patrick.net

Btw, are we still on for this Friday evening, over at the Ferry building wine bar? I have been moving & unpacking for the last few days (i.e., no internet access).

I don't know... I am busy this Friday. I thought Randy suggested making this a monthly thing.

@HARM relative to ACORN

Thanks for addressing this article, I had intended to also.

I also felt revulsion on that ACORN responsibility piece, though from a different angle. I am predisposed to favor such left wing agendas, admirable goals of the organization; someone must look out for the disenfranchised whose lot is largely dictated to them through our racist and unequal system.

However, all the organization did was make clear the systemic flaws of the banksters system. The response from the banksters was to let the sharks through the net to play with the kids. Neither ACORN nor its beneficiaries are in any way responsible for any of it. The PTB and banksters gave starving families tainted food.

Holding these parties responsible is pure and simple a deliberate misinformation campaign. I cringe every time I hear "subprime crisis", as if it's the poor borrowers fault. This is real misinformation spread through the perception management efforts of the banksters. If the population at large blames the real culprits here, our financiers and banksters, then pawning off the debt on taxpayers will become that much more politically challenging. It's important to keep everyone in the dark.

I seem to hold less disdain for the FED policymaking than most here. I agree with you on all other points, but the FED sole mandate is not looking out for the USD. Alan G did miss clear signals of the bubble, and he was too late in tightening, but we were in trouble after dot bubble bust and 9.11 which unbeknownst to most brought our financial system to near state of collapse, and did inflict real damage. There are "loosers" with the loosening, no doubt and that sucks. However, the US economy as a whole must be kept afloat, and the system in tact. (or as China says, "at least we support keeping the present financial order in tact for now"). The national debt is not Greenspans fault, nor is US consumer spend and debt, nor trade imbalances. The FED is reactionary to the real playas, largely. It sucks that the situation puts us in a position where we are discouraging investment and savings, but that’s where we are.

I don't know. The idea of pitching homeownership to those unworthy of homeownership is highly flawed.

Who gets to decide if a homeowner is worthy? Free Market (without taxpayer assistance or policy distortions), of course.

"Catholic or Protestant?" - Yes.

PeeterPee - I agree, there are those who are basically "unworthy" in that it's not right for them to own a home. This does not necessarily mean poor. When you can rent an at least OK apartment in the BA for what it costs the avg. homeowned'er to pay the taxes and keep the lights on, you can see that renting is much the better deal. Owning only makes sense if you're in it for the long haul, have a large family, are handy with tools and can do home maintenance yourself, etc. In an area like California where owning costs 3X-4X or more than renting, owning makes very little sense. In a place like Ohio, where owning and renting come out the same, and owning will get cheaper over time compared to slowly but surely rising rents, it may make more sense to own.

This does not necessarily mean poor.

Of course not. Many "highly-paid" professionals are financially poor. But they have leased bimmers.

Again, no one party is solely or primarily responsible for the housing bubble. We can only blame human nature.

HARM Says:

> I have no love for lobbyist organizations with left-wing
> agendas like ACORN*. Even so, to accuse ACORN
> of having been the primary cause of the lending bubble
> and portraying cheap money pimps like Tangelo of being
> “victims” of unscrupulous subprime borrowers doesn’t
> just cross the line of revisionist history –it tramples and
> then sh-ts on it.

Tangelo did OK selling about half a BILLION in stock over the last few years but most other bankers (who 401Ks have dropped in value) have not done that well. ACORN and the government basically forced banks to make lots of crappy loans or they would punish them for being “racist”.

@NVR,

Actually, I don't think "protecting" the USD is even on the Fed's radar, despite what its stated mandate says. If it were, why has the USD lost 95+% of its value since the Fed's creation? The Fed is all about price "stability" now. Which loosely translates as, "doing everything to ensure that politically sensitive assets connected to powerful lobbies --like housing and stocks-- only go up".

I hold Con-gress in at least as much contempt as I do Easy Al & Co. for the financial mess the country is in. Even so, I take issue with the idea that ZIRP or 1% FF rate was somehow "necessary" or "helps" the economy avoid recessions. IMO, all it did (and can do) is blow successively larger bubbles, encourage reckless lending, and delay our inevitable day of reckoning --preferably beyond the date that 'politician A' or 'bureaucrat B' retire from office.

Since when did it become a "mandate" for government to repeal the business cycle, or have taxpayers underwrite reckless speculation? Should we outlaw recessions or investment losses altogether? If so, I'd like the money I lost in Vegas back.

Should we outlaw recessions

Don't give them suggestions!

@FAB,

Easy Al's 1% basically "forced" banks to lend to anyone who could fog a mirror, or miss out on all the free (in real, inflation-adjusted terms) loot, and be punished by shareholders.

Honestly, I don't know how to begin to quantify the impact of ACORN's (and other like-minded organizations) efforts to ban mortgage "red-lining" and encourage lending to (mostly) unqualified borrowers in poor, minority areas. However, I doubt that all of those efforts combined would even come close to the impact of (quasi-)ZIRP, Congressional tax subsidies, and the GSEs taken separately. To me, it is like comparing an anthill to a skyscraper.

Easy Al’s 1% basically “forced” banks to lend to anyone who could fog a mirror, or miss out on all the free (in real, inflation-adjusted terms) loot, and be punished by shareholders.

Only if the shareholders are short-sighted, which unfortunately they are!

The church-state separation is still be best solution. But won't a Christian leader prevent us from turning into Europe?

No one said anything about giving ruling authority to the church. What if they ban shellfish?

I don’t know… I am busy this Friday. I thought Randy suggested making this a monthly thing.

I did. Let's see if we can get the first one rolling. I'm still on track to make it there, but won't know for sure until late tomorrow.

Too bad I am busy this Friday. I miss HARM. :(

The idea of pitching homeownership to those unworthy of homeownership is highly flawed.

Yes, that's a valid point of contention. However, we begin to get into the affordability issue here. The cheaper it gets, the more folks that get worthy, no? Is that the only marker, or how would you define worthy and unworthy?

I can't believe I'm going to say this, but I think there is room for innovation at the bottom rung to expand homeownership. Certainly not the same "innovation" we've just experienced. Maybe social pooling of mortgages, buy downs, hardship funds, proactive community counseling, ect.. Its a tough problem but all problems are solvable.

How much does it cost to house a prisoner in our gulags again? Some ridiculous amount, maybe $35,000 annually each? Has anyone considered an early release program, putting them in the foreclosures? Solves the upkeep problem and gives 'em a chance at a fresh start, no? Recidivism would go way down. Maybe no worse moral hazard than the recent refund stimulus package. If we doubled and tripled them up, that would cover servicing of a $1M note at current interest rates nicely. About 700K non-violent currently incarcerated, that would do wonders to gobble up supply.

Maybe social pooling of mortgages, buy downs, hardship funds, proactive community counseling, ect.. Its a tough problem but all problems are solvable.

How about building more homes?

@HARM 3:52

Well said, I'm nearly entirely agreed.

HARM - there are open AP's (access points) all over the BA. Assuming you're in the Sunnyvale area, just go downtown. Coffee'n'More has free access, the Bean Scene does, and Firehouse (noisy sports bar) does. Also, the Kinko's in that nearly impossible to get into complex with the theater etc., I only know how to get in/out by one stringy little street off of Lawrence. Kinko's in there has free access, just take your laptop in and plug in their Ethernet cable. It's an unspoken thing, you get to surf the net for free on that.

Or get month's worth of T-mobile and you can use the net at any starbucks etc if you can stand their horrible music.

But there are really APs all over the place, this is why no real "Fash-Crash Doomer" uses a desktop machine, laptops are the way to go. Grab it and run!

@ESVR,

Thanks for the free AP tips. Actually I do have a laptop, but my biggest problem has been time. Getting moved out of storage and into my new place leaves very little time for blogging :-).

I'm still buzzed about Super Tuesday....

If you want to read just one political op-ed story about Idaho this year, read this one:

http://www.idahostatesman.com/localnews/story/287135.html

Obama took the Idaho caucuses 80% to Hillary's 17%. That's the largest percentage of ANY state which went for Obama this year. People in Idaho don't care about your skin color, but are quick to spot a crooked politician. As the article points out, when the Idaho courts seized the neo-Nazi's land holdings, they were converted into a human-rights monument. Idaho is really a libertarian place, where, if I may coin a phrase, people are judged not by the color of their skin but by the content of their character.

Idaho sounds like a nice place.

As I have said, Obama is quite likable. He is quite anti-guns though, isn't he?

I didn't say I liked his politics. He's as "liberal" as they come. But he doesn't pretend to be something he's not.

Getting moved out of storage and into my new place leaves very little time for blogging :-).

That's what happens with renters ;-) Once you buy a home and not "forced" to move, you will have a lot of time for blogging. It would be wonderfully ironic to buy a house so that you get time to blog on a housing crash site. And if you buy multiple houses you can blog as much as Casey Serin !

But he doesn’t pretend to be something he’s not.

True. This is why I find him likable. He won't pretend to cry just to get votes.

I met Newt Gingrich today at a book signing here in Boise (his new book "Real Change").

It's too bad that he and Joe Biden aren't the candidates this year, as those are the two "idea" guys in their respective parties.

So should Obama chose Bill Richardson or Joe Biden for his VP?

Looks like we are stuck with McCain on the GOP side. I hope he picks someone like Romney or Gingrich as his VP.

Economists may be bad at predictions, but they know how to judge a Fed chief.

From WSJ :

Despite his efforts, Mr. Bernanke drew increasing criticism, with economists faulting him for what they said was his poor management of Fed communications and being overly attentive to fluctuations in the stock market. The overall grade they gave Mr. Bernanke dropped below 80 for the first time.

But 43% of the participants said the Fed was too quick with its surprise 0.75-percentage-point cut on Jan. 22, a response to falling stock prices. "They looked unsteady," said Dana Johnson of Comerica Bank.

So should Obama chose Bill Richardson or Joe Biden for his VP?

As long as he does not choose Hillary Clinton...

I hope he picks someone like Romney or Gingrich as his VP.

I just hope he picks someone that will help him win.

PeeterPee - I"m sure Osama's not anti-gun when it's a matter of guns in the hands of the "brothers", it's just guns in the hands of Those Awful White People that bother him.

I saw two large Mitt Romney signs today, and there may have been more I didn't see.

one of those rare trips into the metropolis of Chino Valley lol.

Lots of Mormons here, it's probably why the people here SO nice and decent.

I'd probably have become a Mormon years ago except I grew up in Hawaii and they let Hawaiians and Samoans in etc. I'm not at all fond of that decision.

From Ben's blog.

“I asked Senator Clinton, ‘As President, what would you do to make housing more affordable in California?’”

“The senator’s answer was, ‘Well, I’m the only candidate in either party who has a specific plan. I will have a moratorium on home foreclosures for 90 days to help people work out staying in their homes, and I would freeze interest rates for five years.’”

This is what Hillary is. There are so many things wrong with her promise !
First of all, she is lying. She is making promises about what she has no power over. If she is unaware of her lies, she is an idiot. If she is aware of her lies, she is just being a Clinton. And if she really means it, then it's one horrible proposal.

Basically, she just shouldn't win.

Dunno about Romney, Huckabee is much more likable.

Romney resembles Hillary, doing everything right in a very calculating way. American public don't like that. They like (apparently) simple-minded, down-to-earth folks. McCain - Huckabee is a better combination to appeal to the conservative right and the conservative middle.

Anyway, say NO to HillBilly.

Basically, she just shouldn’t win.

Huh? How is that supposed to make us feel better?

Huh? How is that supposed to make us feel better?

Why do you think I am doing anything to make you feel better ? ;-)

Freeze interest rates for 5 years, when Ben Bernanke is aspiring to lower interest rates to 3%?

You can tell Hitlery's best friends are the banksters.

Stuck, That quote really caught my eye, too.
What I think is most interesting about Senator Clinton's reply, is that she is anwering the wrong question (maybe on the campaign trail too long). The question she answered was "What will you do about those suffering folks whose homes are being foreclosured?" Blah, blah, blah... handwave... you know, I really can't do anything... but if I had a magic wand...
What's ironic, if she did really did do those things, it would actually help prop up prices and keep homes from becoming affordable.

Hey ex-sunnyvale-renter:

http://news.yahoo.com/s/ap/20080207/ap_on_go_ca_st_pe/economy_stimulus;_ylt=ArQ2f7uqXLbaee7291Lh2gQDW7oF

The fate of $600-$1,200 rebate checks for more than 100 million Americans is in limbo after Senate Republicans blocked a bid by Democrats to add $44 billion in help for the elderly, disabled veterans, the unemployed and businesses to the House-passed economic aid package.
ADVERTISEMENT

GOP senators banded together Wednesday to thwart the $205 billion plan, leaving Democrats with a difficult choice either to quickly accept a House bill they have said is inadequate or risk being blamed for delaying a measure designed as a swift shot in the arm for the lagging economy.

So I think you can stop blaming Pelosi (in other threads) for trampling on vets and poor people.

OK so the Dems strike again, it doesn't matter to me anyway, I wasn't counting on getting anything.