patrick.net

What is the name of the emotion that kind of news triggers?

If you don't like them, then Shadenfreude. If you do, then Mitleid. But since you are generally übel, I'd have to go with the first one.

...or the defintion of Schadenfreude for grammar masochists.

wait… I just met someone that told me they paid last month’s mortgage payment on their credit card.

That's a great idea - I've heard of rich kids in college whose parents paid for a year of tuition via their credit cards (private schools.) Just think of the miles/points/rebates you would rack up.

Of course, these people would either:
A) First make sure the credit card had a 0% interest teaser rate or...

B) Pay off the card at the end of the month.

That's what the person you overheard did right? Pay their last mortgage bill with a credit card so that they can earn points and then pay off the bill at the end of the month.

Pretty smart if you ask me. Just like lawyers and doctors getting interest only loans. It's a great idea.

Bap33 Says:

athena, for fellers the reaction is commonly called “a chub” …. or chubby ….

And for gals its normally known as a 'wide-on'.

Or at least in my neck of the woods.

OK, going now...

On that note, I'm going to bed too...

That reminds me of another favourite - "potential", as in that beautiful collapsing barn at the top of the page has a lot of "potential".

Custom graphic courtsey of HARM-X Inc. ®

Shhhhh. Folks, be quiet.

If those folks do not rake in credit card debt, the credit card companies will not make any profit and cancel all their rebate/point/rewards programs.

I personally use only Citi Dividend. 5% cash back on groceries and gas. 1% on everything else. For me nothing beats cash.

DO NOT TELL people to pay off their credit card debt. I need my cash back.

Athena,

I'll bet this lady is one of the people who used an equity line to pay off all their credit cards....now the house is underwater and (ironically) they are loading up the plastic again to make the payments on the house and praying for more home appreciation to bail them out... not gonna happen!

Fortunately, there is a solution for people in this situation. It is called declaring bankruptcy and moving back in with mom. Those of us who took out too many student loans don't have that luxury.

Very nice barn, HARM, I would have added one myself, but it seems I can't upload images to the server. Oh well, yours was perfect!

tsusiat,

Np. Yeah, Patrick limits image uploads mainly to conserve on file space. If you have an image you'd especially like to use next time, either email it to me or post the link here and I'll upload it for you.

Glen,

"Fortunately, there is a solution for people in this situation. It is called declaring bankruptcy and moving back in with mom. Those of us who took out too many student loans don’t have that luxury."

LOL! Did your law profs ever tell you the story of why student loans are no longer forgiveable? With all this homeowner credit abuse, maybe this country can make some moves towards no forgiveness for mortgage loans.

Afterall, at least you're trying to improve yourself with student loans. When a FB buys a house, they're doing zero good for it. Back to debtor's prisons for unpaid personal loans (excluding medical costs, which, damn it, US ought to be providing for free like the rest of the goddamn civilized world).

HARM,

Great picture. This June, I was hiking past condemned 19th century cabins that were in better shape than that house/barn/wreck/fixer upper.

I searched for Main Street Media on the web and this is what I found:

http://www.freerepublic.com/focus/f-bloggers/1627684/posts

A quote from from that link:

]]Do take note that the last guy who kept bringing up inevitable civil war got banned despite his standing as a former SEAL and patriot.

It is getting worse by the day, just go to Los Angeles or San Jose if you have not been there in a few years and you will see that is exactly where things are headed.

Hm, somehow I doubt he's referring to overpriced houses...

Astrid,

Nah...debtor's prison or unavailability of BK is too harsh. I actually have some compassion for some of the ignorant fools...some of them are my friends.

Plus, I think BK serves a useful social function. It lets people start over again, hopefully wiser than when they took out all that debt in the first place. Many people go on to great success after emerging from BK. I think the benefits of the BK system outweigh the moral hazard. If we didn't have a BK system for homedebtors, my guess is that participation in crime and the "underground economy" would be a big net drain. Plus I would guess that alcohol and drug abuse, divorces and suicides would increase quite a bit.

I think when this gets really ugly we will all kind of feel sorry for some of the FBs (at least the ones who were just financially illiterate, if not the greedy flippers). In all seriousness, I expect that a lot of them will be relieved when they file their bankruptcy petition. And I will be more than happy to assist their creditors by making a lowball offer to the bankruptcy trustee on the home of my choice.

Glen,

Maybe not debtor's prison (prisons are never a profitable business for US taxpayers) but why not lifetime debt? The pre-20th Century view of personal bankruptcy was essentially fraud. If we are forced to carry a lifetime debt burden for higher education (and really, US is about the only developed country with such a high education cost burden) then why not housing?

I guess the current BK law will find many people stuck in either a chapter 13 reorg due to income restrictions (I think of it as "shouldn't a high earning professional like you know better" restriction) or fraudulent representation. However, I'd like to see how these laws actually get enforced when the crush of foreclosures and bankruptcies come.

Astrid,

It won't happen. FBs will get away with their wanton excesses. This is a democracy. Politicians make a living out of pandering to the public.

Besides, FBs are not all that bad people. They have been merely optimizing based on low interest rates and rising RE prices, although the optimization is very local and short-term.

We have a nanny state. Children are absolved of their mistakes. It's the parents' fault.

Astrid,

It won't happen. FBs will get away with their wanton excesses. This is a democracy. Politicians make a living out of pandering to the public.

Besides, FBs are not all that bad people. They have been merely optimizing based on low interest rates and rising RE prices, although the optimization is very local and short-term.

We have a nanny state. Children are absolved of their mistakes. It's the parents' fault.

athena,

How good to have you back O Godess of Common Sense!

I don't know how many times I've used your phrase "No, I am not interested in buying your maxed out credit cards" (on the blog and in my day to day conversations! People really seem to be able to connect with that. But then you have so many wise sayings!

Randy H,

I'm not so much surprised by your penchant for sake nor your X like rant (however concise) but on a THURSDAY night! Tisk, tisk.

Discipline has gone right out the window here folks.

(Can I get you a glass of water?)

Conor,

Why the sudden shift? I'd heard it was as high as 43%? just last night. New jobs won't come out for a couple of hours?

WASHINGTON (AP) -- Hiring slowed in July as employers added just 113,000 new jobs, propelling the unemployment rate to a five-month high of 4.8 percent and providing fresh evidence that companies are growing cautious amid high energy prices. Wages grew solidly.

GC,

Thanks! Still had the sound down.

I do agree, not ALL FB's are "bad people" but from my perspective it really doesn't matter that much. Once painted into a corner they will all likely respond pretty much the same. Blaming everyone but themselves and seaking solutions that don't require "anything out of pocket" to them. Including outright lies to their listing realtor, lenders and potential buyers.

seeking?

Nice graphic HARM btw! Is that "beauty" up in Oregon?

Well.. I've been doing some initial relocation research and this is what I've found so far.
I've just spent the last 3 days researching Nashville since it could very well be home in a year. I'd never done a lot of hardcore looking, but all I can say is that compared to SF, the pendulum might as well be swung in the total opposite direction. I knew it was cheaper, but jesus, it's super cheap.
Here's that I found so far. The population is around 550,000 in the immediate city and another 500,000 in the surrounding area. So it has grown from the 350,000 it was when I left. Secondly, there are around 220 Japanese restaurants. I didn't expect any. Some were even rated very well. Not to mention the myriads of BBQ joints.
The school system in general is rated highly throughout the city with small classrooms and a full compliment of extra curricular activtities. Most residents send their children to public schools as there's no need to pay for a private school since the public ones suffice just fine.

Now... here's the juicy part. The cost of housing, both rental and buying is totally the opposite of what it is here. On average, the cost of renting is MORE than the cost of a mortgage. Not always, but seemingly a lot of the time. Rents and home prices were all over the place. Smaller 2-3 bedroom homes from the 40's and 50's were as little as 50k. Newer, large homes in more upscale neighborhoods were as much as 400k. A HUGE delta in prices. Rents were as much as $1800 to $350. Yes.. I saw a HOUSE for $350 a month. It wasn't in the best area, but still... $350.
I saw tons and tons of houses in the 50-75,000 range, and all within 5 miles of the city. These homes are the same size and style as what you'd find common in berkeley. Small 2-3 bedroom cottages and bungalows. Of course many were fairly plain, but for 50k? who cares. Nothing that a few trips to Home Depot wouldn't take care of.There were lots of examples like this: http://nashville.craigslist.org/rfs/186078224.html
Again, not a real charmer, but we could literally put 20k down and still pay less per month on a mortgage than we pay now for renting. And to top it all off, the last 2 jobs that I heard back from in Nashville were willing to pay the same that I make here.
So what this means is that a family making around 60-100k would do about the same in Nashville as a family in SF making 200k. These 2 cities might as well be on diffrent planets. They simply do not have anything financially in common.
I know all of this must sound incredibly obvious, but after I really looked and did some research, it was pretty amazing to me.

wow, that place in the pic is a real fixer-upper... a handyman's dream...

i might even be tempted to swap my red paper clip here for that house...

Sean,
Ya... it's a little rough. I don't think I'd buy that one. But to me it was still amazing that anything- even sort of shoddy would be 40k.For a little more, as in 50-60k, you can get a small home in good shape.
There are a lot of nice victorian style homes for 100-150k, which is more along my lines anyhow. This one, though about 45 minutes outside of Nashville, is absolutely amazing. 150k. I'm imagining this would be well over 1.5 million here in SF, if not more. http://nashville.craigslist.org/rfs/189501035.html

I think this one would be more my style, but I'd paint it some other color.
http://nashville.craigslist.org/rfs/185617914.html

Conor,
One has to be honest about the way things are in diffrent areas. Yes, as someone born and raised in the south, the collective culture there is diffrent from California, just like Chicago is diffrent than NYC. I'll admit that I HATE change. I've been here 7 years. Moving to another area is going to be a drastic change even though I am actually from that region to start with.
But just imagine someone who was born and raised in California? All they've ever knows is nice weather, an expectation of good cuisine, and higher salaries? The way I look at it, there are people like my brother who has never left TN, thinks it's the best place in the world, hates going to NY where his GF lives. So in that respect, I can understand the fear people everywhere, regardless of their home state would have when it comes to relocating.
The other side of the equation is that for people in CA and NY, the choice to move is in some instances caused by elements beyond their control. In CA's case- overpriced housing and a stratified social composition. If you're a hardworking middle class person, or in my case, an educated almost upper middle class person, having to leave because you aren't making enough to buy a crappy little house is almost an insult. We're americans and we like to think that we're all equal. But California makes it clear to everyone that indeed there are now places in this country where you HAVE to be rich to survive, and that's nasty sounding to our ears. So people don't like the idea of changing their lives just because they Joe millionaire up the street got his, and they didn't. Pride. Plain and simple.

I'm hoping there isn't a wave of people following me out of here. I think that the crash will happen soon enough and hopefully people will forget about the housing problem. I have no doubt that there will be a lot of changes in the area I go to, but I'd sure hate to see it turn into another California. What's scary is that a few years ago, a family friend who was from TN moved back from SF after living there as a teacher for 30 years. He moved back for the same reason I'm moving, except he sold his condo for 350k and bought a ranch back home. He told us that Nashville and Knoxville were starting to look like California 20 years ago, so I suppose the inevitable will happen. We'll see.

I have nothing against California or anyone that decides to duke it out and stay. I had to do this for me and my wife and nothing else. That said, I'll keep you all updated on what it's like there, then maybe you'll have a better idea.

Conor,

I agree, those are a few of the overt reasons Californians offer as to why they hang on even when it no longer makes sense. But I sense there's something deeper and "unspoken". I suspect many privately wonder "if this is the coolest place in the U.S, what does that say about me"?

Believe me (as a native Chicagoan) I had plenty of misconceptions when I was first stationed there. Maybe I was picturing some kind of perpetual beach party? What I found was frankly shocking. (Picture Long Beach, CA circa 1979). A lot of mid-western guys didn't want to admit they had made TWO mistakes! Number one, joining the Navy and number two, insisting on being stationed on the west coast. The cost of living was insane even then and the crime rate was unreal! To be sure there were nicer areas but we didn't have any business there. I'll always remeber LB as being some sort bizarre abandoned carnival and counting the days until the ship pulled out for some place. Any place!

main street press? that's an eggcorn.

Dinor,
You know what's funny? Prior to coming here, and this is only 7 years ago, I thought ALL of California was 75 degrees, had a plentiful supply of beach blondes that spent their days roller skating in bikinis down the boardwalks, and that ordinary people like the cast of full house lived in homes right smack dab in the middle of San Francisco.
When I was a kid on 12 acres at my parent's, I figured most everyone in the country lived this way. I remember actually hoping that someday we would move somewhere that had a small yard so I wouldn't have to mow 24 hours a day.
I consider myself a person of some intelligence, and if I had these inaccurate concepts of what California was, imagine what people that have never been to the south must think? If they base their assumptions from the media, it must be an AWFUL place. I read a book years ago, written in the 80's called " Media-Made Dixie", which was a study on the impact that projected media of the region had on the rest of the country. pretty interesting read that in my opinion still rings loud and clear.

the student loan predators are FAR worse than the realtwhores. i have some where i borrowed 10k and now owe 30k. this is wwworse than a mortgage. no more debt for me. not even what the mortgage industry calls "Good Debt".

SHTF,

Funny! You know the largest "expanse" of greenery I saw as a kid was the outfield at Comiskey Park! In the 70's urban decay was in full swing and I just couldn't imagine ANYTHING could be dirtier than this place? So CA HAD to be better right?

I think perhaps the reason so many stay in CA (with one foot out the door) is b/c people HATE to admit they made a mistake! I don't imagine a lot of the folks honking their horns in gridlock traffic tell their folks back home about their frustration level? Their fears for their children's futures and the general level of anxiety and the feeling that they're really not getting ahead (no matter how much their home "appreciates")?

John M,

I KNOW! Most stock traders are really superstitious people (and I'm among the worst of cases) so this damn sign has bugged me all year. It's just so dated! Sometimes it will appear over A.J's right shoulder on the scrolling adv. and that has just f'd me up all year!

John M,

Just to show you all how "text book" a case my OCD is I've taken to NOT wearing my hat on game days if they lost the prior day and the S+P 500 closed up?

I also was going to add (they'll snap out of it) but I didn't want to "hex" the team!

This doesn't have to leave here does it?

Dinor,
I'll admit that part of the reason it took me so long to make the decision was that as you mentioned above, I was sort of embaressed that I stayed here as long as I did while I watched all my friends who stayed back buy their own places, invest in their communties, join clubs, and rise in the same jobs that I have. In many ways I was pissed at myself that I realized that all along, what I was seeking wasn't here.It felt weird here because frankly, the economics and social strata are weird. I think I could have done what most people do here, which is work for decades before accomplishing what people everywhere else accomplish by the time they're 25. It took me 7 years to figure that out.
The other thing was that 5 of my friends from the same town moved to NYC, SF, and LA. I guess I figured that if I moved back, I'd be seen as a failure in my friend's eyes.I know that sounds stupid. But they're all in the same boat too. Most are actually flat out broke. Some are now saying that they too will be moving somewhere else. But we are all changed men. We went west, and now we're going back South!
To be fair, I learned a lot living here. I learned about diffrent food, people, places, cultures, art, music, and seeing wonderful things. But at the end of the day, I still felt that I was proud that I was a Southerner and not from California. I still feel that way, and perhaps what that meant was that I was seeking a way to go back home. At least I saved money during the time that I was having these life altering revelations. I guess I sort of grew up out here. I'm sure the experiences I had here will help me out whereever I go.
Perhaps I won't be able to see as many parades full of men dressed in women's clothing, or competitions of people peddaling flying machines into the bay, but I do know for a fact that there will be the National Lawn Mower races in Nashville in October. Hell ya!

SHTF,

Look, I grew up in a lower middle class family in Cicero, IL. I had no where to go but up! My uncle died at 60 from working in a plant that made fiberglass food trays for prisons and the Navy (which is a prison that floats).

I am NOT one of these "bloom where you're planted" types! You gotta get out there man and see what's up. You gotta make mistakes. Have FUN! See places and THEN decide.

One of the big problems that internally motivated people encounter is that when they are confronted by an obstacle (however slight or grand) they automatically assume THEY ARE the problem! I'm not making enough cold calls. I have to take night classes. I have to get a second job, etc. etc. At some point you have to admit the deck is stacked and move on. Not in defeat but with greater knowledge.

Was it a mistake for me to have stayed in OR after encountering so much rejection. Probably. Was I going to go back and admit defeat? NFW! This is how we are wired. It's what our parents wanted. It's what ALL parents want. The problem with this "parental" advice is that when you're 38 and have a stroke they'll quietly say, "you know if he/she had stayed here I'm sure none of this would have happened".

"get the speculative juices going" LOL!

Conor this has been one of my greatest fears and I think at the core of my current bearish mind set. Like you, I DON'T LIKE being a bearish guy! It's not me. I'm not having fun here. Maybe if I were younger I'd have the energy to chase one bubble after the other. Like I say for those posters here that are already in their late 30's 40's and beyond we should be on a path where every year marks a point that more of our income comes from our investments and less from our labors.

However with the RE stakes this high (and a risk to reward ratio gone mad) who wants to play in traffic?