Fannie/Freddie are reporting that fully 50% of the homes in foreclosure process are sitting empty. There's no movement on modifications since everybody's walking away.
It won't take long for the employment figures to load up the foreclosure ranks. Unlike past recessions these unemployed have no cushion and no incentive to protect nonexistent equity.
i just heard on the radio that with recovery on the horizon we can expect interest rates to rise, which would help people with there investments. This is good news folks. Don't deny The Fed a victory.
A few years ago on a financial blog, a mover and shaker in the loan biz came on and explained just how very close to the edge a good number of people you wouldn't think were, as in folks in perceived high-paying jobs that had worse credit than your average cretin.
homedad43, actually I'm a computer ... well, OK, a few people have met me in person (Nemo and Jillayne in San Francisco last year - more at the NPR event, the guys at the Irvine Housing blog, etc.)
These reports (MBA, New Home Sales) just came out at the same time. They really need to space out housing data releases!
These records aren't a surprise - but they do show the problem is moving to Prime and getting worse.
How can this be? I just read an editorial this morning that said it was all the fault of the CRA and subprime borrowers and that this whole crisis was made up to scare people? I guess I can't believe the paper anymore....
Yesterday we got our quarterly snail mail from a company that specializes in Financial Advisor advice. They wrote that "While the stock market blah blah now is a great time to buy stocks as they are a blah blah..."
It is still green out there...
As sand through the hourglass of time - these are the days people will be stripped of all their green
I love it - got a call from our real estate agent last night. She's good - in 2000, she sold our first house and found us our current house, getting us into a contract before it hit the MLS, saving us about 15% from what the market would have borne at the time. Since then, she's been trying to get us to move up to the next level. We go look with her once a year to see what's out there. Some really nice homes, but prices were ridiculous and taxes even worse. So, last night I said I think they've still got some correcting to do - she didn't argue. That was the surprise. I think we're going to go look again with her, just so I can get a sense of what the agents are thinking in our local market. If prices come down another 40-60%, I could be tempted. Need a lot big enough for target practice.
Startbucks and Mickey D's should be grabbing all the McMansions before the explosive expansion in prices for unreal estate when 'things get back to normal'.
You should do a post on all these initial reports versus the revisions.
I just did a quick analysis of the Initial Unemployment Claims and their Revisions since March. Guess when there was a last upward revision? March 14
So through this whole rally, the numbers have been massaged to show greater "improvements" by comparing a low initial figure to a previous weeks revised higher figure. Boy those decreases in unemployment sure look good, don't they? Except they're not as big as reported.
The past 9 reports have understated UICs by just over 5000 on average. You'd think they could factor that into their estimates.
The numbers themselves should be horrendous enough to anyone who is paying attention.
One Bilderberger said that, “the banks themselves don't know the answer to when the bottom will be hit.” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.”
Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt.
Until that debt is eliminated, the idea of a healthy boom is a mirage.
But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up
Oregon university tuition increase: up to 13%.
Oregon's seven public campuses risk losing students, but officials don't want to gut academic programs.
Officials estimate the 86,500-student system could lose up to 10,000 students if the state cuts the system's budget by 30 percent and tuition goes up 12 percent for the next two years.
... That's on top of a steady climb in prices over the past 30 years. Since 1978, undergraduate resident tuition and fees at UO have gone from $789 to $6,435, a rate three times faster than the U.S. Consumer Price Index, a measure of inflation.
"We certainly don't want to put this whole problem onto the backs of students," Desrochers said.
They don't want to, but they are.
10,000 more young-uns without a job and can't afford college.
"But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up"
Apparently O' and Timmy went to the Phil Graham school of economics and are fighting a "mental recession." No need to worry about fundamentals like transparency and honest regulation to build confidence.
So nearly 1 in 10 of every mortgage in America is in some stage of dilinquency or worse. And then there was the statisitic that the loss rate to JPM on WaMu credit cards was something like 24% (!?!) The numbers are mind boggling. I think all this green shoots nonsense is going to just make people angry when they work out that they have been misled yet again. Add to that they are losing their jobs, followed swiftly after by their homes, and thier kids continue to be a money drag becuase they can't find work following school. You are going to see a lot of shell shocked Americans. Why aren't people more angry?
My sister has had her hours cut. My brother lost his job several months ago and his severance runs out mid summer. Both in skilled trades, age late 40s. Both in Canada but that doesn't really matter because I think Canada is just as hosed as America, they are just not as far along in admitting it.
The good news though is according to my charts the emerging market and commodity bubbles are rapidly regaining lost ground. If we're seeing these kind of movements now without any material economic recovery, once actual growth takes hold we should have a bubble that finally transcends the global economy to form the first truly interstellar galactic faster than light hyperbubble.
Newly minted college graduates oftentimes have no work ethic, as mommy & daddy gave them everything they wanted, so they never had to work @ the mall, or McDonalds...
The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
My grandfather was happy to have a job
My father was in the same job his entire life
I could pick and choose any job, with full benefits
My children can pick and choose any job, no benefits
My grandchildren will be happy to have a job.
I'd bet there are by now a lot of pervert invisible space aliens watching us..."this thing is gonna blow up.soon!". Just remember to smile and wave friendly!
I am waiting for the "Obama's New Deal" where he announces all personal and business debts will be transferred to the USG on such-and-such a date. Then we'll get some kermit.
i'm sure there are ways to get the PDFs for free or "shared"
=====
i thought about that too. but alot of university books arent popular with torrents...though maybe some libraries might have em... though they usually have older editions of textbooks. i like the idea though of materials online. some ppl are actually better motivated to learn on there own, which is the type of student i was.
Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, and prime adjustable-rate mortgages were 24 percent, Brinkmann said
is this by absolute numbers of loans, or by dollar volume?
if it is by absolute number of loans then this is a truly horrific finding, since Prime loans have a much higher average balance compared to non-Prime counterparts.
If the Mayans are right, the world as we know it will end on December 21st 2012.
Alot of people believe that is when the Aliens who created our modern culture and religions return to earth after a lengthy departure.
My guess after they land It will be like: Wholly freaking crap, did you earthlings screw the fook up. Now it is time for Uncle little green man to clean up your crap again............as interglactic invester to restore the earths financial systems.
energyecon (homepage, profile) wrote (in reply to...) on Thu, 5/28/2009 - 7:57 am
umm...why not a 20% decline from the $100k base?
Favorable tax treatment and still needing to have a down payment. $100k mortgage @5% on a $120k house is roughly equivalent to a $84k mortgage @7% on a $102k house. Approximately 15%.
A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book.
I have an offer in on one right now...the bank is playing hard ball. I will just sit back and bid on it at a lower value in the coming months......It can't go much lower than where it is now but it CAN. The suckers are gone...I'm an appraiser and can do most of the rehab myself. Banks think they can get near the foreclosure amount owed. Wrong.......
Jim writes: A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book.
I was outside my professors office and overheard a textbook salesman tell him that he will be guaranteed to be published in the NEXT edition if he would agree to drop the existing book. Scam.....
The bankers will make less money on credit cards (loses plus regulation), so expect them to make up their golden salaries, bonuses and parachutes with mortgage rates that look like credit card rates.
"They had an awful lot of help from the administration and Fed, of the time"
Yeah, but it was the reaction which they wanted. Don't forget about the American people dumbshits they were didn't know any better either as they went headlong into debt doing their "patriotic" duty to defeat them.
Fannie/Freddie are reporting that fully 50% of the homes in foreclosure process are sitting empty. There's no movement on modifications since everybody's walking away.
I think a lot of the folks in that situation have now emotionally thrown in the towel - if they bought a property and had a mortgage 4 times income they can probably divert money to support it for awhile - and easily at first if one of the non-amortizing exotics - but eventually the toll adds up. Even if they are making payments its the other expenses that get deferred for only so long - auto maint. until car completely collapses, medical, house maintenance, kids tuition, etc. Eventually it all breakes them down.
I think a lot of people are finding themselves 'there'... even before the job losses & hour reductions. Throw those in and you get a collective 'F' it - I'm outta here.
I had this discussion over lunch a few days ago with some friends and to my surprise they agreed - listing off all the people they know with homes they paid 6-8 times their income for and financed with mortgages 4-6 times income... even if not underwater yet they are heading there fast and close to throwing in the towel...
"A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book."
Yeah. I'm pretty sure they get kickbacks from the publishers to do that. It is eventually going to bite them in the ass, as they try to kill the used book market, it will just move online. College students are very good at adopting new technology, particularly when they can be easily tempted to spend their book allowance on beer and food.
umm...why not a 20% decline from the $100k base?
Favorable tax treatment and still needing to have a down payment.
C'mon, Rob, do you think any of this stuff is going to suddenly start mattering to people on the way down? It didn't on the way up.
For the run-up of the bubble the only question being asked by buyers was: "How big a house can I get for this monthly payment?"
For the next few years the only question that will be asked is: "Am I sure I can afford this monthly payment?"
And - let's be honest - if 20% cash down reverts back to being the "new normal", with Americans' current balance sheets mortgage rates are going to be the least of the housing industry's worries.
i'm sure there are ways to get the PDFs for free or "shared"
=====
i thought about that too. but alot of university books arent popular with torrents...though maybe some libraries might have em... though they usually have older editions of textbooks. i like the idea though of materials online. some ppl are actually better motivated to learn on there own, which is the type of student i was."
All beside the point; it's the degree that has the cachet and gets you the interview, that and the "old boy network" of MIT grads. Most colleges and universities have basically similar curriculum, and if you work hard, you can get a good education just about anywhere. The advantage of the top tiered schools is that they are top tiered schools, and not much more.
"All beside the point; it's the degree that has the cachet and gets you the interview, that and the "old boy network" of MIT grads. Most colleges and universities have basically similar curriculum, and if you work hard, you can get a good education just about anywhere. The advantage of the top tiered schools is that they are top tiered schools, and not much more.
"
======
Agreed; I was merely trying to point out an alternative educational path for those 10k students mentioned upthread who won't be able to afford to attend college in Oregon.
I'd rather have them in their basements learning fluid mechanics online rather than hanging out causing trouble in public places.
Looks like Kermit has shrugged off the housing numbers. Can't wait to see how he handles the auction results. If rates go up, the administrations efforts to restart the MBS market will be truly dead, and TBTF will just be TB.
"Looks like Kermit has shrugged off the housing numbers. Can't wait to see how he handles the auction results. If rates go up, the administrations efforts to restart the MBS market will be truly dead, and TBTF will just be TB. "
The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
The mortal wounds to the financial system were all self-inflicted - many in place prior to 9/11. Excess leverage and terrible internal financial controls... no transparency... inadequate or captured regulation. Any externality could have taken it down... evidenced by the fact the attacks occurred in 2001 and yet the SHTF late 2006... in between those events were some of the most 'profitable' bubble years ever.
Wall Street with their proxies of Phil Graham, Robert Rubin & 'BushCo' [in general] did more harm than 'our enemies'.
Edit: I left out Alan G - an oversight. He most definitely belongs in there with Graham, Rubin, et. al.
There was a torrent site set up specifically for textbooks. Additionally a friend found a source outside of torrents... my friend currently has more than enough texts he'lll ever need to explore anything he wants to.
There's a backlash for running the scams in University's they have been running the past 10-20 years.
"Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent..."
You need to define "creditworthy". Before the rise in prominence of FICO scores, creditworthy generally meant "having equity". LTVs drove most mortgage underwriting standards.
As FICO gained prominence in the 2000 - 2003 time frame, the perceived need for equity dropped.
At one time you could not get a 100LTV mortgage. By 2007, 100LTV mortgages were common.
Look at the MI's - traditionally their business was about 10-40-40-10 in 85-90-95-100 LTV. By 2007, it became 5-25-30-40. 40% 100LTVs.
Does a high FICO compensate for a low level of initial equity?
In good times, maybe. But look at the numbers from Freddie on the Making Home Affordable program - over half of the homes are vacant.
Even good FICOs are walking away when they have no skin in the game.
In a stress scenario, I would argue a 700 FICO at 100LTV IS subprime.
A 20% downpayment should be required for homebuyers.
There was a torrent site set up specifically for textbooks. Additionally a friend found a source outside of torrents... my friend currently has more than enough texts he'lll ever need to explore anything he wants to.
I was doing a consulting gig where there were several Indian contractors on site. They told me you can buy "grey market" copies of most technical texts targeted at India and China - I think he even showed me an Amazon/India site where you could order them. I don't recall if they limited shipping and excluded the US. Found this article for those interested.
though maybe some libraries might have em... though they usually have older editions of textbooks
My school's library has the current edition of all textbooks on reserve, which is good since they cost over $200 per class per semester. Of course, if you don't do the reading prior to the end of semester, good luck finding a copy. WSJ did an informal textbook price comparison using Amazon and Amazon.uk. Students could save about 25% ordering them from the UK and having them shipped here. One theory as to why textbook prices have gone stratospheric (besides the government backstop) is that, because the secondary markets are so efficient, publishers aren't making any profits except during the first year. So, they jack up the price on the first run, which increases the price in the secondary market, yada yada yada. Supposedly, this is where the kindle will come in. It'd allow the publishers to drastically cut the first run price, since there would be no secondary market; that's the story at least.
re: MIT online.
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
I went to the MIT material online last night - there is no there there. It is very good as a 'review' if you have already had some of the stuff [I spent a couple hours looking over their mat'l sci offerings & also 'managerial accounting' specifically ABC]... if I didn't already know the stuff their 'PowerPoints' would have taught me close to nothing. I can only imagine a HS kid trying to claw through those and 'learning something'... I would NOT want to drive over a bridge that kid designed later in life... you might get a little wet.
A large contributor to the rise in delinquencies is the foreclosure moratoriums, and their secondary effects.
The primary effect was the lack of cleaning out the pipeline. Traditionally, loans enter the delinquency pipeline, go through foreclosure, and get cleaned off the books.
When they do not get cleaned off the books, delinquency inventory builds and builds.
A far more insidious effect was the impact on borrower attitudes.
Borrowers learned that they could stop paying their mortgages and not suffer any consequences for a period of time (notwithstanding a hit to their credit scores, which were already impaired).
Going delinquent was a like a gateway drug - once delinquent, the economics of becoming current made less and less sense.
Because as any good parasite knows, you can't kill the host. That is what they are threatening to do. The Oligarchy may have to make some switches.
When the alphabet soup programs stop flowing in to their troughs I'm sure the pigmen will start calling for new bucket haulers... there are probably plenty of qualified candidates. Until then top it off & hurry!
"So who does Obama replace Bernanke,Summers and Geithner with next year after they get fired?(or I should say who does the Oligarch replace them with)
Why would they get fired? I would think their constituency is quite pleased with their performance so far."
Yep. I think the better question is who does O' get replaced with, if he does not pull his head and the economy out? After all he is the jackass who is between the torches and pitchforks and the bankers. He had a once in a decade opportunity to fix the financial system, and instead chose to keep it broken.
The advantage of the top tiered schools is that they are top tiered schools, and not much more.
perhaps, but one must really look at what that means. the top tier schools really do attract the best students, and those students then compete against and collaborate with one another. Do you not think it is advantageous to compete with and collaborate with extremely smart people?
You can of course get a wonderful education being self taught or by attending a horrific community college. But IMO you get a better education if you are surrounded by people who are able to challenge you.
it's like in sports. In general you don't become a great baseball player by playing in the little leagues. you become a great player by playing in the bigs.
in education: in general you don't become a great learner by being surrounded by average people. You do it by surrounding yourself with the best.
I am a self learner for the most part. However, I must admit that I really learned a lot from the students with whom I trained. they challenged me in a way that average or good students in general couldn't do.
it is similar to this blog. CR readers are ahead of the curve because we challenge each other, and we each bring significant financial acumen to the table. The mainstream media also brings financial acumen to the table... and you can learn quite a bit from the mainstream media... but it is much harder to do so since the level of the mainstream media is lower than that found on places like CR.
again, I do reiterate, you can learn amazing things at an average or mediocre learning institution. But I think people go to far trying to downplay the importance of the educational scene that is found at the top tier universities and colleges.
Wall street mischief has financially ruined tens of millions of lives in the U.S.
And yet, Bernanke claims we have to save wall street in order to save main street. WTF!
The vast majority of Americans were far better off when long run inflation was negligible and finance was 5-10% of our econommy, not 25-40%.
Please STFU. I'm not sure who is more annoying or a bigger loser in life: Juvenal Delinquent or Lucifer. On and on and on and on. Blah,blah,blah,blah,blah. Ignore button activated.
CR quotes from Bloomberg: The U.S. delinquency rate jumped to a seasonally adjusted 9.12 percent
The Yahoo version says: A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit.
It appears both of these numbers are "accurate" assuming there is any good reason to seasonally adjust delinquencies.
For the Bloomberg article also says: One in every eight Americans is now late on a payment or already in foreclosure as mounting job losses cause more homeowners to fall behind on loans, the MBA said.
So shouldn't we be considering the impact of a 12% delinquency rate rather than 9%?
Natural gas is getting some leveraged games today, storage report in with increases and we are just into the injection season with storage levels above the 5 year historical range (which is actually a summation of individual regional maximums in that 5 years, not all necessarily in the same period).
Since I know you won't take the time to research the issue, here are some quotes for you:
"A foreclosure moratorium will unintentionally harm
the borrower’s ability to recover. Statistically, the longer
the borrower remains delinquent, the less likely he or
she will be able to become current again. A mandatory
foreclosure moratorium gives no discretion to lenders
to determine when forbearance is appropriate. Creating
incentives for borrowers to remain or become delinquent
can decrease their chances of recovery."
"Imposing a moratorium on foreclosure will increase
the number of delinquencies as borrowers who would
otherwise stretch to continue to make payments
will decide to stop at least for the duration of the
moratorium."
But what did the govt (through its "conservatorship" of Fannie and Freddie do?
LOL! That is some bad banker luck! 7yrs sounds about right once it becomes apparent to all that the whitewash of the "stress tests," was a bunch of hooey.
Take a name asswipe (profile) wrote on Thu, 5/28/2009 - 8:31 am
"What is good for General Motors is good for America - Chairman and CEO, Charlie Wilson, 1955.
Note to self: I didn't want a National Car Company.
Dryfly - that's true. A lot of people made up the difference by refis that rolled in short-term debt such as CCs. But without that ability, abruptly the new mortgage math earns an F on the RL test.
Having money to "get by" month by month doesn't take care of repairs and the inevitable periodic expenses that come along. The ability to really pay these mortgages was not there in many cases. Nor do I blame people who really can't afford their mortgage for walking away. If they aren't going to be able to keep it, they can't maintain it, and what incentive is there to sit in a house starving, hoping that you'll be able to sell to break even before the eventual foreclosure?
Bad underwriting created this, and bad underwriting created a wave of defaults that put many homeowners in a situation in which they had a mortgage that was difficult to repay, prevented saving, plus were losing equity very quickly in the house. Under those circumstances, at least 30% of the people would go under by past metrics.
Osama Bin Laden did not do this. A bunch of reckless financiers did, and the cost is really being paid by average people. "Do you feel lucky, punk?" should not be the primary credit question asked on a purchase money loan app.
In any case, no genuine "prime" mortgage ever was underwritten this way. Prime mortgages have reasonable DTIs, downpayments, and borrowers with good credit. MBA categorizes prime mortgages by FICO, not by mortgage quality.
I haven't looked in over a year, but I recall that the lectures are posted as well - at least for the computer science courses.
Of course, switching from Scheme to Python will not improve the quality of the CS engineers they produce.
The lectures aren't enough - it is like YTL meantioned above... collaboration & competition with other top students & faculty that makes the difference. Hard to do in your parents basement back in Peoria even IF you have MIT curriculum available online.
I learned more in recitation than I ever learned in lecture [chemical engineering - U Minnesota] and where I went to school over half of my recitations were lead by full profs - not just TAs though the TAs I had were very good. We worked through the details that don't get covered in lecture.
Then of course I worked two years at the medical school doing research while completing my undergrad work. Couldn't have done that from home either though I had great work experience there too [factory floor work which dovetailed w/ my engineering classes].
Point is - like any thing - it is the people who make it work NOT just the 'concepts'. Engineers are notoriously anti-social and many see university as a 'waste'. Those are the ones who need to go to university more than anyone [preferably one with MORE than just geeks].
Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, and prime adjustable-rate mortgages were 24 percent, Brinkmann said
is this by absolute numbers of loans, or by dollar volume?
if it is by absolute number of loans then this is a truly horrific finding, since Prime loans have a much higher average balance compared to non-Prime counterparts.
The really sad part is, It took all kinds make the housing bubble to begin with. Prime lenders where as stupid as the prime buyer to believe the appraisal trend was anything but false.
The event risk has risen sharply in the Baltic markets and we advise utmost caution. Yesterday, the Swedish central bank Riksbanken said it will increase its currency reserve by SEK 100 bn through a loan from the Swedish debt agency. Investors seem to believe that this is a buffer to deal with potential problems arising from the Baltic crisis.
A 20% downpayment should be required for homebuyers.
Yes, but if you lose your job and have no income, it is still going to foreclosure.
People who followed all the rules, (traditional LTV, ratios, no HELOC, etc.), will still be wiped out if they bought after 2005 because of the distortion in prices and subsequent fall. Millions of honest borrowers were screwed by a corrupt system, then lose their jobs because of the fallout from the collapse of the corrupt system, then get to pay higher taxes to bail out the corrupt perpetrators, who thrive and get the start the game all over.
Eras End (profile) wrote on Thu, 5/28/2009 - 10:58 am The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
Osama shot a pistol in the air. The horse ran off the cliff. Osama was a stinker for setting off the firecracker, but had the horse reacted in an even moderately rational fashion, it would never have been in any danger. He advertised openly what his strategy was, it's the same one the US employed successfully against the USSR -- exhaustion through defensive panic -- and we did a great job of playing directly into his hands, even beyond his wildest expectations. America reacted like a nation of simpletons and got the beating it deserved.
"The prime and subprime criteria used in the NDS
are based on survey participants’ reporting of what
they consider to be their prime or subprime servicing
portfolio, since internal servicing guidelines vary.
Participants who service both prime and subprime
loans report the results of each separately for
maximum precision in the classification."
Point is - like any thing - it is the people who make it work NOT just the 'concepts'.
bingo.
there are some fields that lend themselves more to the "learn at home" model, and others that don't so much.
The hard sciences often lend themselves well to self study, at least early on (first few years of undergrad). That's because 1+1=2 no matter who tells you and no matter how smart they are.
However, later in those studies collaboration/cooperation is quite helpful, and may I even say essential. Things like Theoretical Physics and Mathematics, or high level computer/engineering courses, or medicine as example.
the reason: at the higher levels you need someone to "check" your work or to help flesh a thought. a "normal" intelligence/skilled person isn't going to cut it there.
There's a reason why much of the high tech is all focused on the Bay Area. It is NOT easy to develop a search program. You need the best of the best (who may or may not all come from the Ivies) to do it. This is why Google remains far ahead of Microsoft not to mention Chinese competitors years after the fact. Google used to draw the best of the best in the computer science world... and it showed. (it's losing its people now of course).
of course, there are average to mediocre universities that have stellar professors... and if you get those professors then you may end up with a better education than if you go to an Ivy and have a crappy professor... But it's hard for a mediocre teacher to teach an exemplary student. the student surpasses the teacher too quickly.
also: one should separate the Ivies into undergraduate and graduate, and even into program.
Some of the Ivies have phenomenal undergrad programs, but only so-so grad programs. Others are Grad heavy instead. it depends on the school. also, some Ivies are great at most fields, but might suck at one or two. if you go to an Ivy and major in a field in which they suck then it would be better to simply go to a different school that focuses on your major.
and as we all know, not all Ivy league students are great, and not all non-Ivies are bad. I would more say that the aggregate or median Ivy League student is "better" than the aggregate or median non-Ivy League school.
and there are many non-Ivy schools that are as good or better than the Ivies (MIT, Stanford, Cal Tech, UofChicago, the top 10 liberal arts colleges as example).
There's one other aspect to the alphabet soup plans. For every one of them, the US govt. agency involved hires outside consultants to manage projects and monitor results. I don't know the % of funding that will be burned in added admin, but it's substantial.
That's one thing about initiatives. The govt. employees rarely do the actual work. They manage the expensive consultants that do the work...and that work often doesn't add any value anyway. Why bother counting the waste if it's all waste?
Millions of honest borrowers were screwed by a corrupt system, then lose their jobs because of the fallout from the collapse of the corrupt system, then get to pay higher taxes to bail out the corrupt perpetrators, who thrive and get the start the game all over. - Comrade Coinz
Shnaps - but they don't have the all-important distinction between subprime, Alt-A and prime. So pretty much every servicer reports a risk-layered high-FICO loan as "prime" unless it was explicitly done as a subprime. I insist that a prime mortgage is very distinct from an Alt-A.
It's a good thing Mr. Market is pricing in monetization, otherwise these data points would be a real bummer, man! Seriously, are the markets saying that Bernanke is going to make all the banks/REITs/Insurers/Pension Funds/States/Municipalities losses disappear via the printing presses? Meanwhile J6P is losing his job, commodities costs are rising, incomes are stagnant, and taxes must go up. And sadly J6P is too damn stupid and misinformed by propaganda to notice.
The audacity of these jerks never ceases to amaze me. I'm predicting that the whole ball of wax collapses within 6 months. Inflation/deflation, it really doesn't matter (flip a coin). Production is going to tank, misery index will skyrocket, and we'll have millions of Americans wondering WTF happened to the wealth they THOUGHT they'd been building up over the years.
We have a failed political, social, economic, and monetary system. The corpse is sitting out in the open for everybody to see, but we'd prefer to collectively bury our heads in the sand and think happy thoughts. Until we can't.
Anyone know where I can find me some green shoots? Thinking clearly is so depressing!
Juvenal Delinquent (profile) wrote on Thu, 5/28/2009 - 9:08 am
Underwood Deviled Ham, it's premasticated and unlike any other food or potted meat, it comes gift-wrapped, for some reason.
re textbooks: My wife paid 150 for a textbook set,...60 bucks were for two separate internet 'keys', one for extra material, one for homework. (Spanish course)
Smart-money investors are betting that the Obama administration will start leaning more on Fannie Mae and Freddie Mac to kick-start the housing market by giving them the OK to buy mortgages worth up to $1 million.
Current law prohibits the two government-run mortgage giants from buying home loans valued at more than $417,000 nationally, or up to $729,000 in areas where home prices are high. But some mortgage traders and analysts think that could soon change.
Steve Kuhn, a Goldman Sachs alum who now helps run a mortgage hedge fund for Pine River Capital Management in Minnetonka, Minn., thinks conforming loan limits could eventually be raised to "$729,000 nationwide and $950,000 in high-cost areas," and he's betting his hedge fund's money accordingly by buying up nonconforming loans within these ranges.
If the prediction by Kuhn, who left Goldman Sachs in 2007 after working with a team that ran a large mortgage-backed securities portfolio, proves correct, homeowners with high-priced homes in areas like New York and California would be able to refinance at lower rates. It would also help banks burdened by these loans get them off their books.
I think some measure of reality will set in as the true fiscal condition of the states becomes a primary focus over the next month. Tax hikes and spending cuts on hitherto sacred cows (i.e. education, public safety, etc...) may at least get a few of the sleeping masses to wake up.
Today you are starting to see gold/silver strength lock into positive correlation with long T-bond weakness. This is as it should be, and it could go on for months. I don't see anything out there big enough to stop it once it gets moving downhill.
Miners are looking very strong today, and probably are a good way to play it.
Yearning to Learn (profile) wrote on Thu, 5/28/2009 - 11:49 am
"perhaps, but one must really look at what that means. the top tier schools really do attract the best students, and those students then compete against and collaborate with one another. Do you not think it is advantageous to compete with and collaborate with extremely smart people?.....
......But I think people go to far trying to downplay the importance of the educational scene that is found at the top tier universities and colleges. "
Everything you said supports what I said. Thanks for backing me up
"A foreclosure moratorium will unintentionally harm the borrower’s ability to recover.
While I agree the moratorium was worse than useless, it doesn't seem to me that it would have had as much impact as the falling appraisal values. These people were never going to catch up. Think about it, we're talking about the moratoria of a couple of months ago,...who in that group is better able to afford their house now?
"The bigger question is, would we have had a housing bubble at all if borrowers had been required to put down 20%?"
I think the MBS securitization/leverage machine would have still happened, but the wheels would have fallen off the cart much sooner when the availability of qualified borrowers ran out.
Basel Too (profile) wrote on Thu, 5/28/2009 - 10:34 am
re: MIT online.
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
The schools understand the real asset their school possesses is the social prestige (and/or mythology) associated with the name, which is a nontransferrable and intangible asset, or the school would never have approved allowing its curriculum to be put online if that was indeed the key asset. To the administrators, it's all about barriers to entry and the manufacture and maintenance of scarcity, as it creates the prestige, business interest, internship opportunities, and placement ratings that draw students. equally, online education will never find full acceptance in the general public, and if so it will only be as a lower tier option as long as it lacks these attributes.
Some of the advantages of the top-tier are indeed nonreplicable but most of these stem from social interaction and challenge level provided by peers and good instructors capable of challenging them. It may be possible to bring some of that atmosphere to an online program but in the end intellectual capability IS a limited resource and perhaps the most important one we have. Social networks like reddit/slashdot, specialty forums, and even blogs like this one are an example of an alternative model that manages to produce quality, challenges its members, and inspires thought, yet has no official barrier to entry - but can degenerate notoriously as they achieve mass recognition and notoriety or become dominated by certain factions or an overzealous blog owner. We need to rethink the education model (which is a remnant of industrial revolution mentality that views the worker as a passive instrument into which you infuse knowledge and instruction... raw material enters and a finished product exits the system) before we can replace it.
As far as I'm concerned, there's only one indicator we should be focusing on as a source of improvement: Purchasing power.
Purchasing Power = (Income-Debt Servicing Costs) / Cost of a basket of goods
Today incomes are dropping (job losses + wage deflation), and Bernanke is trying to prop up prices, while maximizing the debt servicing costs . This is the worst possible path. The fool must either A) Focus on creating jobs and ensuring that incomes will start to rise, B) Embrace deflation in the cost of goods, or C) Start writing off debt. Otherwise quality of life is going to decline precipitously, and there will be blood.
"The bigger question is, would we have had a housing bubble at all if borrowers had been required to put down 20%?"
The question itself is academic, but the potential for bubbles with different lending norms has been around and demonstrated for a long time. As soon as expected returns exceed borrowing costs things are likely to go crazy.
America reacted like a nation of simpletons and got the beating it deserved.
Also, totally pwned by the Iranians. All they had to do was feed a little fake intel and, bingo, their primary natural enemy in the region gets taken out for them, without them having to fire a shot. Meantime, they can concentrate on their nuclear research program, which the West will never gather the balls to stop after the WMD intel fiasco.
You have to admire them for playing a limited hand very, very well.
do realize that there are two levels at play here. The instinctive, animal level, where we
want to punish those who have done us wrong, while those who have done us wrong have done it
following their animal desires. There is also the rational level, of which to I am
referring to above. Realistically, I know the beast in us will take over and this will end
like it did in France in the 1790's. I will, however, not be the one holding the sword.
I came across this interesting site..check it out Econ & Finance
shocker
first?
Hmm.... moratorium ending. No change in fundamentals. What a surpise.
Got pigged so I'll repeat and on topic.
Fannie/Freddie are reporting that fully 50% of the homes in foreclosure process are sitting empty. There's no movement on modifications since everybody's walking away.
whew, good thing the recession will be over by the end of the year so that all these foreclosures will stop
It won't take long for the employment figures to load up the foreclosure ranks. Unlike past recessions these unemployed have no cushion and no incentive to protect nonexistent equity.
Blah blah blah. Home prices are bottoming. buy now or be left behind forever.
Serious note Transports are performing horribly. Dow theory and all
why walk away when you can live there for free?
CR:
Dammit, man, you're only human.
You have to take a break! It's a marathon, not a sprint!
i just heard on the radio that with recovery on the horizon we can expect interest rates to rise, which would help people with there investments. This is good news folks. Don't deny The Fed a victory.
with recovery on the horizon we can expect interest rates to rise
========
yep, we wouldn't want unbridled economic growth to lead to inflation, or so I remember hearing from Greenspan
Prime fixed-rate mortgages given to the most creditworthy borrowers
Are there any of those creditworthy borrowers left who are dumb enough to think this is the bottom?
This housing market needs a huge Depends supply.
"and the largest share are prime loans!"
I knew prime was going to get crushed, I just did not expect that quite so soon. I guess we are all subprime now...
yep, we wouldn't want unbridled economic growth to lead to inflation, or so I remember hearing from Greenspan
=======
with inflation comes higher wages, more jobs.... total recovery.
Are there any of those creditworthy borrowers left who are dumb enough to think this is the bottom?
=========
Actually, I think among the 95% whose primary news sources are MSM, the answer is yes
with inflation comes higher wages, more jobs.... total recovery.
======
yes, the wicked wage-price spiral like in the 70s
anyhow the sesame street word for this week has been brought to you by the letter R. Recovery.
"Serious note Transports are performing horribly. Dow theory and all"
Interest rate pop should set off a brief home buying spree.
With any luck, the DOW will finally cave in afterwards.
we are all prime now! We are all special in our own way and all American childeren are above average.
A few years ago on a financial blog, a mover and shaker in the loan biz came on and explained just how very close to the edge a good number of people you wouldn't think were, as in folks in perceived high-paying jobs that had worse credit than your average cretin.
High interest rates means house prices will
a) Tank
b) Buy not or be priced out forever
c) Be even more manipulated by banks and "appraisers"
High interest rates means house prices will
a) Tank
b) Buy not or be priced out forever
c) Be even more manipulated by banks and "appraisers"
=======
All of the above -- those are not mutually exclusive events
C and A.
"30 Year Fixed 5.08%"
Whoops! Ben said that is not supposed to happen. End game coming up fast as home buyers purchasing power gets hammered?
your average cretin
Is that part of the banker qualification list?
homedad43, actually I'm a computer ... well, OK, a few people have met me in person (Nemo and Jillayne in San Francisco last year - more at the NPR event, the guys at the Irvine Housing blog, etc.)
These reports (MBA, New Home Sales) just came out at the same time. They really need to space out housing data releases!
These records aren't a surprise - but they do show the problem is moving to Prime and getting worse.
best to all.
Is that part of the banker qualification list?
=====
no, they are above-average cretins
Tim waiting for 2012, yes - the glass half full way of looking at it - we're all Prime now!
best wishes
FNM 30-yr coupon at 4.64, down 1% from yesterday's close
How can this be? I just read an editorial this morning that said it was all the fault of the CRA and subprime borrowers and that this whole crisis was made up to scare people? I guess I can't believe the paper anymore....
(B) was a Freudian slip.
"They really need to space out housing data releases!"
It's a cicada-like strategy. The hope is to limit the impact by exceeding people's capacity to process bad news.
If Benjamins was to be tarred and feathered and run out of town on a rail, like in "O Brother Where Art Thou", i'd be ok with that.
Yesterday we got our quarterly snail mail from a company that specializes in Financial Advisor advice. They wrote that "While the stock market blah blah now is a great time to buy stocks as they are a blah blah..."
It is still green out there...
As sand through the hourglass of time - these are the days people will be stripped of all their green
I love it - got a call from our real estate agent last night. She's good - in 2000, she sold our first house and found us our current house, getting us into a contract before it hit the MLS, saving us about 15% from what the market would have borne at the time. Since then, she's been trying to get us to move up to the next level. We go look with her once a year to see what's out there. Some really nice homes, but prices were ridiculous and taxes even worse. So, last night I said I think they've still got some correcting to do - she didn't argue. That was the surprise. I think we're going to go look again with her, just so I can get a sense of what the agents are thinking in our local market. If prices come down another 40-60%, I could be tempted. Need a lot big enough for target practice.
Startbucks and Mickey D's should be grabbing all the McMansions before the explosive expansion in prices for unreal estate when 'things get back to normal'.
CR,
You should do a post on all these initial reports versus the revisions.
I just did a quick analysis of the Initial Unemployment Claims and their Revisions since March. Guess when there was a last upward revision? March 14
So through this whole rally, the numbers have been massaged to show greater "improvements" by comparing a low initial figure to a previous weeks revised higher figure. Boy those decreases in unemployment sure look good, don't they? Except they're not as big as reported.
The past 9 reports have understated UICs by just over 5000 on average. You'd think they could factor that into their estimates.
The numbers themselves should be horrendous enough to anyone who is paying attention.
"actually I'm a computer"
I thought you were triplets or something...
CR is quad-core, didn't ya know.
I'm still making my mtg payment!
Do I get a trophy from Obama, or do I need to default and get a mod that I pay on for 6 months first ?
One Bilderberger said that, “the banks themselves don't know the answer to when the bottom will be hit.” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.”
Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt.
Until that debt is eliminated, the idea of a healthy boom is a mirage.
But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up
I picture CR as being Nomad circa 1966, on the bridge of the U.S. Enterprise...
A $100k mortgage @ 5% is only an $80k mortgage @ 7%. Right there is a 15% home price decline.
Oregon university tuition increase: up to 13%.
Oregon's seven public campuses risk losing students, but officials don't want to gut academic programs.
Officials estimate the 86,500-student system could lose up to 10,000 students if the state cuts the system's budget by 30 percent and tuition goes up 12 percent for the next two years.
...
That's on top of a steady climb in prices over the past 30 years. Since 1978, undergraduate resident tuition and fees at UO have gone from $789 to $6,435, a rate three times faster than the U.S. Consumer Price Index, a measure of inflation.
"We certainly don't want to put this whole problem onto the backs of students," Desrochers said.
They don't want to, but they are.
10,000 more young-uns without a job and can't afford college.
"But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up"
Apparently O' and Timmy went to the Phil Graham school of economics and are fighting a "mental recession." No need to worry about fundamentals like transparency and honest regulation to build confidence.
A $100k mortgage @ 5% is only an $80k mortgage @ 7%. Right there is a 15% home price decline.
=======
yes, exactly
Juvenal Delinquent (profile) wrote on Thu, 5/28/2009 - 7:45 am
I picture CR as being Nomad circa 1966, on the bridge of the U.S. Enterprise...
"Norman."
If you don't barrow are you premium?
So nearly 1 in 10 of every mortgage in America is in some stage of dilinquency or worse. And then there was the statisitic that the loss rate to JPM on WaMu credit cards was something like 24% (!?!) The numbers are mind boggling. I think all this green shoots nonsense is going to just make people angry when they work out that they have been misled yet again. Add to that they are losing their jobs, followed swiftly after by their homes, and thier kids continue to be a money drag becuase they can't find work following school. You are going to see a lot of shell shocked Americans. Why aren't people more angry?
My sister has had her hours cut. My brother lost his job several months ago and his severance runs out mid summer. Both in skilled trades, age late 40s. Both in Canada but that doesn't really matter because I think Canada is just as hosed as America, they are just not as far along in admitting it.
10,000 more young-uns without a job and can't afford college.
=====
hey at least they can download the entire MIT curriculum for free
The good news though is according to my charts the emerging market and commodity bubbles are rapidly regaining lost ground. If we're seeing these kind of movements now without any material economic recovery, once actual growth takes hold we should have a bubble that finally transcends the global economy to form the first truly interstellar galactic faster than light hyperbubble.
Newly minted college graduates oftentimes have no work ethic, as mommy & daddy gave them everything they wanted, so they never had to work @ the mall, or McDonalds...
Not working has been the norm, why change things?
hey at least they can download the entire MIT curriculum for free
=====
you still have to buy the books though... but it is cool to see what the ivy leagues teach!
AC-lol...
you still have to buy the books though...
======
i'm sure there are ways to get the PDFs for free or "shared"
umm...why not a 20% decline from the $100k base?
The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
My grandfather was happy to have a job
My father was in the same job his entire life
I could pick and choose any job, with full benefits
My children can pick and choose any job, no benefits
My grandchildren will be happy to have a job.
I'd bet there are by now a lot of pervert invisible space aliens watching us..."this thing is gonna blow up.soon!". Just remember to smile and wave friendly!
I am waiting for the "Obama's New Deal" where he announces all personal and business debts will be transferred to the USG on such-and-such a date. Then we'll get some kermit.
Who would have thunk a bunch of bank heads would bring down the US financial system?
DJ/S&P500 just cleared the liftoff pad, with payload bay filled with green shoots.
i'm sure there are ways to get the PDFs for free or "shared"
=====
i thought about that too. but alot of university books arent popular with torrents...though maybe some libraries might have em... though they usually have older editions of textbooks. i like the idea though of materials online. some ppl are actually better motivated to learn on there own, which is the type of student i was.
Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, and prime adjustable-rate mortgages were 24 percent, Brinkmann said
is this by absolute numbers of loans, or by dollar volume?
if it is by absolute number of loans then this is a truly horrific finding, since Prime loans have a much higher average balance compared to non-Prime counterparts.
JD, don't be silly, it was the government forcing them to lend to dead beat minorities...It is all the minorities fault.... snark off
A $100k mortgage @ 5% is only an $80k mortgage @ 7%. Right there is a 15% home price decline.
Err, isn't that 20%?
But the point holds: Median house price in US last month was $175,200. P&I on a $175,200 30-year FRM @ 5% is $941.
At 7% that $941 a month buys only $141,500. That's a 19% house-price drop.
And remember - by the standards of the past 40 years - 7% mortgage rates are cheap. The math gets really ugly if rates head back into double digits.
I hear the kool-aid @ Dow Jonestown is to die for...
Who would have thunk a bunch of towelheads would bring down the US financial system.
Did Greenspan actually where towels on his head?
maybe some libraries might have em
=====
yup, technical library + young person with time on hands + scanner = free books
If the Mayans are right, the world as we know it will end on December 21st 2012.
Alot of people believe that is when the Aliens who created our modern culture and religions return to earth after a lengthy departure.
My guess after they land It will be like: Wholly freaking crap, did you earthlings screw the fook up. Now it is time for Uncle little green man to clean up your crap again............as interglactic invester to restore the earths financial systems.
Then: 19 desperate men
Now: 19 desperate members
energyecon (homepage, profile) wrote (in reply to...) on Thu, 5/28/2009 - 7:57 am
umm...why not a 20% decline from the $100k base?
Favorable tax treatment and still needing to have a down payment. $100k mortgage @5% on a $120k house is roughly equivalent to a $84k mortgage @7% on a $102k house. Approximately 15%.
yah i figured dawg was including a dp and tax deduction in his estimate
A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book.
"Who would have thunk a bunch of towelheads would bring down the US financial system. "
Replicas of box cutters will be put next to the Black Stone of Mecca soon.
I have an offer in on one right now...the bank is playing hard ball. I will just sit back and bid on it at a lower value in the coming months......It can't go much lower than where it is now but it CAN. The suckers are gone...I'm an appraiser and can do most of the rehab myself. Banks think they can get near the foreclosure amount owed. Wrong.......
And remember - by the standards of the past 40 years - 7% mortgage rates are cheap. The math gets really ugly if rates head back into double digits.
In 1980 my dad got one of the last 10% 30 year mortgages in town! And we were grateful.
A few years later I remember having a small savings account with an 11% interest rate.
Now, both items seem like artifacts from another planet, another time altogether.
"Who would have thunk a bunch of towelheads would bring down the US financial system."
They had an awful lot of help from the administration and Fed, of the time.
In a fashion, the U.S. financial system was brought down by big-box cutters, i.e. corporate culture of get big or get lost...
Jim writes: A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book.
I was outside my professors office and overheard a textbook salesman tell him that he will be guaranteed to be published in the NEXT edition if he would agree to drop the existing book. Scam.....
The bankers will make less money on credit cards (loses plus regulation), so expect them to make up their golden salaries, bonuses and parachutes with mortgage rates that look like credit card rates.
"They had an awful lot of help from the administration and Fed, of the time"
Yeah, but it was the reaction which they wanted. Don't forget about the American people dumbshits they were didn't know any better either as they went headlong into debt doing their "patriotic" duty to defeat them.
A young acquaintance (just out of college) tells me that the profs revise their textbooks annually
=====
interesting -- how do the profs revise a published book that they did not author?
in any case - I was referring to the "guerilla education" model involving free online courseware and library books
A $100k mortgage @ 5% is only an $80k mortgage @ 7%. Right there is a 15% home price decline.
Thus, higher interest rates are a good thing, right. Loose credit and low interest rates were the problem.
Fannie/Freddie are reporting that fully 50% of the homes in foreclosure process are sitting empty. There's no movement on modifications since everybody's walking away.
I think a lot of the folks in that situation have now emotionally thrown in the towel - if they bought a property and had a mortgage 4 times income they can probably divert money to support it for awhile - and easily at first if one of the non-amortizing exotics - but eventually the toll adds up. Even if they are making payments its the other expenses that get deferred for only so long - auto maint. until car completely collapses, medical, house maintenance, kids tuition, etc. Eventually it all breakes them down.
I think a lot of people are finding themselves 'there'... even before the job losses & hour reductions. Throw those in and you get a collective 'F' it - I'm outta here.
I had this discussion over lunch a few days ago with some friends and to my surprise they agreed - listing off all the people they know with homes they paid 6-8 times their income for and financed with mortgages 4-6 times income... even if not underwater yet they are heading there fast and close to throwing in the towel...
Scam in College? Really? it is a business with a captive audience. Their in it for the money.
dryfly
+1
"A young acquaintance (just out of college) tells me that the profs revise their textbooks annually and tell students tests will be on new material (so used texts are worthless). Average cost of texts is now in the $100/150. range per book."
Yeah. I'm pretty sure they get kickbacks from the publishers to do that. It is eventually going to bite them in the ass, as they try to kill the used book market, it will just move online. College students are very good at adopting new technology, particularly when they can be easily tempted to spend their book allowance on beer and food.
Average cost of texts is now in the $100/150.
======
That was true when I was in college 20 years ago.
more to the point -> books are not the cost driver for a college education
hey at least they can download the entire MIT curriculum for free
Great, and you learn some incredible things. Where are the jobs? Move to India? China? Brazil?
p.s. MIT isn't an Ivy And I think they are proud of that fact. Read about the ring tradition - at graduation, the Beaver shits on the world.
WHERE. IS. MY. GODDAMNED. TROPHY!!!
A friend got his NOD 5 months ago, the usual story-he and his wife lived the life of luxury, helocs were played with the best intentions...
He's in like $690k on a house worth a ton less, but so far the bank hasn't foreclosed, but they've tried to off it @ $305k.
Fishy business is par for the course in keeping the chimera ruse going.
umm...why not a 20% decline from the $100k base?
Favorable tax treatment and still needing to have a down payment.
C'mon, Rob, do you think any of this stuff is going to suddenly start mattering to people on the way down? It didn't on the way up.
For the run-up of the bubble the only question being asked by buyers was: "How big a house can I get for this monthly payment?"
For the next few years the only question that will be asked is: "Am I sure I can afford this monthly payment?"
And - let's be honest - if 20% cash down reverts back to being the "new normal", with Americans' current balance sheets mortgage rates are going to be the least of the housing industry's worries.
Great, and you learn some incredible things. Where are the jobs? Move to India? China? Brazil?
======
Still a better use of time than playing Halo.
"
i'm sure there are ways to get the PDFs for free or "shared"
=====
i thought about that too. but alot of university books arent popular with torrents...though maybe some libraries might have em... though they usually have older editions of textbooks. i like the idea though of materials online. some ppl are actually better motivated to learn on there own, which is the type of student i was."
All beside the point; it's the degree that has the cachet and gets you the interview, that and the "old boy network" of MIT grads. Most colleges and universities have basically similar curriculum, and if you work hard, you can get a good education just about anywhere. The advantage of the top tiered schools is that they are top tiered schools, and not much more.
"All beside the point; it's the degree that has the cachet and gets you the interview, that and the "old boy network" of MIT grads. Most colleges and universities have basically similar curriculum, and if you work hard, you can get a good education just about anywhere. The advantage of the top tiered schools is that they are top tiered schools, and not much more.
"
======
Agreed; I was merely trying to point out an alternative educational path for those 10k students mentioned upthread who won't be able to afford to attend college in Oregon.
I'd rather have them in their basements learning fluid mechanics online rather than hanging out causing trouble in public places.
Looks like Kermit has shrugged off the housing numbers. Can't wait to see how he handles the auction results. If rates go up, the administrations efforts to restart the MBS market will be truly dead, and TBTF will just be TB.
7yr auction today. Does Ben have any of the $300bln left in dry powder form or does the market determine interest rates now ?
Still a better use of time than playing Halo.
Not if the next big war is on the horizon. We need someone to pilot the Predators and Robots from bunkers in San Diego.
Besides, have you seen those courses? There are damn few kids that could get through the first week of the syllabus in most of them.
(actually, I agree with you - but I am an engineer by training)
"Looks like Kermit has shrugged off the housing numbers. Can't wait to see how he handles the auction results. If rates go up, the administrations efforts to restart the MBS market will be truly dead, and TBTF will just be TB. "
Yeah, but old people will be rocking out
Dow Jonestown cocktail:
Lime kool-aid laced with ipecac
The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
The mortal wounds to the financial system were all self-inflicted - many in place prior to 9/11. Excess leverage and terrible internal financial controls... no transparency... inadequate or captured regulation. Any externality could have taken it down... evidenced by the fact the attacks occurred in 2001 and yet the SHTF late 2006... in between those events were some of the most 'profitable' bubble years ever.
Wall Street with their proxies of Phil Graham, Robert Rubin & 'BushCo' [in general] did more harm than 'our enemies'.
Edit: I left out Alan G - an oversight. He most definitely belongs in there with Graham, Rubin, et. al.
The Fed has already pissed on all the dry powder. But the 'market' is now the printing press.
Aaaand we see yet again that unemployment is a leading indicator for prime mortgage delinquency and foreclosure (in addition to consumer credit)...
There was a torrent site set up specifically for textbooks. Additionally a friend found a source outside of torrents... my friend currently has more than enough texts he'lll ever need to explore anything he wants to.
There's a backlash for running the scams in University's they have been running the past 10-20 years.
From Marketwatch:
Dow industrials rises 29 points, led by GM
2 min ago11:19am 5/28/09
- Laura Mandaro
"Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent..."
You need to define "creditworthy". Before the rise in prominence of FICO scores, creditworthy generally meant "having equity". LTVs drove most mortgage underwriting standards.
As FICO gained prominence in the 2000 - 2003 time frame, the perceived need for equity dropped.
At one time you could not get a 100LTV mortgage. By 2007, 100LTV mortgages were common.
Look at the MI's - traditionally their business was about 10-40-40-10 in 85-90-95-100 LTV. By 2007, it became 5-25-30-40. 40% 100LTVs.
Does a high FICO compensate for a low level of initial equity?
In good times, maybe. But look at the numbers from Freddie on the Making Home Affordable program - over half of the homes are vacant.
Even good FICOs are walking away when they have no skin in the game.
In a stress scenario, I would argue a 700 FICO at 100LTV IS subprime.
A 20% downpayment should be required for homebuyers.
"Throw those in and you get a collective 'F' it - I'm outta here."
An acquaintance at a FSB told me that after they dump the house and move into an apartment, many sub-prime borrowers buy a nice new truck.
There's a backlash for running the scams in University's they have been running the past 10-20 years.
=======
yup, it's coming.
Wow; commodities are smoking today!
Then: 19 desperate men
Now: 19 desperate members
I think I saw them at Mitchell Brotherrs throwing ones to the ladies.....Some dicks just can't stay down....
... and here I am... breakfast with "Special Agent Oso..."
Ahh... nice song for my head... "Your spe-cial assignment was a success! In three special steps!"
Dow industrials rises 29 points, led by GM
Does someone want to tell the clowns at Marketwatch that the Dow is a price-weighted index? GM's up a dime, for Chrissakes.
well, we're not all subprime. craigslist | Page Not Found
I have a feeling this guy is doing ok.
An acquaintance at a FSB told me that after they dump the house and move into an apartment, many sub-prime borrowers buy a nice new truck.
How else are you going to move your shit [quickly] from apartment to apartment?
They may be stupid but they aren't dumb.
So who does Obama replace Bernanke,Summers and Geithner with next year after they get fired?(or I should say who does the Oligarch replace them with)
So who does Obama replace Bernanke,Summers and Geithner with next week after they get fired?
====
fixed that for you
I think I saw them at Mitchell Brotherrs throwing ones to the ladies
and a fair number were throwing tens to the laddies. (grin)
Hmm, Bucky just took a hit. I guess Ben is already buying with the presses.
Inflection point. Unstable ? Doesn't that mean the next readings could go either way ?
Simon says American Idoligarchy is fixed.
So much for the drop in oil after the Mem Day weekend. Up over 64 a barrel.
House Prices Down
Unemployment Up
QE is sure working miracles. How can we avoid a double-dip?
Commodity Inflation
+Asset Deflation
+Wage Deflation
=?
Is there even a name for this? Note sure stagflation even applies.
Should do wonders for the foreclosure numbers going forward.
An Oregon economics (and beer) blog quoting the CR housing inventory post below:
The Oregon Economics Blog: Housing Markets: Inventories
So who does Obama replace Bernanke,Summers and Geithner with next year after they get fired?(or I should say who does the Oligarch replace them with)
Why would they get fired? I would think their constituency is quite pleased with their performance so far.
Bloomberg says GM will file Chapter 11 on June 1st
"What is good for General Motors is good for America - Chairman and CEO, Charlie Wilson, 1955.
Before to long they will be storing extra oil in my backyard. Get a hint morons, no "real" recovery in the next several months.
Time for some deleveraging again.
Simon says American Idoligarchy is fixed
fixed as in repaired?
fixed as in ponzied?
fixed as is neutered?
people want to know.
There was a torrent site set up specifically for textbooks. Additionally a friend found a source outside of torrents... my friend currently has more than enough texts he'lll ever need to explore anything he wants to.
I was doing a consulting gig where there were several Indian contractors on site. They told me you can buy "grey market" copies of most technical texts targeted at India and China - I think he even showed me an Amazon/India site where you could order them. I don't recall if they limited shipping and excluded the US. Found this article for those interested.
though maybe some libraries might have em... though they usually have older editions of textbooks
My school's library has the current edition of all textbooks on reserve, which is good since they cost over $200 per class per semester. Of course, if you don't do the reading prior to the end of semester, good luck finding a copy. WSJ did an informal textbook price comparison using Amazon and Amazon.uk. Students could save about 25% ordering them from the UK and having them shipped here. One theory as to why textbook prices have gone stratospheric (besides the government backstop) is that, because the secondary markets are so efficient, publishers aren't making any profits except during the first year. So, they jack up the price on the first run, which increases the price in the secondary market, yada yada yada. Supposedly, this is where the kindle will come in. It'd allow the publishers to drastically cut the first run price, since there would be no secondary market; that's the story at least.
re: MIT online.
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
"Why would they get fired? I would think their constituency is quite pleased with their performance so far".
Because as any good parasite knows, you can't kill the host. That is what they are threatening to do. The Oligarchy may have to make some switches.
The triple entendre with compulsory figures, if you will.
schizophrenia in the equities markets. what are the traders waiting for? we all know the outcome, get on with it!
So many of you could be in nice boats, miles from shore watching Vesuvius do it's thing, but there's money to be made in Pompeii...
CRB pricing in some savage Fed quantitative easing up the ladder
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
I went to the MIT material online last night - there is no there there. It is very good as a 'review' if you have already had some of the stuff [I spent a couple hours looking over their mat'l sci offerings & also 'managerial accounting' specifically ABC]... if I didn't already know the stuff their 'PowerPoints' would have taught me close to nothing. I can only imagine a HS kid trying to claw through those and 'learning something'... I would NOT want to drive over a bridge that kid designed later in life... you might get a little wet.
There is more to learning than online curriculum.
A large contributor to the rise in delinquencies is the foreclosure moratoriums, and their secondary effects.
The primary effect was the lack of cleaning out the pipeline. Traditionally, loans enter the delinquency pipeline, go through foreclosure, and get cleaned off the books.
When they do not get cleaned off the books, delinquency inventory builds and builds.
A far more insidious effect was the impact on borrower attitudes.
Borrowers learned that they could stop paying their mortgages and not suffer any consequences for a period of time (notwithstanding a hit to their credit scores, which were already impaired).
Going delinquent was a like a gateway drug - once delinquent, the economics of becoming current made less and less sense.
Another failed policy of the government.
"Another failed policy of the government"
They were stopped because they had completely fallen behind. Hence, no policy was ever made, hence your point is useless.
Because as any good parasite knows, you can't kill the host. That is what they are threatening to do. The Oligarchy may have to make some switches.
When the alphabet soup programs stop flowing in to their troughs I'm sure the pigmen will start calling for new bucket haulers... there are probably plenty of qualified candidates. Until then top it off & hurry!
How long have people been borrowing on their homes in the fashion we became accustomed to?
When I was a kid in the 60's and 70's, the only visible sign was HFC (Household Finance Company) which had tv commercials.
"So who does Obama replace Bernanke,Summers and Geithner with next year after they get fired?(or I should say who does the Oligarch replace them with)
Why would they get fired? I would think their constituency is quite pleased with their performance so far."
Yep. I think the better question is who does O' get replaced with, if he does not pull his head and the economy out? After all he is the jackass who is between the torches and pitchforks and the bankers. He had a once in a decade opportunity to fix the financial system, and instead chose to keep it broken.
I had some alphabet soup made up of recent acronyms, and it tasted like cooked books.
"Yep. I think the better question is who does O' get replaced with"
Then we need to ask the question who the guy that replaces "O" is replaced with. Bad economic times=1 termers like the last "rough era".
I met george w bush yesterday. kind of want him back.
The advantage of the top tiered schools is that they are top tiered schools, and not much more.
perhaps, but one must really look at what that means. the top tier schools really do attract the best students, and those students then compete against and collaborate with one another. Do you not think it is advantageous to compete with and collaborate with extremely smart people?
You can of course get a wonderful education being self taught or by attending a horrific community college. But IMO you get a better education if you are surrounded by people who are able to challenge you.
it's like in sports. In general you don't become a great baseball player by playing in the little leagues. you become a great player by playing in the bigs.
in education: in general you don't become a great learner by being surrounded by average people. You do it by surrounding yourself with the best.
I am a self learner for the most part. However, I must admit that I really learned a lot from the students with whom I trained. they challenged me in a way that average or good students in general couldn't do.
it is similar to this blog. CR readers are ahead of the curve because we challenge each other, and we each bring significant financial acumen to the table. The mainstream media also brings financial acumen to the table... and you can learn quite a bit from the mainstream media... but it is much harder to do so since the level of the mainstream media is lower than that found on places like CR.
again, I do reiterate, you can learn amazing things at an average or mediocre learning institution. But I think people go to far trying to downplay the importance of the educational scene that is found at the top tier universities and colleges.
Wall street mischief has financially ruined tens of millions of lives in the U.S.
And yet, Bernanke claims we have to save wall street in order to save main street. WTF!
The vast majority of Americans were far better off when long run inflation was negligible and finance was 5-10% of our econommy, not 25-40%.
Fire Bernanke now! This is No Country for Old Ben
Please STFU. I'm not sure who is more annoying or a bigger loser in life: Juvenal Delinquent or Lucifer. On and on and on and on. Blah,blah,blah,blah,blah. Ignore button activated.
I met george w bush yesterday. kind of want him back.
Not me, not ever. There are 300MM people in America - expand the candidate search.
CR quotes from Bloomberg: The U.S. delinquency rate jumped to a seasonally adjusted 9.12 percent
The Yahoo version says: A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit.
It appears both of these numbers are "accurate" assuming there is any good reason to seasonally adjust delinquencies.
For the Bloomberg article also says: One in every eight Americans is now late on a payment or already in foreclosure as mounting job losses cause more homeowners to fall behind on loans, the MBA said.
So shouldn't we be considering the impact of a 12% delinquency rate rather than 9%?
dryfly: I went to the MIT material online last night - there is no there there.
I haven't looked in over a year, but I recall that the lectures are posted as well - at least for the computer science courses.
Of course, switching from Scheme to Python will not improve the quality of the CS engineers they produce.
I think a good business opportunity would be develop a certification based on the MIT online material.
=====
i'm sure that would violate the MIT rules of use license for their material
It all boils down to timing...
If w was president till 2010, and Obama slipped in as things fell apart, it'd be easier...
Imagine FDR being elected president in 1930, instead of 32'?
[Because as any good parasite knows, you can't kill the host]
Better read up on the Tarantula Hawk. I think that's the bankers' model.
Natural gas is getting some leveraged games today, storage report in with increases and we are just into the injection season with storage levels above the 5 year historical range (which is actually a summation of individual regional maximums in that 5 years, not all necessarily in the same period).
Weekly Natural Gas Storage Report
"Then we need to ask the question who the guy that replaces "O" is replaced with. Bad economic times=1 termers like the last "rough era"."
Don't worry, the presidential campaign for '16 will start after the upcoming mid-terms.
Going to lunch. When I get back there better be a failed 7-year T-bill auction waiting for me.... or else !
Mirror, mirror on the wall
If you break does the 7 year yield fall?
Eras End
I guess YOU work in the mortgage market, and I don't. Sorry for being so "useless"
Oh, wait, here is a paper from the MBAA itself, which predicted exactly what would happen.
http://www.mbaa.org/files/AU/IssueBriefs/ForeclosureMoratoriumIssueBrief.pdf
Since I know you won't take the time to research the issue, here are some quotes for you:
"A foreclosure moratorium will unintentionally harm
the borrower’s ability to recover. Statistically, the longer
the borrower remains delinquent, the less likely he or
she will be able to become current again. A mandatory
foreclosure moratorium gives no discretion to lenders
to determine when forbearance is appropriate. Creating
incentives for borrowers to remain or become delinquent
can decrease their chances of recovery."
"Imposing a moratorium on foreclosure will increase
the number of delinquencies as borrowers who would
otherwise stretch to continue to make payments
will decide to stop at least for the duration of the
moratorium."
But what did the govt (through its "conservatorship" of Fannie and Freddie do?
Media: News Releases > Fannie Mae Extends Foreclosure Sale and Eviction Suspension
But according to you, there was no policy I guess. I just made up the press release on Fannie's site.
But according to you, there was no policy
Yep, there was none. Hence the press release. Understand or move on.
"Mirror, mirror on the wall
If you break does the 7 year yield fall?"
LOL! That is some bad banker luck! 7yrs sounds about right once it becomes apparent to all that the whitewash of the "stress tests," was a bunch of hooey.
Take a name asswipe (profile) wrote on Thu, 5/28/2009 - 8:31 am
"What is good for General Motors is good for America - Chairman and CEO, Charlie Wilson, 1955.
Note to self: I didn't want a National Car Company.
Dryfly - that's true. A lot of people made up the difference by refis that rolled in short-term debt such as CCs. But without that ability, abruptly the new mortgage math earns an F on the RL test.
Having money to "get by" month by month doesn't take care of repairs and the inevitable periodic expenses that come along. The ability to really pay these mortgages was not there in many cases. Nor do I blame people who really can't afford their mortgage for walking away. If they aren't going to be able to keep it, they can't maintain it, and what incentive is there to sit in a house starving, hoping that you'll be able to sell to break even before the eventual foreclosure?
Bad underwriting created this, and bad underwriting created a wave of defaults that put many homeowners in a situation in which they had a mortgage that was difficult to repay, prevented saving, plus were losing equity very quickly in the house. Under those circumstances, at least 30% of the people would go under by past metrics.
Osama Bin Laden did not do this. A bunch of reckless financiers did, and the cost is really being paid by average people. "Do you feel lucky, punk?" should not be the primary credit question asked on a purchase money loan app.
In any case, no genuine "prime" mortgage ever was underwritten this way. Prime mortgages have reasonable DTIs, downpayments, and borrowers with good credit. MBA categorizes prime mortgages by FICO, not by mortgage quality.
So who does Obama replace Bernanke,Summers and Geithner with next week after they get fired?
And wil they get the Medal of Freedom or whatever it was Bush handed out to all the f#uckups
I haven't looked in over a year, but I recall that the lectures are posted as well - at least for the computer science courses.
Of course, switching from Scheme to Python will not improve the quality of the CS engineers they produce.
The lectures aren't enough - it is like YTL meantioned above... collaboration & competition with other top students & faculty that makes the difference. Hard to do in your parents basement back in Peoria even IF you have MIT curriculum available online.
I learned more in recitation than I ever learned in lecture [chemical engineering - U Minnesota] and where I went to school over half of my recitations were lead by full profs - not just TAs though the TAs I had were very good. We worked through the details that don't get covered in lecture.
Then of course I worked two years at the medical school doing research while completing my undergrad work. Couldn't have done that from home either though I had great work experience there too [factory floor work which dovetailed w/ my engineering classes].
Point is - like any thing - it is the people who make it work NOT just the 'concepts'. Engineers are notoriously anti-social and many see university as a 'waste'. Those are the ones who need to go to university more than anyone [preferably one with MORE than just geeks].
to reiterate my quesion:
Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, and prime adjustable-rate mortgages were 24 percent, Brinkmann said
is this by absolute numbers of loans, or by dollar volume?
if it is by absolute number of loans then this is a truly horrific finding, since Prime loans have a much higher average balance compared to non-Prime counterparts.
"We're all subprime now!" = broken record.
The really sad part is, It took all kinds make the housing bubble to begin with. Prime lenders where as stupid as the prime buyer to believe the appraisal trend was anything but false.
Maxed Out Mama
Having money to "get by" month by month doesn't take care of repairs and the inevitable periodic expenses that come along
That is what kills you eventually. One hit and your robbing Peter to pay Paul and you begin the slide backwards...
Would any of you ever go out to eat @ a restaurant and ask for USDA Subprime cuts of meat?
only if they came with a side of bailout
"Do you feel lucky, punk?" should not be the primary credit question asked on a purchase money loan app. - MOM
LOL - thanks MOM, I needed a chuckle today.
Here’s what den Danske Bank says:
The event risk has risen sharply in the Baltic markets and we advise utmost caution. Yesterday, the Swedish central bank Riksbanken said it will increase its currency reserve by SEK 100 bn through a loan from the Swedish debt agency. Investors seem to believe that this is a buffer to deal with potential problems arising from the Baltic crisis.
Event risk in the Baltics is critically high - Credit Writedowns
Today's Blue-Plate Subprime Special:
Underwood Deviled Ham, it's premasticated and unlike any other food or potted meat, it comes gift-wrapped, for some reason.
A 20% downpayment should be required for homebuyers.
Yes, but if you lose your job and have no income, it is still going to foreclosure.
People who followed all the rules, (traditional LTV, ratios, no HELOC, etc.), will still be wiped out if they bought after 2005 because of the distortion in prices and subsequent fall. Millions of honest borrowers were screwed by a corrupt system, then lose their jobs because of the fallout from the collapse of the corrupt system, then get to pay higher taxes to bail out the corrupt perpetrators, who thrive and get the start the game all over.
Eras End (profile) wrote on Thu, 5/28/2009 - 10:58 am
The curse of 9-11 will haunt Americans for years. The action had a specific economic goal and it was achieved within the decade. Who would have thunk a bunch of towelheads would bring down the US financial system.
Osama shot a pistol in the air. The horse ran off the cliff. Osama was a stinker for setting off the firecracker, but had the horse reacted in an even moderately rational fashion, it would never have been in any danger. He advertised openly what his strategy was, it's the same one the US employed successfully against the USSR -- exhaustion through defensive panic -- and we did a great job of playing directly into his hands, even beyond his wildest expectations. America reacted like a nation of simpletons and got the beating it deserved.
MaxedOutMama writes: MBA categorizes prime mortgages by FICO
Umm, not exactly, MoM. The MBA uses whatever each reporting participant tells them a given loan is - which varies from servicer-to-servicer. Or, as they put it:
"The prime and subprime criteria used in the NDS
are based on survey participants’ reporting of what
they consider to be their prime or subprime servicing
portfolio, since internal servicing guidelines vary.
Participants who service both prime and subprime
loans report the results of each separately for
maximum precision in the classification."
In short, it is not consistent by original FICO.
Point is - like any thing - it is the people who make it work NOT just the 'concepts'.
bingo.
there are some fields that lend themselves more to the "learn at home" model, and others that don't so much.
The hard sciences often lend themselves well to self study, at least early on (first few years of undergrad). That's because 1+1=2 no matter who tells you and no matter how smart they are.
However, later in those studies collaboration/cooperation is quite helpful, and may I even say essential. Things like Theoretical Physics and Mathematics, or high level computer/engineering courses, or medicine as example.
the reason: at the higher levels you need someone to "check" your work or to help flesh a thought. a "normal" intelligence/skilled person isn't going to cut it there.
There's a reason why much of the high tech is all focused on the Bay Area. It is NOT easy to develop a search program. You need the best of the best (who may or may not all come from the Ivies) to do it. This is why Google remains far ahead of Microsoft not to mention Chinese competitors years after the fact. Google used to draw the best of the best in the computer science world... and it showed. (it's losing its people now of course).
of course, there are average to mediocre universities that have stellar professors... and if you get those professors then you may end up with a better education than if you go to an Ivy and have a crappy professor... But it's hard for a mediocre teacher to teach an exemplary student. the student surpasses the teacher too quickly.
also: one should separate the Ivies into undergraduate and graduate, and even into program.
Some of the Ivies have phenomenal undergrad programs, but only so-so grad programs. Others are Grad heavy instead. it depends on the school. also, some Ivies are great at most fields, but might suck at one or two. if you go to an Ivy and major in a field in which they suck then it would be better to simply go to a different school that focuses on your major.
and as we all know, not all Ivy league students are great, and not all non-Ivies are bad. I would more say that the aggregate or median Ivy League student is "better" than the aggregate or median non-Ivy League school.
and there are many non-Ivy schools that are as good or better than the Ivies (MIT, Stanford, Cal Tech, UofChicago, the top 10 liberal arts colleges as example).
There's one other aspect to the alphabet soup plans. For every one of them, the US govt. agency involved hires outside consultants to manage projects and monitor results. I don't know the % of funding that will be burned in added admin, but it's substantial.
That's one thing about initiatives. The govt. employees rarely do the actual work. They manage the expensive consultants that do the work...and that work often doesn't add any value anyway. Why bother counting the waste if it's all waste?
Millions of honest borrowers were screwed by a corrupt system, then lose their jobs because of the fallout from the collapse of the corrupt system, then get to pay higher taxes to bail out the corrupt perpetrators, who thrive and get the start the game all over. - Comrade Coinz
=====
post of the day
Shnaps - but they don't have the all-important distinction between subprime, Alt-A and prime. So pretty much every servicer reports a risk-layered high-FICO loan as "prime" unless it was explicitly done as a subprime. I insist that a prime mortgage is very distinct from an Alt-A.
Here's the most important thing to consider in the days-weeks-months ahead...
When communism fell, it was relatively peaceful, as the people had nothing, bupkis.
When capitalism falls, it will be mostly pieceful, as everybody owns something or vice versa.
It's a good thing Mr. Market is pricing in monetization, otherwise these data points would be a real bummer, man! Seriously, are the markets saying that Bernanke is going to make all the banks/REITs/Insurers/Pension Funds/States/Municipalities losses disappear via the printing presses? Meanwhile J6P is losing his job, commodities costs are rising, incomes are stagnant, and taxes must go up. And sadly J6P is too damn stupid and misinformed by propaganda to notice.
The audacity of these jerks never ceases to amaze me. I'm predicting that the whole ball of wax collapses within 6 months. Inflation/deflation, it really doesn't matter (flip a coin). Production is going to tank, misery index will skyrocket, and we'll have millions of Americans wondering WTF happened to the wealth they THOUGHT they'd been building up over the years.
We have a failed political, social, economic, and monetary system. The corpse is sitting out in the open for everybody to see, but we'd prefer to collectively bury our heads in the sand and think happy thoughts. Until we can't.
Anyone know where I can find me some green shoots? Thinking clearly is so depressing!
Juvenal Delinquent (profile) wrote on Thu, 5/28/2009 - 9:08 am
Underwood Deviled Ham, it's premasticated and unlike any other food or potted meat, it comes gift-wrapped, for some reason.
I liked the exorcised flavors better.
re textbooks: My wife paid 150 for a textbook set,...60 bucks were for two separate internet 'keys', one for extra material, one for homework. (Spanish course)
Slightly OT: the 10-year seems to be climbing again after its overnight hiccup.
http://finance.yahoo.com/echarts?s=^TNX#symbol=^TNX;range=5d
$1M MORTGAGE BUYBACKS SEEN
Smart-money investors are betting that the Obama administration will start leaning more on Fannie Mae and Freddie Mac to kick-start the housing market by giving them the OK to buy mortgages worth up to $1 million.
Current law prohibits the two government-run mortgage giants from buying home loans valued at more than $417,000 nationally, or up to $729,000 in areas where home prices are high. But some mortgage traders and analysts think that could soon change.
Steve Kuhn, a Goldman Sachs alum who now helps run a mortgage hedge fund for Pine River Capital Management in Minnetonka, Minn., thinks conforming loan limits could eventually be raised to "$729,000 nationwide and $950,000 in high-cost areas," and he's betting his hedge fund's money accordingly by buying up nonconforming loans within these ranges.
If the prediction by Kuhn, who left Goldman Sachs in 2007 after working with a team that ran a large mortgage-backed securities portfolio, proves correct, homeowners with high-priced homes in areas like New York and California would be able to refinance at lower rates. It would also help banks burdened by these loans get them off their books.
New York Post
Chip sales to fall by 22%
Chip sales to fall 22% in 2009, says Gartner - MarketWatch
They have no idea how much my lady likes chips...especially with some Guacamole or Tim's maui onion....
Yeah, looks like 10 year is being left to the bagholders at this time.
$1M MORTGAGE BUYBACKS SEEN
======
interesting...but does nothing for the underwater or unemployed home debtor
If we've indeed gone a bridge loan too far, and things fall apart financially
Does possession become 9/10's of the law, no matter how much you might owe on it?
a de facto debt jubilee...
GH,
I think some measure of reality will set in as the true fiscal condition of the states becomes a primary focus over the next month. Tax hikes and spending cuts on hitherto sacred cows (i.e. education, public safety, etc...) may at least get a few of the sleeping masses to wake up.
Chip sales to fall by 22%
======
let the chips fall as they may.... (ducks)
Today you are starting to see gold/silver strength lock into positive correlation with long T-bond weakness. This is as it should be, and it could go on for months. I don't see anything out there big enough to stop it once it gets moving downhill.
Miners are looking very strong today, and probably are a good way to play it.
You make up your own mind as to what this chart tells you
http://4.bp.blogspot.com/_FM71j6-VkNE/Sh65Ckc5CrI/AAAAAAAAC5Y/8zPgxhLygvI/s1600-h/LT+Gold+.jpg
( Chart compliments of zero hedge )
D-Day
Operation Overloan
Can I be subprime even if I don't have a mortgage?
Yearning to Learn (profile) wrote on Thu, 5/28/2009 - 11:49 am
"perhaps, but one must really look at what that means. the top tier schools really do attract the best students, and those students then compete against and collaborate with one another. Do you not think it is advantageous to compete with and collaborate with extremely smart people?.....
......But I think people go to far trying to downplay the importance of the educational scene that is found at the top tier universities and colleges. "
Everything you said supports what I said. Thanks for backing me up
"Can I be subprime even if I don't have a mortgage?"
NO SOUP FOR YOU!
rich,
thx for the rec the other day.
[edited so as not to appear like a pumper]
"A foreclosure moratorium will unintentionally harm the borrower’s ability to recover.
While I agree the moratorium was worse than useless, it doesn't seem to me that it would have had as much impact as the falling appraisal values. These people were never going to catch up. Think about it, we're talking about the moratoria of a couple of months ago,...who in that group is better able to afford their house now?
"Yes, but if you lose your job and have no income, it is still going to foreclosure."
True, for the most part, though in many parts of the country people would still have some positive equity and be able to avoid disclosure by selling.
The bigger question is, would we have had a housing bubble at all if borrowers had been required to put down 20%?
Of course, we will never know, but based on the experience in other countries, and the mentality I observed, I'd bet it would have been different.
I agree with the corrupt system part, I believe that is what enabled the lax lending standards, the "look the other way" mentality.
"10-YEAR TREASURY NOTE (^TNX) At 12:13PM ET: 3.71 Up 0.0160 (0.43%) "
Whoops!
Gettin hungry. Off to lunch real quick. If I'm not back before 1pm, everyone have fun checking out the auction results.
UST: Comeuppance see me sometime
"The bigger question is, would we have had a housing bubble at all if borrowers had been required to put down 20%?"
I think the MBS securitization/leverage machine would have still happened, but the wheels would have fallen off the cart much sooner when the availability of qualified borrowers ran out.
Basel Too (profile) wrote on Thu, 5/28/2009 - 10:34 am
re: MIT online.
I think a good business opportunity would be develop a certification based on the MIT online material. Of course, it won't solve the networking problem, but it will address whether the people self-educating can comprehend the material.
The schools understand the real asset their school possesses is the social prestige (and/or mythology) associated with the name, which is a nontransferrable and intangible asset, or the school would never have approved allowing its curriculum to be put online if that was indeed the key asset. To the administrators, it's all about barriers to entry and the manufacture and maintenance of scarcity, as it creates the prestige, business interest, internship opportunities, and placement ratings that draw students. equally, online education will never find full acceptance in the general public, and if so it will only be as a lower tier option as long as it lacks these attributes.
Some of the advantages of the top-tier are indeed nonreplicable but most of these stem from social interaction and challenge level provided by peers and good instructors capable of challenging them. It may be possible to bring some of that atmosphere to an online program but in the end intellectual capability IS a limited resource and perhaps the most important one we have. Social networks like reddit/slashdot, specialty forums, and even blogs like this one are an example of an alternative model that manages to produce quality, challenges its members, and inspires thought, yet has no official barrier to entry - but can degenerate notoriously as they achieve mass recognition and notoriety or become dominated by certain factions or an overzealous blog owner. We need to rethink the education model (which is a remnant of industrial revolution mentality that views the worker as a passive instrument into which you infuse knowledge and instruction... raw material enters and a finished product exits the system) before we can replace it.
$1M MORTGAGE BUYBACKS SEEN
======
interesting...but does nothing for the underwater or unemployed home debtor
But it saves the banks IF a lot of those at risk Jumbos get wrapped up in GSE protection.
Always ask - who benefits. Some of you latin folks can do the translation for me...
So, does a FED auction have carnival-like barkers dressed in tuxedos, getting into peoples faces harshing their mellows, pleading for a bid?
PMI insurance started the lending problems. A hard line 20% and no creative lending would have made a much more stable market.
As far as I'm concerned, there's only one indicator we should be focusing on as a source of improvement: Purchasing power.
Purchasing Power = (Income-Debt Servicing Costs) / Cost of a basket of goods
Today incomes are dropping (job losses + wage deflation), and Bernanke is trying to prop up prices, while maximizing the debt servicing costs . This is the worst possible path. The fool must either A) Focus on creating jobs and ensuring that incomes will start to rise, B) Embrace deflation in the cost of goods, or C) Start writing off debt. Otherwise quality of life is going to decline precipitously, and there will be blood.
But it saves the banks IF a lot of those at risk Jumbos get wrapped up in GSE protection.
====
oh agreed - it's a no-brainer good deal for the banks
"The bigger question is, would we have had a housing bubble at all if borrowers had been required to put down 20%?"
The question itself is academic, but the potential for bubbles with different lending norms has been around and demonstrated for a long time. As soon as expected returns exceed borrowing costs things are likely to go crazy.
Speaking of text books: All Physics Books Categorized (download torrent) - TPB
"Always ask - who benefits. Some of you Latin folks can do the translation for me... "
Caveat emptor?
"So, does a FED auction have carnival-like barkers dressed in tuxedos, getting into peoples faces harshing their mellows, pleading for a bid?"
Nova: Ten Trillion and Counting, showed an auction that was pretty interesting.
adornoghost asks: Can I be subprime even if I don't have a mortgage?
You sure can, Broseph! All it takes is a low FICO score (normally less than 620).
"Subprime" refers to credit-worthiness, not what kind of obligations a person has.
America reacted like a nation of simpletons and got the beating it deserved.
Also, totally pwned by the Iranians. All they had to do was feed a little fake intel and, bingo, their primary natural enemy in the region gets taken out for them, without them having to fire a shot. Meantime, they can concentrate on their nuclear research program, which the West will never gather the balls to stop after the WMD intel fiasco.
You have to admire them for playing a limited hand very, very well.
"$1M MORTGAGE BUYBACKS SEEN"
I made that prediction the other day, though I guessed $1.5MM - $2MM. Whatever the case, the conforming limit will be increasing, is my guess.
I also predict that Fannie/Freddie underwriting standards are going to get a lot looser. Expect more limited doc loans, interest only loans, etc.
The only option the govt has to reinflate the housing bubble is to restore the conditions that existed in the bubble.
do realize that there are two levels at play here. The instinctive, animal level, where we
want to punish those who have done us wrong, while those who have done us wrong have done it
following their animal desires. There is also the rational level, of which to I am
referring to above. Realistically, I know the beast in us will take over and this will end
like it did in France in the 1790's. I will, however, not be the one holding the sword.
I came across this interesting site..check it out Econ & Finance
Articles Updated Daily