patrick.net

skibum,

Try to remember, gang members and illegals are simply committing crimes most Americans won't DO!

If they weren't here, who WOULD do these crimes?

@theotherside

Do you contend that 5%+ inflation for the next 21-30 years is reasonable? If you are relying upon long-run equilibria, then why are you assuming an abnormally high long-run inflation rate?

The NYT model is a 30 year present value model, so you should take the average inflation, not the maximum inflation.

I'll be the first to say that if inflation is 5% for 30 years, by the end of that period probably only 20-25% of Americans will be home owners. Sustained inflation that high implies mortgage rates well over 10%, maybe even 15%, and you continually assert that housing purchases are very sensitive to mortgage rates (which isn't supported by historical correlations, but that's besides this point).

"the type of economic violence that is being discussed every day on this blog"

Huh?

I'm not sure what you mean by "economic violence" but if being torqued off by the fact that we're even entertaining a FB bail-out (very seriously I understand) then yes! I suppose I DO advocate "economic violence".

What about the type of economic violence that is being discussed every day on this blog? Should that be regulated?

As you can tell, I’m trying to make he point that a “free market” very often is not the best solution to a problem.

The only person here arguing for anarchy and calling it a free market was one of our local realtor-trolls. While often libertarian-leaning, you won't find anyone here seriously advocate market anarchy, myself included.

I don't know what "economic violence" refers to, and apparently neither does Google. I assume you mean "market winners and losers" whereby the winners somehow inflict harm on the losers.

I don't need to connect the rest of the dots to see where that line of reasoning leads. But go ahead and cheer for Royal if that suits your tastes.

Randy H,

In that case, if you have the gumption, knock on the door of this house and ask the neighbor innocently, "I was wondering," feigning interest in buying the place, "if I could get a tour, as I'm in the market. Who's your agent? Can I set up an appointment?" Whether or not they divulge, you can see how they respond. And in a Columbo kind of way as you're leaving, "and by the way, do you know your MLS number offhand, so I can peruse your home's stats at a leisurely pace at home?"

If they (a) are indeed listed, you have your innocent answer. If they (b) are "pocket" listed, you have the agent's name to report to the local Realtor (TM) board.

DinOR Says:

> Try to remember, gang members and illegals are simply
> committing crimes most Americans won’t DO!
> If they weren’t here, who WOULD do these crimes?

Don’t forget that without gang members the companies that make malt liquor in 40oz bottle, cheap handguns and “grillz” would have a tough time.
http://www.misterbling.com/grillz-c-29.html

FAB,

Even the Governator is going gangsta-style (with a Green (TM) twist, though):

http://www.allhiphop.com/hiphopnews/?ID=6912

misterbling.com

Lord, what next! LOL!

True, and police officers would actually be able adjudicate some of their time performing safety training and enforcing traffic violations rather than breaking up backyard parties and drawing chalk outlines on the sidewalk.

Muggy,

Biblical Mortgage Company?

Old Testament prohibits paying or collecting interest, New Testament says to give all your money to the poor.

Which principle do you think he will follow?

BusinessWeek: December 30, 1991

Top of the News

WHEN CALIFORNIA SNEEZES...

http://www.businessweek.com/archives/1991/b324623.arc.htm

If only some Hollywood megalomaniac could snap his fingers and bark: "Get me a rewrite of this script!"

But there's nothing celluloid about California's recession. Consider the lumber mills of the Pacific Northwest, which used to count on California's booming building sector to pull them out of the dumps. "Now, it's a different world," moans Dixie Tibbets, sales manager of Medford Corp.'s lumber division in Medford, Ore. With California construction down 25%, orders have dried up. This Christmas, Medford is closing plants for an unusual two-week hiatus.

Retailers, steelmakers, banks, and defense subcontractors from Utah to New York are paying the price as California's economy heads into a recession deeper and longer than almost anyone had forecast. And California's horizons are gloomier than ever. On Dec. 12, San Francisco-based Wells Fargo & Co. announced that it will set aside $700 million for loan losses because of persistently weak California real estate. The next day, Standard & Poor's Corp. lowered its rating on California's public debt to AA from AAA, citing the state's yawning $4 billion budget gap (page 35 33 ).

OUT OF THE CHIPS. Big deal, you say? Banks are a bummer nationwide--what about California's high-techies? True, Silicon Valley hasn't been hit as hard as other parts of the Golden State. But after a gee-whiz-what-a-blast decade of double-digit sales growth, Silicon Valley is girding itself for single-digit territory. Still growing, but get this: Silicon Valley has lost 6,900, or 3.7%, of its electron-ics jobs since October, 1990 (page 34 32 ).Plenty of folks have been waiting for cocky California to get its comeuppance. Too bad, because even far-away Pennsylvanians are finding out the hard way how their own livelihood is linked to the Golden State. Its 30 million residents make up a huge market. Contributing more than 13% of the nation's output, California's economy is tightly interwoven with the rest of the nation's in a way no other state can match (map).

Back to my favorite topic these days:

http://www.marketwatch.com/news/story/emergency-funds-proposed-subprime-crisis/story.aspx?guid=%7BBD993ECB-C722-4616-BCE9-386ED004DD7D%7D

Why don't we send our populistic lawmakers on an extended vacation (3 years or so)?

Space Ace,

Absolutely hysterical! One thing I will definitely give Ben Jones credit for is his relentless pursuit of those types of news coverage. Now it just so happens this story is from THE LAST bubble and it's embarrassing just how seemlessly it fits into today's scenario. Nice find.

Home prices never fall nationally, until they do.

http://money.cnn.com/2007/04/11/news/economy/home_prices/index.htm

I am all for freer markets. However, I am a (moderate) social conservative. I also find small-time gang crimes pathetic. I am at the same time pro-education and compassion-neutral.

Perhaps you can see where I stand.

On Blogs Leading the Mainstream Media

I'm just a lowly blogger who gets into trouble from time to time for daring to try adding things up, but I'd say my tiny anecdotal perspective is that the MSM is desperately wailing about trying to find relevance.

I'm going to write an article on my blog in a few weeks on this, but a preview as such:

When I broke on Second Life I got a lot -- and I mean a scary amount -- of MSM interview requests. Very few of these requests had any indication that the requester had even bothered to read, let alone understand, my articles. Worse, few had even really bothered to verify me or my credibility. I knew this because so many misrepresented my occupation and "title" which I could tell they were picking up from blogs that blogged my blog, getting stuff about *me* wrong.

The biggest disappointment for me was the fact that the highest quality requests (and those I actually agreed to and did) came from foreign press. For example I did a television interview for a large German prime time program (via Skype, it was kind of cool), and their topic was half Second Life and half "how the media's losing the initiative to bloggers".

It wouldn't surprise me if Gross and others actually rely upon blogs as a leading source of information, at least as a gauge on opinion-leading sentiment. But I would be surprised if Gross himself ever laid eyes on my blog articles. More likely one of his analysts read my and other folks' stuff and put together a summary & script heavily influenced by or even based on our work.

And this itself is kind of scary. They have no idea if I know what I'm talking about. I could be some paid shill for this or that, for all they know. I could even be an open late beta version of a JukuBot, trying to cull the herd, as it were.

I could even be an open late beta version of a JukuBot, trying to cull the herd, as it were.

Metaphysically, we are all jukubots.

Why don’t we send our populistic lawmakers on an extended vacation (3 years or so)?

Siriam,

I suggest you write or email your local representatives, Chuck Schumer and Christopher Dodd. Please see my post from last night that has the verbatim email I sent to Boxer, Feinstein, and Schumer. Feel free to cut and paste.

Two additional observations about the Congressional hooha to bailout these FBs.

First, we had the Clinton admin encouraging loose lending standards in an effort to extend the Amerikan Dream (TM) to more Americans. Then we had the Bush admin unwilling to pay attention to the industry and regulate it properly. Now we have a Democratic congress jockeying for position as the do-good feel-good liberal champion of the downtrodden masses (read FB). Our country is screwed - doesn't matter if it's by the Dems or the Republicans - they all suck.

Second, the funniest yet saddest thing about all this hooha is that these folks in Congress are shooting their "save the poor" wad WAAYY too early. What are they going to do once Alt-A starts imploding? More of the same? Let these better-off FBs rot? Presents a minor moral dilemma to these guys that they are to myopic to foresee.

to myopic -> too myopic

This looks like an interesting book:

http://www.amazon.com/gp/product/1400063515/ref=pe_pe_5400_5073880_pe_snp_515

Will the housing bubble burst be a "black swan" event? How will future historians see us as people who imagined the "impossible?"

Predictible sound bites from the likes of Schumer from SG's link:

What was once the American dream of homeownership, according to Joint Economic Committee Chairman Charles Schumer, D-N.Y., has "now become the un-American nightmare.

"We'd like to do something very quickly," Schumer added.

What an idiot.

Predictible sound bites from the likes of Schumer from SG's link:

What was once the American dream of homeownership, according to Joint Economic Committee Chairman Charles Schumer, D-N.Y., has "now become the un-American nightmare.

"We'd like to do something very quickly," Schumer added.

What an idiot.

The want to starve troops in Iraq but they are going to help stupid, clueless homedebtors who did not bother to read fineprints?

WTF?

The media's often idiotic sole focus on the subprime mess is a joke...

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=2364373&src=finance&ch=289023

What is wrong with these media people anyway?
Dont they get it?

The loans were peppered with teaser rates
and payments that were unrealistic to begin with.

The real problem is hyper-inflated prices that are not supported
by real economic fundementals. If you meet a newspaper or TV reporter be sure to give them a wack over the head...

"HEY STUPID DONT YOU GET IT"

LOL ! :) :) ;)

Randy H,

I've read Bill Gross for years and typically his pieces are prefaced by some vague historic reference as he drags you through a labyrinth ultimately arriving in the "present". As predictable as a wet spring in Oregon.

The liklihood that he is even going to use jr. analysts to peruse the blogs is slim. Probably delegated to "sales assistants". The proof (in my mind) is that there ARE a lot of people talking/blogging about the HB, and a fair amount about SL. However CAP 2.0 and here... are the ONLY places I've seen two and two put together!

As Michelle Malkin would say "Hat Tip to Randy H of CAP 2.0".

Peter P,

The Democrats aren't starving the troops. The troops are not in danger of technical starvation. What the Democrats want to do is give the troops more money than Bush asked for (and should have asked for in a regular budget in any case). The Democrats and a growing number of Republicans want to get American troops out of the dangerous quagmire that is Iraq. A dangerous quagmire that everyone outside of the White House and John McCain's head can have no good end, and the continuation of which will just lead to more dead and mained young Americans.

If you must type misleading comments, please at least do it on behalf of a group less abhorrant than GOP political leadership. Maybe serial killers, or smokers, or Scientologists.

"If you meet a newspaper or TV reporter be sure to give them a whack over the head..."

See, there's the "economic violence" *justme was talking about. Now "I" would never advocate THAT! (But if she's "hot" see if you can get her number).

What?

The NAR's reluctant prediction of a historic first-time-ever fall in national home prices has been mentioned already here. I just wanted to point you towards the WSJ's take on it:

http://online.wsj.com/article/SB117630064272466348.html?mod=hps_us_at_glance_most_pop

Realtors Forecast Falling Home Prices

The National Association of Realtors, which has long proclaimed that U.S. home prices haven't declined on a nationwide basis since the Great Depression, now says they are likely to do just that this year...

This is the particularly interesting and funny segment:

Meanwhile, the Mortgage Bankers Association suggested that the media's intense focus on the housing crunch, and shoot-from-the-hip responses from legislators and regulators, threatened to make the situation worse. In an email Tuesday, the association told its members that it has allocated an extra $5 million to combat "a torrent of unfair press and counterproductive policy responses" sparked by the turmoil in the subprime market, where dozens of lenders have been forced to close down or seek bankruptcy protection.

The $5 million budget for extra advertising, research and lobbying is equivalent to about 10% of the trade group's annual budget. The association said it is trying "to shift the media focus away from the 'foreclosure crisis' to the potential for a 'credit crunch' that could result from over-legislation and over-regulation."

Wow. 10% of the MBA's budget is going towards an ad campaign, WHILE they blame the media for (a large part of) this mess?

Well, I guess we all forgot - it's not the fault of FBs, Realtors (TM), lenders, or even MBS investors. IT'S THE MEDIA'S FAULT!

I hope for peace. I am just worried that a premature withdrawal may lead to more violence.

I have NEVER had a problem with premature withdrawl.

They're not asking for withdrawl at this time. They just want benchmarks so we can get out at somepoint rather than get sucked into a rerun or Vietnam or Soviet invasion of Afganistan.

"I have NEVER had a problem with premature withdrawl."

How about Mrs Skibum?

I am getting worried about that too.

Let's talk about something cheerful. Like cakes.

I like cakes.

skibum,

If the MBA (Mortgage B*ttf@ckers Association) is delusional enough to believe that an urgent situation requiring a direct and immediate bail-out will *not* create added scrutiny on their practices they might as well disband.

So what's next?

"Now is a really great time to borrow money against your home OR pay off debt" ad campaign? WTF?

I like cakes with fair amount of alcohol and cream.

Cakes are okay.

Fresh bread with edible oily substance is better.

StuckBA
7- And finally, the only thing standing between you cheap rental ($2500!!) and having your family on the street is the ability of your landlord not to default (except if he bought a long time ago and you cover his costs !!!)

Jimbo would disagree with this. Somehow he thinks landlords just settle for what the market will bear, and will keep renting out at a loss indefinitely.

How about Mrs Skibum?

Ha ha. Not that I'm aware of, or would ever admit to.

An immediate bailout *will* cause mortgage funding to dry up overnight. Hardcore bubbleheads should cheer for it. But reasonable people like us should see beyond that and think for the economy in the long run.