It is difficult to find a harsher demographic contrast than that between USA 1995 and USA 2011 - and until 15-year olds and/or 50-year olds start becoming first-time homebuyers on a regular basis, that is more than a little relevant.

I hate to say this but they were just following the banksters lead and creating money out of bad promises.

//I still remember the stories of people that quit their regular jobs and lived by pulling another $100K out of the house every year.//

"and everyone is depressed. "

depressions are depressing. seriously, people just aren't in the mood to go catch a show, or even drop by with a bottle of booze when they feel like failures. there's a lot of that feeling going around, especially here in median-drop-30%+ california.

Wonder what a chart of %of down payment required to volume of sales would look like. Or wages vs house prices would show. I know during the bubble income had no barring, but it would be interesting to see.

Until a normal family with an average wage can afford an average house - real recovery won't happen.

edited to add, all normal is local

Heretic! Accept the religion of rising real estate prices as the only true religion. Once you accept it, you will realize that factors like employment, job security etc do not matter.

//Until a normal family with an average wage can afford an average house - real recovery won't happen.//

Policymakers decreed it unacceptable for HPI to go to 180 in 2004 and 220 in 2007 and so their bright ideas brought us to today instead.

Drug Companies, White House Reach $80B Prescription Drug Deal

Drug Companies, White House Reach $80B Prescription Drug Deal

Big Pharma cuts their deal in secret ...

Barack Obama ... Progressive Nightmare ...

As long as the person you were buying it from was not a retard, why would anyone sell a house "worth" 50,000 $ for 120 $?

//"Buy a house for $120, and it is worth $50,000"//

Anyone thinking this crash is anywhere near over is crazy ...

As to the 50k part, very doubtful.

Big Pharma is f**ked! Look at their product pipelines. They are putting on a show of strength..

//Big Pharma cuts their deal in secret//

I would not be so sure.. people want to believe in miracles.

//One hopes that the mechanisms that allowed that level of lending dissonance no longer exist.//

The people I know in Miami aren't willing to do NINJAs any more--unless they
are real fraudsters, not accidental ones.

"Drug Companies, White House Reach $80B Prescription Drug Deal"

Just read the article at the link, and wanted to hurl. More bogus price manipulation, more bureaucracy, more uncertainty, more costs borne by the uninsured and those with high deductibles.

And this is supposed to be progress? Will the madness never cease?

2012 is drug patent apocalypse for many profitable drugs.

//This deal will defer bargaining for drugs now won't it ... costing hundreds of billions//

"the previous "bubbles" really weren't bubbles in the sense this one was,..."

Maybe some bubbles are local, but the late 1980s bubble here SoCal sure looked like a bubble to me!

The way the pols are responding to the crisis expect 14% unemployment ... 30% U6 ...

Real estate will go Japanese ... 20 years in negative nominal territory ...

at least until they let hyperinflation loose in desperation in a few years ...

Here is one way to both reinflate housing and end the forclosure mess.

Modify every RE loan to 3/4 of todays real market value. Set 10% as the interest rate.
Everyone will have equity. House payments will be lower. The banks will take a loss now on principal and have higher earnings on interest. Interest rates have always been the investment money maker.

As home mortgages are seen as lower than current value, people will be able to buy and sell. Some will refi if a bank lowers the rates.

Maybe it is a nutty idea, but no stranger than the stuff they are doing now that doesn't work.

The pharmaceutical industry agreed Saturday to spend $80 billion over the next decade improving drug benefits for seniors on Medicare and defraying the cost of President Barack Obama's health care legislation, capping secretive negotiations with the White House and key lawmakers.

$80B is a rounding error on the estimated $1T cost of Obama's plan.

"2012 is drug patent apocalypse for many profitable drugs."

~~~~

Not with appeals and alternative use claims ...

It only works until the entity paying them is solvent.. and therein lies the problem.

//bigpharma already wrote their own ticket for the next few decades with the doghnut bill six years ago.//

The problem is not just patent related.. it is also about ability to pay.

//Not with appeals and alternative use claims//

Quick , Josap, let me go out and get a loan, so we can write off some of it and
then pay it back. I'll pay taxes on the diff. Could get a free car or 2 out of it.

Isn't that a modification of the old model?

//Quick , Josap, let me go out and get a loan, so we can write off some of it and then pay it back. I'll pay taxes on the diff. Could get a free car or 2 out of it//

How do the "infamous 19" pay back TARP. It is a fraud.. on many levels. From modern accounting, sweetheart deals, corporate welfare, scams.. phony money..

//How does BigPharm "pay" $80B for products that have marginal costs nearly zero?//

An accidental fraudster?

I knew someone would pick up on that!!

A person who went with the flow, but had a sneaking suspicion that something
was very wrong, but real estate always goes up and we overstated our income
just a leetle bit, and it appraised out anyhow. . . .

As opposed to, here Mr. Appraiser is an extra 500 bucks for your trouble I need
this to appraise out to xxx dollars, and the buyer is gonna get 20k for his troubles,
and we'll set aside 6 months of payments so they don't investigate us. . .

Basel Too

The whole exercise is to get out from under negotiated prices ...

They can set retail prices to recover the $80 billion ...

But the house is gone.. How can you pay for a house that was destroyed by an "act of god".

//On the other hand, the insurance may not pay out, so this is not much of a solution.//

There is water in arizona?

//There are so many people here so far underwater that they will be counted as fish in the upcoming census.//

Az is worser off, no?

A lot of people have Citizens Insurance, which is the state sponsored one and it is
undercaptialized.

Contractors in '92 were calling it St. Andrew.

Praying for a hurricane--yep, I'm not kidding.

Fiscally conservative republican = oxymoron.

//"One month later, the ten-year cost estimate was boosted to $534 billion, up more than $100 billion over the figure presented by the Bush administration during Congressional debate. The inaccurate figure helped secure support from fiscally conservative Republicans who had promised to vote against the bill if it cost more than $400 billion. "//

and, of course, that ten-year timeframe ends almost exactly when the very first boomers (1947) hit 67.

Refusing to pay a mortgage due to no insurance to rebuild is more socially acceptable than "we made a stupid loan, at bubble values cause we thought we could get rich from the next sucker"

The very first boomers were born in '46. I'm one of them.

We were paid the policy limits in Andrew, for rebuilding and replacement
of personal property. It took about 10 minutes once they got out there.

If you have a mtg, the mtg company holds the funds in escrow for rebuilding.
Not sure I would trust a lender with so much money now.

We didn't owe much, so the insurance co gave the amount we owed to
the bank, and we got checks for the rest. As the property was rebuilt, we
got the money back from the lender.

I have no idea what would happen to seriously underwater properties or
properties that are in foreclosure. Betcha the banks would seek to have
their mtges paid off rather than hold the money for rebuilding. Don't
know if there is any case law on that.

Insurance is required in the amount of the loan, and if you let it lapse they force-place
it at great expense. This insurance covers only the mtg. So the owner could end up with a
ruined house, but no mtg. More hypothetical fun and games with the county and municipalities.

lawyerliz

Andrew was in 1992 ...

The whole insurance scheme has changed since then ... for the worst for the insured ...

agreed totally Mmckinl.

We were very fortunate.

We are already bankrupt, is't just that the loan has not been called due in full yet.

What I mean is the drug companies may be lowering the price a little to avoid
lowering it a lot in the future.

And we are all bankrupt right now. Well, many of us, and the govt.

You took the words right outta my mouth Josap.

Lucifer

"Unlike Bush or McCain?"

//The way Obama is going we'll be bankrupt//

~~~~

The "audacity of hope" ... was the con job ...

The "audacity of betrayal" is what we got ...

Anyone thinking this crash is anywhere near over is crazy ...
And anyone even thinking this is going to return to a Business As Usual paradigm is not paying attention.
We are entering uncharted territory--
How are your gardening skills?

"How are your gardening skills?"

....very good, thank you for asking.

we are running on fumes. we have no money. we are broke,
someone should tell our government, obama knows it he said it,

hurricane people forget the 3 day supply kit, try for min. of 2 weeks.

Sure we have water. We have been fighting with CA for decades over water rights. Mostly ground water and a river boarder.
Well, you are betting against the odds. The last major try to live in the Salt River Valley, the people were reduced to cannibalism.
Arizona has never been able to sustain a long term settlement.
The Colorado River allotments are based on the 50 wettest years in the last 1000. I would not take that bet.
When all that fossil water is used in Tucson, it will be a cyber punk nightmare.

How can they continue to use repeat sales of the same house when there may not be any repeat sales at the high end.

There are always sales, it's just the sample group is much smaller.

Kind of like price discovery in general; very fast on the way up, very slow on the way down.

hurricane people forget the 3 day supply kit, try for min. of 2 weeks.

Hurricane, earthquake, flood, fire, tornado... America has'em all! Now just add the potential for "civil unrest" to the mix...

Civilian Employment-Population Ratio

http://research.stlouisfed.org/fred2/series/EMRATIO/ 

Was driving along the interstate and saw a few billboards advertising "Bankruptcy by phone" with an 800 number. No shit. So, you can drive away from your debts and call an 800 number on your cell phone along the interstate to clear your obligations ? How convenient and efficient.

Peak insolvency.

We should also graph interest rates into this charting.

$400K at 5% is equal to $350,000 at 7% as far as montly expenses go, at least for me.

That civilian-employment:population graph shows the ponzi scheme for tax revenue.

"........and will be having yellow squash and a fresh salad."

our fav is zucchini and yellow sauteed in butter - a few garlic onion shoots and damned if I not hungry again. As you know, there is no comparison - fresh-grown vs. store-bought. This is the first year we've tried herbs - 40' of basil, oregano, rosemary, garlic, two-types of lettuce, and the Mrs went nuts on onions.

adorno.......when we lived in SoCal, plums were like citrus - you got kind of spoiled - everyone had them. I hear they grow well here as well, I should try growing a couple mini-trees.

Gotto go PU alf........

Interesting pawn shop discussion. Earlier this year I noticed empty pawnshops that went under many months ago in Kuna and Nampa, Id. Pawn shops need a normal recession cycle, they're not designed to hold a large amount of inventory for a long time, especially when that inventory is depreciating.

Want a pawn shop? Think again. [General] - MarketTicker Forums

oh, brother that's a new one, pawn shops going under.

Can't say that I've seen that in my areas of Florida. The pawn shops are
still there.....

Liz sighs with relief.

adornosghost - AZ has water, indeed we still have massive amounts of water to waste.
Tucson is a special case, they finally decided to use the CAP allocation to do the smart thing, recharge their aquifers.
The rest of the state (especially Phoenix) has enough, and indeed, if they stopped wasting sooo much water, could sustain a doubling of the population. It is ironic that development uses less water than the agriculture is has replaced. Cotton is a very thirsty crop, especially when you essentially flood irrigate. The majority of water is now used and then reused by agriculture further down the Salt River towards Yuma.

The Anasazi practiced cannibalism, but that was much further north. The biggest factor in the failure of the Hohokam was an extended drought combined with the beginning of Apache predation. The new neighbors were not very nice, and they caused a lot of damage to the Pueblo in New Mexico and to the remaining river settlements in Arizona. That combined with diseases brought north from the Spanish put paid to a lot of Native societies before the Spanish even arrived in New Mexico.

The max population with a more careful water regime is far beyond what most people would even believe, but recycling would be mandatory.

Someday this war's gonna end...

Aren't the Apaches somehow related to the Aztecs?

Why do you want to disturb their dreams?

//What the graph doesn't show is the lagging wage rate
and the need for two income households ...//

"All we do now is wait for more folks to falter and fall by the wayside, and feed the vultures with more foreclosures."

You say that like it is a bad thing. With all the mucking about with the financial system, they add a lot of risk to the equation, that will result in higher rates, even if inflation is a non issue. Surely there are many people and institutions out there trying to be able to make a buck, but as long as the government keeps tossing out half measures, no one knows the rules of the game. Calvinball will be very costly. Who is going to loan Ford any money at anything but usurious rates with the risk of getting harmed by a GM like action?

Housing prices are going to continue to fall AT LEAST until we get to an affordable monthly payment, without the need for exotic loans, and it seems premature to consider cram downs until the public discovers that price.

lawyerliz

"The Apache and Navajo (Diné) tribal groups of the North American Southwest speak related languages of the language family referred to as Athabaskan. Other Athabaskan-speaking people in North America reside in an area from Alaska through west-central Canada, and some groups can be found along the Northwest Pacific Coast. Linguistic similarities indicate the Navajo and Apache were once a single ethnic group.
Archaeological and historical evidence seem to suggest the Southern Athabaskan entry into the American Southwest sometime after 1000 AD." wiki

I have shopped Thrift stores for years, love hunting treasures.

In years passed I was almost alone in the stores if it was a weekday. Sat 1/2 price day was a bit croweded. Now you can't move for all the people on any weekend day and there are always 20 or more shoppers on a weekday.

VS Sears, where we went last month to price dishwashiers when ours died. it was about 6pm,weekday, we were the only 2 customers in the store. In the appliance area there were 4 sales people doing nothing. This store is in the major large mall in an upper middle class suburban area.

Great graph, CR. But I think it shows that unemployment rate is really a minor factor in house prices. Much smaller than availability of financing and interest rates.

What does amaze me in that graph is how we're still so seriously out of whack from what we should be spending on houses. I think that's mostly a function of interest rates being so low compared to the double digit 70s and 80s.

"they ate too many tools;-}"

I can see it. I suspect that they used to do a brisk level of trade with the somewhat nomadic home construction laborers, as some took their money and headed home and others were just showing up to make their fortune. Then the music stops and they all go home/cash out at once. The pawn shops may have even continued to buy at lower and lower prices, in the hopes everything would turn around with the next construction season. They may have caught some actual falling knifes. Or at least drills and bits.

Danny,

I wouldn't call unemployment a minor factor. It's a major one that just happened to be temporary overwhelmed by a tsunami of "free money".

"Great graph, CR. But I think it shows that unemployment rate is really a minor factor in house prices. Much smaller than availability of financing and interest rates."

I suspect financing is much more difficult for the unemployed to get. Looking at the extremes, I suspect that housing rises quite well at peak employment, and collapses if no one has a job that they feel secure about.

On the back end of a 20+ year credit/debt bubble, I think we will get to see just how much.

shill

"How To Leave America
Let's hope it doesn't come down to this. but following a number of blog posts detailing the socialist trends in the United States, a number of commenters and emailers asked where might be an alternate place to live."

~~~~

LOL, almost all countries are more socialist than the US, especially the Anglo countries ...

True you may pay fewer taxes elsewhere but the infrastructure, medical, education social structures are much more unstable ...

they think the mess is all our fault in the first place

There's a lot to that argument.

I agree TJ. That is why we may not be very welcome in a new country if the world falls apart. People everywhere will be hurting, they won't like seeing us with our seemingly pile of cash. Americans are viewed as rich in many countries, even it it is not the truth for a peticular person.

Yes, I have been to Argentina. Yes I speak almost enough Spanish to get by. But I am a fast learner.

Money for emergency is in gold coins. Not a large horde, but enough to get settled and build a life.

So I got the Mexico Anasazi thing backwards.

OT but interesting.

"Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm's second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company's shares in January, has already made a $1bn gain on his investment."

Goldman Sachs to make record bonus payout |
Business |
The Observer

I suppose it would be too much to ask for a little shame from these people.

Or, any common sense.

I am surprised that the demand for longer unemployment insurance has not been made. In other words stop taking care of the banks and start taking care of the people. One thing I have come to realize from reading this blog and others similar to it is that the media has surrendered their obligation to keep the people informed and its place has been taken by this and other blogs like it. It seems to be the only place you can go to find out what is going on or if not dogmatic then at least get the other side of the coin. When I lost touch with CR in that mishmash I thought the blog had been blacklisted and wrote Drudge and Bloomberg publicizing the fact that it was not only no longer available but that as a favorite it had been removed.

Umm, CR, have you made an arrangements for the continuance of
the blog in the event you get sick or something?

We addicts need our fix.

UPDATE: Armed robber shot by Barstow homeowner during break-in - San Bernardino County Sun

Armed robber shot by Barstow homeowner during break-in

( Whispers) .....Good.

One idea that "House of Rain" focused on was the cultural links between different areas of the Southwest that indicate that long distance trade was taking place. For instance, parrot feathers found in sites in the Colorado Plateau where the type of bird obviously was not a local species. So parrot feathers were transported from jungle areas northward quite a ways as an item of value.

Back from seafood fettucini in Rockport, Ma. Did I miss anything? Will California still be there when we land tomorrow?

Rob dawg,

did you sample the escort scene in montreal?

The second question Turner asked was "Who were these cannibals and where did they come from?" He looked around for a source. The Anasazi's immediate neighbors showed no evidence of being cannibalistic. "I couldn't find cannibalism in California or on the Great Plains, either," Turner said. "Where is it? In Mexico."

Turner directed his attention to central Mexico, to the empire of the Toltecs--the precursors of the Aztecs--which lasted from about 800 to 1100 A.D. Central Mexico, he writes, developed a "very powerful, dehumanizing sociopolitical and ideological complex," centered on human sacrifice and cannibalism used as a form of social control. Furthermore, cannibalism spread from central Mexico "into the jungle world of the Mayas and the desert world of Chichimeca" in northern Mexico. Turner concludes, "It takes nearly blind faith in the effectiveness of geographical distance ... to believe that this complex and its adherents failed to reach the American Southwest."

During the Toltec period, Turner hypothesizes, a heavily armed group of "thugs," "tinkers," or perhaps even "Manson party types" (as he put it to me in various conversations) headed north, to the region we refer to as the American Southwest. "They entered the San Juan Basin around A.D. 900," he surmises in "Man Corn," and "found a suspicious but pliant population whom they terrorized into reproducing the theocratic lifestyle they had previously known in Mesoamerica."

The New Yorker Digital Edition : Dec 14, 2009 (subscription required)

liz,,boomers means born after the war, an iam, happily, the grandaddy, being born on vj day. i am also happy to be a former lawyer, having cashed in by going negative on all the bad stocks. anyhow, you are interesting, as is the majority of the board

Central Mexico, he writes, developed a "very powerful, dehumanizing sociopolitical and ideological complex,

The parallels are disturbing.

Cannibalism = Anasazi Layoffs

Eat The Idle!

i have sampled the escort trade everywhere, and i am for it. tomorrow is paris

Will California still be there when we land tomorrow?
No, we fell into the sea this morning.
Scientists at Lawerence Livermore Labs triggered an earthquake to collect the insurance to pay off the state deficit.
It didn't turn out as their models projected.

I'm worried. Did Ventura County set up the road blocks yet? Will I be able to prove residence and be allowed through or are they just turning everyone away?

does anyone here really think the poster known as duke of con dau actually lives in Cambodia, fires rockets on the weekends, and lives in a Utopian conclave?

I hope so as he just sold me a building plot near him, water buffalo and CD set "Learn Vietnamese" as a package deal.

mp, that sure does not dove-tail with the "stabalization" of the US, hows the government tooling, or have all the swabbies just learned to weld and thrown themselves under the bridge to nowhere?

CR states "It appears real house prices declined until the unemployment rate peaked, and then remained stagnant for a few years".

YIKES then housing may be in the shits until 2012 because unemployment ( U3 but especially U6 ) continues will continue to increase then only will get marginally better probably at least for a few years.

Most Americans had better start making gradual shift to a lower standard of living and suggest that most should also be recalibrating their American dream

km4,

Yeah, so many people want to believe that housing's bottomed but history shows housing always recovers after everything else.

Will I be able to prove residence and be allowed through or are they just turning everyone away?

Do you have a Mexican passport?

Hey, that is it!!!! The solution.

Sell CA to Mexico. Trade the state for oil.

It will work. Or do you think Mexico would turn down the offer?

What corporation sold 100k American jobs to China during the Great Recession?

What communist country did 100,000 Americans move to during the Great Depression? Soviet Union.

Sell CA to Mexico. Trade the state for oil.

Mexico is unprepared for the huge influx of Mexican nationals that would result.

Heck, with Cantarell declining precipitously we may have more oil in California than they do in all of Mexico.

NY Times: Treasury and Bill Gross

B.

THE SALE HEARING

...buncha stuff.....then

SO AS TO BE RECIEVED NO LATER THAN JUNE 19, 2009, AT 5:00 P.M. (EASTERN TIME) (the "Objection Deadline')

...I saw that pig CR....

PLEASE TAKE FURTHER NOTICE

, blah blah blah....
(5) Unauthorized Transactions in GM stock or Options.....

this is code for ZERO

Surf shops (surfing gear, kayaks, boogie boards, etc.) seem to be doing great on the OR coast, at least on the north central coast . The one near me--which moved from a smaller storefront to its present location 2-3 years ago-- seems to be packed every weekend & now that school's out it seems busy during the week too whenever I've gone by. Today, someone had set up pizza booth in the parking lot & it seemed to have customers.

I've seen a steady increase in surfer numbers over the past 3-4 years, no real decrease so far this year. Some of them have bought Freightliner vans & do the interiors to include 6 or so surfboard racks, a big sound system, a few places to sleep. An increasing number of wind surfers too. The surfers are mostly male, with an age range from about 15 into what seems to be guys in their 60's, although I'm seeing more women. Windsurfers seem predominantly male & average age 20's to 30's.

So far, recession doesn't seem to be affecting their ability to afford transport, gas, and equipment & gear. Who knows, maybe they're working part time or unemployed & just view the lack of work as providing them with more time to spend on the water.

Hah, last.

Re: pawnshops and power tools

And the first one to open a beginner's shop class, or have a handy guy/gal just give you some tips, will sell those tools.

The problem with the power tools is that there is a huge group of folks who haven't a clue how to repair real stuff, in the real world, especially in the urban areas. In my group of friends, only my odd SRL, Shipyard and NIMBY are tool-users.

I am still looking for a shop class.... the gardening I've been able to teach myself (bumper crop of tomatoes starting, zucchini, lettuce, snap peas, strawberries, spinach, raddichio, arugula, fava beans, cukes, water- and midget melons, string beans, and more!). Yum.

Sewing, well, I can repair stuff. And I am a savvy Salvation Army shopper.

Got the kidlet 3 pairs of very new looking jeans, 3 pairs of new looking shorts and a pair of def. new stylish leather sneakers = $20.73. Was easier than the mall ever was...