patrick.net

It’s almost as if they have thrown money away

The operative words here are highlighted. The MSM wants to say it but cannot say it. I don't remember anyone using those qualifiers while insulting renters.

I need to get onto Brand’s idea and email my representatives.

Brand,

I in fact emailed Schumer, Boxer and Feinstein (and a while a go Christopher Dodd, Connecticut senator) about this. It's easy to do. I won't post links to all their sites, but each one has a similar "email me" page (Boxer's below):

http://boxer.senate.gov/contact/email/policy.cfm

Feel free to use my letter, although take it with caution since it might not be to your liking:

**********

Senator X,

I am writing to voice my opinion, which I know is shared among many, many Americans. I am highly concerned about your proposal currently making the news to provide financial relief to those under threat of home foreclosure due to the fallout from the subprime mortgage crisis. While I feel sympathy for those who may have been misled by unscrupulous lenders, I believe that any proposal to provide financial or other relief to this group is misguided.

First, the truly misled likely comprise a small portion of those subprime borrowers facing foreclosure. What about those who knowingly abused the system, taking advantage of "liar loans," using these loans for investment properties, or who used the extra cash gleaned from serial refinancing and home equity extraction to buy luxury items? Do you plan to "bail" these people out as well? I refer you to a particularly egregious example at www.iamfacingforeclosure.com.

Second, I applaud your efforts to help those who may have been duped by unethical members of the real estate/mortgage industry. However, please bear in mind that your efforts as I understand them absolve many of these people of financial obligations they willingly signed onto. This presents a significant moral hazard. So should we all now obtain subprime mortgages with the intent of not paying them off, in antipation of a bailout? I hope not.

I also ask you to look beyond the political posturing to present yourself as a champion of the working class and to realize that many, many upstanding voters find your proposal appalling and misguided. We do not wish to have our taxpayers' money going to bail out those who are too irresponsible to manage their own finances.

Thank you for you time and consideration.

Randy H,

RE: the NYT rent vs. buy calculator, I've been wondering if they got the idea from your bubblelizer. I am getting the distinct sense that more and more of the MSM are lurking in this and other bubble blogs. Bill Gross' latest newsletter speaks of Second Life (!?!!) in relation to the subprime mess, and now this.

Makes me wonder. If so, they should give credit where credit's due.

I refer you to a particularly egregious example at www.iamfacingforeclosure.com.

What is the probability that Casey Serin runs for Senate in the future?

Another perspective: the anti-evolutionary aspect of humanity (some like to call it compassion) is a solid case for Intelligent Design.

But compassion and team-building and co-operation is what helps the tribe survive. Lack of compassion means that chimpanzes just walk away from orphaned chimps in the tribe and leave them to die.

Between social animals (bees, ants, some primates and people) and asocial animals (such as cheetahs), the social animals often get a better time of it, which is why they have evolved that way.

(Of course, once man has become wildly successful and tamed the environment, evolutionary pressure decreases -- when the environment no longer presents a challenge, biological evolution slows down. However, there is a further social stratification process that tends to select for intelligence, for instance.)

Of course, people show many abilities chimps do not, for which we should also be grateful -- the ability to make and appreciate music, do mathematics, build things, demonstrate advanced learning skills and communicate effectively for joint effort. We would not have buildings and PCs and space shuttles if not for the ability to write things down and pass them on and learn and therefore produce far more with joint effort than any individual ever could acting alone.

No man is an island, entire unto himself... so send not for whom the bell tolls, it tolls for thee...

So thievery, fraud & misrepresentation = Capitalism? Maybe this is true to some (DS), but I like to think we can do a little better than that.

But we aren't... :P

skibum,

I am getting the distinct sense that more and more of the MSM are lurking in this and other bubble blogs.

If I was an MSM editor or producer today I would have at least one staff member scanning the blogs (and not just the bubble blogs either) on a full-time basis looking for leads.

And I reckon I would have a watertight business case if management queried what the scanner was doing.

Oh, and while watching CNBC a couple of hours ago (7:15pm our time) there was a segment based around the NAR prediction of a Calendar Year Median price FALL in 2007, albeit only of 0.7%.

One of the guest analysts pointed out that there was no way the NAR would make such a prediction unless they were certain that a fall was inevitable. It was also stressed that this would be the first such decline since the NAR started keeping national statistics in the 60's, and probably the first since the Great Depression.

My take from this analyst's words was that he felt any refinement of the estimate would be to the downside. The 3 CNBC co-hosts (this is a US/Europe/Asia segment, maybe you don't get it) didn't challenge the estimate and analysis at all, just asked the analysts some questions about the implications of such a fall on the wider economy (and got 'bear lite' responses more or less ending 'we have to wait and see').

The WSJ has run an article on this NAR estimate.

I suspect every housing bubble blog in the world is going to be putting up a thread on this one. :)

OO Says:

> FAB, not long ago (3 or 3.5 years ago), I drove by
> El Camino in San Mateo and witnessed the aftermath
> of a gang shooting (someone lying in blood). I am just
> having a problem with this street by street kind of
> “niceness”, because I can’t predict how this niceness can
> be safely contained in a 4x4 block zone, what is preventing
> the problems beyond the 4x4 block from invading such
> a “safe haven”?

Gang members don’t move around much about 10 years ago a full 50% of the murders in the entire city of San Francisco over a full year were within a couple blocks of the Double Rock Housing Project in Hunters Point.

I live just a few blocks from a SF Housing Project packed full of gang members, but I have never seen a gang member even a block from the projects (where they hang out dealing drugs and drinking 40s). I was talking to some long time residents of my street and when I commented that I have never seen a gang member north of California St. (three short blocks from the projects) they laughed and said they have never seen one north of California St. since they bought their home 40 years ago.

As a kid my Dad used to send me down to the apartments in San Mateo on my BMX bike when a manager called to say a gang wrote their name on a building. We have never had a gang name on a building west of El Camino and just a few times west of the railroad tracks more times east of the tracks and even more east of 101. I’m pretty sure that there has never been even a single gang member living in anywhere in Burlingame, Hillsborough or San Mateo (West of El Camino). There has always been a small pocket of black gang members in San Mateo east of the tracks around San Mateo High (a good rule of thumb is that you never want to live anywhere near a Martin Luther King Park or a Martin Luther King Drive) and a pocket of Mexican gang members east of the tracks that used to hang out and sell pot around a little grocery store south of the DMV. Across the freeway in San Mateo there are mostly Hispanic gangs and some Pacific Islander gangs.

Despite the gang activity in San Mateo over the past 40 years I have never heard of anyone even spotting a gang member in Burlingame, Hillsborough, San Mateo’s Baywood or San Mateo Park or even in Burlingame east of the tracks (just three blocks north of Martin Luther King Park)…

FAB,

To echo your point, two observations. Never in my years of visiting University Ave on the PA side of 101 have I ever seen a gang member hanging out, doing crimes, or whatever, even though if you cross into EPA, you immediately see low riders blaring rap music w/ gangbanger types driving, only 100's of feet away from Crescent Park.

Similarly in Boston where we lived (South End) was a very interesting mix of yuppies (unfortunately we probably fell into that category), gays and gang members from the housing projects sprinkled throughout the neighborhood. This was a result of the brilliant Boston city government deciding in the 1950's to build housing projects in the middle of the largest contiguous collection of historic brownstones in the country. On the other hand, each of these 3 groups generally kept to themselves, even though they literally walk shoulder-to-shoulder on some of the main streets.

skibum,

Try to remember, gang members and illegals are simply committing crimes most Americans won't DO!

If they weren't here, who WOULD do these crimes?

@theotherside

Do you contend that 5%+ inflation for the next 21-30 years is reasonable? If you are relying upon long-run equilibria, then why are you assuming an abnormally high long-run inflation rate?

The NYT model is a 30 year present value model, so you should take the average inflation, not the maximum inflation.

I'll be the first to say that if inflation is 5% for 30 years, by the end of that period probably only 20-25% of Americans will be home owners. Sustained inflation that high implies mortgage rates well over 10%, maybe even 15%, and you continually assert that housing purchases are very sensitive to mortgage rates (which isn't supported by historical correlations, but that's besides this point).

"the type of economic violence that is being discussed every day on this blog"

Huh?

I'm not sure what you mean by "economic violence" but if being torqued off by the fact that we're even entertaining a FB bail-out (very seriously I understand) then yes! I suppose I DO advocate "economic violence".

What about the type of economic violence that is being discussed every day on this blog? Should that be regulated?

As you can tell, I’m trying to make he point that a “free market” very often is not the best solution to a problem.

The only person here arguing for anarchy and calling it a free market was one of our local realtor-trolls. While often libertarian-leaning, you won't find anyone here seriously advocate market anarchy, myself included.

I don't know what "economic violence" refers to, and apparently neither does Google. I assume you mean "market winners and losers" whereby the winners somehow inflict harm on the losers.

I don't need to connect the rest of the dots to see where that line of reasoning leads. But go ahead and cheer for Royal if that suits your tastes.

Randy H,

In that case, if you have the gumption, knock on the door of this house and ask the neighbor innocently, "I was wondering," feigning interest in buying the place, "if I could get a tour, as I'm in the market. Who's your agent? Can I set up an appointment?" Whether or not they divulge, you can see how they respond. And in a Columbo kind of way as you're leaving, "and by the way, do you know your MLS number offhand, so I can peruse your home's stats at a leisurely pace at home?"

If they (a) are indeed listed, you have your innocent answer. If they (b) are "pocket" listed, you have the agent's name to report to the local Realtor (TM) board.

DinOR Says:

> Try to remember, gang members and illegals are simply
> committing crimes most Americans won’t DO!
> If they weren’t here, who WOULD do these crimes?

Don’t forget that without gang members the companies that make malt liquor in 40oz bottle, cheap handguns and “grillz” would have a tough time.
http://www.misterbling.com/grillz-c-29.html

FAB,

Even the Governator is going gangsta-style (with a Green (TM) twist, though):

http://www.allhiphop.com/hiphopnews/?ID=6912

misterbling.com

Lord, what next! LOL!

True, and police officers would actually be able adjudicate some of their time performing safety training and enforcing traffic violations rather than breaking up backyard parties and drawing chalk outlines on the sidewalk.

Muggy,

Biblical Mortgage Company?

Old Testament prohibits paying or collecting interest, New Testament says to give all your money to the poor.

Which principle do you think he will follow?

BusinessWeek: December 30, 1991

Top of the News

WHEN CALIFORNIA SNEEZES...

http://www.businessweek.com/archives/1991/b324623.arc.htm

If only some Hollywood megalomaniac could snap his fingers and bark: "Get me a rewrite of this script!"

But there's nothing celluloid about California's recession. Consider the lumber mills of the Pacific Northwest, which used to count on California's booming building sector to pull them out of the dumps. "Now, it's a different world," moans Dixie Tibbets, sales manager of Medford Corp.'s lumber division in Medford, Ore. With California construction down 25%, orders have dried up. This Christmas, Medford is closing plants for an unusual two-week hiatus.

Retailers, steelmakers, banks, and defense subcontractors from Utah to New York are paying the price as California's economy heads into a recession deeper and longer than almost anyone had forecast. And California's horizons are gloomier than ever. On Dec. 12, San Francisco-based Wells Fargo & Co. announced that it will set aside $700 million for loan losses because of persistently weak California real estate. The next day, Standard & Poor's Corp. lowered its rating on California's public debt to AA from AAA, citing the state's yawning $4 billion budget gap (page 35 33 ).

OUT OF THE CHIPS. Big deal, you say? Banks are a bummer nationwide--what about California's high-techies? True, Silicon Valley hasn't been hit as hard as other parts of the Golden State. But after a gee-whiz-what-a-blast decade of double-digit sales growth, Silicon Valley is girding itself for single-digit territory. Still growing, but get this: Silicon Valley has lost 6,900, or 3.7%, of its electron-ics jobs since October, 1990 (page 34 32 ).Plenty of folks have been waiting for cocky California to get its comeuppance. Too bad, because even far-away Pennsylvanians are finding out the hard way how their own livelihood is linked to the Golden State. Its 30 million residents make up a huge market. Contributing more than 13% of the nation's output, California's economy is tightly interwoven with the rest of the nation's in a way no other state can match (map).

Back to my favorite topic these days:

http://www.marketwatch.com/news/story/emergency-funds-proposed-subprime-crisis/story.aspx?guid=%7BBD993ECB-C722-4616-BCE9-386ED004DD7D%7D

Why don't we send our populistic lawmakers on an extended vacation (3 years or so)?

Space Ace,

Absolutely hysterical! One thing I will definitely give Ben Jones credit for is his relentless pursuit of those types of news coverage. Now it just so happens this story is from THE LAST bubble and it's embarrassing just how seemlessly it fits into today's scenario. Nice find.

Home prices never fall nationally, until they do.

http://money.cnn.com/2007/04/11/news/economy/home_prices/index.htm

I am all for freer markets. However, I am a (moderate) social conservative. I also find small-time gang crimes pathetic. I am at the same time pro-education and compassion-neutral.

Perhaps you can see where I stand.

On Blogs Leading the Mainstream Media

I'm just a lowly blogger who gets into trouble from time to time for daring to try adding things up, but I'd say my tiny anecdotal perspective is that the MSM is desperately wailing about trying to find relevance.

I'm going to write an article on my blog in a few weeks on this, but a preview as such:

When I broke on Second Life I got a lot -- and I mean a scary amount -- of MSM interview requests. Very few of these requests had any indication that the requester had even bothered to read, let alone understand, my articles. Worse, few had even really bothered to verify me or my credibility. I knew this because so many misrepresented my occupation and "title" which I could tell they were picking up from blogs that blogged my blog, getting stuff about *me* wrong.

The biggest disappointment for me was the fact that the highest quality requests (and those I actually agreed to and did) came from foreign press. For example I did a television interview for a large German prime time program (via Skype, it was kind of cool), and their topic was half Second Life and half "how the media's losing the initiative to bloggers".

It wouldn't surprise me if Gross and others actually rely upon blogs as a leading source of information, at least as a gauge on opinion-leading sentiment. But I would be surprised if Gross himself ever laid eyes on my blog articles. More likely one of his analysts read my and other folks' stuff and put together a summary & script heavily influenced by or even based on our work.

And this itself is kind of scary. They have no idea if I know what I'm talking about. I could be some paid shill for this or that, for all they know. I could even be an open late beta version of a JukuBot, trying to cull the herd, as it were.

I could even be an open late beta version of a JukuBot, trying to cull the herd, as it were.

Metaphysically, we are all jukubots.

Why don’t we send our populistic lawmakers on an extended vacation (3 years or so)?

Siriam,

I suggest you write or email your local representatives, Chuck Schumer and Christopher Dodd. Please see my post from last night that has the verbatim email I sent to Boxer, Feinstein, and Schumer. Feel free to cut and paste.

Two additional observations about the Congressional hooha to bailout these FBs.

First, we had the Clinton admin encouraging loose lending standards in an effort to extend the Amerikan Dream (TM) to more Americans. Then we had the Bush admin unwilling to pay attention to the industry and regulate it properly. Now we have a Democratic congress jockeying for position as the do-good feel-good liberal champion of the downtrodden masses (read FB). Our country is screwed - doesn't matter if it's by the Dems or the Republicans - they all suck.

Second, the funniest yet saddest thing about all this hooha is that these folks in Congress are shooting their "save the poor" wad WAAYY too early. What are they going to do once Alt-A starts imploding? More of the same? Let these better-off FBs rot? Presents a minor moral dilemma to these guys that they are to myopic to foresee.

to myopic -> too myopic

This looks like an interesting book:

http://www.amazon.com/gp/product/1400063515/ref=pe_pe_5400_5073880_pe_snp_515

Will the housing bubble burst be a "black swan" event? How will future historians see us as people who imagined the "impossible?"

Predictible sound bites from the likes of Schumer from SG's link:

What was once the American dream of homeownership, according to Joint Economic Committee Chairman Charles Schumer, D-N.Y., has "now become the un-American nightmare.

"We'd like to do something very quickly," Schumer added.

What an idiot.

Predictible sound bites from the likes of Schumer from SG's link:

What was once the American dream of homeownership, according to Joint Economic Committee Chairman Charles Schumer, D-N.Y., has "now become the un-American nightmare.

"We'd like to do something very quickly," Schumer added.

What an idiot.

The want to starve troops in Iraq but they are going to help stupid, clueless homedebtors who did not bother to read fineprints?

WTF?

The media's often idiotic sole focus on the subprime mess is a joke...

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=2364373&src=finance&ch=289023

What is wrong with these media people anyway?
Dont they get it?

The loans were peppered with teaser rates
and payments that were unrealistic to begin with.

The real problem is hyper-inflated prices that are not supported
by real economic fundementals. If you meet a newspaper or TV reporter be sure to give them a wack over the head...

"HEY STUPID DONT YOU GET IT"

LOL ! :) :) ;)

Randy H,

I've read Bill Gross for years and typically his pieces are prefaced by some vague historic reference as he drags you through a labyrinth ultimately arriving in the "present". As predictable as a wet spring in Oregon.

The liklihood that he is even going to use jr. analysts to peruse the blogs is slim. Probably delegated to "sales assistants". The proof (in my mind) is that there ARE a lot of people talking/blogging about the HB, and a fair amount about SL. However CAP 2.0 and here... are the ONLY places I've seen two and two put together!

As Michelle Malkin would say "Hat Tip to Randy H of CAP 2.0".

Peter P,

The Democrats aren't starving the troops. The troops are not in danger of technical starvation. What the Democrats want to do is give the troops more money than Bush asked for (and should have asked for in a regular budget in any case). The Democrats and a growing number of Republicans want to get American troops out of the dangerous quagmire that is Iraq. A dangerous quagmire that everyone outside of the White House and John McCain's head can have no good end, and the continuation of which will just lead to more dead and mained young Americans.

If you must type misleading comments, please at least do it on behalf of a group less abhorrant than GOP political leadership. Maybe serial killers, or smokers, or Scientologists.

"If you meet a newspaper or TV reporter be sure to give them a whack over the head..."

See, there's the "economic violence" *justme was talking about. Now "I" would never advocate THAT! (But if she's "hot" see if you can get her number).

What?

The NAR's reluctant prediction of a historic first-time-ever fall in national home prices has been mentioned already here. I just wanted to point you towards the WSJ's take on it:

http://online.wsj.com/article/SB117630064272466348.html?mod=hps_us_at_glance_most_pop

Realtors Forecast Falling Home Prices

The National Association of Realtors, which has long proclaimed that U.S. home prices haven't declined on a nationwide basis since the Great Depression, now says they are likely to do just that this year...

This is the particularly interesting and funny segment:

Meanwhile, the Mortgage Bankers Association suggested that the media's intense focus on the housing crunch, and shoot-from-the-hip responses from legislators and regulators, threatened to make the situation worse. In an email Tuesday, the association told its members that it has allocated an extra $5 million to combat "a torrent of unfair press and counterproductive policy responses" sparked by the turmoil in the subprime market, where dozens of lenders have been forced to close down or seek bankruptcy protection.

The $5 million budget for extra advertising, research and lobbying is equivalent to about 10% of the trade group's annual budget. The association said it is trying "to shift the media focus away from the 'foreclosure crisis' to the potential for a 'credit crunch' that could result from over-legislation and over-regulation."

Wow. 10% of the MBA's budget is going towards an ad campaign, WHILE they blame the media for (a large part of) this mess?

Well, I guess we all forgot - it's not the fault of FBs, Realtors (TM), lenders, or even MBS investors. IT'S THE MEDIA'S FAULT!

I hope for peace. I am just worried that a premature withdrawal may lead to more violence.

I have NEVER had a problem with premature withdrawl.