patrick.net

It was inevitable, but I find it shocking nevertheless. From CNBC below:

"Euros Accepted signs popping up in NYC"

"In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.

"We had decided that money is money and we'll take it and just do the exchange whenever we can with our bank," Robert Chu, owner of East Village Wines, told Reuters television.

The increasingly weak U.S. dollar, once considered the king among currencies, has brought waves of European tourists to New York with money to burn and looking to take advantage of hugely favorable exchange rates.

"We didn't realize we would take so much in and there were that many people traveling or having euros to bring in. But some days, you'd be surprised at how many euros you get," Chu said.

NVR,

Is that legal? Can I accept payment in any currency of MY choosing? I hope housing perma-bulls are happy. Of course Lawrence Yun is already furiously spinning this as being "a Wall Street problem".

"What an inspiring guy!" LOL!

I thought there was a media flap when it was revealed that Jared's dorm room in college was like a smut distribution center. I heard he charged "late fees" and everything. :(

Is that legal? Can I accept payment in any currency of MY choosing? I hope housing perma-bulls are happy. Of course Lawrence Yun is already furiously spinning this as being “a Wall Street problem”.

Why not? Here in San Francisco's Chinatown and Oakland's Chinatown you have places that accept Hong Kong Dollars right along side USDs.

Can I accept payment in any currency of MY choosing?

So long as you do not decline to accept the peso.

I'm sure it happens all the time, especially in the minority communities. I thought only nationally chartered banks with currency desks were allowed to accept foreign currencies in exchange (at the prevailing exchange rate)? Whatever happened to "ALL debts, public AND private"? Is it alright for retailers to openly advertise this?

Just curious.

It's completely legal to accept or exclude any currency (including USD) from any of your domestic business transactions. Now this said, you still must still deal with the taxman and I'm not sure of GAAP with respect to conversion issues, but I don't think you can pay the IRS in euros or other currencies nor most state taxing authorities where sales tax is involved.

I suspect the existing regulation is well behind the curve on this issue, I could however see it becoming an issue. No doubt, barriers with be created or at least the state will be certain to get a very nice piece of flesh out of the process.

So, significant overhead doing the calculations to deal with taxes.

I wonder if we'll ever see the day when the US government will begin accepting foreign currencies for revenues? Maybe they are already stocking up their foreign reserves? It would be wise to do so, no?

As a practical matter, it's unfortunate that if you did not accept the US peso as payment I'd guess you'd be running transaction rates similiar to a bay area RE agent. Not enough foreign currency circulating here, at least not yet. :-)

Oh... before you head home could make the deposit!?

Imagine the line for the merchant's teller?

What a mess.

From the US Treasury Department:

United States coins and currency (including federal reserve notes and circulating notes of federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.

However, there is no federal statute which mandates that private businesses must accept cash as a form of payment. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a state law which says otherwise.

Companies are generally allowed, for example, to refuse to accept pennies or bills higher than $20.

"Interesting take regarding the cause of the mortgage crisis:

Of course, we cannot assume that liberal politicians actually care about the poor."

Peter P,

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.

Let's be clear about who the major playas were in the lending bubble here, people:

--A Federal Reserve chief predisposed to a) punishing savers and devaluing our currency, and b) an extreme form of laissez faire "self-regulation" for banksters and mortgage pimps.
--A Con-gress and executive branch that never saw a housing subsidy it didn't love, and generally equates "taxpayer risk underwriting" with "affordability".
--A powerful REIC with more paid lobbyists and money spent on campaign bribes than anyone but Big Pharma & Big Defense.

(*disclaimer: Mr. & Mrs. HARM attended a house-buying workshop in 2003 sponsored by ACORN Housing, a non-profit loan counseling service, not to be confused with it's Lobbyist big brother).

INTC, AAPL, GOOG and now CSCO.
Your local BA doomster reporter brings you yet another disappointing earnings report.

http://finance.yahoo.com/q?s=CSCO

Shares down 6%+ in AH.

I am looking forward to the spring selling season.

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.

I know... Folks at S&L is at least 10 times further to the right than anyone here.

Oh, don't forget about Pluto's ingression into Capricorn. :)

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.