patrick.net

Are you freaking kidding me? OH man, Man, it is clearly NOT GETTING better, it is getting worse. These manipulated numbers (reporting has changed, come on man)

Rates are still very high by traditional standards but the trend is very clear and in the right direction

It certainly will not vanish to zero overnight. You can still look forward with more forclosures occuring into several years. What ever number went into foreclosure from bottom to peak 1,2,3,4,5% we will simple repeat during the decline, 5,4,3,2,1% for several years.

If n Million homes went into foreclosure, you can bet you will see the another n Million repeating.

There were a large number of foreclosure hitting the market back in mid90s even though the recession was over years prior.

PPete says

how did two companies with cute little names like Fannie and Freddie come to destroy the entire US economy???

They are a symptom but they weren't the agents of destruction.

The bubble and bust was caused by people becoming able to borrow more than they could service.

stated income / stated asset, interest only, "pick a pay" / negative amortization, teaser rates with early refi penalties.

None of this was the GSEs doing, this was a deregulated industry reaching for the brass ring 2002-2006.

Countrywide, Washington Mutual, S&P/Fitch/Moody's, and Wall Street making the CDOs to grease the skids to hell.

http://research.stlouisfed.org/fred2/series/HHMSDODNS

http://en.wikipedia.org/wiki/Fannie_Mae

http://en.wikipedia.org/wiki/Us_housing_bubble#Causes

Here's reality folks.

From CR:

Economist Patrick Newport of IHs Global: “The second homebuyers’ tax credit pumped up demand, and helped stabilize house prices. Now that the tax credits are behind us, the evidence is accumulating that demand for housing is extremely weak. Existing home sales collapsed in July and remained near a 15-year low in August, while new home sales were at near record lows in July and August. The Mortgage Bankers Association’s Purchases Index, which covers activity through mid September, indicates that home sales in September will be nearly as bad as they were in August. Weak demand, combined with a massive housing glut and a high foreclosure rate, will translate into house prices declining about 6-8% over the next year.”

I know that homes in my home town have rebounded, and that there is 3 yrs worth of applications for new housing in front of the planning board right now. We limit the number of new construction homes, so a builder has to get in line early. I'm guessing its just wishfull thinking on their part, they'd rather eat the $200 than be told they just lost a buyer. This is a different pattern than the last 3 years, however, when NOTHING was going on.

There's no way real estate is going up in the next 5-7 years. The idea that foreign investors are going to swoop in and pluck loser homes off the market is a fantasy of a kind I'm not familiar with. The big piles of money are real, but the last time they tried investing in housing it was something safe, like mortgages insured with CDOs. Nothing could go wrong with that. They will invest in real estate in their own country. Rents here will only go as high as people can afford/willing to pay, and that's just about where they are now.

shrekgrinch says

So, home prices are still overpriced.

Gerneralizations like that are not productive. Comparing price to rent for any particular area is useful--do it on a case by case basis.

shrekgrinch says

Renting is still the way to go…only to be re-evaluated when all the mess clears up or when interest rates rise (because that will lower prices sellers can actually get across the board) or both, in my opinion.

Maybe, maybe not. Historically there hasn't been a strong correlation between interest rates and housing prices. Maybe it will change in the future, but it's by no means a sure thing...

For example, homes will NEVER drop below $230,000 on Carey Drive in Concord.
Are you going to the auction on October 13? I know you don't like the home, but are you curious what it will go for (or if the bank just takes it back)?

shrekgrinch says

In 1968, median California homes were selling for $23,210. Adjusted for inflation, that is $145,604.07 today. That was 2.49 times annual household income (calculated with then median household income $9,302).

$318,660 is 5.22 times annual household income today (calculated with current median household income $61,000).

Back in the late 60s banks would only look at the man's income. Mortgage rates were over 7%.

This is not to say that $320,000 isn't too much for a $60,000 income, though the this loan has a monthly outgo of $2200. But not counting principal repayments, its total cost of ownership is only $1200/mo on average over the 30 yr life of the loan.

Buying a house never makes sense unless you consider a large part of the price the premium for escaping the rent escalator.

At any given time renting may be "cheaper" than buying, but EVERY DECADE so far rents have gone UP, making the buy side's speculative premium pay off.

One problem I see with this picture now is that our governmental processes at the state and national level is simply falling apart. Minarchists cheer this on, but I think it's going to bring a lot of pain and outright wealth destruction this decade as much of America gets to find out what a banana republic is all about.

http://www.bloomberg.com/news/2010-09-28/median-household-income-in-u-s-falls-second-year-to-50-221-census-says.html?source=patrick.net#related_categories_tags_top

US median household income has been GOING DOWN for several years in a row now. Census data just out this week shows the most recent decline (last twelve months).

Last year it went down by another 3% on average. Some places in the Rust Belt, such as Michigan, experienced losses of greater than 6% in just the last twelve months.

Those wage stats are correct; however, when millions are laid off and an economy begins to experience high unemployment, wage numbers are not as meaningful (the lower-paid, low-end workers lose their jobs which distorts averages).

For meaningful work it's best to use the US median income numbers.

Additionally, poverty is rising very quickly in the US (most recent report was dire - no getting around it).

Also to consider: Number of Medicaid recipients soars to new record

http://news.yahoo.com/s/ap/20100930/ap_on_bi_ge/us_medicaid

All of the record-breaking these days seems to be on the side of the bears. Or to the bulls if you are talking contrarian investments.

And Closer to home, pulling it out of Ass, BusinessWeek article...

Silicon Valley Wages Decline 14% Since Dot-Com Boom (Correct)
February 02, 2010, 5:52 PM EST

Even after the declines, Silicon Valley’s technology workers earned about 61 percent more than people in the same industry in the rest of the nation in 2008, according to the report.

Silicon Valley Struggling to Keep Competitive Edge, Study Says
February 11, 2010, 4:16 PM EST

“What do we do? A call to action -- so that as we come out of this recession, around technology, talent and policy, we can compete to continue to be the innovation capital,” he said

Thomas, I dunno.

The commute traffic is getting a lot worse around San Jose.

thomas.wong1986 says

The average salary for technology jobs was $103,850 in 2008,
Technology employment in the region about 436,000 in 2008.
Silicon Valley’s technology workers earned about 61 percent more than people in the same industry in the rest of the nation

Sounds pretty good to me.

And for comic relief,
thomas.wong1986 says

Silicon Valley, may lose its competitive advantage to emerging Huntsville, Alabama

Study Finds Sharp Rise in Mortgages 90-Plus Days Delinquent

tatupu70 says

Wages have been going up.
“Real average hourly earnings rose 0.5 percent, seasonally adjusted, from August 2009 to August 2010.”
From http://www.njfac.org/Wage%20report.htm
I know you guys like to state things as fact when you pull it out of your ass, but let’s try to resist the urge..

What a load of nonsense.

U.S. Household Income Falls for 2nd Straight Year, Census Says

sybrib says

And for comic relief,
thomas.wong1986 says

Silicon Valley, may lose its competitive advantage to emerging Huntsville, Alabama

Crap happens!

gameisrigged says

tatupu70 says

Wages have been going up.
“Real average hourly earnings rose 0.5 percent, seasonally adjusted, from August 2009 to August 2010.”
From http://www.njfac.org/Wage%20report.htm
I know you guys like to state things as fact when you pull it out of your ass, but let’s try to resist the urge..

What a load of nonsense.
U.S. Household Income Falls for 2nd Straight Year, Census Says

Nonsense? Of course. The Bureau of Labor Statistics is another fly by night operation.

I agree with Kris though--you have to be careful which numbers you use because you are measuring different things. People who have jobs are still getting raises, but with the high levels of unemployment the median is going down.

tatupu70 says

Wages have been going up.

“Real average hourly earnings rose 0.5 percent, seasonally adjusted, from August 2009 to August 2010.”

From http://www.njfac.org/Wage%20report.htm

I know you guys like to state things as fact when you pull it out of your ass, but let’s try to resist the urge..

Did you read down to the bottom of your own article, the part about household income falling 1% since 2000? Also I really don't believe .5% wage hourly (is the article referring to only hourly workers? what about salaried? this is not at all clear, could you check your own anal orifice please) increase per year represents a true impact on affordability of housing.

bob2356 says

tatupu70 says

Wages have been going up.
“Real average hourly earnings rose 0.5 percent, seasonally adjusted, from August 2009 to August 2010.”
From http://www.njfac.org/Wage%20report.htm
I know you guys like to state things as fact when you pull it out of your ass, but let’s try to resist the urge..

Did you read down to the bottom of your own article, the part about household income falling 1% since 2000? Also I really don’t believe .5% wage hourly (is the article referring to only hourly workers? what about salaried? this is not at all clear, could you check your own anal orifice please) increase per year represents a true impact on affordability of housing.

Like I said--the exact term you use makes a big difference. You said wages. So I posted what wages have done. If you want to talk about household income, that's a different statistic. There is a link to the BLS report on the website which explains their methodology in detail.

I think the headline should read "reported" delinquencies continue to fall". There are more than enough shenanigans in the housing markets to distort the numbers to the optimistic side. Reference http://boombustblog.com/reggie-middleton/2010/07/27/a-new-spin-on-bank-fraud-banks-defrauding-their-invesors-auditors-and-regulators-which-also-helps-delinquent-mortgagees/ which shows one such methodology.

If you compare the banking situation now with that of the Great Depression, you will see more than enough similarities to convince an objective person that we are in the throes of a "banking" depression. Reference http://boombustblog.com/reggie-middleton/2010/10/01/are-we-in-a-banking-depression/ and notice towards the bottom of the article is further evidence that financial institutions are padding the books to prevent further inventory price declines which, if occurred as the market would have it, would invariably spur further delinquencies.

No such thing will be avaliable. Democrats hate affordabe health insurance. It gets in the way of socialized medicine if people can actually afford it.

tatupu70 says

bob2356 says

tatupu70 says

Wages have been going up.

“Real average hourly earnings rose 0.5 percent, seasonally adjusted, from August 2009 to August 2010.”

From http://www.njfac.org/Wage%20report.htm

I know you guys like to state things as fact when you pull it out of your ass, but let’s try to resist the urge..

Did you read down to the bottom of your own article, the part about household income falling 1% since 2000? Also I really don’t believe .5% wage hourly (is the article referring to only hourly workers? what about salaried? this is not at all clear, could you check your own anal orifice please) increase per year represents a true impact on affordability of housing.

Like I said–the exact term you use makes a big difference. You said wages. So I posted what wages have done. If you want to talk about household income, that’s a different statistic. There is a link to the BLS report on the website which explains their methodology in detail.

No offense, but you are fucking retarded.

Anyone who says wages have risen is a fucking retard.

thomas.wong1986 says

sybrib says

And for comic relief,

thomas.wong1986 says

Silicon Valley, may lose its competitive advantage to emerging Huntsville, Alabama

Crap happens!

Comic huh? Laugh while Rome burns I suppose. I lived and worked there on and off twelve years. There is a huge amount of IT going on down there, NASA in the form of Marshall Space Flight center, for example. It's not emerging, it emerged with the space race and Apollo program. The biggest issue is getting people from elsewhere to get over "it's Alabama, like George Wallace, you know ALABAMA!". Often once relocated, they stay for life and love it. I am a wanderer so I have come and gone from there twice. May go back someday. I think it was actually more vibrant in the 90's. But, really there remains a vibrant IT world and at one point the town had the most PhDs per capita in America, all engineers for the most part.

Sanmina-SCI was once SCI and Sanmina separately. SCI was / is a hugely successful Huntsville corporation. Adtran, that's another.

Wow--seems like I hit a nerve there. If you'd like to call the Bureau of Labor Statistics retarded (or fucking retarded), be my guest. Here's their contact info:

http://www.bls.gov/bls/contact.htm

I know you prefer not to deal with actual facts and figures so they are a thorn in your side...

thunderlips11 says

theoakman says

Keiser

…is no mere entertainer, although he is entertaining. He has a host of accomplishments, not the least being an incredibly successful broker and formulating the system for the Hollywood Stock Exchange. He is a gadfly to the pompous assertions made by the usual suspects.
He called the collapse of the Carry Trade and the Icelandic “Geyser” in advance, and did a show on the BBC and Al Jeezera about it:

http://www.youtube.com/watch?v=JjglR2KYz5o&feature=player_embedded
What’s great is this show aired BEFORE the collapse. And several people in it are now in hiding. Notice the arrogance of the Icelandic Free Traders… “We work longer hours… are smarter… have lots of cod.”

Keiser doesn't call anything. He simply follows the predictions of guys that do make the right calls. I didn't say he was a hack. But if you are going to refer to him for predictions, he's simply ripping off the predictions of most of his guests. I usually like to go to the original source when giving someone credit.

thunderlips11 says

Looks like Monetarists around the world are desperately trying to out do each other in currency devaluation. Feel bad for the Swiss.

Monetarists don't preach currency devaluation. They believe that in the end, a nation that devalues their currency through pegging and manipulation will be ultimately force to let the currency rise when inflation kicks in and people vote with their feet. Of course, they are wrong. They never considered the case of the poor 3rd world worker who earns a nickel an hour. These people can hold out for generations before they demand their currency/wages rise. China is going on about 30 years now? According to the Monetarists, this was only supposed to last a few years at most and the Chinese and Mexican workers would be thriving in equality with the American middle class.

The big fans of currency devaluation are Keynesians. They love an engine of government spending (which is what the printing press is) and they believe the benefit is threefold. They believe it is beneficial to wipe out debt through inflation and they also believe that currency devaluation is always the path to recovery because it can allow you to export your problems away by subsidizing your export market. Of course, they are wrong as well. They never considered the case of the poor 3rd world worker who earns a nickel an hour. The Keynesian solution won't work until their actions bring the American worker's wage down to a nickel an hour as well.

These are your university professors and so called experts. They put forth untested theories based on completely false dogma and manipulated statistics. They completely lack common sense. Yet, they are here to stay and indoctrinate future university students teaching them that the solution to the 6 billion body problem involves a total of 4 variables, one of which we can assume to be fixed. How they ever managed to gain any sort of credibility is beyond my ability to comprehend.

I think it's pretty hard for us to see the whole picture. The big picture. What if what's best for the year 2150, or 2500, or 3000, isn't what's best for certain groups right now ? Not that anyone is actually looking at that.
And while I don't claim to know the answer, it seems to me that the question of whether globalism is good, or whether we should practice protectionism is actually a long term question.

That is, either a somewhat united world, under a global umbrella government is inevitable or it's not.

For some, I think the idea of Armageddon happening in the next century or two is far more appealing. It makes it easy for them to not even consider such troubling long term questions.

theoakman says

According to the Monetarists, this was only supposed to last a few years at most and the Chinese and Mexican workers would be thriving in equality with the American middle class.

Sure. Like it's possible for several billion to live and consume (long term) the way that we have. Maybe you could show us where Friedman ever said anything so silly. Not that I'm a big fan.

not calif - but she's quite conservative from what i hear.

theoakman says

Less we forget George Bush, Bill Clinton, and Al Gore dragging Ross Perot’s name through the mud while he was trying to save the jobs of America.

Ross was a heck of guy! Scared the crap of the dingbats politicans. We could use a guy like that right now.

While at HP, ran the company into the ground and skated out after looting the safe.

Makes $100 million but has an illegal maid she's so cheap and certain rules are for the little people.

If this is your type of person, by all means vote for her.

theoakman says

1988 that claimed that our trade with Japan would balance itself out by 1990

Y83.33 says he was right, just early :) trade deficit is 0.3% GDP this year compared to ~1.2% in the late 80s.

We could use a guy like that right now.

Ron Paul is a close facsimile. His son looks a little more squirrelly (less libertarian/more neocon) on the issues tho.

while he was trying to save the jobs of America

one thing that the "All-Devouring Rent" thesis explains is why offshoring labor to China is a bad deal over the long run.

In the short run, we who do not compete with Chinese labor get much cheaper products without any cost to us, thanks to China's monthly wage being our daily wage. Sucks to be the wage earner that competes with that, but oh well.

But the Theory of the All-Devouring Rent posits that this household savings -- on the order of $2000/yr/household -- just ends up in higher rents and mortgage payments as consumers redirect this surplus into our dominant monthly expense, the rent.

Makes sense to me. What was doubly nasty was that China was turning around our trade deficit and loaning us the money back via the GSE MBS. When all that collapsed they called Geithner to Beijing informing him that he WOULD move their dollars out of those MBS, tout suite. Hence the Fed now having $1.1T of MBS on its balance sheet.

If she were going against some Democratic goofball like Gavin I'd vote for her.

But she's going up against the political equivalent of Steve Jobs. One of my all-time heroes.

Vicente says

While at HP, ran the company into the ground and skated out after looting the safe.

That's actually Boxer's opponent. In that case, if Campbell had won the (R) primary I'd have a tough decision to make. I remember seeing Boxer bumper stickers in LA in 1992, 18 years is long enough.

But the Republicans can't catch a break this year, LOL.

knewbetter says

Anyone who says wages have risen is a fucking retard.

No, ONE person who deliberately ignores the fact that INCOME is down, and instead disingenuously focuses on a dubious source that claims a paltry 0.5% increase in wages (big fucking deal), just so he can pretend to score a technical debate point when he knows perfectly fucking well that people are making less money, is a fucking retard.

I mean, Jesus Christ. Are you homeowners really so desperate to believe all is well that you will stoop that low?

And no, you didn't "hit a nerve", tatapu - I'm just calling you what you are.

Maybe this can be of a help.

http://money.cnn.com/2010/09/28/pf/household_income_report/index.htm

in the article,

While D.C.'s income was essentially flat from 2008 to 2009, nearly every other major metro area suffered a drop in income. Of the 52 largest metro areas with more than 1 million residents, only San Antonio did not record a loss. The city's median income grew 0.5% to $47,698.

pkowen says

thomas.wong1986 says

sybrib says

And for comic relief,
thomas.wong1986 says

Silicon Valley, may lose its competitive advantage to emerging Huntsville, Alabama

Comic huh? Laugh while Rome burns I suppose.

The comedy of it, is what competitive advantage?
The author of that piece refers to our competitive advantage, but he doesn't even say what it is. I will tell you what it is: a magnet for Cool and Hip people from other parts of the USA, magnet for well-to-do Asian immigrants who seem only want to live and work in Fortress Enclaves, a magnet for illegals who want to be domestic help for corporate titans, say like, Meg Whitman.
What kind of competitive advantage is that? Maybe we should ask the management of Toyota & GM that fired thousands of Bay Areans when they closed the NUMMI plant instead of reducing operations somewhere else, or Intel which used to employ thousands of folks in manufacturing in Santa Clara County (but not any more), or IBM which did the same.

Anyone who says " I'll stand up to those unions" and "I will put Californians back to work " obviously does not have a clue about who the workers in California are. She'd have to start with her own state employees - the ones out of work - no cant do that- those are those union employees. On the other hand we have a candidate who has worked at different levels of government in California for a long time. Maybe not perfect but at least might have more of a clue how the state decisions affects the cities and hence the actual people. And not making stupid promises to stand up to those unions and put Californians back to work. I certainly hope I am not the only Californian who heard the awkwardness of her stance towards working folks. Maybe she is confusing Californian's with illegals (?) She just thought they were good non-union workers. hahahahaha

Troy says

That’s actually Boxer’s opponent.

Whoops having a senior moment, right you are