patrick.net

camping says

Your long paragraph talks about how slow banks are, yet you find it unreasonable that they may take years to unload foreclosures if they are flooded with them.

Because I am debating against the argument for reason for delay (not the outcome). Initially you alluded to point that bank would hold properties because they don't want to sell them (to keep inventory artificially lower). I am saying that it is not that they want to, but they have to - because most likely they don't have infrastructure to unload faster. In addition, moratoriums are slowing down foreclosures (hence repossessed properties coming back to market in slower rate). camping says

As you said, they may have to stagger properties as well. Well, if they have 5 in one area and each takes 1 month to sell, then you have a delay of 5 months for the last one, no? Again, if there is a flood of foreclosures, they will stagger them over a longer period of time, which could take several years.

You have to ask yourself, why there is staggering? Because there are there are already too many foreclosed properties in the market, and some of them from very same bank. And if there are too many in market, that defeats your initial argument that banks are intentionally not listing foreclosed homes in market. I don't think anybody would care (except bank itself) if certain foreclosed properties are taking one year to come to market. You have to see how many foreclosed properties are already in market. Rapid inventory will depress the home value in faster rate, and slow increase of foreclosed properties will do it in slower rate. That's the only difference. In the end, what matters is the market trend. So far it's only downwards and no sign of going upward.

camping says

n short, it was related to how everyone thinks we’re in the crapper, jobs are being lost left and right, yet there are still a decent number of sales going on. If/when the economy picks up, I would think sales would pick up even more. We’ve only spent like $60B of the $800B+ of the stimulus package and there may be second stimulus package.

First, just sale volume (and nothing else) is not a good metric to gauge market. Even in worst housing market, there will be certain amount of sales. You have to look at the underlying factors for sales. In 2009 32% sale volume is driven by foreclosure sale. What was the number in 2003? It was definitely not 32%. In fact if there are more foreclosed homes in market, there will be even higher volume sale - probably even higher than 2004/2005 numbers. It does not demonstrate that health of the market is positive. BTW, in 2002-2003 Bay Area was indeed in bad shape. Unemployment in hitech sectors were pretty high. So today's scenario is not exactly same, but not all that different either. However, people's mentality was lot different. In 2003 people used to consider real estate is a safe investment - after losing money on stocks and evaporating stock options. So people were willing to buy house, even if they were expensive. But today not many people think same way. Today's volume of sale driven by different mentality - opportunity to grab foreclosed properties in cheaper price (at least cheaper than two years back).

Most of what you said contradicts itself. The banks don't have the means to unload foreclosures, but the market has too many foreclosures, but they are staggering their foreclosures, and they aren't doing it to keep inventory lower, yet rapid inventory will depress home values faster. You are correct the difference is the rate of the drop in home values. My current view (changes from time to time) is that a slow drop in home values will be offset by inflation and higher mortgage rates to the point where buying in the near future if you can get a deal may be a better option than waiting until 2012.

camping says

Most of what you said contradicts itself. The banks don’t have the means to unload foreclosures, but the market has too many foreclosures, but they are staggering their foreclosures, and they aren’t doing it to keep inventory lower, yet rapid inventory will depress home values faster.

It is not contradiction, but the complexity of the current situation. - Yes, banks don't have means to unload foreclosures in faster rate. - Yes, market has too many foreclosures. - Yes, they are staggering their foreclosures. - Yes, they are not doing it to keep inventory lower. - Yes, rapid inventory will depress home value faster. It's the complexity of current housing market. And I don't think anybody can describe it with simple one liner. So, where is the contradiction?

camping says

y current view (changes from time to time) is that a slow drop in home values will be offset by inflation and higher mortgage rates to the point where buying in the near future if you can get a deal may be a better option than waiting until 2012.

Any given day I would prefer higher interest rate + smaller principal than lower interest rate + bigger principal. Because in later case, the risk is much lower - especially in this volatile time.

If they don't have the means to unload foreclosures, then how does the market have too many foreclosures? They got there somehow. If they are staggering foreclosures, then they are doing it to keep inventory lower (avoid competing with themselves) to avoid depressing home values. Similarly, if they know rapid inventory will depress home values, how can you say they are not doing it to keep inventory lower?

Speaking of bad health bills, it is the Republicans that do those: from paul krugman columns today: "Meanwhile, Mr. Bush claimed to be against excessive government expenditure. So what did he do to rein in the cost of Medicare, the biggest single item driving federal spending? Nothing. In fact, the 2003 Medicare Modernization Act drove costs up both by preventing bargaining over drug prices and by locking in subsidies to insurance companies." An NO, you cannot just say "paul krugman is a liberal, and therefore what he says is invalid". You have to argue with the facts.

P2D2 says

camping says

y current view (changes from time to time) is that a slow drop in home values will be offset by inflation and higher mortgage rates to the point where buying in the near future if you can get a deal may be a better option than waiting until 2012.

Any given day I would prefer higher interest rate + smaller principal than lower interest rate + bigger principal. Because in later case, the risk is much lower - especially in this volatile time.

I agree smaller principal + higher rate is much preferred. But you may not get that. With a slow drop you may only get slightly lower principal and much higher rate. My concern: $700k house now w/ 5.5% rate versus 2012, $650k w/ 8% rate.

camping says

My concern: $700k house now w/ 5.5% rate versus 2012, $650k w/ 8% rate.

The above statement defies the long term trend of housing market. When interest rate goes up, home value adjusts accordingly. The whole issue boils down to affordability - how much mortgage people can pay per month.

P2D2 says

camping says

My concern: $700k house now w/ 5.5% rate versus 2012, $650k w/ 8% rate.

The above statement defies the long term trend of housing market. When interest rate goes up, home value adjusts accordingly. The whole issue boils down to affordability - how much mortgage people can pay per month.

Not true: http://mysite.verizon.net/vzeqrguz/housingbubble/

Can we just get rid of posts that have no factual content and consist only of name-calling? I'd be for it. (SomeGuy, good restraint there.)

camping says

If they don’t have the means to unload foreclosures, then how does the market have too many foreclosures? They got there somehow.

LOL! There could many many many reasons for too many foreclosures. Let me try to think one of them - they are not selling? ;) In redfin I can show property where bank is reducing price $25K every month for last six months. camping says

If they are staggering foreclosures, then they are doing it to keep inventory lower (avoid competing with themselves) to avoid depressing home values.

Effect of staggering is lower inventory than it is supposed to be. But basic purpose of staggering is to avoid having similar properties from bank in same neighborhood (not lowering the inventory). camping says

Similarly, if they know rapid inventory will depress home values, how can you say they are not doing it to keep inventory lower?

It boils down to what they want to do with foreclosed home. From bank's point of view, a foreclosed home is trapped money which they cannot invest anywhere else (lost opportunity). Time goes by, they lose the opportunities to do so. In addition, the foreclosed inventory is not owned by one bank that they can control the whole market. There is always multiple banks competing with each other. So there is always a rat race - a typical behavior of market.

P2D2 - above, you said: banks are not doing it to keep inventory lower and also said: banks don’t have means to unload foreclosures in faster rate. Maybe the President of ZipRealty has ulterior motives for saying this, but if it is true, it seems to contradict your points. Quote: ... And that's only part of the challenge. As banks take possession of more foreclosed homes, not all of those are listed — sometimes because they are holding back inventory so they don't flood the market. "I do know that banks are holding onto inventory, and what they're doing is they're metering them out at an appropriate level to what the market will bear," says Pat Lashinsky, chief executive of online brokerage site ZipRealty. He says this strategy has paid off for banks — even if it also pushes a full housing recovery further out. "By not flooding the market, they were getting better pricing on the homes that they owned," Lashinsky says. "And instead of people coming in and offering less than what the prices were, they were ending up in multiple-offer situations and getting more for the homes." http://www.npr.org/templates/story/story.php?storyId=106113137

camping says

Not true: http://mysite.verizon.net/vzeqrguz/housingbubble/

How exactly the above chart draws relation between interest rate and home value? Yes, interest rate factors into inflation, but not always. You should compare above chart with interest rate chart. Couple of things to note - Sometimes home value peaked (in early 80s and late 80s) while interest rate started climbing up. My conclusion is that it is the similar perception, as you are saying now ("buy it before interest rate goes up"), that drove the price up, only to fall farther down (and fall was spectacular in late 80s SF bay area). - Although sometime interest rate was lower (especially mid 90s), home value did not increase accordingly. My guess is that it is related to median income.

Yes, and median income is generally related to inflation.

camping says

Maybe the President of ZipRealty has ulterior motives for saying this, but if it is true, it seems to contradict your points.

Well, I never doubted about ulterior motives of people from real estate industry. :) And I can't count enough how many times I disagreed with them.

camping says

Yes, and median income is generally related to inflation.

Again, not all the time. In last 10 years median income did not increase (in real term or actual dollar value), although 2005-2008 inflation was pretty high. Same argument goes for early 80s. median income chart Inflation charts Because there are other factors like GDP. In addition, different demographics have different curves - depending on local job growth (e.g hitech job growth in bay area in last 90s).

I thought we were talking about long term trends; now you're picking very short periods to compare.

camping says

I thought we were talking about long term trends; now you’re picking very short periods to compare.

Hmmmm, so I am assuming the decision whether to buy home now or in 2012 (different is only three years) is got to be based on 30 year long term trend. I would recommend you to look at all the small/large bumps in interest rate chart and check how they affect home value.

P2D2 says

camping says

I thought we were talking about long term trends; now you’re picking very short periods to compare.

Hmmmm, so I am assuming the decision whether to buy home now or in 2012 (different is only three years) is got to be based on 30 year long term trend. I would recommend you to look at all the small/large bumps in interest rate chart and check how they affect home value.

I think you should do the same. Historically, when mortgage rates were high, home values went up with the exception of the past few years. I would imagine you agree house prices generally track inflation. Interest rates are higher with higher inflation (generally). Therefore, when inflation is high, mortgage rates are high, and house prices go up.

camping says

I think you should do the same. Historically, when mortgage rates were high, home values went up with the exception of the past few years. I would imagine you agree house prices generally track inflation. Interest rates are higher with higher inflation (generally). Therefore, when inflation is high, mortgage rates are high, and house prices go up.

LOL! I don't know how to answer this one. When mortgage rates were high, home value went up - that's a news to me. Past few years mortgage rates were high? I thought the whole housing bubble was created by combination of lower interest rate and ninja loans.

P2D2 says

camping says

I think you should do the same. Historically, when mortgage rates were high, home values went up with the exception of the past few years. I would imagine you agree house prices generally track inflation. Interest rates are higher with higher inflation (generally). Therefore, when inflation is high, mortgage rates are high, and house prices go up.

LOL! I don’t know how to answer this one. When mortgage rates were high, home value went up - that’s a news to me. Past few years mortgage rates were high? I thought the whole housing bubble was created by combination of lower interest rate and ninja loans.

You can answer it by looking at the charts. Yes, the past 8 years were an exception partially based on easy credit. What were mortgage rates like in the early 80's? What does the chart show for home prices? http://mysite.verizon.net/vzeqrguz/housingbubble/

camping says

What were mortgage rates like in the early 80’s? What does the chart show for home prices?

If I am reading the chart correctly inflation adjusted home price dropped between 1980-1984 (from $150K to $130K). As I have explained already the price went up when interest rate started increasing (because very same psychology "buy before interest rate goes up farther"), but eventually price fell.

Yes, because of high inflation. The nominal value went up. Where do you have your money to keep up with high inflation and liquid enough for you to buy a house when you are ready?

camping says

Where do you have your money to keep up with high inflation and liquid enough for you to buy a house when you are ready?

Isn't it the very same slogan "don't get price out forever" Realtors keep saying all the time? If inflation goes up and income does not keep up in real value accordingly, home value is destined to drop in real value anyway. The whole thing boils down to affordability. If people don't have enough money to buy home in inflationary environment, home value will drop. Let me ask you a very simple question: do you think household income is going to keep up with inflation in next few years?

Not sure about all that HIPPA did but I can tell you from personal experience what it did for me. Had a business that had a small group PPO plan that office and management other workers were covered under union contracts. Due to divorce and other reasons I decided to close the company and move to another state. I have a pre-existing non-life threatening condition completely under control with relatively inexpensive medication. Upon moving to another state I was denied personal policy by the two largest insurers. Because of HIPPA, AKA Kennedy-Kassenbaum or the Federal Portability Act I was able to get coverage under a HIPPA plan from one of the same companies that had previously denied me coverage. The rules that are written into the law are fairly complex and I would bet many people don't take advantage of it or even know about it. It is expensive coverage and cost controls vary from state to state which is another absurdity of the current general system but fortunately I could/can afford it. Personally, I would just like a catastrophic policy and deal with the minor costs of health care myself but that for me is not available. All I can get is a HIPPA policy

What is not to love about the Texas Hill Country? My only problem with Texas is the outsiders coming in and screwing it all up. I am not just talking about the cheap labor from the south. The damn yankees have got to be the worst. To make up for it, I invaded NW Ohio to operate one of their nuke plants because they could not find enough qualified people around locally. I guess they all went to Texas :)

rdm, thanks for sharing that story. It was getting rather one-sided about HIPAA.

Some Guy says

Tell you what. Why don’t you or Kevin or anyone (except Nixon-troll, who I am ignoring), explain what socialized medicine is, and then explain why what Ten Pound Bass is proposing (not Obama’s plan - TPBs plan) is NOT socialized medicine. And do so without irrelevant emotion.

TPB's "plan" seems to be a semi-coherent rant, so I don't know what that is. If he's proposing a socialistic plan, that's fine, but that's not what anyone who matters is proposing, and is irrelevant to the discussion. I don't even know where the "communist" talk is coming from either, it sounded like more insane ranting from a bunch of people who have no idea what the fuck they're talking about.

Just pasting this in here in its entirety, from crikey.com - non-US take on the political situation:

Guy Rundle writes: Barely drawing breath after his ground-breaking Cairo speech, Barack Obama is charging into what will be one of the biggest stoushes in American politics, his plan to reform the hopeless US health system. Obama launched his campaign in a speech in Wisconsin, urging people who supported him to get behind the plan and lobby their Congress members, because “this may be our one chance to get health care reform through.” It would be difficult to over-estimate the risks associated with trying to make even the most basic changes to US health-care. It was after all the failure of Hillary Clinton’s complex plan in 1993 that did more than anything to hole the Clinton Presidency below the waterline, at least as far as being a liberal regime went. Clinton’s plan wasn’t even the dreaded “single-payer” system, the term the US Right uses as some sort of North-Korean image for what Australians would know of as Medicare — baseline state-run universal coverage supplemented by private options. Instead it was an attempt to continue to run health insurance through private providers, while explicitly mandating how much they would charge, how much they would pay out, limiting their ability to exclude people with pre-existing conditions, and so on. It was a scheme designed to please no-one — Big Health were always going to be against it, and the liberal-left wouldn’t get behind it because they were still holding out for a single-payer system, which would not — as would have the Clinton plan — flood rivers of gold into the insurance companies for stuff that could be done at knock-down prices by the state. Since then, the organized left have been pretty much beaten down in Congress, and health care in the US has become much worse. This has given Obama a great political opportunity to get real reform through — but only at the price of proposing a scheme so unthreatening to Big Health, that it will see the wisdom of acquiescing to it. Why did American health get so much worse than it was at the time of the Clinton plan, when it was already pretty dead? Deregulation between 2000-2006 was one factor — a release of the (fairly-worn) brakes that were on the insurers in terms of denying continuing care to the chronically ill, excluding pre-existing illnesses and aggressively using the bankruptcy laws to recover costs. Another has been the open-ended nature of private medical care — as new techniques and tests are introduced year-on-year, open-ended health plans are faced with spiralling costs, created by the increasing demands of patients, and the desire of GPs to bill for endless additional (and often unnecessary) services. With no qualitative and triage-based control of health-care spending, the more consumerist options will crowd out necessity. The ideal health insurance client is a member of the “worried well”, paying top-hole premiums for routine services, the lions’ share of the service fees going to the insurers. The worst client is the one for whom any rational health system should be designed — the chronically ill, the suddenly desperately ill, the seriously injured etc, and health insurers spend most of their energy throwing these people off their lists. The coup de grace has been the sharp rise in unemployment in the US, which has deprived many people of their employer-based health insurance–– the auto manufacturers bail-out deal alone cuts by 50% the health care available to up to a million former car workers and their families, just as many of them are ageing. The core of Obama’s plan is what’s known as a National Health Insurance Exchange, which is a sneaky way of offering public health insurance to the 45 million Americans who don’t have any insurance whatsoever (and aren’t eligible for the below-poverty-line Medicare scheme) — and simultaneously providing subsidised matching fixed-prices schemes offered by private providers, so that no-one can scream socialism. Surrounding this are various measures such as $10 billion in grants to get nationwide electronic record-keeping up and running — US hospitals are the last places in the developed word where the faxes run hot day and night with paper records being transferred — and some real battles, such as prohibiting the exclusion of pre-existing conditions. The advantages of the scheme are all political — people are so angry with health insurers (average premiums have doubled in the last six years), terrified of bankruptcy (half of the million bankruptcies a year in the US are due to medical costs), and worried for their children’s health, that Congress members who simply roll over for their Big Health campaign donors will find themselves the target of grassroots attack in upcoming party primaries for the 2010 elections. The disadvantage is that it’s a monstrously expensive way to achieve what single-payer cover does for half the cost, and twice the result — provide universal optimum health. But if Obama can get this, and if the 2010 Senate vote gives an enhanced Democratic majority, then there is a bridgehead from which non-pauper public health cover can be expanded, thus denying the Right the chance to make a huge fight over it, and gradually converting the American people to the idea that public health provision is not socialism. And also, if it succeeds, proving once again that the road of recent American political history is littered with the bones of those who underestimated Barack Hussein Obama. If it fails? We may find out — health insurers here are starting to make noises about unaffordable Medicare and transitioning to a US health system. So remember to choose which leg you’d like to save if they both get infected, because your plan may not cover both.

Some Guy says

WillyWanker says

The fact that his mother was white is something you just can’t handle. BitterMuch?

Let’s see: Number of times you’ve brought it up: 3 Number of times I’ve brought it up: 0 Yeah, *I’m* the one who can’t handle it. Suuure…..

--------------------------------------------------------------------------------------------------- Some Guy Joined: January 10th, 2008 Posts: 4 Comments: 207 July 22nd, 2009 at 10:48 am | top | quote | email this It’s just tearing you guys up that a BLACK MAN became president, isn’t it? --------------------------------------------------------------------------------------------------- Excuse me, but it was YOU who made the proclamation that some here could not stand having an 'black man' for president. I just corrected your mistake. YOU brought up the race card. Because you can't defend your own positions you feel a need to call anyone who disagrees with you a racist. Just like your messiah in the White House, you can't help yourself but embrace 'race issues' to distort an argument. Hussein is having a tough time with his ObamaCare so he sticks his snout into a police issue and calls police officers 'stupid' and then he attempts to backtrack when he sees that the words he chose may have carried more weight than he had originally intended. 0bama needs to start 'calibrating' his words better. LOL 0bama's not afraid of starting race riots as longs as the country is distracted from the issues at hand. And you are forced to call everyone who disagrees with you a racist because you can't find other words to defend yourself. Good luck with that, asshole.

I had to ask what box to check when I went to college. Some people need to be told who they are.

I don't know whether to laugh or cry. >>I’m starting to understand that the Majority of the Republicans aren’t necessarily Conservatives or Republicans That I can agree with. I'd estimate that a good 50+% of the people that vote Republican have not understood that GOP does not stand for what they claim to stand for, and does not do what it claims to do. The inner circle understandswhat GOP is really doing. The rest has not a clue. >>they just know for damn sure they aren’t a “Liberal” or a “Democrat”, That pretty much sums up the scam that is Karl Rove propaganda, right there.

P2D2 says

camping says

Yes, and median income is generally related to inflation.

Again, not all the time. In last 10 years median income did not increase (in real term or actual dollar value), although 2005-2008 inflation was pretty high. Same argument goes for early 80s. median income chart Inflation charts Because there are other factors like GDP. In addition, different demographics have different curves - depending on local job growth (e.g hitech job growth in bay area in last 90s).

Plus, the past 8 years were somewhat of an oddity with free credit that caused inflation without the need for wage increases.

SG, I think Bass is actually a liberal. He just hasn't understood it yet. But maybe it is better that way, He can infiltrate the fake conservatives and confuse the hell out of them, just like he has done with me. :-)

Guess what? The richest 1% have never had it so good and I am happy to have them finance healthcare since they have gotten so rich on the backs of people who work for a living. http://www.salon.com/opinion/feature/2009/07/25/sirota/

drfelle says

Some Guy says

How would YOU solve the healthcare crisis?

Another Lesson: There is no healthcare crisis! But there is an Entitlement Crisis.

Within 30 years there will be more retired people than working people. Retired people need substantially more health care than working people. Health insurers won't cover these people. Union funds are virtually dead. That leaves us with two options: 1. Medicare 2. Let everyone die in the street Since the vast majority of us aren't a bunch of whackjobs, we're looking for ways to save #1. The only way that is going to happen is to lower overall costs of medical care. That is the entire root of the health care discussion, but you're too blind to even realize it. What is your solution to the coming millions upon millions of people (which you will be amongst) that will have no health care options other than government-provided medicare? "Be Responsible", your favorite mantra, isn't going to work here. What is an elderly person supposed to do to "Be Responsible"? Lets say that they managed to save 20-30% of everything that they were earning, and now they have a million or two in the bank. How many hip replacements and cancer treatments is that going to pay for? Bitching is not going to do a god damned thing for anyone. It is absolutely imperative that costs come down. We can not afford to continue to have health care costs growing at twice the rate of inflation.

Sean says

Just pasting this in here in its entirety, from crikey.com - non-US take on the political situation:

Guy Rundle writes: The disadvantage is that it’s a monstrously expensive way to achieve what single-payer cover does for half the cost, and twice the result — provide universal optimum health. But if Obama can get this, and if the 2010 Senate vote gives an enhanced Democratic majority, then there is a bridgehead from which non-pauper public health cover can be expanded, thus denying the Right the chance to make a huge fight over it, and gradually converting the American people to the idea that public health provision is not socialism.

"gradually converting the American people to the idea that public health provision is not socialism."... This is the most eye opening line of the article. It is amazing how 10 % of the americans with too much money got 90 % of the americans to believe that somehow socialism is a bad idea. This is the power of the propaganda. The 10 % who own media, corporate and political system can simply make everyone else agree to their agenda. Socialism or capitalism they are both bad if taken to extremes. If we take some good things from both that will be the best system. Of course this kind of reality has no room in the agenda of the elite. Why should they have to go to govt run medical system when they can actually afford the private system anyways. How can an average american be so stupid as to run away from a public health care system which will be always available to them. Is it only because some people have spread propaganda that somehow socialism is such a bad thing.... Oh yeah it is okay to save banks though because in this case it was the bad karma of the elite itself....so now socialism in disguise is fine.... Really shameful state of affairs in this country....

>>you’re looking our for #1! I think someone here is holding poor people to a higher standard of selflessness than the richest 1%. The correct answer is that progressive people want a FAIR system for everyone. I suggest to ignore people who will not argue the facts but rather try to cast suspicion on perfectly relevant data and analysis. Keep it short and sweet, do not try to reform or educate the the troll. They are beyond redemption. A one-liner is often the best.

Here is it over 16 years latter and both are still going, but during the tech boom and the RE boom could you imagine the money a public healthcare system would have or could have stored away in their coffers by now. Of course I’d be talking about a nonprofit or not for profit health care system, or a government ran system, where each working person was just taxed a small percent of their income. A tax amount one tenth of what insurance premiums run us now. We’d still be in great shape.

Yea - if we had done something 16 years ago, we wouldn't be in the shape we're in now. And... if we do something now, we won't be bleeding so badly in the future. I agree it needs to be govt or non-profit run; however, the current non-profit model doesn't work so well. The predominant system in the intermountain west charges the same as private companies, spends a hell of a lot on commercials touting their excellence, and denies patient care at the same rate as other hospitals. Considering that they're the only hospital system in Utah and a chunk of Idaho, I'd rather see them pouring their $ into providing healthcare to those who can't afford it. Their contracted doctors don't see people who can't afford to pay, but they go on building huge new clinics & hospitals to spend their $ so that they can maintain their non-profit status. They also give huge bonuses to execs & employees if they're making too much money - instead of giving back to the patients. I've known several elderly people who received personal visits from a rep from the local hospital system after they were discharged, in an attempt to get the patient to leave a chunk of their estate to the hospital. The family found out on one of them and sat in the next room - they were appalled at the high pressure guilt tactics the guy used.