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SPI (Senior Price Index)
Good God, don't give AARP any ideas! Then they'll also have to create a BPI.
Maybe Seniors will create a SPI (Senior Price Index) so that they can have their cake and eat ours too.
SPI:
5% = Canes and orthopedic shoes
5% = Leisure suits at Penney's
15% = Geritol, arthritis meds and Centrum "Silver"
15% = brunch buffet at the Golden Nugget
20% = Winnebago (including gas)
40% = Owner's equivalent rent at Senior Village
what about riverboatel fees and annual cruises and medications that start with V and C? :)
I think medical expenses will be a lot more than 15% of the budget. Those co-payments can really add up, especially for people with diabetes, high blood pressure, and other chronic health conditions.
You may want to substitute brunch buffets for dogfood, leisure suits for Salvation Army mumus, and camping out in their grandkid's room for living at Senior Village -- just to make up the difference.
Man, my hideous grammar!
The third paragraph of the last post should read:
You may want to substitute dogfood for brunch buffets, Salvation Army mumus (cause then you don't need to pay for underwear in addition to adult diapers) for leisure suits, and camping out in their grandkid’s room for living at Senior Village — just to make up the difference.
Anyways, I feel dirty, I'm being so mean to a bunch of hypothetical old people.
astrid :
Anyways, I feel dirty, I’m being so mean to a bunch of hypothetical old people.
You need to watch more Seinfeld. :-)
15% = brunch buffet at the Golden Nugget
Hmmm… don’t forget the small, but volatile gratuity sector.
14.999999999 = brunch buffet at the Golden Nugget
00.000000001 = Tips & gratuity
You forgot:
Senior discount = priceless!!
I think we should all have a foreclosure pool, like a football pool. Draw up some boxes with all the states in them and when the end of the year comes, the state with the most foreclosures wins. We can also have a bonus, whoever bids closest to the highest amount of foreclosures gets bonus money. I think that would be a good way to end this year. What do you guys think?
That depends on how much everyone is willing to spend. This can also be done by city. That will allow a whole lotta boxes.
Option 4 -
Try to Rent it.
Before you accept any rental price increase, use this to check what's available in your neighborhood at your current rent. You should be able to ask for a rent freeze or minimum increase if you want to be friendly about it. At my price, in my neighborhood, inventory looks better than when I rented my current place.
Then check out the $2250+ range and laugh at the FBs. I'd argue that both the volatility and the increased mean in Patrick's graphs is due to the long upper tail from desperate borrowers
Where does all our tax dollars go in California?
This should fit the bill:
http://www.ebudget.ca.gov/BudgetSummary/SUM/1249561.html
Oh, and of course “dem damn illegals†and “evil teacher’s unions†;-).
Holy cow - we spend a lot on prisons!
I just noticed that in 2001, the DOJ reported that CA was spending $25k per inmate. With almost as many state inmates as there are in CT+ME+MA+NH+NY+NJ+PA+RI+VT combined, you'd think we could buy in bulk and save.
(CA: 163,965. Northeast: 172,925)
George,
I'm not quite sure how I feel about this new level of candor. It's as if the "meeting of the minds" rifled through all of their available options to find a culprit and decided that Mr. Flipper would have to take the fall.
Flipper as fall guy serves multiple purposes. Firstly we can shuffle the escalating cost of housing (hence property taxes) on their speculative greed. Secondly the fact that you can't sell the overpriced sh@tbox we just sold you is directly attributable Mr. Flipper's desperate situation. As is the wave of defaults and foreclosures.
"The resulting excess supply has exacerbated the drop in consumer confidence"
This is more bassackwards logic we keep getting from the RE Cartel!
Oh and again with the total focus on 2004/2005! Sheesh! I suppose up to that point everything was on a healthy path?
Please make a tax deductible contribution to the patrick.net "The Bubble Did Not Start in 2004" Foundation! Thank you for your support.
As far as the excess supply "exacerbating the drop in consumer confidence" that's another way of saying the Housing ATM is Out Of Order!
"but it isn't entirely inaccurate"
Oh, agreed. It's difficult to seperate the two, no question. What I took exception to was the notion that this ALL falls squarely on the shoulder of Joe McFlipper and this ALL took place in a period of 18-24 months. My wife works for a huge publicly traded company that makes custom medical devices and home security systems and like 3 out of 5 employees have at least one "investment" property. Several have upwards of 5!
I have to agree with Randy H (usually a good idea) that the tech wreck and housing bubble have more differences than similarities but one trait the aftermaths will share is, after the implosion it will become hard to find people that were flippers! In the 90's daytraders were a dime a dozen but post derailment touting it became outright silly. After 2001 the only ones I could find were those "that dabbled occasionally and got out before the sell off"! Saying you were a flipper by 2007 will look equally dense.
George and DinOR,
Looks like the lending industry (at least Countrywide) got together with the HB's to tow the party line. From the WSJ:
Angelo R. Mozilo, chief executive of Countrywide Financial Corp., the U.S.'s biggest home-mortgage lender, rarely misses a chance to remind people that he has been in the business for more than 50 years. Now he has a sobering message for investors about the near-term outlook for housing and mortgages: Buckle your seat belts.
"I've never seen a soft landing in 53 years," Mr. Mozilo told analysts in a conference call last month.
Nice.
It's always good to be prepared - and to know what to do in a difficult situation. Here are some helpful tips:
"why did your firm loan money to anyone and everyone right up to the 11th hour?"
Cuz he is not lending out his own money?
I have to agree with Randy H (usually a good idea) that the tech wreck and housing bubble have more differences than similarities but one trait the aftermaths will share is, after the implosion it will become hard to find people that were flippers!
I dunno, really -- maybe they have more similarities than difference -- obviously not in proportional magnitude of correction, but in the greed factor, the 'dont' miss out, get on the gravy train, it's the next big thing' attitude, the way investors are always trying to ferret out maximum returns from anything, the easy money aspect, the illogic and mass psychology of following the herd and not doing due diligence checks on the investments, etc.
but, yes, it's usually a good idea to agree with randy ;)
Zephyr Says:
It’s always good to be prepared - and to know what to do in a difficult situation. Here are some helpful tips:
http://www.franksemails.com/misc/things-you-should-know.pdf
Now that's funny s#*t!
astrid,
Oh I'm sure of it! It's just one of those things that dawns on you as hit submit. Had it been his $$$ things would have certainly worked out differently! Good point.
Randy H
2006 Aug 9, 2:10am
I am such a contrarian that if I find everyone agreeing with me I'll disagree with myself. lol
DS,
Good evening, btw! True, the events leading UP TO the HB had similarities but the aftermaths will have a decidedly different outcome. Taking a whoopin' on your 5K ETrade account isn't the same thing as having your house repo'd. The impacts both on a personal and national level may well be more than the American consumer can "boot strap" their way through.
allah,
The only loan somone with a 529 FICO should be getting is a "hard money" loan (if they can get that).
The only loan somone with a 529 FICO should be getting is a “hard money†loan (if they can get that).
I think with their situation, the only advise they should be getting is to cut their loses and sell if they have equity, otherwise put the keys in an envelope and address it to the bank. There is nothing they can do! There is no way they are going to fix their credit no matter what they do, time is not on their side!
Peter P
2006 Aug 9, 3:44am
Of course, the part about House prices stabilizing was a joke, but hey, this whole thing would be bloody comedy if it weren’t so awfully tragic.
It can be bloody comedy even if it were awfully tragic. :twisted:
Think Dr. Strangelove.
George,
Nearly everyone that gets hired by a brokerage firm pitches bonds first. Usually the "trainee program" is based on starvation wages so people want out fast! Some of the classic lines I've heard over the years are:
Rates are going up! Buy bonds!
Rates are going down! Buy bonds!
South Carolina hasn't defaulted on a bond payment since the Civil War!
Mr.________, every time an AFC team has won the Super Bowl it's a good year for bonds! And the Dolphins are 4 point favorites!
BUY! BUY! BUY!
“If you ignore home equity households headed by someone age 75 or older have a typical net worth of just $19,025.â€
*shudder*
Any reason why the WSJ refers to >65 in the first sentence and >75 in the second? World factbook notes 12.5% of the US pop. is over 65, and average life expectancy at 78.
The Fed has paused. Good News! The time to get a loan is NOW!
I'm waiting for:
The housing market has crashed and prices are at 1999 price levels, now is the time to get a loan!
Often when thumbing through the "o'bits" you'll notice that so many that leave this world prematurely were "loved by all" or "an inspiration to everyone who's lives she touched" or "lived each day to the fullest"?
See that's why I'd like to go when it's "my time" and not a moment sooner b/c mine will read:
"He did have his days"!
"Ge.........nerally an (ok) guy"
"He could be a pain when he was sober (which thankfully wasn't often)"
George Says:
“Worked 80 hours a week at three jobs to pay off his adjusting 50-year Mortgage.â€
"He is survived by his 2 loving children, 3 grandchildren, and his 100 year mortgage."
SFWoman,
The other thing that occurred to me was that some of these people might be on the "live it up and die broke" retirement plan, in which case extracting equity would be a reasonable way to go. (And once your balance drops below 10K, take up skydiving.)
(I'd love to see some reasonable life expectancy figures at different ages; I think that last one I saw was about 2K years out of date.)
“Worked 80 hours a week at three jobs to pay off his adjusting 50-year Mortgage.â€
“He is survived by his 2 loving children, 3 grandchildren, and his 100 year mortgage.â€
:lol: + "His only regret in life was he didn't get a chance to liberate ALL of his equity to buy more useless crap before kicking the bucket."
“Worked 80 hours a week at three jobs to pay off his adjusting 50-year Mortgage.â€
“He is survived by his 2 loving children, 3 grandchildren, and his 100 year mortgage.â€
Imagine inheriting debt!
"I was barely scraping by and then suddenly my parents died and I was left with all their debt. I never owned a house, but I actually foreclosed one".
allah,
Unless the kids are dumb enough to be tenants in common with their parents or cosigned the loans or some other such lifetime arrangment, they're pretty safe. They just need to renounce claim to their parents' estates.
requiem,
So would taxpayers in Oregon. Our public employees have their guaranteed retirement benefits paid out based on circa 1970 mortality tables. Much of this data was skewed by the WWll generation and their general practice of working until you drop dead. Now we are by law required to keep them in the manner in which they have become accustomed for considerably longer! (Rather than take the same dollar amount and spread it out over a longer life expectancy). In the end, they'll win. Even if it means bankrupting the state. They're just soooo inflexible!
requiem Says:
> (I’d love to see some reasonable life expectancy
> figures at different ages; I think that last one I saw
> was about 2K years out of date.)
The best way to figure your life expectancy is to take the average age your relatives died (pulling out the 17 year old cousin that drove his car in to a tree drunk) then and add a few years since the average tends to trend up and then add a few more if your lifestyle is healthier than your average dead relative or subtract a few if you are not as healthy as your average dead relative.
Averages in a specific family will mean a lot more than national averages. If a 20 year old Japanese American girl and a 20 year old Samoan American girl wanted to find out how much they will weigh at 50 years old talking the average weight of their relatives at 50 (probably 120 for the Japanese American Girl and 260 for the Samoan American Girl) will be closer than the national average weight at 50 of around 160 for the "average American woman".
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If there's one thing that distinguishes your average Patrick.net blogger from your typical robotic SDCIA.com perma-bull, it's the ability to consider your opponent's P.O.V. and to see things from others' perspectives. This thread is dedicated to this proposition. I want you to put yourself into the mind of a F@cked Borrower.
Peter P has already suggested this concept --in jest-- with his thread, "A cry for help". I would like this one to be approached from a more serious mindset. Image for a moment that you --as our hapless friend from the SDCIA-- find yourself saddled with 14 underwater properties, all bought on margin with exotic financing, and are now unable to make the ARM-reset payments on your night manager's salary from Taco Bell. Never mind that you could have avoided your unsavory predicament by merely applying a modicum of logic, some cursory market research and a dash of high school math to the dubious principle of "it always goes up". It's too late for regret now --you let your greed get the best of you, and so here you are. You now have a "diversified" portfolio of 14 equity-negative properties in different states, and all of them are heading in one direction: down.
So, let's assume you've gotten past the denial, anger, bargaining and depression stages, and have picked yourself up off the floor (after spending several days there whimpering in the fetal position). You've finally reached "acceptance" and are ready to rationally assess your sorry situation with cold, hard-eyed reason, and you must determine a course of action before events progress to the point where your creditors begin making all your decisions for you.
At this point, you have basically three options, none of them particularly good from your P.O.V. Which one do you take?
1. Confront your creditors (MBS shareholders) and request permission to start making "short sales" (i.e., selling the property for less than the amount owed).
This option has a number of attractive advantages, particularly the ability to avoid bankruptcy and/or liens and legal actions against you, as well as the ability to be quickly rid of those 14 "equity alligators" before they eat your alive. If your creditors agree to this, it amounts to a non-BK debt forgiveness, and you will not owe any money after the sales.
It also carries a few drawbacks: (a) Exactly whom do you negotiate with? Your loans got bundled up as MBSs and sold off before the ink even dried. Do you call Fannie Mae, Fredie Mac, the Bank of China, Fidelity, Vanguard, CalPERS --other? (b) Your creditors will undoubtedly require you to bring your entire life savings to the closing table in order to minimize their own losses. Of course, being a reckless speculator who used other people's borrowed money, you're not likely to have much anyhow, so no biggie. But there's another drawback: (c) your creditors will have to report the amount forgiven to the IRS as "cancelled debt", which will be taxable as income. Given your 14 underwater properties, this amount may be quite large. Bailing on your creditors? Relatively easy. Bailing on Uncle Sam? Not so easy.
2. Leave 14 sets of keys on 14 granite kitchen counters and walk away.
Pros: Perhaps your creditors will eventually realize you have no money, no reasonable chance of paying off the debts, and just write them off and leave you alone. To borrow a phrase from J. Paul Getty, “If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.†Even better, if all of your mortgages are "firsts" (no refi's) and you live in a non-recourse state (CA), then your creditors basically have to eat the loans. You'll still be on the hook for tax on the cancelled debt, however.
Cons: Aside from trying to sue you for any current assets and garnish your future earnings (assuming any of your mortgages were refis/recourse loans), your creditors may also try to intercept your tax refunds, ruin your credit (ha-ha, I know --like you care!) and generally harass you and try to make your life miserable.
3. File for Chapter 7 bankruptcy.
Pros: Means a "clean start" no more debts, and no tax liabilities --if you can get it.
Cons: Thanks to the new creditor-friendly Bankruptcy "reform" law, you have to qualify for means-testing and prove you did not commit fraud to obtain the loans in the first place. Uh-oh. That last part could really bite you in the a$$. How much did you inflate your Taco Bell night manager's salary to get those 14 $0-down NAAVLPs? Don't remember? Better consult with an attorney first. If you can't qualify for a Chapter 7 under the new rules, then your only option is to file for Chapter 13 (repayment plan --not good) or reconsider options #1 & 2.
Discuss, enjoy...
HARM
#housing