patrick.net

SBIA,

I say, give us a 10 year of Paul Volcker, we can be even with rest of the crowd.

Paul Volcker on Inflation

northernvirginiarenter,

>Fact is, vaccination DOES cause onset of autism in a subset of children. It
>is not even a subject for debate.

False. No current research proves this theory. No matter how many times you repeat it, there was no link found between autism and vaccination.

> Draw your own conclusions, but Healy is in a better position to judge
> than anyone on this board.

Healy did not prove you point. She merely suggested that there is a certain lack of research on some side effects that might affect some subgroups of children. She is saying that officials do not want to scare public. People are easily scared and if they see an article with a headline like "SCIENTISTS HAVE FOUND A LINK BETWEEN VACCINATION AND FATAL BRAIN MUTATIONS" they won't read the rest of the article that tells a story about a single case of a poor kid in Nicaragua but will stomp each other on their way to the courtoom. What't worse, they will stop vaccinating their kids endangering not only them but the rest of the population. Just like it happened in Sweden with pertussis (1979–96), Netherlands with measles (1999–2000) and Nigeria with polio, measles, and diphtheria (2001 onward). Children and adults started to die en masse due to virtually extinct illnesses after the immunization programs have been stopped or weakened.

Your kids are your responsibility. Just do me a favor and lock them up in a Waldorf school if you decide not to vaccinate them, I don't want my kids to die because of polio outbreak.

RE: autism

At risk of being ridiculed, I still have to say that it is all in the stars.

Peter P,

Would you entrust the care of your child's health to an astrologer or to a doctor?

I intend to fulfill all legal requirements. But I would like to trust an astrologer.

Of course, we still need doctors for physical surgeries.

*** Not medical advice. ***

I support vaccinations though. The potential reward seems to outweigh any potential risk.

Remember, "scientific" studies can be constructed to show anything. Do not underestimate the corruption of Science.

BTW, Evangeline Adams was able to prove to the satisfaction of a trial judge that astrology has the "dignity of an exact science" in 1914.

Too bad mainstream science will continue to vilify astrology because of its inconvenient conclusion.

Loooooong time lurker. Great site Patrick.
Actually the investing comments are what I like best. Odd for a housing bubble site? I've made some money thanks to posters here. I ran across something I've never heard of in 15 years of following WallStreet. I immediatly thought of your site, anyone here heard of CEDE & Company?
http://www.commentamerica.com/

So many good quotes from Volker today. Hard to pick a favorite, but this one stands out.
``The Federal Reserve as other central banks is obviously taking onto its balance sheet a lot of mortgages these days,'' Volcker said. ``Well, the creators of the Federal Reserve system would be rolling over in their graves if they knew the Federal Reserve is buying mortgages.
Oh heck, how about one more since this is an inflation thread.
``If we lose confidence in the ability and the willingness of the Federal Reserve to deal with inflationary pressures'' and buttress the dollar, ``we will be in real trouble,'' Volcker said. ``That has to be very much in the forefront of our thinking. If we lose that we are back in the 1970s or worse.''

Peter P,

You are in rare form today, even by your own standards :-)

Exhibit A: >>Remember, “scientific” studies can be constructed to show anything.

Exhibit B: >>Too bad mainstream science will continue to vilify astrology because of its inconvenient conclusion.

Regular neo-libertarian trolling not working anymore?

Huh?

I am the resident mystic, don't you know? :)

BTW, I consider myself a free-market conservative with a libertarian slant. I am not a too big of a libertarian.

I have a few questions for the pro-privatization camp.

What is privatization exactly? I gather that it means our city and state services like education, police and fire departments, should be given over to bid by private firms and run tax-free. (Please correct my definition of privatization; I'm trying to learn what that term actually means).

In a private venture, the goal is profit. Right? How does a police department, fire department, or school district show a profit? And if I don't like the customer service I'm getting, can I really go to another police or fire department or transfer my kids to another district?

Your thoughts are appreciated.

Absolutely. Without a bit of inflation to 'grease the wheels' of the economy the incentive to invest is diminished. If the investment climate looks even moderately gloomy, and inflation (yes, of the monetary type) was not a worry, might as well keep your savings in a mattress. It's not altogether a bad thing though. In case you haven't noticed, the past century has been the most prosperous in history by a long shot, and since the Great Depression has been seen the longest stretch without 'panics' ever.

Some new developments I watch are finally cracking on their prices. My belief is that this will have a profound effect on the resale market. When you can buy new much cheaper than 20-30 year old homes most would chose new.
I think the 5% in Feb Case-Shiller (yes a single month) scared some builders. They are begining to look at the realistic holding costs for 2 years of chasing at least 1 percent drop each month. They are listing today at 20% of their last 2 years of asking price. Seems to me they are factoring in at least a 30% drop in those 2 years.
It is very nice to see that market forces are much more powerful than the bailout market manipulations.

It is very nice to see that market forces are much more powerful than the bailout market manipulations.

But that is the invariable truth. ;)

TO privatize public safety is a bad idea in my opinion. I want a cop that is a cop because he has the heart of a cop, not because he likes money.

We still need to make sure that cops get paid enough (market rate) though. Police corruption is rampant in countries where cops are underpaid.

In a private venture, the goal is profit. Right? How does a police department, fire department, or school district show a profit? And if I don’t like the customer service I’m getting, can I really go to another police or fire department or transfer my kids to another district?

Your thoughts are appreciated.

Easy, there are multiple police and fire services in each municipality. If you don't pay their "protection fees" they bust into your house, rape your wife, kill your kids and then burn it to the ground.

If you don't like this arrangement, you are free to start your own fire or police service to out-compete them.

Ain't the free market grand?

Bap, that is why it is especially important to have conservative judges in the Supreme Court.

I don't know why the left cries about losing liberty. All they can lose is the liberty to infringe upon the liberty of others (e.g. infanticide, forced charity, atheism, etc)

Peter P,

Umm, how is atheism infringing on liberties of others again?

If teachers are not allowed to talk about God...

Remember, even if people try to preach, one always has the freedom to ignore. I am not a very religious person anyway.

You are oversimplifying First Amendment's Free Exercise Clause vs Establishment Clause controversy that is specific to public schools.

"Teachers, as agents of the government, may not indoctrinate students in religious beliefs" - or in lack thereof. On the other hand teachers, as citizens of the United States, cannot be barred from exercising their freedom of speech.

Balancing these two basic doctrines is a very difficult and sensitive task.

Bap,

If you noticed I specifically mentioned "public schools" (schools that use federal funding) in my previous comment. The government as an employer has to follow certain set of rules defined by law. Any private company can make you sign an NDA or any other free-speech-limiting document. In this case you voluntarily forfeit your freedom of speech in exchange for certain amount of $. Local boards of education cannot make teachers sign frivolous speech-limiting contracts since they can be later contested in the court of law as contradictory to federal regulations. Right now U.S. Department of Education has the following guidelines based on various court rulings in this area :

“When acting in their official capacities as representatives of the state, teachers, school administrators, and other school employees are prohibited by the establishment clause from encouraging or discouraging prayer, and from actively participating in such activity with students. Teachers may, however, take part in religious activities where the overall context makes clear that they are not participating in their official capacities. Before school or during lunch, for example, teachers may meet with other teachers for prayer or Bible study to the same extent that they may engage in other conversation or nonreligious activities. Similarly, teachers may participate in their personal capacities in privately sponsored baccalaureate ceremonies.”

This is why privatizing schools solves a lot of problems.

Oh great, before long, Fed will be knocking on the door of renters to collect rent, or calling delinquent credit card holders to collect bad debt.

"Hello, this is the Federal Reserve, calling you about the credit card balance that you have not paid for the last 6 months"...

EBGuy,

thanks for the heads up, I am still trying to get used to the new CR format.

California man losing nine homes in mortgage mess
Sun May 11, 2008 1:21pm EDT
By Dan Whitcomb

LOS ANGELES (Reuters) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.

The mortgage market has melted down in the past two years in a crisis that began in the subprime sector and has left millions of Americans facing the possibility of foreclosure on their homes.

'THIS COULD GET UGLY'

Forgaard bought his first investment home in the booming housing market of North Las Vegas in 2004, followed in the next two years by eight others in such hot markets as Phoenix and Palm Springs, California, before he realized in 2006 that the situation was worse than he had feared.

"I knew that the market was soft but at that point I'm realizing that this could really get ugly," he said. "At that point I had a bad feeling in my stomach."

Forgaard thought he still had enough equity in the homes to "take a huge hit," possibly losing most of his investment, but thought for a while that he could still ride out the storm.

"It really wasn't until five months ago that I realized, 'Hey, you know what? Not only am I going to lose everything I have invested but this is going to force me into bankruptcy," he said.

"I'm going to lose my car and my primary (home) and we're not going to be able to live in Santa Cruz, where I was born and raised, and live by the beach. And that was pretty tough to take."

Experts say speculators like Forgaard, who count on real estate values to keep rising to pay off their debt, play a risky game and doubly so when they use neg-am loans.

"You are essentially betting the house on the strength of the housing market and if you're that leveraged in debt and the market goes down, you're going to lose your shirt," said Austin King, director of the community organizer ACORN's Financial Justice Center.

"To do it eight or nine times over is eight or nine times as foolish as just doing it once," he said.

The Forgaards likely will sell their Santa Cruz home and declare bankruptcy before banks start foreclosing on his properties. With a newborn son, they intend to start over in his wife's Northern California hometown.

Forgaard said that some good has come out of the experience and that his family is optimistic. He is relieved that he no longer has to deal with 10 homes at once and now will pursue a lifelong dream of starting his own business.

"Where I went wrong is I invested heavily in an area that wasn't my passion and I had a really demanding full-time job so I couldn't pay attention to nuances, the little indicators telling you the housing market was going soft," he said. "I was in over my head."

Tragedy of axing five family members to death occurs in Austria

www.chinaview.cn 2008-05-15 00:11:28 Print

VIENNA, May 14 (Xinhua) -- A 39-year-old Austrian Reinhard St. killed five of his family members by an axe Tuesday and turned himself in to the police in the early morning of Wednesday, said Lieutenant Colonel Thomas Stecher of the Criminal Department I at a press conference in Vienna.

Stecher said on Wednesday that Reinhard admitted his crime of killing his 42-year-old wife and his 7-year-old daughter in Vienna and three other bloody crimes of axing his parents and his father-in-law to death in Upper Austria.

The body of the daughter was found in a taproom and the wife's body was found in the bathroom in Reinhard's home in Vienna.

After killing his wife and daughter, Reinhard drove about 200 kilometers to the city Ansfelden, where is near city Linz, the capital city of Upper Austria.

He then killed his 69-year-old mother at the first floor and axed his 72-year-old father to death who was sleeping in the chair on the second floor of the house.

Then, Reinhard drove forward to city Linz and killed his 80-year-old father-in-law who opened the door for him at the night of Tuesday.

Stecher also mentioned that by the side of each corpse in Upper Austria, there was a letter written by Reinhard, while no letters were found by the bodies of the two victims in Vienna.

The axe, with which he committed crimes, was found at the back seat of Reinhard's car.

The motive of killing his family members was for a 6 digits debt, confessed Reinhard when he reported himself to the police. The real motive and other details of the murdering are still under investigation. It is at least the seventh family tragedy in Austria since 2004.

Hi Guys,

OT I know - but I thought that there's bound to be someone here that can give me the low down on Zecco? Anybody using them?

Thanks,

Claire

BTW - I still lurk a lot, but Mountain View/Los Altos - or at least the zip code(s) I would like to buy in are very disheartening, so i have been taking a rest from the bubble blogs until I have good news to report!

In a survey issued this week of Alt-A mortgages originated in 2006 and 2007 -- these are nonstandard mortgages often marketed to buyers with less-than-prime credit -- Fitch Inc. analysts found that a rise in delinquencies could still be traced to "borrowers who purchased a home they could not afford or those engaged in mortgage fraud for the purpose of property speculation." Legitimate homeowners, the analysts said, "rarely view the home as a short-term investment ... they do not default based solely on a drop in value."

Fitch has also found a high level of misrepresentation in loan applications "by borrowers, brokers, and other parties." When Fitch analysts subjected 45 sub-prime loans to detailed examination late last year, they found "the appearance of fraud or misrepresentation in almost every file," a situation they termed "disconcerting at best" in a report in November.

Some 66% involved "occupancy fraud" -- that is, the borrower misrepresented his or her intention to live in the home, rather than to buy it as an investment. That finding underscores the possibility that bankers are blaming owner-occupants for the more common, and not unexpected, phenomenon of "walking away" by real estate investors.

One source of walkaway "folklore" may be services that purport to help homeowners skip out on their mortgages without long-term harm to their credit ratings. Among them is San Diego-based You Walk Away, which launched a website in January offering to help homeowners "unshackle yourself from a losing investment and ... Walk Away."

Co-founder Jon Maddux acknowledged in an interview, however, that the firm's typical clients are people facing genuine financial stress, whether because they cannot make their current mortgage payments or know that an upcoming raise in their interest rate will make default all but inevitable.

"We do have a lot of people who cry to us on the phone," he said. "They're under stress and don't know what to do. A lot of these people should never have got the house."

Over last few days (3-4 weeks) I have been hearing slight rumblings about the hi-tech IT job market in BA getting colder. Very anecdotal. But some good people I know are not getting job offers as quickly.

Anyone experienced hearing something similar ?

There are very few big employers left in the valley now that so many mergers and acquisitions have happened. Many have hiring freeze. So this may be affecting the situation.

Start-up situation may not be good either. Even if it were, people are noticeably reluctant to join a startup now.

Have you heard these new terms lately, "affordable foreclosure" and "avoidable foreclosure"? Politicians and private foreclosure firms have been using these terms recently. They baffle me.

It seems to me a foreclosure is avoidable if you PAY YOUR MORTGAGE. There seems to be a trend to define some defaults as better than others. There is also some hair-splitting going on to figure out which mortgage owners are speculators (the awful, evil, predatory real estate investors who deserve total financial ruin) and which mortgage owners are innocent victims who have somehow, surprisingly, and by no fault of their own found themselves in default (the good people who deserve a bail-out and our sympathy).

Shawn Foogard wants to be in both categories. A private individual who chose to purchase 9 (yes NINE) mortgages on the delusion that he will be the next Donald Trump. He says "Everyone stumbles". Oh, is that what we're calling monumentally stupid decisions now? A "stumble"?

I'm so sick of this spin and the language that is perpetuated throughout the media to describe defaults and foreclosures. Any individual or corporation which has made a bad decision and willfully, knowingly signed loan papers is responsible for their own losses. I don't care who is the 'victim'. I lump them all in the same category of FB, and they deserve no sympathy, nor do they get to claim their foreclosure is avoidable/affordable. That's just a euphemism for "everyone else should pay for my 'stumble'". BS!

Can I get an "Amen" Patrick.net people?

Thanks for the responses about privatization. I'm still not clear how it fixes all ills, or how it works, but I'm learning. I especially appreciate Bap's comments. I'm one of those atheist Liberal types who is applauding today's ruling on same-sex marriage in CA (cuz it doesn't cost me a darn thing) and yet I believe that discussing God in public schools is as much a part of a child's education as reading, writing and math. If privatization opens that option, I'm more in favor of it. Good values are good values, no matter which denomination (or lack thereof) is preaching it. Discipline is cherished even by the Pagans and the atheists of the world, a conception that I endeavor to promote in my daily, God-less life. Good family values, sound economics, and liberty for all are not owned by any religious group. Not talking about these topics with our school children however is a tremendous dis-service to all of us, and not what our founders intended.

Weird how this site creates some strange alliances (not to imply that Bap is gleeful for same-sex couples).

There are very few big employers left in the valley

The valley has plenty of small companies that are still hiring.

Remember, the freer the market, the freer its people.

Chindians, whether we like to admit it or not, are often times better educated than our own, native work force. And they're cheaper, because they're not trying to pay off massive credit card debt and buy a house that is 4 to 10 times their yearly income. This condition exists even in light of our ever-declining US dollar value.

It's no mystery why a real estate bubble blog such as Patrick.net routinely brings up the H1-B visa issue (or as we affectionately call it, the "Chindian" problem). There is a real and causal relationship between the two.

Here's an idea for Nancy Pelosi and all representatives: let's stop spending our grandchildren's income on educating Iraqi's about democracy and teach our children a marketable skill instead, lest we endeavor to hire cheap and educated Iraqi's to also take our jobs.

San Francisco is doing just fine, thank you:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/15/BA2110LPHB.DTL

10,000 new jobs, 12,000 new residents, population at an all time high.

Sorry to disappoint all the gloom-and-doom'ers but the economy here is zooming right along.

Education is not the problem. The will to get education is more important. This is why I think education ought to be optional.

Of course, we need a viable career path for the uneducated so that they can make a living without resorting to welfare. An early vocational training program may warrant some considerations.

Jimbo -- Please tell our Governor. He apparently did not get that memo about our zooming economy and is axing our budget to bits as we speak.

:)

I'm totally kidding. I think our jobs are fine here in the Bay Area, for domestic and foreigner workers alike. The national jobs numbers were good today as well.

I just relish any opportunity to point to the never-ending debt that we are encurring as a result of Bush's war. Forgive my indulgence.

Here here Peter P. We've lost our love of learning in the US. I say scrap all the Shakespeare's literature study and history courses, etc., and face facts: some of us won't become CEO's or white-collar professionals. So let's just teach them some marketable skills. There's no shame in that. Certainly less shame than getting welfare for contributing absolutely nothing to the overall welfare of our economy.

On this, we agree.

Certainly less shame than getting welfare for contributing absolutely nothing to the overall welfare of our economy.

Absolutely. This is one of the many examples in which any attempt to "level the playing field" will hurt the society.

The world needs all kinds of people.