The Telegraph reports: 'Neighbour from hell' blew up his own home before bailiffs could evict him.
Donald Joyce, 58, was due to be removed from his two-bedroom bungalow in Cherry Hinton, Cambridge, by council bailiffs at 10.30am.
But at 9.45am several explosions obliterated the building, blasting off the roof, flattening a brick wall and launching a giant radio aerial across the cul-de-sac.
The whereabouts Mr Joyce, who is wheelchair-bound and partially sighted, are unknown. He has not been seen since the explosion.
Tuesday, March 31, 2009
Reality is Better than Statistics
From Reuters: Most housing indexes overstate downturn -analysts.
Most closely watched U.S. home price measures lack enough local data to truly reflect house values and are overstating the extent of price drops, executives at a real estate analytics firm said on Monday.
An index is merely an average. It can be badly constructed but otherwise it is exactly what it is - an average, and indicative of the tendency of a population even though it may not reflect the distribution.
Now, the real question is whether the RE analytics firm might actually have a self-interest in "boosting confidence".
Of course, one cannot expect the "superior brain trust" of the MSM to think through these things.
Most closely watched U.S. home price measures lack enough local data to truly reflect house values and are overstating the extent of price drops, executives at a real estate analytics firm said on Monday.
An index is merely an average. It can be badly constructed but otherwise it is exactly what it is - an average, and indicative of the tendency of a population even though it may not reflect the distribution.
Now, the real question is whether the RE analytics firm might actually have a self-interest in "boosting confidence".
Of course, one cannot expect the "superior brain trust" of the MSM to think through these things.
Negative Home Prices (or Pass the Ticking Tax Time Bomb)
The New York Times reports: Banks Starting to Walk Away on Foreclosures.
Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.
Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.
So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.
City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.
Without jobs in the region, the house is worthless. Who's going to pay the insurance, maintenance and property tax year after year?
So it shouldn't be a terrible surprise that the banks find it cheaper to just hand the house back to the mortgagee and say, "Your problem."
“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.
Not a game that you seem to be very good at, daah-link!
Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.
Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.
So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.
City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.
Without jobs in the region, the house is worthless. Who's going to pay the insurance, maintenance and property tax year after year?
So it shouldn't be a terrible surprise that the banks find it cheaper to just hand the house back to the mortgagee and say, "Your problem."
“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.
Not a game that you seem to be very good at, daah-link!
Monday, March 30, 2009
Queer Eye for the Banker Guy
The Audacity of Dopes
From the Washington News Tribune: What you learn when big money goes away.
As a rookie broker at a mom-and-pop mortgage company in Federal Way, Rob Collins had a killer month writing loans in the frothy, frenzied 2005 housing market.
He made $37,000. So he took $5,000 in cash and his fiancée, Heidi, to Bellevue Square.
“I told her, ‘We’re not leaving here until we spend it all,’” Rob recalled this week.
They spent it all right. Heidi bought a pair of designer Richmond jeans, diamond stud earrings, and some odds and ends to supplement her wardrobe. Rob, always impeccably dressed, bought clothes too, including an Italian leather jacket.
Over the following 18 plentiful months, Rob bought a used BMW M3 high-performance sports car, upgraded to a better mortgage company, bought a Hilltop house in Tacoma with Heidi, then married her.
He thought life couldn’t get much better than that.
It didn’t.
Last June, Rob, 29, lost his job writing mortgages for U.S. Bank because he couldn’t write enough approved loans to reach the $1 million minimum his bosses set for him. He sold the M3 immediately and hasn’t owned a car since. He and Heidi, 26, have fallen four months behind paying Countrywide, which owns the loan on their home. Countrywide calls every day asking for its money.
By chance, on a trip to Starbucks in Federal Way last month, I found Collins sweeping the floor before his turn taking orders at the drive-through window. He rides the bus to and from work.
“Starbucks is a great place to work,” Rob said. “I make $8.65 an hour. But I’m up for a raise here shortly.”
And Heidi? She just took a third job. Rob calls the job “swimsuit model.” The wisp of a woman walks the edge of the boxing ring at the Tulalip Casino Resort in Marysville between rounds holding up a placard with the number of the next round.
How are you doing with all this? I asked her.
“Not well,” Heidi said. She choked up. She doesn’t like to talk about it much. The mental and emotional strain, at times, becomes unbearable.
This is just freakin' AWWWWSUMMMMMMMMMMMM!!!
BWAHAHAHAHHAHAHAHHAHAHAHHAHHHHHHHHHHHHHH!!!
As a rookie broker at a mom-and-pop mortgage company in Federal Way, Rob Collins had a killer month writing loans in the frothy, frenzied 2005 housing market.
He made $37,000. So he took $5,000 in cash and his fiancée, Heidi, to Bellevue Square.
“I told her, ‘We’re not leaving here until we spend it all,’” Rob recalled this week.
They spent it all right. Heidi bought a pair of designer Richmond jeans, diamond stud earrings, and some odds and ends to supplement her wardrobe. Rob, always impeccably dressed, bought clothes too, including an Italian leather jacket.
Over the following 18 plentiful months, Rob bought a used BMW M3 high-performance sports car, upgraded to a better mortgage company, bought a Hilltop house in Tacoma with Heidi, then married her.
He thought life couldn’t get much better than that.
It didn’t.
Last June, Rob, 29, lost his job writing mortgages for U.S. Bank because he couldn’t write enough approved loans to reach the $1 million minimum his bosses set for him. He sold the M3 immediately and hasn’t owned a car since. He and Heidi, 26, have fallen four months behind paying Countrywide, which owns the loan on their home. Countrywide calls every day asking for its money.
By chance, on a trip to Starbucks in Federal Way last month, I found Collins sweeping the floor before his turn taking orders at the drive-through window. He rides the bus to and from work.
“Starbucks is a great place to work,” Rob said. “I make $8.65 an hour. But I’m up for a raise here shortly.”
And Heidi? She just took a third job. Rob calls the job “swimsuit model.” The wisp of a woman walks the edge of the boxing ring at the Tulalip Casino Resort in Marysville between rounds holding up a placard with the number of the next round.
How are you doing with all this? I asked her.
“Not well,” Heidi said. She choked up. She doesn’t like to talk about it much. The mental and emotional strain, at times, becomes unbearable.
This is just freakin' AWWWWSUMMMMMMMMMMMM!!!
BWAHAHAHAHHAHAHAHHAHAHAHHAHHHHHHHHHHHHHH!!!
Sunday, March 29, 2009
The Race to the Bottom
The Economist reports on: Sink or swim.
LIKE unwelcome guests who will not leave, 453 container ships, 11% of global capacity, now float outside the harbours of Hong Kong, Singapore and other South-East Asian ports. They are unwanted by their hosts as well as their customers. In recent days China has quietly let it be known that it wants to rid its territorial waters of these nautical squatters.
Only five years ago huge demand from China meant that all these ships, and more, were desperately needed. This had a dramatic impact first on shipping rates, and then on supply (see chart). Between the end of 2006 and July 2008, shipyards received enough commissions to double the world’s fleet. Now these new ships—more than 9,000 vessels—are taking to the water just as demand has collapsed. The world is awash with ships.
To see how the recent boom and bust has affected value, a Hong Kong broker cites a 150-tonne “Cape class” ship that sold in 2003 for $18.5m in the used market. Critical to the price was the prevailing charter rate, then $15,000 a day. By last summer this had risen to $175,000 a day, and an identical ship sold for $85m. Rates peaked shortly thereafter at $300,000. Today rates are back where they were in 2003. Rather than try to find a buyer for another identical ship, albeit one that needed repairs, the owner dumped it for $7m to be used as scrap.
Orders for new ships have, not surprisingly, collapsed and scrutiny has shifted from what can be bought to what can be cancelled: nothing, it turns out, without great effort. South Korea’s shipyards, the global leaders, have learnt from previous busts. They typically demand 20% up front, a further 60% during construction, and the final 20% payment upon delivery. Walk away and you lose a fortune.
Somebody actually learnt from the past?!?
WOW!!! That's quite a feat. Send out the Nobel committee!
Of course, that just means that somebody's bondholders or stockholders are going to be taking that bloodbath not the shipbuilders.
But the real point is that the world is awash in an absurd amount of excess capacity. It will be more than a decade before this stuff normalizes.
And that in case you didn't notice is also extraordinarily deflationary.
LIKE unwelcome guests who will not leave, 453 container ships, 11% of global capacity, now float outside the harbours of Hong Kong, Singapore and other South-East Asian ports. They are unwanted by their hosts as well as their customers. In recent days China has quietly let it be known that it wants to rid its territorial waters of these nautical squatters.
Only five years ago huge demand from China meant that all these ships, and more, were desperately needed. This had a dramatic impact first on shipping rates, and then on supply (see chart). Between the end of 2006 and July 2008, shipyards received enough commissions to double the world’s fleet. Now these new ships—more than 9,000 vessels—are taking to the water just as demand has collapsed. The world is awash with ships.
To see how the recent boom and bust has affected value, a Hong Kong broker cites a 150-tonne “Cape class” ship that sold in 2003 for $18.5m in the used market. Critical to the price was the prevailing charter rate, then $15,000 a day. By last summer this had risen to $175,000 a day, and an identical ship sold for $85m. Rates peaked shortly thereafter at $300,000. Today rates are back where they were in 2003. Rather than try to find a buyer for another identical ship, albeit one that needed repairs, the owner dumped it for $7m to be used as scrap.
Orders for new ships have, not surprisingly, collapsed and scrutiny has shifted from what can be bought to what can be cancelled: nothing, it turns out, without great effort. South Korea’s shipyards, the global leaders, have learnt from previous busts. They typically demand 20% up front, a further 60% during construction, and the final 20% payment upon delivery. Walk away and you lose a fortune.
Somebody actually learnt from the past?!?
WOW!!! That's quite a feat. Send out the Nobel committee!
Of course, that just means that somebody's bondholders or stockholders are going to be taking that bloodbath not the shipbuilders.
But the real point is that the world is awash in an absurd amount of excess capacity. It will be more than a decade before this stuff normalizes.
And that in case you didn't notice is also extraordinarily deflationary.
Friday, March 27, 2009
The Sexy Seven Sisters
Bloomberg reports: Jobless Rate Exceeds 10% in Three More U.S. States.
Nevada, North Carolina and Oregon last month joined the four other states that had previously climbed above 10 percent, according to Labor Department data released today in Washington. Michigan, at 12 percent, remained the state with the highest unemployment rate, followed by South Carolina at 11 percent and Oregon at 10.8. California and Rhode Island bring the total number of states to seven.
Nevada, North Carolina and Oregon last month joined the four other states that had previously climbed above 10 percent, according to Labor Department data released today in Washington. Michigan, at 12 percent, remained the state with the highest unemployment rate, followed by South Carolina at 11 percent and Oregon at 10.8. California and Rhode Island bring the total number of states to seven.
Whitey Whitey, Quite McTightey
The Financial Times reports: Brazil’s leader blames white people for crisis.
Brazil’s President Luiz Inácio Lula da Silva on Thursday blamed the global economic crisis on “white people with blue eyes” and said it was wrong that black and indigenous people should pay for white people’s mistakes.
This is so unbelievably stupid that it's not even worth writing a tirade about.
Brazil’s President Luiz Inácio Lula da Silva on Thursday blamed the global economic crisis on “white people with blue eyes” and said it was wrong that black and indigenous people should pay for white people’s mistakes.
This is so unbelievably stupid that it's not even worth writing a tirade about.
Thursday, March 26, 2009
That Decoupling Feeling
From Bloomberg: China Industrial Profits Fall First Time on Record.
Chinese industrial companies’ profits dropped for the first time on record as the global recession cut demand for exports from the world’s third-largest economy.
Net income sank 37.3 percent in the first two months of 2009 from a year earlier to 219.1 billion yuan ($32 billion), the statistics bureau said today. Profits expanded 16.5 percent in the same period last year. Records began in February 2007.
You know,if you had asked any 19th-century economist, they would've told you that the fate of borrower and borrowee hung in tandem.
Only in this absurd 21st-century did we come up with the equally absurd notion known as "decoupling".
Now that Brazorussia-Chindia have "decoupled", how's that working out for them, huh?
Chinese industrial companies’ profits dropped for the first time on record as the global recession cut demand for exports from the world’s third-largest economy.
Net income sank 37.3 percent in the first two months of 2009 from a year earlier to 219.1 billion yuan ($32 billion), the statistics bureau said today. Profits expanded 16.5 percent in the same period last year. Records began in February 2007.
You know,if you had asked any 19th-century economist, they would've told you that the fate of borrower and borrowee hung in tandem.
Only in this absurd 21st-century did we come up with the equally absurd notion known as "decoupling".
Now that Brazorussia-Chindia have "decoupled", how's that working out for them, huh?
Wednesday, March 25, 2009
Unicorn Stories for Everyone!
From the San Diego Union Tribune: Housing construction remains low in county.
Borre Winckel, chief executive of the San Diego County Building Industry Association, said building might improve by year's end if the economy improves, foreclosures drop and builders sell off their existing inventory.
That's a lot of "if's" big-boy!
If there was a unicorn, and if the unicorn were to fly, and if the unicorn were to crap candy out of its ass while flying then I too would be able to collect the candy raining from the sky.
Borre Winckel, chief executive of the San Diego County Building Industry Association, said building might improve by year's end if the economy improves, foreclosures drop and builders sell off their existing inventory.
That's a lot of "if's" big-boy!
If there was a unicorn, and if the unicorn were to fly, and if the unicorn were to crap candy out of its ass while flying then I too would be able to collect the candy raining from the sky.
Lies, Damn Lies and Statistics
From the AP: Home prices post 6.3 pct annual decline in January.
A government report says U.S. home prices fell 6.3 percent in January from the same month last year.
The Federal Housing Finance Agency says prices, on a seasonally adjusted basis, rose 1.7 percent from December to January.
Home sales included in January's data were weighted toward areas that haven't borne as much of the brunt of the housing recession, the agency says.
Oh good! We thought you might be trying to manipulate the data or something. But nooooooooooo!!! You just weighted the data towards areas that didn't fall as much. Of course, that would make the data particularly useful.
FAIL!!!
A government report says U.S. home prices fell 6.3 percent in January from the same month last year.
The Federal Housing Finance Agency says prices, on a seasonally adjusted basis, rose 1.7 percent from December to January.
Home sales included in January's data were weighted toward areas that haven't borne as much of the brunt of the housing recession, the agency says.
Oh good! We thought you might be trying to manipulate the data or something. But nooooooooooo!!! You just weighted the data towards areas that didn't fall as much. Of course, that would make the data particularly useful.
FAIL!!!
Monday, March 23, 2009
The Japanese Example
Bloomberg reports: Japan Home Prices Slump to 24-Year Low as Recession Deepens.
Japanese residential land prices fell to a 24-year low as job losses and wage cuts discouraged homebuyers, while tighter credit markets choked off funding for property developers.
Residential land prices fell 3.2 percent in 2008 to the lowest since 1984 and average commercial land prices dropped 4.7 percent to a three-year low, the Ministry of Land, Infrastructure, Transport and Tourism said today in a report. Overall property prices declined 3.5 percent, erasing two years of gains that followed a 15-year slump.
Well, hello there! America-of-the-future!
Japanese residential land prices fell to a 24-year low as job losses and wage cuts discouraged homebuyers, while tighter credit markets choked off funding for property developers.
Residential land prices fell 3.2 percent in 2008 to the lowest since 1984 and average commercial land prices dropped 4.7 percent to a three-year low, the Ministry of Land, Infrastructure, Transport and Tourism said today in a report. Overall property prices declined 3.5 percent, erasing two years of gains that followed a 15-year slump.
Well, hello there! America-of-the-future!
Saturday, March 21, 2009
The Florida Death Spiral
The AP reports: New condo loan rules could hurt distressed areas.
Money is already tight at The Wilshire Condominium, and new lending rules threaten to make life even more difficult for it and other condos around the country.
Arthur Barr, a board member of the Wilshire homeowners association, estimates 30 percent of the owners in the 378-unit building in North Miami Beach are behind on their fees. That makes it difficult to pay for things like elevator repairs and gardening.
Now, Fannie Mae — the biggest player in the mortgage market — wants to ensure that if it's backing a loan for a condominium, the building is in good shape. If the building is brand new, Fannie Mae wants to be certain there are enough owners to pay for maintenance and preserve the value of the property.
Under the new regulations, Fannie Mae will reject any mortgage for a condo buyer if more than 15 percent of the other owners are delinquent on their association fees. What's more, Fannie Mae will only guarantee mortgages in new or newly converted condo developments if 70 percent of the units are sold or under contract.
They're toasted. They have, what? A fourteen-year supply of condos assuming "normal" growth.
Ooh, Florida! Ooh, Florida!
How fucked are you, good Florida!
Money is already tight at The Wilshire Condominium, and new lending rules threaten to make life even more difficult for it and other condos around the country.
Arthur Barr, a board member of the Wilshire homeowners association, estimates 30 percent of the owners in the 378-unit building in North Miami Beach are behind on their fees. That makes it difficult to pay for things like elevator repairs and gardening.
Now, Fannie Mae — the biggest player in the mortgage market — wants to ensure that if it's backing a loan for a condominium, the building is in good shape. If the building is brand new, Fannie Mae wants to be certain there are enough owners to pay for maintenance and preserve the value of the property.
Under the new regulations, Fannie Mae will reject any mortgage for a condo buyer if more than 15 percent of the other owners are delinquent on their association fees. What's more, Fannie Mae will only guarantee mortgages in new or newly converted condo developments if 70 percent of the units are sold or under contract.
They're toasted. They have, what? A fourteen-year supply of condos assuming "normal" growth.
Ooh, Florida! Ooh, Florida!
How fucked are you, good Florida!
Haircuts in Florida!
From the News Press: North Fort Myers country club on the auction block.
The old Lochmoor Country Club in North Fort Myers will be auctioned April 14 on the courthouse steps for more than $94 million - the biggest foreclosure in Lee County history, according to local real estate experts
The auction won't bring close to the $94 million, which consists of $79.1 million in loans plus interest and fees, said Fort Myers real estate broker Ed Bonkowski, who handled the Sheraton's sale in 1990.
Essentially, he said, the property is "a nondescript golf course and the water views" for homes that could be built there.
It probably would go for about $7 million, Bonkowski said.
So it will be auctioned for $94M but is likely to go for $7M. Chances are that anyone who is paying even that much is taking a hell of a risk because it's a freakin' golf course. If there's something that is disposable in this climate, it's a golf membership even if you're a golf fanatic (you can always play by paying cash.)
$94M to $7M.
Now that's a real fuckin' haircut!
The old Lochmoor Country Club in North Fort Myers will be auctioned April 14 on the courthouse steps for more than $94 million - the biggest foreclosure in Lee County history, according to local real estate experts
The auction won't bring close to the $94 million, which consists of $79.1 million in loans plus interest and fees, said Fort Myers real estate broker Ed Bonkowski, who handled the Sheraton's sale in 1990.
Essentially, he said, the property is "a nondescript golf course and the water views" for homes that could be built there.
It probably would go for about $7 million, Bonkowski said.
So it will be auctioned for $94M but is likely to go for $7M. Chances are that anyone who is paying even that much is taking a hell of a risk because it's a freakin' golf course. If there's something that is disposable in this climate, it's a golf membership even if you're a golf fanatic (you can always play by paying cash.)
$94M to $7M.
Now that's a real fuckin' haircut!
Friday, March 20, 2009
Hey there, Pizza Boy!
From ABC News: Down But Not Out: From Hedge Funds to Pizza Delivery.
For the first 45 years of Ken Karpman's life, everything was close to perfect.
He graduated from UCLA with a bachelor's degree and M.B.A., then got a high-paying job as an institutional equity sales trader. He married his dream girl, had two children and traveled the world on expensive vacations.
Over the span of Karpman's impressive 20-year career as a trader, he climbed the company ladder, reaching a salary of $750,000 a year.
Karpman was so confident in his good fortune and the strong economy that he left his job in 2005 to start his own hedge fund. To pay for the new business and their standard of living, Karpman quickly burned through $500,000 in savings and, like so many Americans, took a line of credit against his house.
After a lengthy and fruitless job search, the Karpmans were shocked to find themselves in financial dire straits, with zero savings, hundreds of thousands of dollars in debt and their home in foreclosure.
Desperate for quick cash, Karpman tried to find a job bartending but came up empty. Finally, he drove his Mercedes to Mike's Pizza & Deli Station in Clearwater and applied for a job. Mike Dodaro, the owner of the pizza shop, said he was shocked when he read his application but he offered him the job despite some reluctance to hire an over-qualified candidate.
Karpman's salary plummeted from six figures to $7.29 an hour -- plus tips -- but it's money that he's grateful to earn.
The Karpmans are now on food stamps and a tight budget.
As Karpman counts every penny he earns, he still hopes he can come back from the financial brink and reclaim a lifestyle he, like so many Americans, never imagined he could lose.
"I need a couple of wins," he said, "and I think that, hopefully, it'll mushroom up like it caved in."
And they still don't fuckin' get it! They think there will be another bubble to bail them out.
Captain of our fairy band,
Helena is here at hand,
And the youth, mistook by me,
Pleading for a lover's fee.
Shall we their fond pageant see?
Lord, what fools these mortals be!
For the first 45 years of Ken Karpman's life, everything was close to perfect.
He graduated from UCLA with a bachelor's degree and M.B.A., then got a high-paying job as an institutional equity sales trader. He married his dream girl, had two children and traveled the world on expensive vacations.
Over the span of Karpman's impressive 20-year career as a trader, he climbed the company ladder, reaching a salary of $750,000 a year.
Karpman was so confident in his good fortune and the strong economy that he left his job in 2005 to start his own hedge fund. To pay for the new business and their standard of living, Karpman quickly burned through $500,000 in savings and, like so many Americans, took a line of credit against his house.
After a lengthy and fruitless job search, the Karpmans were shocked to find themselves in financial dire straits, with zero savings, hundreds of thousands of dollars in debt and their home in foreclosure.
Desperate for quick cash, Karpman tried to find a job bartending but came up empty. Finally, he drove his Mercedes to Mike's Pizza & Deli Station in Clearwater and applied for a job. Mike Dodaro, the owner of the pizza shop, said he was shocked when he read his application but he offered him the job despite some reluctance to hire an over-qualified candidate.
Karpman's salary plummeted from six figures to $7.29 an hour -- plus tips -- but it's money that he's grateful to earn.
The Karpmans are now on food stamps and a tight budget.
As Karpman counts every penny he earns, he still hopes he can come back from the financial brink and reclaim a lifestyle he, like so many Americans, never imagined he could lose.
"I need a couple of wins," he said, "and I think that, hopefully, it'll mushroom up like it caved in."
And they still don't fuckin' get it! They think there will be another bubble to bail them out.
Captain of our fairy band,
Helena is here at hand,
And the youth, mistook by me,
Pleading for a lover's fee.
Shall we their fond pageant see?
Lord, what fools these mortals be!
The Ponzimonium Strikes Back!
Reuters reports: U.S. regulator probing "rampant Ponzimonium".
Hundreds of people in the United States are under investigation for financial scams, many involving Ponzi schemes, a U.S. regulator said, calling the phenomenon "rampant Ponzimonium."
While none are as mammoth as disgraced financier Bernard Madoff's $65 billion fraud, multimillion-dollar "mini Madoffs" are proliferating from New York to Hawaii, the head of the Commodity Futures Trading Commission said.
So far this year, the agency has uncovered 19 Ponzi schemes, which depend on an influx of new capital instead of investment profits to pay existing investors.
That compares with just 13 for all of 2008.
Chilton called the problem "rampant Ponzimonium" and "Ponzipalooza" -- a play on the word "Lollapalooza," an American music festival featuring a long list of acts.
You didn't exactly expect the greatest Credit Orgy in World History to not end like this, did you?
Every bubble ends with the revelation of a massive number of frauds. It's how the game works.
Hundreds of people in the United States are under investigation for financial scams, many involving Ponzi schemes, a U.S. regulator said, calling the phenomenon "rampant Ponzimonium."
While none are as mammoth as disgraced financier Bernard Madoff's $65 billion fraud, multimillion-dollar "mini Madoffs" are proliferating from New York to Hawaii, the head of the Commodity Futures Trading Commission said.
So far this year, the agency has uncovered 19 Ponzi schemes, which depend on an influx of new capital instead of investment profits to pay existing investors.
That compares with just 13 for all of 2008.
Chilton called the problem "rampant Ponzimonium" and "Ponzipalooza" -- a play on the word "Lollapalooza," an American music festival featuring a long list of acts.
You didn't exactly expect the greatest Credit Orgy in World History to not end like this, did you?
Every bubble ends with the revelation of a massive number of frauds. It's how the game works.
California Failing!
From CBS Marketwatch: Lawmaker suggests San Quentin sale.
A California state senator is calling for San Quentin State Prison to be closed and the land auctioned to private developers.
State Sen. Jeff Denham, R-Merced, said the 158-year-old prison was built on what was once a remote peninsula on San Francisco Bay but the property is now surrounded by some of the most prized real estate in the region.
Denham, who has previously introduced legislation to sell the prison without success, estimated the property could sell for as much as $2 billion.
Now, we could go all nucular on the Senator's ass with fancy analysis and witty rhetoric but let's just stick to the basic numbers.
San Quentin is 432 acres.
Price = $2B/432 = $4.6M
That's what the developer would have to pay. So the houses would have to be much higher. The land is nice but not that nice. Plus, where are the incomes to support that?
And never mind all the cleanup costs, moving the inmates, building a new facility, etc., etc., etc.
See, senator, one quick long division shows the smoke you're blowing up everyone's ass.
Long division, the marvel of financial wizardry!
A California state senator is calling for San Quentin State Prison to be closed and the land auctioned to private developers.
State Sen. Jeff Denham, R-Merced, said the 158-year-old prison was built on what was once a remote peninsula on San Francisco Bay but the property is now surrounded by some of the most prized real estate in the region.
Denham, who has previously introduced legislation to sell the prison without success, estimated the property could sell for as much as $2 billion.
Now, we could go all nucular on the Senator's ass with fancy analysis and witty rhetoric but let's just stick to the basic numbers.
San Quentin is 432 acres.
Price = $2B/432 = $4.6M
That's what the developer would have to pay. So the houses would have to be much higher. The land is nice but not that nice. Plus, where are the incomes to support that?
And never mind all the cleanup costs, moving the inmates, building a new facility, etc., etc., etc.
See, senator, one quick long division shows the smoke you're blowing up everyone's ass.
Long division, the marvel of financial wizardry!
Tuesday, March 17, 2009
Jingle, Jingle, it's Jingle Mail!
The Detroit News reports: Detroit councilman Kenyatta, candidate for mayor, defaults on mortgage.
Kwame Kenyatta, a city councilman and newly announced mayoral candidate, and his wife have handed the bank the keys to their North Rosedale Park house and walked away from the mortgage.
The councilman said the couple moved out in December and decided to default on their mortgage after unsuccessfully seeking a solution with a mortgage company. He said they considered selling the house at a loss and turning over the deed to the mortgage company in exchange for forgiving their debt. Kenyatta said the house goes up for a foreclosure sale in April.
Kenyatta and his wife walked away from a monthly tax, insurance and mortgage payment of $2,600, one year before the interest would jump to 11.625 percent from 6.625 percent and the payment would hit $3,600. Kenyatta said that even though his monthly payment has remained the same for years, he felt it made no sense to remain in a house whose value had plummeted to $100,000.
That whooshing sound, that's deflation!
Kwame Kenyatta, a city councilman and newly announced mayoral candidate, and his wife have handed the bank the keys to their North Rosedale Park house and walked away from the mortgage.
The councilman said the couple moved out in December and decided to default on their mortgage after unsuccessfully seeking a solution with a mortgage company. He said they considered selling the house at a loss and turning over the deed to the mortgage company in exchange for forgiving their debt. Kenyatta said the house goes up for a foreclosure sale in April.
Kenyatta and his wife walked away from a monthly tax, insurance and mortgage payment of $2,600, one year before the interest would jump to 11.625 percent from 6.625 percent and the payment would hit $3,600. Kenyatta said that even though his monthly payment has remained the same for years, he felt it made no sense to remain in a house whose value had plummeted to $100,000.
That whooshing sound, that's deflation!
Thursday, March 12, 2009
God Bless America!
US News & World Report reports: Half of Americans Are Two Paychecks Away from Hardship.
Without a steady paycheck, 50% of Americans say they could not meet their financial obligations for more than a month — and, of that, a disturbing 28% couldn’t support themselves for more than two weeks of unemployment.
(Source: US News & World Report.)
Without a steady paycheck, 50% of Americans say they could not meet their financial obligations for more than a month — and, of that, a disturbing 28% couldn’t support themselves for more than two weeks of unemployment.
(Source: US News & World Report.)
Wednesday, March 11, 2009
Slumdog Half-Millionaire
From CNN: Millions are no longer millionaires.
The financial crisis has weighed heavily on American households, and millionaires are no exception, according to a report released Wednesday.
The number of American households with a net worth of $1 million or more, excluding the value of their primary residence, fell 27% to 6.7 million in 2008 from an all-time high of 9.2 million the year before, according to a report from market research firm Spectrem Group.
Affluent households, defined as those with a net worth of $500,000 or more, declined 28% to 11.3 million from 15.7 million.
Even the very rich have not been immune. Households worth $5 million or more, excluding primary residence, fell 28% to 840,000 last year from 1.16 million households in 2007.
"The culprit is not just the stock market, which we all know has dropped precipitously, but broad declines in the asset classes available to the nation's wealthiest investors," Walper said.
Er, the culprit is loose credit which inflated ALL asset classes, dumbass!
The financial crisis has weighed heavily on American households, and millionaires are no exception, according to a report released Wednesday.
The number of American households with a net worth of $1 million or more, excluding the value of their primary residence, fell 27% to 6.7 million in 2008 from an all-time high of 9.2 million the year before, according to a report from market research firm Spectrem Group.
Affluent households, defined as those with a net worth of $500,000 or more, declined 28% to 11.3 million from 15.7 million.
Even the very rich have not been immune. Households worth $5 million or more, excluding primary residence, fell 28% to 840,000 last year from 1.16 million households in 2007.
"The culprit is not just the stock market, which we all know has dropped precipitously, but broad declines in the asset classes available to the nation's wealthiest investors," Walper said.
Er, the culprit is loose credit which inflated ALL asset classes, dumbass!
Bert and Ernie File for Unemployment
Bloomberg reports: ‘Sesame Street’ Producer to Reduce Workforce by 20%.
Sesame Workshop, the nonprofit organization that produces “Sesame Street,” is cutting 20 percent of its workforce because of the recession.
“After careful review, we have concluded that we will have to operate with fewer resources in order to achieve our strategic priorities,” New York-based Sesame Workshop said today in an e-mailed statement. The company said it eliminated 67 of 355 staff positions.
“Sesame Street,” featuring characters such as Big Bird and Oscar the Grouch, has been on the air since 1969 and is the most widely viewed children’s TV show in the world, according to the producers. Three months ago, Sesame Workshop Chief Executive Officer Gary Knell told Bloomberg Radio that while the company was “able to withstand” recessions, it was not “immune.”
Sesame Workshop, the nonprofit organization that produces “Sesame Street,” is cutting 20 percent of its workforce because of the recession.
“After careful review, we have concluded that we will have to operate with fewer resources in order to achieve our strategic priorities,” New York-based Sesame Workshop said today in an e-mailed statement. The company said it eliminated 67 of 355 staff positions.
“Sesame Street,” featuring characters such as Big Bird and Oscar the Grouch, has been on the air since 1969 and is the most widely viewed children’s TV show in the world, according to the producers. Three months ago, Sesame Workshop Chief Executive Officer Gary Knell told Bloomberg Radio that while the company was “able to withstand” recessions, it was not “immune.”
Tuesday, March 10, 2009
Boom Boom, Bust Bust!
Alternet.org reports: Is the Future Going Down the Drain? Baby Boomers Going Bust.
Millions of baby boomers born into the dawn of the most spectacular economic expansion in history are being forced to re-imagine their retirement futures. Few news outlets have failed to seize upon the low-hanging pun: the boomers have gone bust.
Among the adjustments forced by the new circumstances, perhaps the cruelest twist for many boomers is the need to join younger generations in the roommate queue. The housing crash has forced record numbers of late-middle age homeowners to take in boarders or risk becoming boarders themselves. From California to Vermont, home-share organizations founded to assist the elderly are scrambling to meet the demands of newly bust boomers.
The extent to which boomer wealth was based on home values is highlighted by a new report from the Center for Economic and Policy Research, entitled "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble." The report details how the collapse has left the majority of those around retirement-age almost completely reliant on entitlements. The net worth of median households in the 45 to 54 age bracket has dropped by more than 45 percent since 2004, to just over $80,000. Households headed by those aged 55 to 64, meanwhile, have lost 38 percent of net wealth.
“The collapse of the housing bubble has already destroyed almost $6 trillion dollars in housing wealth for homeowners," says report co-author Dean Baker, who testified last month before the Senate Special Committee on Aging. “This is compounded by the recent collapse of the stock market. The result is that many baby boomers will only have entitlements to rely on in their retirement.”
Make that entitlements, roommates, and each other.
As more and more boomers scale down their retirement plans and consider alternative living arrangements, it's worth asking: Is shared housing such a bad thing for aging boomers? Does a return to the Communal idea, borne of economic necessity, also have emotional, social, and environmental benefits? Why wait for the retirement home or hospice to live with other people? With the nation full of worthless, ridiculously large, and mostly empty houses, why not fill them with the newly penurious and like-minded boomers in need of housing?
Better yet: why not abandon these suburban houses altogether, and find more appropriate housing arrangements closer to urban cores, or build tightly knit communities on cheap rural land?
Let me first remind you about: Blinding Flash of the Obvious.
Every one of the seven points is coming true for the Boomers. They are pretty much screwed.
Millions of baby boomers born into the dawn of the most spectacular economic expansion in history are being forced to re-imagine their retirement futures. Few news outlets have failed to seize upon the low-hanging pun: the boomers have gone bust.
Among the adjustments forced by the new circumstances, perhaps the cruelest twist for many boomers is the need to join younger generations in the roommate queue. The housing crash has forced record numbers of late-middle age homeowners to take in boarders or risk becoming boarders themselves. From California to Vermont, home-share organizations founded to assist the elderly are scrambling to meet the demands of newly bust boomers.
The extent to which boomer wealth was based on home values is highlighted by a new report from the Center for Economic and Policy Research, entitled "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble." The report details how the collapse has left the majority of those around retirement-age almost completely reliant on entitlements. The net worth of median households in the 45 to 54 age bracket has dropped by more than 45 percent since 2004, to just over $80,000. Households headed by those aged 55 to 64, meanwhile, have lost 38 percent of net wealth.
“The collapse of the housing bubble has already destroyed almost $6 trillion dollars in housing wealth for homeowners," says report co-author Dean Baker, who testified last month before the Senate Special Committee on Aging. “This is compounded by the recent collapse of the stock market. The result is that many baby boomers will only have entitlements to rely on in their retirement.”
Make that entitlements, roommates, and each other.
As more and more boomers scale down their retirement plans and consider alternative living arrangements, it's worth asking: Is shared housing such a bad thing for aging boomers? Does a return to the Communal idea, borne of economic necessity, also have emotional, social, and environmental benefits? Why wait for the retirement home or hospice to live with other people? With the nation full of worthless, ridiculously large, and mostly empty houses, why not fill them with the newly penurious and like-minded boomers in need of housing?
Better yet: why not abandon these suburban houses altogether, and find more appropriate housing arrangements closer to urban cores, or build tightly knit communities on cheap rural land?
Let me first remind you about: Blinding Flash of the Obvious.
Every one of the seven points is coming true for the Boomers. They are pretty much screwed.
In Which Turbo-Tax Timmay Tries Learning Econ 101
The New York Post reports: FOR SALE SIGN AT GEITHNER'S.
He's been tapped to lead the country through a massive financial crisis, but Timothy Geithner will be lucky to break even on the sale of his own New York house.
The newly minted treasury secretary and his wife, Carole, have put their five-bedroom, 4.5-bathroom West chester home on the market for $1.635 million - just a tad north of the $1.602 million they paid for it in 2004.
The Geithners want to unload the stately Larchmont Tudor and move to Washington.
The time to sell is when everyone wants to buy not after the fact.
Oh, and you lower the price until it sells.
Louche-y McDouche is gonna learn some basic lessons in finance.
He's been tapped to lead the country through a massive financial crisis, but Timothy Geithner will be lucky to break even on the sale of his own New York house.
The newly minted treasury secretary and his wife, Carole, have put their five-bedroom, 4.5-bathroom West chester home on the market for $1.635 million - just a tad north of the $1.602 million they paid for it in 2004.
The Geithners want to unload the stately Larchmont Tudor and move to Washington.
The time to sell is when everyone wants to buy not after the fact.
Oh, and you lower the price until it sells.
Louche-y McDouche is gonna learn some basic lessons in finance.
Sunday, March 08, 2009
Trump that!
The AP reports: Trump venture folds, leaving buyers strapped.
Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.
The Southern California couple paid $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.
But admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.
"I can't even stand to see Trump's face on TV," says Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.
Investors were told last month their money was spent and they won't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses.
Trump and his children heavily promoted the northern tip of Mexico's Baja California coast. He sold 188 units for $122 million the first day they went on a sale at a lavish event in a downtown San Diego hotel in December 2006.
Trump's condos went on sale when Southern California home prices were near their peak, offering a lower-cost alternative in the Mexican border city of Tijuana. The Trump Organization teamed up with Los Angeles developer Irongate Capital Partners LLC, the partnership behind Trump International Hotel & Tower Waikiki in Honolulu.
Guadalupe Mendoza, 47, paid a $200,000 deposit at the first-day sale in San Diego, refinancing her Downey home and getting a loan from a sister. She watched a giant screen show units getting snapped up.
After signing papers, buyers were ushered to a buffet of sirloin tip and fish tacos. Cheers erupted in the hotel ballroom for each new owner.
"I did it in less than a minute," said Mendoza, an administrator in the Los Angeles County Office of Education. "I remember my head was hurting and thinking, 'My God, what was that?' I was thinking maybe I should have asked questions. It was like a roller-coaster ride."
The December letter says Trump was not an investor, but buyers said they were sold on his imprimatur.
BWAHAHAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHHHHHHHHHH!!!
Stephen and Linda Drake cast aside concerns about owning property in Mexico because they believed in Donald Trump.
The Southern California couple paid $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.
But admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.
"I can't even stand to see Trump's face on TV," says Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.
Investors were told last month their money was spent and they won't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses.
Trump and his children heavily promoted the northern tip of Mexico's Baja California coast. He sold 188 units for $122 million the first day they went on a sale at a lavish event in a downtown San Diego hotel in December 2006.
Trump's condos went on sale when Southern California home prices were near their peak, offering a lower-cost alternative in the Mexican border city of Tijuana. The Trump Organization teamed up with Los Angeles developer Irongate Capital Partners LLC, the partnership behind Trump International Hotel & Tower Waikiki in Honolulu.
Guadalupe Mendoza, 47, paid a $200,000 deposit at the first-day sale in San Diego, refinancing her Downey home and getting a loan from a sister. She watched a giant screen show units getting snapped up.
After signing papers, buyers were ushered to a buffet of sirloin tip and fish tacos. Cheers erupted in the hotel ballroom for each new owner.
"I did it in less than a minute," said Mendoza, an administrator in the Los Angeles County Office of Education. "I remember my head was hurting and thinking, 'My God, what was that?' I was thinking maybe I should have asked questions. It was like a roller-coaster ride."
The December letter says Trump was not an investor, but buyers said they were sold on his imprimatur.
BWAHAHAHAHHAHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHHHHHHHHHHH!!!
Saturday, March 07, 2009
The Jobs Report
The Canton Review reports: Stark’s hottest job: Janitor.
Nearly 700 people have applied for a single job as a school custodian.
Perry Local Schools have an open position — full time with benefits — at Edison Junior High School after its afternoon janitor retired. It pays $15 to $16 an hour.
The job opened last Saturday, and district officials say the stack of applications continues to expand daily.
Nearly 700 people have applied for a single job as a school custodian.
Perry Local Schools have an open position — full time with benefits — at Edison Junior High School after its afternoon janitor retired. It pays $15 to $16 an hour.
The job opened last Saturday, and district officials say the stack of applications continues to expand daily.
Friday, March 06, 2009
The Pain Factor
U-6 is the broadest measure of unemployment. This is what it feels like on the street, and this is how it was measured in 1930. U-3 is completely bogus. As if the rest of the people don't have to eat!By that measure, we are within striking distance of GD1 (which topped out around 20%!) In fact, most rust-belt cities have already exceeded that number - Detroit being the prime example soon to be joined by such luminaries as Cleveland, Rochester, Buffalo, Phoenix, etc.
Please note that both numbers are accelerating not slowing.
This graph shows how many people are searching for part-time work for "economic reasons" (Ed: as opposed to what?)The EE would like to take this opportunity to make a point about statistics. He hates the second graph because it doesn't take into account population growth. You really need to adjust by either (a) number of adults, or (b) number of households (economic units.)
That having been said, the pain is obvious.
Thursday, March 05, 2009
The Four Most Expensive Words in the English Language
Bloomberg reports: Rolls-Royce, Ferrari Suffer as Slump Reaches New Rich.
Rolls-Royce, Lamborghini and rival luxury carmakers that just five months ago said they’d buck the recession are finding they’re not immune.
The new millionaires of Asia and the Middle East have curbed spending, executives from companies including Rolls and Ferrari said in interviews at the Geneva Motor Show this week, torpedoing a market they’d counted on to spur growth after the banking crisis eroded orders in Europe and the U.S.
“Conventional wisdom has it that premium manufacturers do better in a downturn because people with more money can weather the storm,” said Michael Tyndall, an automotive specialist with Nomura in London. “This time it’s different.”
Errr... that's not conventional wisdom.
That would be that luxury goods do really badly in a downturn for obvious reasons. Especially mass luxury like the car makers or jewelry or "upscale" candy.
And, of course, the justification: "This time it's different."
The most expensive words in the English language!
Rolls-Royce, Lamborghini and rival luxury carmakers that just five months ago said they’d buck the recession are finding they’re not immune.
The new millionaires of Asia and the Middle East have curbed spending, executives from companies including Rolls and Ferrari said in interviews at the Geneva Motor Show this week, torpedoing a market they’d counted on to spur growth after the banking crisis eroded orders in Europe and the U.S.
“Conventional wisdom has it that premium manufacturers do better in a downturn because people with more money can weather the storm,” said Michael Tyndall, an automotive specialist with Nomura in London. “This time it’s different.”
Errr... that's not conventional wisdom.
That would be that luxury goods do really badly in a downturn for obvious reasons. Especially mass luxury like the car makers or jewelry or "upscale" candy.
And, of course, the justification: "This time it's different."
The most expensive words in the English language!
That Sinking Feeling
Yahoo! reports: 12 pct. are behind on mortgage or in foreclosure.
An industry survey shows a record 5.4 million American homeowners with a mortgage, or nearly 12 percent, were either behind on their payments or in foreclosure at the end of last year.
The sharpest increases in loans 90-days past due were in Louisiana, New York, Georgia, Texas and Mississippi, reflecting a spreading recession and massive job losses nationwide
The report also showed the delinquency rates for fixed-rate mortgages climbed in the fourth quarter, another sign that layoffs are taking a toll on homeowners.
An industry survey shows a record 5.4 million American homeowners with a mortgage, or nearly 12 percent, were either behind on their payments or in foreclosure at the end of last year.
The sharpest increases in loans 90-days past due were in Louisiana, New York, Georgia, Texas and Mississippi, reflecting a spreading recession and massive job losses nationwide
The report also showed the delinquency rates for fixed-rate mortgages climbed in the fourth quarter, another sign that layoffs are taking a toll on homeowners.
Wednesday, March 04, 2009
The Candy Crappin' Unicorn™'s "Plan"
The Financial Times reports: Obama home rescue plan welcomed.
The US Treasury on Wednesday unveiled the details of Barack Obama’s housing rescue plan, which will pay mortgage servicers to modify troubled home loans while reducing borrowers’ interest rates to as low as 2 per cent.
In an effort to ensure that a relaxation of mortgage terms is only given to borrowers who need them, those hoping to qualify for changes will have to fully document their income and sign an affidavit declaring financial hardship.
Servicers, which collect home loan payments and work with troubled borrowers, will have to conduct detailed assessments of a borrower’s ability to pay and adhere to strict reporting requirements in order to collect incentive payments from the Treasury. Fannie Mae and Freddie Mac, the government-run mortgage financiers, will administer the programme to ensure that servicers only receive payments for successful mortgage modifications.
This is one of the most cynical ploys the EE has ever seen.
Even if these people could pay, they are far better off just handing the keys back to the bank and buying a place in the future. No amount of "interest-rate differential" for five years can make up for the fundamental fact that prices are collapsing.
In fact, they are far better off just walking away, and not looking back.
What this really is is a plan to keep the people who are already in "financial hardship" in hock to the bank. Simply put, they are mortgage slaves who are toiling away month after month to keep their bank in solvency. If they just walked away, they would be able to rent for less, and have a lot more disposable income to boot which they could save to buy a house in the future.
If this be liberalism from the Candy-Crappin' Unicorn™ then the EE has no fuckin' clue what the "right-wing" really looks like.
This is about as illiberal a plan as it gets, and since the EE is really a pragmatic "liberal" at heart, this really pisses him off!
The US Treasury on Wednesday unveiled the details of Barack Obama’s housing rescue plan, which will pay mortgage servicers to modify troubled home loans while reducing borrowers’ interest rates to as low as 2 per cent.
In an effort to ensure that a relaxation of mortgage terms is only given to borrowers who need them, those hoping to qualify for changes will have to fully document their income and sign an affidavit declaring financial hardship.
Servicers, which collect home loan payments and work with troubled borrowers, will have to conduct detailed assessments of a borrower’s ability to pay and adhere to strict reporting requirements in order to collect incentive payments from the Treasury. Fannie Mae and Freddie Mac, the government-run mortgage financiers, will administer the programme to ensure that servicers only receive payments for successful mortgage modifications.
This is one of the most cynical ploys the EE has ever seen.
Even if these people could pay, they are far better off just handing the keys back to the bank and buying a place in the future. No amount of "interest-rate differential" for five years can make up for the fundamental fact that prices are collapsing.
In fact, they are far better off just walking away, and not looking back.
What this really is is a plan to keep the people who are already in "financial hardship" in hock to the bank. Simply put, they are mortgage slaves who are toiling away month after month to keep their bank in solvency. If they just walked away, they would be able to rent for less, and have a lot more disposable income to boot which they could save to buy a house in the future.
If this be liberalism from the Candy-Crappin' Unicorn™ then the EE has no fuckin' clue what the "right-wing" really looks like.
This is about as illiberal a plan as it gets, and since the EE is really a pragmatic "liberal" at heart, this really pisses him off!
Tuesday, March 03, 2009
Dog Chasing Tail Saga
From the New York Times: Fed Chief Vows to Use Every Tool to Stem Financial Crisis.
While the United States economy is likely to worsen significantly over the next year, the Federal Reserve is “committed to using all available tools” to stanch the financial crisis and unfreeze credit markets, the Fed chairman, Ben S. Bernanke, told the Senate Banking Committee on Tuesday.
“If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Mr. Bernanke said.
So if it succeeds, it will succeed; and if it fails, it will fail.
It must be glorious to have a such a knack for clarity and concision!
While the United States economy is likely to worsen significantly over the next year, the Federal Reserve is “committed to using all available tools” to stanch the financial crisis and unfreeze credit markets, the Fed chairman, Ben S. Bernanke, told the Senate Banking Committee on Tuesday.
“If actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability — and only if that is the case, in my view — there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery,” Mr. Bernanke said.
So if it succeeds, it will succeed; and if it fails, it will fail.
It must be glorious to have a such a knack for clarity and concision!
Sunday, March 01, 2009
The Hungarian Horntail
BBC reports: Hungarians feel force of economic storm.
Everyone in Hungary seems to be crying out for help.
Where is the money to come from now that the easy credit that fuelled Hungary's good times has disappeared?
German and Austrian banks are nervously eyeing their indebted Hungarian subsidiaries.
When easy capital swirled around the world, the governments and citizens of central and eastern Europe were a fine sales opportunity.
Now, things are very different. Hungary has been left with a towering debt to GDP ratio.
Borrowing its way out of this situation is impossible.
And its debt burden has made international exchanges worry about - and heavily sell - the national currency, the forint.
Which wouldn't be the end of the world - a cheap currency can boost exports - but for the fact that Hungary has an awful lot of of foreign currency loans to pay back.
Everyone - including the former central bank governor - seems to have a mortgage in Swiss francs.
And as the value of the forint has fallen, day after day, so the cost of a Swiss franc-backed mortgage has risen.
All this has left Janos Keller, 51, high and dry.
His day job as a restaurant maintenance worker was never going to make him rich.
Nor does his hobby of building and repairing stereo equipment; the small desk in his very small apartment in a block off one of Budapest's bigger highways is littered with spare parts and soldering equipment.
His monthly mortgage bills - a 100% mortgage in Swiss francs - have more than tripled since he started repayment at the height of the forint's strength back in the summer of 2008.
The bill is greater than his entire post tax monthly salary.
Didn't he know? Wasn't he warned? His reply is a sad, self deprecating monotone:
"I'm not an expert on these things. I think I wasn't warned and informed well enough by the bank."
Next up: Polish sausage. Mmmmm, mmmmm, you know you want some!
Everyone in Hungary seems to be crying out for help.
Where is the money to come from now that the easy credit that fuelled Hungary's good times has disappeared?
German and Austrian banks are nervously eyeing their indebted Hungarian subsidiaries.
When easy capital swirled around the world, the governments and citizens of central and eastern Europe were a fine sales opportunity.
Now, things are very different. Hungary has been left with a towering debt to GDP ratio.
Borrowing its way out of this situation is impossible.
And its debt burden has made international exchanges worry about - and heavily sell - the national currency, the forint.
Which wouldn't be the end of the world - a cheap currency can boost exports - but for the fact that Hungary has an awful lot of of foreign currency loans to pay back.
Everyone - including the former central bank governor - seems to have a mortgage in Swiss francs.
And as the value of the forint has fallen, day after day, so the cost of a Swiss franc-backed mortgage has risen.
All this has left Janos Keller, 51, high and dry.
His day job as a restaurant maintenance worker was never going to make him rich.
Nor does his hobby of building and repairing stereo equipment; the small desk in his very small apartment in a block off one of Budapest's bigger highways is littered with spare parts and soldering equipment.
His monthly mortgage bills - a 100% mortgage in Swiss francs - have more than tripled since he started repayment at the height of the forint's strength back in the summer of 2008.
The bill is greater than his entire post tax monthly salary.
Didn't he know? Wasn't he warned? His reply is a sad, self deprecating monotone:
"I'm not an expert on these things. I think I wasn't warned and informed well enough by the bank."
Next up: Polish sausage. Mmmmm, mmmmm, you know you want some!
A Vision of the Future
From the Chicago Tribune: Detroit's outlook falls along with home prices.
It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card.
The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.
Not $75,000. Remove a zero—it's seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market.
Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people.
Detroit, which has lost half its population in the past 50 years, is deceptively large, covering 139 square miles. Manhattan, San Francisco and Boston could, as a group, fit inside the city's boundaries. There is no major grocery chain in the city, and only two movie theaters. Much of the neighborhood economy revolves around rib joints, hot dog stands and liquor stores.
The problem is more than a $300 million budget shortfall, said John Mogk, a professor at Wayne State University Law School.
"A thousand people are leaving the city every month," Mogk said, "and the city does not have the financial resources and the economic base to solve its own problems."
This is pretty much the future of Cleveland and all the remaining second-tier Rust Belt cities.
It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card.
The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service.
Not $75,000. Remove a zero—it's seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market.
Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people.
Detroit, which has lost half its population in the past 50 years, is deceptively large, covering 139 square miles. Manhattan, San Francisco and Boston could, as a group, fit inside the city's boundaries. There is no major grocery chain in the city, and only two movie theaters. Much of the neighborhood economy revolves around rib joints, hot dog stands and liquor stores.
The problem is more than a $300 million budget shortfall, said John Mogk, a professor at Wayne State University Law School.
"A thousand people are leaving the city every month," Mogk said, "and the city does not have the financial resources and the economic base to solve its own problems."
This is pretty much the future of Cleveland and all the remaining second-tier Rust Belt cities.
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