patrick.net

I would guess lot of investors knew he was doing something illegal. But, they were just too happy with the returns. The number of feeder funds that invests with bernie was surprising. They should have known better. Well, if you run a ponsi scheme for so long, people start to believe in them. It's like at the peak of bubble, people know it's expensive, but it's been going up for so long and want to be in.

Good point. Madoff's thing really was just like the housing bubble. People buy in knowing it is fundamentally unsustainable.

But they shouldn't go crying for taxpayer handouts when it bursts. I heard that some of the Madoff "victims" are eligible for big tax writeoffs because of the scam.

People get scammed all the time, they don't get big tax writeoff. I don't see many tax payers crying for help (few exceptions), what I see is government doing these stuff on behalf of tax payers. What people cry for is unemployment benefits (Jobs) and health care.

I dunno, aren't the tax writeoffs because they paid taxes on income that they never received? It would suck to be conned out of a big chunk of change and have to pay taxes on it! :)

Finally, justice for the Tan Man?
Staff at the Securities and Exchange Commission decided to recommend civil fraud charges against Angelo Mozilo, co-founder of Countrywide Financial, a newspaper report said Wednesday.
According to the Wall Street Journal, the SEC sent an initial notice to Mozilo several weeks ago warning him of the charges. The charges include alleged violations of insider-trading laws and failing to disclose material information to shareholders.

If Mozilo gets tried in Ventura county I'll pull some strings and get on the jury. Heh, heh.

Speaking of Karma, is anyone else creeped out the the Chase banking commercials. Beautifully shot, but kinda weird to have the "sun" replaced by the Chase logo. And how about some irony -- you think a bank might think twice about using the chorus from a song called "Instant Karma".
Instant karma 's gonna get you
Gonna knock you right on the head
You better get yourself together
Pretty soon you're gonna be dead

A little OT - Any of you folks noticing an uptick in offers on homes? I have been looking around in Dublin/Pleasanton/San Ramon area and seeing multiple offers on homes priced between 500-600k, even though the offers are 10-15k below the asking. The homes that are relatively decent (not beat up REO/Foreclosures) are going "sale pending" in 2-3 weeks..not sure what is going on. Could this be the 8k stimulus..or people are doing the rent vs. buy math in this range? Thoughts?

Coretexity, how do you know there are multiple offers?

You don't get to see the offers, do you?

So you have to trust a realtor that there are actually other offers?

Seems unwise to me.

Coretexity,

Patrick has a good point there. The world demands openness and transparency in the bidding process. Every damn house should have the bibs listed on the web.

Coretexity: Here is some information on Pleasanton

Go to http://www.redfin.com/city/14986/CA/Pleasanton
Uncheck "Both" and Check "House"

Notice the increasing gap between listing $/SqFt(House) and sold $/SqFt(House). As "sold" house prices are unlikely to rise in such a bad economy "listing" house prices are likely to fall.

Now check "# For Sale" and "# Sold" and uncheck "Listing $/SqFt" and "Sold $/SqFt". The inventory of houses for sale is increasing, while the number of houses sold is falling. The gap is the widest it has been in the last few years. The table show that 326 houses are available for sale in April 2009 while only 23 houses sold in February 2009. This works out to a months of inventory number of 326/23 = 14. This implies that house prices are likely to fall in Pleasanton

A true test of a bottom in housing market is when
1. inventory is falling (year-over-year)
2. sales are rising (year-over-year)
3. listing and sold prices are close to each other
4. prices are stable or rising over a full year

If you look at Brentwood (http://www.redfin.com/city/2112/CA/Brentwood) it is closer to the bottom than Pleasanton as it meets 3 of the 4 conditions while Pleasanton meet none.

Realtors most definitely should not be allowed to keep bids hidden. The lack of a transparent market is very harmful to both buyers and sellers. Remember, the sellers won't hear about bids that don't make the maximum money for the realtors.

But the profits they make from ripping off buyers and sellers partly go to paying off Congressmen through the NAR's lobbying. So nothing changes.

Watch it Just me...we may uncover there were no other bids...

old article from Canada...

The secret's out on phantom bids TheStar.com - GTA - The secret's out on phantom bids

Registry, open bidding needed to stamp out phony offer scams, some realtors say

September 15, 2007
Tony Wong
Gail Swainson
Staff Reporters

The incoming head of the Toronto Real Estate Board has come out swinging against phantom bidding tactics after denying they even existed when she ran for the job three months ago.

"It's dirty realty, it really is," Maureen O'Neill said of agents who fabricate offers during bidding wars. She is now calling on the Real Estate Council of Ontario (RECO) to yank the licences of agents convicted of using phony bids.

"Boot them out, we don't need them in the business," O'Neill said. "I don't think these people should be allowed to sell real estate."

Phantom bids can be used by selling agents to spark extra rounds of bidding or to spook potential buyers into rushing or raising offers. The practice is considered a breach of ethics under the Real Estate and Business Brokers' Act of Ontario – administered by the Ontario council – and realtors who are caught can face hefty fines

Australia RE agents exposed...

Dummy Bidding - It's All Lies
Dummy bidding, the most notorious auction lie, is making news again.
The NSW government is proposing a "bidders' register", similar to that proposed in Queensland earlier this year. But that proposal was quashed by the real estate industry.

Today dummy bidding at auctions is rife in EVERY state of Australia.

In Victoria, Consumer Affairs Minister, Marsha Thomson, says she is "outraged" by dummy bidding. Well, let's have it OUTLAWED.

Most consumers have no idea how they are being manipulated with dummy bids. As Douglas Rushkoff, author of 'Coercion', explains, "The better and more sophisticated the manipulation, the less aware of it we are."

DENIALS
When the dummy bidding stories emerged earlier this year, a common industry response was denial. Just say it doesn't exist. Or say that it's "isolated".

Dummy bidding is NOT isolated, it's rampant. Think about it. How can there be an auction with only ONE bidder? Dummy bidding is the spark plug to keep an auction moving.

With consumers now well aware of dummy bidding, the denials have changed to defence and the common corporate response to shady business methods - give it a more respectable name.

"I have been looking around in Dublin/Pleasanton/San Ramon area and seeing multiple offers on homes priced between 500-600k, even though the offers are 10-15k below the asking."

And how in heck do you know what the offers were ?
Pass the salt!

Im still waiting for the RE Phantom bids to be publicily exposed as fraud..
Will not buy till then.. when it does hit the "dumbo media" just watch out!

This uptick in real estate activity in the East Bay is temporary. People are being suckered into the Green Shoots propaganda.

I agree totally with you Patrick. When the story just came out there were a few stories that had the investors suggesting that they knew that what was happening "might not" be on the up and up. This was not persued by the waste of time media. It was all OK as long as they made money for doing nothing.
That is the whole problem with the country these days. No one gets rich by working. They get rich by pulling these amazing financial deals and producing nothing but paper. The guys in China are working their fingers to the bone PRODUCING physical things and are now the top dog. You can say what you will about their admitedly shady Yuan manipulation (I pay more for raw materials than they get for a finished product shipped 5000+ miles) but they actually make things that other people buy. That is the only way to produce new money. That is what made us the economic power we were. Everything else is just taking from one place and moving it to another while all at the same time the government skims its taxes.

OT
A family member died and now I have two houses. I've been in this situation for 6 months. I might sound like a complainer but I'm just mentioning this because as the boomers die off, many people will find themselves in my situation. This situation is not all it's cracked up to be.
I dont have a bunch of money laying around to get this house ready to be rented out. I'm also not sure I want to deal with the hassle of renting out a place. It's all a lifestyle change and that causes stress. I'm paying for utilities on two houses and I'm spending all my extra time fixing up this other house. I'm a strong physical guy. I can do almost anything and I'm a fast learner. I would feel sorry for people who are less equiped to deal with this type of situation. It's a pain in the A$$ and can get very expensive if you are not careful. I am also hearing lots of stories of renters who just stop paying rent. They create am enormous headacke for the owner who has to file all sorts of papers that take months to process before they can finally get rid of tennants. I wonder if more people are becoming BAD renters now that there's such a housing mess. Why care if you are a renter. There will always be some desparate flipper who wont care about your references and just want any cash flow they can get.
Having an extra house is not all it's cracked up to be.

localsavage,
I agree with you, but the US is based on another way of "producing new money":
1. start by colonizing a continent
2. once you have made it, sit back and let newcomers work for you
3. continuously import new people to keep the pyramid scheme growing
4. sell the immigrants expensive real-estate from your wast holdings,
and/or by front-running them in the RE market
5. pocket the profits, go to 3 and repeat.
The problem is that everyone was catching on that real work is for losers, and then even the immigrants were more interested in real-estate than in working. It is all about monetizing previously less-valued land, and about controlling the supply carefully.
Note: I don't mean to imply that the above process is completely continuous. It goes in cycles, such as 1975-80 1985-89 and 1995-2009.

Wow, I see that it is now possible to edit comments after one submits!

Great stuff, Patrick. This should cut down on my corective^H^H^H^H^H^Hr one-liners quite a bit (embedded lame unix joke alert).

empty houses,

Condolences first, and then I must say your login name is now especially apt.

I'm familar with a similar situation, and it does appear it can be a burden, no doubt.

justme,
The only flaw in your logic is "2. once you have made it, sit back and let newcomers work for you"

These newcomers do not come here to work. If they did then every southern border state would not be broke. The ones who do work send a good portion of their money south. I would like to see anyone explain how that is good for the US economy.

Its just sad how a guy like Madoff can steal this amount of money in a post 9-11 era of bank transaction monitoring and only a small portion has been recovered. I guess they are looking as hard as they were on the upside of the scam.

localsavage,
Item 2 only works if the middle class is also working. Now the middle class has learned the ways of the upper class and also want only to own stuff rather than work.
About your other comment:
I must say I do not buy into the argument that (some) states are in bad economic shape because immigrants (a) do not work and/or (b) send money back home.
I think (a) is false and (b) is small per capita. I have seen scant numeric or empirical evidence that supports your view. Feel free to provide hard data.

justme,
You were right they do want to work. The 2.8 million illegals in CA work at jobs that we are paying people legal citizens to be on welfare and not do. That is some genuis system we have. My overall point is that they are a drag on the economy. We pay people who could be working at low wage jobs (ie the only jobs that they are actually qualified for) to sit at home and do nothing. But at least they don't have that stigma of earning minimum wage. At the same time we allow illegals to do those jobs and in some instances send money 16 some billion a year http://www.diggersrealm.com/mt/archives/000911.html
to Mexico. Essentially, we are slowly filtering our tax dollars to Mexico through welfare. We are smart aren't we?

Bernie Madof investors money has been found http://tinyurl.com/cf75ez, but American are to busy with the Idol series or X files reruns when the Superbowl or Hollywood gossip is not in front of the news.

Can you say "Troll"?

Coretexity: Here is some information.
My neighbor told me about this workbook, because i was buying a home and had made a offer on the home and they came back with a counter offer, and said they had serveral high offer pending on this home. My wife read this book and we saved $35,000+ on the same home, by walking a way from the counter offer.
http://www.homebuyerssellersworkbook.com

localsavage,

I can also agree that the existence of poor immigrants has partly corrupted and partly replaced the American worker, who no longer wants to do the work he used to.

But why are we blaming the immigrants for this? It is the non-working non-immigrants that are the drag on the system, not the immigrants. They are all pulling their weight.

Now tell me, is it the ruling elite or the working class that wants the cheap immigrant labor here? This question is where so many Americans fail in their understanding of the issue.

The truth is that the Republican upper-class class want the cheap labor here, at the same time as the not-too-bright Republican under-class of hangers-on and wanna-bes love to blame the same immigrants for high health-care costs or any number of fiscal ills that have little to do with immigration.

Meanwhile, the Democrats get blamed for being "soft on immigration", when in reality all they are saying is "if we are letting them work here, we must at least treat them humanely and decently".

Talk about creating the perfect catch22. Republicans are nothing if not masters of propaganda.

I hope you realize that it is rather incredibly easy to stop illegal immigration. All it takes is to have and enforce laws that punish those who employ illegals. But the Republicans wont have THAT, no sir-eeee.

Cutie, you forgot to say that your posting was a commercial.

thomhall Says:

The house sold about 14 months later.

I presume the house sold for less than your offer?

the not-too-bright Republican under-class of hangers-on and wanna-bes love to blame the same immigrants for high health-care costs or any number of fiscal ills that have little to do with immigration.

This point of view, that illegal immigrants cause various ills including increased health care expense, is the same one expounded on by organized labor. I doubt many labor leaders consider themselves Republicans.

"I dont have a bunch of money laying around to get this house ready to be rented out. I’m also not sure I want to deal with the hassle of renting out a place. It’s all a lifestyle change and that causes stress. I’m paying for utilities on two houses and I’m spending all my extra time fixing up this other house."

Boo Hoo! Why not just sell the house?????

justme,
I am not blaming immigrants at all they do what is best for them not for the US.. I am blaming anyone like you who is an appologist for the illegals. They drag our economy down plain and simple. As for your other comments, Republican bashing while in vogue now is just BS as is Democrat bashing. It is obvious from your comments that you are a Republican basher. It must be good to be a superior Dem these days. The reason both parties pander is because it only takes a swing of 1 to 2 percent to win a national election. If either party went against illegal immigrants they would not be in power.

Localsvage,

>>The reason both parties pander is because it only takes a swing of 1 to 2 percent to win a national election.

Ain't that the truth. If you'd been around longer you'd know that is one of my favorite topics. But not tonight....

Headset,

I had not seen labour leaders blaming immigrants much. Anyone in particular?

Justme,

Remember the reaction of the crowd when McCain was addressing an AFL- CIO group during his campaign? McCain proclaimed a pro-immigrant stance saying the illegals were only doing the work the union membership was unwilling to do. He was nearly booed off the stage.

Union Rank and File Membership dislike of illegal immigtration is common in newpaper/magazine articles. I will admit though, that recently some top union leaders are courting the illegals to boost union membership.

Oh, in 'that' case you'll definitely find this interesting?

http://www.wfaa.com/sharedcontent/dws/wfaa/latestnews/stories/wfaa090515-_lj_harris.7a4a7d4.html

Who needs to be able to read english to work on airplanes? Yeah I'm pretty sure the union was subdued into silence over that one.

DinOR,

I wonder if the solution will not be enforcement of the ICAO English language rule, but instead a new requirement that all manuals be printed in a Spanish edition.

"Boo Hoo! Why not just sell the house?????"

Easier said than done. I dont see houses selling. Do you? Look at the houses on your street that are for sale. Have any of them sold?

If I were going to buy a house right now, I would ONLY look at houses that were in foreclosure.
Even houses in foreclosure are still over priced and those that are not in foreclosure are being sold by people trapped in denial.

Anyway, I'm not going to compete in a market that is filled with foreclosure deals if I dont have to. My extra house is owned free and clear. It's just a pain in the butt because a house is a liability and needs to be maintained. Not everyone wants to get into the landlord game. I know many people that would like to get out of it.

empty houses, no offense, comparing to people like us who don't own a single house, you do sound like a complainer.
Heck, been working my ass off in bay area for 9 years, and still can't afford anything here.
Having a free house in certain area here is basically like having 10 years of free income, don't you agree?
Burden or not, you do have total control of the situation, and selling the house is the easiest route, if you price it RIGHT. But of course there's a reason why you chose the harder route right? :)