Combined with the Fed, FHA, FNM and FRE supporting the mortgage market, you have an epic program of price supports. We must keep house prices high.

Does this make any sense? Well, it certainly does, if you're a homeowner, or a realtor!

That's a small price to pay for protecting the interests of realtors and banks.

Dam, I want these guys running my health care. They could turn a $2,000.00 cat scan into what $10K. The money we will save!

I advocate $100k per silicon chip sold and $5k per webpage viewed, too.

A lottery would probably spread more cheer. 500,000 winners. And few new administrative costs.

In lovely Saratoga Spring, racing season is ending Monday, and many of the shops and restaurants barely holding on are starting to fold.

http://www.saratogian.com/articles/2009/09/02/news/doc4a9f1e429c693905582664.txt

http://www.saratogian.com/articles/2009/08/28/news/doc4a975224e6fb3225549707.txt

I understand that this mercury article must be a satire, but admit that I don't understand the humor.

Josap,

Let's take your free house proposal one step further. Just think of how many more people can would if the government offered free NEW homes for everyone, in existing neighborhoods. Phase I would be to tear down the existing homes, Phase 2 is to redo the lot boundries, Phase 3 is to build new homes!!!!! Look at all the jobs that we can create!!!!

Since seemingly all of the jobs created earlier this decade were housing and housing related, it shouldn't be too hard to find some contractors looking for work.

josap (profile) wrote on Fri, 9/4/2009 - 4:39 pm
First?
At $100,000.00 per house, why don't they just give every newly wed a free house?

How long would they need to stay married to "become vested"?

These are the pre holiday closings.

After the first of the year I expect more than a few smaller businsess to close the doors.

Not very efficient or effective.

Since when are those the criteria for any government program?

Shame about Saratoga. That's a beautiful spot.

Thinking of Dawg's evening at the Hollywood bowl, how was attendance at the Saratoga festivals this Summer?

Lots of people getting married and divorced in a short time span.
....

Better make a provision for domestic partnerships too

Upton Sinclair

burnside:

Attendance at Saratoga events was good. The problem is people aren't spending money on $300 hand bags and $40 steaks.

just have the Fed pay the credit, that way there are no issues with deficit spending...

Some version of homesteading will return. However, instead of vacant land, you will get vacant homes. You just have to live there, take care of the place, and pay all relevant property taxes and utilities for five years. Then it's yours.

Think I'm kidding? Been to Detroit or San Jacinto lately?

It is difficult to get a man to understand something when his salary depends upon his not understanding it.
-- Upton Sinclair

This is how I picture the Blind Optimism crowd going into the weekend with $1000 dollar Gold and a Market Dazed and confused...I see them Stripped naked covered in Crisco.
Curled up next to the door in a fetal position, sucking their thumbs, waiting for the Obamabots to come and save them. Hopium the Real Blind Flue.

It is time for CR and the Commentariat (c.) to throw our weight around .

It's Friday of a holiday weekend. We need 50 intelligent and satirical comments at the Mercury News site (trouble with links so far) and we'll see if they respond...

We should have let the market clear. Motgage paper was trading at less than 50 cents on the dollar before Bernanke got involved. At that price, investors could have bought the paper and forgiven debt at a profit. The losses would have accrued to the appropriate lenders and borrowers. Home prices would have been re-aligned with incomes to the point our economy could grow sustainably.

Instead, Bernanke decided to save the banks by allocating future earnings into non-economic mortgage credit. The man is a disgrace for allowing the housing bubble to get so far out of hand. More than anything, Bernanke is papering over his own mistakes. How can anybody trust his intentions?

Fire Bernanke NOW!

Debt was used to create a house bubble. It started with homebuyers taking on debt rationally due to government incentives (tax and otherwise). Then the homebuyers/homeowners took on insane, unsustainable debt due to visions of ponzi profits, and enabled by private mortgage lending gone mad.

Now to keep the game going, the government is taking on the debt. Every tax credit given, every dollar lost by FHA/FNM/FRE, and every dollar lost on Fed-purchased MBS securities will add to that 12 trillion dollar debt.

That debt will fall on all of us, on behalf of the prime beneficiaries: homeowners, homebuilders and home salesmen (realtors).

But as long as > 66% of us own houses, it's a winner, right? Gotta love democracy!

That might even convince me get remarried.... nahhh >; )

"Combined with the Fed, FHA, FNM and FRE supporting the mortgage market, you have an epic program of price supports."

Amazing, isn't it, that with 10% U3 and 17% U6 the government is still mainly concerned with supporting housing?

Fire Bernanke NOW!

Heh. As if.

"I do notice, when driving at night, lots of RV's & motorhomes parked in driveways that have lights on at night. "

I see that on the streets. Overnight car camping is banned all over town (otherwise we'd have them on every block), but there are a few industrial neighborhoods where no one lives and no one complains at night. Cops only respond for car camping upon complaint. You drive by at 10 pm, see the TV flickring through the half-shaded side window of an old Winnebago. The old-time nomads (vets, migratory construction workers, old hippies) know where to park. And just how convert they have to be, or don't.

""Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. – As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

Keynes.

I agree with CR - there's a difference between temporarily stimulating economic activity and designing policies solely to prop up inflated asset prices. It seems the goal of policy should be to bring unsustainable price increases (in home prices, education, health care...as others have mentioned here) in line with slowly increasing wages. Not saying I know how to do that, but it does seem like 3.5% down and $8,000 credits are not a step in the right direction.

I asked this in the previous thread, but obviously it's on-topic here:

Has anybody seen this same (or similar) editorial in their local newspaper?

I'd love to see evidence that a template editorial was provided to the various papers, and then customized by each for their own locale... That could look pretty bad for the RE industry PR factory, and the supposedly un-biased newspapers.

You get to governate.

"At $100,000.00 per house, why don't they just give every newly wed a free house?"

Why not? We did even more for the bankers. The controversy, of course, will come when the Repubs decide is shouldn't go to same-sex newlyweds.

We gotta keep prices elevated so they're more affordable to buy.

Has anybody seen this same (or similar) editorial in their local newspaper?

no, but i'll keep an eye out for sure

"Why not? We did even more for the bankers.

........starting to think death panels aren't such a bad idea."

Ayatollahs could offer some tutorials. You wouldn't even have to be sick.

1 currency yogi - instead of everyone registering at once and thereby blowing cover that it's a coordinated flame, why not flick it on to other sites, eg misc red state, blue dog, foreign etc etc with added snark and suggested alternative blog lead line / lede. Better coverage, distributed michief, maybe better effect. Otherwise you quarantine something that is clearly worth sharing, a gift that could keep on giving...

C

Pavel,

That was way funny.

$100K price buoy due to the tax credit. That's great! Let's double the credit to get prices up another $200K. We will be back to peak bubble prices in no time! Problem solved

Thanks, josap.

I'll be doing an anti-housing tax credit extension phone blitz next week

Congress (202) 224-3121

But really we need to get this $60,000 to $100,000 per house number out there in the media, so it gets to the public and congress.

The Onion has it work cut out to stay one step ahead of these guys.

this good chrysler, bad chrysler saga is a pain in the ass. So now, bad chrysler is defaulting on the original UST loans, meaning the UST becomes another unsecured creditor of the bad company. good luck with that. but at least the lawyers and consultants got paid...

Old Chrysler Defaults on Bankruptcy Loan From U.S. (Update3) - Bloomberg.com
The U.S. Treasury has sent the bankrupt remains of Chrysler LLC a default notice, saying the company failed to pay back a loan due June 30.

Since filing for bankruptcy on April 30, Chrysler paid $55 million for advice from lawyers, bankers and accountants, according to the monthly operating report filed today in U.S. Bankruptcy Court in Manhattan.

i think the reason they keep wanting to do things that prop asset prices doesnt have anything to do with the consumer or homeowner, but only with the impact of asset prices on the banking sector and that they dont have any other choice now that theyve set the game in motion.

If we say we know asset values now related to housing, and know that acknowledging this puts the general banking sector (overall) into the insolvent category, then any further erosion just means a much bigger hole to dig out of. This reality, combined with the fact that we've decided the banks plan is to earn their way out, means that the process would go on much much longer than is already expected. And if it were to go on that long, then credit would remain restricted and markets dysfunctional for a much longer period, with the associated impact on businesses that are already hanging by a thread with iffy financial conditions and weak demand. If we keep losing yet mroe jobs, and still more of these firms are pushed out biz by their precarious financial conditions combined with a broken banking sector, we head still higher in UE for far longer, and have more pressure on the same home prices we are trying to prop.

I dont agree with any of this strategy really, but once you make your bed, you gotta lie in it. Since they chose not to get rid of bank management, ignore the reality of asset values on the books, make the Fed lender of last resort, not force the insolvent banks out of biz, and not create and fund new banks -- the die was cast. We're goin status quo reflate, ignore the toxins in the banking sector, ponzi our way out of it. You cant really change course now without an epic fail first. So there is NO WAY they are going to stop the subsidization of housing.

Maybe we should call it Jumanji economics.

OMG now this is getting out of hand.

Chaps, dogs. Microwaves.

I can't stop laighing and people at work think I have lost my mind.

Just about 5 minutes until the first BFF press releases drop.

I made these comments last night on the FHA thread:

It's simply an attempt to prop up house prices. Any pretense that it's to make home ownereship affordable to a greater group of people is laughable, as the market was accomplishing that by price drops.
There's not much (societal) good that comes from price fixing, especially for such a basic, essential good such as housing. What happens when you implement price supports is that you generate additional supply over what would have been produced. Witness the lack of bankruptcy filings by the major homebuilders, and the irrational level of housing starts (given the couple million vacant homes).

Oh, and the additional supply (being prompted by the price supports) will ultimately cause more downward pressure on prices. Then what will happen if/when the price support policy is abandoned, for whatever reason

Does anybody share my belief that additional supply will put downward pressure on prices, which might result in another collapse in prices when the price supports are removed? Obviously these tax credits must end at some point. But beyond that, what happens if the government's need for additional tax revenues forces cuts in legacy tax subsides for housing, such as the mortgage interest deduction? What if California must do the unthinkable and eliminate Prop 13 protection of property taxes?

CR,

Keynes advocated burying money in bottles in order to get people working (digging). So imo, much of the foolishness can be blamed on Keynes.

As for employment, it's becoming more and more clear that our monetary system just doesn't match our modern economy. Even service jobs are being lost. I always use the electronic cashier at the big box stores and haven't interacted with a bank teller in years. Heck, I'm now considering outsourcing my accounting and tax prep overseas as this year I didn't even meet with my accountants face to face. George Jetson had a job - it consisted of pressing a button. George worked just a few hours a week, but was always stressed. Hanna and Barbera had more foresight than Bernanke.

One more point, don't take my rants to seriously. Some people say if you want attention whisper. I don't ascribe to that, especially on the internet. Obviously.

Bagholder, RIF, ShortC...this was my point in a previous thread that it is the Lords of Finance that really run the country. The political process that involves itself with finance is but a veneer. That is why the banking sector wins every game it plays in the end, and why they object to practically none of the supposed reform coming down the pipe. Because it all is irrelevant given what we've already handed over to the banksters. (and a similar point im making above that there is no way they stop these price supports...they cant now that theyve started)

This is all about asset prices, maintaining power to the EXISTING banking sector and those that run it.

"The real capital owners are the powers behind the throne and the stage and they aren't going to lose money, period."

Do the 'real' capital owners really deliberately wreck the economic system so as to increase their rate of profit? Perhaps they too, in a way, are captives of the system. I saw this during the 80s in contemplating nuclear war fighting - how people on both sides struggled to free themselves from the logic of that system. Then, it was a matter of survival, life and death. But the economy?

josap (profile) wrote on Fri, 9/4/2009 - 5:09 pm
OMG now this is getting out of hand.
Chaps, dogs. Microwaves.
I can't stop laighing and people at work think I have lost my mind.
Welcome to the dark side-

Thought that Keynes example was in the context of providing a slightly better fallacy to show the error?

pavel - dont think of it as destroy, think "subjugate." That is what finance does on a mass scale.

MAS - mutually assured subjugation. You see, the little people keep thinking they are going to make it big like the fat cats, but in the end, they are getting conned in the investment schemes and nickled and dimed on the everyday financial transactions. That is the system we have and it's that way because the people who own it and run it like it...a lot.

Oops, was pigged and forgot the new thread. this is an answer to Homegnomes BFF ettiqette question.

Dear rsj

Would it be rude to check the BFF status on my iphone while out with friends for cocktails?

Dear Homegnome

I guess it could be rude UNLESS you include them. Yak a bit about it, awe them with the terrible majesty of the putrid numbers involved, and then do a mini-poll. Then it wont be rude to check periodically since they will want to check too. especially if you throw some money on it. Think of it like I think of football: totally ewww, except when the FB pool at work is really large and their is a chunk of change at stake, then it gets really cool. do the same thing with your drink-mates.

You could also think of turning it into a drinking game at the bar, lounge or club you all happen to go to.

Hope that helped dear reader.

snicker. hahaha. sorry, feeling silly today.

thank god for the victory gin though

"pavel - dont think of it as destroy, think "subjugate." That is what finance does on a mass scale."

All right, but to what end?

It's quarter-past 5 and a bank hasn't failed in Georgia?

What kind of Friday is this?

Oh, crap. Labor-day weekend. Can I change my vote?

My ideas:

1. Screw those who flip and trade homes as commodities. Just tax the hell out of any gain when selling. 75%-85%!

   Allow primary residence exemption for move up/down...blah blah.

2. Drop all credits for purchase.
3. Drop interest deduction.

My lady whose account was garnished still doesn't have her money.

I did force the branch manager to tell me he was sorry. I am asking
for attorney's fees.

The branch manager at Chase--a former WAMU branch--didn't know how
to work the system so that he could check and see if the garnishment
was dissolved. The lady in Louisiana--or was it Ohio--had to tell him,
as a child, which buttons to push.

I don't think he was a boomer.

No, too many tracks, go to the editorial, copy the link, go directly to another site and sound off mightily about the stupidity of it all, and leave the editorial link there. Think up a memorable line to add, eg "SF Liberals Want $60k More for Chardonnay", "Gov Ends Private Property and Market Pricing", "The Right's Next Target : Be Prepared" - depending if the site is known to be respectively, red, lib or blue.

Repeat. Enjoy. Ask Broward for a meme tracker and there you have it. Could be the anti-TARP campaign of this fall...

C

Shnaps (homepage, profile) wrote on Fri, 9/4/2009 - 5:21 pm
It's quarter-past 5 and a bank hasn't failed in Georgia?
What kind of Friday is this?
Oh, crap. Labor-day weekend. Can I change my vote?
Is Corus in CDT?

but your teeth will be shiny and your breath sweet

Do the dogs REALLY need those biscuits? Seems like you
could've bought some nice hamburger!

Do the dogs REALLY need those biscuits? Seems like you
could've bought some nice hamburger!
................
My corgi likes carrots and green beans. The shepweiler holds out for leftover cat food.

ShortCourage:

Lower house prices is usually good for most of the people, most of the time.

I too have been harping on this for 2 years:
A 'housing crisis' is not enough shelter. We have excess inventory, yet an estimated 140,000 to 200,000 homeless veterans.

1 currency now -yogi (profile) wrote on Fri, 9/4/2009 - 5:28 pm
ShortCourage:
Lower house prices is usually good for most of the people, most of the time.

Good for buyers, not for sellers-
Especially underwater sellers-

If Keynes were merely an economist, I'd agree. But once he gladly accepted the position of advising politicians, he became a politician. No different than Krugman. If Keynes is misunderstood and misquoted, most of that is his fault.

It's important to recognize that modern liberal ideologies are based on this notion of bringing together economics and politics. I.E. modern liberal governance is about rule via control over economic activity (as opposed to rule via ideology, force, religious faith, etc).

I don't think you can blame economists for wanting to apply their field to real world governments and economies to make a "better" society.

I think what you can blame them for though is not honestly looking at themselves and their theories and asking whether they can make a better society.

It seems to me that economists today have an almost godlike view of themselves and their abilities, and are not willing to consider their own limitations.

Sometimes it is the people that believe they are destined to do the greatest good that actually do the greatest harm. And the people that think they're the smartest of all, by virtue of this belief, that are actually the most ignorant.

what's the pizzavix in alpharetta tonight?

OMG the FDIC is really ramping up....tonsa jobs!!

FDIC Careers

But only a few in each place!!

We are all FDIC employees now.

One of the eventual BFF candidates, TierOne Bank, may have found a way off the list - they sold 23 branches, $1.1 billion of deposits and $800 million of loans to Great Western Bank today - Great Western is owned by National Australian Bank.

Looks like the FDIC is trying to make up for all the job loses.
That is one very long list of jobs.

1 currency now -yogi wrote on Fri, 9/4/2009 - 2:28 pm
ShortCourage:
Lower house prices is usually good for most of the people, most of the time.

I too have been harping on this for 2 years:
A 'housing crisis' is not enough shelter. We have excess inventory, yet an estimated 140,000 to 200,000 homeless veterans.

Exactly.

And even worse is this: Housing subsidies that extend out to all price ranges are extremely regressive. If you want to further widen the gap between the rich and the poor, this is a great way to do it.

Somebody needs to tell the Mercury News that the recession is OVER (at least that is what CNBC been blasting lately) and the market has already priced in 4% growth next year. Don't need no stinkin' tax credit extension.

If this passes, I'm gonna slide one step in your direction, ghost.

pavel.chichikov (homepage, profile) wrote on Fri, 9/4/2009 - 4:14 pm

Do the 'real' capital owners really deliberately wreck the economic system so as to increase their rate of profit? Perhaps they too, in a way, are captives of the system. I saw this during the 80s in contemplating nuclear war fighting - how people on both sides struggled to free themselves from the logic of that system. Then, it was a matter of survival, life and death. But the economy?

pavel, I have long believed they are just as trapped as anyone else. It only appears to be freedom. It is a physical system but it enshrines a psychological complex.

ac,

The vast majority of eCONomists are CON artists. Those that are not are marginalized.

Bob Dobbs +1

As we wait for the giant BFF ball to drop, my story is complicated because of a divorce and dog custody. The X has all the food and snacks and all I have is anxiety and my pal for the weekend...

William's at the bowl. He is doing Holst again?
/ducks >; )

'their only flaw is being delusional megalomaniacs'

No offense commrade but that could almost as easily describe us

I think FDIC has a long vacation break in works.... nothing out there.

Charlotte Business Journal: Bank of Granite stock dives after sanction

Off topic madness:

YouTube - Letterman - Stupid Pet Tricks: Playing Dead

Wait a second Cinco-X, who gets the house after they split up? Wait...I'm guessing that we would give every newly divorced person a house too. People could get married, get a house, then get divorced and they each get a house.

See, it's thinking like this that qualifies me for high office!

Hoopajoops LTD (homepage, profile) wrote on Fri, 9/4/2009 - 4:52 pm

They already know that anything I have is already theirs.

And was never actually yours... So it's not really a new economy after all Same old magick trick.

I am renewing my appraisal license (insert gratuitous insult here) and, in my textbook, I came across a sentence that made me cry (not in a good way)...

"Real estate brokers and salespersons are entrusted with people's hopes, dreams, and money."

Irony is not dead...

""Real estate brokers and salespersons are entrusted with people's hopes, dreams, and money."

Irony is not dead... "

Reminds me of when I worked for an insurance company. Basic orientation included a textbook that said, over and over again, "Insurance is not gambling!"

Of course it's not gambling. The house always wins. What's the gamble?

Ok, 18:02 EST, what the heck are they doing? Getting still?

C

If you don't go to that link:

Some Houston parents, however, said telling children they should not hear out the president of the United States, even if their parents dislike his policies, sends the wrong message — that one should not listen to someone with whom you disagree.

“It’s difficult for me to understand how listening to the president, the commander in chief, the chief citizen of this country, is damaging to the youth of today,” said Phyllis Griffin Epps, an analyst for the city who has two children in public school.

ahh, so no Eastern Time Zone failures this week?

So they took all of the Washington employees and shipped them west for the weekend? Good for Shelia!!!

First Bank of Kansas City down..

“It’s difficult for me to understand how listening to the president, the commander in chief, the chief citizen of this country, is damaging to the youth of today,” said Phyllis Griffin Epps, an analyst for the city who has two children in public school.

I imagine parents in past eras had similar comments. I usually took a war to disabuse them of their complacency.

One down ten to go. I smell bacon.

No worries, it's an old joke about Williams. Everything sounds like Planets.

I'm still friends with my former film industry commrades. I love them but they have some strange humor. This is a youtube of an old friend on the aniv of the moon walk. The guy he got the suit from is an old BF. Small world... I hope Liz gets to see it.

Doc Holiday (homepage, profile) wrote on Fri, 9/4/2009 - 6:09 pm
Ernst & Young resigns as Corus' accounting firm -- chicagotribune.com
Ernst & Young LLP has resigned as its accounting firm, according to a Securities and Exchange Commission filing late Friday.
Corus said no replacement firm has been selected or engaged at this time.
Didn't they just lose their head of accounting?

"“It’s difficult for me to understand how listening to the president, the commander in chief, the chief citizen of this country, is damaging to the youth of today,”

......and it's difficult for me too, to understand why I as a parent have trouble with other parents or NON-parents, who give me grief because I choose NOT to allow my child to view ANYTHING in school - regardless the item or reason.

did you see the story in the WAPO- $1,500 neck MRI costs $98 in Japan and the private lab doing the tests makes money !!

But heck we are Americans we are number one and have nothing to learn from the rest of the world!!!