patrick.net

Troy says

Private credit peaked at $1.2T/yr 1999-2001, took a mild breather down to $1T/yr during the First Bush Recession, and then zoomed up to $2T/yr immediately prior to the 2nd Bush Recession.

Wow. Bushie was able to force the country into a recession within months of taking office. Calling the 2001 recession the "First Bush Recession" is disingenuous. It would be more partisan-accurate to call it Clinton's parting gift to Bush. If you really want to be serious, though, it was the bursting of the dotcom bubble (which actually happened months prior under Clinton's watch) and really wasn't caused by either one of them.

Opinions are worthless but here is mine:

The real crime is the feds giving low/zero downpayment loans by the trillions.

If we only had 20% down payment (NO MATTER WHAT, no HUD/CAL hfa, etc) Then mortgage fraud would be so difficult and rare you wouldnt hear about it (even with loan guarantees by the feds, 20% would cure 95% of fraud IMO)

With low/zero down you get every crook in the world gaming the system, have to hire more governmemt agents, more auditors, more prisons, the losses are higher so you print more money and bailout more banks. Prison guard unions and police/federal workers LOVE this system. Basically this situation is the Democrats Dreamland of Nanny Stateism.

Loan Mods for everyone!(who are able to fake thier income down to what the rules say a loan mod will alow....etc) Please everyone : Dont forget to get a loan mod between jobs or while you are on medical/pregnancy leave!(free gov money!). Im serious.

terriDeaner says

cloud13 says

This is one heck of a home,
http://www.redfin.com/CA/San-Jose/15111-Stratford-Dr-95124/home/1333989
This guy has spent money on the home like anything

Wait, wait, wait… overhead can lights, wall-to-wall carpet, AND vinyl blinds?! This is one classy joint.

Heh, ha, splurt, hahahaha! I'll never understand some of the people around here. $725k?!!? And cloud13 thinks that's a heck of a home (and a good price, I assume)?? Look at the front door - it fills the full height of the building to the roof line. I'm not even 6' and I would practically bump my head on the porch. When that was built, it was a little blue collar shack. A 1948 blue collar shack. So somebody dumped a bunch of high end fixtures and can lights into a crackerbox. And a hot tub and a high-end grill.

Wow. Just wow. Buy now! Insider info! A steal!!

With 20% ($145,000 of cold hard cash) your payment (not counting taxes and insurance) is "only". $3,069. I rented something better in the same area a few years ago for $1950 and I felt I was overpaying.

Ridiculous.

Syphilis says

redfin has bugs because their software is new and they are constantly adding features.
any company young or old, if they release a **NEW** product, will have tons of bugs at time of release.

Still, it sucks that redfin is proving to be a not-so-reliable source of data. I like how their website works relative to most other MLS-based real estate portals. And I *thought* that their software for data curation and summary statistic calculation provided more accurate/believable estimates than Zillow or Trulia. Alas!

That said, MLS data is MLS data, after all...

EightBall says

Calling the 2001 recession the “First Bush Recession” is disingenuous.

How so? There were two recessions during Bush's 8 years, one in 2001-2002 and one in 2007-2009.

Is there anywhere in my above I said Bush was responsible for the first Bush Recession? It would take a really stupid person to make the inference that the business cycle ending in March 2001 was Bush's doing.

Defensive much? Bush that much of a heroman to you still?

Nah, he's not my hero. I guess by your definition you can call it the "First Bush Recession" but when you say it that way it implies that he was responsible. If I said something that included "The Obama Recession" I'd get the same reaction from someone else. I tend to get picky with the meaning behind words and when you use someone's name as a possessive adjective it implies ownership. After the partisan rant that you went on, it is difficult not to infer that your statement was implying that he was responsible. Pardon my misinterpretation, if you please.

I don't like Bush or Clinton - for different reasons. They are both pathetic in their own special way ;)

Syphilis says

redfin has bugs because their software is new and they are constantly adding features.
any company young or old, if they release a **NEW** product, will have tons of bugs at time of release.

I would compare web 2.0 upstarts like zillow/redfin to dqnews, a more established firm. Pretty sure DQ has more roll up the sleeve analysis and not just pushing data to their websites. Since DQ sells this data to other parties, their bread and butter, they take more effort to review the data for accuracy and summarize the findings, as evidenced by their lengthy narratives. For the web 2.0 companies the estimates are not what drives their revenue, and put less effort on accuracy.

RFs software isnt new, nor off the self, its most likely their rushed and immature programming. Throwing out a project to a 5 year inexperienced programmer to create analytics, is what causes problems many times over. Guess we will have to wait for version 5.0 for them to get it finally right.

thomas.wong1986 says

Pretty sure DQ has more roll up the sleeve analysis and not just pushing data to their websites. Since DQ sells this data to other parties, their bread and butter, they take more effort to review the data for accuracy and summarize the findings, as evidenced by their lengthy narratives.

How do you feel about CoreLogic?

EightBall says

After the partisan rant that you went on, it is difficult not to infer that your statement was implying that he was responsible.

Only if you're a moron and/or didn't know that the recession started March 2001.

The underlying reality of this -- and it isn't "partisan" to point it out -- is that every Republican-initiative 1995-2005 was responsible for the bubble and its eventual collapse.

Clinton and other conservative Democrats signed on, or failed to adequately oppose, much of it -- the repeal of Glass-Steagall, the failure to regulate the GSEs and their various accounting frauds, the increasing availability of easy-money loans (2001-2005), including subprime and other initiatives to get more money to home buyers, the effective deregulation of lending starting in 2003, and the SEC and Fed allowing leverage to increase to 30:1 or more.

The Republicans -- conservative Republicans -- were running the House 1995-2006, conservatives -- both Democrat and Republican, but mostly Republican -- controlled the Senate during this time, conservatives controlled the courts, and of course the Bush admin was in power 2001-2008.

That you think these facts constitute a "rant" is major part of the problem in this country. The people who fucked up everything 1995-2005 -- conservatives -- are now trying their best to deny, obfuscate, and bullshit.

And it will probably work. . .

no idea...but here is who they are wiki... TRW certainly was well known back in the day.

History

The company known today as CoreLogic, Inc. dates back to 1991, when TRW Real Estate Information Services entered into a partnership with three real estate information service units from Elsevier, a Dutch publishing company.[3] In 1996, the group, by then known as TRW Information Systems & Services, was spun off and renamed Experian.[4]

In 1997, majority ownership of Experian's real estate information business was acquired by The First American Corporation, in a partnership with Experian. The partnership was called FARES LLC, and the new entity began operating under the name First American Real Estate Solutions (RES). In 2001, the group acquired Transamerica's property information business, becoming the largest real estate information and analytics provider in North America.[5]

Kraig Clark and Steve Schroeder co-founded C&S Marketing in 1997 in Sacramento, CA. Created to provide fraud prevention and collateral risk management solutions to the mortgage banking industry, the company was later renamed as CoreLogic.[6]

In March 2007, First American Corporation merged its First American RES subsidiary with CoreLogic, under the FARES LLC subsidiary.[7] The division began operating under the name First American CoreLogic.

In June 2010, CoreLogic, Inc. was established as a standalone business when The First American Corporation split its businesses to create two separate legal entities, CoreLogic, Inc and First American Corporation (NYSE: FAF) which provides title and financial services.[8]

Troy says

There were two recessions during Bush’s 8 years, one in 2001-2002

I am not a Bush fan in any way, but, as I recall, there was something that happened on 9/11/2001. Did that have anything to do with this recession?

RayAmerica says

I am not a Bush fan in any way, but, as I recall, there was something that happened on 9/11/2001. Did that have anything to do with this recession?

On an anecdotal level, my stocks were in the tank and I was out of a job before Twin Towers fell.

September 11th just gave the financial people a justification to have all regulators look even harder the other way. It was in national security interests. Because letting bankers run wild would give us plenty of money to fight multiple wars. Or something like that. The increasing heroin injections of Greenspan & Friends seemed to be helping.... for a while.... You know what you need to do America? Go shopping. Buy more & bigger everything, it's your patriotic duty.

Also are we talking about the "rich" as those with high incomes or with "high" (often inherited) net worth?

I believe that the lines of class warfare are different from what most people perceive...
On one side there are those with net worths of $5,000,000 or less and on the other those with high net worths (mainly because of inherited wealth). I would like to look into that more.

as I recall, there was something that happened on 9/11/2001. Did that have anything to do with this recession?

yes and no. The business/credit cycle ran pretty "rich" 1995-2000, but there was a lot of flim-flam and Enron/Worldcom misinvestment that was starting to come to light after the NASDAQ tanked in March 2000. Enron blew up right after 9/11.

The Fed Funds rate was dropped once Bush was elected and before 9/11:

http://research.stlouisfed.org/fred2/graph/?g=cP

and rates were held low right through most of 2004, after we had already won the war in Afghanistan.

I think the Iraq war had more to do with the overall macro situation and the PTB in 2003 not wanting to put monetary stress on the nation when we were entering both a major war of liberation and a presidential election cycle.

Here's a 25-year (log-scale) chart of corporate borrowing:

http://research.stlouisfed.org/fred2/graph/?g=cT

you can see the 2000-2004 topping out was similar to the 1989-1994 topping out.

The 2008 borrowing recession came in half the time and lasted half the time of the previous recessions.

Corporate borrowing was very big in the 90s, but wasn't the pulling the train in the 2000s . . .

Same chart of household borrowing:

http://research.stlouisfed.org/fred2/graph/?g=cU

shows household debt doubling between the tech recession of 2001 and the "subprime" recession of 2008.

Janky home lending 2003-2007 gave us the boom, and it gave us the bust. Bin Laden had nothing to do with it unless he was moonlighting as a loan broker.

We're trying to pretend that we've dusted ourselves off from this unfortunate business, but I have my doubts . . .

From digby today:

"this should be a really fun campaign if the Village openly buys into the idea that any defense of the social compact amounts to class warfare. But why wouldn't that be so --- TV announcers are among the highest paid people in the country. The last thing they want to talk about is some dull tale of a bunch of old losers and their health problems. Let's face it, this story of people being tossed out of their homes and Wall Street billionaires committing fraud and getting away with it and all this nonsense about the rich swallowing more and more of the nation's wealth for themselves is tiresome and old hat. We've heard it all before, ok, so let's move on shall we?

The new, exciting story is about how we have to slash the deficit as quickly as humanly possible by cutting spending and cutting taxes because it is the single greatest threat to America since the founding of the nation (or at least since terrorism got boring -- the last greatest threat since the founding of the nation.)And folks, everyone knows we won't get there by blaming our most productive citizens. They need to create some low paying jobs for us and taunting them about their selfishness will only make them leave New York and Washington DC and move to Beijing or Calcutta and create them there. We're hanging on to our billionaires by our fingernails and if we aren't careful we won't have any. "

a million vacant houses, CA is going nowhere.

kentm says digby says

slash the deficit as quickly as humanly possible by cutting spending and cutting taxes

Another genius who thinks lowering taxes to zero, will take government tax revenues to infinity.

This guy need to read Laffer, and then explain how he concludes that taxes are still above the level that would generate maximum revenues.

AAPL PE is 18, not 80. This stock is perhaps expensive, and perhaps worth it, like their products.
I don't know how bad the stock market is but since I began in 84 with bond funds and moved in 91 to stock funds I see less of a problem in my accounts. Others who bought later may have different results.
All of Thunderlips points can be 100% correct and the market may still climb a "wall of worry" with "irrational exhuberance" because it's an auction and funny things can happen in them.
Although things may stink around the world, countries will continue to develop, build roads, grow food, use products, energy and drugs, and whatnot. Even in a poor country you'll see Caterpillar, Coke, Abercrombie, Apple, Walmart, Merck, Toyota, Deere, etc.
If I had a bunch of new money to invest, I would probably buy a metal ETF, gold or silver, aapl, and some giant dividend paying stocks.

For the record, the majority of my investment is mutual funds. I fantasize about having "new money", i.e. "extra income" and investing it differently. If I were looking for huge dividend paying stocks I would probably still use a mutual fund for the purpose.

Nomograph says

Conservatives self-destruct before even getting out of the starting gate.

The overlords have already decided it will definitely be Obama again. Where does the Donald get his marching orders ?

Shirk, would a diagram be helpful ?

I'm starting to understand how Shrekgrinch is a conservative. In shrek's world, Obama voters are angry at the President for not being liberal enough so they are going to vote...TRUMP. Obama released a forged birth certificate to the world despite possibly being born...in the United States.

The twists and turn of logic used to justify Shrek's Birtherism Lite are astounding. (Birtherism Lite is when you take the Palin position of "believing" the President while suggesting that he is completely lying about his own birth story and perhaps ineligible to be President).

kentm says digby says

We’re hanging on to our billionaires by our fingernails and if we aren’t careful we won’t have any. “

So let me get this straight. After centuries of having countless youth giving their lives for this country, billionaires are going to just pack up and leave because they pay a little more in taxes or because this country isn't going to drop to being underpaid slave labor so that we can compete better ?

If his answer is, "no, I just meant that I want them to invest here instead of over there." Don't kid yourself, they are already investing in developing countries as much as they can, relative to risk.

marcus says

So let me get this straight. After centuries of having countless youth giving their lives for this country, billionaires are going to just pack up and leave because they pay a little more in taxes or because this country isn’t going to drop to being underpaid slave labor so that we can compete better ?

If his answer is, “no, I just meant that I want them to invest here instead of over there.” Don’t kid yourself, they a re already investing in developing countries as much as they can, ralative to risk.

Marcus you can't expand private sector by taking money out of it and giving it to the government to spend inefficiently.

Our tax system is total b****** based around government taking as much as it can. You work for the government, and you do not see it. But I work in private sector, paying self employed tax and all the other taxes involved with running a business? It is very expensive and adds to overhead tremendously making it insanely difficult to compete in the global market. I personally have difficult time competing with overseas labor because they can undercut me by usually 30% due to taxes if someone is willing to deal with overseas. And I'm not alone in that boat, while government officials are sitting on their lazy asses decided which one of their k street friends to hand out my tax dollars to.

How about a marriage tax penalty? If my wife and I were not married we'd actually pay less in taxes. What kind of degenerate government junkie decided that we should penalize marriages.

Marcus you really have to look at this system through the eyes of someone in the private sector. If government taxation runs me out of business or keeps me down, I wont have much to pay eventually in taxes to pay your salary cascading the effect to more layoffs in the public sector and complete dislike of government officials. Government is literally chewing off the hand that feeds it, and it's ideologically motivated employees do not see it, because they do not see how wealth is actually created.

mutual funds are much more expensive with fees and interest, I'd recommend simply buying stocks if you are willing to rebalance your portfolio manually once in a while and do your own research on what you think will do well.

Besides with stocks you can on occasion claim losses through put/call window without taking losses. That's a very neat hedge.

I spent more of my work life in the private sector than the public sector, including about 8 years being self employed.

Taxation is really a relative question. Everyone knows we need some level of government services and taxation. You are essentially saying with taxes the lowest they have been since ??, that you feel the need to get the government off your back.

"I personally have difficult time competing with overseas labor because they can undercut me by usually 30% due to taxes"

You honestly think that TAXES are the main reason you can't compete with overseas labor? You don't think it has to do with things like WAGES? Let's see, do I open a factory in the U.S. and pay $15 an hour, or do I open it in China and pay 31 cents an hour? Do I hire a $70,000 software engineer in the U.S. or do I hire one for $15,000 in India?

And the government does not care about small businesses like yoruself, which is why the tax code is rigged in favor of multinationals. To the governmet, your a burden and it would be best if you just went away so that the Fortune 500s can make more money.

"We’re hanging on to our billionaires by our fingernails and if we aren’t careful we won’t have any. “

Name one billionaire who has left the country over taxes. Certainy you can name at least one.

It's a well written piece. I have never been what I call an accidental landlord (underwater and have to more so they rent the place out) or as you say, unwitting landlord. I have been a landlord for 20 plus years and these are all very good tips. All but the first few years I have used large, professional management companies and they are dilligent about all of these "rules" that the article points out.

HousingWatcher says

And the government does not care about small businesses like yoruself, which is why the tax code is rigged in favor of multinationals. To the governmet, your a burden and it would be best if you just went away so that the Fortune 500s can make more money.

Which is exactly what I'm complaining about. The tax code is rigged for multinationals. While a small business or anyone self employed has to deal with overseas competition being beat on the tax bracket. And I don't see my taxes as all time low either, I'm paying a lot... So it comes down to who has more influence in Washington and hence government picking winners and losers based on who has more friends on the capitol hill.

It's a part that marcus misses. Government isn't a separate entity, in capitalism it's a form of oppression ran by big money in order to keep the money upstairs. Small businesses always get ****** in the process by the gman. I'll even quote patrick: "we have socialism for the wealthy" who are in high places in the government, everyone else has to find a way to fit into that government ran business model or end up broke. Washington and their clubby nature.

While a small business or anyone self employed has to deal with overseas competition being beat on the tax bracket.

This is largely hokum. You're being beat on the currency cross between dollars and whatever your competition earns, plus the standard of living gap.

Taxes are really, really orthogonal to this.

A very decent Chinese annual wage is å…ƒ123,000 -- that sounds high until you learn that there are currently 6 å…ƒ to the USD now.

Taxes are actually VERY low here in the US, anyway, especially after the 2003 tax reform that lets you pull money out of C Corps at dividend tax rates.

Government isn’t a separate entity, in capitalism it’s a form of oppression ran by big money in order to keep the money upstairs.

It is true that government is structured to benefit the very poor and the very rich, and the vast middle class is stuck with the bill. We need a better progressive tax rate structure to fix this -- there used to be many more income tax brackets but the very rich jiggered the process to hide behind the merely upper middle class by having the brackets top out at ~$200,000.

Thing is, nobody should be earning more than $100,000/yr in wages anyway. If you're making more than that you should have an S or C corp arrangement.

I've found that setting the rent slightly lower works, i used to do that and there were times that i'd get about 20 responses within an hour of posting the ad on craigslist.

Another thing thats been working for me having the nicest rental around.
I've found that most pro landlords dont treat their rentals as a place they would live themselves.
I can command top dollar and have pick of high quality tenants by offering something that's a little bit nicer.

of course it works best in areas where there's a shortage of decent rentals like silicon valley for example. :)

interesting thread

so short SLV in july eh?

Troy has made a statement about extra money finding its way into bidding up the price of land at some point. I agree.

Also does anyone disagree with making some cuts in military spending?

I certainly do not disagree with military spending cuts.

American in Japan says

Also does anyone disagree with making some cuts in military spending?

Raytheon. Northrop Grumman, Lockheed Martin, and all the 100's of thousands of folks that are paid by them to dig holes and fill them back up.

Cuts are going to be tough, though.

100 BRAC base closings from 1991-2000 saved around $15B (total) and were an immense shock to economies.

We need to cut $300B/yr just to get back to 2007-level spending.

Veteran's benefits are $140B/yr alone right now, up $90B/yr from 2002.

Just that VA increase alone is $800/household/year.

Frankly, I simply don't understand these numbers. There simply has to be an immense amount of fraud going on.

DOD spending is $750B this year. At $250,000 per job that would be 3 million jobs.

The problem with bad governance is that it's easy to fall into and impossible to get out.

WTF were we thinking 2001-2006???

Troy,

I know but it will just mean more spending...more printing...then more inflation for everyone.
I think they should phase out some of the spending over time, other things need to be done of course.

It's funy how many people say how Palin would cut spending, but she wouldn't touch the military gorilla.

The Republican party is a wholey owned subsidary of the military industrial complex. Scum like Eric Prince (founder of Blackwater, I mean Xe) control them.

HousingWatcher says

The Republican party is a wholey owned subsidary of the military industrial complex. Scum like Eric Prince (founder of Blackwater, I mean Xe) control them.

What about the Democratic Party? By the way, the "scum" Haliburton continues to do as much business under Obama et all as they did under Bush. Any comments on that? Also, in case you haven't noticed, Obama has EXPANDED the war in Afghanistan dramatically and is now bombing Libya. Any comments??

Your right. Can't argue there. But Obama did drastically reduce troop levels in Iraq, soemthign Bush never did.