Here is your open thread for the weekend beginning Friday July 10th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
David Losh » Jul 10, 2009 at 8:12 am
As the selling season for Real Estate winds to a close for another year we can expect a lot of disappointment. Some places sold for more, some for less, but all were over priced.
There may be some crying about the refinancing of over priced assets also. People paid fees to get those low rates.
By this time next year I expect more of the same bottom calling, seasonal rush into the market, and again disappointment, unless perception of Real Estate changes dramatically.
When there was talk about manufacturing in a previous thread i was less sure than I am today about the direction of investment dollars. You can buy property, rent it out, and generate cash flow if you buy low and rent for a reasonable amount.
If your rental income were based on manufacturing, or sound business principles, there may be a higher probability of a return. The thing we dismiss is that there is business outside of the slick swindle.
In my opinion we are so used to money laying in the street we forget that there were tough times not that many years ago. Many people are anguishing over the loss of paper equity they never really had rather than looking forward at how they are going to make the next round of profits. You’re going to need those profits to pay down those loans.
As the curiosity about Real Estate fades what will be the next dot com, or house flipping ventures?
patient » Jul 10, 2009 at 9:05 am
RE: David Losh @ 1 -
“As the curiosity about Real Estate fades what will be the next dot com, or house flipping ventures?”
Commodities has been bubbling on and off since the stock market and housing market dived. I’m not sure if the man on the street actively participated yet so perhaps it could be an area that will attract the crowds? Nothing will be as lethal as the housing bubble though since it was leveraged with borrowed money. It’s hard to if not impossible for a person to get that kind of financing for other “investments”.
On another subject, on my daily lunch hour run I passed through bridle trails in Kirkland yesterday when I was stopped by a well dressed man that looked like he was in his late 20s asking for directions to a food shelter. First time that happens and kind of surrealistic around the multi million dollar homes. A sign of the times?
SeaBuyer » Jul 10, 2009 at 9:34 am
“Food shelter?” That’s sad for sure.
I saw this article on MSN this morning: link
Quite interesting and a change of tone from what we see in the media every day. I like the piece below in particular, which has been discussed here a lot before:
“What’s worse is that according to new research, the likelihood of a borrower making a “strategic” decision to default — in effect, mailing the keys back to the bank and walking away — increase greatly depending on how deeply underwater they are and whether people they know have done the same. This means there is a very real possibility that home prices declines reaccelerate as hope is lost and it becomes socially acceptable to give up on your mortgage.”
The Tim » Jul 10, 2009 at 10:12 am
By patient @ 2:
On a related note, my wife and I have regularly shopped at the Grocery Outlet in Kenmore since it opened a few years ago. Ordinarily there’s a certain, shall we say, “class” of people we tend to see shopping there. Apparently saving money on food is below certain people.
However, we were in there yesterday and I noticed a distinct shift in the vibe, with respect to the other shoppers. There were a lot more people I would categorize as “young professionals,” including a well-dressed guy yapping away on his bluetooth headset. Rarely saw those type of people shopping at Grocery Outlet in the past.
Ira Sacharoff » Jul 10, 2009 at 10:23 am
RE: The Tim @ 4 –
I stopped at the Grocery Outlet @ Martin Luther King and East Union in the Central District a few weeks back. and I too was kind of startled. A couple of nicely dressed gentlemen were hotly debating the merits of one Cabernet Sauvignon over another. It wouldn’t have been more than a couple of years ago that the debate would have been which fortified wine got you snockered faster, the Thunderbird or the Mad Dog 20-20.
So is it that young professionals are pinching their pennies when grocery shopping, or young professionals are pinching pennies when deciding where to live, and now reside in areas that have Grocery Outlets?
Fran Tarkenton » Jul 10, 2009 at 11:13 am
RE: Ira Sacharoff @ 5 – “…or young professionals are pinching pennies when deciding where to live, …”
That Grocery Outlet (I call it the “Used Food Store” in a joke that no one laughs at) is pretty close to some tony neighborhoods. You don’t have to head too far east to hit Denny-Blaine, Madrona and Madison Park, and it’s located between those neighborhoods and downtown Seattle, where I’d imagine a lot of those people work. That store also has a semi-ritzy farmers’ market in its parking lot on Fridays, so it may be more upscale than your average outlet.
ray pepper » Jul 10, 2009 at 11:30 am
I just came across this yesterday and had to laugh…………
http://www.youtube.com/watch?v=Pt2vLKKn_eQ&feature=channel
The last time I had lunch with my Buyers or Sellers was………………………………………………..NEVER!!
Who would want to eat lunch with me? Except Ira. Looks like I will owe him a lunch at Claim Jumper. Hurry up Tim. Buy something already! I have 6 months left on my bet!
The Tim » Jul 10, 2009 at 11:33 am
By ray pepper @ 7:
Maybe Ardell?
Acerun » Jul 10, 2009 at 2:29 pm
http://www.redfin.com/WA/Seatac/4517-S-192nd-Ln-98188/home/340385
This second picture is priceless.
Acerun » Jul 10, 2009 at 2:35 pm
http://www.calculatedriskblog.com/2009/07/short-sellers-beware.html
Who wears short shorts?
This is sort of awesome.
ray pepper » Jul 10, 2009 at 2:37 pm
RE: The Tim @ 8 –
NOW THAT IS FUNNY!
The Tim » Jul 10, 2009 at 2:38 pm
RE: Acerun @ 9 – Wow, nice find. That’s going right onto the Detrimental Listing Photos thread in the forums.
Softwarengineer » Jul 10, 2009 at 2:49 pm
RE: The Tim @ 4 –
LOL TIM
I saw a news article about a month ago on the fact that the homeless tent cities in Florida now have unemployed technicals from Michigan living there. The food banks are getting more and more displaced middle class too, all over the country…
If I was desparate in Michigan, I’d move to Florida too, to be homeless…..can you imagine winters without heat in Michigan?
I hear Walmart and Dollar Store stocks are the only ones still flat tabling lately [not plummetting down in value]….the ritzy stores are moving out of closed down malls too, all over America lately.
Is there more Cash Advance outlets than McDonalds and Starbucks lately? LOL
deejayoh » Jul 10, 2009 at 2:54 pm
I’m curious how the Neiman-Marcus/JimmyChoo/Louis Vuitton mall is going to do when it opens in Bellevue in Sept. Seems really badly timed.
Kary L. Krismer » Jul 10, 2009 at 3:36 pm
The changes to the deed of trust statutes take effect July 26. I’m not sure if the cutoff time is the notice of default of notice of trustee’s sale, but either could be the explanation for the increase in number of notices of trustee’s sale.
David Losh » Jul 10, 2009 at 4:37 pm
RE: Acerun @ 10 -
Lenders wanting to collect deficiency judgments is nothing new. This is why I have warned people who read blogs to get an attorney to explain their options. I have very good files on good people who had hardships, or were out and out swindled, where the lender wants to play hard ball.
I have one file from last year where Chase actually sent the short seller a letter thanking them for their responsible approach and a waiver of deficiency. They started the process with an attorney before contacting me.
The past six months I have been talking about banks asking for financial statements as a way, in my opinion, to find where any money or assets may be. I see a rise in garnishments the way things are going.
It’s also my opinion that the short sale process is dead and that foreclosure may give the home borrower more distance from the lender.
Niz Monkey » Jul 10, 2009 at 4:45 pm
RE: Acerun @ 10
Howdy. I am new here so pardon me if I say something ill-informed. I always assumed that after a short sale the borrower would still owe the difference from the mortgage balance/sale price. Is that not the case? Wouldn’t that be straight up debt forgiveness? Unbelievable.
Racket » Jul 10, 2009 at 5:48 pm
By deejayoh @ 14:
Probably not as bad as a Nordstrom opening. They type of clientele that frequents these stores, still has a ton of money.
Softwarengineer » Jul 10, 2009 at 8:09 pm
RE: Niz Monkey @ 17 –
From what I’ve read, every short sale contract can be different, my advice is have your attorney explain it to you before you sign, some still stick you with a loan principle and payments, but you sold your house….
Jillayne » Jul 10, 2009 at 8:26 pm
AceRun, what IS that in the second photo?
Jillayne » Jul 10, 2009 at 8:28 pm
Looks like another Seattle area troubled bank is under watch by FDIC
“Seattle Bank said Friday it has agreed with state and federal regulators to reduce its problem loans and raise its capital ratios.
In an interview, President and CEO Ellen Sas said that “we can actually get our ratios in order” by shrinking the bank’s lending portfolio and resolving problem loans. But Seattle Bank is also exploring ways to raise new capital, looking at amounts from “zero to $30 million … which would allow us to grow,” she said.
The agreement with the Federal Deposit Insurance Corp. (FDIC) and the state Department of Financial Institutions calls for the bank to reach a 10 percent Tier 1 capital ratio and 12 percent risk-based capital ratio, she said.
As of March 31, the bank’s actual ratios were 7.72 percent and 11.85 percent, respectively.
The bank’s parent company, Seattle Financial Group, signed a similar agreement with its regulator, the Office of Thrift Supervision.
Seattle Bank ranked among the most seriously troubled in each of three stress measures examined in a May 31 Seattle Times analysis of first-quarter results from 53 Washington banks.
The bank’s problem loans came mainly from its heavy focus on residential construction and development, which accounted for more than half its business as of spring 2008. Seattle Bank stopped lending to residential and commercial real estate developers last year, Sas said Friday…”
http://seattletimes.nwsource.com/html/businesstechnology/2009450049_seattlebank11.html
Sniggy » Jul 10, 2009 at 8:35 pm
By Niz Monkey @ 17:
In a lot of cases yes, the borrower waives the white flag, and the the bank weighs its options, and if they see it will be cheaper to short a house and forgive the difference they may.
Rally dude » Jul 11, 2009 at 3:55 am
What about trying to smoke the public that there is a rally that is about to explode and that all commodities, real estate, stocks might be really hot and now is the time to make the jump.
The media would have to cooperate.
The govt could start buying things to jack up the demand and then people would start buying because they would fear to be priced out. The govt could do a covert job.
And in order to get unployment down the govt could revise yet again how it counts unemployed people. And for strategic companies like GM or Boeing – the govt would start buying things and this would keep the ball rolling. The key is to do a covert operation and have media cooperate somehow.
David Losh » Jul 11, 2009 at 8:45 am
General Motors is emerging from bankruptcy. That was pretty quick. They are promising that it will be a new company and not business as usual.
The last interview I heard the CEO do sounded like business as usual and judging from bank performance they also are just going to lumber along while every one else pays the price.
I’m thinking more that Americans should be in business rather than looking for jobs. Once the plan is laid out people can be trained to do it. We have thousands of moth balled plants in the United States that could be something, but it’s cheaper to set things up in other countries.
If Americans could turn out high quality products I think there would be a market for them. The question is the price.
From what I have heard the United states government will own 70% of General Motors. That would put them in the same category as a European plant.
There was a discussion about Mercedes and BMWs here on the Bubble. Geez, Germany has to be one of the most government giving countries on earth next to Japan. Does any one other than me wonder how two countries that were conquered in World War II became top car manufacturers? I think it’s focus from military to automobiles.
I agree that government controlled industry is contrary to the American Way. What I’m thinking is if some of the business minds who have been chasing phantom profits will turn their attention to manufacturing.
What this has to do with Real Estate is that most plants I’ve looked at are for redevelopment. Now that the price of Real Estate is tanking some of those plants are going to start looking at generating dollars again. Low business volume was great with the promise of a Real Estate sale wind fall, but that is now a distant possibility.
Kary L. Krismer » Jul 11, 2009 at 8:48 am
Interest rates have been creeping down the past few weeks–check out the 15 year fixed!
http://www.raincityguide.com/2009/07/10/rates-for-friday-morning/
Sniggy » Jul 11, 2009 at 8:55 am
Wow now all the real estate agents can get back to ripping off the knife catchers.
/sarcasm
Softwarengineer » Jul 11, 2009 at 9:58 am
RE: David Losh @ 24 –
ACTUALLY JAPAN’S RECENT CAR SALES TO AMERICA HAVE HORRIFYINGLY DROPPED 71%
Ford out sold Toyota recently and Ford is now #1 in America, see the proof:
http://www.autoblog.com/2009/05/01/ford-sells-more-cars-in-april-than-toyota/
I’d add this too….with Japan’s recent automotive manufacturing demise, that Obama guarentee of the GM and Chrysler warranties probably makes American cars far less risky purchases in the future too, than the down-trodden Japanese cars on the brink of bankruptcy…LOL
Softwarengineer » Jul 11, 2009 at 10:08 am
RE: Kary L. Krismer @ 25 –
FROM YOUR PERSPECTIVE ITS PROBABLY GOOD NEWS THE $787B STIMULUS IS APPARENTLY ONLY 5% SPENT
And Obama is nixing any follow-on stimulus, to let the first stimulus kick in…..i.e., maybe/perhaps ever get spent, in clear language.
This is wonderful news for mortgage rates as follows:
“…To mortgage markets, printing cash would be a strong kick in the gut. Monetary inflation is as insidious as commodity-fueled inflation and — in any form — inflation is terrible for mortgage rates…”
The rest of the URL:
http://themortgagereports.com/
Softwarengineer » Jul 11, 2009 at 10:18 am
RE: Rally dude @ 23 –
KIND OF HARD FOR BOEING TO RALLY THIS YEAR WITH 65 A/Ps SOLD AND 64 A/Ps CANCELLED
I just heard this on the KIRO morning news today. Couple this news with the 787 fiasco and the stock nose dive.
Its similar to Detroit taking a 98% drop in sales for 2009, which they didn’t of course.
I hear Google is coming out with a new O/S to compete with M/S…..if the new M/S product is as bad as VISTA, I’m waiting to possibly buy Google’s O/S, especially if it passes the first year tests better than the Windows.
Kary L. Krismer » Jul 11, 2009 at 10:22 am
RE: Softwarengineer @ 28 – I don’t think you can equate stimulus spending with printing cash.
Softwarengineer » Jul 11, 2009 at 10:34 am
RE: Kary L. Krismer @ 30 –
IN THIS CASE, LACK OF SPENDING…LOL
Softwarengineer » Jul 11, 2009 at 10:59 am
RE: Jillayne @ 21 –
ASSUMING SEATTLE BANK IS FEDERAL HOME LOAN BANK SEATTLE
Goodness gracious, we’ve hit approximate zero on savings interest, how can we lower mortgage interest anymore without negative savings interest?
See their savings rates [the good news, they're horrifyingly low; the bank apparently isn't desparate for depositors]:
http://www.fhlbsea.com/Rates/Default.aspx
Sniglet » Jul 11, 2009 at 11:08 am
For all my friends on SeattleBubble, I wanted to let you know that I too have become one of the statistics. Yesterday Microsoft decided to end its 8 year relationship with me, and I will no longer be sharing the hallowed electronic ether with the great community of people I have come to know and befriend in my 8 years at the company.
You can see a more detailed view of my thoughts now that I have left at my blog.
http://surkanstance.blogspot.com/2009/07/big-event.html
At least this unshackles me from commenting on things happening in the tech industry (and with Microsoft)!
Kary L. Krismer » Jul 11, 2009 at 11:13 am
RE: Sniglet @ 33 – Sorry to hear that, but I think you’re right viewing this as an opportunity rather than something bad
Kary L. Krismer » Jul 11, 2009 at 11:17 am
RE: Softwarengineer @ 31 – I like monetary policy more than fiscal policy, because the latter is too slow and more prone to over-shooting the mark. Unfortunately, monetary policy was played out a long time ago.
Krugman is again saying the original stimulus was too small. Maybe, but given the glacial speed of these things I’m not sure we’ll know that for at least a year.
Also, on the economy, I’ve noticed banks taking heat from the press on not accepting California’s warrants. Like they’re supposed to take illiquid crap because the government bailed them out. That would sort of defeat the purpose of the bailout. Just like the California energy crisis, the solution to the problem is in the legislature and governor’s camps. It’s hard to imagine a more dysfunctional government than that of California.
Rally dude » Jul 11, 2009 at 11:29 am
Sniglet – Can you let me know if MSFT is firing people all over the place? I worked for MSFT as a PM for 4 years but quit back in 2003…… So at that time I ended the relationship but in a nice way – it was not a big deal. In any case – when I used to work – MSFT would never lay off people but would tell them that the group is discontinued and then you could look for a job elsewhere at the company. They had a great web site that showed all the job openings and you could easily schedule an informational interview.
Are they laying off contractors or FTEs?
All the best to you. I am sure that with MSFT experience you will do well in life even in this economy.
jon » Jul 11, 2009 at 12:23 pm
RE: Sniglet @ 33 – Sorry to hear that sniglet. I’ve been there. It’s tough to go through, but you come out stronger.
The Tim » Jul 11, 2009 at 5:02 pm
FYI: Comments should be re-enabled now for anyone whose DNS server is up-to-date with the new server IP address.
Ira Sacharoff » Jul 11, 2009 at 5:16 pm
Sniglet,
I’ve been there too.
I can almost guarantee that a couple of years down the road you will be a lot happier, and that you’ll find an employer that encourages and welcomes scrappiness and non conformity. I’m sure there are some mixed feelings going on right now, but I would be surprised if feeling liberated wasn’t amongst them.
Kary L. Krismer » Jul 11, 2009 at 6:33 pm
By Ira Sacharoff @ 39:
Of if not, he can always become a real estate agent! ;-)
Sniglet » Jul 12, 2009 at 8:12 am
They have definitely been firing a lot more people this year (which is not the same thing as a “lay-off”, when you get severance) than I’ve ever seen in my 8 years at the firm. My own boss has fired 3 of his six employees this year (including me). I also know of quite a few other people who are under-going the same kind of stress as I went through as their managers go through the process of creating documentation to justify termination.
I have a friend who is a manager in a completely different division who told me that he was asked to reduce his staff by a certain number of people, and then had to go through the process of “proving” why certain employees should be fired (i.e. which means they don’t get any severance, etc), even though he felt they were actually doing good jobs. I really can’t say if this is the kind of mandate that had been given to my own boss since it’s difficult to take everything my manager said at 100% face value since he is obligated to try and protect the company from liability.
In actually I agree that I no longer fit well into the Windows organization where I worked. I am a scrapper, always looking for whatever unconventional way I can find to do things. By contrast, Microsoft has become much more bureaucratic and process oriented over the years, and my work-style grated on number of people (particularly senior managers). My unwillingness to play political games also contributed to my departure. I did a lot of research which not only didn’t fit the pre-conceptions that was prevalent in some groups, but I also was pretty blunt in my presentations and recommendations which was threatening in particular places.
I am the kind of guy who is always pointing out the elephant in the room, which isn’t necessarily always appreciated. The same traits that made me a good journalist in a past life, became liabilities for me at Microsoft in recent years. Which is not to say I don’t have my fans there. Over 200 people joined my recession study group, and there are a lot of individuals who really appreciated my work. I’ve had over 100 people write me very kind notes since I left, which is very gratifying. In fact, I’ve been getting people at Microsoft who I don’t know from a hole in the ground, writing me indicating that they need mavericks like me, and wonder if I would be interested in discussing roles in their groups.
It’s ironic that I had to get fired to find out there are people in the company who would like to have me work for them.
In any event, this is actually an opportunity to find a job in a more entrepreneurial organization where I can thrive.
TheRealStory » Jul 12, 2009 at 9:15 am
Interesting Article on RE Broker Practices
http://finance.yahoo.com/real-estate/article/107302/10-things-your-real-estate-broker-wont-say.html?mod=realestate-buy
Stb » Jul 12, 2009 at 10:27 am
RE: Sniglet @ 41 – Knowing how to effectively share your ideas is a skill. You were let go because no matter how “right” you are, if you don’t approach your work environment with some class, it doesn’t go over well. I wish you luck on your job hunting (<–Not meant as sarcasm)
Kary L. Krismer » Jul 12, 2009 at 10:33 am
Very little activity here. At first I thought it related to the weather, but now I’m wondering if it’s related to the DNS issue. What’s the longest a DNS server could take to update?
The Tim » Jul 12, 2009 at 11:50 am
RE: Kary L. Krismer @ 44 – Generally it takes as little as a couple hours, or as much as 24 hours. However, last time I moved hosts there were some people whose ISPs had still not updated their DNS records nearly a week later. Hopefully that is the minority.
Rally dude » Jul 12, 2009 at 12:23 pm
RE: Sniglet @ 41 –
Sad to hear all of this. Back in the 90’s MSFT was a really fun place to work at! I was actually proud to have been hired by MSFT right after college. I was flown in from NJ. I did not even know that WA was such a beautiful place. In NJ – the Garden State – you kind of get used to the fact that the world is a very industrial place and not very clean. I am not saying that NJ is a bad place – it has great city life etc but just WA state seemed to me to be an upgrade. So WA state was a blessing to me at that time….. Obviously folks who have always lived in WA state probably percieve this world as a very clean place with ocean, mountains, trails, water falls and Mount Rainier…..
Singlet – I am 100% sure that with MSFT experience though – you will get a job offer. If you cannot get it – then who can?
Can you tell me if they are laying off mostly contractors or FTEs? Back in 2002 I remember they were trying to convert contractors to full time employees because of some lawsuits. So I am not sure if they still use lots of contractors or not.
Are normal people at MSFT starting to get scared about their jobs?
Sniglet » Jul 12, 2009 at 12:39 pm
You are absolutely right. Being right isn’t all it’s cracked up to be… You have to “influence” others too. I can certainly work on getting better on the influence part. That said, I know that I am much more succesful at having influence in some environments than others. Like I said earlier, Microsoft has changed quite a bit over the years, and it is much less amenable to listening to ideas (that don’t evolve through official channels, and such) than it once was.
Of course, some jobs are much less prone to this kind of problem. In the last couple years I was doing market research, and the definition of “good” work is highly subjective, and largely due to how well it meshes with the views of the organizations you work with. Doing programming work, by contrast, is at least a little more quantifiable and less political (not entirely, but at least a little less subjective).
David Losh » Jul 12, 2009 at 12:39 pm
RE: Sniglet @ 41 –
“Microsoft has become much more bureaucratic and process oriented over the years”
I’ve thought this and had people tell me this for years now. Two of the people I work with are Microsoft retirees who just didn’t like it there. It’s one of the things that has formed my opinion that Microsoft will move into developing countries.
Egypt, India, Chna, Spain, Argentina, and the list goes on, all want to develop software that will be useful in broader market places. In my opinion for what Microsoft spends here they could dominate any market place with local talent.
patient » Jul 12, 2009 at 12:46 pm
Sorry to hear that sniglet, it’s very easy to get rid of people in wa, as an employment “by will” state. You need to get a couple of powerful people to hold your back especally if you are going to be controversial.
At least you have followed your own preaching and have no mortgage to stress you out and are fully mobile to
look for other jobs anywhere and also adapt your costs to your income/situation. Good luck!
S-crow » Jul 12, 2009 at 1:16 pm
RE: Rally dude @ 46 –
I used to ask my Father who grew up in NJ (born in south Amboy) about why he stayed in WA. It was always a short conversation. He said there are things in life you will never share with people and where his neighborhood was located is one touchy subject. Said he would never show me and to drop the conversation in that unique NJ way. Said to me “I’ve been all over the world (Navy) and WA is one of the the most beautiful places on the planet. That’s all you need to know about why I located here.”
Kary L. Krismer » Jul 12, 2009 at 3:11 pm
RE: S-crow @ 50 – Seattle is a huge draw for new lawyers looking for employment, even though the salary and fees are not as high here as some other places.