Cinco-I didn't mean to offend, my foot slips inside my mouth too often. My apologies re: McCain.
But on a bright note; I take some solace in that the USA isn't alone in trying to make something happen.
*Oct. 23 (Bloomberg) -- Lawmakers in Kuwait, which is richer per capita than Germany, are demanding a government bailout of all consumer loans, threatening to reignite a power struggle that’s already shut down the assembly twice in 18 months.
At least half of the 50 elected lawmakers say they’ll back a plan for the government to buy all 6 billion dinars ($21 billion) of bank loans taken by Kuwaiti citizens to pay for homes, cars, holidays and other purchases, write off interest payments and reschedule the rest. The government opposes the bailout. Parliament convenes next week after a four-month break. *
Despite the 20 lb wood splitting maul, duct tape, and the rest of my efforts, my girlfriend was thinking about submitting an offer on a short sale. The listing agent has asked that her good faith deposit be placed in an escrow account before the bank has even accepted the file and escrow begun. In the meantime she promises not to show the house to anyone else but with nothing in writting to this effect.
My answer to this is run, don't walk away from the listing. Isn't this a repeat of the same sort of madness as before?
The list agent aka the short sale pro says this is becoming common to keep people from making multiple short sale offers. Anyone else find this fishy?
The housing market continues to operate. It hasn't seized nor has it collapsed. That said, neither has it normalized nor has it stabilized. At this point it is hard to tell paddle twitches from signs of life. Anybody who says otherwise is either lying, guessing or worse; talking their book.
The worst in housing is probably behind us,'' said Lawrence Yun, an economist for the National Association of Realtors in Washington.The market is stabilizing in large part because mortgage rates have fallen.''
His comments were similar to Robert Toll, the chief executive officer of luxury home builder Toll Brothers Inc., who said last week that ``we continue to look for signs that a recovery is imminent but can't say that one is in sight.''
If someone, hypothetically, had a close relative living in that country, could this type of confrontation end badly? I mean cars overturned, apartments on fire, beheading-type of bad? Arabian politics is an enigma to me.
If we think of a balloon that contains existing home inventory and vacant apartment units, the tax credit is like pushing a finger on the balloon - the indent makes the balloon look smaller, but the volume of the balloon remains the same (the decline in existing home inventory is offset by an increase in vacant apartments).
Take away the FTHB and the analogy is a finger pressing on a bubble.....POP!
Should housing appreciate from here? Who knows? I purchased with very little expectation of appreciation except for the initial arbitrage due to the purchase being distressed. At least on the low end in my region, I don't perceive a lot of downside risk, because it is near impossible to build for as low cost as the low end around here, either SFR or apartments. I'm reminded of the old joke at the car lot: you want a 3-year-old car that's never been in an accident with under 30,000 miles in mint condition for under $8,000. Let me call the used car factory and see what they can do.
However, if I were sitting with a house valued over 3 times the median income for a given area, I would be worried. Over 6 times, and I would be at outright panic.
In other words, the free market system has failed America miserably. Well, at least in this instance, and that by itself should raise very grave doubts about that system.
And it's not all that hard either to see why that is. If you let market participants free to pursue what is in their best interests, without forcing them to give priority to society's best interests, they will eventually figure out that the best single investment they can possible make is to buy the government. That allows them to make the laws. Which is detrimental to the rest of society, and leads to the sort of mess we're in right now, which even libertarians concede is not desirable.
So you would have to prevent that from happening. For which you need laws and regulations to keep those market participants out of the government. Since free market guys and dolls don't want regulations, they have no solution to offer. Exit left, center stage.
On the BFF front, a bit surprised both CIT and Capmark have been so quiet the past week - also, anything new on United Commercial? I am thinking we may have a late BFF party tonight - from looking at CR's problem bank list, several western banks have been fermeting for awhile and Shelia may finally decide that they are ready (assuming they have any bidders).
"We know commercial real estate loans are a very important part of your business, and we're not panicking about the quality of your loans," Curran told a group of about 60 Central Oregon bankers. "But the concentration (of commercial real estate loans) is a concern."
**According to federal numbers, commercial real estate loans in Oregon totaled $9 billion as of March, comprising 66 percent of the lending portfolio of the state's banks. ** :bitch bitch:
cost of replacement is meaningless with excess inventory. look at oil when it sold for $20 per barrel. furbies after the fad wore out.
the one good reason to buy a house, even above its current underlying market clearing value, is the stupid cheap interest rates of a loan denominated in USD with a term of 30yrs and a cheap premium... I mean downpayment
I think one of the big problems is that we think of qualified buyers only in terms of economics i.e. do they have the income to afford the mortgage. I think an equally important consideration is do they have the discipline to be and remain homeowners. Although it is not politically correct to say so - this is a character and upbringing issue. Home ownership requires a level of disciple that a renter never has to face. Starting with the ability to hold onto your job and going all the way to setting aside money to cover all the contingencies that home ownership implies. The bell curve applies to home ownership. Just like no amount of education is going to make everybody into a brain surgeon there are just some people who should not be home owners. I believe we passed the threshold in the boom years and all attempts to maintain that level will come to grief.
Plus in an economy where people will change jobs 6-7 times does home ownership still make sense.
That's an awesome quote and it fits our eCONomy perfectly over the past decade.
We're impoverishing ourselves with debt. The impoverishment isn't noticeable at first, but it's there. There will be hell to pay for a long time. Allowing the bankers that perpetuated this debt fraud to skip off with fortunes is a disgrace.
this talk about credit crunch 2.0 is bunk. we've established a new policy doctrine that says we will print and backstop at all costs. the same crisis will not happen the same way, again. the next crisis will be something altogether different.
put down the party hats and the shotguns. it's not time, yet.
EHP, on "cost of replacement" - these guys need to visit Detroit and a few other areas! They need to compare households vs. housing units ... if the price is below cost of replacement that just means there will be few new homes built in that area, and there are probably more housing units than households.
Plus in an economy where people will change jobs 6-7 times does home ownership still make sense.
I would say no. There was an interesting study in England not too long ago comparing two cities that had severe economic losses. I think both were caused by coal, but it could have been textiles or something like that. Anyhow, the city with more renters was quicker to turn around than the city with higher home ownership.
The Bell Curve stuff we'll just have to disagree with. Day to day, 97% of the population can handle whatever the proposition it.
OT: CIT Group Inc. estimated that recovery value for general unsecured claims in case of an “accelerated liquidation” is between 6 and 37 cents per dollar.
@Doc. CRE is still hidden away, for the most part, off balance sheet for some of the biggie piggy banks and regionals. Its the next whistling shoe bomb. This is one reason there is the 'hoarding of cash' going on among others and why credit is still mostly frozen for main street. Or at least that's this simpleton's understanding of it.
My city is not that far economically from Detroit. Certainly price can approach zero. The assumption that must ride with that is income on the low end approaching zero. That isn't a bet I would make in other areas of the country where a low income apartment has a $1000/month rent bill.
Fannie Mae is replacing a forbearance program for troubled borrowers with one that will make the breaks available to property investors and owners of second homes. In a forbearance, the government-sponsored enterprise reduces the monthly payment on a mortgage for up to six months. The current program only provides this relief for loans on owner-occupied properties.
The GSE said it wants to give property investors and owners of second homes "new options of support" since they are ineligible for the Obama administration's Home Affordable Modification Program...
Or to put it another way, run off mode can take a very long time, and it is likely not even a solid proposition that the country is in run off mode in housing.
There is a bigger problem- if interest rates go from 5% to 6% then incomes have to rise by about 11.7% to hold the mortgage payment as percentage of income constant. If we are already pushing the envelope with 3% down and $8,000 tax credit to qualify borrowers where are the buyers in the future going to come from to take out the existing buyers if they have to move for whatever reason. Historically about 15% of the population has moved each year.
I have advocated for the idea of a portable mortgage- it seems to me that all the current plans without a portable mortgage is going to end up freezing a whole bunch of people in place with its concomitant impact on economic activity.
Why? The derivative bomb is still out there, undetonated, but it's no dud.
ok. let's discuss this. what about the derivatives market makes it such that the government can't continue to backstop it? EDIT: and, what would the tipping point be to push us to a new crisis in the derivatives market?
There is a bigger problem- if interest rates go from 5% to 6% then incomes have to rise by about 11.7% to hold the mortgage payment as percentage of income constant.
crazyv,
Our eCONomy and sham banking system can't handle higher rates. No way. If it can't it won't. Rates will trend lower for years imo.
The GSE said it wants to give property investors and owners of second homes "new options of support" since they are ineligible for the Obama administration's Home Affordable Modification Program...
Somebody help me out here - who is buying all this GSE junk again?.
I get access to several for fee foreclosure services and I've shown her the flood. She remains persistant. I'm now just hoping to save her one house at a time. Since everyone is so quiet, I'm guessing this money into escrow account before escrow is opened is now common.
Rates have already been trending lower for years. Nothing ever changes.
Whiskey,
Indeed. I just threw that out there for all the inflationists. I'm a chicken deflationist myself. I'm primarily positioned for deflation and low growth but I have some insurance and am always standing near an exit.
One other thing... it's pretty clear from the headline CR's never been 'on commission' because one thing is clear to this peddler - if the activity equals commissionable transactions its a BIG TASTY achievement... for somebody.
Indeed. I just threw that out there for all the inflationists. I'm a chicken deflationist myself. I'm primarily positioned for deflation and low growth but I have some insurance and am always standing near an exit.
I'm a clusterfucationist. The future will be worse in every conceivable way.
Some Federal Reserve Fun Time!
Here is a new this year series, FRB: Stock Market, Selected Statistics, November 2009
Of Note:
Since March, volumes have been declining (more evident if you include the stats published by BATS)
Since February, accounts have been using up available margin credit
There is another similarly new series that tracks issuance of stocks and bonds. Looks like the financial industry absorbed a megaload of capital relative to the non-financial economy.
a trip down memory lane to Commercial paper. It hasn't been exciting since the Fed launched the first salvo to bring down interbank rates by using JPM to execute that first big loan. Of note are the flip from foreign financial institutions reducing USD debt, to now increasing USD debt. If they are using that money outside of the US, as is likely, that is effectively shorting the USD. Commercial Paper is short term though, so it will unwind very fast if that is what they are doing and it comes to that. Commercial Paper Outstanding
Totally OT, but had to post it: " HEALTH CARE -- FIFTY-FIVE REPUBLICANS WHO ARE 'STEADFASTLY OPPOSED' TO A PUBLIC OPTION ARE CURRENTLY ON MEDICARE: Yesterday, the office of Rep. Anthony Weiner (D-NY) released an internal study showing that 151 members of Congress "currently receive government-funded; government-administered single-payer health care -- Medicare." Of those 151 members, 55 are Republicans who also happen to be "steadfastly opposed [to] other Americans getting the public option, like the one they have chosen." Included on Weiner's list are anti-public option crusaders Senate Minority Leader Mitch McConnell (R-KY), Sen. Chuck Grassley (R-IA), Sen. Jon Kyl (R-AZ), Sen. John McCain (R-AZ), Sen. Orrin Hatch (R-UT), Sen. Richard Shelby (R-AL), Sen. James Inhofe (R-OK), Sen. Mike Enzi (R-WY), Rep. Virginia Foxx (R-NC), and Rep. Peter King (R-NY). Weiner explained that the purpose of this study is to "point out some of the hypocrisy of this debate." "Even in a town known for hypocrisy," Weiner said in a statement yesterday, "this list of 55 Members of Congress deserve some sort of prize. They apparently think the public option is ok for them, but not anyone else." Back in July, Weiner, an outspoken proponent of single-payer health care reform, offered an amendment that would have given these 55 people a chance to end their own public option by eliminating Medicare once and for all. According to Weiner, it was "put-up or shut-up time for the phonies who deride the so-called 'public option.'" Of course, no one voted for the measure. Yet now "you have members of Congress thumping their chest how they’re against government health care," Weiner noted, adding, "and yet when it's time for them to accept Medicare, they're like, 'Sign me up!'""
From today's Progress Report. I'd say the same probably applies to the horrifyingly overcompensated CEOs in the US, except that they probably stay on some gold-plated health insurance paid for by shareholders, and the salaries of former employees, and now, I suppose, the taxpayer, present & future.
WestSac_grrl: Confused ... is your friend just talking about a "good faith deposit" into a realtor's trust account, that will be applied to the down payment if/when the offer is accepted? That seems pretty common. Otherwise, I don't know.
"ok. let's discuss this. what about the derivatives market makes it such that the government can't continue to backstop it?"
Inflation and any accompanying, higher interest rates, put the debt service on the deficit into dangeous territory? Every other industrialized nation is a net saver so they do not suffer from the drag of now high priced debt... As rates rise housing prices tank, and the derivatives based on them, go boom.
WestSac_grrl
She sounds emotionally driven. Either construct an emotionally-grounded argument (do you want to deprive your future children from the chance to finish high school because she couldn't resist an impulse buy), or just make up a lie like some brutal murder happened in that house. Create a fake newspaper article, tell her you found it only through a print version at the library because the owner is trying to cover it up, that the agent wants the deposit because the earlier prospective buyers must have found out and ran away
Down payment is just an assessment of risk. Folks here keep treating it as a qualification to buy. When CR says that net transaction costs, a home sold flat after 3 years will have consumed the down payment, that is saying that loan doesn't properly reflect the risk present. And that is fine. Bankers should be concerned about this. The idea that implied value after a given period of time shouldn't be taken into consideration when making a loan is just wrong. We wouldn't have leasing without it, and I'm doubtful folks are going to bring fire and brimstone down against leasing. The problem with the mortgages was that they didn't properly reflect the risk. That sucks when you have the equivalent of a closed end lease, but that is the business risk. Whether these risks should should be allowed and subsidized by the government is a separate policy question. However loaning money to people without down payments can and does make sense and is not necessarily indicative of a sub-prime candidate.
Thanks for bringing up the CP outstanding, hadn't looked there in a bit - well that is a sh!t kicker of a seasonal adjustment in September, the non-adjusted number shows a decline of-$17 billion, but the seasonally adjusted value is up +$120 billion...
The GFD into a realtors trust until 2/28/2010 to be used as part of the deposit if the bank agrees to go into escrow between now and then. This just smells bad.
I drove my real estate agent near crazy when I purchased because I was in no hurry to get an offer in and I wasn't afraid to hear back, "no." There are very few once in a lifetime deals. If a deal gets past you, there will be another one available. Be patient and recognize that you have more time than the counterparty.
why are you confusing us with facts? can we please worry about the things that will effect my children and grandchildren like Obama's birth certificate.
The GFD into a realtors trust until 2/28/2010 to be used as part of the deposit if the bank agrees to go into escrow between now and then. This just smells bad.
Smells bad to me too. It sounds more like the agent is trying to corner the buyer than anything else. This isn't a requirement from the bank.
It sounds insane to me: I am going to put something into escrow in order to make an offer and put something in escrow?
I'd ask that he put his good faith closing costs into escrow so that I can place my realtor's trust escrow in place for my escrow after the offer. I mean, if we're going to insane, let's really be insane.
no kids, just over 50, no spouse. Her arguement is that if she were younger, she'd be willing to wait out the rest of the great correction. If she is going to buy and be able to pay it off, it has to happen soon.
badger,
You are off base. Historically, globally, housing prices might rise 2-3% above inflation because of better value or lower TCO for newer construction. Historically downpayment is 20%. Cutting it to 3.5% not only attracts buyers that are less qualified, as they haven't demonstrated the capacity to save over years from their disposable income, but it depends on capital appreciation to preserve collateral. The average bank sold property recoups 10% less (that's from memory, one of the posters here can clarify that number) than market price due to the need to sell it fast, and the general costs of foreclosure. Never mind all the other risks like liquidity, interest rates, unemployment, etc. Those loans are far below cost. If they were to take into account the future expected value of the property, the downpayments required would be huge. We complain because they are not properly reflecting the future value of the property.
Inflation and any accompanying, higher interest rates, put the debt service on the deficit into dangeous territory? Every other industrialized nation is a net saver so they do not suffer from the drag of now high priced debt... As rates rise housing prices tank, and the derivatives based on them, go boom.
BH, thank you for your thoughts on this. To me, this sounds like something that requires an exogenous event... one like a treasury auction failure or a run on the dollar. Furthermore, this crisis would be driven by a public debt crisis, not exclusively private sector defaults. Wouldn't that be a different kind of crisis than the one that happened last Fall? i.e., wouldn't that be the bursting of the government ? the big one?
PS, not be an ass, but I don't this statement applies very well to Japan.
It does if you're coming at it from a U.S. perspective. They're the second-biggest holder of our government debt (Hu's on first) - something like $800B worth and rising.
Everyone talks about China, China, China - but if Japan woke up tomorrow and started dumping their Treasuries, we'd be just as screwed.
Our citizens propensity to save over the past decade or so was abysmal.
Tough to buy into the saving scam concept when your neighbor to the south is throwing a debt funded orgy for 30 years and appeared to be really enjoying themselves.
(Did the music get too loud? Sorry 'bout that....)
"Wouldn't that be a different kind of crisis than the one that happened last Fall? i.e., wouldn't that be the bursting of the government Bubble, Bubble, Toil and Trouble? the big one? "
Given that the Gov and Fed now own a metric shitload of MBS? Maybe. But if any other economy, other than the USA, leads the world out of recession, then yeah, I could see a problem in finding Treasury buyers. Of course if the Fed buys them all with printed money...
Tough to buy into the saving scam concept when your neighbor to the south is throwing a debt funded orgy for 30 years and appeared to be really enjoying themselves.
In general, our savings-rate numbers appeared to always be about 18 months behind you guys. Still are, as far as I'm concerned.
Apparently it takes a year and a half for news to cross the 49th parallel. Our stupid Canada Customs and Revenue Agency holds everything up at the border, even the savings rate.
For anyone that wants to be the last one to tap their margin account, I recommend just buying Amazon.
$51bn market cap, up 27% in a day
this time it's different
To buy a house at 50 is to set yourself up to have to hire people to do all the maintenance that you eventually won't be able to do. It's a lot like renting except with the added fear you are going to be ripped off. At 50 she should be getting eligible for those elder housing programs. Those are some very nice places, subsidized with your tax dollars. Plus, you don't have to shovel or mow the lawn.
Japanese citizens own the bulk of Japans debt. Unlike the USA. So in my view, it applies.
Financial health is dependent on total debt, not external debt. see: Rogoff and Reinhart
(debt tends not to be evenly distributed, which makes sense, otherwise you would have people using their credits to cancel debits and cut out the cost of processing both)
Financial health is dependent on total debt, not external debt. see: Rogoff and Reinhart
But what if we end up in an expensive debt market like the 70's. The interest Japan pays goes to Japanise citizens, stimulating their economy. The interest the USA would pay, would go to Japan stimulating Japan and acting as a drag on the US economy.
Many economists, myself included, believe that China’s asset-buying spree helped inflate the housing bubble, setting the stage for the global financial crisis. But China’s insistence on keeping the yuan/dollar rate fixed, even when the dollar declines, may be doing even more harm now.
Think of NAR Yun as part of that spree that PK mentions.
*Down payment is just an assessment of risk. Folks here keep treating it as a qualification to buy. *
Not quite.
Interest rate is really the assessment of risk. But down payment, including the source of the down payment funds, is a big qualification that goes into the risk assessment. No one here has a problem with a 3.5% down payment if the interest rate is commensurate, the income history will support it, and value appreciation (which seems to look at too small a time frame).
The listing agent has asked that her good faith deposit be placed in an escrow account
This might work out, but I probably wouldn't do it without a lawyer. Lawyers or comparable personal experience are usually necessary for successful bottom feeding. The seller (or broker) is definitely trying to put her in a box, and it is important to know the characteristics of the box before getting in.
Among other things: she would want to make sure the money is in an account where it can't be stolen or affected in any way by the insolvency of the broker or seller, she would want to make sure she understands the terms on which she would get the money back, she would want to make sure she can get her money back if they try to add new terms once the bank gets done evaluating the sale, etc. She would also want to make sure she isn't going to need the money for anything else between now and then, including an offer on a different house, but that isn't something a lawyer can necessarily help with.
.....Come on........Why spoil the dream for today's buyers?
Today's buyers tend to be my age, i.e. in their early 30's and not in their 50's. Once you hit 50, the risk/reward calculation changes. If she knows she can afford to retire by buying the house at a particular price, she should do it at that price.
"The interest Japan pays goes to Japanise citizens, stimulating their economy."
And the money the Japanese gov't gets isn't robbed by gun point from the citizenry but appears via the mystical magical money fairy. If only we could capture the money fairy, all our problems would be solved. Or we could base on monetary system on tree leaves, like the Golgofrinchen. Either way.
The government bubble will not burst- it will just deflate slowly. For the deflationists out there- not possible in a fiat currency world for the government to go bust and there not be inflation. I do think there is the option of a selective default. e.g. reintroducing with holding taxes on US government debt.
And the money the Japanese gov't gets isn't robbed by gun point from the citizenry but appears via the mystical magical money fairy. If only we could capture the money fairy, all our problems would be solved. Or we could base on monetary system on tree leaves, like the Golgofrinchen. Either way.
Check this out...
Nouriel Roubini - 'Big Crash Coming' (IndexUniverse.com, Dave Nadiq, Oct. 23, 2009)
Roubini - 'Oil at $145 was the reason - more than Lehman - that the global economy tipped into the worst recession of the last 60 yrs...'
Regarding CFTC, 'I'm not usually in favor of position limits.'
Huh? What about the housing bubble, credit freeze, and derivatives implosions? Oil speculation caused this but who needs 'limits'?
The Econo-Speak is making NO sense anymore...
But what if we end up in an expensive debt market like the 70's. The interest Japan pays goes to Japanise citizens, stimulating their economy. The interest the USA would pay, would go to Japan stimulating Japan and acting as a drag on the US economy.
There can't be high interest rates in either case. Once that happens sovereign default rapidly follows. Debt servicing as a % of revenues is what kills a country's finances. The US for example cannot afford a 5% average yield on Treasuries. Once that tipping point is passed, USD denominated debt gets expunged, and foreigners who thought they had found the secret formula to wealth find out they weren't so special. Bernanke has devaluation style imported hyperinflation on one side, great depression style deflation and de-leveraging on the other, a weak economy chasing him forward, and there isn't the option of an export led recovery to run towards as he scrambles down the increasingly narrow path.
Roubini - 'Oil at $145 was the reason - more than Lehman - that the global economy tipped into the worst recession of the last 60 yrs...'
I'd love to see how he empirically arrived at this conclusion. The destruction of a decade-long credit-orgy bubble vs oil priced at high levels for a few weeks. Hmmm.....
I am one of those who believes that the Fed's moves to cut interest rates in response to liquidity problems despite a perceived inflation threat sparked a sell off in the dollar and a spike in oil prices. I think it was the gasoline price spike that pushed the most marginal borrowers (who by definition were in distant suburbs) over the tipping point. I also believe that the narrative is backwards- the economic problems caused the melt down on Wall Street not the other way around.
Roubini is wrong there.
What happened was the debt engine slowed in 2007. In search of returns, the money flowed into commodities because emerging markets were still doing well and because of capital controls commodities was the best way to exploit those surplus returns.
And the money the Japanese gov't gets isn't robbed by gun point from the citizenry but appears via the mystical magical money fairy.
It could come from the USA in Japan held, 800bb T-Bill interest? I'm pretty sure the debt service on Japan T-Bills will be far less, for a long time, than the interest the USA will be paying.
the economic problems caused the melt down on Wall Street not the other way around.
Whether it was a cigarette butt or a lightening strike, do we really care what set the fire? I prefer to blame the guy who spread gasoline over everything.
....lets see.........Spend the most amount of money you'll ever spend in your life playing a game. In this game the rules keep changing while you're playing. Different referees shuttle in and out - always with a new set of rule changes. At quarters and half-time you might be asked to roll the dice to add more money to the pot to continue playing. Other players are playing by different sets of rules and the object of the game is different for all. On top of all this, cheating is abundant and allowed by the players, the referees, and the game operators. Welcome to the US Real Estate Investment Game - 21st Century Fiat Edition........
That was my thinking. She needs to smile and say "yess'm" while tossing caltrops behind her. If the deposit is small enough that she can use it as a hedge on the one property while continuing go shopping with some other stash. If it isn't ,claim she's frail and poor and negotiate the deposit down to where it becomes a inexpensive hedge against the direction of the local market..
Does she get the money back if the house fails inspection for any reason? If so, there's your out.
It never was. Few of the people my age that I know are well-informed on current events, economically literate, and not crippled by student loan debt. Most are paying huge overdraft fees, yet are unaware that it is or could be a political issue.
But, that might not be what Roubini was saying exactly. It might have just his guess at who lit the match, not what caused all the fumes.
Oh I agree 100% in that conclusion. I just really don't care who lit the match. As much as I don't care who was driving a poorly maintained car when it finally seized on the side of the road.
Welcome to the US Real Estate Investment Game - 21st Century Fiat Edition........
HA!! Not sure ONLY Real Estate... You've just described the overall new Merican eCONomy. The peasants "investors" are going to get rolled by the playaz, that's fer sure.
"Spend the most amount of money you'll ever spend in your life playing a game. In this game the rules keep changing while you're playing. Different referees shuttle in and out - always with a new set of rule changes."
To DC Rogers from last thread because this will affect oil prices...
I was saying that after 8 years in Afganistan, the U.S. only has a 'toehold'...but I got to thinking that this 'occupation' is not just about fighting 'Islamo-fascism' in Afganistan (and Iraq)but to have a increasing troop deployment ready as the scope of the 'War On Terror' Operation is escalated by surrounding Iran and being ready for deployment to Pakistan that is being set up. There's other factors such as securing oil supply, building natural gas pipelines, the renewed opium trade by ?, national security for Israel, finding the corpse 'stand-in double' of bin Laden, etc.
The scope of the operation is to produce a foothold and then a stranglehold on the Mideast for all of the reasons above and others that are 'classified'. Just as we fought the dominoes in the War on Comminism...we are fighting the War on Islamo-fascism on a major front in several countries. That's why withdrawal in Afganistan (even though promised) is not in the cards of the Military/Industrial/Financial complex...
Having said that, I already know how I'm going to die, and it won't be some in some vampire squid nursing home.
Hopefully it's with loved ones taking care of you. There are many things to be proud of for us as Western society, but how we integrate the elderly into our society is not one of those things. Hopefully we can take a hint from more progressive Asian countries and learn to take care of our family when they age, instead of outsourcing it to the lowest bidder. This is my intention, as the eldest in my family.
EDIT: Although, in retrospect, I'm sure there's a good business case in outsourcing nursing homes to India, or China.
Hopefully it's with loved ones taking care of you. There are many things to be proud of for us as Western society, but how we integrate the elderly into our society is not one of those things.
What you describe only applies when you raise your own family. If you can never afford to raise your own family, you're screwed.
Krugman needs to start looking in the mirror a bit more while he's triying to figure out who caused this clusterf**k. First it was the Republicans. Then it was the Chinese.
If you believe that the Wall Street problems caused the economic problems then you do exactly what the administration has done so far- bring prosperity back to wall Street and prop up asset prices (homes) while you are doing that. On the other hand if you believe that it is the underlying economic rot that is at the heart of the problem than spending all this money on Wall Street is a fool's errand.
I don't believe that people went into debt because they thought it was cool to be in debt. They went into debt because there wasn't the income to support the demand that had been created. Wall Street was only too happy to oblige. The only mistake that Wall Street made is that they forget they were the dealer not the junky and started to sample their own crap. I don't think any of the Obama policies have done one thing to address that long term problem.
What you describe only applies when you raise your own family. If you can never afford to raise your own family, you're screwed.
My suggestion isn't perfect, but it's better than throwing up a person's hands and walking away from you parents, with only bi-monthly afternoon visits as a follow-up. The last apartment I had was in a building with 80% seniors, and I was more than a little disturbed at how infrequent any of them had guests. I can only imagine how much worse it is when they're in a proper nursing home.
But I can't play high-and-mighty here, as I'm not much better. I visit my parents and in-laws frequently, but my grandparents much less frequently due to their location. Hopefully my parents are doing their part.
Speak for yourself, noob - three generations under my roof and care - by choice.
Kudos and mucho respect from moi. It is also my intention, although I don't know if my parents will submit. They are stubbornly pig-headed in their independence, and barring the death of one of them I can't see that changing anytime soon.
But you are an outlier, from what I've witnessed generally.
That's why withdrawal in Afghanistan (even though promised) is not in the cards of the Military/Industrial/Financial complex..
It wouldn't be wise to "bring the troops home" anyway. Beside "the troops" being HERE instead of there, the entire 300+ billion we spend on "everything military" can't be rolled back without serious danger to (what's left) of democracy in Merica. The scum that are currently looking over-there for trrrrsssts would suddenly have nothing to do, focusing their paranoia HERE. People like this have to be VERY slowly reintegrated to a normal society. It might take generations, even if it was possible to start demilitarizing (which it's not).
I have a relative in his last days at the hospital. Reading emails between more immediate members about what to do is just downright depressing. Our society takes a rather utilitarian view of the value of the human person, which doesn't bode well for the elderly.
That is my sitch, noob - MIL is a widow and lives with us - and I am a lucky SOB (running joke with my wife that her mom loves me better, and my parents love her better) - add the kinder princess and a tankful of fish for zany fun!
edit: Yes, outlier - your observation holds well for the vast majority, sadly...
Our society takes a rather utilitarian view of the value of the human person, which doesn't bode well for the elderly.
Yeah, agreed. But, as an old-fart, I also know the more people you've got the less unique they are. Which is why big-cities are more "impersonal" than bucolic small towns.
EHP - I agree: there has been a REAL problem with the assumption that downpayments are only about ensuring sufficient collateral. Because it is often proof of a persistant ability to live withing one's means. Unfortunately, people were under the illusion that the people's credit score as a substitute. But a credit score is a better indication of people's ability to live within their credit limit than it is an indication of people's ability to live within their income. As lower rates lead to a historic loosening of credit it turned out there was a great deal of difference between the two.
I would completely disagree. I think we make too much of a big deal of death. We view it as challenge to our technology. My mother in law was fortunate that she had the opportunity of dying at home with her family around her rather than in a hospital ICU with tubes stuck in her.
On the other hand if you believe that it is the underlying economic rot that is at the heart of the problem than spending all this money on Wall Street is a fool's errand.
I was speaking to who I personally hold accountable for this. It'll be a cold day in hell before I ever expect the government to admit their mistakes.
I don't believe that people went into debt because they thought it was cool to be in debt. They went into debt because there wasn't the income to support the demand that had been created. Wall Street was only too happy to oblige.
My agreement will have to diverge here. The consumer, like wall street, cannot be held blameless in all of this. Certainly there was subterfuge, obfuscation, and downright fraud in having some consumers take on unsupportable levels of debt, but the vast majority went quite willingly. Wall Street acted quite rationally in responded to excess credit demand and limited savings supply, and began bastardizing old effective systems in order to bring balance into the system. But consumers, wall street, the fed, and many others have plenty of blame to share in this.
I think the contest into the close will be to paint it as another outside day (today, open higher than previous close and close lower than previous open)...
The error would be in thinking that anybody in D.C. actually cares that allowing the tax credit to be used as the down payment is a mistake (i.e., poor policy). As for the administration and Congress, they already have someone to blame when a great number of the recent loans default - - the FHA. (Can't you just hear administration officials and congressmen berating FHA representatives? "Why, how could the FHA risk the taxpayers' money, which money we love, er, hold so dearly, by insuring such ill-considered loans! This is outrageous!" puffs the great Senator Blowhard.
I wasn't suggesting that consumers weren't to blame for this. But I doubt very much we would have seen the same levels of indebtness if incomes had been going up during this period. If you put a coat of lousy paint over a rotten structure the peeling paint in part can be blamed on the quality of the paint but the problem that needs to be fixed is not the quality of the paint but the rotting structure. Trying to find whom to blame just ignores the basic problem of the underlying economic rot.
Roubini in article cited above...
On commodities...Roubini clarifies...'If position limits were going to be effective - and I don't know that - I would not be against them.'
He also said, 'There is a global recovery (with)...improving fundamentals...We're creating a bigger bubble than before (because of zero interest rates and a huge carry trade.)
(IndexUniverse.com)
not sure I understand your comment. If you don't fear death but do fear pain and suffering would you not want somebody who would make sure that you don't suffer even if it means that your death might be hastened?
Noob and Energycon: Fire up the euthanasia clinics? Soylent green is people! Indeed the more of us there are the cheaper life becomes except of course for Lord Blankfein...this is nature and its unforgiving. For the rest of the demographic, I suppose Logan's Run might be a good watch. Oh, I'm feeling horribly nostalgic these days.
Stocks, commodities went up a multiple of the amount that the dollar declined. That's how I knew it wasn't inflation, but the idea of a hyperinflation trade. We should see the reverse, asset prices fall by more than the dollar rises
Trying to find whom to blame just ignores the basic problem of the underlying economic rot.
The source of the rot is in our sham democracy, which WAS caused by "the people" (including me). The financial rot was simply gotten from the social/political rot started 50+ years ago.
Stocks, commodities went up a multiple of the amount that the dollar declined. That's how I knew it wasn't inflation, but the idea of a hyperinflation trade. We should see the reverse now, asset prices fall by more than the dollar rises
i've observed that same thing. it appears that equities are more sensitive to a rising dollar than they were to a falling dollar. that sets off red and yellow lights in my head. rur roh, reorge.
IThe relative figures of debt from the credit their oil created from our dollar purchases are now causing a debtor resistance. Where will be the leaders of the US of GS Debtor Resistance? Is Kuwait a good example to follow?
Trying to find whom to blame just ignores the basic problem of the underlying economic rot.
I agree completely. And on that happy note, I'm outta here for a bit. Someone give some ritalin to while I'm gone, as he's getting a little uppity today.
If you don't fear death but do fear pain and suffering would you not want somebody who would make sure that you don't suffer even if it means that your death might be hastened?
I wouldn't burden anyone with that kind of problem.
An airtight living will takes care of that problem in the event of total incapacitation.
If I wasn't incapacitated I'd deal with it myself.
I've always wondered how debt destruction in a Muslim economy would work out. I guess we'll be finding out. Not sure "the good Muslim book" looks favorably on debt. Might be right up-there with the proper-5th-appendage-usage and fornicatin-harlots here.
I don't think our democracy is a sham. If we vote our vote is counted (by and large). I do think that we have to look in the mirror and recognize the enemy and accept the blame for what is happening. As long as we allow ourselves to be distracted by inconsequential issues we allow those in power to steal us blind through the back door. I think we should after watching the performance of a Democratic President and Congress realize that this is not partisan issue. It doesn't matter which party is in power. If we wanted to change it we could - in that respect our democracy is still functioning. If we choose not to take the time to educate ourselves then we deserve to be screwed.
It is the karma of sheep to be fleeced and eaten- I guess the American people are performing their karmic role.
Everyone by now probably knows what I'm expecting. Though, I don't think the short USD / long risk trade will end until the oil bubble ends. Oil could go to just under $98 in mid November if not prematurely burst. It could also have burst yesterday. Soon though. When the correction comes, it won't end with a 10% pussyfooting about it. Probably go down in windsprints. 20% down at first. We'll see how long until government intervention occurs. No fundamental base for the SP500 until 600, but that is in no rush to arrive. 1.3-2.3 years. Pretty monumental re-balancing of global relationships, stuff for the history books
The UK gdp report today was hysterical
gotta love those financial sector types that believe they are cold and calculating, but have a very big irrational warm fuzzy spot in the heart for the home base
was close though, only off by -200%
*I don't think our democracy is a sham. If we vote our vote is counted (by and large). *
I do. Because we purposely decided not to scale it. 50 states for 300 million people is too few, yet we keep it constant. Worse, we keep 435 representatives constant. One in a million isn't very good odds your voice will be heard, yet as a vendor (aka, politician) it's nice to have a larger pool of customers. Hence lobbying groups form. And there are so many lobbying groups, it's merely logical that they pay to be in the front of the line. The supply of representation is kept artifically low, the demand for representation increases, the price skyrockets.
EHP: That is interesting, what I fear out of this is what naked apes do when competing for power/resources: War. The nuclear genie is out of the bottle and that doesn't bode well for our future. I really, really hope I am wrong and history isn't a teacher this time.
BTW, I didn't read well and though you said you were expecting, so glad you aren't otherwise it would have been a huge shift in my head of what you look like. Today, that would cause brain meltage.
I agree with many of your comments which is why as a progressive I believe strongly in States Rights. Although I would point out that in India with 3 times as many constituents per seat they successfully turn incumbents out office of a regular basis. Could it be that an illiterate electorate is smarter?
Could it be that an illiterate electorate is smarter?
I have no idea. They might have more parties to choose from too. Our "two" parties are owned by the same people. What differences does it make to turn out an incumbent here?
If the turnover in Congress was greater than that of The Soviet Politburo maybe the odds of finding a politician not bought and paid for would be greater.
Although it is not politically correct to say so - this is a character and upbringing issue. Home ownership requires a level of disciple that a renter never has to face.
Hey, I sold early last year and have been renting since then. My first landlord was a total ****-up who had to scrape together my security deposit over several paychecks to give it back to me, and had no idea about the costs of upkeep of property, landlord-tenant interaction, and so on.
Now my current landlord can't keep which months I have paid for straight in his head, even though I pay him 5-6 days before the end of the month.
Meanwhile, back in responsible home-ownership land, many of the less-capable human beings I know continue to sit in their underwater houses, paying the man, too stunned to take action, or, if actually in the black on the loan, too stupid to sell while there is still a chance.
Do these owners sound like pillars of the community to you? The high half of your bell curve?
Artificially inflated prices and volumes are the "achievement".
Where "achievement" is defined as deliberately trying to make something happen and then having it happen.
NAR chief economist Lawrence Yun argued this morning:
I'm amazed that ANYBODY listens to somebody with the title: NAR chief economist.
NAR has proven beyond a shadow of a doubt that their organization is completely unable to judge who is qualified for that position.
Cinco-I didn't mean to offend, my foot slips inside my mouth too often. My apologies re: McCain.
But on a bright note; I take some solace in that the USA isn't alone in trying to make something happen.
Kuwaiti Politicians Feud Over $21 Billion Consumer Bailout Plan - Bloomberg.com
Where is the distressing gap? My guess is it is still wide.
I like the edge CR
question for all you RE pros.
Despite the 20 lb wood splitting maul, duct tape, and the rest of my efforts, my girlfriend was thinking about submitting an offer on a short sale. The listing agent has asked that her good faith deposit be placed in an escrow account before the bank has even accepted the file and escrow begun. In the meantime she promises not to show the house to anyone else but with nothing in writting to this effect.
My answer to this is run, don't walk away from the listing. Isn't this a repeat of the same sort of madness as before?
The list agent aka the short sale pro says this is becoming common to keep people from making multiple short sale offers. Anyone else find this fishy?
should be NAR chief SHILL Lawrence Yun
CR smacked him down
I go away for 15 minutes and Frazier is again a bloody mess on the floor. He was looking wobbly but still coherent 15 minutes ago.
btw, Moody's John Lonski today said "The worst is over for US Housing"
If I may be afford a few meta observations.
The housing market continues to operate. It hasn't seized nor has it collapsed. That said, neither has it normalized nor has it stabilized. At this point it is hard to tell paddle twitches from signs of life. Anybody who says otherwise is either lying, guessing or worse; talking their book.
> November 14, 2006
The worst in housing is probably behind us,'' said Lawrence Yun, an economist for the National Association of Realtors in Washington.The market is stabilizing in large part because mortgage rates have fallen.''
His comments were similar to Robert Toll, the chief executive officer of luxury home builder Toll Brothers Inc., who said last week that ``we continue to look for signs that a recovery is imminent but can't say that one is in sight.''
Yun is a retarded slob and I want my BFF
Nanoo-Nanoo wrote:
If someone, hypothetically, had a close relative living in that country, could this type of confrontation end badly? I mean cars overturned, apartments on fire, beheading-type of bad? Arabian politics is an enigma to me.
If we think of a balloon that contains existing home inventory and vacant apartment units, the tax credit is like pushing a finger on the balloon - the indent makes the balloon look smaller, but the volume of the balloon remains the same (the decline in existing home inventory is offset by an increase in vacant apartments).
Take away the FTHB and the analogy is a finger pressing on a bubble.....POP!
CR:
DING-DING-DING!!! We have a winner!
Should housing appreciate from here? Who knows? I purchased with very little expectation of appreciation except for the initial arbitrage due to the purchase being distressed. At least on the low end in my region, I don't perceive a lot of downside risk, because it is near impossible to build for as low cost as the low end around here, either SFR or apartments. I'm reminded of the old joke at the car lot: you want a 3-year-old car that's never been in an accident with under 30,000 miles in mint condition for under $8,000. Let me call the used car factory and see what they can do.
However, if I were sitting with a house valued over 3 times the median income for a given area, I would be worried. Over 6 times, and I would be at outright panic.
The Automatic Earth: October 22 2009: Still squat'n' in the tall cotton
In other words, the free market system has failed America miserably. Well, at least in this instance, and that by itself should raise very grave doubts about that system.
And it's not all that hard either to see why that is. If you let market participants free to pursue what is in their best interests, without forcing them to give priority to society's best interests, they will eventually figure out that the best single investment they can possible make is to buy the government. That allows them to make the laws. Which is detrimental to the rest of society, and leads to the sort of mess we're in right now, which even libertarians concede is not desirable.
So you would have to prevent that from happening. For which you need laws and regulations to keep those market participants out of the government. Since free market guys and dolls don't want regulations, they have no solution to offer. Exit left, center stage.
Mr Slippery, I'll post the "Gap" after new home sales are released next week.
best wishes
More Activity, Little Achievement
Are we talking Home sales? Or the Obama administration?
On the BFF front, a bit surprised both CIT and Capmark have been so quiet the past week - also, anything new on United Commercial? I am thinking we may have a late BFF party tonight - from looking at CR's problem bank list, several western banks have been fermeting for awhile and Shelia may finally decide that they are ready (assuming they have any bidders).
Yun and all the scum can try to hide from truth, but there is nowhere on Earth to F'ing hide!
Banks are cautioned on loans | Business
| The Bulletin
**June 09. 2006 **
"We know commercial real estate loans are a very important part of your business, and we're not panicking about the quality of your loans," Curran told a group of about 60 Central Oregon bankers. "But the concentration (of commercial real estate loans) is a concern."
**According to federal numbers, commercial real estate loans in Oregon totaled $9 billion as of March, comprising 66 percent of the lending portfolio of the state's banks. **
:bitch bitch: 
cost of replacement is meaningless with excess inventory. look at oil when it sold for $20 per barrel. furbies after the fad wore out.
the one good reason to buy a house, even above its current underlying market clearing value, is the stupid cheap interest rates of a loan denominated in USD with a term of 30yrs and a cheap premium... I mean downpayment
hardly feels like BFF here in the rainy PNW
ill fix that
steppin out to get some pizza and beer
btw im doublin down on last weeks bet
i still think one big one is goin down any day now, cause there has been a lull in FDIC action
they must be gettin ready for the big blow...so i vote two ... one smallen one very biggen
I think one of the big problems is that we think of qualified buyers only in terms of economics i.e. do they have the income to afford the mortgage. I think an equally important consideration is do they have the discipline to be and remain homeowners. Although it is not politically correct to say so - this is a character and upbringing issue. Home ownership requires a level of disciple that a renter never has to face. Starting with the ability to hold onto your job and going all the way to setting aside money to cover all the contingencies that home ownership implies. The bell curve applies to home ownership. Just like no amount of education is going to make everybody into a brain surgeon there are just some people who should not be home owners. I believe we passed the threshold in the boom years and all attempts to maintain that level will come to grief.
Plus in an economy where people will change jobs 6-7 times does home ownership still make sense.
I'm waiting for sun in PNW, but that may happen next May...
"Never mistake activity for achievement."
That's an awesome quote and it fits our eCONomy perfectly over the past decade.
We're impoverishing ourselves with debt. The impoverishment isn't noticeable at first, but it's there. There will be hell to pay for a long time. Allowing the bankers that perpetuated this debt fraud to skip off with fortunes is a disgrace.
this talk about credit crunch 2.0 is bunk. we've established a new policy doctrine that says we will print and backstop at all costs. the same crisis will not happen the same way, again. the next crisis will be something altogether different.
put down the party hats and the shotguns. it's not time, yet.
No 'A for effort' for YOU Mr. Housing Market!
Allowing buyers to use the first-time home buyer tax credit as a downpayment is "the next mistake".
It's a good thing that the banks are on the hook for these and not taxpayers.
EHP, on "cost of replacement" - these guys need to visit Detroit and a few other areas! They need to compare households vs. housing units ... if the price is below cost of replacement that just means there will be few new homes built in that area, and there are probably more housing units than households.
best wishes
Plus in an economy where people will change jobs 6-7 times does home ownership still make sense.
I would say no. There was an interesting study in England not too long ago comparing two cities that had severe economic losses. I think both were caused by coal, but it could have been textiles or something like that. Anyhow, the city with more renters was quicker to turn around than the city with higher home ownership.
The Bell Curve stuff we'll just have to disagree with. Day to day, 97% of the population can handle whatever the proposition it.
OT: CIT Group Inc. estimated that recovery value for general unsecured claims in case of an “accelerated liquidation” is between 6 and 37 cents per dollar.
See yah later @ BFF.... is there a poll?
@Doc. CRE is still hidden away, for the most part, off balance sheet for some of the biggie piggy banks and regionals. Its the next whistling shoe bomb. This is one reason there is the 'hoarding of cash' going on among others and why credit is still mostly frozen for main street. Or at least that's this simpleton's understanding of it.
Plus in an economy where people will change jobs 6-7 times does home ownership still make sense.
That economy sir is long gone. 10 maybe 20 years from now maybe, but not anytime soon.
My city is not that far economically from Detroit. Certainly price can approach zero. The assumption that must ride with that is income on the low end approaching zero. That isn't a bet I would make in other areas of the country where a low income apartment has a $1000/month rent bill.
RockyR wrote:
Why? The derivative bomb is still out there, undetonated, but it's no dud.
National Mortgage News
No Hamp for You? Fannie Offers Hand to Investors
By Harry Terris
n
Call it Hope for Home Flippers.
Fannie Mae is replacing a forbearance program for troubled borrowers with one that will make the breaks available to property investors and owners of second homes. In a forbearance, the government-sponsored enterprise reduces the monthly payment on a mortgage for up to six months. The current program only provides this relief for loans on owner-occupied properties.
The GSE said it wants to give property investors and owners of second homes "new options of support" since they are ineligible for the Obama administration's Home Affordable Modification Program...
Or to put it another way, run off mode can take a very long time, and it is likely not even a solid proposition that the country is in run off mode in housing.
There is a bigger problem- if interest rates go from 5% to 6% then incomes have to rise by about 11.7% to hold the mortgage payment as percentage of income constant. If we are already pushing the envelope with 3% down and $8,000 tax credit to qualify borrowers where are the buyers in the future going to come from to take out the existing buyers if they have to move for whatever reason. Historically about 15% of the population has moved each year.
I have advocated for the idea of a portable mortgage- it seems to me that all the current plans without a portable mortgage is going to end up freezing a whole bunch of people in place with its concomitant impact on economic activity.
"question for all you RE pros.
Despite the 20 lb wood splitting maul, duct tape, and the rest of my efforts, my girlfriend was thinking about submitting an offer on a short sale."
Tell her to read this first, then decide.
Amherst Mortgage Insight Report - Laurie Goodman Watermarked
Blackhalo wrote:
ok. let's discuss this. what about the derivatives market makes it such that the government can't continue to backstop it? EDIT: and, what would the tipping point be to push us to a new crisis in the derivatives market?
this is not a baited question, btw.
There is a bigger problem- if interest rates go from 5% to 6% then incomes have to rise by about 11.7% to hold the mortgage payment as percentage of income constant.
crazyv,
Our eCONomy and sham banking system can't handle higher rates. No way. If it can't it won't. Rates will trend lower for years imo.
Angry Saver wrote:
Rates have already been trending lower for years. Nothing ever changes.
The GSE said it wants to give property investors and owners of second homes "new options of support" since they are ineligible for the Obama administration's Home Affordable Modification Program...
Somebody help me out here - who is buying all this GSE junk again?.
The listing agent has asked that her good faith deposit be placed in an escrow
Screw that. Ask him if he wants an offer or not, and tell him it isn't 2006 anymore.
OK, so you're sitting at a poker table and you're looking for the sucker...
I get access to several for fee foreclosure services and I've shown her the flood. She remains persistant. I'm now just hoping to save her one house at a time. Since everyone is so quiet, I'm guessing this money into escrow account before escrow is opened is now common.
That really makes me want to break something that shatters into a zillion tiny pieces.
The $60T derivatives market is the real house of cards. We just propped it up with a measly $1.3T to keep it from turning into 52 Card Pickup.
Rates have already been trending lower for years. Nothing ever changes.
Whiskey,
Indeed. I just threw that out there for all the inflationists. I'm a chicken deflationist myself. I'm primarily positioned for deflation and low growth but I have some insurance and am always standing near an exit.
Why on earth would you ever agree to this for a short sale? The seller is under duress, and you're giving him/her an out. Besides, there's always REO.
One other thing... it's pretty clear from the headline CR's never been 'on commission' because one thing is clear to this peddler - if the activity equals commissionable transactions its a BIG TASTY achievement... for somebody.
Cui bono.
Allowing buyers to use the first-time home buyer tax credit as a downpayment is "the next mistake".
I liked it better when scumbags like Mozillo were making these types of loans, rather than the FHA.
Angry Saver wrote:
I'm a clusterfucationist. The future will be worse in every conceivable way.
WestSac_grrl wrote:
Don't know anything about how it's done in Cali - that is an alien land from my perspective.
Somebody tell me why he's still getting a big fat paycheck at BoA instead of a boyfriend in jail (Mozillo)?
Whiskey wrote:
Yo Brother!
because all the REOs are being swarmed over by cash investors and that's if they will pass FHA. The only thing left is short sales.
aka the voice of experience?
Some Federal Reserve Fun Time!
Here is a new this year series,
FRB: Stock Market, Selected Statistics, November 2009
Of Note:
Since March, volumes have been declining (more evident if you include the stats published by BATS)
Since February, accounts have been using up available margin credit
There is another similarly new series that tracks issuance of stocks and bonds. Looks like the financial industry absorbed a megaload of capital relative to the non-financial economy.
a trip down memory lane to Commercial paper. It hasn't been exciting since the Fed launched the first salvo to bring down interbank rates by using JPM to execute that first big loan. Of note are the flip from foreign financial institutions reducing USD debt, to now increasing USD debt. If they are using that money outside of the US, as is likely, that is effectively shorting the USD. Commercial Paper is short term though, so it will unwind very fast if that is what they are doing and it comes to that.
Commercial Paper Outstanding
iceman wrote:
Actually, originating FHA loans is Countrywide's main business now.
Whoopsie on the duplicate postie.
Totally OT, but had to post it: " HEALTH CARE -- FIFTY-FIVE REPUBLICANS WHO ARE 'STEADFASTLY OPPOSED' TO A PUBLIC OPTION ARE CURRENTLY ON MEDICARE: Yesterday, the office of Rep. Anthony Weiner (D-NY) released an internal study showing that 151 members of Congress "currently receive government-funded; government-administered single-payer health care -- Medicare." Of those 151 members, 55 are Republicans who also happen to be "steadfastly opposed [to] other Americans getting the public option, like the one they have chosen." Included on Weiner's list are anti-public option crusaders Senate Minority Leader Mitch McConnell (R-KY), Sen. Chuck Grassley (R-IA), Sen. Jon Kyl (R-AZ), Sen. John McCain (R-AZ), Sen. Orrin Hatch (R-UT), Sen. Richard Shelby (R-AL), Sen. James Inhofe (R-OK), Sen. Mike Enzi (R-WY), Rep. Virginia Foxx (R-NC), and Rep. Peter King (R-NY). Weiner explained that the purpose of this study is to "point out some of the hypocrisy of this debate." "Even in a town known for hypocrisy," Weiner said in a statement yesterday, "this list of 55 Members of Congress deserve some sort of prize. They apparently think the public option is ok for them, but not anyone else." Back in July, Weiner, an outspoken proponent of single-payer health care reform, offered an amendment that would have given these 55 people a chance to end their own public option by eliminating Medicare once and for all. According to Weiner, it was "put-up or shut-up time for the phonies who deride the so-called 'public option.'" Of course, no one voted for the measure. Yet now "you have members of Congress thumping their chest how they’re against government health care," Weiner noted, adding, "and yet when it's time for them to accept Medicare, they're like, 'Sign me up!'""
From today's Progress Report. I'd say the same probably applies to the horrifyingly overcompensated CEOs in the US, except that they probably stay on some gold-plated health insurance paid for by shareholders, and the salaries of former employees, and now, I suppose, the taxpayer, present & future.
>
Whiskey wrote:
HA!!! too funny. I think I'll join your club. We can throw beer bottles at the inflationesta and deflationesta currently wrestling in the Bankerdoom.
WestSac_grrl: Confused ... is your friend just talking about a "good faith deposit" into a realtor's trust account, that will be applied to the down payment if/when the offer is accepted? That seems pretty common. Otherwise, I don't know.
Thanks! I'll stop bugging you about it.
It isn't about achievement any more and hasn't been for a long time.
It's about addressing problems at the lizard level because that's easier to do than addressing them on a rational level.
It's about appearances.
"ok. let's discuss this. what about the derivatives market makes it such that the government can't continue to backstop it?"
Inflation and any accompanying, higher interest rates, put the debt service on the deficit into dangeous territory? Every other industrialized nation is a net saver so they do not suffer from the drag of now high priced debt... As rates rise housing prices tank, and the derivatives based on them, go boom.
WestSac_grrl
She sounds emotionally driven. Either construct an emotionally-grounded argument (do you want to deprive your future children from the chance to finish high school because she couldn't resist an impulse buy), or just make up a lie like some brutal murder happened in that house. Create a fake newspaper article, tell her you found it only through a print version at the library because the owner is trying to cover it up, that the agent wants the deposit because the earlier prospective buyers must have found out and ran away
mp wrote:
Hence the buzz word in DC - OPTICS
Down payment is just an assessment of risk. Folks here keep treating it as a qualification to buy. When CR says that net transaction costs, a home sold flat after 3 years will have consumed the down payment, that is saying that loan doesn't properly reflect the risk present. And that is fine. Bankers should be concerned about this. The idea that implied value after a given period of time shouldn't be taken into consideration when making a loan is just wrong. We wouldn't have leasing without it, and I'm doubtful folks are going to bring fire and brimstone down against leasing. The problem with the mortgages was that they didn't properly reflect the risk. That sucks when you have the equivalent of a closed end lease, but that is the business risk. Whether these risks should should be allowed and subsidized by the government is a separate policy question. However loaning money to people without down payments can and does make sense and is not necessarily indicative of a sub-prime candidate.
EHP,
Thanks for bringing up the CP outstanding, hadn't looked there in a bit - well that is a sh!t kicker of a seasonal adjustment in September, the non-adjusted number shows a decline of-$17 billion, but the seasonally adjusted value is up +$120 billion...
The GFD into a realtors trust until 2/28/2010 to be used as part of the deposit if the bank agrees to go into escrow between now and then. This just smells bad.
I drove my real estate agent near crazy when I purchased because I was in no hurry to get an offer in and I wasn't afraid to hear back, "no." There are very few once in a lifetime deals. If a deal gets past you, there will be another one available. Be patient and recognize that you have more time than the counterparty.
why are you confusing us with facts? can we please worry about the things that will effect my children and grandchildren like Obama's birth certificate.
WestSac_grrl wrote:
Smells bad to me too. It sounds more like the agent is trying to corner the buyer than anything else. This isn't a requirement from the bank.
badger wrote:
My motto is that the "perfect home" comes up on the MLS every 3 months or so.
It sounds insane to me: I am going to put something into escrow in order to make an offer and put something in escrow?
I'd ask that he put his good faith closing costs into escrow so that I can place my realtor's trust escrow in place for my escrow after the offer. I mean, if we're going to insane, let's really be insane.
no kids, just over 50, no spouse. Her arguement is that if she were younger, she'd be willing to wait out the rest of the great correction. If she is going to buy and be able to pay it off, it has to happen soon.
But i do like that news paper article idea
badger,
You are off base. Historically, globally, housing prices might rise 2-3% above inflation because of better value or lower TCO for newer construction. Historically downpayment is 20%. Cutting it to 3.5% not only attracts buyers that are less qualified, as they haven't demonstrated the capacity to save over years from their disposable income, but it depends on capital appreciation to preserve collateral. The average bank sold property recoups 10% less (that's from memory, one of the posters here can clarify that number) than market price due to the need to sell it fast, and the general costs of foreclosure. Never mind all the other risks like liquidity, interest rates, unemployment, etc. Those loans are far below cost. If they were to take into account the future expected value of the property, the downpayments required would be huge. We complain because they are not properly reflecting the future value of the property.
Blackhalo wrote:
BH, thank you for your thoughts on this. To me, this sounds like something that requires an exogenous event... one like a treasury auction failure or a run on the dollar. Furthermore, this crisis would be driven by a public debt crisis, not exclusively private sector defaults. Wouldn't that be a different kind of crisis than the one that happened last Fall? i.e., wouldn't that be the bursting of the government
? the big one?
Brilliant. Now to write the addendem for her to forward on
RockyR wrote:
PS, not be an ass, but I don't this statement applies very well to Japan.
this is surprising.
August Price Decline Erases July Gain, FHFA Says : HousingWire || financial news for the mortgage market
RockyR wrote:
Canadians were net savers, but only in comparison to Americans. Our citizens propensity to save over the past decade or so was abysmal.
PS, not be an ass, but I don't this statement applies very well to Japan.
It does if you're coming at it from a U.S. perspective. They're the second-biggest holder of our government debt (Hu's on first) - something like $800B worth and rising.
Everyone talks about China, China, China - but if Japan woke up tomorrow and started dumping their Treasuries, we'd be just as screwed.
If I had a JD, you'd have the language in hand right now.
noob goldberg wrote:
Tough to buy into the saving scam concept when your neighbor to the south is throwing a debt funded orgy for 30 years and appeared to be really enjoying themselves.
(Did the music get too loud? Sorry 'bout that....)
Given that the Gov and Fed now own a metric shitload of MBS? Maybe. But if any other economy, other than the USA, leads the world out of recession, then yeah, I could see a problem in finding Treasury buyers. Of course if the Fed buys them all with printed money...
How does buying a house fit into her overall retirement plans? Does she know how much income she'll receive, and if she's saved enough?
Whiskey wrote:
.....Come on........Why spoil the dream for today's buyers?
NOTaREALmerican wrote:
In general, our savings-rate numbers appeared to always be about 18 months behind you guys. Still are, as far as I'm concerned.
Apparently it takes a year and a half for news to cross the 49th parallel. Our stupid Canada Customs and Revenue Agency holds everything up at the border, even the savings rate.
For anyone that wants to be the last one to tap their margin account, I recommend just buying Amazon.
$51bn market cap, up 27% in a day
this time it's different
RockyR wrote:
Japanese citizens own the bulk of Japans debt. Unlike the USA. So in my view, it applies.
To buy a house at 50 is to set yourself up to have to hire people to do all the maintenance that you eventually won't be able to do. It's a lot like renting except with the added fear you are going to be ripped off. At 50 she should be getting eligible for those elder housing programs. Those are some very nice places, subsidized with your tax dollars. Plus, you don't have to shovel or mow the lawn.
Sun Microsystems Aug 28, 2000 == Miicrosoft Oct 22, 2009.
Blackhalo wrote:
Financial health is dependent on total debt, not external debt. see: Rogoff and Reinhart
(debt tends not to be evenly distributed, which makes sense, otherwise you would have people using their credits to cancel debits and cut out the cost of processing both)
yes yes yes - puhleeeeeeze give me some of that retailer at a 75 P/E!
EvilHenryPaulson wrote:
But what if we end up in an expensive debt market like the 70's. The interest Japan pays goes to Japanise citizens, stimulating their economy. The interest the USA would pay, would go to Japan stimulating Japan and acting as a drag on the US economy.
Haven't you heard? They have found a way to avoid paying sales tax, the profits are virtually unlimited!
Allowing buyers to use the first-time home buyer tax credit as a downpayment is "the next mistake".
The next next mistake will be to give up huffing solvents.
energyecon wrote:
I don't care about the valuation, I do it for the dividend. I like them to pay me to own their stock.
Wait, what?
Think of NAR Yun as part of that spree that PK mentions.
*Down payment is just an assessment of risk. Folks here keep treating it as a qualification to buy. *
Not quite.
Interest rate is really the assessment of risk. But down payment, including the source of the down payment funds, is a big qualification that goes into the risk assessment. No one here has a problem with a 3.5% down payment if the interest rate is commensurate, the income history will support it, and value appreciation (which seems to look at too small a time frame).
WestSac_grrl wrote:
This might work out, but I probably wouldn't do it without a lawyer. Lawyers or comparable personal experience are usually necessary for successful bottom feeding. The seller (or broker) is definitely trying to put her in a box, and it is important to know the characteristics of the box before getting in.
Among other things: she would want to make sure the money is in an account where it can't be stolen or affected in any way by the insolvency of the broker or seller, she would want to make sure she understands the terms on which she would get the money back, she would want to make sure she can get her money back if they try to add new terms once the bank gets done evaluating the sale, etc. She would also want to make sure she isn't going to need the money for anything else between now and then, including an offer on a different house, but that isn't something a lawyer can necessarily help with.
Black Star Ranch wrote:
Today's buyers tend to be my age, i.e. in their early 30's and not in their 50's. Once you hit 50, the risk/reward calculation changes. If she knows she can afford to retire by buying the house at a particular price, she should do it at that price.
"The interest Japan pays goes to Japanise citizens, stimulating their economy."
And the money the Japanese gov't gets isn't robbed by gun point from the citizenry but appears via the mystical magical money fairy. If only we could capture the money fairy, all our problems would be solved. Or we could base on monetary system on tree leaves, like the Golgofrinchen. Either way.
The government bubble will not burst- it will just deflate slowly. For the deflationists out there- not possible in a fiat currency world for the government to go bust and there not be inflation. I do think there is the option of a selective default. e.g. reintroducing with holding taxes on US government debt.
Comrade Misean is Dope wrote:
Have I told you lately that I love you?
heyas Misean hows life treating you these dayz?
Check this out...
Nouriel Roubini - 'Big Crash Coming' (IndexUniverse.com, Dave Nadiq, Oct. 23, 2009)
Roubini - 'Oil at $145 was the reason - more than Lehman - that the global economy tipped into the worst recession of the last 60 yrs...'
Regarding CFTC, 'I'm not usually in favor of position limits.'
Huh? What about the housing bubble, credit freeze, and derivatives implosions? Oil speculation caused this but who needs 'limits'?
The Econo-Speak is making NO sense anymore...
Busy energy...friggin busy.
Blackhalo wrote:
There can't be high interest rates in either case. Once that happens sovereign default rapidly follows. Debt servicing as a % of revenues is what kills a country's finances. The US for example cannot afford a 5% average yield on Treasuries. Once that tipping point is passed, USD denominated debt gets expunged, and foreigners who thought they had found the secret formula to wealth find out they weren't so special. Bernanke has devaluation style imported hyperinflation on one side, great depression style deflation and de-leveraging on the other, a weak economy chasing him forward, and there isn't the option of an export led recovery to run towards as he scrambles down the increasingly narrow path.
merchants of fear wrote:
I'd love to see how he empirically arrived at this conclusion. The destruction of a decade-long credit-orgy bubble vs oil priced at high levels for a few weeks. Hmmm.....
I am one of those who believes that the Fed's moves to cut interest rates in response to liquidity problems despite a perceived inflation threat sparked a sell off in the dollar and a spike in oil prices. I think it was the gasoline price spike that pushed the most marginal borrowers (who by definition were in distant suburbs) over the tipping point. I also believe that the narrative is backwards- the economic problems caused the melt down on Wall Street not the other way around.
Roubini is wrong there.
What happened was the debt engine slowed in 2007. In search of returns, the money flowed into commodities because emerging markets were still doing well and because of capital controls commodities was the best way to exploit those surplus returns.
merchants of fear
Comrade Misean is Dope wrote:
It could come from the USA in Japan held, 800bb T-Bill interest? I'm pretty sure the debt service on Japan T-Bills will be far less, for a long time, than the interest the USA will be paying.
US 10-Year 3.47%
10-Year Japan 1.37%
crazyv wrote:
Whether it was a cigarette butt or a lightening strike, do we really care what set the fire? I prefer to blame the guy who spread gasoline over everything.
Your demographic is no longer the swing vote.
Sorry.
....lets see.........Spend the most amount of money you'll ever spend in your life playing a game. In this game the rules keep changing while you're playing. Different referees shuttle in and out - always with a new set of rule changes. At quarters and half-time you might be asked to roll the dice to add more money to the pot to continue playing. Other players are playing by different sets of rules and the object of the game is different for all. On top of all this, cheating is abundant and allowed by the players, the referees, and the game operators. Welcome to the US Real Estate Investment Game - 21st Century Fiat Edition........
That was my thinking. She needs to smile and say "yess'm" while tossing caltrops behind her. If the deposit is small enough that she can use it as a hedge on the one property while continuing go shopping with some other stash. If it isn't ,claim she's frail and poor and negotiate the deposit down to where it becomes a inexpensive hedge against the direction of the local market..
Does she get the money back if the house fails inspection for any reason? If so, there's your out.
mp wrote:
Perhaps not, but we're the ones choosing which old-age home you end up in. Which, at this rate, will be the crooked one we saw on 60 minutes.
EDIT: And I totally stole that joke, before I'm accused otherwise.
Blackhalo wrote:
fair enough.
noob goldberg wrote:
But, that might not be what Roubini was saying exactly. It might have just his guess at who lit the match, not what caused all the fumes.
Not sure exactly, Roubini is ok with me. He's a public figure now, he's got to moderate his doominess.
nice.
mp wrote:
It never was. Few of the people my age that I know are well-informed on current events, economically literate, and not crippled by student loan debt. Most are paying huge overdraft fees, yet are unaware that it is or could be a political issue.
NOTaREALmerican wrote:
Oh I agree 100% in that conclusion. I just really don't care who lit the match. As much as I don't care who was driving a poorly maintained car when it finally seized on the side of the road.
Ha! You're right and I'm just being rowdy.
Having said that, I already know how I'm going to die, and it won't be some in some vampire squid nursing home.
Black Star Ranch wrote:
HA!! Not sure ONLY Real Estate... You've just described the overall new Merican eCONomy. The peasants "investors" are going to get rolled by the playaz, that's fer sure.
mp wrote:
you hire a hit man to take you out when you run out of money?
"Spend the most amount of money you'll ever spend in your life playing a game. In this game the rules keep changing while you're playing. Different referees shuttle in and out - always with a new set of rule changes."
Calvin Ball FTW!!!!! Wh00t!
To DC Rogers from last thread because this will affect oil prices...
I was saying that after 8 years in Afganistan, the U.S. only has a 'toehold'...but I got to thinking that this 'occupation' is not just about fighting 'Islamo-fascism' in Afganistan (and Iraq)but to have a increasing troop deployment ready as the scope of the 'War On Terror' Operation is escalated by surrounding Iran and being ready for deployment to Pakistan that is being set up. There's other factors such as securing oil supply, building natural gas pipelines, the renewed opium trade by ?, national security for Israel, finding the corpse 'stand-in double' of bin Laden, etc.
The scope of the operation is to produce a foothold and then a stranglehold on the Mideast for all of the reasons above and others that are 'classified'. Just as we fought the dominoes in the War on Comminism...we are fighting the War on Islamo-fascism on a major front in several countries. That's why withdrawal in Afganistan (even though promised) is not in the cards of the Military/Industrial/Financial complex...
RockyR wrote:
Is there a Financial INDUSTREEEEE equivalent to this investment (in the hit man)?
mp wrote:
Hopefully it's with loved ones taking care of you. There are many things to be proud of for us as Western society, but how we integrate the elderly into our society is not one of those things. Hopefully we can take a hint from more progressive Asian countries and learn to take care of our family when they age, instead of outsourcing it to the lowest bidder. This is my intention, as the eldest in my family.
EDIT: Although, in retrospect, I'm sure there's a good business case in outsourcing nursing homes to India, or China.
Having said that, I already know how I'm going to die, and it won't be some in some vampire squid nursing home.
Encased in concrete?
I'm kind of like an elephant. I'll know when it's my time and where to go.
"Never mistake activity for achievement."
Never mistake debt for wealth. Never mistake debt for income.
i'm glad to see that someone else gets it.
NOTaREALmerican wrote:
these days, that is looking increasingly more like the USD!
noob goldberg wrote:
What you describe only applies when you raise your own family. If you can never afford to raise your own family, you're screwed.
NOTaREALmerican wrote:
Is there a Financial INDUSTREEEEE equivalent to this investment (in the hit man)?
One way to collect on the insurance...
Krugman needs to start looking in the mirror a bit more while he's triying to figure out who caused this clusterf**k. First it was the Republicans. Then it was the Chinese.
And I say this as a Democrat.
The blame game is a bit tiresome at this point.
That can be a huge PIA, but it is always better than the other problem in my experience (not enough to do)...good to see ya in the 'hood.
mp wrote:
When you're last set of teeth runs out?
Yeah! Something like that.
I'm certainly not indispensable. No one is.
"EDIT: Although, in retrospect, I'm sure there's a good business case in outsourcing nursing homes to India, or China."
if the nurses are anything like the flight attendants on Singapore/Cathay Pacific I'll pre register right now.
mp has SETS of teeth....I'm going to go shiver in the corner now....
it actually matters a great deal.
If you believe that the Wall Street problems caused the economic problems then you do exactly what the administration has done so far- bring prosperity back to wall Street and prop up asset prices (homes) while you are doing that. On the other hand if you believe that it is the underlying economic rot that is at the heart of the problem than spending all this money on Wall Street is a fool's errand.
I don't believe that people went into debt because they thought it was cool to be in debt. They went into debt because there wasn't the income to support the demand that had been created. Wall Street was only too happy to oblige. The only mistake that Wall Street made is that they forget they were the dealer not the junky and started to sample their own crap. I don't think any of the Obama policies have done one thing to address that long term problem.
Roubini article link:
Nouriel Roubini: Big Crash Coming - Features
Speak for yourself, noob - three generations under my roof and care - by choice.
Whiskey wrote:
My suggestion isn't perfect, but it's better than throwing up a person's hands and walking away from you parents, with only bi-monthly afternoon visits as a follow-up. The last apartment I had was in a building with 80% seniors, and I was more than a little disturbed at how infrequent any of them had guests. I can only imagine how much worse it is when they're in a proper nursing home.
But I can't play high-and-mighty here, as I'm not much better. I visit my parents and in-laws frequently, but my grandparents much less frequently due to their location. Hopefully my parents are doing their part.
haha! it's conjure having sets of teeth that has me skeered...
energyecon wrote:
Kudos and mucho respect from moi. It is also my intention, although I don't know if my parents will submit. They are stubbornly pig-headed in their independence, and barring the death of one of them I can't see that changing anytime soon.
But you are an outlier, from what I've witnessed generally.
merchants of fear wrote:
It wouldn't be wise to "bring the troops home" anyway. Beside "the troops" being HERE instead of there, the entire 300+ billion we spend on "everything military" can't be rolled back without serious danger to (what's left) of democracy in Merica. The scum that are currently looking over-there for trrrrsssts would suddenly have nothing to do, focusing their paranoia HERE. People like this have to be VERY slowly reintegrated to a normal society. It might take generations, even if it was possible to start demilitarizing (which it's not).
I have a relative in his last days at the hospital. Reading emails between more immediate members about what to do is just downright depressing. Our society takes a rather utilitarian view of the value of the human person, which doesn't bode well for the elderly.
That is my sitch, noob - MIL is a widow and lives with us - and I am a lucky SOB (running joke with my wife that her mom loves me better, and my parents love her better) - add the kinder princess and a tankful of fish for zany fun!
edit: Yes, outlier - your observation holds well for the vast majority, sadly...
badger wrote:
Yeah, agreed. But, as an old-fart, I also know the more people you've got the less unique they are. Which is why big-cities are more "impersonal" than bucolic small towns.
My take on the used home sales report:
Used Home Sales Soar
EHP - I agree: there has been a REAL problem with the assumption that downpayments are only about ensuring sufficient collateral. Because it is often proof of a persistant ability to live withing one's means. Unfortunately, people were under the illusion that the people's credit score as a substitute. But a credit score is a better indication of people's ability to live within their credit limit than it is an indication of people's ability to live within their income. As lower rates lead to a historic loosening of credit it turned out there was a great deal of difference between the two.
I would completely disagree. I think we make too much of a big deal of death. We view it as challenge to our technology. My mother in law was fortunate that she had the opportunity of dying at home with her family around her rather than in a hospital ICU with tubes stuck in her.
crazyv wrote:
I was speaking to who I personally hold accountable for this. It'll be a cold day in hell before I ever expect the government to admit their mistakes.
My agreement will have to diverge here. The consumer, like wall street, cannot be held blameless in all of this. Certainly there was subterfuge, obfuscation, and downright fraud in having some consumers take on unsupportable levels of debt, but the vast majority went quite willingly. Wall Street acted quite rationally in responded to excess credit demand and limited savings supply, and began bastardizing old effective systems in order to bring balance into the system. But consumers, wall street, the fed, and many others have plenty of blame to share in this.
It looks like they're pumping the dollar today. Seems to be having a bad effect on the stock market.
Hoocoodanode?
Frasier Frasier, How down is thee?
I think the contest into the close will be to paint it as another outside day (today, open higher than previous close and close lower than previous open)...
NOTaREALmerican wrote:
Even the Caesars knew better 2 millennia ago than to bring a hardened army home to a restive populace.
I certainly agree with that.
Personally, I don't fear death, but I do fear pain and suffering.
I'll not patronize some son of a bitch who tells me he can alleviate my pain and suffering in order to allow me a so-called dignified death.
That's not only inhumane, it's inhuman.
The error would be in thinking that anybody in D.C. actually cares that allowing the tax credit to be used as the down payment is a mistake (i.e., poor policy). As for the administration and Congress, they already have someone to blame when a great number of the recent loans default - - the FHA. (Can't you just hear administration officials and congressmen berating FHA representatives? "Why, how could the FHA risk the taxpayers' money, which money we love, er, hold so dearly, by insuring such ill-considered loans! This is outrageous!" puffs the great Senator Blowhard.
I wasn't suggesting that consumers weren't to blame for this. But I doubt very much we would have seen the same levels of indebtness if incomes had been going up during this period. If you put a coat of lousy paint over a rotten structure the peeling paint in part can be blamed on the quality of the paint but the problem that needs to be fixed is not the quality of the paint but the rotting structure. Trying to find whom to blame just ignores the basic problem of the underlying economic rot.
Roubini in article cited above...
On commodities...Roubini clarifies...'If position limits were going to be effective - and I don't know that - I would not be against them.'
He also said, 'There is a global recovery (with)...improving fundamentals...We're creating a bigger bubble than before (because of zero interest rates and a huge carry trade.)
(IndexUniverse.com)
sm_landlord wrote:
it's not that much of a pump.
last I checked, going down = good
is my pal
not sure I understand your comment. If you don't fear death but do fear pain and suffering would you not want somebody who would make sure that you don't suffer even if it means that your death might be hastened?
Noob and Energycon: Fire up the euthanasia clinics? Soylent green is people! Indeed the more of us there are the cheaper life becomes except of course for Lord Blankfein...this is nature and its unforgiving. For the rest of the demographic, I suppose Logan's Run might be a good watch. Oh, I'm feeling horribly nostalgic these days.
RockyR wrote:
Stocks, commodities went up a multiple of the amount that the dollar declined. That's how I knew it wasn't inflation, but the idea of a hyperinflation trade. We should see the reverse, asset prices fall by more than the dollar rises
crazyv wrote:
The source of the rot is in our sham democracy, which WAS caused by "the people" (including me). The financial rot was simply gotten from the social/political rot started 50+ years ago.
EvilHenryPaulson wrote:
That's what I'm seeing.
I'm not afraid to die, I just don't want to be there when it happens.
-- Woody Allen.
above average volume on the DOW
EvilHenryPaulson wrote:
i've observed that same thing. it appears that equities are more sensitive to a rising dollar than they were to a falling dollar. that sets off red and yellow lights in my head. rur roh, reorge.
A news report so rich in implication and irony, you could open up a foundry-
Kuwaiti Politicians Feud Over $21 Billion Consumer Bailout Plan - Bloomberg.com
IThe relative figures of debt from the credit their oil created from our dollar purchases are now causing a debtor resistance. Where will be the leaders of the US of GS Debtor Resistance? Is Kuwait a good example to follow?
Sivertoes
crazyv wrote:
I agree completely. And on that happy note, I'm outta here for a bit. Someone give some ritalin to
while I'm gone, as he's getting a little uppity today.
I wouldn't burden anyone with that kind of problem.
An airtight living will takes care of that problem in the event of total incapacitation.
If I wasn't incapacitated I'd deal with it myself.
silvertoes wrote:
I've always wondered how debt destruction in a Muslim economy would work out. I guess we'll be finding out. Not sure "the good Muslim book" looks favorably on debt. Might be right up-there with the proper-5th-appendage-usage and fornicatin-harlots here.
I don't think our democracy is a sham. If we vote our vote is counted (by and large). I do think that we have to look in the mirror and recognize the enemy and accept the blame for what is happening. As long as we allow ourselves to be distracted by inconsequential issues we allow those in power to steal us blind through the back door. I think we should after watching the performance of a Democratic President and Congress realize that this is not partisan issue. It doesn't matter which party is in power. If we wanted to change it we could - in that respect our democracy is still functioning. If we choose not to take the time to educate ourselves then we deserve to be screwed.
It is the karma of sheep to be fleeced and eaten- I guess the American people are performing their karmic role.
nova wrote:
LOL.
Angry Saver wrote:
Never mistake debt for money.
Oh, wait.
Everyone by now probably knows what I'm expecting. Though, I don't think the short USD / long risk trade will end until the oil bubble ends. Oil could go to just under $98 in mid November if not prematurely burst. It could also have burst yesterday. Soon though. When the correction comes, it won't end with a 10% pussyfooting about it. Probably go down in windsprints. 20% down at first. We'll see how long until government intervention occurs. No fundamental base for the SP500 until 600, but that is in no rush to arrive. 1.3-2.3 years. Pretty monumental re-balancing of global relationships, stuff for the history books
The UK gdp report today was hysterical
gotta love those financial sector types that believe they are cold and calculating, but have a very big irrational warm fuzzy spot in the heart for the home base
was close though, only off by -200%
*I don't think our democracy is a sham. If we vote our vote is counted (by and large). *
I do. Because we purposely decided not to scale it. 50 states for 300 million people is too few, yet we keep it constant. Worse, we keep 435 representatives constant. One in a million isn't very good odds your voice will be heard, yet as a vendor (aka, politician) it's nice to have a larger pool of customers. Hence lobbying groups form. And there are so many lobbying groups, it's merely logical that they pay to be in the front of the line. The supply of representation is kept artifically low, the demand for representation increases, the price skyrockets.
EHP: That is interesting, what I fear out of this is what naked apes do when competing for power/resources: War. The nuclear genie is out of the bottle and that doesn't bode well for our future. I really, really hope I am wrong and history isn't a teacher this time.
BTW, I didn't read well and though you said you were expecting, so glad you aren't otherwise it would have been a huge shift in my head of what you look like. Today, that would cause brain meltage.
YouTube - Secondhand Lions Original Ending
badger wrote:
it is well past the time for soylent green factories spread across the nation. as long as I get to choose the movie, i'd be ready to choose that path.
Nanoo-Nanoo wrote:
None taken; I was sorta teasin' you anyway, and remember, lke McCain said on the campaign trail, ya' gotta keep a sense of humor
Have a nice BFF-
I agree with many of your comments which is why as a progressive I believe strongly in States Rights. Although I would point out that in India with 3 times as many constituents per seat they successfully turn incumbents out office of a regular basis. Could it be that an illiterate electorate is smarter?
crazyv wrote:
I have no idea. They might have more parties to choose from too. Our "two" parties are owned by the same people. What differences does it make to turn out an incumbent here?
If the turnover in Congress was greater than that of The Soviet Politburo maybe the odds of finding a politician not bought and paid for would be greater.
crazyv wrote:
Hey, I sold early last year and have been renting since then. My first landlord was a total ****-up who had to scrape together my security deposit over several paychecks to give it back to me, and had no idea about the costs of upkeep of property, landlord-tenant interaction, and so on.
Now my current landlord can't keep which months I have paid for straight in his head, even though I pay him 5-6 days before the end of the month.
Meanwhile, back in responsible home-ownership land, many of the less-capable human beings I know continue to sit in their underwater houses, paying the man, too stunned to take action, or, if actually in the black on the loan, too stupid to sell while there is still a chance.
Do these owners sound like pillars of the community to you? The high half of your bell curve?
Do what I did with my renters.
Have him open a savings account for free at any local bank. You get a sheaf of deposit only slips and there can never ever be a question.