Don't have time to chase the link, but the GS bonus thread seems a logical extension of the Mythbusters episode in which the intrepid investigators conclusively proved that, yes, you actually can polish a turd...
I know I am singing to the choir, here, however someone new may read this and take notice:
Question marks indeed.
What are the questions we should be asking? What happened to changes for ratings agencies that gave high marks for bogus mortgage securities? Why trust the Fed which, in the words of one critic “started the fire” through low interest rates to extinguish it
Simon Johnson, the ex-IMF Chief now at MIT asks some others
•Has the President really been briefed on the supposed benefits of having large financial institutions with great economic power and pervasive political influence? Don’t just claim that these are a good thing – tell us, in detail and preferably with numbers, what we the public gain from the presence of these behemoths among us. Keep in mind that “everyone has them” is no kind of argument – something so manifestly dangerous is not to be blindly copied.
•Why was executive and other compensation so notably absent from the latest Geithner-Summers joint statement of our problems and likely solutions? Does the President really expect us to believe that any set of reforms will work if they do not directly constrain the amounts that can be earned from misunderstanding risk today and hoping that the consequences do not appear on your watch? Does he have any idea of how the people who run big financial firms will game whatever controls try to limit their risk-taking?
•. Can President Obama finally talk about the much broader break down of corporate governance in this country, with boards of directors serving no discernible purpose in terms of limiting the excesses of corporate executives in the financial sector but also more broadly? Surely, without a reform package that includes measures to address this core issue, we will get exactly nowhere.”
The Obama Financial Reforms: Road to Change or Perdition?
Stabilizing A Flawed System is Not The Same As Restructuring Or Remaking It
I suspect that this will solve most of the problems...
legal
financial
We need someone responsible...if everyone is responsible, then no one is responsible...
back on-topic - i almost wonder if a national grouping of bubble-resistant places from all over the nation - would be useful. mercer island, san francisco, santa monica, brooklyn - the area including NW dc and bethesda might be a worthy inclusion in such.
Corporate BK is a shell game, pure and simple. Dick Fuld has a high-paying job, but his salary does not get garnisheed to pay back all the money his company lost. Keep personal BK only.
Well D.C. probably has a larger percentage of employees who are resdents of other jurisdictions than any state. This means that EXACTLY HOW the statistics are gathered is important.
From that SacBee article on the small banks taking TARP money to loan to their directors for RE speculation:
'Community Business Bank has a 10-member board, including DiMichele and another bank executive. The other directors – three of whom have borrowed from the bank – comprise five real estate or land developers, one lawyer who represents developers, one development and lending consultant, and one farmer. Five real estate professionals are among its founding shareholders. All five have borrowed from the bank.
"It's a bad mix to have developers running a bank," Ely said. "It's often a recipe for banking disaster, particularly if they are borrowing heavily from the bank."
DiMichele said loans to savvy directors, founders and their relatives are central to the bank's approach.
He added: "What business is that of the public?"'
Maybe we should have created a Bank of Calculated Risk and applied for TARP money after all.... hoocoodanode?
All, I'm working on some of the other graphs. The big problem is city unemployment rates don't go back far enough - but I think I can use some state data.
The city unemployment data for D.C. doesn't go back far enough, but treating D.C. as a state works.
I've deleted a few comments here ... for (hopefully) obvious reasons.
the "ignore user" link is the best troll-repellant, folks.
While UE is of course an important driver of home prices, I think it's only one factor and not a primary factor.
People will always pay what they can afford, and this affordability is affected by income taxes, other mandatory contributions (FICA, Medicare, health insurance), the cost of transportation to employment, and of course interest rates and the availability of suicide loan programs like IO/neg-am, and stated-income.
That negative-amortization was even a legal lending offering is mind-boggling.
"Well D.C. probably has a larger percentage of employees who are resdents of other jurisdictions than any state. "
? D.C. is not a State. A large percentage of employees in New York City and other big cities do not reside in the city's jurisdiction, certainly not in the borough where they work.
--i almost wonder if a national grouping of bubble-resistant places from all over the nation --
I think a breakout based upon the composition of the labour market would be more illustrative. After all whats the point of looking at the statistic in Resort Areas? They'll always find enough waitstaff and handymen.
If Mossadegh had not been overthrown in 1953 by a US funded coup, would Iran have become a theocracy? or would it have developed into a very moderate muslim country (like turkey)?
In the 80s FHA had what was called a 3-2-1 buydown loan. It was neg am.
I was a baby real estate agent at the time. One couple wanted a house they could not afford with a 30yr fixed. I refused to sell them the house, explained that in 3 years they would not be able to make the higher payments. (they had 3 kids, mom stayed at home, dad had a good job but not much room for pay increases)
They bought the house through the builder, with the buydown.
They lost the house.
This loaning to the unqualifed has been going on for most of my adult life.
"If Mosadegh had not been overthrown in 1953 by a US funded coup, would Iran have become a theocracy? or would it have developed into a very moderate muslim country (like turkey)?"
Most likely yes. Revolution in 1979 brought theocracy with all kinds of weird sh*t like killing gays etc etc but they got their "freedom". Now Iranian youth wants freedom from that particular "freedom". Back to the future.
well, DYBI, none of the areas i posted are resort areas per se - the point would be seeing how a similar market behaves in very different geographies. tourists don't go to noe valley, yet people still line up to plunk down 900K for 2000 sqft places there - which is a similar phenomenon to the other places i posted, and flies in the face of the national trend.
In legal cases, there is such a thing as "strict liability"...If you play with explosives and others are injuried, you are automatically responsible, whether you did anything at all contrary to accepted principles, rules, regs, etc..
If we allow corporations to continue to exist, they should be held to the same standard of strict liability for any damages they cause...and this includes their corporate officers and board personally on a strict liability basis...This situation is way out of control....
This would cut out all these cushy jobs of wanting more money for rising above their own level of incompetence...
Personally, I like the chinese system of justice for corporate officials and board members...30 minute trial, executed with a bullet and bill sent to the relatives...
Swift justice for a strict liability action...
NOW I have no problem paying what ever salary and bonuses are necessary to get someone to fill the job....that person(s) and the their board will be competent or will suffer the consequences of their in-actions or poor actions...
CR's posts are excellent, and the discussion here is informative insofar as finance and economics is concerned.
The OT posts concerning the broader issues of world politics and morality, however, show the absolute dearth of intelligence of a populace trained to react in a pavlovian reflex to the stimuli of their media programmers.
Fortunately, occidental civilization will survive the collapse of the empire of lies, stupidity and brutality called the "West". Hopefully some of this civilization will also survive in North America after the collapse.
Might be interesting to see the housing starts in DC chart overlaid. I suspect DC housing will overshoot to the downside because there was huge amounts of "renewal" in the north/central districts, much of which if it's on stream has had to come down in price and whichever saps are still finishing off apartment complexes can't be too comfortable right now. The renewal of the southside has basically tanked, partly to do with Lehman's REIT pulling out, and the only major project seems to be DHS moving into the (no sh!t) former mental hospital. There was some discussion a couple of weeks ago here about more tanking going on in the exurb arms of the metro system; again, way too much bubblenomics driving med-density developments, which came face to face with the near-bust in metro capacity through Q1/2 2008, plus a further spin on the age-old question - what the hell are these people all going to do?
I am suggesting that overthrowing Mosadegh was one of the worst US foreign policy mistake. If he had been allowed to go on, Iran would have become a westernized country and eventually a useful american ally.
But the 1950s "WASPs rule the world" mentality of the Eisenhower adminstration preferred short term gains over medium/long term gains.
let me try to achieve the near impossible and bring this close to on-topic:
"Most likely yes."
nations seldom successfully throw off the burden of religious hysteria and bigotry - witness the way our shotgun marriage of 'growth' through an unholy marriage of fiat currency and debt is still clung to with ever-greater force by the mullahs at the fed as it unravels
"£42bn losses are predicted to hit Britain as a result of a three per cent fall in gross domestic product (GDP) due to the swine flu pandemic, according to a new report from the Oxford Economics think tank, due to be released tomorrow. Researchers claim that swine flu could threaten already fragile businesses and put further strains on financial markets in what could become a "vicious cycle that postpones the recovery".
Deflation is a "significant risk" as a result of the pandemic's impact on the economy – putting back economic recovery by two years, says the report. The predictions are based on a 30 per cent infection rate, should a pandemic begin in October and last for six months.
A $2.5 trillion cut in global GDP is a possibility – with a flu outbreak in the autumn hitting the world economy just as it starts to recover from the credit crunch."
lucy, that was in the context of the cold war. in any case, it is hard to think of a nation with more population, resources and imperialist history to ever end up quite so globally irrelevant. were it not for the shia/sunni schism, this wouldn't be quite as true, but it is.
well, DYBI, none of the areas i posted are resort areas per se - the point would be seeing how a similar market behaves in very different geographies. tourists don't go to noe valley, yet people still line up to plunk down 900K for 2000 sqft places there - which is a similar phenomenon to the other places i posted, and flies in the face of the national trend.
In my hazy recollection from the times, Noe Valley was one of the very first previously non-exclusive SF neighborhoods to go bubble-icious in the late '70s -- because it was on a major street with timed lights (Guerrero) that to an limited-access expressway (San Jose Ave.) that connected directly to the new Highway 280 speedway to the South Bay. You could be in Cupertino in 35 minutes -- faster than getting downtown on Muni. Silicon Valley money that wanted SF style, arrowed right for it.
I'd guess that this dynamic is still at work as long as hot Valley money is still around -- not so much the entrepreneurs as the high-end designers and marketers, the "knowledge workers."
I'm guessing that in the long run, bubble neighborhoods are FILD -- first inflated, last deflated.
Hollywood Hack writes: "...it is hard to think of a nation with more population, resources and imperialist history to ever end up quite so globally irrelevant."
Iran is and forever will be relevant. One cannot change global positioning, only alliances. Their oil is not the reason, and even though my house is covered in dozens of fine rugs, their rugs are not the reason.
The reason is where they are on the globe. They will, after this regime change decide their alliances. And that will make all the difference in the world.
creditcriminalslovetarp (profile) wrote on Sun, 6/21/2009 - 11:14 pm
re - Duke,
update on NKorea ship Yahoo! 404 - Page Not Found
....
thanks, forgot about the arms ban!
.....
hey, maybe help is on the way to Daw Aung San and along with future developments could get a 2-fer!
.....
it is a big mistake to compare China's T-Square uprising with Iran... the Persians won't be crushed over the
long term like the Chinese... I have made comments before on the 3 gen. family structure, Confucian filial piety, and how easy it is
to control the 'trouble makers' w/o tossing them in the slammer ... not so in Persian society, besides a sense of superiority over any other nation in the ME they possess an element missing in a very large way in China... a strong sense of individualism...
my original argument still holds - a variation of Prague Spring ... Moussavi is like an unelected Dubcek...
"I'm guessing that in the long run, bubble neighborhoods are FILD -- first inflated, last deflated."
right, and it would be interesting to see how they nationally respond, wheras current methodology clumps areas like noe valley in with cities like richmond, santa monica with palmdale, nw dc with anacostia, etc etc
Maybe not. If you're talking the last 10-15 years, even Noe Valley didn't inflate as fast as some of the subprime areas, percentage-wise. But over 30 years, back to where it all began back in the '70s, I'm thinking maybe so from where I hit. Your mileage may vary.
I was working in a warehouse in SiliValley back in '77 when housing prices started going up 10 percent a month. On break, all of us gawped at the stories in the newspapers, like dinosaurs watching a fireball in the sky get bigger... and bigger.
It is interesting that nations with too many straight border lines are nowadays in trouble. Most likely because those lines were drawn by some British general who didn't give a sht about tribal borders. Nations with zigzag borders are mostly peaceful. Oh wait...USA has also too many straight lines WITHIN...oh sht! Duck and cover!
Lucifer
the overthrow of Mossadegh in '53 was a British play due to the abrogation of the BP's oil contracts,
Bp got 90 cents on every dollar and Moss. wanted a 50/50 split.... which caused Churchill to have a
conniption fit, " a contract is a contract"... yes, they used the CIA to retire him (Schwartzkopf's dad was
head of the operation)
....
almost worked for Scully VC firm in NYC about 6 years ago on an internet product that
after doing some background research would not work (used some former Manhattan DAs as
sources)....
The data for D.C. MSA (unemployment) only goes back to 1989. But for D.C as a "state" goes back to 1975.
The two series move together (although the "state" rate is much than the MSA. But the PURPOSE of this exercise is to line up the peaks of unemployment with prices - so this works for this exercise
All, I've added the D.C. MSA unemployment rate. Same result - house prices don't fall until after unemployment peaks - sometimes well after the peak
This is important to note because a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent.
I don't normally check rents in my "desirable" town, but I did see the other day that asking price for nice, nothing-special 3/2s was back in the $2300-$2500/ month range. It had reached that level briefly during the dotcom years, sank back 20 percent when that bubble burst, and rose again with the real estate bubble. And now that this bubble is bursting, I expect the same to happen -- though weather prices drop as far, not as far, or even farther than last time is beyond me.
In California, unless in an exceptional area, I'd say it'd be risky to plug current rent into your spreadsheet when evaluating cash flow for an income property. Me, I'd kick it down by 20 percent.
There is still a move up in UE after GWB2 is in office 2000/2001. This is somewhat counter to my expectations. I thought I remembered that W (and friends) were big spenders in DC.
In California, unless in an exceptional area, I'd say it'd be risky to plug current rent into your spreadsheet when evaluating cash flow for an income property. Me, I'd kick it down by 20 percent.
From 2000 to 2003, my rent declined from $3700 to $1600 per month. (same place)
June 21 (Bloomberg) -- Consumer spending in the U.S. probably rose in May for the first time in three months and home sales increased as Americans became more confident the recession will end this year, economists said before reports this week.
Purchases advanced 0.3 percent, according to the median of 58 estimates in a Bloomberg News survey ahead of Commerce Department figures due June 26. Combined sales of new and existing homes likely improved to 5.18 million, capping the first back-to-back increase since 2006, the survey showed.
Logical consistency? that is the old paradigm.. get with the new paradigm aka "we make it up"
//This is important to note because a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent.//
"a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent."
Therein lies the problem. Jobs will not come back unless asset prices come back in real terms. Not gonna happen.
Who in their right mind would pay a whopping "$2300-$2500/ month"......... for rent? Am I a dinosaur? Nevermind, sorry, I already know the answer to that.
Tim waiting for 2012 (homepage, profile) wrote on Sun, 6/21/2009 - 11:28 am
"a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent."
'Therein lies the problem. Jobs will not come back unless asset prices come back in real terms. Not gonna happen.'
Asset prices will not come back unless jobs (wages) come back in real terms.
house prices don't fall until after unemployment peaks - sometimes well after the peak
In a lot of areas I'm reading on this blog, prices have fallen pretty far. But in the areas I like to check - up and down the east coast - I am not seeing prices falling far enough. Prices in a lot of areas are still well over 3x median income.
I wonder what impact the rise in unemployment will have on median income, whether 10% UE is enough to impact median income rates. If so, then housing prices have to fall even further than the current 3x median income.
Until there is equilibrium between median income and housing prices, there will not be a healthy economy. (And the rents I'm seeing aren't in line w/median income either -- still too high)
Some areas have dropped MUCH MORE than the averages. Looking at the latest RRE prices here yesterday, I was shocked to see 1400-2000 sq ft manufactured homes on 2.5 acres listed at $50-60K. At the highest, they were getting $175k+. The differences might be due to older retired or dead (estate settlement) sellers ?
California coast, baybee... warm air, cold water, too much money around, limited real estate.
More specifically: 3 to 6 college students, a surfing software designer and wife who bring in $100K+ family income from SiliValley but wants to surf before heading off to work, and, often 1-3 unattached middle-aged adults who never settled down and find themselves sharing a house because they can't even afford 1 br apts on their own.
It's a desirable area, and a lot of people are willing to pay the price to life here for a while. But they settle and riase families elsewhere. Except for those perpetual bachelors/spinsters who hang on here until old age sharing houses or living in garages.
But you're not a dino -- well, at least this isn't the issue that proves it. But you're living in an environment where there is a lot less demand and a lot more supply.
I think it depends on the area and how mobile/flexible you can be. My rent for a small 1 br in downtown Sac was 475 in 2000. My portion of the rent for a huge suite with gorgeous views is 460. The place 2 doors down is now for rent and after weeks on CL, the listed rents is even less then we pay now and the place is just as nice with a better backyard. This is after I made a deal to get the rent reduced 350 less on this place
If you are renting and waiting for your LL to make a deal, lots of luck. But if you are willing to vote with your feet economically, life is very good.
I think it's safe to say that the gross rents calcs speculators are depending on are going to bite them in the @ss.
Employment will have a large effect on housing and all other assets.
Unemployment is obvious, wages being cut, hours being cut also have a large effect. MSM has not really focused much on the hours worked = how many full time jobs in wage terms have occured as losses. The same holds true for wages cut or lower wage jobs taken by the prior unemployed.
We are moving lower and lower on the income per household scale. Many people are using up all credit card funds to maintain a house they can not afford, or keep the kids in the style they are acustomed to. The availabilty of those funds are now pretty much gone.
An artical I read really defined the prediciment of many households. Should they file BK or let the house go into forclosure? Which was a lesser hit to future credit, home buying ability? What a place to find yourself as the dreams unravel.
Hee Hee. Hey Jane, when UC chooses one of the wage reduction plans that includes furlough days, do you think you'll actually get to take any of them off?
My dept. is applying for "protection" for further layoffs, for reasons I won't get into here. I don't work the long hours right now, but if management can take credit for "saving your jobs," you can bet they'll strongly imply we should give them a pound of any spare flesh we have hanging around, "for the team."
Last evening we went to a party in an area where 1 mil homes are the LOW end.
Within 1/4 mile of turning off the main street into the housing area we saw 4 for sale signs.
This income bracket does not sell unless they NEED to in this market. Either they are trying to short sale or the signs simply did not say REO due to the high income area.
The damage is moving up the ladder big time now. I am guessing 6 mos at the most before it gets really ugly. The low, low end seems to have stablized at about 25% of bubble value. It will be interesting to see where the high end settles.
"The damage is moving up the ladder big time now. I am guessing 6 mos at the most before it gets really ugly. The low, low end seems to have stablized at about 25% of bubble value. It will be interesting to see where the high end settles.
Metro Phoenix area. "
josap, do you think that a collapse at the high end will drive down lower-end prices even more out your way, by reducing demand for the cheapest houses (because the more expensive ones are now affordable)? This is something I've speculated about out here in California, but haven't seen yet.
No, I don't think the changes in high end will effect the low end much at all. The low end is being bought by investors. People with regular jobs can't get credit for homes. And the low end is being rented to very low wage workers at rock bottom rents.
The middle has dropped 50% from bubble peak, but rents would still be too low to cover the expenses. So few investor buyers. And everyone thinks the middle prices will continue downward for at least another year. We have alot of forclosed properties in this price range and the banks aren't taking lowball offers yet. In fact I see plenty of vacant houses with no signs of rent or sale.
High end being 1 mil + has dropped about 25%. But it still takes real money to buy the high end. These are not and never will be investment properties.
Historicly in Phoenix, investors set the bottom and things balance out from there. This is the third time I have seen the "over build to bust" cycle here.
Many people are using up all credit card funds to maintain a house they can not afford, or keep the kids in the style they are acustomed to. The availabilty of those funds are now pretty much gone.
I have not seen statistics on this, but I would think it's true.
Which is why I'm wondering whether the new 125% or higher LTV refi's are going to allow cash-outs. That would stave off the end for many in this position.
OT, I managed to make a good call this year. I put off my garden to focus on my new guineas and chicks. It has been incredibly rainy and cool up here in the NE, and I can only imagine gardeners are now on their upteenth replantings.
Thanks, josap. We didn't have the extreme overbuilding around here; a desirable area, but short on land and water. The "extreme low end" for 10 miles in any direction $350K, 900 square feet, and you bring your own contractor. Even now. So in Phoenix metro terms, we're a high/medium-end area.
There is a town about 15 miles away where you score something for half that, but it's low income, high crime. Most people here wouldn't buy there -- though a lot of low-wage workers around here commute from there -- and most people there could never afford to buy here, even if prices dropped 50 percent.
Hmmph. Maybe there could be a hermetic seal between ultra-low and middle, if they're separate markets and not mixed. Food for thought.
An Amherst woman has won a $40,000 judgment against a mortgage giant after a judge ruled the firm harassed her by making at least 200 collection calls to her home in a year.
I think credit has been used up due to long term unemployment, cut backs from credit card firms, use of cards for replacements of dishwashier etc when they have no savings and people just giving up and having one last shopping spree.
And when middle income people start asking the question on blogs, they have accepted reality and are trying to decide what is in their own best interest in the long term. These people know they are going under, they know their friends, co-workers and neighbors are going under.
When the water cooler conversation is "Do I walk or file BK?" there is a major shift in socially acceptable survival tactics.
You mistaken - the Brits drew those borders with the concept of regional conflicts firmly in mind - keeping the locals squabbling makes the whole imperial game a bit simpler, don't you know...
When the water cooler conversation is "Do I walk or file BK?" there is a major shift in socially acceptable survival tactics.
Yup. And I think one big impetus towards bk/walking becoming more acceptable was when taxpayer dollars were re-routed to banking reserves. At that point, I think people started feeling the banks owed them more than they owed the banks.
I think there are a lot of people who have no money and no credit left. Some of
them have jobs paying less, some of them have barely functional small businesses, some have to learn to live without mew, and some
of them are unemployed and they all have to learn to live off less money.
One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that
they tend to live the same way until they have absolutely no money at all.
I think it will be very glaringly obvious in the next few months.
"Who in their right mind would pay a whopping "$2300-$2500/ month"......... for rent? Am I a dinosaur? Nevermind, sorry, I already know the answer to that. "
When we sold our house around 5 years ago to wait out the bust we knew we would be renting for a long time. Going from a house back to an apartment would be impossible without either selling a lot of our furnishings or renting a storage unit. So we are stuck with renting a home. House rents in a decent neighbourhood around here were $1800/mos when we moved in and around $2300/mos as of 6 months ago. They have dropped recently and we are planning to ask for a 10% reduction when our lease comes up for renewal.
When people try to work a short sale with the bank and the bank won't take an offer $2,000.00 under asking - people let the forclousure happen. And are angry.
When the bank tells a short seller "We will work with you and not forclose." Then forclouse people are angry.
When the banks get bailed out, get bonuses, get screaming deals from the gove and each other, people are angry.
When economic help is all for the banks and none for the people, they are angry.
When the bank tells you to stop paying your mortgage to be concidered for a modification, then won't do the mod and forclouses on you. People are angry.
So, yes. In many peoples minds they have been screwed by the banks and don't care if they screw them back. Usually by running their cards to the max and then filing BK.
And, per the normal human condition, it couldn't be their own fault!
"One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that they tend to live the same way until they have absolutely no money at all."
That's kind of scary. Wonder how widespread that mindset is?
Because on the other side, you have people who still have good jobs and money coming in who are cutting back, because it's simply the prudent thing to do in uncertain times. This behavior makes some of the schlockier economists angry -- how dare you be cautious and cut spending?
I don't know -- small business types and others are more like compulsive gamblers -- won't take themselves out of the game until the last chip is gone?
The differance in mind set between selfemployed and an employee is:
Self employed - I am in control and can fix the issues. I have taken a risk and made it pay. I can somehow improve my business, profit, income, bottom line.
Employee - I have no control over staying employed and must save to survive what may be imposed on me. I may have to take a lower wage job if something happens to the one I have. I like safety, not risk.
After watching the clip RATM posted a link to, I wondered what was happening in the rural parts of Iran. This article more or less answered that question and asks why --it must be a rhetorical question--the US media as usual wholly fails to view what's happening from a class or economic perspective, as in, which candidate would further US oil interests?
This isn't to say I agree with everything the current regime does, I don't, but then, I don't feel the Bush administration gave me much, if anything to approve of either, unless it was the continued efforts of some brave individuals & organizations to push back against his administration's corruption, destructiveness, sadism & unquestioning belief in the right of an economic elite to run the US.
One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that
they tend to live the same way until they have absolutely no money at all.
I think it will be very glaringly obvious in the next few months.
I think that's true. I guess at some point, they know there's no way out even if they do cut back. How much of their income is actually disposable? They have adjusted their payments to match their income. They probably cannot cut back much on their daily living expenses as it is. Therefore - just go with it till it crumbles around you.
Whether it will become obvious in the next few months is the question. These things seem to take a really long time to actually run out of all options. Just like the state of California. They've been crying doom for months now, and so far, I don't hear much about their demise. Not that we want Calif. to go off the cliff. But just to show it takes a while for a forward moving ship to switch to reverse.
When elected government officials secretly collude with bankers to create a non-governmental
Federal Reserve Bank that controls the currency of the country and systematically generates
inflation to allow government to spend at an ever increasing rate.
Taxing citizens to create bureaucratic government agencies and programs that fail to
accomplish their mission while continuing to grow in size as politicians use them to reward
the contributors to their re-election campaigns.
Obammi is an empty suit, that's for sure. He will be out in 2012. Hillary & McCain were
right regarding his lack of experience and appeal to working, hard working white people.
!!
Twice in a row.
Where's Nemo's auto refresh?
Nemo?
Oh, boy, just waiting eagerly for Miami.
Much grass.
Don't have time to chase the link, but the GS bonus thread seems a logical extension of the Mythbusters episode in which the intrepid investigators conclusively proved that, yes, you actually can polish a turd...
Wow, was DC UE really increasing during the early W years?
I know I am singing to the choir, here, however someone new may read this and take notice:
Question marks indeed.
What are the questions we should be asking? What happened to changes for ratings agencies that gave high marks for bogus mortgage securities? Why trust the Fed which, in the words of one critic “started the fire” through low interest rates to extinguish it
Simon Johnson, the ex-IMF Chief now at MIT asks some others
•Has the President really been briefed on the supposed benefits of having large financial institutions with great economic power and pervasive political influence? Don’t just claim that these are a good thing – tell us, in detail and preferably with numbers, what we the public gain from the presence of these behemoths among us. Keep in mind that “everyone has them” is no kind of argument – something so manifestly dangerous is not to be blindly copied.
•Why was executive and other compensation so notably absent from the latest Geithner-Summers joint statement of our problems and likely solutions? Does the President really expect us to believe that any set of reforms will work if they do not directly constrain the amounts that can be earned from misunderstanding risk today and hoping that the consequences do not appear on your watch? Does he have any idea of how the people who run big financial firms will game whatever controls try to limit their risk-taking?
•. Can President Obama finally talk about the much broader break down of corporate governance in this country, with boards of directors serving no discernible purpose in terms of limiting the excesses of corporate executives in the financial sector but also more broadly? Surely, without a reform package that includes measures to address this core issue, we will get exactly nowhere.”
The Obama Financial Reforms: Road to Change or Perdition?
Stabilizing A Flawed System is Not The Same As Restructuring Or Remaking It
by Danny Schechter
From Globalresearch.ca
The Obama Financial Reforms: Road to Change or Perdition?
Washington D.C is special.
Remove "person-hood" from corporations...
I suspect that this will solve most of the problems...
legal
financial
We need someone responsible...if everyone is responsible, then no one is responsible...
BTW - Lucifer, if the US is 'The Great Satan', are you getting payments for trademark infringements?
What about civil wars.. not all civil wars are violent.
//"wars involve heavy loss of life, and we kill people in them"//
back on-topic - i almost wonder if a national grouping of bubble-resistant places from all over the nation - would be useful. mercer island, san francisco, santa monica, brooklyn - the area including NW dc and bethesda might be a worthy inclusion in such.
Goldman-Sachs is still making money, right?
//Lucifer, if the US is 'The Great Satan', are you getting payments for trademark infringements?//
nice, the de-troll patrol is on the case...
"Remove "person-hood" from corporations..."
That brings me to my weekly rant.
Corporate BK is a shell game, pure and simple. Dick Fuld has a high-paying job, but his salary does not get garnisheed to pay back all the money his company lost. Keep personal BK only.
Well D.C. probably has a larger percentage of employees who are resdents of other jurisdictions than any state. This means that EXACTLY HOW the statistics are gathered is important.
Whoops! I got pigged - repost
From that SacBee article on the small banks taking TARP money to loan to their directors for RE speculation:
'Community Business Bank has a 10-member board, including DiMichele and another bank executive. The other directors – three of whom have borrowed from the bank – comprise five real estate or land developers, one lawyer who represents developers, one development and lending consultant, and one farmer. Five real estate professionals are among its founding shareholders. All five have borrowed from the bank.
"It's a bad mix to have developers running a bank," Ely said. "It's often a recipe for banking disaster, particularly if they are borrowing heavily from the bank."
DiMichele said loans to savvy directors, founders and their relatives are central to the bank's approach.
He added: "What business is that of the public?"'
Maybe we should have created a Bank of Calculated Risk and applied for TARP money after all.... hoocoodanode?
All, I'm working on some of the other graphs. The big problem is city unemployment rates don't go back far enough - but I think I can use some state data.
The city unemployment data for D.C. doesn't go back far enough, but treating D.C. as a state works.
I've deleted a few comments here ... for (hopefully) obvious reasons.
best to all.
Yes.. but that is what it was always meant to be!
//Corporate BK is a shell game, pure and simple.//
"Shylock, our trollish friend - pray tell what blameless, pure-as-driven-snow nationality is claimed by yourself? "
That nation might be Iceland but those scheming little bastards started this Great Depression number two
the "ignore user" link is the best troll-repellant, folks.
While UE is of course an important driver of home prices, I think it's only one factor and not a primary factor.
People will always pay what they can afford, and this affordability is affected by income taxes, other mandatory contributions (FICA, Medicare, health insurance), the cost of transportation to employment, and of course interest rates and the availability of suicide loan programs like IO/neg-am, and stated-income.
That negative-amortization was even a legal lending offering is mind-boggling.
"but treating D.C. as a state works."
errm... don't know about that... treating DC ex-SE, Montgomery County and Fairfax County as a state works...
CR Tim over at the SeattleBubble Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area. Might have a couple excel files to make your graph-making easier.
Just a thought.
Not a lawyer, however no "legal fiction" should have the same rights as a person without the responsibilities and exist possibly forever...
Referring to Corporations...
EDIT2
"Well D.C. probably has a larger percentage of employees who are resdents of other jurisdictions than any state. "
? D.C. is not a State. A large percentage of employees in New York City and other big cities do not reside in the city's jurisdiction, certainly not in the borough where they work.
--i almost wonder if a national grouping of bubble-resistant places from all over the nation --
I think a breakout based upon the composition of the labour market would be more illustrative. After all whats the point of looking at the statistic in Resort Areas? They'll always find enough waitstaff and handymen.
Nemo is preoccupied and too hung over to come up with anything snarky on short notice.
Hypothetical question..
If Mossadegh had not been overthrown in 1953 by a US funded coup, would Iran have become a theocracy? or would it have developed into a very moderate muslim country (like turkey)?
In the 80s FHA had what was called a 3-2-1 buydown loan. It was neg am.
I was a baby real estate agent at the time. One couple wanted a house they could not afford with a 30yr fixed. I refused to sell them the house, explained that in 3 years they would not be able to make the higher payments. (they had 3 kids, mom stayed at home, dad had a good job but not much room for pay increases)
They bought the house through the builder, with the buydown.
They lost the house.
This loaning to the unqualifed has been going on for most of my adult life.
Nemo got lucky?
//Nemo is preoccupied and too hung over to come up with anything snarky on short notice.//
"If Mosadegh had not been overthrown in 1953 by a US funded coup, would Iran have become a theocracy? or would it have developed into a very moderate muslim country (like turkey)?"
Most likely yes. Revolution in 1979 brought theocracy with all kinds of weird sh*t like killing gays etc etc but they got their "freedom". Now Iranian youth wants freedom from that particular "freedom". Back to the future.
well, DYBI, none of the areas i posted are resort areas per se - the point would be seeing how a similar market behaves in very different geographies. tourists don't go to noe valley, yet people still line up to plunk down 900K for 2000 sqft places there - which is a similar phenomenon to the other places i posted, and flies in the face of the national trend.
In legal cases, there is such a thing as "strict liability"...If you play with explosives and others are injuried, you are automatically responsible, whether you did anything at all contrary to accepted principles, rules, regs, etc..
If we allow corporations to continue to exist, they should be held to the same standard of strict liability for any damages they cause...and this includes their corporate officers and board personally on a strict liability basis...This situation is way out of control....
This would cut out all these cushy jobs of wanting more money for rising above their own level of incompetence...
Personally, I like the chinese system of justice for corporate officials and board members...30 minute trial, executed with a bullet and bill sent to the relatives...
Swift justice for a strict liability action...
NOW I have no problem paying what ever salary and bonuses are necessary to get someone to fill the job....that person(s) and the their board will be competent or will suffer the consequences of their in-actions or poor actions...
EDIT3
CR's posts are excellent, and the discussion here is informative insofar as finance and economics is concerned.
The OT posts concerning the broader issues of world politics and morality, however, show the absolute dearth of intelligence of a populace trained to react in a pavlovian reflex to the stimuli of their media programmers.
Fortunately, occidental civilization will survive the collapse of the empire of lies, stupidity and brutality called the "West". Hopefully some of this civilization will also survive in North America after the collapse.
Might be interesting to see the housing starts in DC chart overlaid. I suspect DC housing will overshoot to the downside because there was huge amounts of "renewal" in the north/central districts, much of which if it's on stream has had to come down in price and whichever saps are still finishing off apartment complexes can't be too comfortable right now. The renewal of the southside has basically tanked, partly to do with Lehman's REIT pulling out, and the only major project seems to be DHS moving into the (no sh!t) former mental hospital. There was some discussion a couple of weeks ago here about more tanking going on in the exurb arms of the metro system; again, way too much bubblenomics driving med-density developments, which came face to face with the near-bust in metro capacity through Q1/2 2008, plus a further spin on the age-old question - what the hell are these people all going to do?
But here in MD we're special. Needed. Secure.
C
timmyone,
I am suggesting that overthrowing Mosadegh was one of the worst US foreign policy mistake. If he had been allowed to go on, Iran would have become a westernized country and eventually a useful american ally.
But the 1950s "WASPs rule the world" mentality of the Eisenhower adminstration preferred short term gains over medium/long term gains.
let me try to achieve the near impossible and bring this close to on-topic:
"Most likely yes."
nations seldom successfully throw off the burden of religious hysteria and bigotry - witness the way our shotgun marriage of 'growth' through an unholy marriage of fiat currency and debt is still clung to with ever-greater force by the mullahs at the fed as it unravels
" Nemo got lucky?"
breakfast at whatshername's?
"£42bn losses are predicted to hit Britain as a result of a three per cent fall in gross domestic product (GDP) due to the swine flu pandemic, according to a new report from the Oxford Economics think tank, due to be released tomorrow. Researchers claim that swine flu could threaten already fragile businesses and put further strains on financial markets in what could become a "vicious cycle that postpones the recovery".
Deflation is a "significant risk" as a result of the pandemic's impact on the economy – putting back economic recovery by two years, says the report. The predictions are based on a 30 per cent infection rate, should a pandemic begin in October and last for six months.
A $2.5 trillion cut in global GDP is a possibility – with a flu outbreak in the autumn hitting the world economy just as it starts to recover from the credit crunch."
Swine flu 'could infect up to half the population' -
Health News, Health & Families - The Independent
"I am suggesting that "
lucy, that was in the context of the cold war. in any case, it is hard to think of a nation with more population, resources and imperialist history to ever end up quite so globally irrelevant. were it not for the shia/sunni schism, this wouldn't be quite as true, but it is.
well, DYBI, none of the areas i posted are resort areas per se - the point would be seeing how a similar market behaves in very different geographies. tourists don't go to noe valley, yet people still line up to plunk down 900K for 2000 sqft places there - which is a similar phenomenon to the other places i posted, and flies in the face of the national trend.
In my hazy recollection from the times, Noe Valley was one of the very first previously non-exclusive SF neighborhoods to go bubble-icious in the late '70s -- because it was on a major street with timed lights (Guerrero) that to an limited-access expressway (San Jose Ave.) that connected directly to the new Highway 280 speedway to the South Bay. You could be in Cupertino in 35 minutes -- faster than getting downtown on Muni. Silicon Valley money that wanted SF style, arrowed right for it.
I'd guess that this dynamic is still at work as long as hot Valley money is still around -- not so much the entrepreneurs as the high-end designers and marketers, the "knowledge workers."
I'm guessing that in the long run, bubble neighborhoods are FILD -- first inflated, last deflated.
Why would swine flu cut the Brit's economy by 3 whole per cent?
Hollywood Hack writes: "...it is hard to think of a nation with more population, resources and imperialist history to ever end up quite so globally irrelevant."
Iran is and forever will be relevant. One cannot change global positioning, only alliances. Their oil is not the reason, and even though my house is covered in dozens of fine rugs, their rugs are not the reason.
The reason is where they are on the globe. They will, after this regime change decide their alliances. And that will make all the difference in the world.
"Why would swine flu cut the Brit's economy by 3 whole per cent?"
Reasons given int the complete article. Please use link, above.
BobDobbs not in Fla.
"The reason is where they are on the globe."
no more or less relevant than kazakhstan - just infinitely more chauvinistic, with absolutely zero basis for such in terms of the last two millenia
creditcriminalslovetarp (profile) wrote on Sun, 6/21/2009 - 11:14 pm
re - Duke,
update on NKorea ship
Yahoo! 404 - Page Not Found
....
thanks, forgot about the arms ban!
.....
hey, maybe help is on the way to Daw Aung San and along with future developments could get a 2-fer!
.....
it is a big mistake to compare China's T-Square uprising with Iran... the Persians won't be crushed over the
long term like the Chinese... I have made comments before on the 3 gen. family structure, Confucian filial piety, and how easy it is
to control the 'trouble makers' w/o tossing them in the slammer ... not so in Persian society, besides a sense of superiority over any other nation in the ME they possess an element missing in a very large way in China... a strong sense of individualism...
my original argument still holds - a variation of Prague Spring ... Moussavi is like an unelected Dubcek...
"I'm guessing that in the long run, bubble neighborhoods are FILD -- first inflated, last deflated."
right, and it would be interesting to see how they nationally respond, wheras current methodology clumps areas like noe valley in with cities like richmond, santa monica with palmdale, nw dc with anacostia, etc etc
Maybe not. If you're talking the last 10-15 years, even Noe Valley didn't inflate as fast as some of the subprime areas, percentage-wise. But over 30 years, back to where it all began back in the '70s, I'm thinking maybe so from where I hit. Your mileage may vary.
I was working in a warehouse in SiliValley back in '77 when housing prices started going up 10 percent a month. On break, all of us gawped at the stories in the newspapers, like dinosaurs watching a fireball in the sky get bigger... and bigger.
that's it for me, two in one week--sheesh
Ok, so that 3% is after there's a big pandemic.
It is interesting that nations with too many straight border lines are nowadays in trouble. Most likely because those lines were drawn by some British general who didn't give a sht about tribal borders. Nations with zigzag borders are mostly peaceful. Oh wait...USA has also too many straight lines WITHIN...oh sht!
Duck and cover!
Lucifer
the overthrow of Mossadegh in '53 was a British play due to the abrogation of the BP's oil contracts,
Bp got 90 cents on every dollar and Moss. wanted a 50/50 split.... which caused Churchill to have a
conniption fit, " a contract is a contract"... yes, they used the CIA to retire him (Schwartzkopf's dad was
head of the operation)
....
almost worked for Scully VC firm in NYC about 6 years ago on an internet product that
after doing some background research would not work (used some former Manhattan DAs as
sources)....
The data for D.C. MSA (unemployment) only goes back to 1989. But for D.C as a "state" goes back to 1975.
The two series move together (although the "state" rate is much than the MSA. But the PURPOSE of this exercise is to line up the peaks of unemployment with prices - so this works for this exercise
best to all.
Congress woman can't keep up her own home:
Congresswoman's abandoned house angers neighbors - Los Angeles Times
And who could possibly misunderstand or disagree with the purpose of such an exercise.
It says my rent is too high.
C
All, I've added the D.C. MSA unemployment rate. Same result - house prices don't fall until after unemployment peaks - sometimes well after the peak
This is important to note because a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent.
best wishes
"It says my rent is too high."
I don't normally check rents in my "desirable" town, but I did see the other day that asking price for nice, nothing-special 3/2s was back in the $2300-$2500/ month range. It had reached that level briefly during the dotcom years, sank back 20 percent when that bubble burst, and rose again with the real estate bubble. And now that this bubble is bursting, I expect the same to happen -- though weather prices drop as far, not as far, or even farther than last time is beyond me.
In California, unless in an exceptional area, I'd say it'd be risky to plug current rent into your spreadsheet when evaluating cash flow for an income property. Me, I'd kick it down by 20 percent.
-- I've added the D.C. MSA unemployment rate --
There is still a move up in UE after GWB2 is in office 2000/2001. This is somewhat counter to my expectations. I thought I remembered that W (and friends) were big spenders in DC.
Rents in Phx Metro have already dropped 20%, more in the outlying areas.
In California, unless in an exceptional area, I'd say it'd be risky to plug current rent into your spreadsheet when evaluating cash flow for an income property. Me, I'd kick it down by 20 percent.
From 2000 to 2003, my rent declined from $3700 to $1600 per month. (same place)
good night, must head out to the Heart of Darkness
CONfidence?
Spending, Home Sales Probably Increased: U.S. Economy Preview
Spending, Home Sales Probably Increased: U.S. Economy Preview - Bloomberg.com
By Shobhana Chandra
June 21 (Bloomberg) -- Consumer spending in the U.S. probably rose in May for the first time in three months and home sales increased as Americans became more confident the recession will end this year, economists said before reports this week.
Purchases advanced 0.3 percent, according to the median of 58 estimates in a Bloomberg News survey ahead of Commerce Department figures due June 26. Combined sales of new and existing homes likely improved to 5.18 million, capping the first back-to-back increase since 2006, the survey showed.
Logical consistency? that is the old paradigm.. get with the new paradigm aka "we make it up"
//This is important to note because a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent.//
"a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent."
Therein lies the problem. Jobs will not come back unless asset prices come back in real terms. Not gonna happen.
Who in their right mind would pay a whopping "$2300-$2500/ month"......... for rent? Am I a dinosaur? Nevermind, sorry, I already know the answer to that.
Tim waiting for 2012 (homepage, profile) wrote on Sun, 6/21/2009 - 11:28 am
"a number of people have started calling a house price bottom, even though most people think unemployment will rise into at least 2010. Those two views are probably not consistent."
'Therein lies the problem. Jobs will not come back unless asset prices come back in real terms. Not gonna happen.'
Asset prices will not come back unless jobs (wages) come back in real terms.
There, fixed it for you >; )
house prices don't fall until after unemployment peaks - sometimes well after the peak
In a lot of areas I'm reading on this blog, prices have fallen pretty far. But in the areas I like to check - up and down the east coast - I am not seeing prices falling far enough. Prices in a lot of areas are still well over 3x median income.
I wonder what impact the rise in unemployment will have on median income, whether 10% UE is enough to impact median income rates. If so, then housing prices have to fall even further than the current 3x median income.
Until there is equilibrium between median income and housing prices, there will not be a healthy economy. (And the rents I'm seeing aren't in line w/median income either -- still too high)
The snake is eatting it's own tail.
banks - housing - jobs - credit - banks - housing and on and on it goes.
All as the gov tries to shove another rat into the already half dead snake.
Some areas have dropped MUCH MORE than the averages. Looking at the latest RRE prices here yesterday, I was shocked to see 1400-2000 sq ft manufactured homes on 2.5 acres listed at $50-60K. At the highest, they were getting $175k+. The differences might be due to older retired or dead (estate settlement) sellers ?
D - Jane
Haha guess that's what they call a negative feedback loop.
California coast, baybee... warm air, cold water, too much money around, limited real estate.
More specifically: 3 to 6 college students, a surfing software designer and wife who bring in $100K+ family income from SiliValley but wants to surf before heading off to work, and, often 1-3 unattached middle-aged adults who never settled down and find themselves sharing a house because they can't even afford 1 br apts on their own.
It's a desirable area, and a lot of people are willing to pay the price to life here for a while. But they settle and riase families elsewhere. Except for those perpetual bachelors/spinsters who hang on here until old age sharing houses or living in garages.
But you're not a dino -- well, at least this isn't the issue that proves it.
But you're living in an environment where there is a lot less demand and a lot more supply.
Outsider,
I think it depends on the area and how mobile/flexible you can be. My rent for a small 1 br in downtown Sac was 475 in 2000. My portion of the rent for a huge suite with gorgeous views is 460. The place 2 doors down is now for rent and after weeks on CL, the listed rents is even less then we pay now and the place is just as nice with a better backyard. This is after I made a deal to get the rent reduced 350 less on this place
If you are renting and waiting for your LL to make a deal, lots of luck. But if you are willing to vote with your feet economically, life is very good.
I think it's safe to say that the gross rents calcs speculators are depending on are going to bite them in the @ss.
Outsider
Employment will have a large effect on housing and all other assets.
Unemployment is obvious, wages being cut, hours being cut also have a large effect. MSM has not really focused much on the hours worked = how many full time jobs in wage terms have occured as losses. The same holds true for wages cut or lower wage jobs taken by the prior unemployed.
We are moving lower and lower on the income per household scale. Many people are using up all credit card funds to maintain a house they can not afford, or keep the kids in the style they are acustomed to. The availabilty of those funds are now pretty much gone.
An artical I read really defined the prediciment of many households. Should they file BK or let the house go into forclosure? Which was a lesser hit to future credit, home buying ability? What a place to find yourself as the dreams unravel.
"There, fixed it for you >; ) "
Hee Hee. Hey Jane, when UC chooses one of the wage reduction plans that includes furlough days, do you think you'll actually get to take any of them off?
My dept. is applying for "protection" for further layoffs, for reasons I won't get into here. I don't work the long hours right now, but if management can take credit for "saving your jobs," you can bet they'll strongly imply we should give them a pound of any spare flesh we have hanging around, "for the team."
Last evening we went to a party in an area where 1 mil homes are the LOW end.
Within 1/4 mile of turning off the main street into the housing area we saw 4 for sale signs.
This income bracket does not sell unless they NEED to in this market. Either they are trying to short sale or the signs simply did not say REO due to the high income area.
The damage is moving up the ladder big time now. I am guessing 6 mos at the most before it gets really ugly. The low, low end seems to have stablized at about 25% of bubble value. It will be interesting to see where the high end settles.
Metro Phoenix area.
Tim,
positive feedback loop >: )
Bob, I'm lucky in that I'm only getting a 4% reduction. The other shoe is the layoffs they aren't mentioning yet.
Ok off to lodi to pick up a case of some tasty tempranillo... nom nom nom.
"The damage is moving up the ladder big time now. I am guessing 6 mos at the most before it gets really ugly. The low, low end seems to have stablized at about 25% of bubble value. It will be interesting to see where the high end settles.
Metro Phoenix area. "
josap, do you think that a collapse at the high end will drive down lower-end prices even more out your way, by reducing demand for the cheapest houses (because the more expensive ones are now affordable)? This is something I've speculated about out here in California, but haven't seen yet.
Ok off to lodi to pick up a case of some tasty tempranillo... nom nom nom.
Ah, my favorite for everyday. Inexpensive, yet has everything that's good about red wine.
The only drawback is it makes me write naughtygrams to the hot girls I know.
Enjoy Jim Grant (audio).
Page Not Found
Bob
No, I don't think the changes in high end will effect the low end much at all. The low end is being bought by investors. People with regular jobs can't get credit for homes. And the low end is being rented to very low wage workers at rock bottom rents.
The middle has dropped 50% from bubble peak, but rents would still be too low to cover the expenses. So few investor buyers. And everyone thinks the middle prices will continue downward for at least another year. We have alot of forclosed properties in this price range and the banks aren't taking lowball offers yet. In fact I see plenty of vacant houses with no signs of rent or sale.
High end being 1 mil + has dropped about 25%. But it still takes real money to buy the high end. These are not and never will be investment properties.
Historicly in Phoenix, investors set the bottom and things balance out from there. This is the third time I have seen the "over build to bust" cycle here.
Many people are using up all credit card funds to maintain a house they can not afford, or keep the kids in the style they are acustomed to. The availabilty of those funds are now pretty much gone.
I have not seen statistics on this, but I would think it's true.
Which is why I'm wondering whether the new 125% or higher LTV refi's are going to allow cash-outs. That would stave off the end for many in this position.
OT, I managed to make a good call this year. I put off my garden to focus on my new guineas and chicks. It has been incredibly rainy and cool up here in the NE, and I can only imagine gardeners are now on their upteenth replantings.
Thanks, josap. We didn't have the extreme overbuilding around here; a desirable area, but short on land and water. The "extreme low end" for 10 miles in any direction $350K, 900 square feet, and you bring your own contractor. Even now. So in Phoenix metro terms, we're a high/medium-end area.
There is a town about 15 miles away where you score something for half that, but it's low income, high crime. Most people here wouldn't buy there -- though a lot of low-wage workers around here commute from there -- and most people there could never afford to buy here, even if prices dropped 50 percent.
Hmmph. Maybe there could be a hermetic seal between ultra-low and middle, if they're separate markets and not mixed. Food for thought.
BTW, you all might get a kick out of this:
Judge: Mortgage Giant Harassed Woman - New Hampshire News Story - WMUR Manchester
"Judge: Mortgage Giant Harrassed Woman"
An Amherst woman has won a $40,000 judgment against a mortgage giant after a judge ruled the firm harassed her by making at least 200 collection calls to her home in a year.
She represented HERSELF.
I think credit has been used up due to long term unemployment, cut backs from credit card firms, use of cards for replacements of dishwashier etc when they have no savings and people just giving up and having one last shopping spree.
And when middle income people start asking the question on blogs, they have accepted reality and are trying to decide what is in their own best interest in the long term. These people know they are going under, they know their friends, co-workers and neighbors are going under.
When the water cooler conversation is "Do I walk or file BK?" there is a major shift in socially acceptable survival tactics.
timmyone,
You mistaken - the Brits drew those borders with the concept of regional conflicts firmly in mind - keeping the locals squabbling makes the whole imperial game a bit simpler, don't you know...
(Google irredentism)
When the water cooler conversation is "Do I walk or file BK?" there is a major shift in socially acceptable survival tactics.
Yup. And I think one big impetus towards bk/walking becoming more acceptable was when taxpayer dollars were re-routed to banking reserves. At that point, I think people started feeling the banks owed them more than they owed the banks.
Obama's Pick for State Department Post Failed to File Her 2005 & 2006 Tax Returns; She Blames Her Cardiologist Husband and the Post Office
TaxProf Blog: Obama's Pick for State Department Post Failed to File Her 2005 & 2006 Tax Returns; She Blames Her Cardiologist Husband and the Post Office
Goldman to make record bonus payout
Goldman Sachs to make record bonus payout |
Business |
The Observer
The live off credit cards thing is pretty much over for the S. Florida set.
Miami has the highest cc debt in the nation, I read.
"The live off credit cards thing is pretty much over for the S. Florida set."
Where do they go from there, Liz? BK?
I dunno. I have one who has to get out of her house by July 31. She could go live with
her son, wife, 7 cats, etc, but doesn't want to.
She does have a very big deal pending which could save her ass.
People are gonna end up with relatives. . .or on the street.
Charitable orgs are gonna get a much better class of client.
I think there are a lot of people who have no money and no credit left. Some of
them have jobs paying less, some of them have barely functional small businesses, some have to learn to live without mew, and some
of them are unemployed and they all have to learn to live off less money.
One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that
they tend to live the same way until they have absolutely no money at all.
I think it will be very glaringly obvious in the next few months.
"Who in their right mind would pay a whopping "$2300-$2500/ month"......... for rent? Am I a dinosaur? Nevermind, sorry, I already know the answer to that. "
When we sold our house around 5 years ago to wait out the bust we knew we would be renting for a long time. Going from a house back to an apartment would be impossible without either selling a lot of our furnishings or renting a storage unit. So we are stuck with renting a home. House rents in a decent neighbourhood around here were $1800/mos when we moved in and around $2300/mos as of 6 months ago. They have dropped recently and we are planning to ask for a 10% reduction when our lease comes up for renewal.
When people try to work a short sale with the bank and the bank won't take an offer $2,000.00 under asking - people let the forclousure happen. And are angry.
When the bank tells a short seller "We will work with you and not forclose." Then forclouse people are angry.
When the banks get bailed out, get bonuses, get screaming deals from the gove and each other, people are angry.
When economic help is all for the banks and none for the people, they are angry.
When the bank tells you to stop paying your mortgage to be concidered for a modification, then won't do the mod and forclouses on you. People are angry.
So, yes. In many peoples minds they have been screwed by the banks and don't care if they screw them back. Usually by running their cards to the max and then filing BK.
And, per the normal human condition, it couldn't be their own fault!
I agree Liz.
People save face - until they fall on it.
"One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that they tend to live the same way until they have absolutely no money at all."
That's kind of scary. Wonder how widespread that mindset is?
Because on the other side, you have people who still have good jobs and money coming in who are cutting back, because it's simply the prudent thing to do in uncertain times. This behavior makes some of the schlockier economists angry -- how dare you be cautious and cut spending?
I don't know -- small business types and others are more like compulsive gamblers -- won't take themselves out of the game until the last chip is gone?
The price compression in PHX is taking place above conforming, but below $1mm, especially with appraisals now 15% below comps.
In AZ you only need to squat for 2 years to take the property over; I've got my eye on one that's close to my house that's been vacant forever.
The differance in mind set between selfemployed and an employee is:
Self employed - I am in control and can fix the issues. I have taken a risk and made it pay. I can somehow improve my business, profit, income, bottom line.
Employee - I have no control over staying employed and must save to survive what may be imposed on me. I may have to take a lower wage job if something happens to the one I have. I like safety, not risk.
For lawyerliz and anyone else in FLA:
There is an absolutely hilarious collection of news stories about FLA RE over at the HBB today.
OT but--
LL, you asked what was happening in Iran, here's an article that has a different perspective on the candidates, their positions and the possible end result of the tumult t r u t h o u t | Some Observations on the Iranian Presidential Election and Its Aftermath
After watching the clip RATM posted a link to, I wondered what was happening in the rural parts of Iran. This article more or less answered that question and asks why --it must be a rhetorical question--the US media as usual wholly fails to view what's happening from a class or economic perspective, as in, which candidate would further US oil interests?
This isn't to say I agree with everything the current regime does, I don't, but then, I don't feel the Bush administration gave me much, if anything to approve of either, unless it was the continued efforts of some brave individuals & organizations to push back against his administration's corruption, destructiveness, sadism & unquestioning belief in the right of an economic elite to run the US.
One thing I have noticed with small buz failures, and others who lived high,and now
have very little money, is that
they tend to live the same way until they have absolutely no money at all.
I think it will be very glaringly obvious in the next few months.
I think that's true. I guess at some point, they know there's no way out even if they do cut back. How much of their income is actually disposable? They have adjusted their payments to match their income. They probably cannot cut back much on their daily living expenses as it is. Therefore - just go with it till it crumbles around you.
Whether it will become obvious in the next few months is the question. These things seem to take a really long time to actually run out of all options. Just like the state of California. They've been crying doom for months now, and so far, I don't hear much about their demise. Not that we want Calif. to go off the cliff. But just to show it takes a while for a forward moving ship to switch to reverse.
Good thing it doesn't just jolt.
When elected government officials secretly collude with bankers to create a non-governmental
Federal Reserve Bank that controls the currency of the country and systematically generates
inflation to allow government to spend at an ever increasing rate.
Taxing citizens to create bureaucratic government agencies and programs that fail to
accomplish their mission while continuing to grow in size as politicians use them to reward
the contributors to their re-election campaigns.
good website: Econ & Finance Articles Updated Daily
Obammi is an empty suit, that's for sure. He will be out in 2012. Hillary & McCain were
right regarding his lack of experience and appeal to working, hard working white people.
AOL, MCI-Worldcom, and a lot of tech fallout in the early part of the Bush years.