patrick.net

Patrick Killelea for Congress!

Do you even have a job Peter, or do you just post all day from work?

Hey. Peter has a zero carbon footprint.

This is really funny. These guys are so screwed up they can't even issue a stern warning with teeth. So let me get this straight, someone sticks it to a bank for say 250K and the only warning is that they can't do it again for 5 years. And then they even have the disclaimer that it doesn't apply if the person was really under distress.

Some black 19 year old shoplifts a $50 shirt, it becomes a permanent record. How is this right?

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/13/RE34101D2M.DTL&ref=patrick.net

"The country's two largest sources of mortgage money have a blunt warning for anyone thinking about joining the growing "walkaway" trend, where homeowners stop making payments and months later send the house keys back to their lender: You will feel the pain."

"On March 31, Fannie Mae sent out new guidelines to lenders intended for walkaways and other foreclosure situations. Fannie will now prohibit foreclosed borrowers from getting another mortgage through the giant investor for five years, unless there are "documented extenuating circumstances." In those cases, the mortgage prohibition is for three years."

Peter has a zero carbon footprint.

Huh? :)

Do you even have a job Peter, or do you just post all day from work?

I need distractions to focus.

How is this right?

You believe things ought to be right? What if it is wrong to right wrongs? Although being wrong is just being human...

Well you see Malcolm, it's all about intent. The kid always intended to be a crook and steal the shirt. But the unfortunate borrower is the victim of a down housing market, a change in personal circumstances and/or the false promises of his mortgage broker. And the lender was just legally gambling; it looked good on paper.

Or maybe it's just easier to prove the intent when somebody steals a T-shirt, vs. when they send in the jingle mail or accidentally screw up a pension fund with MBS toxic waste.

Isn't it a riot? This country's economy has become so dependent on debtors that the government selectively forgives certain people with the real hope that they will go out and dig themselves in a hole again so long as certain in-crowds benefit. Punishing someone who walks away by never letting them buy under the federal program is too much of a drain on the future growth of the economy.

:)

I think the motive is the same but I concede. I'm now convinced the black kid was born that way.

Now on the other hand, the government seems to not like people like me and others here. I find it a little too coincidental that the rebate checks cut off at an income just a little below my income for last year. It's a little strange that after mouthing off here about how we were going to do the unthinkable and either save or as some said, buy an ounce of gold, all of a sudden it is announced that the rebates are only going to people who will spend them. I paraphrase George Bush, he said something to the effect that the stimulus package includes a rebate with the intent being that people will spend it and keep the economy stimulated.

We must be the first civilization in history to have government literally force gluttony on the population.

Peter P Says:
April 14th, 2008 at 5:45 pm

"I need distractions to focus."

Peter, you should write comical fortune cookie messages. That one would have cracked me up at lunch yesterday.

can't believe you guys are still posting here on this saddest day of the year...

Does filing taxes make you sad, OO?

can’t believe you guys are still posting here on this saddest day of the year…

April is the cruelest month.

Peter, you should write comical fortune cookie messages. That one would have cracked me up at lunch yesterday.

Hmm... perhaps... perhaps. :)

This year is the only year that has pissed me off paying income taxes. I've had years where I wrote much bigger checks to the gubment, but just knowing that this year it is reverse income redistribution to the banks is sickening.

Malcolm says:

This is really funny. These guys are so screwed up they can’t even issue a stern warning with teeth.

Well said Malcolm, I got interested in the link y'day and read it. When I read 5 years, It was like Fannie telling people to walk away now and come back pretty soon.

Leave the people guessing on repercussions. Don't come out and tell them it's easy to walk away.

Hey here's a news-flash. Scientists have determined that testosterone was the cause of the recent housing bubble.

www.sciencedaily.com/releases/2008/04/080414174855.htm

The influence of steroids naturally produced in the body (specifically testosterone and cortisol) may also provide insight into why people caught up in bubbles and crashes often find it difficult to make rational choices, unintentionally exacerbating financial crises.

Testosterone is a steroid hormone which controls competitive encounters as well as sexual behaviour. ... However, too much testosterone can have a detrimental affect on the ability to assess risk rationally.

DennisN,

Uh, actually I think the cause of the housing bubble was the insufficient amount of testosteron to counteract the surge of estrogen that was running around talking each other into wanting to buy more real estate.

I think stock bubbles *may* be testosteron driven. Housing bubbles I'm almost certain are estrogen-driven.

Malcom said (concerning Fannie/Freddie threat to walk aways):

This is really funny. These guys are so screwed up they can’t even issue a stern warning with teeth.

A comment from MISH:

Fannie and Freddie's big threat seems to be if you walk away they will require a big down payment, higher FICO score, and ability and willingness to pay the loan back.

So the threat is: "If you walk away now, we will apply sane lending standards the next time you come to us for a loan."

I think stock bubbles *may* be testosteron driven. Housing bubbles I’m almost certain are estrogen-driven.

LOL. I would agree.

Hey, I wasn't greedy, It was my testosterone/estrogen that made me do it.

Housing bubbles I’m almost certain are estrogen-driven.

LOL. That's too funny, says so much with so few words. I'm sure many here can relate, as I know I can.

And besides those few, I'd guess true a significant amount of time. :-)

Threat:

I dare you to walk away from your albatross now whilst values are plummeting and likely to continue on the downslope for the next 5 years. I dare you to avoid the personal losses associated with residential housing for the next 5.

And if you are so brazen to do so....well....let me think for just a second.

What's best for me in all this? I really don't care what happens to you, nor moral hazard. Let's be real. Maybe the best thing to do is put myself in a position to write more paper and make more money. Maybe I should just inflate another bubble by creating another mass class of ready and willing suckers, a fertile hunting ground in only 5 years time. Oh, the money to made. Happy days will be here again, and none to soon.

So heres the deal. Let's you and I do some *business*.

Walk away now and in 5 years you will be in perfect shape to buy at the bottom. All the major private financial institutions will be history, we are too big to fail, and in 5 we can endeavor *conspire* to form a housing bottom, we will pump up the volume, and we will slide you through again. We will both make out like bandits. :-)

Good for me, good you yew. Tu capisci? Capish?

So, do we have a deal or what?

Based upon last three months, back of napkin numbers seem to indicate we are now burning at close an annual inflation rate of 20%. Of course this will not be reflected in official numbers.

Don't see the *scale* of this number being bandied about much in the press, at least yet.

That's absolutely crushing for savers, clearly. When the sheeple really wake up to this as it continues to get worse and everything gets more *expensive*, look out.

It is easy to understand folks unhappiness with the FED at this point.

My personal experience yesterday, not a dataset for good science obviously but…..

Haircut. Up from $17 to $24.
Dry cleaning. Shirts up from $.99 to $1.49.
My secret Thai spot. Lunch entrees up from $6 avg to $8 avg. (menus marked up manually)
Fill up unleaded. Up from $35.00 to $55.00 seemingly overnight, but actually over last couple months. ($3.50 gallon)
Coffee shop large coffee. Up from $2.01 to $2.39.
Quick grocery run, same items. Up from $40 to $60.

I was out for maybe two hours and was $250.00 lighter for my trouble. This really feels like it happened almost overnight. Literally overnight. With the exception of gas, everybody has really *suddenly* raised prices.

Houston, we have a problem. Upward wage pressure imminent, which could not come at a worse time as employment not just softens, but goes to mush.

McCain seems to be our only hope:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4o9i1xgCJEY&refer=home

McCain Seeks Tax Cuts, Spending Curbs to Lift Economy

McCain blamed the slowdown of the nation's economy in part on bankers and lenders who ``forgot some of the basic standards of their own profession,'' leading to the current crisis in housing and credit.

We need a hero!

Happy Tax Day everyone. ;-)

But here is something to cheer you up.

http://www.dqnews.com/News/California/Southern-CA/RRSCA080415.aspx

Southland home sales log tepid gain; record price drop
...
The median price paid for a Southland home was $385,000 last month, the lowest since $380,000 in April 2004. Last month's median was down 5.6 percent from February's $408,000, and down a record 23.8 percent from $505,000 in February 2007. That peak median of $505,000 was reached several times last spring and summer.

Things that have never happened, continue to happen.

sa Says:
When I read 5 years, It was like Fannie telling people to walk away now and come back pretty soon.

Isn't that actually the perfect reason for an FB to walk away right now?

My guess is that the crash will hit bottom sometime around 2010, 2011, and scrape along the bottom for at least two or three years after that - so figure about 2013, 2014. Which means that someone who walks away NOW, in 2008, will:
1. avoid throwing away their money on an upside-down mortgage for the next five years
2. not be a debt-slave
3. be able to move to where the jobs are
4. have a shot at saving up some cash
...
and in five to six years time, when Fannie's little sulk is just about up- they will be positioned to pick up a depreciated house at a pretty decent price.

Given that scenario, why would anyone with negative equity and a supersized mortgage NOT want to walk away STAT!

I believe this belongs on the things that never happened and never would happen, continue to happen front.

from today's sfgate/chronicle front page

Analysis finds that many in the Bay Area, especially those who bought recently, owe more on their house than it is worth.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/15/BULE105CR4.DTL

northernvirginiarenter Says:
My secret Thai spot. Lunch entrees up from $6 avg to $8 avg.

Tell me about it - my secret Thai spot also went up from a $ 7.99 lunch in 2005 to $ 8.99 lunch last week. AND what is worse is that they stopped including free iced coffee (with refills), so that is actually about a $ 3.00 hike in actual terms of actual price.

(off topic) question for administrator:

Patrick

there's a blogger/reporter/ex green beret, who's reported from Iraq for years. I have tremendous respect for his bravery and integrity, as he's reported both bad and good news in the past (kept going out on missions when there were almost no other embeds left, he was first to report that there was a civil war in Iraq etc etc).

He has a book out which anyone planning to vote in 2008 should probably read. Do I have your permission to post a (promotional) link?

Last weekend, I caught one of the Shitty Realtwhore (tm) critters planting a sign on _my_ property, with an arrow pointing to some crap-shack that she was open-housing.

She saw me, and walked over to dump her mugshot-encrusted card on me. So I said screw that, and first "tell me what you think of this market?" She spouted some blather about 'location' and 'buyer opportunity' - and seemed to assume that I was a renter.

Tries to shove the stinking card at my face again - ignored.

"Wait a sec, you think it is a good time to buy?" She seemed to be going through some sort of internal struggle - probably her conscience and self-respect getting beaten up by hunger spasms and the thought of the upcoming lease payment on her Shitty Realtwhore Car (tm).

"Yes, interest rates are low and prices are stable - you have lots of inventory."

"So, should I wait some more time for things to get even better?"

"Oh things are great right now, you should get in before..."

"Before what, exactly?"

"Before prices go up."

"Thanks, I don't want you card."

She drove off, and a couple of minutes later I accidentally kicked over her open-house sign. I didn't know which way she had pointed it before, so I took a best guess - since it was a 4-way intersection, there is a 3-in-4 chance I got it wrong... oh well, c'est la fookin' vie.

SP,

I suppose you are asking people to walk away if they are upside down.

What I am arguing for is, there are people who are trying to game the system. Folks who can afford to pay their mortgage, but just want to walk away. I want these folks to pay their mortgage and eat their losses. I didn't argue about 3 year clause for people who are really distressed, it's fine for them to walk away. I hate the idea of speculators walking away.

I like how McCain singled out The Tan Man for approbation.

You know, having McCain for the GOP candidate this year may actually make sense. He's got enough clout with the center to actually beat O'Bama/Hillbilly with they way they are screwing things up.

Do you think McCain has the stuff to pick Ru Paul as his Veep?

Do you think McCain has the stuff to pick Ru Paul as his Veep?

I love Ron Paul, but a winning combination is more important.

How about Rice? :)

Rice got to where she is only because she is BOTH black and woman, or perhaps lesbian too, fills three quota in one, bravo.

Americans shouldn't really complain about inflation in this country. Yeah, grocery went up perhaps 20-40% in the last two years, restaurant food up 25% or so. But food accounts for a very small part of our monthly expenditure, so the 40% hike is translated into, say, $300, not nice but hardly breaking anyone's back. Second, there are countries out there with far worse inflation than us. Heard of 200%, 300% in a year or two?

We living in California are very blessed with the mild weather. People who need heating half time of the year are really screwed by their heating bill, which probably is a $500-1000 impact on their living cost. I would be very amused to see what kind of heating and cooling bill these 7000-sft McMansion owners will get this coming summer and winter.

But food accounts for a very small part of our monthly expenditure

Huh? Our food expenditure exceeds our housing expenditure.

Fowever, for now, many restaurants do not yet have the pricing power to raise prices significantly.

I would be very amused to see what kind of heating and cooling bill these 7000-sft McMansion owners will get this coming summer and winter.

If they have to wonder, they cannot afford 7000-sqft mansions. ;)

People who need heating half time of the year are really screwed by their heating bill, which probably is a $500-1000 impact on their living cost.

We need cooling though. Last weekend was very hot in the Bay Area. We had to turn on the AC.