patrick.net

SFWoman,

Does anybody know if there is a tightening up of standards for the purchase of loans in the secondary mortgage market?

There is indeed an article in today's SJMN - link has already been posted - that points to some tightening of standard. It will help burst the bubble. But it's a slow process. Increase in interest rate has more dramatic and percived impact. At least we won't hear "Interest rates are still low by historic standards, and hence there is no bubble" type of arguments.

Perfect Markets:

I may be one of those around here closest to a "market fundamentalist". But even I don't claim markets are perfect, nor do they solve all problems. In fact, markets have a nasty tendancy to get stuck in local maxima and non-optimize. This is the function of government, to "ustick" markets and push them off a local high-point so they can find a better optimization.

But, I defy you to provide an example of a non-market function which has historically demonstrated more efficient allocation of capital and resources over any sustainable period of time. Markets may be a natural state of human affairs, only occassionally interrupted by political-command structures.

Heli-Ben will definitely lower rates and I think he will wait till the end of the year or next spring. If the Feds have learned anything from the debacle in housing prices in NZ, AUS and Britain, thats what they have learned. They will reduce the rates, and not a little, a whole lot to create interest in the market. Those people who can ride this storm for sometime when they cant refinance to pay their homes but tighten their pants to pay their bills first, will come out alive and will still be able to sell their houses without a loss - to people who are waiting and watching and will jump in since they believe that the rates have tanked or is stagnant and wont move down anymore. Feds will keep at this cycle until Japan, China and India and other nations decides that enough is enough and dump all the $ reserve and the T-bonds.

This way, extreme exploitations can be avoid.

Ordinary exploitation is fine though. So, why object to a statutory minimum wage if your social aim is to avoid extreme exploitation?

This contradicts the earlier argument that you should be able to pay a non-teen $2 an hour, and how the whole economy is being completely devastated because WalMart workers get a whopping $6.25 an hour (with no shift penalty rates), which is obviously way too much for their station in life, even if it's not even a living wage... Meanwhile, doctors and lawyers and stockbrokers and mortgage brokers and DC lobbyists and Congressmen and heiresses and Hollywood stars who can't construct a sentence but were lucky to be born with a pretty face can swan around as much as they like... It's all about the individual's cleverness in being able to assert power due to some attribute they possess and claim an hourly rate... the perfect market... Oops, getting into Foucauldian post-modernism now...

The illegitimate uses probably pay pretty well. I think our society places a premium on basketball players and v.c.s over neurosurgeons, astrophysicists and teachers. What do you do about it?

SFWoman
Absolutely. Sportspersons and entertainers get paid obscene amounts of money quite unnecessarily, due to that glitch in the market that lets some people raise almost unlimited revenues due to repeat sales. Watching football or basketball playoffs is an indulgence and a luxury if there are homeless people wandering around or rampant poverty and want in general. But that's modern society for you. I'm obviously against people being paid or accumulating obscene amounts of money in general...

Why is someone's right to live decently and with dignity predicated not on their personal qualities or who they are, but on what they do, how well they process symbolic logic, how well they can lie, or how well they can sing and dance or run? Fortunately, most people can complacently get a reasonable job without a strain, but for many it is a struggle. Not to forget all the bullshit that goes on CVs, all the empty bloated language and fakery, the constant struggle to keep a job or get the next one, etc, especially in a time of employment constriction.

I agree with the dilemma of people who do very difficult science courses at college only to find there is not much market demand for their knowledge on graduation - there are loads of under-utilised biology graduates here as well, who can't get meaningful jobs - they are considering giving them minimal retraining and breaking down the demarcation boundaries in medical practice to allow them to take more of a role in healthcare if they want it. And sometimes govt insists on, say, training loads of aerospace engineers because of the space race only to find the need has evaporated after a couple of years, leaving a huge pool of people who need to retrain into something else. It takes a lot of time and money and personal resolve and commitment to throw away your interests and beliefs and expensive college training and start all over again to do something the market wants -- maybe in real estate sales next time : )

Why is someone’s right to live decently and with dignity predicated not on their personal qualities or who they are, but on what they do, how well they process symbolic logic, how well they can lie, or how well they can sing and dance or run?

Life is not fair. Live with it.

delete the troll quickly before it breeds

That’s a 60% return on your 20% downpayment, and all you had to do was live in your house!

If you sell the mother fucking house you gain, if you take out the "equity" in a HELOC, you are a fucking idiot. So fucking what your house went up, what does that mean exactly other than posting inane fucking messages.

25% of all mortgage to reset....

There is an impending wave of mortgage resets in 2006 and 2007: $2 trillion dollars worth of mortgages, to be exact, or about 1/4 of all mortgages.
Many borrowers in this category still have plenty of equity. For instance, someone who took out an ARM with a 3-year reset is sitting on a pile—although these folks will receive quite a payment shock. Recipients of 2-year resets have less equity, but still a little something. Those who got a 1-year ARM in 2005 will get a substantially higher payment with no equity to show for it. As time progresses, this mix will get worse... as will the number of resets. If interest rates don't cooperate things will be ugly in 2007... but either way, this is yet another headwind facing the housing market.

Wow...that troll just dissappeared....

I’m not PC, so I just think that you, Harm, and surfer-x just have bad visual acuity and are in need of more information than most researchers into this issue.

No problems with visual acuity here at HARM-X. We just believe in the scientific method and no breast shall be declared fake until a sufficent sample (fondling and/or nuzzling) has taking place. I say 50 real, perky, set and 50 fake perky sets ought to be sufficient for an informed opinion.

Wasn’t poverty rather accepted until fairly recently? I don’t think there were safety nets until the 20th century. Poor? Go to the poor house or the orphanage. Can’t pay your bills, go to jail. I think we developed more concern for the poor as the society became richer as a whole. I also think that other societies (not Europe) have a large number of poor, and they don’t seem to be as concerned with them as we are in the US.

yes. i can't address all those remarks in terms of the entire anthropological history of man, as it would more or less become a book, which might even become a bestseller... ; )

all good points, but i don't take european civilisation beginning from the Renaissance up to a couple of centuries later as a good starting point for the journey. you're broadly right about increasing affluence leading to raising the bar for poverty relief, etc, which is a Good Thing, which is why I resist arguments that attempt to dismantle those safety nets 'to see what happens'. Wanting to go back to the 18th century prior to poor laws seems to me to be regressive. Note the evolution from poor laws and church charity and debtors prison to the spectrum of organised welfare today, from cradle to grave, guaranteeing a good measure of wellbeing to all, hopefully — pre-natal and neo-natal health checks, school programs, free basic education, college scholarships, unemployment benefits, old age pensions. 150 years ago, only 20% of the population could read. free education has changed all that. recruiters in england in WWII were astonished at the rates of lifelong malnutrition they observed in ordinary Londoners fronting up, leading to more welfare reform. Society and the state was asking these people to die for their country, but couldn't even provide them with adequate nourishment through their lives in a time of unprecedented overall prosperity.

we can obviously create a massive surplus these days very easily, through agrarian, industrial, scientific and medical revolutions, the morality is in how we choose to distribute it. e.g. amassing fortunes, denying healthcare to many, etc.

Simple neolithic and paleolithic societies were much 'flatter' in structure and had strict rules around sharing, distribution, and 'mutual reciprocity', which is much more civilised, I guess. The advent of many civilisations in some ways was a Bad Thing.

Anyway, back to work!!... [kerr-acckkkk]

So Mosher is sellind Mosh-pits? How 80s of her.

-sellind
+selling

I think I got sprayed by the last can of troll-b-gone too. Can't seem to post.

I think I got sprayed by the last can of troll-b-gone too. Can’t seem to post.

Huh?

Life is not fair. Live with it.

so why are you on this site complaining about house prices then? waste of time... same advice for all the people scapegoating 'boomers' etc for causing it.

so why are you on this site complaining about house prices then? waste of time…

Again, I am not complaining.

same advice for all the people scapegoating ‘boomers’ etc for causing it.

Let's find a way to make money off boomers. hehe

Also, do you think that in the US we have a ‘let the market decide’ mentality because up until very recently it was possible to move up the economic ladder with hard work and determination. Might it not be in our national character to champion the rich because, hey, we might all be one some day?

OK. I'll address this one... Americans seemed to be noted from the early days of settlement to show relative disregard and indifference to the plight of others, and today, by most measures, they have about the most regressive welfare system in the OECD, and it tends to have bred a lot of fatalism in outlook. Shame that early ideas of the Revolution foundered so badly.

Mike Moore has a really big spray in 'Dude, Where's My Country?' I think, where he points out that many Americans don't criticise the rich establishment Republicans because they believe that one day they too will 'have a seat at the table' if only they're entrepreneurial enough (as though the Establishment would welcome them). The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility. However, that belief system allows the rich to get away with more and more egregious cons, and actually get admired for it by the population...

The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility. However, that belief system allows the rich to get away with more and more egregious cons, and actually get admired for it by the population…

This is not untrue but what is the alternative?

so why are you on this site complaining about house prices then? waste of time…
Again, I am not complaining.

right. so you just come here for kicks and to get quiet amusement from people concerned about housing affordability as a part of the social settlement.

which makes you some sort of market apologist or real estate troll, i suppose. and because you are laissez-faire market, your contributions are in no way intended to effect any change in current market conditions, or serve as a lobbying platform to govt.

and it's just you holding these extreme, unsubstantiated, unthoughtful and indefensible beliefs, putting in the occasional short put-down without any credible or reasonable justification.

don't you have anything better to do with your time than sit in a forum in which you apparently have no worthwhile interest?

right. so you just come here for kicks and to get quiet amusement from people concerned about housing affordability as a part of the social settlement.

I still want to discuss about the possibility of profiting from the housing bubble bust.

Of course, we also want to talk about OT things because the participants here care about each other. ;)

your contributions are in no way intended to effect any change in current market conditions, or serve as a lobbying platform to govt.

We cannot effect any change, but we can react to changes.

This is not untrue but what is the alternative?

the social democrat states of Europe, where there is a reasonable balance between the family, the state and the market, better social guarantees and much lower salary multiples in executive and 'professional' remuneration. less of galbraith's famous 'private affluence and public squalor'. canada. NZ. australia. i've posted all of this before in other threads.

someone who has never seen or experienced an alternative or read or studied widely but professes to know best is...?

Of course, we also want to talk about OT things because the participants here care about each other.

but you don't really care about anyone, you've made that obvious. you apparently care for a random collection of anonymous posters, but are unable to generalise this concern to the broader community. that's a sign of...?

i suppose you could create an options instrument like 'put options' or a hedge in the share market - offer home owners trying to sell their places a guaranteed price below current market as an expiring option, then sell that option to others... i don't know if it would work too well... this, of course, is profiting from others' suffering - another sign of sociopathy...

there's any number of dodgy spruikers out there claiming to offer such advice on how to profit in a falling market -- for only, say, $5,000 you can go to their 'boot camp', followed by another $5,000 for their 'business mastery' course...and another $5,000 for their 'instant property wealth' course. comes complete with course notes, with huge margins, large type face, double-spaced, with loads of empty pages for 'notes'...

see www.johntreed.com/reedgururatings.html - in fact, john reed himself sells books for $30 on how to profit in real estate, he may have a few pointers on profiting in downward markets...

oops, try http://www.johntreed.com/Reedgururating.html

i don’t know if it would work too well… this, of course, is profiting from others’ suffering - another sign of sociopathy…

Well, either this or someone will profit from our suffering.

Well, either this or someone will profit from our suffering.

hmm, they already are...

the urban proletariat will have to have a people's revolt, as in the French Revolution - if the peasants can't afford bread, then let them eat brioche... ho, ho, very witty, your majesty...

Prices may be out of touch with your reality if you’re pulling down 60 grand a year. But, I hate to break this to you, 60 large in 2006 is crap. My first recollection of a salary was my father’s which in 1975 was 40 grand and we weren’t exactly living like kings.

Not sure what the context of the post is, but isn't the average salary in the US still about $50K or something?

Maybe you should have quit that McDonald’s assistant manager job after high school and went for a law or medical degree instead? Just a thought.

Isn't this individualising a systemic problem and blaming the victim? And saying ordinary people don't count? Not that i'm sure what the context of the post is...

SFWoman Says:

"I asked the contractor and the landscapers how much the workers get, and they each separately told me $16/hr. ($4/hr commission to the contractor per laborer) Considerably more than you would earn at Walmart or McDonalds. Why is it that only Mexicans and El Salvadoreans are doing this work? It is hard work, and they work harder than anybody, but why are they the only people I have ever seen doing this?"

There has been a big change in the past 20 years where white people don't seem to want to do hard work any more. My first job was for $0.60 an hour (a penny a minute) pulling weeds and I've done everything from picking grapes to painting apartments to fixing roofs in the rain. I was just talking to a couple friends (one who's parents still live in Atherton and are members of the Circus Club and another who's parents still live in Presidio Heights and are members of the PU Club). One worked at McDonalds in High School and the other was a grocery store bag boy in Laurel Heights the entire tine he was going to UHS). We were commenting that we don't know a single person (friend of the family or relative) doing similar hard work today. You can find some Irish and Asian illegal aliens doing hard labor around town but most of the people working their ass off doing the hard work in Northern California today are from Latin America.

Foreclosure World aka The American Dream aka the Perfect Free Market:

http://www.johntreed.com/Foreclosureworld.html

Different Sean Says:

"Americans seemed to be noted from the early days of settlement to show relative disregard and indifference to the plight of others"

You are way off base here, no country in the world helps others as much as America (or even comes close). I don't know a single person that gives less than a thousand dollars a year to charity and I know many that give tens of thousands along with many hours (I've been way over $12K a year since my first job out of grad school). I might look the other way then I see a guy on the street with a crack pipe or a bottle of Mad Dog 20/20 in his hand but when my Uncle told me about a hard working gardner in his Parish that was having a tough time paying for three kids in Catholic school despite his long hours I got a bunch of friends to chip in and pay their tuition.

"many Americans don’t criticize the rich establishment Republicans because they believe that one day they too will ‘have a seat at the table’ if only they’re entrepreneurial enough (as though the Establishment would welcome them). The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility."

The "rich establishment Republicans" (and "rich establishment Democrats") welcome new people all the time. As the demographic profile of the Bay Area (and the nation) changes I'm seeing both parties actively reaching out to Hispanics, Asians, Indians and other fast growing groups here in America. There are verey very few WASP only old money hold outs in the US left...

Ha Ha, you make 160K total compensation, AND have 150 large in the bank. ;)

Let’s find a way to make money off boomers. hehe

Seen the Fidelity Investments ad with psychedelic flower power art and Iron Butterfly's In-A-Gadda-Da-Vida playing? Maybe all it takes is to play 60's or 70's music in the background and appeal to memories of being wasted. Wondering what to do with that fat wad? Buy a Peter Framton Immediate Annuity and get guaranteed monthly income for life. [Include nostalgic disco music and leisure suits.]

Another great ad: Century 21. The hubbie does not want to buy the house because it stretches them too far. (I assume that's why he's beaded with sweat.) The nagging wife (obviously suffering from unipolar recurrent mania) whines about how good the schools are. Hubbie says but the kids are only like 1 and 3. Wifey, now also beaded in sweat, whines back but they GROW UP FAST! Realtor leaves voice mail that yes, they CAN TOO afford it (must have skipped that ethics course in the NAR ad). Hubbie sees "no doggy style in-n-out glide for 6 months" in wifey's eyes, and crumbles. Perfect illustration of the old adage: Get 'em by the balls and their hearts and minds will follow.

There is also a very, very progressive tax system in France. Over a certain income (and I’m sorry, but I don’t know the amount)

Therefore most high earners in France shelter offshore, as do most high earners anywhere in continental Europa. When I lived in Germany earning DEM, I took a good portion of my income in CHF and CAD as "royalties", which was encouraged common practice for expats earning in in the "high" tax zone. It was unseemly: a double tax shelter avoiding both German and US taxes. That was the 90s, things may have changed now.

I saw a sign on the Marin Civic Center this past weekend. Peter Frampton is coming! You’d better hurry if you want your ticket.
I am bummed that I missed the Whirling Dervishes there. It sounded rather interesting.

I heard Front 242 is opening for Frampton. lol...not.

A progressive tax system will only invite tax shelters. The rich will always find a way because they tend to be more savvy.

Any attempt to create a fair system will be exploited as a way to create more unfair advantages.

There's a short story in a recent Atlantic Montly that gives a scenario for bursting of the housing bubble. Housing bubble, credit bubble, liquidity bubble, all sorta tied together.

In this fantasy, the event that triggered it was kinda peripheral, sorta off most folks' radar screen: politics in Venezuela. Well that exact scenario might be far fetched but the point is that that the "it"could be something most of us overlooked.

Check it out, it's a good read. (Published before Katrina, the author mentions the gov't helping to get homeless folks into living in RV's.).

http://www.theatlantic.com/doc/200507/fallows/2

@Surfer-X,

"HARM-X" I love it! Better get it Trademarked, like NAAVLPâ„¢, just to be on the safe side, ya' know...

@Peter P, Randy H, SFWoman, FormerAptBroker, etc.,

I've been extremely busy with work lately, and was starting to feel neglectful with regards to my blog participation here. Then I skimmed through Different Sean's various rants, and felt a whole lot better.
I really wouldn't waste anymore of your valuable time arguing with him. Everyone here has tried to explain his/her position as patiently and respectfully as possible --only to have your words twisted, exaggerated and spit back at you in the ugliest possible tone. And then laced with personal insults to boot.

As has been pointed out before, DS is a shrill demagogue, not interested in a true policy debate, much less friendly conversation. He is only interested in seeing/admiring his own brand of agitprop and bile up on the screen, a-la "Limbaugh from the Left". Despite the fact that bloggers here reflect a broad spectrum of socio-politcal-economic beliefs, in DS-world, we're all culture-war neo-cons and market fundamentalists. And even worse, he can't even manage to be succint --he's got to drone on and on and on...

Does the term "Always on transmit, never on receive" ring a bell with anyone?