Here is your open thread for the weekend beginning Friday October 23rd, 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!
TJ_98370 » Oct 23, 2009 at 7:41 am
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That darn Bernanke is at it again –
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Bernanke urges Congress to act now on overhaul
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Federal Reserve Chairman Ben Bernanke prodded Congress Friday to enact legislation overhauling America’s financial regulatory system to prevent a repeat of the banking and credit debacles that had thrust the country into crisis.
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“With the financial turmoil abating, now is the time for policymakers to take action to reduce the probability and severity of any future crises,” Bernanke said in remarks to a Fed conference in Chatham, Massachusetts…….
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softwarengineer » Oct 23, 2009 at 8:47 am
RE: TJ_98370 @ 1 –
He Didn’t Mention Anymore Bonus Bailouts
But I catch your drift and read between the lines too.
softwarengineer » Oct 23, 2009 at 8:59 am
So You Went Into Nursing to Escape the Layoffs
Article in Part:
“….Yet however bleak the financial picture is, people continue to need hospital care. That has lessened the devastation in the health-care sector relative to other industries. Even so, some expect further local hospital layoffs due to Gov. Chris Gregoire’s proposed health-care budget cuts for the next two years, including elimination of the general assistance unemployable program and cuts in Medicaid service payments. Sauer said these cuts would result in lost income totaling about $170 million a year for Washington hospitals.
“There’s no way this can happen without laying off staff,” she said.
In an interview, Swedish’s Hochman said proposed Medicaid cuts will hurt hospitals, as will low service payments from Medicare. And commercial health insurers, he added, are under significant pressure from employers to lower reimbursement rates or keep them down as much as possible.
“For the next two years,” he said, “we don’t see a bright picture on the reimbursement side.”…”
The rest of the PSBJ 2/2009 article:
http://seattle.bizjournals.com/seattle/stories/2009/02/16/story2.html#
A nursing contract company I do board work for has lost 60% of its hospital contracts this month, with layoff plans for its nursing personnel.
S-Crow » Oct 23, 2009 at 9:13 am
RE: softwarengineer @ 3 – Yup. On a related topic, I spoke at length with a friend (the mother of one of my son’s soccer team mates) who is a nurse (long long time employee at Providence in Everett) about Hospital care staff layoffs and hiring freezes. Healthcare may not always be immune like some people suggest.
truthtold » Oct 23, 2009 at 9:38 am
“so you went into nursing to avoid layoffs” – entering a career to avoid something YOU fear? Sounds morbidly safe and when one is already half dead, why wait? There is no chart for this but pay is too low + cost is too high.
There is a side of brain which contains inspiration…find it. Be a nurse only if you want to be a dang good nurse and more than a half dead albeit employed person.
johnnybigspenda » Oct 23, 2009 at 10:04 am
http://finance.yahoo.com/news/Home-sales-rise-94-pct-in-apf-1768521642.html?x=0&sec=topStories&pos=1&asset=&ccode=
Home sales rise 9.4 pct in Sept., beats forecast
WASHINGTON (AP) — Home resales in September clocked the largest monthly increase in 26 years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires…..
I think that’s all you need to read…. (tax credit expiration)
Prices, however, continued to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price. The median price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August’s median of $177,300.
volume up… prices down…. same old… better than volume down prices down… but its going to be a while yet.
Tim will like this part of the article:
One potential roadblock to an extension also emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.
At a hearing on Thursday the Treasury Department’s inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old.
AMS » Oct 23, 2009 at 10:18 am
RE: johnnybigspenda @ 6 – “At a hearing on Thursday the Treasury Department’s inspector general for taxes questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old. ”
Is there an age limitation on the first-time buyer credit written in the law?
TJ_98370 » Oct 23, 2009 at 10:27 am
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From same article linked above –
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…For its part, the Fed has been taking steps to strengthen oversight of banks, sharpen consumer protections and on Thursday unveiled a sweeping proposal to police banks’ pay policies to make sure they don’t encourage top executives and other employees to take reckless gambles…..
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The point I was hoping to make is that Obama and Company cannot implement changes by themselves, Congress has got to act. Singling out Bernanke, Obama, or whomever as being to blame for not fixing the economy seems a bit myopic.
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softwarengineer » Oct 23, 2009 at 12:27 pm
RE: TJ_98370 @ 8 –
Perhaps, But Maybe We Can Just Cut the Slack and Make Believe
And make Goldman Sach dictator…LOL
me » Oct 23, 2009 at 1:42 pm
I don’t think it’s possible to post a picture into this thread, but here’s a link to a graph of nationwide median housing prices over the last 4 years.
http://i37.tinypic.com/2jb5yeq.jpg
Sales may be bottoming out, but not prices.
AMS » Oct 23, 2009 at 3:10 pm
RE: me @ 10 – Note how as median prices went down so did the number of sales. This is just the opposite of what was happening in the run-up period: prices were increasing, and buyers were lining up in droves. There were those in the mist of the frenzy who waived inspections just to make their offer so much more attractive.
Normally one would expect that as selling prices went down the quantity sold would increase.
Excluding the government just handing out billions in a futile attempt to prop prices up, how long will it take for the areas that have gone down by 50%, or more, to sustain prices that are doubled?
I realize that Seattle has not seen this level of price reduction, at least as of today.
If I were Boeing, I’d consider building a plant in Detroit. I could offer employees “a new home” in Detroit for less than 1/2 a year’s worth of Seattle area wages, yet I don’t think the selling price of the final product would change one dime. And if you don’t think that there are hundreds, thousands, of qualified workers in Detroit, you are fooling yourself.
I just don’t see how the large gap, both in terms of dollars as well as multiples, can go on.
Quality of life, but at what financial cost? Is it sustainable?
What I find a little disturbing is that so many suggest that the auto workers are overpaid, but what about Boeing workers?
Matsayswhat » Oct 23, 2009 at 3:10 pm
RE: softwarengineer @ 3 –
The reality though, is that demand for nurses is still high enough that those laid off will probably be able to find work elsewhere. Especially since different institutions have different rules about how many medicare patients they’ll accept (because of how poor the reimbursement is) and thus aren’t necessarily as impacted.
Not to say that I’d encourage someone to go into nursing now if all they care about is job security, but if someone wants to be a nurse I certainly wouldn’t discourage them or try to convince them to become a construction worker instead.
David Losh » Oct 23, 2009 at 4:37 pm
I’d like to post a web site called: Value Appeal
http://www.valueappeal.com
It gives you the opportunity, and ammunition, to challenge your tax assessment. The time limit for appealing King County property taxes is running out, but this is a great reference site also for future use.
Scotsman » Oct 23, 2009 at 7:13 pm
Discussion of Seattle’s CRE popped up over on Tickerforum, several good links:
http://www.tickerforum.org/cgi-ticker/akcs-www?post=115537
Kary L. Krismer » Oct 23, 2009 at 7:57 pm
RE: David Losh @ 13 – I think except for condos, it has run out for most people.
Jillayne » Oct 23, 2009 at 10:56 pm
My sis runs a cardiology office and says nurses like to work at the hospitals because they are paid more and are paid signing bonuses. It’s tough to recruit good nurses at the clinic level because the pay is lower and…no signing bonus. Maybe the laid off nurses will be able to pick up work after all.
David Losh » Oct 23, 2009 at 11:29 pm
RE: Kary L. Krismer @ 15 –
Maybe, but it’s an interesting site and business model. My first thought when I saw it was that it low balls values rather than puffing them up. The data is all County Records as near as I can figure.
Ira Sacharoff » Oct 24, 2009 at 12:20 am
RE: David Losh @ 17 –
That’s definitely a fun website. County records strike me as being all over the map. A lot of them have come down a lot, and sometimes maybe too far. For my own house the assessment has gone down a little over 15%, but I’m pretty sure that if i wanted to, I could easily sell my house for ten or fifteen thousand higher than the assessed valuation.
But I’m still seeing assessed values on some houses way higher than the house could sell for.
To get the current market value: Look up your valuation on Zillow, ( which will likely be wrong) add it to the incorrect valuation from the county, divide by two, subtract 10%, add 500 dollars, multiply by two, add five hundred dollars, and then divide by two, you should then arrive at the current market value:)
But this only works when it’s precisely 63 degrees outside.
Kary L. Krismer » Oct 24, 2009 at 7:58 am
I just did a guest blog piece on that site: http://blog.valueappeal.com/zestimate/could-lowered-assessed-value-hurt-you-when-you-sell-your-home
When I ran my house it said I couldn’t likely appeal, and I think that’s likely with the new assessment. I sort of wish that I’d known of the site last year. I was thinking of appealing just for the experience.
TJ_98370 » Oct 24, 2009 at 8:54 am
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According to this article, Seattle is poised to be one of the best places for housing “recovery”.
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Housing: Best Recovery Bets
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2. Seattle
Median home price: $371,000
Value lost since 2006: 15.2%
Forecast gain by 2011*: 3.8%
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Seattle has become a world-class city with a diverse, vibrant economy. As a home to manufacturers such as Boeing and software providers such as Microsoft, the job market has held up better than average, with a current unemployment rate of 8.8%……
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……After another modest price decline of 2.3% in the next eight months, the market should begin to turn up. Between June 2010 and June 2011, the city should see a gain of 6.2%. Averaged out, that means a 3.8% gain over the next two years*…..
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Ira Sacharoff » Oct 24, 2009 at 12:21 pm
RE: TJ_98370 @ 20 –
How do they arrive at these conclusions? Like predicting a 2.3% decline in the next eight months, and a 6.2% gain in the following twelve months? Aren’t these numbers being pulled out of an orifice where the sun don’t shine?
We’ve seen declines in the last eight months far larger than 2.3%, but we have seen sales increasing and inventory shrinking. Still, I don’t see a shred of evidence that supports those predictions. I wouldn’t be shocked to see prices stop declining by mid 2010 somewhere, but 6.1% gain in the following twelve months? Nah, that’s not independent research, that’s more like the article writer asking J Lennox Scott for his ” impartial” opinion.
One Eyed Man » Oct 24, 2009 at 2:20 pm
By Ira Sacharoff @ 21:
Well Ira, you made me curious cause I thought I smelled something I didn’t like. So you want to see “where the sun don’t shine”? We’ll old One Eye got the financial colonoscopy out just for you and sniffed this one out. It’s interesting, but I don’t know if I can really shed any light on the subject. And after taking a look, I’m not sure if it really smells as bad as you’d think. Believe it or not, I found Dr. Stiff hiding from the light.(I assume he has a PhD although I haven’t seen anything saying he does.) Great name for a guy calling a bottom for some locations, don’t you think?
The predictions came from Fiserv, the banking industry consultants that do the number crunching for Case Schiller. David Stiff is apparently their chief economist. They’re the same guys who are saying the national median will be down more than 11% over the next year if I recall the various comments of the last week correctly. Here’s a link to a podcast with David Stiff saying that the forecast for increased prices is based on affordability, job stabilization and consumer confidence. And here I thought that Dr. Stiff was probably just pimping for the Home Builders or RPAC.
http://lansner.freedomblogging.com/tag/fiserv/
This appears to be the release direct from fiserv on the next year’s real estate price declines. If you’re like me, you’d rather see what the horse has to say rather than hearing it filtered thru CNN or Money Magazine. Sorry for all the bad puns but I couldn’t help myself.
http://investors.fiserv.com/releasedetail.cfm?ReleaseID=398504
Scotsman » Oct 24, 2009 at 2:40 pm
I’m willing to bet he’s wrong. The basic problem with models is the underlying assumptions and how a desired outcome can be designed in. Looking back over the last couple of years Schiller has consistently been too conservative in his predictions. Interestingly, so has Roubini. I think these both of these guys know more than they let on, but for political reasons don’t want to appear to far out there. They are always just a bit ahead of the crowd, but not too far in the distance. I think if they said what they really think there is a fear of losing credibility, and their credibility is their business.
Ira Sacharoff » Oct 24, 2009 at 3:14 pm
RE: Scotsman @ 23 –
I won’t bet against you on this, Scotsman. Every once in a while I find myself in complete agreement with you. This is one of those rare instances.
Besides, we didn’t hear any of this from the mouth of Dr. Schiller, but from Doctor Stiff, the life of the party. Lots of people interpret the Bible differently from each other, so why not Case-Schiller?. Do you we know whether Robert Schiller and Doctor Stiff share the same assessment after looking at the same data?
Herman » Oct 24, 2009 at 4:33 pm
There are a lot of Debbie Downers on this site. I used to believe the prophesies of doom when you backed it up with numbers and evidence. Now whenever there are numbers and evidence that says “bottom” you’re all deniers.
TJ_98370 » Oct 24, 2009 at 7:29 pm
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As an interesting counterpoint to the Seattle housing recovery article I linked earlier, I read an article by Tom Kelly today. Mr. Kelly is a well known real estate journalist / author / commentator, and his article was entitled “Experts say housing recovery is not around the corner”. I cannot seem to find the article posted on the internet anywhere or I would link it (maybe someone more skilled than I can find it?)
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In the article, Mr. Kelly quotes our friend Mr. David Lereah, the former NAR chief economist . The following is Mr. Lereah’s comments about surveys indicating positive consumer confidence in a near term housing price turn- around:
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“….These results are surprising since the economy continues to shed jobs on a monthly basis and foreclosures continue to dominate the housing landscape. The Case-Shiller survey indicates that home-buyer optimism overshadows economic reality. I worry that they are becoming over exuberant once again….”
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Wow! That kind of statement is far from the expected / normal from Mr. Lereah. After leaving NAR he has become the president of Reecon Advisors, Inc. located in Washington D.C.. Maybe that would explain his departure from the unrealistic real estate investing cheerleader mode he has become so well known for.
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whiteonrice » Oct 24, 2009 at 8:37 pm
Herman – if you got it, smoke it… there is an attempt at an orderly deleveraging of our economy, coordinated between the corporations and media in this country as not to escalate a total collapse of the system… buy a house today, be in negative equity for the rest of your life…
The Tim » Oct 24, 2009 at 8:45 pm
By johnnybigspenda @ 6:
That makes a great headline, except for the fact that it’s false. Home sales did not rise in September, they fell. The headline is a nonsense lie made up by the salespeople at NAR.
See:
Existing Home Sales FALL in September 2009
and Understanding Seasonal Adjustments
David Losh » Oct 24, 2009 at 9:14 pm
RE: Herman @ 25 –
Herman, you know the numbers have been presented here time and time again. The Census data between rents and housing values is a story all of it’s own, Rents are not keeping pace with the value of properties.
The bigger picture is that the Census data available is between 1940 and 2000.
Can you imagine what the new data will show? Think about it for a couple of minutes. Rental income wasn’t keeping pace with inflation up to 2000, What will double digit appreciation do to those numbers? Do you think rents have gone up by double digits or fallen?
Our economy is based on the numbers, the data, the statistics. What will the new numbers, coming out next year going to look like?
I mean really, you can’t imagine? It’s a crystal ball kind of question?
David Losh » Oct 24, 2009 at 9:19 pm
RE: The Tim @ 28 –
A point being over looked is that there is all of this activity in September. It’s proof of how stupid the buying public is. Home prices have risen, but people are lining up for $8K and low interest debt.
It’s a very sad commentary on the mortgage and Real Estate industries.
Scotsman » Oct 25, 2009 at 12:24 am
RE: Herman @ 25 –
Funny how some folks take one piece of data, completely ignor the context, and make a god of it. CS isn’t famous for their predictions, but for their data base of past events. Predictions are a bit of a new business for them. There is a ton of data out there that suggests we aren’t any where near the bottom, along with a whole host of structural issues in the economy, its skeleton- if you will, that suggest there are still serious problems to resolve. I don’t see how anyone thinks one prediction, probably based on irrelevant historical trends, can be reliable.
If you really think this is the bottom, lever up! Rates are low, many think inflation is just around the corner (not me), and prices have dropped almost 20%. It’s a great time to buy!
TheHulk » Oct 25, 2009 at 12:16 pm
RE: Scotsman @ 31 –
“prices have dropped almost 20%”
Make that 20% down from ridiculous highs. Prices need to fall at least another 10% – 15% to get them in line with historical trends. I dont expect that to happen this year considering how much money the government has pumped into the market. But once the goosing power dissappears and the only thing that seems to accomplish is temporarily bump up non-sustainable activity, while borrowing from future demand, prices will start edging down again.
Hold off and you will see the same house priced 10% less next year at the same time.
Scotsman » Oct 25, 2009 at 12:21 pm
RE: TheHulk @ 32 –
“Hold off and you will see the same house priced 10% less next year at the same time. ”
Yup, at least. I really expect demand to pretty much disappear here soon. We’ll see.
Ira Sacharoff » Oct 25, 2009 at 12:46 pm
By Scotsman @ 33:
Scotsman » Oct 25, 2009 at 3:06 pm
RE: Ira Sacharoff @ 34 –
Ah, stupid people with money, similar to, but different from: People with money, but no taste. Flip sides of the same coin?
I long ago filed this one under “life isn’t fair, get over it and move on.” But if you ever figure it out, Ira, please let me know. Please! ;-)
Scotsman » Oct 25, 2009 at 3:07 pm
This is just too depressing to read on a rainy day. More government involvement, ala Jimmy Carter and Nixon. Indeed, what could go wrong?
http://hotair.com/archives/2009/10/25/could-see-this-coming/
Lake Hills Renter » Oct 25, 2009 at 3:10 pm
Detroit house auction flops for urban wasteland
Scotsman » Oct 25, 2009 at 10:02 pm
RE: Lake Hills Renter @ 37 –
“”OK,” he said. “We only have 300 more pages to go.”
WoW!
AMS » Oct 25, 2009 at 10:40 pm
RE: Lake Hills Renter @ 37 –
“Speculators are often not good for a city and, from my experience, they are going to lose a fortune,” he said. “But there are no easy answers. [Detroit] is a declining city.”