Mid-Week Open Thread (2009-11-04)

Here is your open thread for the mid-week on November 4th, 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!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

53 comments:

  1. 1
    scotsman says:

    “The Republican and Democratic parties in the USA are the right and left wings of the same bird flying the wrong direction. ” (stolen from another site.)

  2. 2
    Trigger says:

    Scotsman – But what would you do to fix the economy and the crisis?

    I see that people who reset their expectations and work harder for less do well. My friend used to earn 120K per year. It was decent job but he got laid off. So he reset his expectations and accepted a job offer paying 85K. As such he was able to take an almost 30% pay cut. But at least he is not sitting unemployed. He now works harder for less to keep himself competitive in the new environment.

    My other friend owns a construction business and unlike what was suggested in the previous thread – people who work sometimes for little money actually create lots of value. There are people who cannot do a job properly but those people are unprofitable in good and bad times. Certain jobs would appear if the minimum wage was lowered.

    Kary suggested that lowering minimum wage creates poverty and if we wanted to create poverty we can ship a few guys to Mexico. Try driving on I-20 and seeing places like Concrete. A lot of people in the US live like in a 3rd world country even now. Go to Forks, WA for example and you will see how bad it can get. And I don’t want to even think how people live in places like Michigan.

    So the question is: Is it better for a person to get a job for $5 per hour or is it better for this person to earn $0 per hour because the person is unemployed? In my opinion being flexible in this environment is key and it is key not to focus on 3rd world countries because parts of the US also look like 3rd world even now. By lowering minimum wage you only open up jobs that pay very little. But as with my friend who used to earn 120K per year – he also needed to be flexible and work harder for less. So just people who are unemployed need to be a bit flexible.

    Also in a crisis like this one – I would start looking at unions. I never trusted them and I trust them even less now. Those guys try to get a really good deal for the workers and not the employer. As such the employer is burdened with costs. It reduces profit for the employer and increases the chances that a given employer decides to leave or shut down some production.

    Regarding social security. Well people say – oh everything is bankrupt, we will not get our social security payments, the system does not work. But again the same thing applies – being flexible and work harder for less. Basically you can raise the age when people are entitled to social security payments. So you get less and you work longer. You can raise the bar so high that social security will be loaded with cash.

    So things can work out for everybody – it is a question of being flexible. And a question of expecting less and giving more.

  3. 3
    what goes up must come down says:

    RE: Trigger @ 2 – what the hell are you talking about, how about I line up some jobs for you and you work for free sound like a good deal.

  4. 4
    Trigger says:

    Also when it comes to investing it is important also to look at the mood and not only fundamentals. For example if someone comes to you and sells a $100 rusted nail worth 1 cent it is not an easy decision whether to buy it or not. If sb else buys it for $120 – you made $20.

    Same issue when the bubble was brewing with houses. It made sense to buy houses then because the mood was such that people wanted to buy like crazy – it was clear that flipping properties made sense.

    Now we have a potential money bubble and this also is an opportunity. Banks will load up on cash like crazy.
    http://www.ft.com/cms/s/0/9a5b3216-c70b-11de-bb6f-00144feab49a.html

    So basically it is best to hike, hike some more, go to Cannon Beach, Hawaii and just relax and try to take advantage of the market. And always lock in profits.

  5. 5
    Trigger says:

    RE: what goes up must come down @ 3 – No. I meant. Work harder for less and be flexible. It does not have to be for free. But sometimes it is better to work for free to get a good offer later on. This way you get free training. So what I am saying is to be flexible. And hike a lot, relax, work out etc. Try to unwind a lot. Taking advantage of wilderness is key when you have to work harder for less.

  6. 6

    RE: scotsman @ 1 – I analogize them to the AL and NL of MLB.

  7. 7

    RE: Trigger @ 2 – You do realize that some people like to live in the sticks and think that places like Federal Way’s commercial district are a blight on the earth.

  8. 8
    David Losh says:

    RE: Trigger @ 4RE: Trigger @ 2

    I read through the entire article in almost agreement. The premise, in my opinion, is correct, investors, institutional investors, are leveraging dollars into risky ventures. Those commodity positions may seem like a smart bet to some one in the United States, but the higher priced commodity trading crushes other economies. This is another example of where the paper profits drive the economy, while real work still needs to be done.

    Let’s talk about me and my business. My main company A Spring Cleaning is set up as a contracting company. I also have Rot Work, Seattle Deck, and Kill Mildew. All business models that just need some one to work. I forgot about Seattle House Painting. Then these companies compliment the Real Estate Investments that are out there.

    I’m really busy blogging so I don’t have all the time in the world to devote to these business ventures. When I talk with people about helping me I get the deer in the head lights look. Well, yes, you would have to actually do something.

  9. 9
    truthtold says:

    Trig,
    it is agreed that hiking is okay.
    Yes, hiking is fun for some. Others hate it.
    Especially when working six days a week for peanuts.
    Cheap entertainment is key so bake bread, grow your own, visit library, raise chickens.
    Know that cliffs and steep ledges should be avoided if you’re shaky from life as an American peasant or impending bankruptcy.

    Feel groovy + beautiful despite crap circumstance…I think (not sure) this is yer intended point?
    It is agreed.

  10. 10
    scotsman says:

    A lot of people are going to have to adjust their expectations over the coming decade. More work for less pay will probably become the new norm. Jobs will have to create real value or they won’t exist. I doubt the U.S. will drop to third world status, but it won’t have the easy fluff and excess of the last thirty years. Flexability will be a big plus. Those with a strong sense of entittlement will suffer the most.

  11. 11
    truthtold says:

    Those with a strong sense of entitlement are most likely the entitled – detrimental impact is questionable or somewhat limited. Ivy grows well on towers.
    I think eat-cake peasants scramble best or nicely stated “remain most flexible” and have super high pain tolerance…they make good labor (willing soldiers, too!) and stay focused on survival with little further aspiration.
    Death = honor and maybe a better life no longer subject to dirt wage or sufferings’ frantic prayer.

  12. 12
    Trigger says:

    RE: truthtold @ 11 – BTW dirt pay is all relative. I remember when I was vacationing in a small village in Mexico in Celestun (BTW – a very beautiful place) – I talked to a waiter. He was Mexican. He said he used to work for a Mexican farmer and he used to get paid $6 per day. He had to buy water for himself and pay $2-$3 per day. So his take home pay was $3-$4 per day. I think he was uneducated though but spoke some English because I do not speak Spanish myself. Now this is a definition of dirt pay. This is why it is important to put all of this into perspective.

    Like my friend who used to work for 120K and now works for 85K – he still feels like a privileged person. And he still lives in a place where you can spend a nice weekend. He comes from Omaha and is able to appreciate the upgrade that he got in life.

    In Omaha, NE people have nothing to do over the weekend – there are just corn fields around them and flat plains and really cold weather that resembles the cold in Siberia. So although you have to be flexible in many instances it means that you have to give up sthg but not everything.

  13. 13

    RE: Trigger @ 2
    IMO, Its Unfixable Without Depopulation ASAP

    So smile and get used to it getting worse and worse with more uncontrolled growth.

  14. 14

    A Slight Change of Topic

    The suckers’ 2009 stock market rally appears to have bottomed out per the following C/S/I October 2009 stock deterioration data:

    G Fund F Fund C Fund S Fund I Fund
    October 2009 0.26% 0.51% (1.86%) (5.51%) (2.41%)
    Year-to-date 2.46% 6.29% 17.23% 21.83% 24.27%
    12 Month 3.02% 13.89% 9.98% 13.34% 24.80%

    BTW: C= American stocks and S/I are international stocks.

  15. 15
    Rojo says:

    By softwarengineer @ 13:

    RE: Trigger @ 2
    IMO, Its Unfixable Without Depopulation ASAP

    So smile and get used to it getting worse and worse with more uncontrolled growth.

    population at the world level or US population?

  16. 16

    RE: Rojo @ 15
    Either One

    Most of the world is worse than us, but America’s out of water for the world’s bread basket food and out of infrastructure/money to stop GDP deterioration [excludes grandkid debt GDP, that’s unsustainable and just set up for Wall Street short term profits anyway].

  17. 17
    truthtold says:

    RE: Trigger @ 12
    Omaha is not actually hell and many happily reside there (think of all the horses and ponies beyond city limits). I’ve known of people who even elected to…live in Omaha. Your friend may be a fortunate person…I don’t have a clue and find that sorta trigger-like.
    Take good care, globe is terrible big and suggests perspective.

  18. 18
    Sniglet says:

    Here is the latest updates on my podcasts.

    In the latest episode of “Entrepreneurs Northwest” T.A. McCann explains how Gist (his latest startup) provides a portal, and filtering mechanism, for all the data streams people have to deal with from their friends and acquaintances. Unlike his previous ventures, Gist has been well endowed with capital by investors, and has been able to take the time necessary to build a good product before taking it to the broader public. The real challenge will be to convince users there is enough value to pay for subscriptions when Gist begins monetizing their service later next year.

    http://bit.ly/mWSNW

    In the latest episode of “Tales from the job search trenches” John Polhill gives an insider’s perspective to the world of corporate recruiting. Amongst many other gems of wisdom, John explains that on-line job applications aren’t a complete waste of time, but you have to know how to game the system and prepare your resume to make it through screenings. He also gives guidance on the questions you need to ask before heading into an interview, and to be very wary when you are applying for a completely new position.

    http://bit.ly/29Zgoj

    In this episode of the Optimistic Bear round-table economics discussion Matt Stiles joins us as a guest, filling in for our regular participants who were unavailable last week. We talk about the paradox of a declining stock market at the same time that the economic news was so positive this week and the financial stresses that local governments are experiencing with pension obligations.

    http://bit.ly/NlTjn

  19. 19
    b says:

    By Trigger @ 12:

    How many huge pay cuts have you taken? How often have you gone from a high paying job to a low paying job without the bat of an eye? I notice your stories are about your friend, not yourself. It is very easy to tell other people they need to be flexible and work for much less than before if you don’t have to do it as well.

  20. 20
    Trigger says:

    RE: b @ 19 – I think taking a pay cut is hard but you need to be flexible because many worse things happen in life like you can get cancer or become paralyzed. So pay cut should not be a biggie.

    I am a business owner and as a business owner I too had to settle for less profit. Again this is not such a biggie. I try to hike. Enjoy scenery. Drive to Leavenworth or Winthrop. Hike around on Olympic Peninsula etc. And if not for taxes I would be enjoying better weather in CA. So that’s it. I try to focus on the good things that life can bring to me. And then I try to make the best decisions I can make. And I try to stay away from places like Omaha because I don’t like the plains.

    That’s why I think SEA still has a lot of potential. People in general will prefer to live in SEA over almost any place in the US. Taxes will force people not to move to CA. Just that expectations of people all around will need to be reset. And if you look at people in Africa or Mexico – you will then come to a conclusion that whatever happens to you is really not a biggie.

  21. 21
    David Losh says:

    RE: Trigger @ 20

    I’m a business owner who also seconds you opinions about taking less, it’s better than nothing.

    Many of the people I know, including my late mother, are horrified that my wife and I have a cleaning business. It pays some bills. Our contracting business is for shot, our Real Estate investments we dumped, and let’s not talk about my investments because even though they can maintain value, it’s no longer a money maker.

    Most of the people I know are trying to make it all work out doing the same things they always have. In my opinion you do have to be flexible. There is a lot to be said for hanging in there, but we are in strange times. Nothing will be the same again, in my life time at least.

  22. 22
    AMS says:

    RE: b @ 19 – It never ceases to amaze me how people treat pay like housing: It always goes up, never down. Many people simply do not plan for a rainy day.

  23. 23

    Went Bowling With My Best Friend Last Night

    let’s not talk about my scores :-)

    The point is sometimes we have to learn to “give up” and smile anyway….BTW, my old bowling alley, Cascades Lanes/Casino, went out of business and was remodeled and taken over by Hooters. Yes Hooters, LOL

    Its good and bad, the venue is more pleasant to the eye and the food menu is more varied, but the bowling costs went up a bit and there’s more of the bar crowd out in the alleys now….not always the most congenial crowd at times, if you catch my drift. My friend and I had to watch our bowling balls or they disappearred….getting them back was not nice either.

  24. 24
    TJ_98370 says:

    .
    Ms. Gregoire in action …………..
    .
    Bank Crackdown Draws Criticism
    .
    Politicians are putting pressure on regulators to ease up on small community banks across the U.S., a move some say could increase the cost of cleaning up the financial crisis.
    .
    Last week, House Financial Services Committee Chairman Barney Frank (D., Mass.) sent a letter to the country’s top bank regulators, including Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair, urging them to “show some temperance in their regulation of traditional banks.” One common complaint from lawmakers is that regulators’ tough examinations are making banks reluctant to lend……
    .
    …….Washington Gov. Christine Gregoire sent a letter to her congressional delegation Oct. 9 complaining that “federal regulators have applied inflexible “one size fits all” regulatory standards on community banks and potential investors that hinder the ability of these community banks to weather the financial storm and actually inhibit opportunities to raise critically needed capital at the local level.” Her letter came just days after the Federal Reserve declined to approve the sale of Frontier Financial, the fifth-largest bank in her state, to a New York investment fund for $450 million. Frontier Financial Chief Executive Patrick Fahey declined to comment.
    .
    Scott Jarvis, director of Washington’s Department of Financial Institutions, said the letter didn’t say “you have to have a systemic opening of floodgates.” Rather, he said, the state wanted to see “a little fine tuning to deal with reality.”…….

    .

  25. 25
    patient says:

    By AMS @ 22:

    RE: b @ 19 – It never ceases to amaze me how people treat pay like housing: It always goes up, never down. Many people simply do not plan for a rainy day.

    I think the real problem is how people treat debt, not income. Almost like it’s free money and any future impact it has once the money is spent is not properly evaluated. I can admit that my wife and I for a long time lived the high life around the world not worrying about tomorrow confident that our fancy degrees in high demand fields would always get us through. What we never did however was taking on debt other than our student loans. Partly perhaps since we didn’t need to but mostly because we enjoyed the freedom that comes with being debt free. When we got kids it all changed, the responsibility of other peoples lives made us buildup reserves with continous savings in terms of 401ks, college funds etc. We are still debt free and can live a very comfortable life with many luxuries. Imo the key is to keep your debt to a minimum. We will eventuaully take on a mortgage but it will be a low factor relative to our incomes. If there is one lesson I will make sure my kids learn it’s to treat debt with outmost care. it’s a pity our government didn’t get the memo.

  26. 26
    AMS says:

    RE: patient @ 25 – I think things should be simple, not complicated. If something cannot be described in a very simple manner, then I blame, at least in part, the presenter of the situation. That said, I certainly appreciate advanced concepts.

    As far as the debt, savings, and all that, I have long claimed that it’s quite simple:

    Income less expenses = savings.

    Essentially living on less than what’s earned.

    One day, and I have a few of these projects, I will take a closer look at that student loan type debt. There is little doubt that someone with a college degree has a higher expected income than someone without one. Of course Gates is an outlier. That said, that extra income comes at a cost, both in terms of time and financial. Essentially I am asking the question of what is the present value of an education. This will vary with the interest rate charged on the student loans, and I only seek to measure the economic value. There are plenty of people who live a “happier life” with a college degree, but that is very difficult to measure the value. Ever see a non-engineer, and I use the term “engineer” very loosely, try to solve a basic physics problem? (In this case, the term “engineer” might include physicists, mathematicians, architects, and so on, but the point is that those without a basic understanding of math and physics, forces, and the like come up with some of the craziest ideas.)

    How can I relate student loans to the present “economic crisis?”

    Poor investment always nets a negative return. Have you ever spoken to someone who has graduated from one of those tertiary schools? Now I want to be very careful here, as much of the underlying issue is the student, but the tertiary schools specialize in picking up the most marginal of all students. I am not suggesting that this is a bad thing, as there will always be some dividing line between top and bottom, but rather I am only making observations as to the value of an education.

    If you spend too much to get too little, in terms of education, then you will always have a negative return. The interest rates, blah, blah, blah, don’t really matter. I am concentrating on the cost versus value to the individual, on an economic basis.

    What kind of investment do we have going on right now?

    First time home buyer tax credit
    Cash for clunkers (not right now, but in the recent past)
    Extension of Unemployment benefits
    Highway projects where there is little to no traffic (how about upgrading that Montana border crossing that averaged 2 cars per day?)
    Bailouts, if I can use that term, galore
    and so on.

    These investments had better payout returns in the future, or our economy will be like the recent grad that gets a bill instead of a diploma.

  27. 27
    patient says:

    RE: AMS @ 26 – What is advanced with being careful with debt and a pesronal anecdote on how it has played out very well for us. The “if it pays to have a higher level education” is a bit of a sidetrack to what I was trying to convey. The main message was that as long as you have no or very little debt the way your income fluctuates and how you spend it has less consequences. You have a much wider range to tackle abrubt and unexpected or planned changes ( as kids ) with little or no debt, wether it is living on less income or increase your reserves to cover your responsibilities. So how you treat debt is much more important than your salary expectations imo.

  28. 28
    AMS says:

    RE: patient @ 27 – The problem is that you have not included potential large gains based wholly on finance concepts.

    For example, you have that you financed your education through debt, and I believe you are suggesting that the investment paid off.

    Here is the situation:

    Take two people who graduate from high school.

    1. Enters the work force immediately.
    2. Goes to college and earns a 4-year degree before entering the work force.

    (I know there are many other possibilities, but I am taking these two situations for an example)

    Clearly person 1 is earning far more than person 2 who is not earning. Person 1 gets plenty of immediate material gratification, but person 2 will eventually catch up, even on a net present value basis, if the investment pays off.

    It looks something like this:

    Income of Person 1 (years separated by commas):

    $25k, $26k, $27k, $28k, $29k, $30k, $30k, … …

    Income of Person 2:

    -$25k, -$26k, -$27k, -$28k (these negative first four represent the financial cost of the education),
    now the education starts to pay off, so the amount earned is more like $50k+

    (Please note I didn’t look up any statistics to cite for these example, but I hope it is clear that for the education to pay off one must make a much larger amount in the future, which generally, based on history, is the case.)

    The cost of the education, about $100k in my example, better pay off in the future.

  29. 29
    patient says:

    RE: AMS @ 28 – No that was not what I suggested even if it is the case ( that it paid off ). The only reason I brought up the education was to explain why we treated our income irresponsibly during our first 10 years of marriage. We relied on our good education to get us through. We could get away with it since we had no debt other than government funded student loans ( Europe ). So the education was just a side note to explain our slightly reckless treatment of income while the treatment of debt was what really made it possible without any bad implications. The same goes for the situation today where we are responsible with income, it’s the treatment of debt that is the key to our sustainable financial health. So independent on our treatment of income it is the way we treat debt that has been the real key.

  30. 30
    AMS says:

    RE: patient @ 29 – It might not have been what you were suggesting, but student loan debt, good versus bad, should not be ignored.

    What I hear you saying is that you have student loan debt which purchased a good education that has carried you through.

    There are plenty of people who have student loan debt where the education is not worth much.

    Also you were able to be ‘irresponsible’ without much abandon because of your education, which was financed through government sponsored loans.

    This is very much like the housing crisis:

    There were plenty of people who financed their homes, many with government sponsored debt, and the investment paid off, if they sold soon enough.

    Then there were those who bought near the top, or, similarly purchased a poor quality education, with government sponsored debt. Clearly these investments do not pay off in the future.

  31. 31

    October NWMLS is out. For King County SFR the median is 377,500, down from 392,000 a year ago, and the volume is 1,758, up from 1,319 a year ago.

    The mean is 453,xxx, down from 486,xxx.

  32. 32
    AMS says:

    RE: Kary L. Krismer @ 31 – Approximate gross volume with your numbers:

    This year:

    453k by 1,760 = ~$800M

    Last year:

    486k by 1,320 = ~$640M

    Lower prices resulted in higher gross sales. This is a positive indicator, but the sales might have been pulled forward from the future based on free government money, specifically the first-time home buyer tax credit.

    Also the increase in the number of sales probably has given a few agents some income that otherwise would have had none.

  33. 33
    patient says:

    RE: AMS @ 30 – Get over the education and student loans, it totally makes you miss the point. It was not the education and student loans that has carried us through unscatch, we thought it would while we were living it up but in hindsight it was really the living debt free ( other than the student loans that we paid off ) that has been the key to our sustainable financial health thorugh good and bad economic times.

  34. 34

    By AMS @ 30:

    There are plenty of people who have student loan debt where the education is not worth much.

    And unfortunately they were (are?) running our banks! ;-)

    On the topic of education, even if I had not had a four year accounting degree, I could have had a JD/MBA by simply attending one more year of graduate school. How much do you think can be learned in one year if you had no prior education background in business?

  35. 35

    RE: AMS @ 32 – The peak in June 2007 at just over 1.5. That’s a lot of excise tax government isn’t getting!

  36. 36
    AMS says:

    RE: Kary L. Krismer @ 35 – Prices have been going down, but so has gross volume. This is a clear indicator that there is little support for the current prices. A lot more support is shown when prices go down but the number of sales increases to keep gross volume the same or higher.

    What we have is lower prices and no one is buying, and thus liquidity is going down.

    As far as that excise tax, that’s not the only tax revenue that’s been falling. Income tax revenues, sales tax revenues, property tax revenues have begun falling, and so on.

  37. 37
    AMS says:

    RE: Kary L. Krismer @ 34 – The second Master’s degree is much easier to earn than the first. The second million is much easier to earn than the first…

  38. 38
    AMS says:

    RE: patient @ 33 – How can education be ignored when that is often the base of high income? Maybe I am missing your point entirely.

    Those who live below poverty levels, whatever that might mean, generally have little left in savings equation:

    income less expenses = savings

    Those with high levels of education generally have plenty left, or can live carelessly.

  39. 39
    patient says:

    RE: AMS @ 38 – “Maybe I am missing your point entirely”. That would be a yes but it’s all in the comments above and I’m already horrofied over being on the top 10 commenters so I leave it with that. :-)

  40. 40
    patient says:

    By Kary L. Krismer @ 31:

    October NWMLS is out. For King County SFR the median is 377,500, down from 392,000 a year ago, and the volume is 1,758, up from 1,319 a year ago.

    The mean is 453,xxx, down from 486,xxx.

    Nice, that’s very close to my prediction for the year ( in the January 2008 prediciton post ) with 5% YoY decline for the median. Last years December median was $403k so 5% decline would be ~480k, though with the wild swings of the median it’s impossible to say if it will be close in December but never the less it’s looking good so far. I have 10% YoY for C/S which is much to early to guess the accuracy of.

  41. 41
    AMS says:

    RE: patient @ 39 – I went back and reviewed, and I hope another poster can come on and provide a little insight.

    I thought we were talking about debt and its potential future value, or net present value?

  42. 42
    Tim McB says:

    Looks like what was suggested earlier in the year is coming to fruition. Fannie Mae is renting back properties instead of foreclosing. Any guesses on the cost to Fannie (i.e. federal government) for this program? So far only 1,200 properties have been done this way.

    http://news.yahoo.com/s/ap/20091105/ap_on_bi_ge/us_foreclosures_rentals

  43. 43
    AMS says:

    RE: Tim McB @ 42 – I am going to guess that the rental revenue with legitimate tenants to protect the property has a higher value than empty homes, or homes filled with squatters.

    In other words, renting the homes is the “least costly” alternative.

  44. 44
    patient says:

    RE: AMS @ 43 – I agree, just another example of dressing up a lender bailout in “oh we are helping the poor foreclosed family bs”. The renting is for up to a year maximum and if the property sells during that time the former owner most move out. What I understand currently owners often stay months for free in foreclosed properties, this makes sure the lender gets paid for this “squatting” and if they aren’t the property starts to decay. So this will probably not slow down foreclosures just give the lender income while it’s for sale.

  45. 45

    RE: Tim McB @ 42

    If Its Like President Johnson’s Great Society Low Income Rentals: We’re Shafted

    The low income tennants totally destroyed the units in no time and the Great Society became the Great Cost Burden to remodel and rebuild continuously….I hate to say it, but it would be far cheaper to We the People to just bull doze the units and make parks out of the land.

  46. 46
    AMS says:

    RE: patient @ 44 – If the market has not sufficiently recovered, then it’s going to be tough to suddenly stop all these rental agreements. In other words, much like unemployment benefits, I can see this program being extended for those already renting for quite some time.

  47. 47
    AMS says:

    RE: softwarengineer @ 45 – “just bull doze the units and make parks out of the land.”

    These units are already built, so I doubt it would be good use of resources to just raze the structures.

  48. 48

    Possible Terrorist Attack At Fort Hood Texas Just Now

    7 dead and 20 injured, one of the attackers is loose….

    http://news.yahoo.com/s/ap/us_fort_hood_shooting

  49. 49
    AMS says:

    RE: Tim McB @ 42
    RE: patient @ 44

    Ok, let me stand by the whole ‘least costly’ idea, and having people live in homes is better than having them empty, but now I read that Fannie needs millions, oops, make that about 15 thousand million, i.e. 15 BILLION dollars.

    When you are begging for billions, renting out all that property that cannot be sold, or if sold, at low prices, is attractive–get revenue now. It appears that Fannie Mae is the latest “accidental landlord.” Isn’t this how all those other “accidental landlords” begin?

    “Fannie Mae (FNM/NYSE) reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. … Third-quarter results were largely due to $22.0 billion of credit related expenses, reflecting the continued build of the company’s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage backed securities trusts in order to pursue loan modifications.

    As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company’s behalf.”

    http://www.calculatedriskblog.com/2009/11/fannie-mae-189-billion-loss-requests.html

  50. 50
  51. 51
    AMS says:

    RE: scotsman @ 50 – What are the boomers thinking? My guess: “The system will save me.” Or the other similar claims, “Everything will be just fine, as markets generally go up.”

    My question is what happens if the system cannot rescue of all failed retirement plans of all the boomers?

    Naturally in a period of deflation, those who rely on fixed annuity payments are happy, if the retirement payments are actually paid.

  52. 52

    RE: scotsman @ 50 – Yeah, thinking they only need $800,000 to fund a retirement! ;-)

  53. 53
    wreckingbull says:

    RE: Kary L. Krismer @ 52 – Very true, What is even more scary is the median value of a boomer household retirement account is only 100K. Time for remedial math for an entire generation

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