Anecdotal evidence suggests that rents are falling, and so are home prices, so this "cash on the housing sidelines" is not coming back to market any time soon
picosec, I tried to sell at the peak. I listed my house in late 2005 - trying to catch the top - but I got tired of people walking through. Besides, I live in California, and Prop 13 is a disincentive for long term homeowners like me to sell (and I like where I live).
I don't mind missing ... no big deal. It's just a place to live and hang out on the internet!
Basel Too, JP, Kung Fu Panda, (and any others): Did EHP mention when he would return to the CR comments section? Also, is MS/Ciao around? (Thanks in advance)
Finding pet friendly condos or houses is becoming almost impossible now days. Our HOA is pet neutral, they all must be under 25lbs, but we have around three feral cat colonies, all spaded and nurtured and we feed them daily.
I have a family friend who is in her mid fifties, went through a nasty divorce in 2006.......they tried to sell the house for over two years..could not get the 1.2million pricetag..... flash forward 3 years later, she got the house, calls today to say she is listing it for 2million.....
whoever put "nightstand cowboy" in the glossary may need to get help before an intervention happens.
v,
No idea about EHP...my impression is that he got a rather unfriendly "welcome" from certain regulars that day that he showed up again. Maybe he's ticked off...too bad; I though his contributions were very worthwhile. Just my 2 cents..
The gain in homeownership rates clearly unsustainable IMO. Will probably undershoot going forward due to investment/employment losses.
Also, I am reading a very interesting and disturbing book on modern Japan called Dogs and Demons: Tales from the Dark Side of Japan by Alex Kerr. Here's the Amazon summary:
"Japan is in effect managed by an autonomous and corrupt government bureaucracy, driven by an ethos of economic growth at any cost and a mania for control. Everywhere Japan's natural beauty is being destroyed by useless construction projects, as nature must be controlled and construction companies rewarded. The great ancient cities too representative of old, underdeveloped Japan are being replaced by monuments and hotels that are concrete monstrosities. Japan's banking system has failed, yet no one really knows the extent of the damage, as the bureaucracy keeps accurate information hidden. Meanwhile, the bureaucracy continues to pour money into older industries, while Japan falls dangerously behind in the development of new information technologies. There is popular discontent, but protest is hard to come by, because the bureaucratically controlled educational system emphasizes obedience above all else. Japan is stuck, concludes Kerr, and he sees no easy way out. While perhaps alarmist in his message, Kerr fascinates with detailed descriptions of Japan's dilemma and offers a surprising, if controversial, vision of a land in trouble."
It's a bit hyperbolic at times, but the general concepts that Kerr is talking about seem accurate to me. I think the key cultural attribute that Kerr identifies in Japan is the tendency toward extremism or fanaticism The fanatical focus on quality in certain industries or the extreme nature of entrance exams preparation undertaken by high schoolers in Japan are a couple of examples. Kerr suggests that a lot of policies/economic trends are driven by incentives created by the bureaucratic system. I think that makes sense.
JP, the homeownership rate increased because of demographics and loose lending. the demographics portion will remain, so I'm guessing the declines will only be to 65% to 66% (not all the way to the '95 bottom)
MrM, I don't think the REIT data goes to the MSA level. I think Goldman has someone that compiles that data and they were nice enough to let me use it.
BTW, Lawyer Liz is having difficulties getting on the message board - and says hi to everyone. Hopefully that will be fixed soon.
We will know, someday. The bi-annual surveyslike The Panel Study of Income Dynamics follow the same households bi-annually, and ask questions about own vs. rent, and other such housing stuff. Unfortunately, it takes a couple of years to process the responses and make them publicly available. I checked, and the 2007 data on owners transitioning to renters is out yet. But soon. A good dissertation topic for someone.
I don't know many smart people - at least money wise. People I know never stopped buying houses. Now, instead of bragging about the instant equity - it's "what a deal I got."
There's where I (and I believe Dawg) differ with you, CR. Aging boomers and a trend reversal in household size appear to auger for a decided downtrend in homeownership rates. We'll see.
Don't forget there were idiots like me who sold all their rental properties 2005-2006. Paid hellacious taxes but by 2008 I was far ahead of any potential 1031 alternatives of the time.
"Don't forget there were idiots like me who sold all their rental properties 2005-2006. Paid hellacious taxes but by 2008 I was far ahead of any potential 1031 alternatives of the time."
~~~
Me too ... I didn't fall for the limited partnerships in CRE that are now blowing up ...
and I didn't invest in the stock market ... but the muni market hasn't been kind ...
I'm with nova. I think the number of people who were willing to sell a home that had big equity and then go rent is very small. You need to be a hardcore investor to have that sort of conviction. Sort of like me holding my SRS these past few months.
Most people borrowed against their "equity gains". Few cashed out.
I think we could ask how many went all cash in 2007 in their 401Ks to find a good estimate of how many sold to rent. I know a lot of people. The only ones I know who got out in the summer of 2007 are me and my parents (because I made them). Everyone else lost around 40%.
Tim waiting for 2012, I think prop 13 needs to be modified. It did two things: 1) limit property taxes to 1% of the value (with some exceptions) and 2) only allow the value to increase a max of 2% per year. Putting a limit on the percent is probably a good idea (some communities were up to 4%!). But putting a limit on the increases never made sense to me - except maybe for retired people over 65.
TJ and The Bear, the boomers won't be downsizing en masse for a few more years (maybe 10 or more). And downsizing - as long as they still own - doesn't change the homeownership rate. We will see ...
As to the question of who sold out, I'd guess the answer is between zero and insignificant.
I was a housing bear in early 2006 but didn't think prices would fall enough to cover the transaction costs, I just expected them to level out and decay in real terms.
Not that I understood this dynamic at the time, but the Fed did have a lot of bullets to support housing by dropping mortgage rates from 7% in 2006 to 4.5% earlier this year. That gun is empty now.
Like I like saying, it wasn't until the Casey Serin story came out did I understand that prices were completely and totally unsupportable.
Gen Y is said to equal the Baby Boomers but Gen Y is in a very different place then their parents 30-40 years ago.
Gen Y has higher taxes, more student debt, less savings lower to flat wages compared to their parents.
I don't see Gen Y helping housing much.
It depends. (1) Not all boomers found it easy to buy back then ... my friends sure didn't... it is MUCH easier now for a young person to buy than it was for us... (2) not all Gen Yers are going to try to buy in over priced bubbleville... some will buy in boondocks [or what those in bubbleville call the boondocks].
I don't think it really is that different.
What IS different is the type of houses available... minimcmansions don't make very good 'starter' stock... at least not until they are worn down & worn out... sort of like the old trashed victorians & art decos we were buying back in the late 70s & 80s... money pits IF you tried to fix them up... most of us didn't because we couldn't afford to... just lived in them as is.
I see that repeating except the minimcmansions won't hold up as well to the abuse I fear.
I think many "owners" just took out loans against their phantom equity.
Few saw the end game of the credit bubble and decided to "cash out".
Many more rode the MEW trainwreck.
I was talking to a 27 year old i was working with on a project. they mentioned they had $100K in student loans. I asked them where they went to grad school. figuring they had an Ivy MBA or law degree. They said they didn't. Just undergrad at a small liberal arts college I'd never heard of.
this generation of americans is in for a wake up call. I'm only 10 years older than this kid, I've got an ivy league education that I borrowed $20K to get which i paid off years ago, my wife and i have a nice retirement fund, rental income and no debt. To this kid i must look like something from star trek. Or the fifties. It has been a mean ten years.
I'm with nova. I think the number of people who were willing to sell a home that had big equity and then go rent is very small. You need to be a hardcore investor to have that sort of conviction. Sort of like me holding my SRS these past few months.
Most people borrowed against their "equity gains". Few cashed out.
There is a natural churn in home ownership - people move to new places, downsize, etc.
Historically, a home owner would sell one home and buy another one.
This dynamic could have shifted: A number of people sold their homes - not because of convictions but because of other reasons. However, they did not buy new homes because of convictions.
Bought in 2004.
Sold in 2006,
Bought again in 2006, but at 1/7 the price, 1/5 the size, and 1/10 the safety.
Last two years, been boarding in 130 sq ft room.
There's something to not having to worry about taxes, insurance, maintenance, lawn care, weekly cleaning, etc.
Just undergrad at a small liberal arts college I'd never heard of.
Most small liberal arts colleges start at $35K just in tuition... Simply ridiculous. Better off going to State MegaU
Bought a condo in 2000, in Sac to live in. Sold in August 2005 at triple the purchase price, to move for a job, where I now rented an apartment.
I was closely watching the housing events unfold at that time and got very lucky with the timing of my move.
Had I not taken the job, I would have sold by the next spring anyway, as it was looking dicey.
Most people that sell for a move end up going into a similar housing unit don't they? SFH --> SFH, Condo --> Apt
Downsizing the primary residence, no, but what about secondary / vacation properties? Retiring boomers were probably the largest holders of those and will be shedding them steadily as the demographic ages.
Furthermore, given the statistics showing fewer boomers retiring (indicating weaker financials) there's a very real possibility of further household consolidation to save on expenses.
I think we could ask how many went all cash in 2007 in their 401Ks to find a good estimate of how many sold to rent. I know a lot of people
The potential cost of getting out of the market was small. The potential cost of getting out of the housing market in 2006 was immense -- who knew if another 1970s tidal wave of wage-price inflation was coming again? In 1976 prices seemed quite high compared to 1972, but inflation kept on coming and 1979 was worse, until the 20% mortgage rates totally nuked the economy and housing market in particular.
MrM
That describes my situation exactly. We wanted to move anyways (kids starting school, wanted great district). So we sold our house at the end of 05 and have been renting in our current community ever since. The key driver in our rent vs own decision was our conviction that prices would fall (and by late 05 there was quite a bit of evidence that would happen). Best financial decision we ever made.
I, too, am amazed at the amount of student debt racked up on worthless degrees.
If they are truly 'worthless' then 'yes'... by that they make the same amount as a min wager w/out a degree... and if you wander around flyover and walk factory floors like I do you see a lot of those. More than a few would borrow $100K in a heartbeat to get off that factory floor.
The worst of all worlds - the antipangloss - is to have the degree and still be stuck in near min wage job on some hot as hell factory floor. I doubt many are but maybe I'm wrong.
I don't think many here see how bad the bottom of the barrel really is... its down there brother.
I don't think many here see how bad the bottom of the barrel really is... its down there brother.
I don't think that many who read/post here realize how much of America is mobile home/shit job, half of everyone you know has a drug/drinking/god problem.
We sold in 2005 and have rented since then. But we sold for non-financial reasons (undecided about where to retire to) and have waffled on that question ever since. It has been financially advantageous to rent, but owning has its appeal. If we could make up our minds about where to live, I think we'd rather own than rent, but I would find it difficult to pay the current premium to own. My own guess is that we'll buy something in about two years. If that makes us 'money on the sidelines' so be it. But it is a decidedly non-economic story. When we buy, I'm guessing that the part of the market we'll buy in will have declined by about half, peak to through, but there's no science in that guess--just that what happened at the low end seems to be spreading to the mid to upper end. It will be what it will be.
I think it is unfair to characterize all Gen Y's as lazy bums mooching off their parents.
Look at the obstacles in front of someone in their twenty's. He's looking at a flat to down market for the next decade, high energy/food costs, high UE, rising taxes. I don't know if I can ever save enough to live half as well as my parents have.
Wow...ask ye shall receive! And all I did was step away to make supper!
@HollywoodHack - thanks for the link in the last thread.
@TJ - same here in Charlottesville, VA - we are reasonably insulated as these things go...stunningly. There is a lot of shadow inventory here, and it has started to go on the rental market over the past two years, so yeah, anecdotally the same here.
Most small liberal arts colleges start at $35K just in tuition... Simply ridiculous. Better off going to State MegaU
Yup - unless private college throws money at you. My daughter went to RPI & got an engineering degree there, they threw so much money at her it was equivalent to mega state uni. She came out w/ some debt but manageable [>$20K after four years including travel]. She is now going back to grad school [doctoral level physical therapy] at local state uni... half the cost of any of the private programs she looked at.
My son is going to state uni and it should cost him LESS than $15K per year total room & board included. It ain't no Ivy but the kids aren't all dummies...
People need to shop, know what they want & learn to say 'no' if the price isn't right.
June 29 (Bloomberg) -- Japan’s industrial output rose at a pace that matched the steepest increase in 56 years as companies rebuilt inventories and the economy started to climb out of its deepest postwar recession.
Production climbed 5.9 percent in May from a month earlier, the Trade Ministry said today in Tokyo, the same rate as the previous month, which was the biggest gain since 1953. Economists surveyed by Bloomberg predicted a 6.9 percent rise. Factories were still producing 29.5 percent less than last year.
most students today are opting for the 30-year amortization plan. the 10 year is nearly impossible to repay, especially if you factor in grad school. The problem is that the Federal Government has made it possible to borrow the ENTIRE cost of education (tuition, room, board, fees, etc), so long as the school will certify the budget. Of course, as long as the credit's flowing like wine, there's no incentive for colleges to reduce costs. It's not uncommon for some students to borrow $60K/year without even applying for non-debt financial aid.
I don't know if I can ever save enough to live half as well as my parents have.
Well, I do.
Four out of the five us never got close to my father's standard of living.
I'd say on average we probably earned about 1/2 as much, overall.
My brother still might match it but not if he's unemployed for the next five years.
Well, there must be really good money as a taxi driver because I have met a lot of degreed hacks.
As for generation Y, one of the best people I work with is one, and you will not find a more focused and competent person. All of his classmates on the other hand should be in jail.
You benefited from a lull in College applications in the early late 80's - 90's. As the Gen Y tidal wave came over colleges as well as the 2000's recessionary decade degree's became a hot commodity. As Gen Y winds down and the economy goes back to a lower baseline costs will drop.
My daughter went to RPI & got an engineering degree there
My daughter got the RPI medal last year. We visited and I really liked the programs, but the neighborhood stunk. Plus she didn't get in the accelerated PH.D/MD program (small wonder). Ended up she's going to state u for almost free. Lucky duck.
Anyway --
About rents, I wish the rents in our area were coming down, but they aren't. I don't know how someone squeaking by on a low wage can manage. It's ridiculous.
We sold in 2006 for school district reasons at 50% more than we paid in 2002, then bought in 2007 after prices started dropping. I wouldn't change that for the world. But w/3 kids, a dog, and easter egg dye on the beige carpet, we just couldn't survive in a rental, which we had to take for 10 months between houses.
The property slump is hitting home for Sheila Bair, chairman of the Federal Deposit Insurance Corp. -- one of the few regulators who saw trouble in the housing market before the bust.
Last week, Ms. Bair removed her 14-room colonial in Amherst, Mass., from the market after cutting its sale price by $100,000 from an initial $795,000 in April, according to the listing sheet. It's across the street from Emily Dickinson's house in the college town.
Ms. Bair, and her husband, Scott P. Cooper, paid $355,000 for the house in 2002. In "02 and "03 they received building permits valued at $89,500 to renovate the 1860s house., including new roofing and a counter-current basement pool. In 2006, President George W. Bush appointed Ms. Bair, then a professor at the University of Massachusetts at Amherst's school of management, to the FDIC post, and she was one of the few officials to remain in their positions in the Obama administration.
The U.S. economy won't regain its strength until the price of houses stops falling. And that day hasn't yet arrived.
"The crisis cannot end fully until home prices in the U.S. are at least stabilizing," says Alan Greenspan, who continues to dissect housing data with as much interest as he did when he was Federal Reserve chairman.
I sold at the peak, but immediately bought another house. At least I can take heart in
1: I wasn't in a bubble market.
2: mrs.shnaps won't be second-guessing my real estate prognostications from here on out. At least I keep telling myself that.
June 29 (Bloomberg) -- U.K. financial services companies may cut 13,000 jobs in the third quarter even as they expressed rising optimism for the first time in two years, Britain’s biggest business lobby group said.
“Conditions still remain rough but there are signs of some improvement expected in the coming months,” according to Ian McCafferty, the Confederation of British Industry’s chief economic adviser at a press conference in London. Profits, employment and investment remain “on a downward trend,” he said.
My daughter got the RPI medal last year. We visited and I really liked the programs, but the neighborhood stunk. Plus she didn't get in the accelerated PH.D/MD program (small wonder). Ended up she's going to state u for almost free. Lucky duck.
My daughter LOVED the neighborhood... it was a slum and EXACTLY the opposite of her safe little midwestern hometown... heck she was even accepted by Cal Poly out Dawg's way and chose frozen rough-n-tumble Troy NY over San Luis Obispo or our local state uni [U Minnesota]. But RPI threw a lot of money at her - equivalent to the Medalist Award plus some. She was also an athlete... they are DIII and can't offer athletic scholarships but come as close as the NCAA allows.
June 29 (Bloomberg) -- Wall Street’s largest bond-trading firms say the worst may be over for investors in Treasuries after government securities posted their biggest first-half losses in at least three decades.
The 16 primary dealers, which trade directly with the Federal Reserve and are obligated to bid at Treasury auctions, forecast the benchmark 10-year note yield will finish the year little changed at 3.58 percent, after rising from 2.21 percent at the end of 2008, according to a survey by Bloomberg News.
Hopefully EHP will be back. It's summer, maybe he's traveling.
Wasn't there a thread the other day about credit card companies accepting 50% of the owed balance? Or was I reading that on CNNMoney or similar? Don't remember, but I guess it's happening more frequently now.
Only thing is today i read that taxes may be owed on the discharged debt. That would hurt.
"The crisis cannot end fully until home prices in the U.S. are at least stabilizing," says Alan Greenspan, who continues to dissect housing data with as much COMPETENCE as he did when he was Federal Reserve chairman.
EHP mentioned that, during his first hiatus, he was going to visit NYC. My guess is that the trip was work-related and fruitful, which would explain his current absence.
Only thing is today i read that taxes may be owed on the discharged debt. That would hurt.
Unless it's on the primary mortgage, debt forgiveness is always taxed. Incidentally, this taxability is why I don't mind depreciation in a company's issued debt being counted as income.
When we visited RPI for the medalist open house, they announced that their fundraising alumni (I think) fund drive was able to end early due to getting so much $$ from alumni (or is it alumnae? can never remember) Anyway, they said that meant good things for financial aid. However, I don't know if you saw this, but their applications were WAY WAY up this year -- I believe 100% up over just a few years ago. My daughter, a medalist, didn't even GET IN. I don't know if she was skipped over after not gaining acceptance to the accelerated program or whether she was flat out truly not admitted, but I thought that acceptance was a no-brainer. She's not engineering tho, she's medical, and with the male predominance, she was not leaning that way.
I think I stand a chance of being better off than my parents as long as I can keep up my 45% savings ratio, and it helped that we were dirt poor.
The real question is inflation, and if there will be an asset class that I see in time to keep up with it.
I'm don't think I will be able to match the living standards of my grandparents though.
Lucifer (profile) wrote on Sun, 6/28/2009 - 8:59 pm reply
Somewhat relevant?
FDIC's Bair Cancels Listing After Cutting Home Price
Go easy on Sheila. She is the only thing between banksters and the Fed. "Between" as in "preventing the complete joining together."
By the way, Sheila went to U Kansas, so that might earn some respect on this board
I'm a huge fan of Bair's. Most people who ridicule her don't understand that FDIC is not the primary regulator for banks, and it's a huge political pissing match when the FDIC has to use its secondary authority to get a bank shut down.
Anyways, both Geithner and Summers wanted her removed, which means that she's doing her job.
You benefited from a lull in College applications in the early late 80's - 90's.
Yeah, my mom was born in '43 and had me in '67, kinda early for a college-bound kid with a baby-boom parent, since the baby boom population in 1967 was under 21 still so the baby boom echo was still 5-10 years out.
Unless it's on the primary mortgage, debt forgiveness is always taxed.
I don't think I'd jump up and down about a 50% credit card balance discharge if I were taxed on it as income. I wonder what the actual savings would be.
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone? Are you taxed on the "discharge" then, or is it not an official discharge?
We bought in 2000 and sold in 2003. Made 50% of the purchase price. (metroWest Boston)
Rented for a year. Bought in 2004 and sold in late 2007. Made 28% of the purchase price. (western MA)
Rented for a year and bought this past September. (metroWest Boston again) The house price was about 35% off peak 2005/6 (estate sale) in a town that is fine long-term. Half acre, walking distance to trains, library, town common, grocery stores, bus stops--you name it. But a suburb feel on our little street. Major college in the back yard.
I do wish we'd waited another year, though--the house next door went on the market 7 weeks ago and just sold for $22K less than we paid, though it's 20 years older and has half the land.
We did fine, though--we have a 4.5% fixed, 30 year mortgage and no consumer debt as of August.
We moved 50% to cash in April 2008 in the 401K, and the rest in September 2008. We're down about 9% altogether.
We WOULD have sold the house in early 2007 and moved to cash then, too, if my husband had been on board. It took some time to persuade him that what I was reading was real, and once he read The Black Swan he was on board.
Yeah, my mom was born in '43 and had me in '67, kinda early for a college-bound kid with a baby-boom parent, since the baby boom population in 1967 was under 21 still so the baby boom echo was still 5-10 years out.
Had to read that twice but I got it. Must be exhaustion and the beer kicking in.
It just refused to let me in. The green bars at the bottom went all the way
across, but the thread never came up, and when I tried to close the
thread, the computer told me the program wasn't responding.
Yeah, count me in on missing EHP...I didn't realize he'd been run off or bailed...
I have four properties - one is just land, another is a rental, another has my ex and one is nominally my home. The last I bought in 2006, and it was in pretty horrible shape, but is adjacent to the land I already had, so it was worth doing, and I pressed the seller down pretty hard, largely based on what I'd learned here.
On my "home" - the seller tried to market it a bit (about 8 months), and in late '06 decided I was right - which means I've only lost about $10k. The idea was to have a place to start a family with the 2nd Mrs. Comrade (now also ex-!). Fortunately a much shorter marriage, and less costly. I was renting before that, and would have continued to, except for that decision to marry. I would be in much better financial shape today (though I'm OK), if I'd done that.
Right now I'm sitting in my rental, doing renovations - students are hard on a property. The one still occupied by the 1st Mrs. Comrade (next door neighbor!) will cease to be mine when I finish paying it off (nice deal huh?)...but fortunately, it's a 15 year fixed, and I'm most of the way through that...we never cashed out; both of these were acquired before 2000, during the low ebb in the mid-90s. The rental I'm sitting in is paid for, so that helps, but carrying costs are a bitch, and the market here is softening a bit.
Yes, I am a relationship disaster, but I hold out hope.
She's not engineering tho, she's medical, and with the male predominance, she was not leaning that way.
My daughter is the opposite... as an athlete w/ two brothers [most of the neighborhood was boys too]... she finds it easier to compete with guys than 'cooperate' with the 'cliquishness' of many girl circles. Now she will see the other side... her DPT program is about 70-80% female. Her husband thinks its funny - he's seen her in action. Hope she can handle it.
Also - she was planning on a medical grad degree herself so went biomedical engineering... one of the best degrees to have when applying to medical school [according to my boss who was the head of admissions for the U Minnesota Medical School circa 1980s... situation hasn't changed].
@dryfly - I have a female employee very much like your daughter...and if she weren't my employee, I'd sure like to lobby her to become the 3rd Mrs. Comrade. Come to think of it, the first two really didn't like women either...definitely preferred men, not just romantically.
Her husband thinks its funny -- Not to mention relieving?
Yup, my daughter's going biomed. One thing she said about the biomed is that there are so many options with it, which is probably what your daughter is finding too, switching over to PT (which I still think is a really smart move).
2 of the richest people I know didn't make it past 8th grade....they both get up at 5AM every morning thinking about how to make money no matter what they drink the night before
I misspoke earlier regarding the treatment of debt cancellation as income. Been awhile since I took tax law...
Here are the exceptions to debt cancellation as income.
1. The cancellation of a student loan for a student required to work for certain employers. See Canceled Debts in Publication 525.
2. The cancellation of debt that would have been deductible if paid. See Deductible Debt under Canceled Debts in chapter 5 of Publication 334.
3. The reduction of a debt by the seller of property if the debt arose from the purchase of the property.
Here are the exclusions to debt cancellation as income:
* The cancellation takes place in a bankruptcy case under the U.S. Bankruptcy Code. See Bankruptcy case exclusion, later.
* The cancellation takes place when the debtor is insolvent (see Insolvency exclusion, later), and the amount excluded is not more than the amount by which the debtor is insolvent.
* The canceled debt is qualified farm debt (debt incurred in operating a farm). See Cancellation of Debt in chapter 3 of Publication 225.
* The canceled debt is qualified real property business indebtedness (certain debt connected with business real property). See Publication 525.
* The canceled debt is qualified principal residence indebtedness (applies to debt canceled between January 1, 2007, and December 31, 2009). See IRC section 108(a)(1)(E).
Thank you, Basel. I imagine the insolvency would be pretty easy these days, but definitely to take into consideration before you go for a cc reduction. Still at that point you'd think you'd do a full fledged bankruptcy to wipe out 100% of the bills, if you're that insolvent.
It does not. However I do not want to pay alimony, child support or listen to BS about how she is willing to date down. I would rather get a very good looking and well reviewed escort -better attitude, you get what you pay for and no strings.
I think he just likes venting against women, has issues, and believes that there are women you talk to, and the rest. You can't teach an old dog new tricks, the key is to find one you like to talk to, get along with that is not a total psycho.
Around here that is hard to do, mostly because all the men have made them insane.
O/T, just for a change ... we have arc-light and a fair bit of explosive noise outside from the NE. Sounds like Rockville's being liberated or the fire station is having a Honduran business meeting.
I maybe the only unschooled person on this board other than the Mom with the GED who posted the otherday.
My roommate in college had a MS in Physics [quantum mechanics] and a PhD in Mechanical Engineering and said to me upon completion of his doctoral orals... "I am glad I'm done with schooling and can get back to learning." No joke. Then we got drunk.
Only costs $2K for a BK? I didn't realize it had gone that high.
Wasn't it just around $300 a few short years ago? I thought I had read it was cheap before the new regs, and then went up to $1K after the new BK regs, but at $2K, you better make sure you don't do that too often. Must be a lucrative business for the attys?
After nine harrowing months on the brink, it appears the U.S. economy can be taken off life support and moved out of intensive care. All concerned can breathe a deep sigh of relief. Disaster has been averted.
Which might explain the recent improvement in consumer confidence despite still-rising unemployment and yet another seemingly inexplicable spike in gasoline prices. In this case, just surviving is sufficient cause for celebration.
my wife and i recently drove from washington state to new york and then down to virginia and and back...seeing family along the way
6,845 miles
the most stunning change since last trip i saw along the way was...thousands of wind turbines along the columbia river gorge...western wyoming near fort bridger and then in iowa along I-80 near walnut grove and avoca
obviously i post less but still readin CR every day
TROY — Some may wonder about all the excitement surrounding Dinosaur Bar-B-Que and question why the city cares so much about attracting a biker bar. The simple answer to those questions is this: it’s a restaurant that knows how to draw crowds.
The Syracuse-based restaurant chain is well known for being consistently busy and has been recognized for offering some of the best barbecue dishes around. With that kind of popularity, city officials are hoping that it can breathe new life into the abandoned waterfront location of the former Fresno’s Restaurant, located at 377 River St.
It also may be of interest for residents to learn that Soros Strategic Partners, a group run by billionaire George Soros, a far left-wing Democrat, owns a 70 percent controlling interest in the Dinosaur Bar-B-Que chain, according to the restaurant’s application to Troy’s IDA.
TROY — Some may wonder about all the excitement surrounding Dinosaur Bar-B-Que and question why the city cares so much about attracting a biker bar. The simple answer to those questions is this: it’s a restaurant that knows how to draw crowds.
The Syracuse-based restaurant chain is well known for being consistently busy and has been recognized for offering some of the best barbecue dishes around. With that kind of popularity, city officials are hoping that it can breathe new life into the abandoned waterfront location of the former Fresno’s Restaurant, located at 377 River St.
It also may be of interest for residents to learn that Soros Strategic Partners, a group run by billionaire George Soros, a far left-wing Democrat, owns a 70 percent controlling interest in the Dinosaur Bar-B-Que chain, according to the restaurant’s application to Troy’s IDA.
Does that no taxes thing include 2nd mtges? I've heard yes and no.
That's because the answer depends on whether the second mortgage would be considered acquisition indebtedness. For example, if the second mortgage was used to build another bathroom, the debt discharged would not be considered income. OTOH, if the second mortgage was used for the Land Rover, you're out of luck UNLESS one of the other exclusions (e.g. insolvency) applies.
It only cost 2K to do a BK?
Obviously not for Chrysler or GM, but I was talking a vanilla Chapter 7 legal fees. the filing fee is about $450, and the government will let the debtor pay in installments.
Would lose my front row seat to the end of the world.
Women actually have told you that in dating you they are
"dating down", Luci? Weird.
I begged the hub to sell in 05, and it had nothing to do with
financial wisdom at all. We had just finished 2 years with
4 hurricanes apiece, (which missed us tho one did flood a
house across the street), and I was convinced, and prolly still
am, that the insurance companies wouldn't pay. He refused.
I'm not all that sorry, since the momster is now living with us
and we would have bought something smaller. She will
have 2 rooms and a bathroom for herself.
Matt Taibbi, the Rolling Stone magazine contributing editor who in March wrote a brilliant and searing piece on the collapse of insurance giant AIG ("The Big Takeover'), now turns his attention to Goldman Sachs Group. If you've read or heard Taibbi before, you know he's not writing a profile that is likely to be excerpted in the next Goldman annual report to shareholders. Here's how his story in the latest issue of RS begins:
"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
The theme of Taibbi's takeout on Goldman is that the firm has, by design, been at the center of the biggest investment bubbles since the Depression. He includes the tech-stock bubble of the late-1990s, the housing bubble of this decade, and the oil bubble of the first half of 2008.
the most stunning change since last trip i saw along the way was...thousands of wind turbines along the columbia river gorge...western wyoming near fort bridger and then in iowa along I-80 near walnut grove and avoca
There are even more up along I 35 & I 90 in Iowa & Minnesota than along I 80... it really is stunning to see 50 or 100 turbines going up at a time. Then come back and see another batch going up.
Hmmm... I wonder if Soros has a home in Troy... ha.
thousands of wind turbines along
Drove thru Boston today down to RI and I noticed several wind turbines up too. I forget why they're controversial. And I don't believe they're terribly productive?
My daughter said they wanted to put some in the water, somewhere
around Boston, but the NIMBYs were steadfastly refusing. I think wind
turbines are pretty, tho they can beat up on birds, I understand.
Drove thru Boston today down to RI and I noticed several wind turbines up too. I forget why they're controversial. And I don't believe they're terribly productive?
They are out here... some of the windiest parts of America out here. And not as erratic either... wind is pretty consistent on the plains... just no people to use the power. Blow dry buffaloes maybe?
Basel Too (profile) wrote on Sun, 6/28/2009 - 6:51 pm
if a butterfly flapping its wings in Tibet causes hurricanes in the Atlantic, what the hell does thousands of wind turbines cause?
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
The conversation has moved on, but I wanted to add to my earlier post re selling to rent. We were correct about house prices falling in late 05, but we made two fairly major miscalculations .... we didn't expect the price decline to take as long as it has (we live in one of those SoCal neighborhoods where it is just beginning) AND we didn't expect interest rates to go so low. We thought we'd be able to earn a lot more interest income than we have. Renting probably still has turned out to be a great decision, but it would have been a much more difficult one had we known then what we know now.
Well, I posted some more additions to my CR inspired story "American Apocalypse."
sample
We weren’t the only people on the move. Nor were we the only ones in the woods. We would pass well worn paths that lead away from the main trail. Occasionally we would catch glimpses of the tarps of the Tree People. Sometimes we see them watch us, and then pace us for short distances, until we had left what they claimed as territory.
All of the financial news websites have NO mentions of July 1st and the massive tax increases/government layoffs/bankruptcy in many states associated with it. Ironically, CNNFN has this headline:
"The second quarter and first half of the year are set to end with a bang as investors brace for the latest on housing, manufacturing and the labor market."
I know that some reasonable folks on this board do hot have much respect for Zero Hedge, but I do think that Tyler's pushing and pulling is providing valuable social service. Here is the latest example Zero Hedge: FOIAing The Fed: The AIG Bankruptcy Negotiations
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
They must not fish... first thing I thought was those things will be fish magnets just like drilling platforms and shipwrecks.
Ummm, Comrade Scott, I think before you interview for a 3rd wife, you should
have your mom, or sister, or somebody, or me, vet her.
Thanks Liz - you would be the latest in a now long line of women who know me un-romantically and have insisted on this...and I scoffed the first time(s) they offered (contrary) advice, but I'm now open to it...I have a thick skull, but eventually things get through.
I shouldn't be so glib - the first marriage lasted for 14 years, and we are amicable, even as neighbors. I miss the 2nd, and in a maudlin mood spent part of Friday looking at honeymoon pictures...time has a way of erasing bad memories, leaving good ones in tact. I wish them both well, and I hope I haven't created too much misery in their lives. Not so sure about mom...she and dad had a far worse marriage than either of mine. The first wasn't so bad, we just grew apart, and the second had the potential to be crazy the way my parents' was...and I'm slow sometimes, but not altogether stupid.
edit - I'm not sure how the "s" got converted into that crazy drunk smiley wink...I'm not that soused!
I sold in July '05 for non financial reasons (I was getting divorced and decided that I didn't want to buy my ex-'s share of the house). I've been happily renting since but expect to buy at some point in the next few years. No rush though.... It was only when the property was sold and I saw the insane proposed financing that people were putting in offers that I realized just how far out of whack things had become.
I did. Had nothing to do with timing the market, though - got transferred in August 2006, and my new area (NoVA) was clearly insane from a price standpoint.
Not sure what to do now, though. It's clearly too early to buy, but after 3 yrs of renting the wife has about had it. Decisions...
Scrooge - hardly surprising, since the "states are in the crapper" story's endings are basically variations of "growth" and "tax". I suspect the former is less likely than the latter, and CBPP confirms:
"By July 1, the start of the fiscal year in all but four states, most states will have employed a combination of budget solutions that also involves drawing down reserve funds, maximizing the use of federal dollars, and raising taxes. A number of prominent economists have pointed out that budget cuts are more harmful to state economies during a recession than properly structured tax increases, so it is good policy to use tax increases to fill a substantial portion of deficits that exceed the amount that can be closed with reserves or federal funds."
"All but four states must have new budgets in place less than two weeks from now — by July 1, the start of their fiscal year. But most are already predicting shortfalls as tax collections shrink, unemployment rises and the stock market remains in turmoil."
"In all, states will face a $121 billion budget gap in the coming fiscal year, according to a recent report by the National Conference of State Legislatures, compared with $102.4 billion for this fiscal year."
"As a result, governors have recommended increasing taxes and fees by some $24 billion for the coming fiscal year, the survey found. This is on top of more than $726 million they sought in new revenues this year."
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
yeah too true, and here my wife and i thought the wind turbine looked awesome and didnt harm the scenery at all
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone?
they turn you over to a collection agency. Then your troubles begin.
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
of course, that would never happen in a Republican stronghold. Save it, RD.
mock turtle, glad to hear from you. Thought we lost you.
My wife and I sold in late 05 in the East Bay of San Francisco specifically for that reason. Moved to a nicely renovated rental flat in San Francisco and have been waiting it out for almost 4 years. Moved mostly to cash in early 2007 thanks to CR and others. We figured it wasn't and "if", but a "when". The top reminded me of the peak frenzy of the internet craze in 99, 2000. Hundreds of people storming through our place during an open house ready to pay 25% over asking price. Took 1.5 weeks to sell b/c i wanted to hold the second open house. Never looked back. Been hiding out in SF waiting on a normalized (for SF) price/rent ratio.
A number of prominent economists have pointed out that budget cuts are more harmful to state economies during a recession than properly structured tax increases
Yeah, we know how well "prominent economists" have fared this time around.
We purchased our first home in 2006. It was a foreclosure in northeastern WI. No regrets. Given the discount we took purchasing it, it would take a lot for us to get negative equity. The carrying costs pretty much negate any benefits of renting. We weren't ever looking at our house as an investment though. While there may not be a lot of people sharing our situation, I'm sure there are more than a few who could look in hindsight and claim that selling wouldn't have been the optimal choice in 2005. You do have to live somewhere afterall. I would imagine if you were in the bottom third of housing stock, there was no better deal around.
We sold our home in NW suburban Chicago for more than I ever imagined and moved to Colorado where we rented a brand new home that had never been lived in.
Within 18 months she left.
A few months after that my landlord lost the home to foreclosure.
barfly (profile) wrote on Sun, 6/28/2009 - 7:11 pm
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone?
- they turn you over to a collection agency. Then your troubles begin.
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
- of course, that would never happen in a Republican stronghold. Save it, RD.
I want and deserve an apology for this. I didn't "chose" Kennedy/Kerry, they were instrumental in preventing an offshore wind farm near their sailing grounds off their multimillion dollar island estates. "Save it, RD" is totally out of line with the facts and the way I presented them. Of course it could happen in a Republican stronghold. Be careful not to confuse what is with what could be.
Dawg, you do deserve an apology. While it could happen in a Republican stronghold, it would take some skanks to juice it up enough to notice - Long live the Duke!
I sold to rent in July 2007, purely because I foresaw what was going to happen, and wanted to use the equity to short the stock market. Too late to catch the top, but at the top there was nothing decent to rent in this area (NW suburbs of Chicago), as homes that in normal times might have been rentals were all being rehabbed with granite countertops by flippers.
Back at that time I was predicting home prices would fall 40%, and CR was opining that it wouldn't be that bad. Now the local real estate markets are even worse than I expected. For all practical purposes, except in the most upscale suburbs, there is no market for homes priced above $600k, though a very large fraction of the MLS listings are above that price. Many homes in the $600k+ range are now in their third year on the market, and many of them are vacant. As the number of people with the financial resources to keep paying the mortgage or construction loan on a $600k+ home can't be that great, and has to be getting smaller all the time in the current business climate, I expect a complete collapse in high-end pricing is not far off.
I sold my home in FL in Sept, 2004 and have rented ever since. It wasn’t really economic genius on my part though. I moved home to Madison, WI around that time when I got a job here. I thought the amount I sold for seemed too high, and I couldn’t bring myself to turn around and pay those inflated prices. It turned out to be the right choice. I probably wouldn’t have done it if I hadn’t been moving anyway.
Homewood, Alabama - closing today to sell our 2br 1ba condo for $73,000. Bought in March 2005 at $61,000. 0 down back then with a 15 year fixed at 5.35% plus 20% went on a Wells Fargo HELOC that ranged from 6-8% until paid off within 2 years. Most of the time we've been a 2 income, 1 kid household but I've gotten laid off with increasing frequency and the wife's job is at risk. Decided to list the condo when the crap hit the fan at her job. Listed for about 15% off the asking prices of the other units in the complex (none of which has sold in nearly a year in the 100+ unit complex).
No problem getting the wife on board, as we've been stockpiling and anticipating further doom for a couple of years now...
We're renting now in the most awesome little complex I've ever seen. 2 BR, same sq ft as the condo for $800 a month and moved into the best school district in the state!
A good number of the owners-to-renters are readers of this blog
The better question is, how many wish they had?
Tried to get the wife to sell ... in vain ...
Having pets doesn't help ...
But she is aware that we have lost a couple hundred thousand ...
fergit them weenie bands-
Mojo Nixon - Redneck Rampage
That first chart appears to show a small but steady increase in rental overcapacity going back a number of years before the 2004 occupancy low.
mmckinl -
But she is aware that we have lost a couple hundred thousand ...
That has to be worth a couple "I told you so's", maybe even a get out of the dog house free pass at least once if used very carefully.
Anecdotal evidence suggests that rents are falling, and so are home prices, so this "cash on the housing sidelines" is not coming back to market any time soon
picosec, I tried to sell at the peak. I listed my house in late 2005 - trying to catch the top - but I got tired of people walking through. Besides, I live in California, and Prop 13 is a disincentive for long term homeowners like me to sell (and I like where I live).
I don't mind missing ... no big deal. It's just a place to live and hang out on the internet!
best wishes
Basel Too, JP, Kung Fu Panda, (and any others): Did EHP mention when he would return to the CR comments section? Also, is MS/Ciao around? (Thanks in advance)
KK,
You don't know much about women, do you?
I have to wonder if the ownership rate is really that high ...
Many speculators lied about owner occupancy ...
Many foreclosures are being postponed ...
Two anecdotal cases, two of my friends sold in 2005 and went overseas to work, one in Japan and one jumping from one desert hotspot to another.
i'd assume that most homeowners are in SFRs, and that most renters are in condos/aparments - it makes it impossible to quantify this.
TJ and The Bear -
I did say if used very carefully. Otherwise your just digging a deeper hole.
Kauai_Kahuna
cats ... 4 of them ...
MrM, I think it is more than anecdotal data on rents. The REIT data is showing falling rents, and the BLS will follow soon.
best wishes
When I extend the line down to 1995 ownership levels, it looks like the correction (for this graph) will occur in the 2015 time frame? Ug.
Sold July 2004 - Condo (East Coast). Owned for 8 years: sold for 3X+ purchase price.
Missed the peak by about 12-18 months -- probably gave up another 30%.
Rented ever since and never looked back.
JP,
Greenspan himself called that 5% gain in homeownership "at risk".
I think it is more than anecdotal data on rents.
CR - is this data available at the MSA level? It would be quite interesting to compare rent trends to Case-Shiller HPI.
You don't know much about women, do you?
Who does?
@ v : I'm pretty irregular here myself, so I wouldn't know. MS was here a couple of days ago tho.
mmckinl -
cats ... 4 of them ...
Finding pet friendly condos or houses is becoming almost impossible now days. Our HOA is pet neutral, they all must be under 25lbs, but we have around three feral cat colonies, all spaded and nurtured and we feed them daily.
I'll do one:
I have a family friend who is in her mid fifties, went through a nasty divorce in 2006.......they tried to sell the house for over two years..could not get the 1.2million pricetag..... flash forward 3 years later, she got the house, calls today to say she is listing it for 2million.....
whoever put "nightstand cowboy" in the glossary may need to get help before an intervention happens.
v,
No idea about EHP...my impression is that he got a rather unfriendly "welcome" from certain regulars that day that he showed up again. Maybe he's ticked off...too bad; I though his contributions were very worthwhile. Just my 2 cents..
The gain in homeownership rates clearly unsustainable IMO. Will probably undershoot going forward due to investment/employment losses.
Also, I am reading a very interesting and disturbing book on modern Japan called Dogs and Demons: Tales from the Dark Side of Japan by Alex Kerr. Here's the Amazon summary:
"Japan is in effect managed by an autonomous and corrupt government bureaucracy, driven by an ethos of economic growth at any cost and a mania for control. Everywhere Japan's natural beauty is being destroyed by useless construction projects, as nature must be controlled and construction companies rewarded. The great ancient cities too representative of old, underdeveloped Japan are being replaced by monuments and hotels that are concrete monstrosities. Japan's banking system has failed, yet no one really knows the extent of the damage, as the bureaucracy keeps accurate information hidden. Meanwhile, the bureaucracy continues to pour money into older industries, while Japan falls dangerously behind in the development of new information technologies. There is popular discontent, but protest is hard to come by, because the bureaucratically controlled educational system emphasizes obedience above all else. Japan is stuck, concludes Kerr, and he sees no easy way out. While perhaps alarmist in his message, Kerr fascinates with detailed descriptions of Japan's dilemma and offers a surprising, if controversial, vision of a land in trouble."
It's a bit hyperbolic at times, but the general concepts that Kerr is talking about seem accurate to me. I think the key cultural attribute that Kerr identifies in Japan is the tendency toward extremism or fanaticism The fanatical focus on quality in certain industries or the extreme nature of entrance exams preparation undertaken by high schoolers in Japan are a couple of examples. Kerr suggests that a lot of policies/economic trends are driven by incentives created by the bureaucratic system. I think that makes sense.
Worth a read...
JP, the homeownership rate increased because of demographics and loose lending. the demographics portion will remain, so I'm guessing the declines will only be to 65% to 66% (not all the way to the '95 bottom)
MrM, I don't think the REIT data goes to the MSA level. I think Goldman has someone that compiles that data and they were nice enough to let me use it.
BTW, Lawyer Liz is having difficulties getting on the message board - and says hi to everyone. Hopefully that will be fixed soon.
best wishes
i've been pumping 'dogs and demons' for the past few years...
the idea that we can 'infrastructure' our way out of this is yet another page from that playbook
Well, I'm 'bout ready to open a six pack o' whoop ass and go on a Redneck Rampage!
We will know, someday. The bi-annual surveyslike The Panel Study of Income Dynamics follow the same households bi-annually, and ask questions about own vs. rent, and other such housing stuff. Unfortunately, it takes a couple of years to process the responses and make them publicly available. I checked, and the 2007 data on owners transitioning to renters is out yet. But soon. A good dissertation topic for someone.
Greenspan himself called that 5% gain in homeownership "at risk".
~~~~~
With the employment rate staying low 'cause' of our "new" economy
my take is that ownership rates will end up much lower going forward ...
The economy that is being formed now will have a constant U6 of over 15%
even after any recovery ... lower wages, more part timers, fewer benefits ...
My take is that U6 will hit about 30% before this is all over unless they change priorities ...
I don't know many smart people - at least money wise. People I know never stopped buying houses. Now, instead of bragging about the instant equity - it's "what a deal I got."
To answer ocrenters question (somewhat), the number of renters increased by about 1.6in the 2004 to 2006 period.
CR, could you clarify the units for the 1.6 in the above statement.
the demographics portion will remain
There's where I (and I believe Dawg) differ with you, CR. Aging boomers and a trend reversal in household size appear to auger for a decided downtrend in homeownership rates. We'll see.
p.s.: Thanks for the post!
How does the home ownership stats separate out second homes ?
Does one couple owning say a house in Cali and a house in Hawaii count twice ?
Second homes are now really hitting the skids ...
CR would you support overturning Prop 13 to help balance the state budget?
Don't forget there were idiots like me who sold all their rental properties 2005-2006. Paid hellacious taxes but by 2008 I was far ahead of any potential 1031 alternatives of the time.
On demographics
Gen Y is said to equal the Baby Boomers but Gen Y is in a very different place then their parents 30-40 years ago.
Gen Y has higher taxes, more student debt, less savings lower to flat wages compared to their parents.
I don't see Gen Y helping housing much.
CR would you support overturning Prop 13 to help balance the state budget?
Would it?
Rob Dawg
"Don't forget there were idiots like me who sold all their rental properties 2005-2006. Paid hellacious taxes but by 2008 I was far ahead of any potential 1031 alternatives of the time."
~~~
Me too ... I didn't fall for the limited partnerships in CRE that are now blowing up ...
and I didn't invest in the stock market ... but the muni market hasn't been kind ...
Gen Y is in a very different place then their parents
Actually, they're in the very same place since they've all moved back home!
Tim
I don't see Gen Y helping housing much.
I don't see them helping much at all.
I'm with nova. I think the number of people who were willing to sell a home that had big equity and then go rent is very small. You need to be a hardcore investor to have that sort of conviction. Sort of like me holding my SRS these past few months.
Most people borrowed against their "equity gains". Few cashed out.
I think we could ask how many went all cash in 2007 in their 401Ks to find a good estimate of how many sold to rent. I know a lot of people. The only ones I know who got out in the summer of 2007 are me and my parents (because I made them). Everyone else lost around 40%.
Would it?
NWIH.
Tim waiting for 2012
"Gen Y has higher taxes, more student debt, less savings lower to flat wages compared to their parents.
I don't see Gen Y helping housing much."
~~~~
Great points on the Gen Y situation ...
How much is lost to prop 13?
You've probably heard me complain about South Carolina more than once, but here is something good about our state:
YouTube - Boneshow #12 - Danielle Howle - While I Miss You
Danielle puts on one hell of a live show too.
curious, 1.6 million - sorry about that.
Tim waiting for 2012, I think prop 13 needs to be modified. It did two things: 1) limit property taxes to 1% of the value (with some exceptions) and 2) only allow the value to increase a max of 2% per year. Putting a limit on the percent is probably a good idea (some communities were up to 4%!). But putting a limit on the increases never made sense to me - except maybe for retired people over 65.
TJ and The Bear, the boomers won't be downsizing en masse for a few more years (maybe 10 or more). And downsizing - as long as they still own - doesn't change the homeownership rate. We will see ...
best to all
As to the question of who sold out, I'd guess the answer is between zero and insignificant.
I was a housing bear in early 2006 but didn't think prices would fall enough to cover the transaction costs, I just expected them to level out and decay in real terms.
Not that I understood this dynamic at the time, but the Fed did have a lot of bullets to support housing by dropping mortgage rates from 7% in 2006 to 4.5% earlier this year. That gun is empty now.
Like I like saying, it wasn't until the Casey Serin story came out did I understand that prices were completely and totally unsupportable.
Gen Y is said to equal the Baby Boomers but Gen Y is in a very different place then their parents 30-40 years ago.
Gen Y has higher taxes, more student debt, less savings lower to flat wages compared to their parents.
I don't see Gen Y helping housing much.
It depends. (1) Not all boomers found it easy to buy back then ... my friends sure didn't... it is MUCH easier now for a young person to buy than it was for us... (2) not all Gen Yers are going to try to buy in over priced bubbleville... some will buy in boondocks [or what those in bubbleville call the boondocks].
I don't think it really is that different.
What IS different is the type of houses available... minimcmansions don't make very good 'starter' stock... at least not until they are worn down & worn out... sort of like the old trashed victorians & art decos we were buying back in the late 70s & 80s... money pits IF you tried to fix them up... most of us didn't because we couldn't afford to... just lived in them as is.
I see that repeating except the minimcmansions won't hold up as well to the abuse I fear.
"How much is lost to prop 13?"
~~~~
Great question ... would home prices be as high?
Knowing your future liabilities was a great help to me in deciding on whereto retire ...
That's why I ruled out places like Florida and Nevada ... property taxes ...
Another factor was the 250/500 k exemption on owner occupied capital gains ...
But putting a limit on the increases never made sense to me - except maybe for retired people over 65.
I'm a total single-taxer Georgist and I think residential, owner-occupied property should enjoy a large, generous exemption from property taxes.
Commercial property and rental housing stock, NOT SO MUCH.
I think many "owners" just took out loans against their phantom equity.
Few saw the end game of the credit bubble and decided to "cash out".
Many more rode the MEW trainwreck.
I was talking to a 27 year old i was working with on a project. they mentioned they had $100K in student loans. I asked them where they went to grad school. figuring they had an Ivy MBA or law degree. They said they didn't. Just undergrad at a small liberal arts college I'd never heard of.
this generation of americans is in for a wake up call. I'm only 10 years older than this kid, I've got an ivy league education that I borrowed $20K to get which i paid off years ago, my wife and i have a nice retirement fund, rental income and no debt. To this kid i must look like something from star trek. Or the fifties. It has been a mean ten years.
my neighbor has started trapping squirrels.
barfly - ditto, thanks for the Mojo Nixon link ... took me to something even funnier:
YouTube - "Love Me, I'm A Liberal" Jello/Mojo
C
I'm with nova. I think the number of people who were willing to sell a home that had big equity and then go rent is very small. You need to be a hardcore investor to have that sort of conviction. Sort of like me holding my SRS these past few months.
Most people borrowed against their "equity gains". Few cashed out.
There is a natural churn in home ownership - people move to new places, downsize, etc.
Historically, a home owner would sell one home and buy another one.
This dynamic could have shifted: A number of people sold their homes - not because of convictions but because of other reasons. However, they did not buy new homes because of convictions.
I, too, am amazed at the amount of student debt racked up on worthless degrees.
Bought in 2004.
Sold in 2006,
Bought again in 2006, but at 1/7 the price, 1/5 the size, and 1/10 the safety.
Last two years, been boarding in 130 sq ft room.
There's something to not having to worry about taxes, insurance, maintenance, lawn care, weekly cleaning, etc.
Just undergrad at a small liberal arts college I'd never heard of.
Most small liberal arts colleges start at $35K just in tuition... Simply ridiculous. Better off going to State MegaU
Bought a condo in 2000, in Sac to live in. Sold in August 2005 at triple the purchase price, to move for a job, where I now rented an apartment.
I was closely watching the housing events unfold at that time and got very lucky with the timing of my move.
Had I not taken the job, I would have sold by the next spring anyway, as it was looking dicey.
Most people that sell for a move end up going into a similar housing unit don't they? SFH --> SFH, Condo --> Apt
CR,
Downsizing the primary residence, no, but what about secondary / vacation properties? Retiring boomers were probably the largest holders of those and will be shedding them steadily as the demographic ages.
Furthermore, given the statistics showing fewer boomers retiring (indicating weaker financials) there's a very real possibility of further household consolidation to save on expenses.
I think we could ask how many went all cash in 2007 in their 401Ks to find a good estimate of how many sold to rent. I know a lot of people
The potential cost of getting out of the market was small. The potential cost of getting out of the housing market in 2006 was immense -- who knew if another 1970s tidal wave of wage-price inflation was coming again? In 1976 prices seemed quite high compared to 1972, but inflation kept on coming and 1979 was worse, until the 20% mortgage rates totally nuked the economy and housing market in particular.
MrM
That describes my situation exactly. We wanted to move anyways (kids starting school, wanted great district). So we sold our house at the end of 05 and have been renting in our current community ever since. The key driver in our rent vs own decision was our conviction that prices would fall (and by late 05 there was quite a bit of evidence that would happen). Best financial decision we ever made.
I, too, am amazed at the amount of student debt racked up on worthless degrees.
I talked to a guy last week, he told me the current tuition for a four-year degree at ITT is around $80K.
The risk of outsourcing almost makes it pointless at that level of debt.
Better to become a policeman.
Maybe a better measurement would be "when did you start buying extra food and gold/guns/squirrel cookbooks?"
I, too, am amazed at the amount of student debt racked up on worthless degrees.
If they are truly 'worthless' then 'yes'... by that they make the same amount as a min wager w/out a degree... and if you wander around flyover and walk factory floors like I do you see a lot of those. More than a few would borrow $100K in a heartbeat to get off that factory floor.
The worst of all worlds - the antipangloss - is to have the degree and still be stuck in near min wage job on some hot as hell factory floor. I doubt many are but maybe I'm wrong.
I don't think many here see how bad the bottom of the barrel really is... its down there brother.
I don't think many here see how bad the bottom of the barrel really is... its down there brother.
I don't think that many who read/post here realize how much of America is mobile home/shit job, half of everyone you know has a drug/drinking/god problem.
I sold to rent near the peak.
dryfly
I believe the current stats for unemployment are 4% for those with college degrees and 18% for those without.
I'm not saying you shouldn't invest in higher ed. i'm saying you should go to a state school and get some good grades in between your keg stands.
my grandfather raised a family of 7 in a nice neighborhood with a college degree. Try that today.
Dryfly,
Most of America is really unmotivated.
I should've said my grandfather did that "without" a degree
We sold in 2005 and have rented since then. But we sold for non-financial reasons (undecided about where to retire to) and have waffled on that question ever since. It has been financially advantageous to rent, but owning has its appeal. If we could make up our minds about where to live, I think we'd rather own than rent, but I would find it difficult to pay the current premium to own. My own guess is that we'll buy something in about two years. If that makes us 'money on the sidelines' so be it. But it is a decidedly non-economic story. When we buy, I'm guessing that the part of the market we'll buy in will have declined by about half, peak to through, but there's no science in that guess--just that what happened at the low end seems to be spreading to the mid to upper end. It will be what it will be.
I don't think many here see how bad the bottom of the barrel really is..
Work out the numbers here.
$80K loan, assume a payback of $120K.
You have to earn taxes on that, so make it $160K.
Assuming you're paying back $1K per month, that's 13 years.
Minimum wage at McDonald's is almost $9/hr in Seattle.
And at $9 / hr, you can often qualify for subsidized housing, etc.
And if it has no guarantee of physical locality, the job might not even exist in ten years.
Alright getting some conversation started...
I think it is unfair to characterize all Gen Y's as lazy bums mooching off their parents.
Look at the obstacles in front of someone in their twenty's. He's looking at a flat to down market for the next decade, high energy/food costs, high UE, rising taxes. I don't know if I can ever save enough to live half as well as my parents have.
half of everyone you know has a drug/drinking/god problem.
Hey, I'm two for three!
Wow...ask ye shall receive! And all I did was step away to make supper!
@HollywoodHack - thanks for the link in the last thread.
@TJ - same here in Charlottesville, VA - we are reasonably insulated as these things go...stunningly. There is a lot of shadow inventory here, and it has started to go on the rental market over the past two years, so yeah, anecdotally the same here.
my grandfather raised a family of 7 in a nice neighborhood with a college degree. Try that today.
EXACTLY
Most small liberal arts colleges start at $35K just in tuition... Simply ridiculous. Better off going to State MegaU
Yup - unless private college throws money at you. My daughter went to RPI & got an engineering degree there, they threw so much money at her it was equivalent to mega state uni. She came out w/ some debt but manageable [>$20K after four years including travel]. She is now going back to grad school [doctoral level physical therapy] at local state uni... half the cost of any of the private programs she looked at.
My son is going to state uni and it should cost him LESS than $15K per year total room & board included. It ain't no Ivy but the kids aren't all dummies...
People need to shop, know what they want & learn to say 'no' if the price isn't right.
As far as Gen Y they now see the catastrophe of owning assets in general over the last 10 years ...
That lesson is not lost on them ...
OT: Fundraising by Daiwa
Daiwa Securities plunges after share sale news
Daiwa Securities plunges after share sale news
| Reuters
I think it is unfair to characterize all Gen Y's as lazy bums mooching off their parents.
Exactly. Most are not.
Nova...didn't you say you're in Chapel Hill ?
I'm your neighbor over here in Durham!
my grandfather raised a family of 7 in a nice neighborhood with a college degree. Try that today.
Know folks doing that EASILY in my town today. Depends on (1) where you live and (2) HOW you live.
You don't have to live in the damned most expensive places in the world you know.
DOW 6000,
No, I live in DC. where little gods in black vehicles mess up traffic far to often.
The 'green shoots' meme again.. That is OK.. Let them try. Fools will learn no other way.
Japan’s Industrial Production Rises Most in 56 Years (Update1)
Japan’s Factory Output Rises 5.9%, Third Monthly Gain (Update3) - Bloomberg.com
By Jason Clenfield and Tatsuo Ito
June 29 (Bloomberg) -- Japan’s industrial output rose at a pace that matched the steepest increase in 56 years as companies rebuilt inventories and the economy started to climb out of its deepest postwar recession.
Production climbed 5.9 percent in May from a month earlier, the Trade Ministry said today in Tokyo, the same rate as the previous month, which was the biggest gain since 1953. Economists surveyed by Bloomberg predicted a 6.9 percent rise. Factories were still producing 29.5 percent less than last year.
most students today are opting for the 30-year amortization plan. the 10 year is nearly impossible to repay, especially if you factor in grad school. The problem is that the Federal Government has made it possible to borrow the ENTIRE cost of education (tuition, room, board, fees, etc), so long as the school will certify the budget. Of course, as long as the credit's flowing like wine, there's no incentive for colleges to reduce costs. It's not uncommon for some students to borrow $60K/year without even applying for non-debt financial aid.
I don't know if I can ever save enough to live half as well as my parents have.
Well, I do.
Four out of the five us never got close to my father's standard of living.
I'd say on average we probably earned about 1/2 as much, overall.
My brother still might match it but not if he's unemployed for the next five years.
Well, there must be really good money as a taxi driver because I have met a lot of degreed hacks.
As for generation Y, one of the best people I work with is one, and you will not find a more focused and competent person. All of his classmates on the other hand should be in jail.
12th percentile
"It has been a mean ten years."
You benefited from a lull in College applications in the early late 80's - 90's. As the Gen Y tidal wave came over colleges as well as the 2000's recessionary decade degree's became a hot commodity. As Gen Y winds down and the economy goes back to a lower baseline costs will drop.
My daughter went to RPI & got an engineering degree there
My daughter got the RPI medal last year. We visited and I really liked the programs, but the neighborhood stunk. Plus she didn't get in the accelerated PH.D/MD program (small wonder). Ended up she's going to state u for almost free. Lucky duck.
Anyway --
About rents, I wish the rents in our area were coming down, but they aren't. I don't know how someone squeaking by on a low wage can manage. It's ridiculous.
We sold in 2006 for school district reasons at 50% more than we paid in 2002, then bought in 2007 after prices started dropping. I wouldn't change that for the world. But w/3 kids, a dog, and easter egg dye on the beige carpet, we just couldn't survive in a rental, which we had to take for 10 months between houses.
Somewhat relevant?
FDIC's Bair Cancels Listing After Cutting Home Price
FDIC's Bair Cancels Listing After Cutting Home Price - WSJ.com
By SIMMI AUJLA and SARA LIN
JUNE 26, 2009
The property slump is hitting home for Sheila Bair, chairman of the Federal Deposit Insurance Corp. -- one of the few regulators who saw trouble in the housing market before the bust.
Last week, Ms. Bair removed her 14-room colonial in Amherst, Mass., from the market after cutting its sale price by $100,000 from an initial $795,000 in April, according to the listing sheet. It's across the street from Emily Dickinson's house in the college town.
Ms. Bair, and her husband, Scott P. Cooper, paid $355,000 for the house in 2002. In "02 and "03 they received building permits valued at $89,500 to renovate the 1860s house., including new roofing and a counter-current basement pool. In 2006, President George W. Bush appointed Ms. Bair, then a professor at the University of Massachusetts at Amherst's school of management, to the FDIC post, and she was one of the few officials to remain in their positions in the Obama administration.
Basel
30 years to pay off but they can wear the sweatshirt for ever...
Blowhard with thin skin.
Lucifer
In SF 800k will get you 3 BR 2 Bath in a relatively safe neighborhood with a bus roaring by every 20 min.
Real estate run-up and taxes have gutted a lot of the second generation, much less the third (post Boomers).
Is he nuts?
Economy Can Strengthen Only When Housing Prices Do
Economy, Housing Will Rise Together - WSJ.com
By DAVID WESSEL
The U.S. economy won't regain its strength until the price of houses stops falling. And that day hasn't yet arrived.
"The crisis cannot end fully until home prices in the U.S. are at least stabilizing," says Alan Greenspan, who continues to dissect housing data with as much interest as he did when he was Federal Reserve chairman.
I sold at the peak, but immediately bought another house. At least I can take heart in
1: I wasn't in a bubble market.
2: mrs.shnaps won't be second-guessing my real estate prognostications from here on out. At least I keep telling myself that.
and lots of hobos?
//In SF 800k will get you 3 BR 2 Bath in a relatively safe neighborhood with a bus roaring by every 20 min.//
What it all comes down to is
that going forward the United States
is going to be a much poorer country ...
much poorer ...
So increased confidence about a recovery causes job losses?
U.K. Financial Firms Plan to Eliminate 13,000 Jobs, CBI Says
U.K. Financial Firms Plan to Eliminate 13,000 Jobs, CBI Says - Bloomberg.com
By Jon Menon
June 29 (Bloomberg) -- U.K. financial services companies may cut 13,000 jobs in the third quarter even as they expressed rising optimism for the first time in two years, Britain’s biggest business lobby group said.
“Conditions still remain rough but there are signs of some improvement expected in the coming months,” according to Ian McCafferty, the Confederation of British Industry’s chief economic adviser at a press conference in London. Profits, employment and investment remain “on a downward trend,” he said.
EHP was a good poster. He explained his position well and his theories were interesting.
rich, dont harsh the EHP lookback.
My daughter got the RPI medal last year. We visited and I really liked the programs, but the neighborhood stunk. Plus she didn't get in the accelerated PH.D/MD program (small wonder). Ended up she's going to state u for almost free. Lucky duck.
My daughter LOVED the neighborhood... it was a slum and EXACTLY the opposite of her safe little midwestern hometown... heck she was even accepted by Cal Poly out Dawg's way and chose frozen rough-n-tumble Troy NY over San Luis Obispo or our local state uni [U Minnesota]. But RPI threw a lot of money at her - equivalent to the Medalist Award plus some. She was also an athlete... they are DIII and can't offer athletic scholarships but come as close as the NCAA allows.
Jas might come back on this board?
Bond Dealers Say Worst Over as Demand Soars at Treasury Sales
Bond Dealers Say Worst Over as Demand Soars at Sales (Update2) - Bloomberg.com
By Daniel Kruger
June 29 (Bloomberg) -- Wall Street’s largest bond-trading firms say the worst may be over for investors in Treasuries after government securities posted their biggest first-half losses in at least three decades.
The 16 primary dealers, which trade directly with the Federal Reserve and are obligated to bid at Treasury auctions, forecast the benchmark 10-year note yield will finish the year little changed at 3.58 percent, after rising from 2.21 percent at the end of 2008, according to a survey by Bloomberg News.
yeah, i miss EHP. frighteningly deep knowledge of some fairly random stuff.
Hopefully EHP will be back. It's summer, maybe he's traveling.
Wasn't there a thread the other day about credit card companies accepting 50% of the owed balance? Or was I reading that on CNNMoney or similar? Don't remember, but I guess it's happening more frequently now.
Only thing is today i read that taxes may be owed on the discharged debt. That would hurt.
that going forward the United States
is going to be a much poorer country ...
But to be fair: We weren't actually as wealthy as we were acting.
@Lucifer - should read:
"The crisis cannot end fully until home prices in the U.S. are at least stabilizing," says Alan Greenspan, who continues to dissect housing data with as much COMPETENCE as he did when he was Federal Reserve chairman.
Voila, all fixed.
C
vancouver real estate is cyclic and there is lots of hidden money in vancouver.. ya sure!
EHP was a good poster. He explained his position well and his theories were interesting.
The kiss of death?
//Alan Greenspan, who continues to dissect housing data with as much COMPETENCE as he did when he was Federal Reserve chairman.//
I also miss EHP, he did a lot of explaining to someone lost and confused, namely me.
EHP mentioned that, during his first hiatus, he was going to visit NYC. My guess is that the trip was work-related and fruitful, which would explain his current absence.
Only thing is today i read that taxes may be owed on the discharged debt. That would hurt.
Unless it's on the primary mortgage, debt forgiveness is always taxed. Incidentally, this taxability is why I don't mind depreciation in a company's issued debt being counted as income.
that going forward the United States is going to be a much poorer country ...
Rents are free to fall a lot still. Less rent = more income spent on actual wealth.
Except if you are collecting rents, of course.
that going forward the United States
is going to be a much poorer country ...
But to be fair: We weren't actually as wealthy as we were acting.
And nobody knows that better than the PBoC & BOJ.
Still 90F here in scenic South Carolina.
and that power bill is cutting into my beer money.
That's eCONomics for you.
But RPI threw a lot of money at her
When we visited RPI for the medalist open house, they announced that their fundraising alumni (I think) fund drive was able to end early due to getting so much $$ from alumni (or is it alumnae? can never remember) Anyway, they said that meant good things for financial aid. However, I don't know if you saw this, but their applications were WAY WAY up this year -- I believe 100% up over just a few years ago. My daughter, a medalist, didn't even GET IN. I don't know if she was skipped over after not gaining acceptance to the accelerated program or whether she was flat out truly not admitted, but I thought that acceptance was a no-brainer. She's not engineering tho, she's medical, and with the male predominance, she was not leaning that way.
I think I stand a chance of being better off than my parents as long as I can keep up my 45% savings ratio, and it helped that we were dirt poor.
The real question is inflation, and if there will be an asset class that I see in time to keep up with it.
I'm don't think I will be able to match the living standards of my grandparents though.
Less rent = more income spent on actual wealth.
Same goes for owning, which is why the idea that high housing prices is good for the economy is ridiculous.
Hurrah, I managed to get on this thread, even tho the Dilbert one doesn't come up.
Addiction satisfied. I wonder if it will work in Miami?
Lucifer (profile) wrote on Sun, 6/28/2009 - 8:59 pm reply
Somewhat relevant?
FDIC's Bair Cancels Listing After Cutting Home Price
Go easy on Sheila. She is the only thing between banksters and the Fed. "Between" as in "preventing the complete joining together."
By the way, Sheila went to U Kansas, so that might earn some respect on this board
What was the trouble liz?
I'm a huge fan of Bair's. Most people who ridicule her don't understand that FDIC is not the primary regulator for banks, and it's a huge political pissing match when the FDIC has to use its secondary authority to get a bank shut down.
Anyways, both Geithner and Summers wanted her removed, which means that she's doing her job.
Ben, Tim and Larry = Three Stooges.
And nobody knows that better than the PBoC & BOJ.
Does the WH know they know?
Do they know the WH knows they know?
Some questions to ponder...
You benefited from a lull in College applications in the early late 80's - 90's.
Yeah, my mom was born in '43 and had me in '67, kinda early for a college-bound kid with a baby-boom parent, since the baby boom population in 1967 was under 21 still so the baby boom echo was still 5-10 years out.
Unless it's on the primary mortgage, debt forgiveness is always taxed.
I don't think I'd jump up and down about a 50% credit card balance discharge if I were taxed on it as income. I wonder what the actual savings would be.
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone? Are you taxed on the "discharge" then, or is it not an official discharge?
We bought in 2000 and sold in 2003. Made 50% of the purchase price. (metroWest Boston)
Rented for a year. Bought in 2004 and sold in late 2007. Made 28% of the purchase price. (western MA)
Rented for a year and bought this past September. (metroWest Boston again) The house price was about 35% off peak 2005/6 (estate sale) in a town that is fine long-term. Half acre, walking distance to trains, library, town common, grocery stores, bus stops--you name it. But a suburb feel on our little street. Major college in the back yard.
I do wish we'd waited another year, though--the house next door went on the market 7 weeks ago and just sold for $22K less than we paid, though it's 20 years older and has half the land.
We did fine, though--we have a 4.5% fixed, 30 year mortgage and no consumer debt as of August.
We moved 50% to cash in April 2008 in the 401K, and the rest in September 2008. We're down about 9% altogether.
We WOULD have sold the house in early 2007 and moved to cash then, too, if my husband had been on board. It took some time to persuade him that what I was reading was real, and once he read The Black Swan he was on board.
And I wonder who is gonna buy all that juicy production, Luci?
Comrade Troyski -
Yeah, my mom was born in '43 and had me in '67, kinda early for a college-bound kid with a baby-boom parent, since the baby boom population in 1967 was under 21 still so the baby boom echo was still 5-10 years out.
Had to read that twice but I got it. Must be exhaustion and the beer kicking in.
Aliens from another planet?
//And I wonder who is gonna buy all that juicy production, Luci?//
It just refused to let me in. The green bars at the bottom went all the way
across, but the thread never came up, and when I tried to close the
thread, the computer told me the program wasn't responding.
Yeah, count me in on missing EHP...I didn't realize he'd been run off or bailed...
I have four properties - one is just land, another is a rental, another has my ex and one is nominally my home. The last I bought in 2006, and it was in pretty horrible shape, but is adjacent to the land I already had, so it was worth doing, and I pressed the seller down pretty hard, largely based on what I'd learned here.
On my "home" - the seller tried to market it a bit (about 8 months), and in late '06 decided I was right - which means I've only lost about $10k. The idea was to have a place to start a family with the 2nd Mrs. Comrade (now also ex-!). Fortunately a much shorter marriage, and less costly. I was renting before that, and would have continued to, except for that decision to marry. I would be in much better financial shape today (though I'm OK), if I'd done that.
Right now I'm sitting in my rental, doing renovations - students are hard on a property. The one still occupied by the 1st Mrs. Comrade (next door neighbor!) will cease to be mine when I finish paying it off (nice deal huh?)...but fortunately, it's a 15 year fixed, and I'm most of the way through that...we never cashed out; both of these were acquired before 2000, during the low ebb in the mid-90s. The rental I'm sitting in is paid for, so that helps, but carrying costs are a bitch, and the market here is softening a bit.
Yes, I am a relationship disaster, but I hold out hope.
Lucifer - OMFG - you mean Austr-aliens?
C
Outsider - Are you taxed on the "discharge" then, or is it not an official discharge?
It would be reported to the IRS as income to you, but if your a dead beat, they don't pay taxes.
Which OS/ Browser combo are you using?
//It just refused to let me in.//
She's not engineering tho, she's medical, and with the male predominance, she was not leaning that way.
My daughter is the opposite... as an athlete w/ two brothers [most of the neighborhood was boys too]... she finds it easier to compete with guys than 'cooperate' with the 'cliquishness' of many girl circles. Now she will see the other side... her DPT program is about 70-80% female. Her husband thinks its funny - he's seen her in action. Hope she can handle it.
Also - she was planning on a medical grad degree herself so went biomedical engineering... one of the best degrees to have when applying to medical school [according to my boss who was the head of admissions for the U Minnesota Medical School circa 1980s... situation hasn't changed].
@dryfly - I have a female employee very much like your daughter...and if she weren't my employee, I'd sure like to lobby her to become the 3rd Mrs. Comrade. Come to think of it, the first two really didn't like women either...definitely preferred men, not just romantically.
I maybe the only unschooled person on this board other than the Mom with the GED who posted the otherday.
Comrade Scott -
Yes, I am a relationship disaster, but I hold out hope.
OK, I think I use my phrase always looking for my next ex-wife more carefully.
At least you can see yourself working through it, cheers
Ummm, Comrade Scott, I think before you interview for a 3rd wife, you should
have your mom, or sister, or somebody, or me, vet her.
I don't know Luci and the hub is watching a disaster movie, how can I tell?
Escorts! That is what you need..
//Yes, I am a relationship disaster, but I hold out hope.//
Her husband thinks its funny -- Not to mention relieving?
Yup, my daughter's going biomed. One thing she said about the biomed is that there are so many options with it, which is probably what your daughter is finding too, switching over to PT (which I still think is a really smart move).
I managed to complete 8th grade. It was an exclusive Montana Junior High tho...
Humm, os, operating system??? That would be windows something.
But remember I COULD get on the thread under Dilbert.
nova,
No degree here, but that's a story for another day.
nova -
Just because I went to college does not mean I'm educated.
Hey, I went to UH.
nova,
2 of the richest people I know didn't make it past 8th grade....they both get up at 5AM every morning thinking about how to make money no matter what they drink the night before
In this one case, Luci, I rather agree.
For a while, anyway.
outsider:
I misspoke earlier regarding the treatment of debt cancellation as income. Been awhile since I took tax law...
Here are the exceptions to debt cancellation as income.
1. The cancellation of a student loan for a student required to work for certain employers. See Canceled Debts in Publication 525.
2. The cancellation of debt that would have been deductible if paid. See Deductible Debt under Canceled Debts in chapter 5 of Publication 334.
3. The reduction of a debt by the seller of property if the debt arose from the purchase of the property.
Here are the exclusions to debt cancellation as income:
* The cancellation takes place in a bankruptcy case under the U.S. Bankruptcy Code. See Bankruptcy case exclusion, later.
* The cancellation takes place when the debtor is insolvent (see Insolvency exclusion, later), and the amount excluded is not more than the amount by which the debtor is insolvent.
* The canceled debt is qualified farm debt (debt incurred in operating a farm). See Cancellation of Debt in chapter 3 of Publication 225.
* The canceled debt is qualified real property business indebtedness (certain debt connected with business real property). See Publication 525.
* The canceled debt is qualified principal residence indebtedness (applies to debt canceled between January 1, 2007, and December 31, 2009). See IRC section 108(a)(1)(E).
Most people today would avoid paying taxes under the insolvency exclusion (FMV of assets < liabilities).
Publication 908 (03/2009), Bankruptcy Tax Guide
lawyerliz,
Why should a guy keep on taking BS when he can buy a better looking experience for less?
//In this one case, Luci, I rather agree.//
Basel Too,
Can you really go after a broke unemployed student?
Sold out of the rat race in August 2005 @ the top of the market, and downsized intrastate.
Didn't leave any gouda on the table...
Which 2, Gnome?
Thank you, Basel. I imagine the insolvency would be pretty easy these days, but definitely to take into consideration before you go for a cc reduction. Still at that point you'd think you'd do a full fledged bankruptcy to wipe out 100% of the bills, if you're that insolvent.
Here we go again.
Luci, you obviously like my conversation.
Why does sex preclude conversation?
lawyerliz,
It does not. However I do not want to pay alimony, child support or listen to BS about how she is willing to date down. I would rather get a very good looking and well reviewed escort -better attitude, you get what you pay for and no strings.
//Why does sex preclude conversation?//
Does that no taxes thing include 2nd mtges? I've heard yes and no.
lawyerliz -
Why does sex preclude conversation?
I think he just likes venting against women, has issues, and believes that there are women you talk to, and the rest. You can't teach an old dog new tricks, the key is to find one you like to talk to, get along with that is not a total psycho.
Around here that is hard to do, mostly because all the men have made them insane.
one problem these days is that many people can't come up with the $2K upfront to do a BK. Pro se BK is a massive pain in the butt.
O/T, just for a change ... we have arc-light and a fair bit of explosive noise outside from the NE. Sounds like Rockville's being liberated or the fire station is having a Honduran business meeting.
Any locals? MD lore students?
C
It only cost 2K to do a BK? I learn something new everyday.
I don't think anyone has to do that to them.
//Around here that is hard to do, mostly because all the men have made them insane.//
creditcriminalslovetarp
I get every morning at 5 am wishing I could retire.
I maybe the only unschooled person on this board other than the Mom with the GED who posted the otherday.
My roommate in college had a MS in Physics [quantum mechanics] and a PhD in Mechanical Engineering and said to me upon completion of his doctoral orals... "I am glad I'm done with schooling and can get back to learning." No joke. Then we got drunk.
Only costs $2K for a BK? I didn't realize it had gone that high.
Wasn't it just around $300 a few short years ago? I thought I had read it was cheap before the new regs, and then went up to $1K after the new BK regs, but at $2K, you better make sure you don't do that too often. Must be a lucrative business for the attys?
Delusional! That was just the trailer! The main feature has just started.
Financial catastrophe has been averted: But recovery will be a long, hard road back
Financial catastrophe has been averted - JSOnline
Posted: Jun. 28, 2009 8:07 p.m.
After nine harrowing months on the brink, it appears the U.S. economy can be taken off life support and moved out of intensive care. All concerned can breathe a deep sigh of relief. Disaster has been averted.
Which might explain the recent improvement in consumer confidence despite still-rising unemployment and yet another seemingly inexplicable spike in gasoline prices. In this case, just surviving is sufficient cause for celebration.
my wife and i recently drove from washington state to new york and then down to virginia and and back...seeing family along the way
6,845 miles
the most stunning change since last trip i saw along the way was...thousands of wind turbines along the columbia river gorge...western wyoming near fort bridger and then in iowa along I-80 near walnut grove and avoca
obviously i post less but still readin CR every day
hey, you might not like the RPI neighborhood (troy), but Soros does.
http://www.troyrecord.com/articles/2009/06/28/news/doc4a470de50a691526083984.txt
TROY — Some may wonder about all the excitement surrounding Dinosaur Bar-B-Que and question why the city cares so much about attracting a biker bar. The simple answer to those questions is this: it’s a restaurant that knows how to draw crowds.
The Syracuse-based restaurant chain is well known for being consistently busy and has been recognized for offering some of the best barbecue dishes around. With that kind of popularity, city officials are hoping that it can breathe new life into the abandoned waterfront location of the former Fresno’s Restaurant, located at 377 River St.
It also may be of interest for residents to learn that Soros Strategic Partners, a group run by billionaire George Soros, a far left-wing Democrat, owns a 70 percent controlling interest in the Dinosaur Bar-B-Que chain, according to the restaurant’s application to Troy’s IDA.
hey, you might not like the RPI neighborhood (troy), but Soros does.
http://www.troyrecord.com/articles/2009/06/28/news/doc4a470de50a691526083984.txt
TROY — Some may wonder about all the excitement surrounding Dinosaur Bar-B-Que and question why the city cares so much about attracting a biker bar. The simple answer to those questions is this: it’s a restaurant that knows how to draw crowds.
The Syracuse-based restaurant chain is well known for being consistently busy and has been recognized for offering some of the best barbecue dishes around. With that kind of popularity, city officials are hoping that it can breathe new life into the abandoned waterfront location of the former Fresno’s Restaurant, located at 377 River St.
It also may be of interest for residents to learn that Soros Strategic Partners, a group run by billionaire George Soros, a far left-wing Democrat, owns a 70 percent controlling interest in the Dinosaur Bar-B-Que chain, according to the restaurant’s application to Troy’s IDA.
Does that no taxes thing include 2nd mtges? I've heard yes and no.
That's because the answer depends on whether the second mortgage would be considered acquisition indebtedness. For example, if the second mortgage was used to build another bathroom, the debt discharged would not be considered income. OTOH, if the second mortgage was used for the Land Rover, you're out of luck UNLESS one of the other exclusions (e.g. insolvency) applies.
It only cost 2K to do a BK?
Obviously not for Chrysler or GM, but I was talking a vanilla Chapter 7 legal fees. the filing fee is about $450, and the government will let the debtor pay in installments.
I could stop working and don't want to.
Would lose my front row seat to the end of the world.
Women actually have told you that in dating you they are
"dating down", Luci? Weird.
I begged the hub to sell in 05, and it had nothing to do with
financial wisdom at all. We had just finished 2 years with
4 hurricanes apiece, (which missed us tho one did flood a
house across the street), and I was convinced, and prolly still
am, that the insurance companies wouldn't pay. He refused.
I'm not all that sorry, since the momster is now living with us
and we would have bought something smaller. She will
have 2 rooms and a bathroom for herself.
Goldman Sachs as the Heart of Darkness?
Goldman Sachs as the Heart of Darkness? | Money & Company | Los Angeles Times
6:05 PM, June 28, 2009
Matt Taibbi, the Rolling Stone magazine contributing editor who in March wrote a brilliant and searing piece on the collapse of insurance giant AIG ("The Big Takeover'), now turns his attention to Goldman Sachs Group. If you've read or heard Taibbi before, you know he's not writing a profile that is likely to be excerpted in the next Goldman annual report to shareholders. Here's how his story in the latest issue of RS begins:
"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
The theme of Taibbi's takeout on Goldman is that the firm has, by design, been at the center of the biggest investment bubbles since the Depression. He includes the tech-stock bubble of the late-1990s, the housing bubble of this decade, and the oil bubble of the first half of 2008.
the most stunning change since last trip i saw along the way was...thousands of wind turbines along the columbia river gorge...western wyoming near fort bridger and then in iowa along I-80 near walnut grove and avoca
There are even more up along I 35 & I 90 in Iowa & Minnesota than along I 80... it really is stunning to see 50 or 100 turbines going up at a time. Then come back and see another batch going up.
Hmmm... I wonder if Soros has a home in Troy... ha.
thousands of wind turbines along
Drove thru Boston today down to RI and I noticed several wind turbines up too. I forget why they're controversial. And I don't believe they're terribly productive?
People should act on their beliefs. They should also realize that beliefs have consequences.
//Women actually have told you that in dating you they are "dating down", Luci? //
and the government will let the debtor pay in installments
But the lawyers won't, eh? Heh.
Complaints from the peanut gallery over here, too much time out of the picture. G'night all.
if a butterfly flapping its wings in Tibet causes hurricanes in the Atlantic, what the hell are thousands of wind turbines going to cause?
My daughter said they wanted to put some in the water, somewhere
around Boston, but the NIMBYs were steadfastly refusing. I think wind
turbines are pretty, tho they can beat up on birds, I understand.
Drove thru Boston today down to RI and I noticed several wind turbines up too. I forget why they're controversial. And I don't believe they're terribly productive?
They are out here... some of the windiest parts of America out here. And not as erratic either... wind is pretty consistent on the plains... just no people to use the power. Blow dry buffaloes maybe?
We'll find out I guess, Basel.
Drove thru Boston today down to RI and I noticed several wind turbines up too. I forget why they're controversial.
They spoil the view from the Cape Cod vacation houses
dry-hahahahahahahahahahah
Basel Too (profile) wrote on Sun, 6/28/2009 - 6:51 pm
if a butterfly flapping its wings in Tibet causes hurricanes in the Atlantic, what the hell does thousands of wind turbines cause?
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
The conversation has moved on, but I wanted to add to my earlier post re selling to rent. We were correct about house prices falling in late 05, but we made two fairly major miscalculations .... we didn't expect the price decline to take as long as it has (we live in one of those SoCal neighborhoods where it is just beginning) AND we didn't expect interest rates to go so low. We thought we'd be able to earn a lot more interest income than we have. Renting probably still has turned out to be a great decision, but it would have been a much more difficult one had we known then what we know now.
Well, I posted some more additions to my CR inspired story "American Apocalypse."
sample
We weren’t the only people on the move. Nor were we the only ones in the woods. We would pass well worn paths that lead away from the main trail. Occasionally we would catch glimpses of the tarps of the Tree People. Sometimes we see them watch us, and then pace us for short distances, until we had left what they claimed as territory.
site is: afterthecrash.net
All of the financial news websites have NO mentions of July 1st and the massive tax increases/government layoffs/bankruptcy in many states associated with it. Ironically, CNNFN has this headline:
"The second quarter and first half of the year are set to end with a bang as investors brace for the latest on housing, manufacturing and the labor market."
Bwahahaha.
Edited: Mainstream
We all can't handle the truth now.
dryfly (profile) wrote (in reply to...) on Sun, 6/28/2009 - 6:52 pm
Blow dry buffaloes maybe?
Why? Are the wet ones just not in the mood?
I know that some reasonable folks on this board do hot have much respect for Zero Hedge, but I do think that Tyler's pushing and pulling is providing valuable social service. Here is the latest example Zero Hedge: FOIAing The Fed: The AIG Bankruptcy Negotiations
Dawg, dawg, dawg. Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahhahahahahah.
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
They must not fish... first thing I thought was those things will be fish magnets just like drilling platforms and shipwrecks.
Ummm, Comrade Scott, I think before you interview for a 3rd wife, you should
have your mom, or sister, or somebody, or me, vet her.
Thanks Liz - you would be the latest in a now long line of women who know me un-romantically and have insisted on this...and I scoffed the first time(s) they offered (contrary) advice, but I'm now open to it...I have a thick skull, but eventually things get through.
I shouldn't be so glib - the first marriage lasted for 14 years, and we are amicable, even as neighbors. I miss the 2nd, and in a maudlin mood spent part of Friday looking at honeymoon pictures...time has a way of erasing bad memories, leaving good ones in tact. I wish them both well, and I hope I haven't created too much misery in their lives. Not so sure about mom...she and dad had a far worse marriage than either of mine. The first wasn't so bad, we just grew apart, and the second had the potential to be crazy the way my parents' was...and I'm slow sometimes, but not altogether stupid.
edit - I'm not sure how the "s" got converted into that crazy drunk smiley wink...I'm not that soused!
TARP.. Is that accursed thing still around in your post-apocalyptic world?
//Occasionally we would catch glimpses of the tarps of the Tree People//
dryfly...I-90, yep, my next trip
in DC a friend who is is a senior partner in a very large accounting firm was very interested to see the jpegs i took of the turbines
he indicated he believed the industry is poised for even greater growth and profit potential
im not invested, yet, but giving it serious consideration
Lucifer,
Yep, and they are still blue.
Why? Are the wet ones just not in the mood?
LOL... ya I think bull buffaloes are always in the mood... for female buffaloes, cattle, land rovers... you name it.
I sold in July '05 for non financial reasons (I was getting divorced and decided that I didn't want to buy my ex-'s share of the house). I've been happily renting since but expect to buy at some point in the next few years. No rush though.... It was only when the property was sold and I saw the insane proposed financing that people were putting in offers that I realized just how far out of whack things had become.
So does the mob get timmay, paulson, ben, summers and rubin?
//Yep, and they are still blue.//
Nova, ya beat me to the blue comment.
I did. Had nothing to do with timing the market, though - got transferred in August 2006, and my new area (NoVA) was clearly insane from a price standpoint.
Not sure what to do now, though. It's clearly too early to buy, but after 3 yrs of renting the wife has about had it. Decisions...
Scrooge - hardly surprising, since the "states are in the crapper" story's endings are basically variations of "growth" and "tax". I suspect the former is less likely than the latter, and CBPP confirms:
"By July 1, the start of the fiscal year in all but four states, most states will have employed a combination of budget solutions that also involves drawing down reserve funds, maximizing the use of federal dollars, and raising taxes. A number of prominent economists have pointed out that budget cuts are more harmful to state economies during a recession than properly structured tax increases, so it is good policy to use tax increases to fill a substantial portion of deficits that exceed the amount that can be closed with reserves or federal funds."
Tax Measures Help Balance State Budgets — Center on Budget and Policy Priorities
Different take on blue states, maybe, in Fig1.
C
States Turning to Last Resorts in Budget Crisis
"All but four states must have new budgets in place less than two weeks from now — by July 1, the start of their fiscal year. But most are already predicting shortfalls as tax collections shrink, unemployment rises and the stock market remains in turmoil."
"In all, states will face a $121 billion budget gap in the coming fiscal year, according to a recent report by the National Conference of State Legislatures, compared with $102.4 billion for this fiscal year."
"As a result, governors have recommended increasing taxes and fees by some $24 billion for the coming fiscal year, the survey found. This is on top of more than $726 million they sought in new revenues this year."
STATES TURNING TO LAST RESORTS IN BUDGET CRISIS - NY Times
PIGGED. Let's see if the internet gods let me post on the next
thread. Thanks CR for telling people I was off.
If not, nitey-nite.
Rob Dawg wrote
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
yeah too true, and here my wife and i thought the wind turbine looked awesome and didnt harm the scenery at all
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone?
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
mock turtle, glad to hear from you. Thought we lost you.
@Counterpointer
"A number of prominent economists have pointed out that budget cuts are more harmful to state economies during a recession"
So those bastards are responsible for my tax increases.
My wife and I sold in late 05 in the East Bay of San Francisco specifically for that reason. Moved to a nicely renovated rental flat in San Francisco and have been waiting it out for almost 4 years. Moved mostly to cash in early 2007 thanks to CR and others. We figured it wasn't and "if", but a "when". The top reminded me of the peak frenzy of the internet craze in 99, 2000. Hundreds of people storming through our place during an open house ready to pay 25% over asking price. Took 1.5 weeks to sell b/c i wanted to hold the second open house. Never looked back. Been hiding out in SF waiting on a normalized (for SF) price/rent ratio.
A number of prominent economists have pointed out that budget cuts are more harmful to state economies during a recession than properly structured tax increases
Yeah, we know how well "prominent economists" have fared this time around.
We purchased our first home in 2006. It was a foreclosure in northeastern WI. No regrets. Given the discount we took purchasing it, it would take a lot for us to get negative equity. The carrying costs pretty much negate any benefits of renting. We weren't ever looking at our house as an investment though. While there may not be a lot of people sharing our situation, I'm sure there are more than a few who could look in hindsight and claim that selling wouldn't have been the optimal choice in 2005. You do have to live somewhere afterall. I would imagine if you were in the bottom third of housing stock, there was no better deal around.
Getting the wife to agree is/was the problem.
But I did get the wife to agree to sell.
We sold our home in NW suburban Chicago for more than I ever imagined and moved to Colorado where we rented a brand new home that had never been lived in.
Within 18 months she left.
A few months after that my landlord lost the home to foreclosure.
I don't miss Illinois
I don't miss the ex.
I do miss the house.
Oh well. Two out of three ain't bad.
Bought in 2004. Got laid off, sold at peak, Aug. 2005 w/ $30K profit. Paid off all debt.
Happily renter after, debt-free, relaxed as all hell.
Oh: went to cash/treas/gnma not long after. Still there.
barfly (profile) wrote on Sun, 6/28/2009 - 7:11 pm
How about if you're a deadbeat and you just don't pay the bill at all until they give up and leave you alone?
- they turn you over to a collection agency. Then your troubles begin.
They cause the hypocritical rich like Ted Kennedy and John Kerry to quash any possibility of wind turbines in the places where they sail their boats and enjoy unobstructed views.
- of course, that would never happen in a Republican stronghold. Save it, RD.
I want and deserve an apology for this. I didn't "chose" Kennedy/Kerry, they were instrumental in preventing an offshore wind farm near their sailing grounds off their multimillion dollar island estates. "Save it, RD" is totally out of line with the facts and the way I presented them. Of course it could happen in a Republican stronghold. Be careful not to confuse what is with what could be.
Dawg, you do deserve an apology. While it could happen in a Republican stronghold, it would take some skanks to juice it up enough to notice - Long live the Duke!
Thanks CR for the direct linkage!!!
I sold to rent in July 2007, purely because I foresaw what was going to happen, and wanted to use the equity to short the stock market. Too late to catch the top, but at the top there was nothing decent to rent in this area (NW suburbs of Chicago), as homes that in normal times might have been rentals were all being rehabbed with granite countertops by flippers.
Back at that time I was predicting home prices would fall 40%, and CR was opining that it wouldn't be that bad. Now the local real estate markets are even worse than I expected. For all practical purposes, except in the most upscale suburbs, there is no market for homes priced above $600k, though a very large fraction of the MLS listings are above that price. Many homes in the $600k+ range are now in their third year on the market, and many of them are vacant. As the number of people with the financial resources to keep paying the mortgage or construction loan on a $600k+ home can't be that great, and has to be getting smaller all the time in the current business climate, I expect a complete collapse in high-end pricing is not far off.
I sold my home in FL in Sept, 2004 and have rented ever since. It wasn’t really economic genius on my part though. I moved home to Madison, WI around that time when I got a job here. I thought the amount I sold for seemed too high, and I couldn’t bring myself to turn around and pay those inflated prices. It turned out to be the right choice. I probably wouldn’t have done it if I hadn’t been moving anyway.
Homewood, Alabama - closing today to sell our 2br 1ba condo for $73,000. Bought in March 2005 at $61,000. 0 down back then with a 15 year fixed at 5.35% plus 20% went on a Wells Fargo HELOC that ranged from 6-8% until paid off within 2 years. Most of the time we've been a 2 income, 1 kid household but I've gotten laid off with increasing frequency and the wife's job is at risk. Decided to list the condo when the crap hit the fan at her job. Listed for about 15% off the asking prices of the other units in the complex (none of which has sold in nearly a year in the 100+ unit complex).
No problem getting the wife on board, as we've been stockpiling and anticipating further doom for a couple of years now...
We're renting now in the most awesome little complex I've ever seen. 2 BR, same sq ft as the condo for $800 a month and moved into the best school district in the state!
Best decision we've ever made.