Bad News for Bears (humor)
Submitted by
CalculatedRisk on Sun, 02/07/2010 - 12:41pm (452 comments)
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furst?
Indianapolis and New Orleans as symbols of America in recovery?
Rob Dawg wrote:
Better than AZ or Detroit...
Blackhalo wrote:
true, sad, true
Played in Miami. Mebbe lots of people will look around and
say gosh, I'd like to buy a house here!!!
I can hope.
Conversely, maybe it'll be A-shaped, and we're at the peak.
No matter the score, the
and 
still win. Go sponsors!
It is really, really hard to see how a slightly improved amount of manufacturing can drag an economy into recovery with completely dead residential and commercial construction sectors plus declining personal credit and increased savings. Personally, I think that if you adjust out the stimulus and peg in an amount for additional bad debt that was counted in the GDP growth column, the economy has never left recession.
And since the stock market manipulators made the mistake of getting the price too high before they sucked Joe 6 in, I think they will have to sit on dead money - if not a big loss - for a long, long time. They banks cannot make money off each other forever.
I'm a naturally optimistic guy, too.
Agreement with Greespan should of course make you reconsider your own position. But that doesn't mean you need to take the opposite position. I think it just means you are being way to optimistic.
Why is Greenspan worried? The unemployment rate just dropped 0.3% in one month. At that rate, we'll be down to 6.4% by the end of the year.
an economic recovery is “going to be a slow, trudging thing.” - Greenspan
Uh oh, it makes me nervous when I agree with Greenspan,.. - CR
As soon as you accept the second leg down you don't have to believe in either Greenspan or a recovery. :darkhelmet:
noob goldberg wrote:
That's what I'm betting... at least with the stock market.
Castor.
wally wrote:
I'm a naturally bittersweet guy.
recovery ∅
∄ recovery
∃ ¬ decline
we ⊂ clusterxxxx
We should have a pool:
When (and where) will U3 and mortgage rates cross?
U3 and Prime?
U6 and FFR?
Just woke up from a nap. This has been a great Superbowl Sunday so far...speaking of which...was Scrooge running that power plant construction site in Connecticut where the explosion was...making workers work on Superbowl Sunday...that's just unAmerican...seriously though...my heart goes out to the families involved. You just never know.
Vonbek777 wrote:
I'm thinking Mr. Burns, myself.
A more realistic question is how many skittles does a unicorn poop on an average day?
feels a lot like January 2008 right now
Re: "“very difficult” to see U.S. unemployment falling soon"
Greenbaby knows his shit -- yah need to listen to the old goat, even if he is a living ghost ... this may be one of the first honest things he has said since being alive!
Mr Slippery wrote:
Mr. Natural
Sounds like we need a Federal grant to do a study. Being a magical creature, this project could take years, might need grants from multiple agencies...start with the Department of Energy...
EvilHenryPaulson wrote:
January 2008 felt warmer
But I agree with the feeling. I don't know what's in store for the coming year, but I'm having a hard time imagining many surprises to the upside. I have no problem imagining unpleasant surprises, however. And I felt very similar in 2008, with the difference that I was already bearish on commodities, about six months too early...which means I'll probably lose a fair bit of money trading this 'feeling'.
Bubblisimo Gerkinov wrote:
here's some really bad news for bears:
Geithner Says U.S. Will ‘Never’ Lose Its Aaa Debt Rating
Time to be a family man. Enjoy the superbowl, everyone.
EvilHenryPaulson wrote:
That was a credit recession and Dow at 13k.
This is a business cycle recession and a FedGov out of bullets. Double sucks because the credit recession part deux; The Great CREmation could arrive as early as this summer. Theme music: YouTube - Lovin' Spoonful - Summer In The City
U3 and mtg rates, hmmmm. 9%.
lawyerliz wrote:
Year 2040
My English teacher used to be very hesitant to use the
words always and never because you were just asking for
someone to figure out one example of where you were wrong.
And then focus on the one example rather than the overall
point of what you were saying.
I guess he didn't have as good an English teacher.
Here's some total bullshit:
... after analyzing annualized average S&P 500 returns from 1967 through 2009, Capital IQ found that wins by the Colts were correlated with an average 10% stock market return.
I wonder how those correlation connect to The Great Depression l (and our GD ll)?
HedgeFund.net: Public news from HedgeNews
High interest rates are right around the corner.. The US is sucking wealth like a vacuum with $1T+ deficits and those folks are gonna want a premium interest rate shortly...
It gets interesting when folks have to decide between parking $100K with the US Treasury -OR- maintaining their lifestyle.
Those that choose the treasury will want proper reward for any risk and for lowering their standard of living....
Someday this war will end, but not today.. and tomorrow isn't looking good
Hahahahahahahahahahahahahahahaha.
Conjure is a student of financial structures. He points to this article, by Wolfgang Munchau, as an excellent example of this type of analysis.
FT.com / Columnists / Wolfgang Munchau - Europe needs to show it has a crisis endgame
Meanwhile, Conjure's Mad Max Clock is ticking.
The last time they crossed, a young Volcker was castrating a golden bull. Won't happen again in my lifetime (and I am in my mid-30s and quite healthy).
No, long before than.
And by the way when we bought the
stead in late '96 our
rate--with good credit and over 40% down--was 8 1/2%. We dithered abouot re-fi-ing, but
I couldn't bear to borrow more money, and instead we paid it off
in 11 years. I rather think this involved spending less money than re-fi-
ing would have done, but I've never checked for sure.
I wonder if a roulette wheel spun in 1930, with the ball dropping on red/20 is related to a roulette wheel being spun today, with a ball dropping? I wonder if you would have to use the same wheel in the same room and drop it at the same "time" at the right angle and then spin the wheel with the right velocity and .. well, yah know, correlations and models are very predictable, right?
lawyerliz wrote:
Well, not the part right next to the stadium.
How many datapoints does it take to generate a valid correlation.
Although we got a lot of snow here in the DC Metro, I can assure you that Ben's press is still operational. Thus, as long as his press is operating, infinite dollars at rock bottom rates (0-0.25%).
Rob Dawg wrote:
In looking for a bright scenario for US asset prices and recovery, it's unfortunate that what I see as the most likely short term bright spot has to do with other economies having real trouble. That will move investment money to $ and the US.
It locked me out without registering.
I don't like to register blindly.
And sometimes I think conjure is, you know, a real person.
Errr, entity. Errrr supernatural being.
But definitely hairy or furry.
I'm in Tunica, MS for a poker tournament. The obesity is truly amazing.
So, when did Ben's press break? Thought so.
Agreed, said this yesterday, except I said they
were doing it on purpose.
lawyerliz wrote:
You might be right. I'm personally using Japan's experience as a model for this tongue-in-check prediction.
NorkaWest wrote:
That all depends on the size of your
and what type of 
you need at the end of the day and obviously, your gamma (jumpiness) and phi (correlation) parameters have to be calibrated to the root-mean-square error, so that your gaussian copula doesn't get as fucked up as you are.....
Ben's press wuz only printing dead electrons anyway,
stuffed into insolvent banks.
No inflation until it gets into the pockets of actual people.
And I don't see how, unless like Kristina, a whole lotta people
get their ponies.
Got the Colts giving 5 and over 57, but mainly for fun. I wouldn't bet real money on it, only some dollars.
Gaussian copula?
This is a family blog.
For real--in the 60s the hub used to subscribe to various
Soviet glossies, and even then didn't want to come to
anyone's attention, so he subscribed under the name Maxwell
Gauss.
longwaver wrote:
Most people assume interest rates will rise. The short term pressure will come from the end of Fed MBS purchases. After that, what is going to push rates up? Is the conventional wisdom that there will be limited funds and large supply of debt issuance, and competition for the funds will drive up rates? I don't think it will come from increasing economic activity, and if upward pressure becomes too great, I think QE will be turned back on by central banks. I am not sure there will be a large raise in rates after the initial pop from the end of the Fed MBS program.
lawyerliz wrote:
I thought that said, dead erections at first ... gotta go .... LOL!
Since Greece and Europe seem to be coming up, here are a couple of recent links from Mauldin on the subject:
A Bubble in search of a Pin (Caution: PDF)
And one with a piece by M. ElErian
If PIIGS Could Fly - John Mauldin's Outside the Box - InvestorsInsight.com | Financial Intelligence, Advice & Research / Investment Strategies & Planning for Individual Investors.
1 currency now -yogi wrote:
I'm shocked. Next thing, you'll end up in Houston, TX for a poker tournament and say the same thing...
Doc Holiday wrote:
Those used to be called luxury condo towers.
Every time Geithner opens his mouth lately, what comes out is embarrassing for Obama.
But it seems that Obama has lost control to do anything about it.
So, Geithner is a loose cannon blasting away in the circular firing squad.
Sad to watch...and millions of Americans are watching.
rich wrote:
And not just Americans. Imagine how our creditors are reacting.
sm_landlord wrote:
The Bear Sterns hedge funds are contained, besides they don't have to bail them out if they don't want to
rich wrote:
Obama can only fire him once so it is best to get the most out of it. The bank stocks look particularly weak. Can Citi survive? Save then use Timmay on-a-Stick to distract the public and Congress from something big like that.
the only good thing about that is we should live a little longer if famine ever strikes....
I was at King tut exhibit yesterday and its amazing how big people are today.....I don't mean tall either....
Many of them should have thought about running around the exhibit.....
EvilHenryPaulson wrote:
Except this time with countries there's no counterparty risk. After all these are sovereign debts and between the low yields and infinite counterparty risk (immunity) no one would ever take the other side of the trade. Right? [crickets and laughter]
Update from New Zealand:
Nestled amongst these news articles:
World view: fear reigns
Bumpy week ahead for Wall St
We have this bit of news:
End in sight for Govt bank guarantee
And Geithner is actually correct.
US Gov Debt is denominated in dollars which only the US Gov can print in unlimited quantities. It kind of is the definition of Aaa for fiat currencies (debt denominated in your currency).
Remember: Aaa only says you get your dollars. It does not guarantee their purchasing power.
Reminds me of the story of Golgafrincham - now there's a conspiracy theory
lawyerliz wrote:
Here's a tease.
Europe needs to show it has a crisis endgame
By Wolfgang Münchau
Published: February 7 2010 17:28 | Last updated: February 7 2010 17:28
The last few days have reminded me of the speculative attacks on sterling and the Italian lira in September 1992. Europe’s finance ministers and central bankers at the time reacted with anger and incomprehension. Sterling’s central parity in the exchange rate mechanism was as unsustainable then as Greek public finances or Spanish wages are today. Today’s financial markets correctly perceive the eurozone as not addressing the imbalances. They are confused by shifting signals from Germany and France about a bail-out. Investors have concluded that the probability of a contagious default is rising. They are right.
What has not changed since the 1992 crisis is that European policymakers and their economic advisers still lack a basic understanding of how financial markets react to policies or, in this case, to a lack of policies. At the moment, it is totally unclear what would happen should one eurozone country become unable to refinance its debt. I suspect there will be a bail-out, but I am no longer as certain as I once was.
The least helpful suggestion in this situation – one that has already contributed to investor panic last week – is to let the International Monetary Fund sort out the mess. The argument is that the European Union is not in a position to provide emergency aid in an effective manner and that the IMF has the experience, personnel and the instruments to do so.
That is all true, but advocates of an IMF-led bail-out conveniently ignore the disastrous signal that this would send to the financial markets about where the eurozone is heading in the future. It would demonstrate that the eurozone was incapable of sorting out its own problems. The eurozone might end up losing so much credibility that investors started treating it not as a monetary union but as a fixed exchange rate system with a finite time horizon.
One large investor I spoke to last week about IMF involvement immediately invoked the comparison with Argentina. Argentina was not willing to devalue. Greece is not in a position to do so. IMF-led programmes work better when currencies are allowed to devalue, as otherwise the adjustment would have to come exclusively through a fall in wages and brutal fiscal austerity. If the IMF came in, Greece might well go the same way as Argentina.
It would be so much better if the eurozone were to sort out its own problems. That would require a strategy that went beyond the route prescribed by the bloc’s stability and growth pact. The problem is the lack of a credible endgame. The pact contains detailed procedures of what happens when a government fails to comply with the wishes of other members, but it does not go beyond its ultimate sanction – a fine. Yet what is the point of fining an insolvent state? The endgame is still default – and contagion...
...At the moment, in the absence of any framework, the threat of a default is transmitted automatically from the first to the next vulnerable country. Last week, the stock market fell even more in Madrid and Lisbon than in Athens. And, lest we forget, other European countries might also be vulnerable. Austria could still be drowned by its banking crisis; Belgium has a much higher level of debt than either Spain or Portugal and a financial sector heavily shaken by the global crisis. As worries spread north, serious investors might be tempted to bet serious money on a eurozone break-up.
At their special economic summit this Thursday, EU leaders should focus on the crisis rather than debating diffuse microeconomic reforms. More money for research and development is not the answer here. The EU needs to send out an urgent signal that it is willing to devise a robust anti-crisis policy. There is no need for such a policy to be in place this week, but the summit should give a clear signal to the world that the eurozone will sort out its own problems.
The policy will need to do the job, it will need to be compliant with current EU law – including the no bail-out rule – and it must include sufficient disincentives for any potential recipient. The EU summit is probably the last chance to end the ambiguity that Europe’s headless finance ministers and the European Commission have created. The EU needs to give investors its own vision of an endgame. Otherwise we are back to 1992.
Badger boy wrote:
Not to worry about printed money. The GOP, when next in control of Congress, will outsource the money printing to the NY Post and other of Rupert's rags. Money will be called vouchers. Glod will be reserved for corporations paying for election of congress and WH.
So what exactly are they supposed to do to save the day?
He says it almost like that was a bad thing.
Maybe they decided this was easier than passing another stimulus? They already have the TARP funds in place they just had to pull the gun and hold it to the banks heads to get them to go along. J6P is well aware that nothing has been done to help you know, actual people and that the banks are balking. Heck, it is even common knowledge among the crowd at my bar. I'd guess at least 8 out of 10 patrons knows someone that is trying to refi, get a mod or drowning in housing debt that the banks are doing nothing for even if they are flush with our taxpayer dollars. Also, now that FandF have been used to buy up all these mortgages they can push these things through very quickly. I said from the beginning had they offered to do this early and quickly it would stop many of the foreclosures. I realize some out there think housing should go back to being worth about what a new car does now but I don't see that is being feasible minus a deflationary depression. Just how bad do you want a cheap house?
I wish they would...They certainly won't be missed. I do love the whole "taxed enough" idea though. They act like they are all of a sudden paying more taxes than they were last year which is asinine unless they make about 200K or so. We all know that is a TINY percentage of our population.
Secret summit of top bankers | News.com.au
sneaky little bankers....
yagij wrote:
After
descends, we can live off the fat of the land....
Agreed.
There are some here who think that a Detroit type death
spiral is just the thing.
My 55% bottom will let the average person buy.
the towers are hopelss, I think. 80% off for them
Any truth to the rumors that David Paterson is going to follow the route of Spitzer? Paterson Sex Scandal In The Works? Media Abuzz About Possible 'Bombshell' Story
creditcriminalslovetarp wrote:
What the heck do they think they can accomplish?
"Hey, we're all still printing and buying each other's crappy assets right?"
rich wrote:
Obama can't fire Geithner since the Senate will never approve an Obama treasury secy to replace him (there are about 20 treasury appointees that can't get a confirmation vote now). A ton of ex-lax couldn't move a vote.
How cheap do I want houses to be? Simple In line with wages (30% of jobs not coming back) Enough households to consume inventory. Still a long way to go from here.
JimPortlandOR wrote:
Got soap? /Tyler_Durden
"not quite contained" Dubai an isolated incident.
Hahahahahahahahahahahaha.
I think these people believe their own lies.
Anyone even passingly familiar with BB's 2002 manifesto will recognize that he sees the pulled-PIGS party as a golden opportunity to ship a few greenbacks abroad. Well, more than a few. The PPT is bored with just pushing the SPX around - heroically saving an actual sovereign is much more fun.
Terry wrote:
Eventually, NYS is going to have to face its problems instead of denouncing its messengers.
.
Edit: The OT is timeless in this regards. Hate on Jeremiah all you want, but Jerusalem still fell...
Nobody wants to make the case for higher rates beyond the initial pop after the end of the Fed MBS program?
Let 'em have all the sex they want, if they go after the
bankers.
creditcriminalslovetarp wrote:
I see that get-together was organized by the Bank for Orwellian Settlements...
Comrade Kristina wrote:
Just back to inflation-adjusted 1997 prices. Of course there may be some overshoot...
I bet the food will be good..
other than that, maybe a coodinated short massacre rally.....
Europe needs a crisis endgame?
Well, here's the German view: let them fry.
Interview with German Government Economic Adviser: Euro Zone 'Could Cope with Greek Bankruptcy' - SPIEGEL ONLINE - News - International
You said that and the first thing I thought of was poison.
Bad Liz, bad, bad.
Badger boy wrote:
This is not actually that simple.
Here is how Moody's describes its approach to sovereign ratings
From A Guide to Moody's Sovereign Ratings
Why governments default on their debt
The probability of default for a government depends on both the ability and willingness to repay. In contrast to nongovernmental economic agents that are forced to default because they no longer have the resources to repay debt, governments, by the distinctive nature of possessing sovereignty - i.e. freedom from a higher authority - can make the deliberate choice to not repay their debt. A point might be reached in which a government may decide that the economic, social and political cost of repaying the debt is higher than the economic, social and political cost of not repaying it according to the terms of the original contract.
Another issue is that government default risk should not be confused with generic economic, political or financial risks, although they are often related. For instance, a large exchange rate depreciation may precipitate the default of one country (justifying an outright rating change), erode the shock-absorption capacity of another (justifying some downward rating pressure) or have no impact on still another government's credit metrics.
...
Local currency government bond ratings reflect Moody's opinion of the ability and willingness of a government to raise resources in its own currency to repay its debt to bond holders on a timely basis. The key question is the extent to which a government is able and willing to alter - if and when necessary - domestic income distribution in order to generate enough resources to repay its debt on time.
Two implications can be drawn from this: assessing default risk first relies on a cost-benefit analysis to repay the debt, and, second, requires an evaluation of the government's resources (solvency risk), as well as its ability to mobilize resources in a timely fashion (liquidity risk). To determine whether a government will punctually face debt payment streams, it is necessary to assess the possibility and associated costs of (1) raising additional taxes or cutting spending, which both expose the sovereign to the risk of dampening growth and fueling social discontent; (2) liquidating assets, risking depletion of productive national resources; or (3) obtaining monetary financing from the central bank, with the risk of undermining the monetary authority's credibility and fueling inflation.
Classic example of a country defaulting on debt denominated in its own country is Russia in 1998. The Russian government correctly calculated that after the initial shock this decision would be beneficial to Russia and would shift much of the financial losses to foreign investors (who were holding much of the rouble-denominated debt) and local oligarchs, who were not viewed as essential or loyal to the Russian government.
Now, please try again to argue that the US case is fundamentally different.
I think the TBT perspective is looking more ridiculous than ever. So is the idea that the fed will pause for more than a few weeks in terms of sucking down more MBS trash. We'll see parity between GDP and the Fed balance sheet soon enough, probably around the same time we're at a clean double between debt and GDP.
NorkaWest wrote:
Ask S&P & Moodys. They should know, right ?
JimPortlandOR wrote:
Time to force some votes - I've never seen a filibustering senator crap his pants at the podium - I'd like to see that before I die.
lawyerliz wrote:
It wasn't too long ago that the Detroit (and Buffalo) death spiral was unthinkable. Who's next? I an experiment at Nellis AFB went awry and made a crater 50 miles across all the rest of us would experience nothing more than an extension to the Lake Powell Recreation Area.
My sister sent me this ...
The Next Big Thing: Neomedievalism - By Parag Khanna | Foreign Policy
with 'love' for my
ers...
MrM wrote:
I'm sorry. Russia defaulted on its dollar denominated debt in 1998. There were also issues with the rubble denominated internal debt but they were a secondary part of the crisis.
Rajesh wrote:
Excellent typo!
dryfly wrote:
Good stuff.
.
Made my afternoon. Time for a power-nap before our culture's yearly religious festival.
wally wrote:
Good interview, thanks!
An interesting quote:
Bofinger: It is not low, but it is lower than in the US. There, the national debt is 92 percent of GDP. In Japan, it is even 197 percent. And the United Kingdom's budget deficit is far worse than that of the euro zone. And as far as a possible loss of confidence is concerned, let me point out that the state of California has been on the verge of bankruptcy for months and its share of the US's GDP is about 13 percent. Viewed from that perspective, my fear of a domino effect is limited.
...
I suggest a tripolar system with the dollar, the euro and the renminbi serving as global reserve currencies. Instead of fixed exchange rates, the values of the three currencies should be strictly determined by interest rate differentials. For example, if the euro zone has higher interest rates than the US, the euro would have to be devalued against the dollar. If the interest rates in the euro zone then falls below that of the dollar, the euro would be revalued again. All other states could peg their currencies to one of the three reserve currencies of the tripolar system. The entire system would be monitored by the IMF, making selfish monetary policies impossible. Likewise, speculators wouldn't have a chance because should a particular currency have favorable interest rates, that would always be offset by a corresponding devaluation in the value of the currency (i.e. making carry trades unattractive). That would contribute massively to stabilizing the global economy.
dryfly wrote:
The Next Big Thing: Neomedievalism - By Parag Khanna | Foreign Policy
I vote for feudalism, but glad to see the disease is catching...
???
SOURCE: The NYT's Big David Paterson Bombshell Will Break Monday, Governor's Resignation To Follow
Harris just published his latest book on Cicero & late Republican
Rome. It is to be a trilogy.
The factionalism in their Senate sounds like ours.
dryfly wrote:
From the article:
"In Egypt and India, democratic elections have devolved into auctions."
We taught them well, I guess.
rich wrote:
True. It's actually worse than that though. See, it's a circle jerk where Obama opens his mouth and Geithner gets all shaky and embarrassed and he passes it back with some dumbass utterance. I saw Geithner this AM and I was amazed how every single phrase involved some praise for how wonderfully the President has handled this and that. I spit up in my mouth.
How is it no one has demanded to know how AIG got so upside down on unfunded liabilities while the NY Fed & the SEC were watching all the gambling markers getting placed. Geithner was in charge the entire time. It's not like $trillions should go unnoticed when the IRS is able to discover a $20 error on my tax return. Maybe we should put the IRS in charge ?
Was he yanking on the
tentacle too?
I believe so.
ResistanceIsFeudal wrote:
My sis and I had been talking about this ... her comment in the email was something like 'are they listening in on our dinner conversations?'
Now that's a smart bet even in light of the significant amounts of
, spin, distorted facts & stats we'll be getting from Obama admin, corptocracy controlled Congressiters, assclown MSM and pundits 
Oh, and did anybody notice that Bollinger was complaining about
car production be moved to. . . . .The USA?
wally wrote:
I hope no sheep were involved. They have enough of a PR problem with the discussion of methane production.
yagij wrote:
I like Paterson's message on the need to get the budget under control. I wonder if the discomfort caused in Albany by that message is leading to these stories.
I want pumpkin-nut cookies, but to get them, I have to make
them. Anyone know how to summon the cookie fairy?
bearly wrote:
Just because he was in charge doe not mean that he was responsible. A suitable underling will be drawn and quartered as soon as we figure out where they are all hiding.
lawyerliz wrote:
Marry one.
lawyerliz wrote:
I just call my sister. She and her son make awesome cookies.
lawyerliz wrote:
Yes, and notice how he blamed it on exchange rates? Europe has their own reality check coming soon.
The hub is good at many things, but not cooking.
Rajesh wrote:
My daughter too - but she never makes them for me - just her husband and my youngest son. I suffer.
Rajesh wrote:
No need to be sorry, Wiki is there to help
1998 Russian financial crisis - Wikipedia, the free encyclopedia
On August 17, 1998, the Russian government and the Central Bank of Russia issued a "Joint Statement" announcing, in substance, that: (i) the ruble/dollar trading band would expand from 5.3-7.1 RUR/USD to 6.0-9.5 RUR/USD; (ii) Russia's ruble-denominated debt would be restructured in a manner to be announced at a later date; and, to prevent mass Russian bank default, (iii) a temporary 90-day moratorium would be imposed on the payment of some bank obligations, including certain debts and forward currency contracts[6]. At the same time, in addition to widening the currency band, the authorities also announced that they intended to allow the RUR/USD rate to move more freely within the wider band.
The Fed research is also helpful
http://research.stlouisfed.org/publications/review/02/11/ChiodoOwyang.pdf
By late 1997, roughly 30 percent of the GKO (a short-term government bill) market was accounted for by nonresidents.
Mind you, 30% is only on-balance sheet ownership, much more was swapped by Russian bank to foreign banks.
Hence the Russian government felt no mercy when applying the default screws.
I did 2 batches yesterday....big hit with all these girls in the house....raisin oatmeal walnut masterpieces....
dryfly wrote:
Seriously though, between Krugman referencing the 'banking Borg' and now a reputable source talking about 'neomedievalism'... kind of amusing that we're apparently nearing the same wavelength...
her comment in the email was something like 'are they listening in on our dinner conversations?'
They're everywhere!
LL: They should be creative.
lawyerliz wrote:
I cook - I don't bake - I got a pot of Red beans & another of rice going now - in honor of our friends downstream from the land of whodat.
But the wife did make a batch of spinach artichoke dip - time to dig in - catch you all later.
Beam some over. I will forgive the lack of pumpkin.
NorkaWest wrote:
That would imply using brain cells.
sweet....any ham hocks in there....
dryfly wrote:
I got a pot of Red beans & another of rice going now
Sounds good... all you need is some spicy sausage or bratwursts now
Two.
My hubby is actually a very good cook. He is great with grilling and makes the best grilled wings I've ever had. His baking consists of the cookie dough you buy at the store. I love them anyway, the turtle ones are fabulous.
If you can think of this, why can't "they"?
I guess they had too much sex with someone/thing verbotten.
I would but these ladies are very cookie territorial...
greenchutes wrote:
Thanks for the response, greenchutes.
Better not be my
Comrade Kristina wrote:
I think it must have been the
edit: although I hear that the Japanese are the ones that are really into that tentacle stuff.
OMG. Meg Whitman is buying Super Bowl per-game time to preach fiscal responsibility in her run for California Governor. I'll take the sheep guy thankyouverymuch.
growling stomach..that sound delicious right now....
I'm craving some lima beans and ham hocks....gotta go..
enjoy the game everyone....
duty calls....
My fiancee cant cook worth a bean....so its up to me...
This quote is riddled with comparisons of trainwrecks to apples and oranges.
Someone craves lima beans?
sm_landlord wrote:
although I hear that the Japanese are the ones that are really into that tentacle stuff.
LOL. Saw an article -- apparently this began in anime porn and has spread to the non-animated variety ... a fetish is born!
lawyerliz wrote:
Fava beans and a nice bottle of Chianti
yep....it's that southern in me....grandma grew up in Tupelo, Ms...made the best homemade dumplings on earth......
MMM Tupelo honey is the best. We have local Tupelo honey here in Panama City...
mp wrote:
foxhole logic: "There are smoking craters all around us, so we're safe now."
Take the title of the article in question -
"Europe needs to show it has a crisis endgame"
And run it through Google. Lots of links shown in Google will give you the whole article.
We are grilling RibEye steaks and Bacon Wrapped Scallops. I'm also making baked potatoes and have various chips and dips. Hubby is going to light a fire in a little while as it is supposed to be down in the 30's tonight. BRRR
Rob Dawg wrote:
Meg Whitman alters campaign ad to clarify residency issue | PolitiCal | Los Angeles Times
Comrade Kristina wrote:
Yum.
So what was the magic G7 outcome on the PIIGS today?
My expectation would be a
comrade,
I bought this honey below la paz, baja that derived from bee's pollinating mango trees...
I'm a honey freak and this was as close to heaven as anything....
Maury the Credit Responsibility Panda wrote:
You are correct!
Maury the Credit Responsibility Panda wrote:
If there are any important announcements today, they will probably be scheduled during the 3rd quarter of the game.
lawyerliz wrote:
They aren't willing to be ruthless with future employers.
When they realize that it is coming down to the issue of survival of the system, they will be.
Example, naked shorting and bear raids were fine when applied to dot-com and industrial companies, but when Wall Street started eating its own, short-selling of financial stocks was banned. Iceland was the "dot-com" of sovereign debt, PIIGS are the Bears Stearns and Lehmans. Sovereign government governments are going to have to draw the line somewhere.
NorkaWest wrote:
Which century will this be in?
NorkaWest wrote:
How many PIIGieS go down before they "do something" then?
edit: Nothing happened after Soros bagged the Bank of England in 1992, did it?
I am having BBQ White House Roast Beef sandwich with steak house potato salad. Desert is chocolate chip cookies, homemade of course.
I hope this doesn't become a gossip blog. I could care less about the sex habits of my elected officials.
sm_landlord wrote:
Back long enough to address this.
If the contagion starts, they will go fast, very fast. They'll go faster than the EU can react. That's how fast.
If, for example, Greece defaults, England's banks get hit to the tune of 120 billion pounds. Instantaneously.
And they aren't even a member.
Have a good evening.
Yeah mp, I just bought a whole cup last week. I froze most of them but had to save these for today.
That explosion today is awful, they just said 12 injured and 5 dead so far. There were several contractors with crews working today. Apparently this was in the area that was still not completed in the plant. They still have no idea how many people were in the area when it happened.
sm_landlord wrote:
At the time the U.K. intended to join the Euro. As a result of the 1992 crisis, the U.K. has kept the pound and remains outside of the Euro. This has been immensely helpful in the current crisis as the pound has devalued against the Euro.
Helpful to whom? Certainly not pound savers and lenders.
1 currency now -yogi wrote:
It's good to have a banking system (I think.)
I'm still amazed at how many here believe there's no consequence to Ben buying all of Timmy's paper.
Lobbyist Ben Dover wrote:
I could go for some White Castle burgers right now. Some sliders would be good for the Superbowl party.
mp wrote:
mp - got a link for this number?
Thanks
One last thought.
Don't forget, the EMU is a monetary union, not a budgetary or political union.
If any one of those countries is allowed to default, Mr. Market will force the unwinding of the EMU just as a clock mainspring unwinds when it it broken, and all of this for lack of a published policy.
And that's why, IMO, Greece will be bailed out. It would be suicide to do otherwise.
That will put additional pressure on the EU.
Good for bankers. Having a currency that can be easily devalued cheats anyone who has no discounted access to credit/cash/bailout/stimulus/currency.
Can someone explain how an integrated currency is devalued? Do some people in Greece get paid in Lira and others in Euros? What if your bank statement includes both currencies when you open the the mail? Etc.
Sen. Richard Shelby blocks Obama nominees, citing air tanker controversy | Breaking News from the Press-Register - al.com
mp wrote:
I thought the EMU had a policy against bailing out member states. So they either can that policy and watch the rest of the PIIGS line up at the trough, or they call in the IMF and let Washington try to fix it, or... they let it go.
MrM wrote:
The Scotsman, February 6.
"British banks could be sitting on 100 bn time bomb"
They say 100. Conjure and I say 120. Want the over or the under?
Have a good day.
the second phase of the credit card relief act is supposed to come into effect this month,any one hear anything about it?
mp wrote:
20 billion's not what it used to be.
Why, Ah 'member back in '94 when 20 billion cud buy four senators, an island mansion and two Masseratis, with change left over for eight mistresses and a satchel of coke.
Rob Dawg wrote:
If Greece were to default, the direct impact on the EU economy would be minuscule
The real question is what will an indirect impact on German and French banks. I would not be surprised if German and French governments preferred to deal with that impact by extending temp loans and putting additional screws on their banks as opposed to bailing out Greece.
I say
mp wrote:
Thanks, mp
Here is the link on exposure of French and German banks
Greece, Spain, Portugal Bonds Remain Under Pressure - WSJ.com
According to figures from the Bank for International Settlements in Basel, Switzerland, for example, French and Swiss banks had $75.5 billion and $64 billion of exposure to Greece, respectively, as of the third quarter of 2009. That includes exposure through private-sector loans, as well as ownership of government bonds.
U.K. banks, meanwhile, have a total of $193 billion exposure to Ireland, according to the Bank for International Settlements.
German banks have the same amount and French banks have $78 billion, according to the data.
German banks, meanwhile, have the greatest exposure of major European countries to Spain, with $240 billion outstanding.
Quite manageable by TARP standards even taking into account differences in economy size
Besides, the debt is likely to be restructured similar to Latin American deals, with no outright default
1 currency now -yogi wrote:
It occurs to me that your global currency would be somewhat like an ocean, and most likely subject to latency and geographical distortions, ergo subject to tsunamis and storms. What do you think of a structure like the Panama Canal with locks? A regionalization feature that allows a local increment / decrement to value, and possibly a handle for taxing piurposes?
if we hire many people
to fish for giant squid..
we will fix unemployment problem
Problem is: England's banks are playing with euros, not sterling. If England is not part of the prevention solution, will France and Germany's European Central Bank lend the Bank of England enough euros to paper over their difficulties. After all, we do have their treatment of Iceland as precedent.
Comrade Kristina wrote:
How much real money, cash out of your own pocket, did you pay for your current home? I had the impression it was less than the price of a new car.
The EU bailing out Greece is akin to DC bailing out California. If the underlying problems aren't addressed then it's simply "extend & pretend", except (as others have noted) all the other "states" come a running for their bailouts.
sm_landlord wrote:
We have our own pigs to worry about.
Arizona decides to close most state parks - Los Angeles Times
$881 million state budget shortfall could cost 300 Nevada public employees their jobs
States Look to Expand the Tax Net to Services - WSJ.com
TJ and The Bear wrote:
Probably closer to bailing out Alabama, but yes, there is a small moral hazard problem.
She inherited it.
The home was my Mother's so it is kind of a silly question to ask. The house (or equity in the house) was willed to me by my Mother. Equity is looking pretty scarce as of late.
TJ and The Bear wrote:
Article by Jim Willie from two months ago warning about cascading failures spreading out from Greece.
"Full Circle of Govt Debt Default" by Jim Willie, CB, FSU Editorial 12/15/2009
TJ and The Bear wrote:
Oh, there is a consequence. It's called inflation. (I know you don't believe that will happen, but many of us see that as the consequence. It comes with a long timer fuse.)
What do you bet that patient will say you are a bad,
bad, morally compromised person?
I say if you multiply Kristina by millions, and the price
s.
of gas keeps dropping you may have the beginning of some
patientrenter wrote:
And higher interest rates at some point. Which of course would bust housing and banks for a long while.
I bet you are correct liz. Thankfully I didn't take that whole catholic upbringing to seriously so I don't get all hung up on morals anymore anyway. I figure so long as I don't kill or steal I'm doing fine.
Patient would prolly rather be right than have the
economy turn around.
Blackhalo wrote:
Inevitable.
Thirty years of declining rates conditioned people to believe rates always go down.
2003 was probably the true bottom of the credit cycle (for interest rates). 2003-2007 was a kooky battle between the Federal Reserve and the Credit Cycle, which created the housing bubble via short-rate manipulation. 2007-2009 has been a holding action with massive government bailouts.
Rates go up.
Treasuries go boom, along with most other paper.
lawyerliz wrote:
He must learn to deal with disappointment.
He could finally get squatters rights on the home of his dreams if we go all Mad Max,...
Except addressing the underlying problems will cause European economies to shut down due to general strikes, countries to become ungovernable due to civil servant job actions and "work-to-rule" and cities to burn due to riots and civil disorder.
Californians are much more docile and disorganized.
ekathimerini.com | PM responds to ‘attack’ by speculators
Comrade Kristina wrote:
Yes, so you paid nothing for it. Yet you make fun of those people who still can't afford to pay Florida prices because they intend to fund any purchase using their own out-of-pocket money. Existing homeowners can be smug, knowing their home prices, and tax and bailout and other privileges are protected by their majority voter status.
NorkaWest wrote:
It's already starting in Greece:
FT.com / UK - Greek strikes escalate as austerity plans kick in
gabyjan wrote:
Papandreou is laying the groundwork to defend the indefensible. What a weasel.
Dubai Business | Kippreport
» Islamic banking gets the blues
»
Paid nothing? Paid nothing.
See, all your devotion to your mom is deemed worth nothing.
Florida prices are now eminently payable.
Bah.
sm_landlord wrote:
His father and grandfather were Prime Ministers before him. It's in the DNA.
NorkaWest wrote:
YouTube - Sweatshop Union - Labour Pains "Remain in chains as we pray for change"
and what will you say when the great faceless mass comes crawling, on its own initiative, what will you say to that
a crowd is easier to control than an individual, a crowd has a common purpose, the purpose of an individual is always in question
The housing market will find itself no matter what. The Government has a good side and a bad side to their intervention. they do nothing and it falls to fast the whole thing goes past the true bottom to collapse. They do something (very badly as it is) it does slow the fall and should not overshoot the bottom a bad. Jobs/wages will be the controller of about every thing. No jobs, no recovery and down hill continues.
patientrenter wrote:
BWAHAHAHAHA!!! It's no longer the 20th Century.
Yes, their peasants have a long history of revolting. Their TPTB remember.
Our peasants have a history of just pulling up stakes and moving on to greener pastures. But all of our greener pastures appear to have brown shoots and the stakes are set in a concrete of debt. Our TPTB should remember that without the mobility our peasants could easily go European on them.
Sad, isn't it Liz? Not to mention the fact that I didn't get the house for free at all. It came with mortgage that I GET to pay. Funny that.
So far I've paid over 40 thousand dollars in three years for my FREE house.
Lobbyist Ben Dover wrote:
Demand subsidies and supply restrictions raise prices. Period. Each action that lifts the demand or depresses the supply curve simply raises the equilibrium price for that point in the housing cycle.
NorkaWest wrote:
So there's no way out that doesn't involve severe pain? HOOCOODANODE?!? Sounds familiar...
Over all there is no demand based on not enough butts for all the seats. Lack of jobs does not create demand as there is less money to buy. This isn't over and price stability will be hit again and again. It is coming depending where you are. Just my opinion based on past responsible lending practices.
Lobbyist Ben Dover wrote:
But it's pretty obvious those past responsible lending practices are not coming back in the US for a very long time, Ben. We've seen a massive change in the last 10 years, and now I don't think we're going back for decades, if ever. People see home loans as a right, even when they are putting very little of their own money at stake. And they see repaying the loans as optional - something to be done with spare cash, if they want to. Our entire lending culture has changed, and it's not going back until after we've truly cratered, which won't happen before a decade or two of the baby boomers have retired.
Bingo LBD. I think they are simply pushing out mods now because they don't want to create even more empty seats, never to be filled. I know the value of my home is going to sink further. I don't mind that because I plan on living in it. It is my HOME, not an investment. I'm above water still but I'm not sure that will be the case before this is over. With the Mod I can feasibly keep it in the worst case scenario (other than Mad Max of course)>
bill... what bill? Bernanke doesn't see a bill, just a fountain of money everywhere he looks
I once met a man who said he could get money out of a rock through hard work, he then said the problem is when there are no rocks at all
whatever, high rates of unemployment in the US will be the #1 topic amongst economists who remain purposefully ignorant of credit/debt's role in the economy -- not necessarily in perpetual equilibrium. the financial crisis is for the media, inventing gremlins in the machine to explain the change in unemployment is for economists
Comrade Kristina
Would that worst case scenario be Florida attempting to raise tax revenues with something like an income tax, or maybe a hike on sin taxes, ...?
gabyjan wrote:
All the change in terms notices would have to have been sent out by the first week of January to beat the 2/22 deadline, so if you did not get one, your rates on existing debt will stay the same. They can change rates and payment terms on new debt on 45 days notice. They can also close accounts and cut lines without advance notice. Marketing cards to those under 21 will be shut down until they can figure out how to work the exceptions. You have to opt into overdraft fees - if you don't, they cannot charge you an overdraft fee, but they are likely to refuse the charge instead.
Your statements will contain additional information and you will have 21 days to pay after you get your statement. You cannot be charged for paying in different ways, except expedited payments (waiting till the last minute). You will not be charged default rates unless you are 60 days past due.
Some issuers are trying some cute tricks - Citi raised rates to 29.99 but if you pay the minimum payment by the due date, you get a "rebate" of finance charges back to a 9% rate. You miss the payment, the rebate goes away. Not sure if that works under the new rules.
They've already gone the sin tax route EHP. A carton of cigs here is 50 bucks. A pack at the bar? 7 Bucks. They'd never get an income tax passed but our sales tax is pretty obnoxious and my property tax is bad too. They also just doubled the license plate tag and drivers license fees here.
EvilHenryPaulson wrote:
It's not that hard to figure out.
There's a finite amount of work. Looking back over that EMRATIO chart, it's interesting that our current reset is almost in line with the peak of 1979. If you toss out 1980-82 as the transition phase, it's a reset back to the start of the bubble.
Saudi consumers demand gov't action on Toyota
| Reuters
We will have to go back to a point or we will destroy ourselves. How long it takes to unwind the damage a lot of lies believed by lots of people. Getting out of this mess will leave America weaker for ever.
Lobbyist Ben Dover wrote:
Better a weak patient than a dead one.
Perhaps a bit OT, since it is hard to follow all the threads with so many good comments flowing. If I am right CK got some positive action from the bank. If so, good on ya' as my Australian friends say and I hope this means you will get to stay in the house you love.
Perhaps not OT, since I have lived in Greece for the last thirty+ yrs on and off (12 in Portugal) but have no Greek roots; I just love the language, history, archaeology, music, food and I have so many wonderful friends here. The economy is in shambles; the two major parties have ruled for more than thirty years, and both have lived by crony-capitalism. The current situation only surprises me in that it did not happen twenty or more years ago when it should have. I think some of the current folks in government (such as the newly-elected prime-minister) are serious about trying to fix it, but it will take a long time and much pain. Whatever the projected economic pain required, it is probably an under-estimate by a huge margin, like the revision of numbers from 3.7 to 12% of the budget deficit I believe, and I think it will be met with huge public unrest.
I think the government estimates the shadow or parallel economy at 30+%, but I would estimate that it is well above 50% for many professions, but I have little aside from anecdotal data points and experiences, such as my wife's operation several years ago for which the surgeon issued a receipt for 25% of the fee we paid. I imagine the EU or IMF (probably not at the moment) will engineer some type of bailout or rescue package or backstop, but I have no idea what form it will take.
No income tax on the menu yet.
Boward,
Yes I agree, now lets stop this that twice lately!
Badger boy wrote:
Remember: Aaa only says you get your dollars. It does not guarantee their purchasing power. "
And recall we saw how good the rating agencies are at predicting the future, with the CDOs et.al. Perhaps the solution is that really there is no entity that deserves an AAA rating the world is less secure than that implies, or are ratings given on the curve like a lot of grades, in which case if the high score is 50 in the class it still gets the A? The rating agencies have demonstrated that you should not trust them any further than you can throw them.
EvilHenryPaulson wrote:
Florida is currently as paralysed as Kali, but for different reasons.
The colts are winning.
Patient just keeps repeating the same stuff over and over
again, without ever adjusting his view to any actual real world case.
On the recent change in the US culture around lending and borrowing:
It was perhaps inevitable that, in a world with an excess of savings, lending and borrowing would become reckless.
The problem is that this has gone on for so long (and is still going on) that people's natural attitudes have completely adapted to a world with a savings glut, as have our financial and governmental institutions.
When the tide reverses, as it always does, we will have a culture that doesn't thrive in the new lower-savings world. And we won't be able to change that until the pain is very high. It's much harder to adapt to a glut than a shortage.
It will be decades from now before this unfolds (when the younger Chinese generations reach their middle years), but it will be a tough time for the US.
Lobbyist Ben Dover wrote:
I try to avoid a moral stance, I focus on understanding the mechanics of what's happening and motivation of the parties.
Capitalists have two choices - raise wages / accept huge paper losses or face a terminally declining economy and lose it all anyway. CK's house loan is a microcosm of what will happen, one way or another.
lawyerliz wrote:
Your view on RRE prices also stays the same, LL. Homeowners like your view better than mine.
The legislature isn't even in session yet.
It is quite possible Fla will be paralyzed too, but
give us a chance first. We are less than half
as bad as Kali. And all those screaming fans
will want to move here (maybe).
patientrenter wrote:
"savings glut" == "wage starvation"
The same problem exists across the "first world"...
"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy..."
Alexander Fraser Tytler, Scottish lawyer and writer, 1770
It isn't my view that Nobody (hardly) Can Get a Loan, here.
It's just a fact. Fact you hear? Fact.
If things tighten up any more, well, it will be really nobody.
Higher interest rates will be a good thing for the Fla economy,
I think. The market will get moving.
Remember, I closed loans at 17 1/2%, and the mkt was slow,
but it was moving.
lawyerliz wrote:
Yeah, moving even faster to the bottom of the ocean.
ha.
They love the buffet.
The effects of a False economy based on high prices supported by nothing but imaginary future money. I read an article on growing into the spending debt as a way out. I don't see this happening with declining job base and wages. That leaves inflation and that will just kill growth even more. We are between a rock and a hard spot. I would be very happy to be wrong.
Lobbyist Ben Dover wrote:
Stop agreeing with me.
An income tax for Nevada has never been on the menu either, but it's an increasingly tempting solution after the other attempts have failed
Soon they will need money to deal with the clean up of condos that have no operating/maintenance funds. Assuming they take ownership, then either for attracting full occupancy and depressing surrounding RE prices, or to demolish and dispose of them.
Just like some households couldn't maintain their debt payments by re-budgeting, the same applies to states. It's like trying to dig your way out of a hole, you're just moving the problem around without getting anywhere.
[ with apologies to Florida which is not in the front pack for the first state default. I'll always be skeptical of a property and sales tax only regime though, doesn't seem robust enough ]
Ukrainian and World News: National Exit Poll: Yanukovych beats Tymoshenko by 3.2% margin
and this too
Ukrainian and World News: Tymoshenko: it's premature to talk about election results
EvilHenryPaulson wrote:
Say that after hurricane season.
Let's look at Comrade Kristina's HAMP loan modification.
My original payment is 1124.00 and doesn't include taxes or insurance. So say, 1400.00 per month. The new payment with t and i for the first five years is 769.00 per month and the interest is at 2%. It's crazy really...Liz says it is real and that she just closed one that had the same terms mine does.
This is from the April 2009 SIGTARP Report:
1. certify the borrower’s income
2. calculate the lender reductions necessary to make monthly loan payments
38% of monthly income
3. calculate the lender reductions and U.S. subsidies necessary to make
monthly loan payments 31% of monthly income
In addition they do some type of NPV test where they show that a modification is the least costly route (vs. foreclosure).
Starting backwards:
$769 is 31% of her gross monthly income. Gross monthly income is ~ 2480.65
$942.65 is 38% of gmi.
Treasury will pay the lender half the difference monthly for 5 years (60 months).
86.82/month x 60 = $5209.35
Lender: $5209.35
In addition there are incentives:
Loan Servicer's have incentives.
$1000 for a successful 90 day period.
$1000 per year for each year (up to 3) the loan is current.
$500 if the loan is less than 30 days delinquent (still current)
Mortgage Holder incentives:
$1500 if the loan is less than 30 days delinquent (still current)
Home Price Decline Payments (offsets the losses of failed modifications when home prices further decline... unknown).
Total cost to taxpayer of CKs modification (assuming she is able to make payments for 5 years):
$5209.35 subsidy to lender.
$1000 for 90-day period to loan servicer.
$3000 for 3 years success to loan servicer.
$5000 ($1000 per year) for the principle reduction for borrower (this is the $83.33 she mentioned).
$500 payment to loan servicer
$1500 to mortgage holder
Total:
$10209.35 to pay off mortgage
$4000 incentives
$2000 more incentives if it was current*
Total cost to taxpayer
$14209.35
$16209.35*
Actually, a hurricane or two would boost the economy down here by putting construction workers back to work. It would hurt the insurance industry but they should be well capitalized by now considering the rate hikes they've thrust upon us.
OT:
Folks in the Chicago area should note the pdf file linked in the first sentence of the second paragraph. The pdf file contains DETAILED foreclosure info.
Despite government interventions, foreclosures continue to climb in Chicago region
lawyerliz wrote:
What happened to the FHA? And all the hard-money lenders?
Does anyone have stats in FL on the number of closings, and how many had financing?
OT continued:
From
Chicago foreclosures: Foreclosures soar in Chicago in fourth-quarter study shows - chicagotribune.com
Now back to your regularly scheduled doom programming.
Broward & LBD: You're both wrong. We are between the hard spot and the rock. (Europe is just between two rocks.)
lawyerliz wrote:
Those people could re-finance at a lower rate, debt:income was lower at household/state/corporate levels, and a demographic boom was coming. Besides, the Federal government would go bankrupt if the average interest rate on Treasuries exceeded 5%. Hence, our dilemma.
If it was just a matter of no high rate mortgages being available... someone could have saved 100% of a house's price in 5 years 8 months and 17 days (assuming the 17.5% was interest only)
It's been 3-4 years since Florida's been falling?
I would be surprised if no one was lending to someone with 50% down at this stage in Florida... I think the problem is that anyone who could put 50% down doesn't want a house, and anyone who wants a house couldn't put 50% down
It could be more than that, what are comparable rental costs doing?
YLSP, thanks for the breakdown. They don't seem to be jacking the rate after the first five years though. The highest it can go now is after eight years is tops out at 5.25% for the remainder of the loan.
I assure you that if she defaulted the costs would
be far higher.
Time to foreclose: at least one year. 12 x 1240 == 15000, approximately.
Depreciation for an empty house ????? 10k? 20k?
6% of say 125k for real estate commission == 7.5k.
Mowing etc? Who knows.
This is a no brainer.
No hard money lenders anymore.
Don't kinow the FHA stats.
At least we are not under the rock. Well not yet anyway.
Lobbyist Ben Dover wrote:
The digging accelerates...
We can assume the lender is eating a lot more than the $10k subsidy... $350/month for 60 months (and beyond!) that's 21k...
There is $10B in TARP money set aside for home price decline payments if/when modifications go bad.
YLSP wrote:
thanks for the accounting + research
Assuming the $75bn HAMP budget only goes towards these incentives and is used completely with perfect efficiency, and assuming that $15k is the average pay out per mod, that would provide for 5mn mods
[ those aren't necessarily valid assumptions, but if things are moving now then they could still hit 1mn mods that don't default for 1 year ]
Not to mention the long hot summer with no ac running and the walls molding and rotting. The inevitable roof leak that comes with a blown away shingle during a Tropical Storm or Hurricane hits that doesn't get fixed and rots a few floors along the way as well. So now you have to have a new roof, new floor and new walls...
Still a no brainer-- in my example above the sales price is way below
the amount owed. You cannot understand the losses. They are stunning.
YLSP wrote:
YLSP,
Thank you for providing a worked example. You've pointed out the direct costs of the modification. They seem reasonable. However, there may be other indirect costs. I worry that lenders will make up the difference (see above) by charging prime borrowers more for their loans. I was looking at loan terms recently and origination fees/closing costs seem to have increased significantly since I last looked...summer 2006.
lawyerliz wrote:
I don't know why FL laws make a foreclosure take a year. Who profits most from that delay? It seems to be an obvious case of regulatory capture of the FL legislature by a powerful and well-paying interest group.
Balance sheets can't take the hit that fast so slow down the foreclosures and sale.
Aaghrrrrrrrr.
Back in the 80s, the 80s mind you one of our clients was
a realtor who had some sort of REO contract with the lenders.
We got to see the prior title policy and typical losses on resales
were in the 30-40 k range. Back then. Based on what I'm seeing
now, they are at least twice that. I know one where the loss was
700k, another, 300k.
EvilHenryPaulson wrote:
I very much doubt that the housing market has only two equilibria, both at opposite extremes - all cash for all sales, or money-for-nuthin' 3.5% down, easy underwriting, low-interest loans. I strongly suspect that those who want a 50% loan can get one.
House next door just listed as a short sale at $86/sq.ft. - no bargain as it needs a lot of work... Bad comp for me though...
That was a modest estimate. For uncontested foreclosures it's prolly more
like a year and a half.
THERE IS NO regulatory capture. Stop thinking in these pre-digested
boxes. It used to take 4-6 months, before there were so many frigging
foreclosures. And at least a third used to cure. Now? Hardly any without
the mod.
As Kristina pointed out, it is a really BAD THING to have
a house with no ac, fans or ventilation over the summer.
I'm in Phoenix for the winter- you would never guess that there is any problem in the economy here - heavy traffic, shoppers all out, restaurants have lines on weeknights... We went to the Barrett-Jackson collector car auction and while the prices were not as strong as 5 years ago, they were still impressive, and the place was packed. We spent about $200 there and didnt get a car for it either....
YLSP,
Excellent example.
What about the additional cost generated by others who also want a mod because they see someone else getting one? Isn't this one of the biggest costs? For example, if each additional mod inspired one copycat mod, then the cost per additional granted mod would double.
Where is mp???
Possible run on Greece banks
The Run On Greece Is Here: Investors Pull Out €10 Billion From The Troubled Country; Crisis Escalation Approaches | zero hedge
Right now there's $50B in TARP money for HAMP. I'm trying to remember how much is left in TARP out of the $700B but there is no doubt ~ $150B more they could throw in if they wanted to. (I expect we'll be throwing more money at Citi, BoA, or AIG)? Speaking of which why the eff haven't we resolved AIG by now? You'd think it would no longer be TBTF... and we can fail it...
Heck YLSP, why are we still allowing hundreds of trillions to be gambled by these same entities on an unregulated shadow market?
lawyerliz wrote:
Don't some states have a much simpler and faster foreclosure process than FL's?
If that is the case, then slow FL foreclosures mean more paper-shuffling, and someone in FL is getting paid for all that paper-shuffling. Is that not the attorneys? I really don't know FL, so tell me who it is if it's not the attorneys. But if it were the attorneys, I don't think any other group would have such a lock on the FL legislature. After all, most of the legislators are attorneys.
Guest Post: The OTHER Reason that the U.S. is Not Regulating Wall Street « naked capitalism
For example, by signing the FSA, the U.S. agreed not to break up too big to fails. The U.S. also promised to repeal Glass-Steagall, and did so 8 months after signing the FSA.
Indeed, in signing the FSA and other WTO agreements, the U.S. has legally bound itself as follows:
• No new regulation
• Removal of regulation
• No bans on new financial service “products”
• Certain forms of regulation banned outright
Liz, I've been thinking about what you said the other day about my not wanting to save the world...I am really torn. A part of me really wants to keep pushing this issue. The other part weighs my responsibilities to my husband, uncle and rescued pets. I don't exist in a vacuum. If it were just me and hubby, I'd go all the way in on this. I am still not sure I won't. I haven't signed yet.
Just like the mortgage market correction the banks should be on a similar time table. To fast of a correction is very dangerous. I hate it but we have no choice but to tough it out. Time is pain but helpful. Hopefully.
patientrenter
That's the point I was making. The only thing is that current prices aren't attracting enough of a market, which could mean prices have to fall below building cost to sell, because without ongoing spending a house's price can and will go negative (due to rot, mould, infestation of animals or insects, ...)
Which is why there shouldn't have been overbuilding, because it is possible for everyone to end up as a loser. The shrinking pie. The main problem with that are people like Bernanke who was an ardent supporter of the theory that a strong housing market was just a consequence of a strong economy
Personally I don't believe it would be a problem if we weren't subsidizing it. I actually don't think its really all that evil to buy CDS on events you have no underlying stake in currently... because due to the "butterfly effect" things could happen that aren't anticipated. Think about it... what if you lived in America and had something like meteor insurance. So a meteor hits across the world in somewhere like Eurasia. As a result there are all sorts of unintended consequences which would've impacted you had you not bought Eurasian meteor CDS, which makes up for some of your loss. I have no problem with you gambling on meteor CDS. I do have a problem with my taxmoney subsidizing it.
I don't know where I read it but somewhere I saw a great theory on what happened to TARP. It involved GS and others bringing the banking system to brink, right at the changeover of a presidential administration, and right as Congress was about to break for campaigning. The key thing about TARP that I have a problem with is that Paulson didn't ask for the legal authority to go and recapitlize banks (CPP) or pour more money into AIG (same recapitalization); he asked for and was granted authority for the TARP which we never even saw implemented (and then the automaker bailouts). It would've been easy for Congress to pass a bank recapitalization plan; however they all broke and were too busy campaigning to bother with coming back to DC and making a vote.
I suspect as a result the taxpayers might be able to sue Paulson directly for damages. This is why Obama and Geithner are going to be forced to pass that tax to pay for TARP. If the taxpayers suffer any loss we can sue Paulson directly.
EvilHenryPaulson wrote:
and a stupid housing market is just a consequence of a stupid economy.
You just have to recognize the difference between strong and stupid.
EvilHenryPaulson wrote:
Oh, I am pretty sure that in radically overbuilt areas, such as large swathes of FL appear to be, that the most economically efficient home prices are well below building cost. How else can the market tell builders to stop building homes?
But it is unlikely that the clearing prices in most of FL are below zero. There are enough people who want to live in FL at a low enough price to avoid the Detroit problem.
CK,
I would suggest that you take the loan if you want to keep the house, it is a pretty good offer.
I would also gently suggest that you and your husband get in better financial shape, asap. A cushion against lack of work and poor health would do wonders for your situation.
As for the economy, we are now in muddle through, with occasional moments of terror- Talk Greek to me, bond market;-}
So, on the whole, if you are comfortable staying in the house, and can build a cushion, that low rate may look wonderful in ten years.
Think about it- as LL says, she remembers high rates, and no money available. So do I. I remember thinking a million bucks would be enough to never work again, just live off the interest- now that is risible, but this too will change.
It has to, and when it does, we start the big rollercoaster again.
Someday this war's gonna end...
Rajesh wrote:
Definitely seems to be a relationship or correlation between the two. We have a weak economy and a weak housing market.
It's no coincidence that the financial crisis reached a head right before a Presidential election. 1932 was the same.
EvilHenryPaulson wrote:
This would have a great deal of opposition among independent professionals and small/medium-sized entrepreneurs. Back in the '90s Nevada was the promised land for people who wanted a way around California taxes while still doing business in California. Consultants, service providers, distributors -- Nevada was the place. I knew one guy, a tech pubs contractor, who commuted to the SF Bay by private plane from the Nevada side of Lake Tahoe. He'd fly back once or twice a week, couch-surf with friends the rest of the time, and happily avoid those California taxes. And there were others.
If you raise taxes any significant amount, do those guys have any reason to stay in Nevada? Not sayin' they'd come back to Mother Bear, but some of 'em would just look for another tax haven.
Hmmm Congress is holding a hearing over HAMP...Could this be why the spigot has been turned on?
Daily Kos: Opening The Government's Loan Modification Black Box
The guy that wrote that is a consumer attorney.
Committee launching probe into efforts to buoy housing market - TheHill.com
patientrenter wrote:
Every time I think about finally becoming a FTHB I think back to Detroit in spirit. Homes are coming up in areas where I'm not sure I would want to live even at a better price, and where the houses are in good areas, I'd be nervous about the local city/county trying to take their share of flesh/diminished services through hiking fees for utilities/trash/removal and property taxes.
)
.
At the office, we have started looking at people's assessment and property tax payments when they come in for consultations. With the common thought being that it is a good sign to see if they would be a paying client if their aren't 2+ years behind on their taxes. At least 3 new clients are behind on their taxes and as a result, they were asked to provide a higher retainer (Unofficially
Somehow I can't see a Republican legislature here in Florida with a Republican Governor trying to start an income tax in tea bagger central...call me crazy.
Citizen AllenM wrote:
The political upside there -- a sop to those retiring boomers whose houses are worth less but actually have money. They could live off the interest like their parents back in the '80s.
CK,
If the conditions of the loan mod are in your favor, take it and put the problems behind. With the knew knowledge you have work it and protect it. Comes a point when it is every man for himself.
patientrenter wrote:
Totally. Furthermore, the magnitude of the price declines below building cost (as determined by whatever is high enough to attract workers plus the cost of materials and land) are relative to how quickly you want to occupy that supply.
patientrenter wrote:
Bottom, center of page whos financing by type and number sold. 1/3 cash, 1/3 FHA 1/3 conv.
http://www.armls.com/pdfs/HmSalesMaricopaAll2009.pdf
Bob Dobbs wrote:
Academic question: where would this tax haven be? North Dakota? Almost everywhere near CA's Sphere of Influence is on a death spiral in regards to taxes and costs. Seems like you will have to enjoy not having sunny weather or jumping in/out of country to enjoy what the Nevada folks have been doing.
At this moment it's 49 °F in San Jose, CA and Narsarsuaq, Greenland.
broward wrote:
I think a single currency is not crucial. More important is open source control with minimal transaction costs. Taxing authorities can keep their local currencies until they devalue to nothing. I don't see geography as a factor-- more trade relationships.
LBD, I guess in the end; I loved Big Brother
Comrade Kristina wrote:
Income taxes are most popular when the majority of people don't have much income and are exempted from it. Perhaps not a coincidence that fairly draconian tax rates for the upper income brackets were established at times when the vast majority of people had little more, and blamed the small group of people who seemed to have most of it.
yagij wrote:
I know we all are used to the common identification of higher prices and a good housing market, so we just have to deal with it. But a home should be, for 99% of people, a place to live, not primarily an investment. We all nod our heads, but if we really believed that, we'd be using positive adjectives for low/lower home prices.
The truth is that, since the 1970's in the US, homes have become a money machine as home prices rode the wave of increasing population; increasing workforce participation as more women joined the work force and earned more; a decrease in the average size of households; and the maturation of the baby boomers. There is something odd and unsustainable about the idea that we can become wealthy by sitting on a couch at a home bought with OPM, and the bigger and nicer the home, the greater the couch-sitter's wealth accumulation. Like all that things that can't go on forever, it won't.
When the concept of a home as a money machine fades (and that might be decades from now), we will cheer lower home prices. Until then, we are stuck in an upside-down world, where even the lingua franca is backwards.
adornosghost, It is going down in the 30's here tonight in North Florida.
patientrenter wrote:
Then I need to renew my lease. Got it.
yagij wrote:
I don't have an answer to that, you may be right. Just sayin' that a lot of recent immigrants to Nevada in the business class won't let their personal financial decisions be swayed by love of homeland. If anyone does personally love Nevada; I've never heard anyone express much affection for it.
Pete's still got it, but Roger needs to do an update for the geriatric set:
It's my teenage grandkids wasteland.
Meet the old boss, same as the old boss, and our government is the same as it ever was.
Someday this war's gonna end...
josap wrote:
Many thanks, josap. I don't know if the FL situation is similar to Phoenix, but I'd guess it would be. So 2/3 financed and 1/3 cash, with an equal split between FHA and conventional.
If someone sees the FL stats, I'd be curious. Maybe even LL would be too.
Should be...
New World... same as the Old World...
I wanna be a space pilgrim...
LOL - I was thinking the same thing - old man wasteland.