Olympia on the Economy: Liars, Fools, or Malefactors?

[Note: This is an opinion piece on a political matter. If that sort of thing offends you, it is recommended that you skip this post.]

Christine Gregoire, January 2008:

“The only thing we have to fear is fear itself,” Gregoire said, quoting former President Franklin Roosevelt and referring to national recession fears. “It is a very frustrating time, I know, for you, and it is for me. … I’m struggling to get the message out to Washingtonians. The economy is strong. Buy your home.” (The Olympian, 01.25.2008)

“There is no good reason for a slowing of home purchasing in the state of Washington today” (Associated Press, 01.25.2008)

In the twenty-two months between the Governor’s declaration that “there is no good reason for a slowing of home purchasing” and the latest data on Seattle’s Case-Shiller home price index (November 2009), home prices have fallen 18%. Some “strong economy,” huh?

Just eight months later… Christine Gregoire, September 2008:

“This is the worst economic situation we’ve faced since the Depression.”

“When you’ve got tough economic times, it’s not the time to raise taxes,” she said. “Nobody is talking about taxes but [Dino Rossi].” (Seattle Times, 09.19.2008)

Gregoire was quickly proven dead wrong about how strong the economy was and how we should all go out and buy overpriced houses. In January 2008 she was obviously either lying or oblivious to the growing problem. Neither option seems like a quality we would want in a Governor.

But hey, at least she promised not to raise taxes in these suddenly “tough economic times.” Note that at the time of the above quote, Washington’s state-wide unemployment rate was 5.5% (seasonally-adjusted).

Wait now, what’s this?

Democrats in Olympia are getting ready to play right into their stereotype as lovers of taxes.

They are preparing for a final vote to overturn initiative 960, the initiative which requires a 2/3rds vote of both houses to raise taxes or in fact ANY additional revenue.

And which ALSO requires the legislature to send out an e-mail anytime a bill is proposed that even MIGHT raise revenue.

Those of us who subscribe to that list have received a steady stream of e-mails in the past month warning us of bills that will raise revenue, most of them sponsored exclusively by democrats.

By voting to suspend the 2/3rds requirement and to stop those e-mails, it looks like they’re not only are they hell-bent on raising taxes in a recession, but hell bent on keeping it secret. (Dave Ross, 02.10.2010)

So now, with the state unemployment rate at 9.5% (as of December), not only are Gregoire’s comrades in the state legislature planning “a steady stream” of bills to raise taxes, but they’re also taking measures to make sure that it is more difficult for the public to keep track of such actions. Again, Mrs. Gregoire was either lying or completely oblivious.

The important thing to note in this most recent development is that as Dave Ross (a former Democrat candidate for the US House) points out, the legislature could have suspended only the 2/3rds requirement portion of I-960. In fact that was what the state Senate originally did on Tuesday. However, that was not enough for them. They have instead decided to go the extra mile to spite the people of Washington and eliminate the legislative transparency portions as well.

I-960 has other provisions the people want. One is that Office of Financial Management must calculate the 10-year cost of every revenue-raising bill introduced. For every such bill, OFM must send out an e-mail to interested members of the public and the press of the costs, hearing dates, legislative votes and contact information for lawmakers. (Seattle Times, 01.13.2010)

Not only that, but the state Senate and House are pushing these votes through the Legislature in late-night and weekend votes, seemingly to keep things as under-the-radar as possible. The House takes up the bill tomorrow morning (Saturday), during the weekend break in the news cycle.

I will grant that this is only tangentially related to real estate—some of the tax proposals floating around Olympia include expanding the sales tax to include services, such as those provided by a real estate agent. However, the Governor has been so two-faced, and the state legislature so underhanded on this matter that this deserves to be mentioned.

If those in charge down in Olympia want to raise taxes on real estate services, soda, chocolate, or whatever—fine, let’s have that discussion. But why all the sneaking around and lying? Why not be forthright about your intentions and hold an open dialogue on the issue?

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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.


  1. 1

    Tim, I Hear You

    And its enough to start pulling hair out over.

    The real Progressives 100-200 yrs ago must be turning in their graves….LOL

  2. 2
    Ray Pepper says:

    I listened to Gregoire at a TPCAR conference in University Place 18 months ago.

    I will never forget her promoting of our local economy and how we are so much better off then nearly every state. The Realtors were clapping like buffoons. It reminded me of this video.


    It seems she was entirely clueless about real estate and what was happening. I sincerely wonder if she ever heard of the S&P/Case-Shiller Home Price Indices.

    I left TPCAR and not even an hour later the news about Boeing hit the airwaves. It was the same thing that happened to me after going to the Venture Bank community forum in Gig Harbor. All was good at the meeting and the very next day they issued a cease and desist and of course now they are First Citizens Bank.

    Its almost comical if it wasn’t so tragic.

  3. 3

    I’m much further to the left politically than you are, Tim, but I’m not the least bit offended by your post.

    It’s not just Gregoire. Transparency and politicians are mutually exclusive terms. It’s not like the Republicans have this reputation for being honest and forthright, and I doubt that Dino Rossi would have come off as any more honest than Gregoire. Let’s not forget the industry that he came from: Real Estate.

    Gregoire has mostly struck me as clueless rather than evil, but maybe I’m giving her too much credit.

  4. 4
    AMS says:

    Gregoire isn’t too happy with the level of banks with problems. Since this is BFF, maybe we’ll see the number going down?

    Sure the financial assets look better when the FDIC covers the losses. For some reason a bank failure does not seem to correct the underlying problems.

  5. 5
    The Tim says:

    RE: Ira Sacharoff @ 3 – If Republicans had any power in Olympia, I imagine there would be plenty of reasons to rip on them as well. The Democrats just happen to be the target because they hold all the power, and have in this state for quite some time. Certainly long enough to have avoided this mess had they been more prudent during the boom times.

    Like you said, the problem is not so much Rs or Ds, but with politicians.

  6. 6

    First let me say although I’m not a fan of Gregoire, I will say she hasn’t turned out to be as bad as what I expected when she was first elected. Since she couldn’t run the AG’s office well enough to ensure a notice of appeal was timely filed in a case involving a multi-million dollar judgment, I wasn’t expecting much, and didn’t think she deserved to be moved up to Governor. That said, the economic outlook changed quite a bit in September, 2008, so I don’t think it’s terribly fair to call her out as possibly being a liar based on comments she made earlier.

    I also don’t have a problem with them eliminating the 2/3rd requirement on tax matters. I strongly suspect that like so many other Tim Eyman initiatives, that is unconstitutional. Unlike his other initiatives, however, this one simply didn’t have an obvious plaintiff.

    The changing the notice provisions, however, that is hard to justify, unless perhaps there are timing issues that require it that might otherwise affect the ability of the legislature to close up shop on time.

  7. 7
    biliruben says:

    “Sneaking sneakers! ” ;)

    If they are trying to be sneaky, they are doing a pretty darn bad job, as it’s pretty much all I’m reading and hearing about. Even on the bubble-blogs for chrissakes!

    I agree the dems are big pusses. They should have done away with this initiative that makes it all-but-impossible to govern with forethought and responsibility a long time ago. They are such chicken-shiznets when it comes to scarry Eyman.

    At the very least, they should have made some attempt to have the courts throw it out, as the super-majority is clearly Unconstitutional.

  8. 8
    Ray Pepper says:

    Can someone get this to Gregoire and get a statement:


    Each day that goes by I become more fascinated and disgusted.

  9. 9
    Andre says:

    To be fair, you should remind us what brought this crisis about (low interest rates, loosened lending standards), who engineered it (the Bush administration) and did any in the Rep Federal administration officials warned us on an impending crisis?
    In term of bias, I have even heard some hard core Republicans argue that the “whole thing” (market meltdown) was due to Carter and Clinton that passed laws “forcing” lenders to accept all applicants.

    Anyway, the problem is not with politicians, it is with us, the voters. Who would vote for a somber candidate telling us “things are going to get tough”, or something like that, while the economy is revving up to the red zone. Who was listening to Peter Schiff in 2006?

    I think you are off the target here. Point to the responsibles of this mess, not to those who are too f***ing scared to take care of it. We don’t like bad news, that’s the big problem. We like to think we deserve everything we get, we are way too self entitled, that’s the problem.

    We are the problem, and a big one if we prefer to point at those that inherited of the problem, rather than those who created it.

    By now, it should be clear to anyone that Rs ARE the problem. That doesn’t mean that Ds are the solution, but you’ve got to acknowledge the real cause of the problem before you even try to solve it.

  10. 10
    The Tim says:

    RE: Andre @ 9 – We’re talking about the state budget. The pandering Rs that controlled things for a while at the national level didn’t force the Ds in charge here in WA to overspend and under-plan. Here in WA, the Ds have sole responsibility since they had all the power.

  11. 11
    AMS says:

    RE: Andre @ 9 – “I think you are off the target here. Point to the responsibles of this mess, not to those who are too f***ing scared to take care of it.”

    “By now, it should be clear to anyone that Rs ARE the problem. That doesn’t mean that Ds are the solution, but you’ve got to acknowledge the real cause of the problem before you even try to solve it.”

    There is probably plenty of blame to go around, if you want to play that game. That said, there is nothing one can do to change the past.

    What’s needed isn’t placing blame, but rather, solid investment in the future.

  12. 12

    RE: The Tim @ 10

    You Got It Tim

    As bad as 2009 Califoria’s deficit is, Washington State’s is worse.

    Population: 37M
    2009 Deficit: $41B
    $1108 per capita deficit

    Population: 7M
    2009 Deficit: $8B
    $1143 per capita deficit

    Welcome to Washifornia.

  13. 13
    Everett_Tom says:

    By softwarengineer @ 12:

    RE: The Tim @ 10

    Welcome to Washifornia.

    Does “Washifornia” look like the name of a bank to anyone else?

  14. 14
    Scotsman says:

    Alright! Nine posts in and it’s “Bush’s fault.” I knew it wouldn’t take long to bring up that one size fits all rebuttal. Nice!

    Chris G. is too much of a nothing-burger to have done much one way or the other. she’s neither evil nor incompetent, she just lays low and goes with the flow. She’s always been reactive, not proactive. And that’s too bad because we could use some real leadership now.

    I’m waiting for November- I think enough people are fed up that we will see some real change, not just more “hopey-changey” b.s. I disagree that the people are unwilling to take the hard hits and agree to make the necessary changes. While there is a percentage of the population the will fuss about having their economic status reset to some lower level, there are enough grown-ups getting involved that change will happen. It may well be too little too late, but it’s better than nothing.

  15. 15

    RE: Ray Pepper @ 8

    Thanks a Bunch Ray

    I did get your URL Out to Washington DC’s FAIRUS.ORG. BTW, WOW, its was EYE-OPENNING.

    They lobby against the corporations, like the banksters. They support We the People.


  16. 16
    anonymous says:

    It was a frustrating gubernatorial election given that both Gregoire and Rossi are clearly in the pocket of the real estate industry. Remember when the building industry association was sued for illegal fundraising for Rossi? http://www.seattlepi.com/local/382082_rossi07.html

    There were no real options in that election who wouldn’t constantly push people into buying property.

  17. 17
    Vellebue Renter says:

    As soon as the Repubs are most likely back in power in 2010 they will be pandering to their special interests as well,mostly corporations. The Supreme Court is filling in for them at the moment:


    Dems are just as bad only their core special interest groups are Unions & non-whites.

    Remember, Government is always hard at work, just not for us.

  18. 18
    Chris says:

    Great post Tim.

    Over the last 12 years the state budget has grown from $39 Billion to $69 Billion.


    I remember several years ago the state’s chief economist warning that revenues looked good but the positive surprises in real estate excise tax revenues couldn’t last. Sadly, political argurments seem to have more sway than analytical arguments. In 2005 they struggled to balance the budget even with an uptick in revenue.


    The bottom line is that the government needs to live within its means – unfortunately with this latest move they’ve overturned the will of the people to increase the means rather than live within what they have. Maybe next time the voters will be looking for fiscal conservatives on the ballot.

  19. 19

    RE: The Tim @ 10
    I don’t know. State and local budgets all over the country are suffering, with both Dems and GOP at the helm. The economy has a lot to do with it, and it seemed to blindside a lot of elcted officials of both parties. The Republicans tend to claim the mantle of being the responsible fiscal stewards, and the Dems tend to claim the mantle of being ” for the people”. In fact, Republicans in power have squandered money like drunken sailors, and Dems in power have been “for the people” who head major corporations.

  20. 20
    One Eyed Man says:

    The Tim, did you know Dino is acting as a spokesman for a group of real estate investment people and mortgage brokers who have recently put on several dog and pony shows at Maggiano’s in Lincoln Square. Maybe you should go see the seminar and take it from the horses mouth, if indeed thats the end that its coming out of. They don’t have another seminar scheduled that I’m aware of, but if you want the email notice for one of the prior presentations, I probably saved one that I can forward to you. I’m sure your just the type of person they’d love to have attend and you get a free Italian dinner too.

    With all due respect to Gregoire, you’re probably far more knowledgable about the real estate market than she is. That is to say I think that she’s more of a fool than a liar. Ironically the statement that we have nothing to fear but fear itself is to some degree an acknowledgment that Shiller is right when he says that the market is driven by psychology. Unfortunately she failed to see that psychology had already driven the market up above historically fundamental economic benchmarks so that fear was in fact warranted.

  21. 21
    The Tim says:

    RE: anonymous @ 16 & One Eyed Man @ 20 – Last I checked, Dino Rossi wasn’t the governor. I agree that he is not likely to be any less of a real estate industry pal, but I don’t see how the comments about him are relevant to this discussion since he has no power.

  22. 22
    Jillayne says:

    It’s time to stop circulating that video about Indymac. The FDIC is not amused. Here’s their response:


  23. 23
    David Losh says:

    Most States looked at building development as a cash cow that would never end, more housing units more tax base, more public transportation, more State employees. It’s the same as having a new factory in town until the factory goes out of business.

    If you really want to fix anything you need to go back to the Mike Lowry years of adding State employees. By adding departments, and employees we got public service projects like Light Rail. We all want public transportation don’t we?

    Our State probably could cut programs and be alright, but that would put more people out of work. Those departments would be gone for a very long time, and a lot of projects would stay incomplete. So the State politicians are looking for revenue.

    We actually need a visionary in our State who can capitalize on our resources. We need a negotiator like Gary Locke. I liked Gary, and thought he brought a lot of business into our State without giving away too much. I also liked Booth Gardner, and thought he was a practical pro business Governor.

    In my opinion this vote against the expressed will of the people of this State will cause more businesses to stop doing business here. I think the people of this State have voted for enough Eyeman bills, to show we don’t want more taxes. I think both Boeing, and Microsoft have been clear they don’t want more taxes or they will move.

    I don’t see this as a win for our politicians.

  24. 24
    David Losh says:

    RE: Jillayne @ 22

    I’m also not amused by these two guys. These are a couple of con men who have lied in this, and other videos to get attention, which they certainly got. This is in the category, in my opinion, of the Kelman guy at redfin going to Congress for his publicity stunt.

    These are lowest forms of life that are ten time worse than any welfare fraud case, and have probably cost the tax payers a thousand times more.

    Real Estate hucksters are Real Estate hucksters no matter what the message.

  25. 25
    Pegasus says:

    The governor was lying. Plain and simple. She was acting just like your old pal David Lereah did for years. Pumping BAD lies to promote BAD business. Probably for pals. She gave away the gambling rights for peanuts. At least California got some big bucks for the same thing. Christine got a nice donation while the public in this state got screwed. Here is a little info that I am sure she had in early 2008 when she was spinning yarns of gold in real estate to sucker in the last rubes for slaughtering.

    Washington Quarterly Revenue Projection Down $423 million

    FOR IMMEDIATE RELEASE—February 15 , 2008

    OLYMPIA—The February revenue forecast for Washington state government shows projected General Fund revenue down $423 million for the current two-year budget period.

    “Although our economy is outperforming the rest of the nation, it is clear from this forecast that national trends can have an effect here,” Gov. Chris Gregoire said. “When the rest of the nation has economic problems, it affects us, too.”

    Dr. ChangMook Sohn, the state’s chief revenue forecaster, said the predicted revenue change was due to clear signs that the U.S. economy is slowing down. The U.S. downturn is led by continuing problems in the real estate sector, high gas prices and other challenges facing consumers. According to Sohn, Washington should fare much better than other states during this downturn, but no state is totally immune. Sohn noted that the change in the forecast is less than 2 percent of total General Fund revenue for the 2007–09 biennium.

    “Given the expected decline in revenue, I have been meeting with Senate Majority Leader Brown and House Speaker Chopp to discuss the effect this will have on budget planning,” Gregoire said. “We must maintain a prudent reserve while also protecting the critical investments we have made in education, health care and economic development that put us on strong footing for economic growth Washington state.”

    The national economic picture is in stark contrast to the continued strength in Washington’s leading industries, especially aerospace and software, which is helping insulate Washington from the worst effects of the U.S. slowdown.

    “The economy in Washington stands on solid ground,” said Victor Moore, director of the state budget office. “Job growth in Washington continues to outpace the national average and Washington had the highest increase in personal income in the nation for the third quarter of 2007. The strength of our export economy will keep us growing.”

    Revenue for the current budget period, 2007–09, is projected to decrease $423 million, resulting in total projected revenue for the biennium of $29.5 billion.

    The revised forecast leaves $524 million in unobligated General Fund revenue for 2007–09. In addition to the budget surplus, the Rainy Day Account proposed by Gov. Gregoire and passed by the voters last fall will contain $429 million in constitutionally protected reserves.

    In addition to updating the outlook for the current budget period, the Forecast Council provided the first look at economic and revenue prospects for the next biennium, 2009–11. Sohn predicted General Fund revenues of $31.9 billion, or about 5 percent per year growth, which is close to the historical average.


  26. 26
    Pegasus says:

    Jillayne @ 22

    Don’t overreact to the spin that the FDIC is giving to that video. Some of the facts might not be 100 percent correct but I and others are willing to bet that they are more correct than the spun answer the FDIC is giving. Who will you trust? The FDIC that went broke by not enforcing rules, laws or failed supervision oversight or people who are tired of our leaders stealing from the public? Oh and the head of the FDIC just got caught getting a below market mortgage from BAC while the FDIC was working on how to save BAC. But that’s ok because Chris Dodd did the same thing and he got away with it.

    “A few days ago we posted “The Great Highway Robbery Continues: How the FDIC is Legally Transferring Billions in Taxpayer Money to Hedge Funds” which presented a clip by Think Big Work Small, highlighting what was seemingly a grand scheme to defraud taxpayers with the FDIC’s complicity. Today, the FDIC strikes back, issuing a Press Release claiming the video contains “blatantly false claims”, “perpetrates other falsehoods” and has “no credibility.” The counterargument which is supposed to render all allegations of impropriety false: “OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets” and that “in order to be paid through loss share, OneWest must have adhered to HAMP.” Unfortunately, reading between the lines of the response indicates that not only are the falsehoods actually truehoods, but the video is still, sorry Sheila, quite credible.

    So to make sure we get this straight. OneWest could have an accrued loss balance of $2.499 billion as of today, and just one more loss will be enough to force the FDIC to make a lump sum payment instead of linear payments? And somehow we are supposed to be comforted by this? A cursory public filing search for OneWest bank reveals no such organization. Maybe while it is denying the validity of the video the FDIC can advise taxpayers where they can get some information on what the correct reserve or loss accrual at OneWest is? Courtesy of the most opaque accounting rules in the history of America, OneWest could have already gotten way beyond the $2.5 billion threshold and is simply waiting for the proper time to spring this to the unwitting FDIC.

    And as for adhering to HAMP? Would that be the same program that will ultimately benefit less than 1% of US first mortgages due to ridiculous constrains that make the vast majority of participants ineligible? Aside from scoring one for the stupidity of the administration, does the FDIC actually believe that Americans will find this to be a relevant gating issue?

    Sorry FDIC, but not only did your press release not refute the video’s claims in the least, but you just dug yourself an even deeper grave as every aspiring blogger and investigative reporter will now do everything in their power to find comparable examples of blatant “slap in the face” fraud expecting you to retort to any and all allegations, ensuring 15 minutes of fame for all implicated.”


  27. 27
    Snigliastic says:

    RE: David Losh @ 23 – Eyeman bills. those are a crock. and that guy is crocktastic.

  28. 28
    One Eyed Man says:

    RE: The Tim @ 21

    So I guess there’s no reason to talk about Republicans or the policies they might represent for their constituents because they’re not in power?;-) I would contend that criticizing the incumbent has limited value unless you can offer an alternative that would improve things and Dino was the most recent viable alternative offered.

    As to the substantive issues in the post, the timing of votes for one party’s advantage is politics as usual in modern America as far as I can tell. As to the elimination of email information on tax bills, I’m in favor of open government and the free flow of information, so I oppose the elimination of the emails unless someone can show me how it causes some kind of huge burden which I doubt.

    As to cutting government spending, I doubt that another administration would have done much there. At best they might have decreased the growth rate of spending a little. Most likely they would have had more success with tax cuts and caused the deficit to be just as bad if not worse than it is now.

    As to the relevance of comments regarding federal fiscal policy to state fiscal policy, as I understand it, a lot of state spending is driven by federal requirements to receive certain federal funding so at least to that extent federal policy is relevant.

    As I said in comment 20, IMO Gregoire is probably more of a fool than a liar. But I don’t think there were any real alternatives offered that would have changed our fiscal mess to a great degree. I don’t particularily like democrats or republicans. I think they all contributed to the fiscal mess and very few if any of them have the fortitude to cut spending. They all want to preserve their own spending items while cutting someone elses. As far as I’m concerned, all government budgets, state and federal, including entitlements and salaries (and pensions if not constitutionally protected) should be cut equally by 15% to start.

    But no politician is going to do it because no one thinks they can win if they say that. Its far easier to promise tax cuts. And IMO Tea Parties don’t get the job done because just like during the Reagan and Bush years they focus on tax cuts without ever tackling the more difficult problem of continued spending funded by debt. The problem is at least 30 years old. Gregoire isn’t satan, she’s just the latest local edition of a continuing saga of spending and debt that drags on and on, and on . . .

  29. 29
    David Losh says:

    RE: Snigliastic @ 27

    The people in the State of Washington are extremely conservative. As a contrast, we have a long line of Democrat Governors. Eyeman stepped in, if for no other purpose, but to prove the people of this State want to cut taxes, and limit the ability to raise taxes.

  30. 30
    Norm says:

    ” But why all the sneaking around and lying? ”

    Because most politicians are merely paid-for corporate provocateurs. The only way to stop them is to throw a cog into the gears of the corporation that’s paying for them.

  31. 31
    redmondjp says:

    RE David Losh @29:


    Yes, there are some conservatives in the state, but you’ve got to drive at least 40 miles out from Seattle before you start finding any . . .

    And the initiatives are evidence of nothing more than a case of “we want our cake and want to eat it too” which is unfortunately a universal human condition . . .

    Looking at all of the school levies which recently passed (which allows the gov’t to otherwise spend their general fund money that should go to education), I’d say that there are millions of people in our area who are quite willing to pay even more taxes, or at least to continue their high level.

    We get the government that we deserve. Nothing will change until many, many more of us stand up and demand action (sigining initiative petition in front of Costco doesn’t count). And frankly, I don’t see that happening in our area anytime soon. Real pain hasn’t been felt yet.

  32. 32
    Ray Pepper says:

    RE: Pegasus @ 26

    “but I and others are willing to bet that they are more correct than the spun answer the FDIC is giving. ”

    I’m in the same camp! Not only for passing the video but from a VERY reputable contact at WFC and BAC that assures me this is true. Banks continue to profit heavily from Short sales causing the Loan Mod to be virtually non-existent. When approved the Loan Mod remains a near parallel to the Loan the homeowner already had causing ZERO distress to the bank for the principle remains intact.

    However, they both discredit the last part about the 75k the Banks go after the clients for. This is what was done 3 years ago. Not now. The homeowner would not even attempt to short sale if there would be a 75k penalty on a 475k loan. They would let it foreclose.

  33. 33
    AMS says:

    RE: Pegasus @ 26 & Ray Pepper @ 31

    We need transparency of both the FDIC and Fed. Once that happens, we’ll know what’s really going on. At this point I find it difficult to trust anything that the FDIC releases, but I have no reason to suggest that a fraud is taking place.

    Ultimately it took that video to get the attention of the FDIC. For that alone, I applaud the work, even it has some technically inaccurate claims.

    Do we really need such FDIC secrecy?

    Then there is the question of responsibility to get the facts right. Really? I mean come on. Why should someone not be allowed to put forward whatever garbage they so desire? Just because it’s on the Internet it’s required to be 100% unbiased and factual?

    I think this will take an entire movement in my musical.

  34. 34
    Ray Pepper says:

    RE: AMS @ 32

    Jillayne…just sent me this after I asked her to dig some more:

    Press Releases

    FDIC Provides Additional Information on its Loss Share Agreement With OneWest Bank

    February 12, 2010

    FDIC Director of Public Affairs Andrew Gray said, “It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP).

    The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.

    This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It’s too bad that the creators of this video opted to premise it on falsehoods.”

    Supplemental Fact Sheet

    Hmmmmmmmmmmm. Did I get duped and fall for Hucksters? Not according to my contacts but hey…Maybe I’m so eager to point fingers at all the problems that I fell for it. I continue to get told by my contacts that these banks are making ALOT of money off of these short sales and nobody gets a Loan Mod.

    Jillayne please keep us posted. You simply cannot get duped!

  35. 35
    AMS says:

    RE: Ray Pepper @ 33 – I posted this early in the open thread:


    Be sure and look at the documents released:


    I’d like to trust the FDIC, but alas, I am finding that very difficult.

    If nothing else, I’ll just add this situation to the recovery that pfft keeps talking about.

  36. 36
    Ray Pepper says:

    RE: AMS @ 34

    Great work AMS. But, heck….I have to Coach a Soccer game and BBall game tomorrow. Did you dissect all that info?


  37. 37
    AMS says:

    RE: Ray Pepper @ 35 – I didn’t go through all the documents carefully, but on quick inspection the losses are computed much differently than the video portrayed.

    That said, I am convinced that the FDIC is entering into these “loss share” agreements for two big reasons:

    1. It pushes the loss realization out in time. The FDIC simply signs an agreement, and then the cost of the losses related to the “toxic assets” are simply pushed out in time. It’s like buying a home on easy payments–it does not matter how much it costs, as long as you can make these payments in the future…

    2. Even if not the best deal, the deals take a lot of administrative burden off the FDIC. When there are no buyers, the FDIC has setup an entity to dispose of the ‘assets,’ which are the bad loans, and other bad assets, like REO that’s not worth much.

    Basically it’s quick and easy for the FDIC.

    Let me suggest that if it were only one or two small bank failures, I’d be in the who cares camp. Does it make much difference for a couple small banks? The problem is much larger than that.

    Remember in Vegas prices have gone down by ~60%. We know you keep promoting the “owners” to run, not walk, away. We both recognize you are not a member of my Church of Real Estate.

    Simply put, Who takes the losses? Unless we have massive inflation, I don’t see Vegas going back to the peak for at least 10 years, but probably 15 years. If we have massive, unexpected, inflation, then all bond holders, pensioners, and so on will pay a big price.

    Given our global economy, how long will wages in America remain high?

  38. 38
    David Losh says:

    RE: redmondjp @ 30


    Seattle is a small place in the State. Washington is conservative. It’s military, vastly rural, timber, and fishing. School levies are another problem because no one is watching how the money is spent.

    Conservatives in the State have the stigma of Dixie Lee Ray. The post is about the governor right? Tax dollars being spent on public projects that go nowhere? Dixie Lee Ray has been the slogan for what can go wrong.

    What I’m saying is that Gregoire, and Rossi were two of the same. There was no substance to either canidate, and no direction. Probably Gary Locke was distracted in his later years in office, but he did promote International trade with China.

    Revenue in the State of Washington relied on, in part. timber and fishing, two industries that are pretty much at a stand still. Boeing and Microsoft are balking. We have this long list of business taxes, and ask business to collect the taxes, for the State.

    Pretty much our State would have to over haul our tax system to make it cohesive. That’s the part no one wants to touch.

  39. 39
    Pegasus says:

    David @ 38
    Gary Locke? Gary Locke sure sounded good as he ran the first time but after elected it became very clear he was completely worthless. He never failed in that image in his second term. The only thing Gary did was spend his time chasing bats around the mansion and hiding from responsibility.
    The voters of Washington are not conservative. That is why we keep suffering through one useless eater after another……Patty Murray, Maria Cantwell, Gregoire, Greg Nichols, Ron Sims…….

  40. 40
    mydquin says:

    The state should be filling its budget gap with bonds instead of taxes and spending cuts until the recession lets up, but “comrades?” Wow… it is a shame to see a website with such potential get cheapened with ad hominem attacks.

  41. 41
    The Tim says:

    RE: mydquin @ 40 – Hah, so now using a word that literally means “friend or associate” is an ad hominem attack? Fascinating.

    That criteria puts this Toronto Star article about the late luger in an interesting light: Georgian athletes dedicate Games to fallen comrade. Pretty cheap to insult the dead, I suppose.

    Or this one from the BBC about British soldiers in Afghanistan: Soldier killed rescuing fallen comrade in Afghanistan. It’s a shame to see the BBC get cheapened with ad hominem attacks on their own military forces, no?

    Give me a friggin’ break.

  42. 42
    Ray Pepper says:

    RE: AMS @ 37

    Remember in Vegas prices have gone down by ~60%. We know you keep promoting the “owners” to run, not walk, away. We both recognize you are not a member of my Church of Real Estate.

    actually 70% in areas of S Vegas. 60%+ in Reno.

    I never promote anyone to do anything OTHER THEN take care of your families best financial interests and ALWAYS look whats best for your family. That will lead you in the right direction.

    I do condemn Steve Tytler for applauding his “broker friend” who owns a 500k Mtg on a home worth 250k. My contention is GOOD if that works for his BROKER FRIEND. However, it doesn’t work for the best interests of ANY familes I know.

    Church has nothing to do with it. Its not a moral issue. If you lose your job, illness, divorce, family dynamics, pay reduction, whatever and you find it is easier on the family unit to walk I contend there is NO SHAME. Millions of Americans will have walked by the time this is over.

    It has been said here repeatedly. You sign a promise to pay. When you do NOT you suffer the consequences. However, the consequences NOW are far less severe then being strapped to a home that YOU CANNOT SELL for possibly 2 decades.

    Life is far too short to be confining your family to an obligation that restricts its ability to live life to its fullest. Those that promote moral behavior in an effort to stop people from walking continue to be INEPT and have no support from me.

  43. 43
    David Losh says:

    RE: Pegasus @ 39

    Dan Evans, Dixie Lee Ray, who ran as a Democrat on a Republican platform, and then John Spellman, now add in Slade Gordon.

    The problem in that era was spending on public projects. Booth Gardner ran on a pro business platform that never materialized, and in my opinion Gary Locke did the same.

    We have a screwed up tax system. Business get taxed then taxed again. We have glaring deficiencies from timber, and fishing, that are gone, or certainly not the wind fall they were in the past.

    The politicians from the 1980s on have flip flopped on the tax issues. That’s how a guy like Eyeman has a toe hold. The people of the State want to be progressive, but don’t want to figure out how to pay for it.

    Let’s say that the State needs an Income Tax, and should get rid of all the B & O tax along with a significant reduction is sales tax. Now you have a fire storm.

  44. 44
    Helmut says:

    Ray, can you find an example of a mortgage that has a clause that says the borrower is obligated to repay the loan only so long as the asset is worth more than the outstanding amount on the note? I’d like to see it.

    As for walking away because it feels good not being an issue of morality, I think you’re a little off on this one too. Maybe you can point me to a bible passage where Jesus says not to sweat paying your bills, even when you are able, if you don’t feel like it’s in your families best interest.

    The only argument for walking away and not feeling like a gigantic tool, which you should anyway, is that your lender actually bought the asset. They were stupid enough to give you, a complete amoral loser, a lot of money. They should have known better (they really should have, I’m not using sarcasm, this is a large piece of the puzzle of why we are in this mess) and they should bear some of the responsibility.

    Of course, you’re still a tool, and you should still seriously consider the idea of marching you, and your various sprog into the ocean and not returning.

  45. 45
    AMS says:

    RE: Ray Pepper @ 42 – “I do condemn Steve Tytler for applauding his “broker friend” who owns a 500k Mtg on a home worth 250k.”

    Are you condemning my Church members?

  46. 46
    Pegasus says:

    Helmut @ 44

    I am not saying one should walk away from their obligations but buyers do agree to make mortgage payments OR face the consequences. Foreclosure, credit damage, lawsuits, etc. All part of the contract. The banks agree to the contracts and always have the upper hand until their equity disappears. In this state they can sue for recovery of those losses if they use judicial foreclosure. What is the difference with that versus what most corporations are doing with their mortgages when the values drop? Look who walked way here:

    “Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders.

    But the trade group for mortgage lenders is refusing to say exactly how it extracted itself from that predicament.

    On Friday, CoStar Group Inc., a provider of commercial real estate data, announced that it had agreed to buy the MBA’s 10-story headquarters building in Washington, D.C., for $41.3 million. The price is far below the $79 million the trade group says it paid for the glass-walled building in 2007, while it was still under construction. The price also is far below the $75 million financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. to finance the purchase.

    John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. “We’re not going to discuss the financing,” he said. A spokeswoman for the MBA added that the MBA has reached “an agreement with all relevant parties” regarding the outstanding amount on that loan but declined to provide any details.”


  47. 47
    David Losh says:

    RE: Helmut @ 44


    The bible says that you should pay your debts, and forgive your debts.

    Fraud on the other hand is wickedness.

    In terms of finance it is clear that we all share.

    Jesus answered, “If you want to be perfect, go, sell your
    possessions and give to the poor, and you will have treasure in heaven.
    Then come, follow me.”

    Luke 12:33 Sell your possessions and give to the poor. Provide purses for
    yourselves that will not wear out, a treasure in heaven that will not be
    exhausted, where no thief comes near and no moth destroys.

  48. 48
    Pegasus says:

    David @ 43
    Do you really think raising the sales tax to over 10 percent which is being proposed by both Olympia and King County is the answer? How about we run the state as an effective business and stop overpaying government employees especially through their benefits that will eventually bankrupt the state. Municipalities around the nation are declaring bankruptcy to negotiate those payments lower. Is that the answer? Wait until you are bankrupt to deal with the issues after you blow all of the reserves foolishly? Should the average wage for government employees be higher than those that actually produce something?

    “There was a time when government work offered lower salaries than comparable jobs in the private sector but more security and somewhat better benefits. These days, government workers fare better than private-sector workers in almost every area—pay, benefits, time off, and job security. And not just in California.

    According to a 2007 analysis of data from the U.S. Bureau of Labor Statistics by the Asbury Park Press, “the average federal worker made $59,864 in 2005, compared with the average salary of $40,505 in the private sector.” Across comparable jobs, the federal government paid higher salaries than the private sector three times out of four, the paper found. As Heritage Foundation legal analyst James Sherk explained to the Press, “The government doesn’t have to worry about going bankrupt, and there isn’t much competition.”

    In February 2008, before the recession made the disparity much worse, The New York Times reported that “George W. Bush is in line to be the first president since World War II to preside over an economy in which federal government employment rose more rapidly than employment in the private sector.” The Obama administration has extended the hiring binge, with executive branch employment (excluding the Postal Service and the Defense Department) slated to grow by 2 percent in 2010—and more than 15 percent if you count temporary Census workers.

    The average federal salary (including benefits) is set to grow from $72,800 in 2008 to $75,419 in 2010, CBS reported. But the real action isn’t in what government employees are being paid today; it’s in what they’re being promised for tomorrow. Public pensions have swollen to unrecognizable proportions during the last decade. In June 2005, BusinessWeek reported that “more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies,” numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.

    These huge pension increases have eaten away at public finances, most spectacularly in California, where a bipartisan bill that passed virtually without debate unleashed the odious “3 percent at 50” retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50” and the forces behind it have only become more entrenched.”

    When do the voters finally grow some cohones and shout “No Mas”?

  49. 49
    mark says:

    Got my property tax bills for 2010 today, the assessments came some time ago.

    The assessments were down a little over 16%, 2010 compared to 2009.

    The tax bill was down a bit also, but less than .5%.

    We’re going to be paying about $40 less this year than last.

  50. 50
    David Losh says:


    If you want to talk free markets, it is all markets. The first thing we get rid of is the standing army, and especially those on foriegn soil. We do away with border patrol, drug enforcement, and immigration laws. Free enterprise is free enterprise, and survival of the fittest.

    I want to build my own car. I resent being told what kind of vehicle I have to drive to conform to standards. Insurance for sure has to go. It is a useless enterprise that does nothing for any one except those collecting the premiums.

    We need to get rid of patents, and what we make should be by those who can make the best products, for the best sales price. Protecting intellectual properties is hindering progress at a time when we need innovation.

    As a conservative who has lived with guns, and gold most of my life I know that you will disagree. You need welfare. You need people to take care of you. You need your corporate structure that government protects.

    Welcome to America comrade. We have a place for you.

  51. 51
    Ray Pepper says:

    RE: Helmut @ 44

    Wow Helmut. Someone else also calls people tools. I thought it was just me. You appear to be new here and obviously have NO CLUE as to what your talking about but let me simplify so even YOU can understand.

    We are a mobile society Helmut. People MUST move due to job, illness, divorce, family, and life circumstances. Buyers who bought in the last 5 years are grossly underwater. They cannot sell NOW nor can they sell in most likely this decade. You would rather these homeowners continue to live in the home, with no ability to sell, and be a chain to it?

    See, what you must understand my toolish friend is until you realize the enormity of short sales and foreclosures that will continue to plague the markets for many years to come. Furthermore the quicker these homeowners WALK or short sale the sooner this problem will be cleaned up.

    Helmut you can only be STUPID for so long. These homeowners DO NOT and will NOT have the cash to cover the difference now or in 5 years. We can Loan Mod year after year but in the end THEY ARE STILL UPSIDE DOWN and the problem lingers like a boil on your brain.

    Keep pumping your Moralistic virtues and telling people to pay and in about 6 more months you will REALIZE just how stupid this paragraph was:

    The only argument for walking away and not feeling like a gigantic tool, which you should anyway, is that your lender actually bought the asset. They were stupid enough to give you, a complete amoral loser, a lot of money. They should have known better (they really should have, I’m not using sarcasm, this is a large piece of the puzzle of why we are in this mess) and they should bear some of the responsibility.

    But, theres hope Helmut. Its coming from the FED. Its called Mtg Cramdown and it will have many different faces and variances. You will be SHOCKED at what will happen and I hope it infuriates you so much that you will finally realize who the REAL TOOL is and must continue to live their life with incompetent uneducated thought processes.

  52. 52
    mydquin says:

    Tim, you give me a break. You obviously used the term, comrade, to insinuate that legislators are communists. I generally agree that the legislature should not be forcing taxes or spending cuts through right now and that their actions should be transparent. However, don’t insult everyone’s intelligence with your hollow denials. Just own up to letting your frustrations get the best of you and try to be more civil and rational in the future.

  53. 53
    Willy Nilly says:

    RE: David Losh @ 50


    You are greatly mistaken. The whole purpose of intellectual property and patent protection is to create an incentive for innovation. Innovation is a result of the creative process. Innovation through the creative process involves risk and delayed gratification, if there is not an environment that supports taking risk with the opportunity to be rewarded there is little reason to innovate. Ideas are easy for some to come by, and for others not so much. There is an aggregate of behaviors, attitudes, beliefs, personality, emotions and other aspects that make up the creative individual. Individuals with the proper comprehensive mixture of attributes to be creative, are a minority of the population – about 2%. The capacity and aptitude for true innovation lies within individuals, but the society in which they exist is instrumental in allowing the capacity to manifest itself. I happen to be a creative type, and a good portion of my business involves generating products that have some intrinsic features and benefits which are novel and qualify as being patentable. Many of the products we make can be patented, but it is not worth the trouble due to the cost, effort, duration of filing for, and getting a patent approved. I do hold several active utility patents as well as several patents applications that are pending. Several of these products took years to develop, and involved many hours of brain time, loads of experimentation, making prototypes, etc. Sacrifice – risk with the potential for reward. A Mad Max type of society is not supportive of fostering innovation, but it might allow you to build and drive your own vehicle on the road – if you could get fuel for it. The complexity and inventions of our modern society cannot grow out of an anarchistic world.

    If you are interested in learning more about innovation I recommend the following books – Csikszentmihalyi, Mihaly (1996). Creativity : Flow and the Psychology of Discovery and Invention. As well as – Creators on Creating by Baron & Montuori, which is a much less technical read.

  54. 54
    Tyler says:

    RE: Ray Pepper @ 42

    Ray, you have real transparency, and it is refreshing – I wish more politicians were as open and honest about their moral cloth as you are. It would make choosing representatives much easier.

    I however disagree with your statement that it isn’t a moral issue, and your ‘my family first and last’ sentiment serves as a poor reflection. Are you representing the mission statement of 500realty.net?

    While it is true that not everybody can find an easy way out of their current financial mess, if they got themselves into it, most could find a way out of it. It may indeed require sacrifice, patience, perseverance but those are great virtues to obtain that will later serve them well – and as an added bonus they’ll keep their dignity intact. The path of least resistance makes all rivers, and some men, crooked –Napoleon Hill

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