer. We have to wait for closing for a few more weeks for the 3
years to be up to become a first timer.
When you see someone being dragged over a cliff by an anvil around their ankle, purchasing said anvil is not considered a "move up," no matter how many gables and bedrooms the anvil has.
Move-up buyers stayed away in droves
We are move up buyers to be. We have been for about 6 years. For half of that we never could catch up. Always behind and chasing houses that in price would leave us behind in a matter of months.
Now? Why buy and lose money? Especially having done that before.
got "pigged" on the last thread...
EHP,
You've mentioned a few times recently that you could see the Fed capping LT Treasury rates. I don't understand how that would work. I thought LT rates were established by the market as new supply came to auction.
Are you suggesting a hard cap, i.e. "The US Treasury will pay no more than 5% for our 30 year Treasury Bonds", or an effective cap based on more printing and buying of our own debt?
If you're talking about a hard cap, is there any precedent? I certainly hadn't factored that possibility into my strategy for navigating this mess. Thx.
The wife and I epitomize the "no move up" crowd. We bought our first house back in 2001, and we are planning to be buried in the backyard. Should some type of disaster strike and we need to move, we'll go back to renting.
The kiddos are just going to have to live with doubling up in the same room when the guests visit. Good for the old character. When I was growing up I remember having to sleep on a cot in the basement when the grandparents visited.
OT, but wanted to get it out there and didn't want it pigged - yeah, I just got on and was reviewing the last thread when this came up.
If the treasury is really about to crack - and Rich is probably salivating - then what's the effect on MM funds? I've heretofore assumed that the treasuries were the way to go for safety and split the various proceeds up amongst treasuries and MM funds.
But if the treasury market finally pukes, what's the effect on MM funds? I assume that treasury MM funds would still be alright given the exceptionally short term nature of the instuments. What about TIPS, denominated in 7 - 10 year terms?
Thanks, folks.
Another problem is where the affordable housing is. I love the idea of driving for 3 hours a day. The rule of thumb a million years ago (1980's) was the house price went down 1k for every mile you moved away from the beltway.
Chainsaw, read this 2002 speech by Bernanke. He talks about capping rates in it.
Speech, Bernanke --Deflation-- November 21, 2002
prev. thread: "This is an "especially good year" for edible weeds, whose sales have gone up by about 25% compared with last year, he says, and he has been raising more weeds such as dandelion, purslane and amaranth.
Recall the N. Koreans eating grass? The US elite are now on that track by eating weeds.
If you cap UST's @ 5%, when hyperdevaluation rears it ugly debt and inflation runs rampant, by definition, everybody that owns em' is a certifiable bagholder.
Thx RhodesianGreenback. I'll read it.
The Treasury can't set what you call a hard cap. If there are no takers at the rate the Treasury wants to pay, the auction will just fail.
The Fed can print money and buy Treasury debt....
Plenty of move-up buyers are coming.
Boomers will be "moving up" to areas north of California, Arizona, Nevada and Florida.
@Chainsaw
"Historical experience tends to support the proposition that a sufficiently determined Fed can peg or cap Treasury bond prices and yields at other than the shortest maturities. The most striking episode of bond-price pegging occurred during the years before the Federal Reserve-Treasury Accord of 1951.10 Prior to that agreement, which freed the Fed from its responsibility to fix yields on government debt, the Fed maintained a ceiling of 2-1/2 percent on long-term Treasury bonds for nearly a decade. Moreover, it simultaneously established a ceiling on the twelve-month Treasury certificate of between 7/8 percent to 1-1/4 percent and, during the first half of that period, a rate of 3/8 percent on the 90-day Treasury bill. The Fed was able to achieve these low interest rates despite a level of outstanding government debt (relative to GDP) significantly greater than we have today, as well as inflation rates substantially more variable. At times, in order to enforce these low rates, the Fed had actually to purchase the bulk of outstanding 90-day bills. Interestingly, though, the Fed enforced the 2-1/2 percent ceiling on long-term bond yields for nearly a decade without ever holding a substantial share of long-maturity bonds outstanding.11 For example, the Fed held 7.0 percent of outstanding Treasury securities in 1945 and 9.2 percent in 1951 (the year of the Accord), almost entirely in the form of 90-day bills. For comparison, in 2001 the Fed held 9.7 percent of the stock of outstanding Treasury debt."
No more movin on up?!
A primal scream echoes through exurbia:
YouTube - Primal Scream - Movin' On Up [Live]
C
."Sorry yogi, you are going on ignore. "
No doubt you're not the first, Byz. I was ignored by lawyers and judges when I doubted the NYPD version of the Central Park Jogger crime 20 years ago. So when it turned out I was right, not the established legal community, not the established press, and not 95% of public opinion, I promised myself never to let up the attack on people willing to trample Constitutional rights, like you.
We job relocated in 12/07 and sold in 3/08. Thought we'd "move up" within 3 months, but the correction curve in the new location looked fishy. Even though we have a relo benefit on buying, we're cutting bait -- going to get the stuff out of storage and rent a house. Thanks to this blog (and a few others), a non-MBA Jane Sixpack put together this thought experiment about a year ago. It saved us from buying "great deals!!":
People with homes
1. Bought at peak and won't want to sell for a loss. They can't "move up."
a. won't sell for a loss
b. have to sell because of mortgage problems. If so, they can only move down. Or start renting. They won't contribute much to market.
2. Some bought long ago:
a. Seniors who don't want a new house.
b. Pre-bubble buyers: Is a scary economy a good time to buy a more expensive house?
c. Left with pre-bubble buyers who make enough money/have enough savings to risk buying a more expensive house in a falling market.
First time buyers.
1. If they have the savings and credit. But if prices are dropping would you wait. And, if you're "first time," you're lower income. Do you risk buying a house in a scary economy when you could lose your low paying job.
2. Majority of homes in this market currently are not "first time buyer" homes.
3. If a seller manages to sell their first time home-- are they going to move up, move down or wait.
Investors
Wild card.
1. Are there enough of them.
2. As the market gets worse and more of them get burned, are their numbers declining.
3. Since the economy is plummeting, the timeframe for reselling at a profit is lengthening, how long is "too long."
Unseen Sellers
Seniors who want out.
People waiting for less inventory.
People waiting for prices to stabilize.
Relocation buyers.
As economy drops, layoffs increase, more companies implement "hiring freeze"-- therefore fewer relo buyers.
@broward funny but actually sobering for those in SoCal, Arizona, Southern Nevada ( Las Vegas ) parts of NM because water resources will be extremely depleted by 2020.....gee that just a decade and change away !
Capping Treasuries is stupid. They need to get higher to help munies and pension plans. The low rates have been the big problem.
5.5% rates aren't going to kill anybody and that is probably the top. Everything above either you are having serious economic boom.
2013
We just moved up!
Really? What did you buy?
A 1998 Chevy Suburban. Now me and the missus can have her parents over for dinner!
"The Treasury can't set what you call a hard cap. "
Sure they can.
"Your 401K WILL be re-invested into Treasuries" under the emergency Save America Act
Presto, you're in for .01%, no matter what.
"Messrs Bernanke and Summers, we have identified a segment of the housing market not totally driven by free government money. It's the move-up market. We need to create new ways to soak it with a few trillions of dollar. Can you help".
"No problem. We'll go huddle right now with Barney and Chris. Tim will bring us coffee and cookies and take notes. Give us 3 months to get results. Nice talking with you. Now you remember to bring us any more problems like this right away, you understand? We don't want you being bothered by this notion that some asset prices are just way too high."
iceman, Nemo is having fun ... I came up with that move up graphic over two years ago. It was obvious this was going to happen, but I think people are finally realizing that there will be few buyers at the high end.
best to all.
If people stop keeping up with the joneses in not just homes, but cars and his and hers jet skis, and gawdawful 28 foot rv's called "Wilderness" (with a trailered Lexus suv), it wouldn't be a bad thing.
If Ben tries to buy up the entire long end of the curve (and he'd have to do it to effectively cap rates), then he becomes the market. Everyone and their uncle sells into his bid, leaving him the bag holder.
What happens next is pure speculation, but I'm guessing that everyone left in shorter duration bills stampedes to the short end of the curve, blowing rates sky-high and giving the entire credit-based ponzi-conomy one big golden shower.
2015
Hey Ravi Bob! I heard you were moving up?
"yep" he says, the pride of ownership reflected in his voice. "Got a hardshell for the truck.
@ CR - great graphic for RE times gone bye bye !
Anyone with graphic talents that would dare tamper with the Mortgage Pig? I'd love to see a new flipbook with sucklings
Ending with the sow devouring them would be spectacular, but that is probably asking too much. Both literally and figuratively.
Ah, yes, Primal Scream giving us Beggars Banquet/Let it Bleed redux.
2017
"Jeebus, Antonio X thinks he is such hot shit."
"What do you mean?"
"He lined his fire pit with granite from one of them thangs they call houses. Ya know...those old mounds of kudzu. har har"
Worth reading: Economist's View: Feldstein: Has the US Recovery Begun?
ponyless:
EXactly my thought as I read thru the speech. Realized that I'd read it before thanks to some previous link here and forgotten.
Kinda like the Gospel according to Benjamin.
That said, they cap the LT rate and there'll be no buyers. A comparison with 1950s isn't valid...we were then the currency to be held and the safest place in the world on a currency basis. Not anymore.
I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas.
CR I think we have beat this horse enough. Housing is TOAST and will be crumbs ...soon. It's over, done, finished, kaput, out, and gone. Can we have some more chart porn...please?
Counterpointer, you might as well just go with the prototype.
YouTube -
central_scrutinizer, the Fed will buy across the yield curve. I think you can see that simply buying Treasuries and making interest rates low is "too easy" a solution, so you're struggling to find the problem. The problem will not be that one part of the yield curve has to blow up. The problem will be higher inflation as the Fed prints money to buy all those Treasuries. It won't show up for a year or two, but it will show up with a vengeance.
//I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas.//
This photo has seemed more and more appropriate lately:
http://greenewable.files.wordpress.com/2008/10/wsj-10-11-08-car-for-sale.jpg
Benjamins has already stated that the majority of Americans don't travel outside of our border, so of what effect would devaluation of the dollar mean to the hoi ploy?
Let them eat mistake...
Many move up buyers are now move down buyers.
Juvenal Delinquent (profile) wrote on Tue, 5/26/2009 - 8:35 pm
If people stop keeping up with the joneses in not just homes, but cars and his and hers jet skis, and gawdawful 28 foot rv's called "Wilderness" (with a trailered Lexus suv), it wouldn't be a bad thing.
if people stopped keeping up with the joneses and attempting to emulate the celebrity lifestyles propagandized to them on 1/1000 the budget, the entire consumption-based economy would spectacularly collap... errr... never mind. carry on, carry on.
"Chainsaw, read this 2002 speech by Bernanke. He talks about capping rates in it."
Basically he talks about doing what he has been doing to date, though he hasn't specifically targeted rates yet.
The speech is a good read, as it does show his mindset: that deflation is something that can be solved using monetary policy alone. Note that he cites Japan (and the US in the GD) a lot.
Funny there was no mention of Argentina, or Zimbabwe, or Weimar Germany.
Amaranth can be bought at the healthfood store and is very nutritious, as is the other 2.
'Way healthier than stuff made with white flour.
I think the Aztecs called it the food of the Gods.
One person's weed is another's ambrosia.
oops! there was a lot of unintended content on that link. Oh well, the studio version will have to do: YouTube - Rolling Stones You can't always get what you want
I dunno ... if something sounds too easy, it usually is. Nobody is bigger than the market, not even the Fed.
At a minimum, Bernanke is running increasingly reckless experiments aimed at proving his thesis. We're mostly arguing about what kind of monster (hyperinflation, dollar collapse, etc.) is born from his stupidity.
Oh, it didn't get the media coverage it deserved but in DC it was the usual Harley bikers ride in to celebrate Memorial Day and their service to our country. Lots and lots of them. It was also Black Gay Pride weekend downtown. Leather and leather did not come together...
I love the running board.
I'm seeing a new phenomenon with jet-skis...
People near lakes are trying to rent them out by the day, I saw 3 possibilities on the roadside.
well i was planning on being a first time home buyer within the next few months but that plan has been derailed. i had just printed up the docs from my employers credit union today to get down to business when i called my mom to see if she wanted lunch. when i met her for lunch she informed me that she was laid off on friday. now i'm back to my bunker mentality because her well being is one of my primary concerns. the mortgage docs are going into the trash. i was saving close to 50% of my net pay a month before this news, now i'm going to kick it up even more. mom is close to 60 and a little overweight.
everything is going to be alright, i kept telling her as she cried at the restaurant. it was heart breaking man.
anybody know anybody (in or near las vegas nv.) that needs a 50 something legal secretary? i'll pay you a finders fee.
Schwarzenegger details $5.5B more cuts to budget
Let's she what he proposes cutting....
SACRAMENTO, Calif. – Gov. Arnold Schwarzenegger on Tuesday proposed eliminating welfare for 500,000 families and terminating health coverage for nearly 1 million children to help close the state's ballooning budget deficit.
The governor has said he would not support further tax hikes after agreeing to $12.8 billion in higher sales, personal income and vehicle taxes earlier this year. He said Tuesday that "if we don't make those cuts, I think we will face catastrophic consequences because the state would simply run out of money and get insolvent, which we cannot afford to do."
State Republicans also said they were not willing to raise taxes.
Hmmm I see the head in in sand approach from GOP assclowns is as good as Obama's and Dems ( in collusion with the 19 too big to fail banks that got trillions in TARP ) is to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored AND PEOPLE CAN TRADE UP TO MORE EXPENSIVE HOUSES
no wonder former GAO Comptroller General David Walker ( who was one of the good guys ) quit last year:
“The federal government’s total liabilities,” Walker explained, “translates into a de facto mortgage of about $455,000 for every American household and there’s no house to back that mortgage. In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases.”
do same PR with Cali state government.
American is FUBAR !
Don't you worry, Obama will start a program to get homeowners to upgrade. Can't have an economy without upgraders.
Some what you mean is that flipper is dead?
iceman, Nemo is having fun ... I came up with that move up graphic over two years ago. It was obvious this was going to happen, but I think people are finally realizing that there will be few buyers at the high end.
:: ::
'People' as in the middle-elites who own the homes the plebes used to buy [liberating those currently holding the 'move up']. They only noticed it once THEIR homes wouldn't sell.
"Good God Muffy it really ISN'T contained!!!"
Frankly, that QE stuff looks like politics right now.
If you want to QE, you do it in MUCH bigger ammounts. They size they are doing now is way to small.
Obama has the answer. Like Gitmo he is going to pass a law that the recession is over in a year. It has to be it is the law!
Sneering nihilist turns out to be anything but sneering and a nihilist.
Good for you, sn.
flaminia - more like the K-wave summer edition!
So, 23 years to primal scream, 18 to present day. This is definitely a fib retrace. Spring is imminent.
C
My impression is many McMansion owners in Florida, California and other bubble areas are now buying dirt dirt dirt cheep houses in these areas and will soon walk on their Garage Mahals, Faux Chateaus, and Hummer Homes soon leaving a dearth of real estate devastation in their paths. Anyone subscribe to this theory besides me?
My sister somehow spent $35k on a bathroom, which included a $10k crapper that flushed money down the drain quicker than any other comparable model could.
Yeah, Michael, they're looking for cheap.
'Course, in a few more months that may just mean slightly smaller McMansions.
Re-reading that speech, is there any doubt BB doesn't have the arrogance to interfere in equity markets as well?
Yancey Ward (profile) wrote on Tue, 5/26/2009 - 8:48 pm
Don't you worry, Obama will start a program to get homeowners to upgrade. Can't have an economy without upgraders.
A sliding mortage interest deduction combined with the homebuyer discount would be just the trick. The longer past 2 years you own the same home, the less tax benefit you get. Alternately, real estate taxes could be set up to rise yearly. Or these methods could be combined into a federal program and given an innovative acronym. Welcome to the plantation!
nihilist:
Condolences. At least you have a boatload saved.
Mine is 80 and has burned through over a third of what she had before this started.
So the gubernator is threatening to kill kids health care and welfare for the poorest? Sounds like he's stolen Bill Clinton's 1996 playbook.
Whenever the rabble dare to shirk their duty to pay higher taxes, clever politicians threaten to kill the most popular programs. Note that convicted felons still get free viagra and cable TV.
C:
Huh?
liz -- yeah the name is extra-snarky even though my shallow but serious study of philosophy did rob me of pretty much everything but my intense skepticism. meh...
*
Scrutinizer:
More worried about felons rioting that a bunch of sick kids doing so.
I was thinking exactly the same thing scrutinizer.
nihilist:
I'd rather have gained my skepticism via books than practical experience.
i can haz amerikun dreem?
Only if you attach a cute cat picture, Scotto.
central_scrutinizer (profile) wrote on Tue, 5/26/2009 - 8:59 pm
So the gubernator is threatening to kill kids health care and welfare for the poorest? Sounds like he's stolen Bill Clinton's 1996 playbook.
Whenever the rabble dare to shirk their duty to pay higher taxes, clever politicians threaten to kill the most popular programs. Note that convicted felons still get free viagra and cable TV.
Threatening to cut beat cops and firefighters usually creates the necessary amount of fear to keep the rabble in line. It took a few centuries of civilization, I'm sure, before it was realized that threats to cut Adminstrators didn't inspire much terror.
High interest rates good!!!!!!!!! Low interest rates bad!!!!!!!!!!!
Liz,
A move to a slightly smaller McMansion at 75% off is seen as a wise and prudent move, and is not frowned upon anymore by their pears.
@Citizen Scotto
Preznit giv me turkee too!
homedad43:
Rolling Stones 1968
Primal Scream 1991
Now
All a big Kondratieff rock n roll cycle, summer, fall, winter. Spring's next. Y'know, sunshine, rainbows, unicorns. All correlated to RE asset values.
C
Agreed, Michael.
Fear and loathing and lost wages, a savage journey into the debt of the American Dream
" Y'know, sunshine, rainbows, unicorn"
Skittles.
Taste the Rainbow!
If I drag a c-note across a trailer park does that count?
Ick.
mmmmmmmmmm............unicorn
tastes like pony
hd43 -- probably all comes out the same.
i knew things were going to go to hell soon because i was starting to feel optimistic.
Tried to move up this spring. First time buyers with no money down and $8k obamination money were scooping shit up before we could even walk through the damn house. This happened a half a dozen times where we even had appointments and it got bought out from under us. There is going to be such a loud crash here when all these McMansions don't sell and the sleazy lending ends in more foreclosures. This is Oklahoma, and prices are still going up and the 3000+ sq. ft. houses are multiplying like rats. After what the gubbermint has done to the housing market and made shit so unfair I am going to wait until hell freezes over. Let them turn those McMansions into immigrant shit shacks, I don't care anymore.
" i was starting to feel optimistic."
Damn you.
Things were going so well....
Patience, young buzzsaw, patience.
sorry man. guess we're all getting on this ride together.
when does it end and how does one get off?
"A sliding mortage interest deduction combined with the homebuyer discount would be just the trick. The longer past 2 years you own the same home, the less tax benefit you get. Alternately, real estate taxes could be set up to rise yearly. Or these methods could be combined into a federal program and given an innovative acronym. Welcome to the plantation!"
I was thinking about this issue as well. I suspect it will play out somewhat along those lines, or maybe: tax deductions for all closing costs; tax deductions for selling costs on old home (not just cap losses, but straight deductions for the 6% realtors fees, etc); and/or, very likely, the conforming loan limit will be raised to infinity, and BB will just buy all the securitized MBS.
But there is no doubt that we have not nearly seen the end of govt interference in the housing markets.
To keep the taxpaying rabble in line, they realized a threat to cut administrators would not inspire fear, so firefighters and police are always first on the chopping block.
I will be the first to call them on their threat. Go ahead, cut the police and fire budgets, see if I care.
"After what the gubbermint has done to the housing market and made shit so unfair I am going to wait until hell freezes over."
Such is the lesson of the crash: being responsible and saving does not pay in America today.
Spring's next. Y'know, sunshine, rainbows, unicorns.
But what happens when the X wears off?
being irresponsible and borrowing does not pay either.
"Such is the lesson of the crash: being responsible and saving does not pay in America today. "
I disagree responsible and saving is part of it. Learn the cycle of overbuying and position your self for the bargains in the off cycle.
I should mention, if you are at all eligible for a 97LTV FHA loan, and can use the 8K as the downpayment, that is a sweet deal. The value of the put option is hard to value, but it is certainly worth a lot.
My greatest regret is not getting 100LTV financing on my house in 2007. I will never make that mistake again.
re: Capping long term treasury rates
Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment
,,,
re: new deductions to spur home sales
I would expect them to make impaired capital gains on a house transferrable to the buyer to cover the sale costs. I don't know why I expect that, I'm not a policy wonk. I don't know how soon they'll move to do something like that
CIA Briefers Regularly Mislead Hill Intelligence Panels, Ex-Spy Charges
By Jeff Stein | May 26, 2009
CQ Politics |
SpyTalk - CIA Briefers Regularly Mislead Hill Intelligence Panels, Ex-Spy Charges
A former deep-cover CIA operative says the spy agency's congressional briefers routinely shade the truth or hide facts altogether from congressional overseers. "They mumble, they dissemble, and there's a lot of 'on the one hand . . .'" said the retired official, who spent 25 years as a CIA operations officer but now writes blistering, unauthorized critiques of the spy agency using the pen name "Ishmael Jones."
Jones added: "It relishes this 'cowboy' image, and its greatest fear is that the taxpayer might figure out how little it actually is doing.
Now apply "the greatest fear is that the taxpayer might figure out how little it actually is doing" to most Federal and State governments like what we just saw with Schwarzenegger details $5.5B more cuts to budget Yahoo! 404 - Page Not Found and maybe just maybe revolution in this country will happen
As long as you don't overpay. Walking is painful, no matter how ruthless you are.
"I would expect them to make capital gain losses on a house transferrable to the buyer to cover the sale costs. I don't know why I expect that, I'm not a policy wonk. I don't know how soon they'll move to do something like that"
Doubtfull that is coming anytime soon
"Garage Mahals"
Good one!
"I would expect them to make capital gain losses on a house transferrable to the buyer to cover the sale costs. "
Interesting. They do have a precedent in the new Fannie/Freddie refis, in that they are ignoring the current property value and instead arguing that the previous value should be the basis for interpreting the GSE charter language.
The IRS could just do the same, use the last (previous) purchase price as the basis, not the newest one. That effectively transfers the current loss to the new buyer. If the new buyer can then take a one-time markdown, Voila, they get an instant tax credit.
Might work.
This post title is mis-spelled. It's not "Dearth", it's "Death".
The move-up market is almost entirely dependent upon rolling over accumulated homeowner equity, and NEWSFLASH! there isn't any.
As CR has documented all along, despite a doubling of national home values the percentage of homeowner equity actually declined throughout the boom. IOW, everybody spent all their equity gains and their existing equity, too. Now, take away the gains from the bubble and there's nothing left... zip, zero, nada.
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
Been away from the computer till now. Did see the moon shot with the confidence number though. So a real number (Case-Shiller) that's bad gets dwarfed by a survey number that's dubious. Oil up, bond yield up, but no mention of problems these issues will cause? Seems a little rigged to me, tho my 60% cash can weather anything, my brown shorts notwithstanding.
Mook - it never will, because we now have new, improved, hypermega ... FEDX!
There can be no end to the high.
C
when does it end and how does one get off?
I'd seriously consider getting out of Vegas. The truly sustainable part of that economy can only support a fraction of the current population.
I'd love to see Ben try & set an explicit rate ceiling.
You know that oft-imitated scene where one kid says "if you cross this line", the second steps over it, then the first kid steps back and says "well, if you cross THIS line"...
It's not that the capital loss transfer would be a good idea, but it is a publicly acceptable way of delivering money to key stakeholders. They already did it on a temporary limitless basis when Paulson brokered the sale of Wachovia to Wells Fargo. It is focussed most on those houses which are underwater. Fed likes it because it helps clear the real estate market. FHA likes it because it brings in the private capital of a buyer/the government. Banks love it because they eat a smaller loss. People won't oppose it because they just don't see any tax revenue as belonging to the government.
sneering nihilist,
you are such a good guy. I am sorry that your mom is having a hard time, but she has you as a son, so she knows what's she's doing. Once the shock is over, besides Craigslist, remind her to let all her friends, even casual ones, know she is looking. Searching for work is estimable, even if it feels difficult, and any sort of social network might kick up leads. All best wishes to both of you.
"One person's weed is another's ambrosia. "
The British explorers would throw throw away the seal's liver. The Eskimo thought that unwise.
The Eskimo didn't get scurvy.
Being in a big city is not where i'd want to be, as people start losing their minds and money, not necessarily in that order.
Thanks lawyerliz, others,
I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses. I know everyone here in freedumb's land is rolling in money (sarcasm) so I will wait for a much, much, nicer house for less $ too. I may be old and gray by then, but I'll be damned if I'll buy anything but a bank repo in 2016 now, cash.
interesting, roubini link from CR just a year ago....
Calculated Risk: Financial Times Interview With Professor Roubini
China warns Federal Reserve over 'printing money'
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.
China warns Federal Reserve over 'printing money' - Telegraph
Did somebody order a Chinese Take-Out of the dollar?
If China doesn't like it, do something about it, stop financing it. Basically they are saying, hey go right ahead with their actions right now.
I'm probably what they would considered a "move up" buyer, but I don't ever what to"own" a home, although I could....
TJ,
China is really starting to get on my nerves. If China did not exist, the US would not be having the problems we are having today. China can go suck on their drywall.
Don't worry about the Chinese eating our lunch. They'll be hungry again in half an hour.
Anyone else notice their 401k investment options have merged into one "Blackrock" investment fund?
Blackrock is preparing for the PPIP
~miser
@sneering nihilist,
Sorry to hear the bad news. The mother of a very close friend of mine was laid off in March from her part time University job. Almost everyone is hurting this time, or knows someone that is. It will be a long hard slog for all of us. Hang in there.
norma (profile) wrote on Tue, 5/26/2009 - 7:42 pm
reply ignore user
I'm probably what they would considered a "move up" buyer, but I don't ever what to"own" a home, although I could....
If you don't buy a house (or two) the terrorists win... or is it communists? I can't remember.
in '05 i got myself worked up into a pretty good frenzy over peak oil and the housing bubble so i moved to oregon thinking that i'd be better off there. what i learned there is that i want to be close to loved ones, whatever the circumstance. i made friends quickly in oregon, but i have friends that i love here in vegas. been a best man twice, a godfather, etc... however bad(or good) it gets, i'll be with people that i care about. another good thing that happened to me when i went to oregon was the new century, nova star, and pulte leap puts that i loaded up on. best. trade. ever.
fried -- thanks
Michael,
Couldn't disagree more. The US has been headed down this path for quite a while; China & Japan have simply been our best "enablers".
Frankly, I wish foreigners would stop buying Treasuries altogether. If we're ever going to get our house in order we have to start living within our means.
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:28 pm
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
yes, exactly. unless there are policies that devalue present real-estate holdings and encourage new buying (an artificial attempt to force housing turnover) people will largely be staying put, and in turn will start selecting homes on the basis of long-term value. so it will take policy action to destroy that natural response and keep the money flowing, through a combination of homebuying incentives, subsidizing mortgages to rates below inflation, and disincentives for proles to buy a house as a place to live for more than a few years before moving on and up.
sn,
Yeah, I've got friends & family there, too. We'll see how long they can hold out.
A society is built for materialistic pleasures, living among "your means" isn't a option.
Rob, I live in Idaho and I also own a trailer! So, there you go ....
Buzzsaw: I've been waiting forever to buy in OC, CA. The idiots who told me to buy in 2005 called "me" an idiot back then. Now I'm an idiot for not buying now. One of the loudest critics lost a million on his house when he sold it recently. He don't give me shit no more.
RIF,
Forced housing turnover, at least in that manner, would make everyone move-down buyers. Frankly I don't see where the government's going to come up with money to incentivize anything before too long.
sm_landlord
You asked about a Canadian real estate before, finally got to look at the one you posted, ended up searching the web and came up with a neat site. House Prices Worldwide - C
It basically brings various national housing indices and puts them in one place
Chart Porn....Need Chart Porn....preferably inflation adjusted. I need the fix because when the mother f'ing crap storm called inflation hits....I want something to show my UNBORN kids that proves just how bad it really is...when I tell them that they have to share one bed, 1 meal, and one ball glove....AND LIKE IT!!!!!!
TJ, I agree. Move down buyers are the only ones who are buying . But, what do I know, I've been charged with a felony for blogging in the local paper. But then again, I live in Boise, Idaho....
Inflation isn't coming anytime soon. The cost of living will go up but inflation? Nope.
"Private Idaho" is all about the B-52's getting busted for ganja in the potato state.
ResistanceIsFeudal (profile) wrote on Tue, 5/26/2009 - 7:50 pm
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:28 pm
Combine that with the demographics changes and the move-up buyer is essentially extinct for a decade.
yes, exactly.
I'm suing for copyright. The few very old timers here will verify that I was preaching the demographics before even Tanta was putting me in my place.
Increased cost of food, energy, and basic necessities appear pretty inflationary to my meager falling wages Sir........
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 9:52 pm
RIF,
Forced housing turnover, at least in that manner, would make everyone move-down buyers. Frankly I don't see where the government's going to come up with money to incentivize anything before too long.
Well said. But move-up or move-down matters little to the giant infrastructure that handles these flows of funds. This won't end with a homebuyer credit and unnaturally-low mortgage interest rates. The FIRE economy won't put itself out and I don't see the political will to do it either.
Money Man (profile) wrote on Tue, 5/26/2009 - 8:01 pm
reply ignore user
Increased cost of food, energy, and basic necessities appear pretty inflationary to my meager falling wages Sir........
Don't worry the theoretical decline in OER will put it back in your pocket.
Ya but corp. paper is recovering. So who cares 'bout the re market. Just GM paper is junk...saw my F paper (T series) move up from a 36 yield to just under 6..whohooo!
Been away. Busy. Miss much?
Markets are on a tear. Have doubts 'bout testing those Nov/Mar lows.
N. Korea is making things interesting. Didnt see much reaction in USD or Au...something tells me this is but a pimple on an elephants behind.
It doesn't matter how necessities are priced, they are not inflation.
EHP - was in your neck of the woods yesterday....when its sunny its a nice place.
Not sure markets are on a tear. They have not moved much lately and the lastest spurge will be beaten back as it was meant to be.
Without move-down buyers price collapse would not be as fast, in the same manner move-up buyers helped to cause price increases. Thank God for move-down buyers.
Pundits pointed to the Conference Board consumer confidence number as the driver for the stock run up today. But no one mentioned the other consumer confidence poll released today, the ABC/WaPo, which came at -47, two points below last month's -45. Which is more accurate?
The few very old timers here will verify that I was preaching the demographics before even Tanta was putting me in my place.
C'mon, Dawg... we were both preachin' demographics back in the early days of HBB.
"I should mention, if you are at all eligible for a 97LTV FHA loan, and can use the 8K as the downpayment, that is a sweet deal. The value of the put option is hard to value, but it is certainly worth a lot.
My greatest regret is not getting 100LTV financing on my house in 2007. I will never make that mistake again."
Ghostfaceinvestah,
Basel made the same point a few days ago, but I must be achieving peak stupidity, I can't follow this at all. Could you explain in extremely simple terms how this put option differs from simply being a knifecatcher? Many thanks.
Barley (profile) wrote on Tue, 5/26/2009 - 8:05 pm
reply ignore user
Ya but corp. paper is recovering.
That's what they want you to think. Just like the totally bogus LIBOR spread. Commercial paper spreads are just the short tail left twitching after the sheeple is mostly in the snake.
Dawg....We go back a ways...so take this nicely....I see short signs of things not looking as bad. Corp paper and the spread is real, real money following real returns.
TJ and The Bear (profile) wrote on Tue, 5/26/2009 - 8:08 pm
reply ignore user
The few very old timers here will verify that I was preaching the demographics before even Tanta was putting me in my place.
C'mon, Dawg... we were both preachin' demographics back in the early days of HBB.
Ehhh? What's that? Speak up young'n. My hearing is getting weak.
Yes, we were. Back then people didn't understand that it takes years for demographics to manifest. Now that it is happening there is renewed interest in the actual math.
China warns Federal Reserve over 'printing money'
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5379285...
Chinese merchantilists bitching because the can't have BOTH an ever rising surplus AND value in the currency of that surplus just plain cracks me up.
Wonder how far they are behind Japan in coming to that 'Oh Noes!' moment.
Dawg writes,
"the short tail left twitching after the sheeple is mostly in the snake"
Quite clever Dawg, did you just make that up yourself?
/I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses./
All those McMansions are going to be shared senior homes as the boomers age. Four boomers, one cook, they all chip in and occasionally a nurse shows up to give them all an enema on a group discount.
The McMansion mushroom farms of today are the modified nursing homes of tomorrow. Just a theory. (What else are they going to do with them.)
"I don't remember the reference but the greatest % losses during the Great Depression were in the highest-end housing. The most expensive housing lost up to 90% of its value in some areas."
Some of the Newport mansions enjoyed a second life as tourist attractions, but visits have been falling for years Considered distastefully gaudy by critics even in the Gilded Age, they can barely generate enough revenue to be preserved by non-profit groups (the Vanderbilts cashed out or took a tax loss long ago).
"called me an idiot"
I'm "delusional, disturbing, dangerous" , "gay, bi", "crazy, ignorant, disruptive"
Most people can't think well.
This isn't even close to being over. The Shiller numbers are a strong indicator that thehousing market alone hasn't inflected yet
GM will become Government Motors
GM Majority Equity Stake to Be Held by Treasury (Update2) - Bloomberg.com
General Motors Corp.’s equity would be majority owned by the Treasury once the automaker’s restructuring plan is in place, said a person familiar with government discussions.
“The government has showed that it’s going to put its muscle behind this,” George Magliano, director of automotive research for IHS Global Insight Inc. in New York, said in a Bloomberg Television interview. “They don’t want a long bankruptcy. They want to get it in, get it out to minimize the impact of a long bankruptcy.”
The person, who asked not to be identified describing private talks, wouldn’t estimate the government’s ownership percentage for GM. The Canadian government also will have an equity stake, the person said.
RhodesianGreenbackinAZ:
Trying to extrapolate the Fed's ability to influence Treasury yields in the 1940's and 1950's to today requires one to ignore the differing macro fiscal environments between then and now.
In the 1940's and 1950's, we were the world's largest creditor, our competitors were flat on their backs after the destruction from a world war, and Americans were net savers.
Today, we are the world's biggest borrower, our competitors have state-of-the-art plant and equipment and our physical plant has been encouraged to degrade, and Americans are in-over-their-heads deadbeat borrowers.
Night and day.
Couldn't disagree more. The US has been headed down this path for quite a while; China & Japan have simply been our best "enablers".
Frankly, I wish foreigners would stop buying Treasuries altogether. If we're ever going to get our house in order we have to start living within our means.
:: ::
From TJ's keyboard to God's screen!
CONJURE'S WORD OF THE DAY
Prompted by the Telegraph link posted above.
Today's word is RIGHTEOUSNESS.
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
It has become acutely clear to me where this whole mess is going to end up.
Citizen Scotto - Thanks loads for putting that MIT link up on the last thread. While digging around in there I found the coolist link to Classical texts, which are a favorite pastime of mine. A very pleasant surprise.
I am taking a vacation from the CR comments. Unremitting negativity ... .
If we're ever going to get our house in order we have to start living within our means.
Oh, didn't you hear, John Maynard Keynes said we can all have a free lunch. That living within our means stuff was long ago discredited. /snark
MommyKnows (profile) wrote (in reply to...) on Tue, 5/26/2009 - 10:17 pm
/I refuse to compete with silliness. There is a veritable sea of huge rooftops, there are more expensive houses built on spec now than affordable houses./
All those McMansions are going to be shared senior homes as the boomers age. Four boomers, one cook, they all chip in and occasionally a nurse shows up to give them all an enema on a group discount.
The McMansion mushroom farms of today are the modified nursing homes of tomorrow. Just a theory. (What else are they going to do with them.)
Usefully repurposed artifacts from the age of conspicuous credit-fueled consumption? I like it, and it makes great economic sense. Very subversive! Of course this only applies to the McMansions still standing that weren't vandalized beyond repair and are not home to squatters.
"Unremitting negativity ... ."
You noticed that?
"John Maynard Keynes said we can all have a free lunch"
Wrong guy.
Today's word is RIGHTEOUSNESS.
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
Hey - I voted for no incumbants in the last election. I bet there are more like me on this board.
Dawg: 'If you don't buy a house (or two) the terrorists win... or is it communists? I can't remember. "
Perhaps you need re-education. Whoever is trying to control Afghanistan is the enemy, it being crucial to the global economy. And it should read "If you don't finance a house (or two)..."
"I am taking a vacation from the CR comments. Unremitting negativity ... . "
One persons negativity is another persons positivity.
mp (profile) wrote on Tue, 5/26/2009 - 10:22 pm
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
maybe that was true at one time. modern election should be renamed as "selection", as what we in fact have is the freedom to do is to select between alternatives already chosen for us by the interests that financed the respective campaigns.
Barley,
No need to "pussyfoot." I agree. What I see is olden type corporate credit standards reasserted. If you "pass" everything is fine [my company 'passes'] but the other 70% are left with no options with which to roll short term debt.
Dawg:
Re: demographics
So was I.
We are Japan lagged by a decade and a half.
RIF,
People, I mean sheeple will never understand that concept even though it is true. It's just too easy to fleece the sheeple.
Has it always been common for businesses to rely on short term debt to smooth out cash flow in the normal course of business? I hear a lot about it now, but I don't recall hearing much about it in decades past, except in family farming. Could be my ignorance, but it could also be a fundamental shift the same way that consumers rely heavily on credit cards.
Good luck "Repurposing" McMansions built the last few years profitably.I watched a lot of developments go up in NorCal the last few years and the shoddy quality of construction from site prep on means maintenance and repair costs are going to be a LOT more than historical averages suggest.And this goes for all price ranges excluding only a few custom homes.These were built to be flipped,not lived in.
ResistanceIsFeudal (profile) wrote on Tue, 5/26/2009 - 8:32 pm
mp (profile) wrote on Tue, 5/26/2009 - 10:22 pm
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
Maybe that was true at one time. modern election should be renamed as "selection",...
I am accepting applications for citizenship en Nueva California.
After the revolution I plan on using San Luis Obispo as my new Capital of El Centro de Kalifornia. Stretching from San Vincente Blvd at the base of the Pacific Palisades to my future summer Palace at San Simeon, encompassing the Santa Monica Mtns., Santa Lucia Range, San Rafael Mtns inland to as far as Taft, my benevolent dictatorship will rule in peace and prosperity. After the rotting corpses of any remaining lawyers are dealt with my first act will be to outlaw public transit except for the exclusive transport of real estate agents. My second act will be to replace all these damn compound Spanish place names. Henceforth Santa Barbara and San Luis Obispo will be simply known
as "Babs and Larry."
Kindest regards from the exile HQ in Camarillo"
I remain your,
El Supremo de Nueva Kalifornia
NorkaWest (profile) wrote (in reply to...) on Tue, 5/26/2009 - 8:34 pm
Dawg: Re: demographics
So was I.
We are Japan lagged by a decade and a half.
I can only pray we aren't Japan's lost decade times 1.5. [especially since their lost decade is 16 years]
"This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them," the [Fed President Fisher] said.
i actually have heard similar comments out of Geithner's mouth... There is this attitude from them that ultimately this crisis was not the financial system but on the american ppl being so stupid to be grifted by them....like its the womans problem for dressing 'sexually' for being raped...
sometimes i just hate these guys and hope they get there just deserts... like Louis XVI did...
"I don't care who does the 'lecting so long as I do the nominating"
O/T...
, the woman who warned of the credit derivative bomb. What an excellent name, Brooksley Born.
WaPo profile of Brooksley Born
Quotes from the Baseline Scenario on the article:
She wanted to release a “concept paper” — essentially a set of questions — that explored whether there should be regulation of over-the-counter derivatives. . . . [Robert Rubin, Larry Summers, and Arthur Levitt] warned that if she did so, the market would implode and predicted tidal waves of lawsuits.
Translation: You cannot say anything that might upset the markets.
In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”
Translation: The Deputy Treasury Secretary should listen to the thirteen bankers in his office.
"Unremitting negativity ... ."
You noticed that?
MP
lol - you owe me some wipes for my key board!
Dawg - shit rolls down hill. Yes I agree w/ that. While I see some not bad news some other things bother me - Why has C been so quiet? Are loan loss provisions enough to cover CC writeoffs and the up coming CRE blowoff? How many companies can stand a 17-25% reduction in sales? Once inventories levels get depleted can most companies replentish at staggered forecasts? Will unemployment become self fofiling? How will investors react once they learn that earnings are spread across a bazillion shares?
Positivity?
MIT curriculum- free
Cornell Law Library- free
Calculated Risk- free
Times Square- no more cars
There's no going back.
In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”
They should have let her do it. Now they have no one to blame but themselves.
Feckless, it used to be that every bank worthy of the name had a commercial loan department. Small business people had access to a form of revolving credit based on the prime rate plus. The credit line was usually secured by something: receiveables, equipment, what have you.
Many small business people now rely on credit cards. Some use a second on their home. For many, it's a short term credit problem. Figuring out how to finance receiveables.
Factoring isn't available to small business.
I am being completely serious in the thread regarding McMansions. our options are refusal to participate or at least attempts to minimize our involvement, and repurposing or subverting the artifacts produced by that system to a useful purpose. that is the real "green" economy... we have tons of consumer trash with a very short life-cycle, paperboard spec housing that won't last more than 5-10 years at most, and bizarre remnants of capitalistic hubris like artificial islands in a desert. someone is going to have to either pick up the pieces and make something useful, or dispose of the waste products.that are left over. this is the real green economy and this is our actual future. I'm not saying green shoots, but opportunties will exist and the future IS going to look a lot different in some fundamental ways, even if the Galactic Federation of Planets announces itself tomorrow and there is complete recovery.
Damn Larry Summers, back in power and still wrecking the place up.
Dawg,
Can I be referred to in your new country as a Natural Person and a Free Person, rather than a "Citizen", if so I'm all in.
Barley,
Don't be silly, it never stops raining. There's only brief periods of daylight
,,,
O/T: I watched I.O.U.S.A. on tv. How quickly we forget, Paul O'Neill was the Treasury secretary from 2001-2002 who opposed the tax cuts. Then John Snow came in to rubber stamp everything before Paulson took the reigns
The most sensible plan would be to inoculate the important 1% and unleash a plague that would thin out about 40% of the herd in a 6 month span,thus eliminating a lot of unneeded mouths and stimulating the rest into productive and obedient behaviour.
mp - so does that mean there's been a shift away from securitized commercial lending toward unsecured? Or did all the lenders get so caught up in real estate that there was less credit available for commercial lending? Just wondering what the changes have been over the last few decades.
Barley (profile) wrote on Tue, 5/26/2009 - 8:42 pm
Dawg - shit rolls down hill.
But money flows uphill. The laws of finance have momentarily trumped physics.
While I see some not bad news some other things bother me - Why has C been so quiet? Are loan loss provisions enough to cover CC writeoffs and the up coming CRE blowoff
IMO the CC and CRE losses are the straws that break the camel. Break the camel is an interesting phrase. You don't actually break the animal, they just refuse to carry an unfair load. Likewise through the eye of the needle doesn't mean a sewing tool but rather a passage next to the city gate just large enough to allow an unladen camel to pass.
We need to throw off bad debt. Sad, unfair but necessary.
Emperor Dawg Norton - I propose that the Emperor's official vehicle should be a 1972 El Camino with a big block, 2 quad Holleys and Flowmasters all the way back.... And that that Emperor should permanently ban arugula from the palace menu... And that Botox be placed on the banned substances list...
And once in power that you go over the budget, line by line, eliminating waste, fraud, and those programs which are not effective... (I lifted that from another candidate...)
Tom Stone (profile) wrote on Tue, 5/26/2009 - 10:49 pm
The most sensible plan would be to inoculate the important 1% and unleash a plague that would thin out about 40% of the herd in a 6 month span,thus eliminating a lot of unneeded mouths and stimulating the rest into productive and obedient behaviour.
indeed! survival of the fittest... and who better than the important 1% to decide who is the important 1%?
All lending is unsecured now.
[With the obvious ultimate consequences.]
OT: California budget
Yes, the noises you hear are the sacred cows being put on the grill to scare both sides -- but both sides NEED to be scared into real action here. The "welfare cuts" are to scare the democrats -- let them know that one of their two core constituencies (their voting one) is about to get slaughtered. Their other constituency (the state workers unions) need to be forced to the table for contract renegotiation.
Next on the spit -- "Police and firefighter layoffs" and "releasing the rapists". Before you bleed too much for the former, they need to come to the table too -- cozy work-rules and pensions are a big reason for the fiscal crisis, esp. at the city level and prison level. Half of all pensions over $100,000k/year go to public safety workers, typically retiring in their 50's. As for the latter, too many drug offenders better treated than imprisoned feed an over-expensive system (thank the rightwing), and an unwillingness to offload illegal immigrants back onto the feds for deportation is another big chunk (thank the leftists). Retirees often take another state job, allowing double-dipping into yet another pension plan before true retirement.
When you start hearing: retirement reform; prison reform; true budget caps based on some reasonable base year and population growth; reform on Prop 13 on commercial; ban double-dipping; then you'll know they're getting serious. Sadly, it's likely too late, as no-one will believe them even if they propose such things and put them on the ballot now.
Should be interesting times for CA bondholders, such as myself!
"In one call, Summers said, “I have 13 bankers in my office and they say if you go forward with this you will cause the worst financial crisis since World War II.”"
And if you don't, we will cause the worst financial crisis since 1929.
"am taking a vacation from the CR comments. Unremitting negativity ... . "
Sure. Group think has started to hit the Bears badly and they are behaving like Bulls did in the 2005-7 timeframe.
Since the contraction slowed down, they have gotten worse.
ShadowInventory (profile) wrote on Tue, 5/26/2009 - 8:53 pm
Emperor Dawg Norton - I propose that the Emperor's official vehicle should be a 1972 El Camino with a big block, 2 quad Holleys and Flowmasters all the way back...
Does it help that I drove my kid back to UCLA this morning in the Civic?
If I had a choice in the field you describe I'd have the mid 80s Ford Thunderbird with the police V8 and suspension again.
Nowadays, Nueva de Kalifornia is open to corporate sponsorship.
there was an interesting article in the telegraph comparing the US/UK approach to the financial crisis (i.e. naked printing) and the austerity imposed on Eastern Europe by the IMF.
i had no idea how much much hatred many Asians have for Larry Summers. Not surprising given his deregulatory bent while at the World Bank, which set the stage for the currency crisis of the 1990s, followed by his role in the IMF "solution."
Summers replacing BB in 2010 may be an absolute disaster.
If the Emperor drove a Civic, it should at least have an 800hp crate motor.....
DCRogers - you exaggerate for dramatic effect. I read the state's budget analysis today. Things are serious enough - we don't need more fear-mongering.
Basel wrote: "there was an interesting article in the telegraph comparing the US/UK approach to the financial crisis (i.e. naked printing) and the austerity imposed on Eastern Europe by the IMF."
Do you have a link handy?
NW
mp - so does that mean there's been a shift away from securitized commercial lending toward unsecured?
"Secured" ≠ "securitized".
Feckless, based on my experience, it has become more difficult for small business people to obtain "reasonably-priced" credit.
Part of this, I think, is due to the consolidation trend in banking. There are far fewer community banks than there used to be, and community banks competed with each other for business. They had loan officers that specialized in serving business borrowers and they were intimately familiar with the communties in which they operated.
Believe it or not, loan officers used to call on small business people in an effort to get their business. No more.
The main change I've seen at the community level over the last thirty to forty years is a shift towards consumers (credit cards, automobile loans, etc.) and away from real estate and small business loans. Why? Well, as I said, banks consolidated. Also, it takes a lot of money and time to run a good commercial loan department with properly trained loan officers.
Banks, like everyone else, are looking for the fast and easy buck. That means they want fee business (overdrafts, etc) and they want business that doesn't require a lot of servicing, again, like small commercial.
IMO, this shift away from community level banking is one thing that is just killing small business in this country and consolidation helped bring it about.
All lending is unsecured now.
[With the obvious ultimate consequences.]
Lending is always defacto unsecured - bankers just have to learn it and relearn it.
Banker from the 80s farm crisis: "I don't want another damned farm we can't sell - I want the money we owed back!"... Oooops.
"Secured" ≠ "securitized".
Of course, Yalt. Mea culpa. Brain cramp.
I should have added that it also requires a lot of money to run a good real estate department.
"Factoring isn't available to small business. "
and if you can find a factoring house, the rates are usurious.
I watched a young firm wilt from this sort of "help". They had enough cash even if 25% of receivables defaulted. They just didn't have anyone who was willing to get on the phone and work. It was sad to watch.
Dryfly and Dawg,the most important of the "C's" making someone creditworthy is character,and that is something that a megabank can not take into consideration,unlike a loan officer at a community could in the past.Can not,due to the structure of the large institution.Too bad...
dryfly (profile) wrote (in reply to...) on Tue, 5/26/2009 - 9:05 pm
Lending is always defacto unsecured - bankers just have to learn it and relearn it.
Festivus!
Seriously, you are correct. IMO the "problem" is/was that lending got too impersonal.
We need a much shallower lending pyramid.
"and if you can find a factoring house, the rates are usurious. "
Well, yeah, and I guess I should have made note of that. If you need the cash, though, you go to where you can find it.
sorry, it wasn't the telegraph, but an FT editorial.
FT.com / Columnists / Gideon Rachman - When austerity does not come easily
Nueva de Kali will encourage an open source currency indexed to world commodity prices I assume?
Believe it or not, loan officers used to call on small business people in an effort to get their business. No more.
I would change the last part from "No more" to "Rarely"... I work w/ small mfgrs too and I know at least two people [one who owns a small biz trying to expand and another trying to buy one with seed money from others on top to boot] who are actively courted by small 'local' bank loan officers. And recently too - within the last two months.
But these guys are real exceptions - both understand 'bootstrapping' as well as anyone I know. The owner of the small shop looking to expand drives a used Toyota ~8 years old. If he had the free cash to buy a nicer car... he'd buy more fixtures & tooling for the shop instead. The bankers that call on him are local & know that - walk his shop floor - they have also been providing him credit going on 20 years [before he bought & built up the current business].
But in general mp is right - and probably for good reason - most small business isn't that disciplined.
Sure. Group think has started to hit the Bears badly
Geez, if you're going to troll, at least use something original. That line was used ad nauseum here back in that very 2005-7 timeframe, but those trolls aren't around anymore because they're just as wrong as you are now.
When CR commenters turn predominantly bullish then things are turning around, not before.
With the obvious ultimate consequences.
Out of my way! I want to make loans that are or aren't paid back based on how many votes I've got behind me. After all, it's the patriotic thing to do.
BTW, what happened to longtimelurker/shorttimeastroturfer just when things are really getting interesting?
When CR commenters turn predominantly bullish then things are turning around, not before.
Actually, there is a "false dawn" scenario that worries me. (I was negative during 02/03, and was sure that the music had stopped for housing back then. Surprise! Greenspan pumped us to where we are today.)
Feckless Ness writes: DCRogers - you exaggerate for dramatic effect. I read the state's budget analysis today. Things are serious enough - we don't need more fear-mongering.
Not trying to monger -- would like to hear your comments, and solutions.
In the case I mentioned, they didn't need the cash. What they needed was for the folks on the payroll to do their jobs. I tried to talk sense into the ceo but all she could think of was her next 3 month vacation to europe.
I guess my point is always know your net worth, read and analyze everything before you sign, and be especially wary of mustache twiddling help.
TJ, you cannot tell anybody they are "trolling" when nothing in my post even gave a hoot about what you think.
Listen, group think kills. Get caught in your own ideological zoo and you die. That is it and that is all it can be.
My advice is watch for the herd, they can get slaughtered and your utopian visions shattered.
Actually, there is a "false dawn" scenario that worries me.
It may worry you, but it looks like relative paradise to me. The "real dawn" is going to suck -- no reason to rush it.
1 currency now -yogi (profile) wrote on Tue, 5/26/2009 - 9:15 pm
Nueva de Kali will encourage an open source currency indexed to world commodity prices I assume?
A basket of Central Valley produce, linear feet of coastline and tech/biotech futures will make an excellent medium of exchange. I had a Bacon varietal Avocado with my salad this evening and the local strawberries are only 2 weeks away. We may get tired of healthy food but we won't starve.
My advice is watch for the herd
The herd isn't here, it's out there. If you can't tell the difference, well...
I am saddened by the lack of referent:
Richard Fariña:
Been Down So Long It Looks Like Up To Me
New York: Random House, April 28, 1966.
Eras End (profile) wrote on Tue, 5/26/2009 - 11:22 pm
TJ, you cannot tell anybody they are "trolling" when nothing in my post even gave a hoot about what you think.
Listen, group think kills. Get caught in your own ideological zoo and you die. That is it and that is all it can be.
My advice is watch for the herd, they can get slaughtered and your utopian visions shattered.
I agree but we are not there yet. When MSM starts to sound like CR commentary on a particularly grumpy late night, no one will touch stocks with a ten foot pole and there are mass political demonstrations to abolish the federal reserve, taxpayer revolts and the guillotine gearing up for business, the turnaround may be near.
"I tried to talk sense into the ceo but all she could think of was her next 3 month vacation to europe."
Well, there's always those. In my experience, they either have no skin in the game, or the business was handed down to them and they're milking it for all it's worth.
In one of my previous lives I was a banker myself, so FINANCIAL CONTROLS were something that was beaten into me early on.
In my experience, they either have no skin in the game, or the business was handed down to them and they're milking it for all it's worth.
Hell mp, in my experience there is a higher percentage of clueless incompetence than either of those.
Swimming round and round
like a deadly hand
on the radio clock
at the bottom
of the pooooo-aaaaa-llllllllllllllllll.
dyew denerledip
idaho!
get out of the state
get out of the state your in
you better bewa-yaaaaaaaaaaaaaaaaaa
don't go on the patio!
.
For as long as I can recall, so-called experts were telling me to put 20 percent of my income into the stock market (fortunately I did not). And then the experts said to buy a big house (as much as you can afford was what I recall). I did not, but instead bought a house I could afford. I remember thinking that is was an industry trying to get me to spend more money. Now, it has all been revealed to me. Its all a big scam.