Monday Open Thread (2010-11-01)

Here is your open thread for Monday November 1st, 2010. 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.

95 comments:

  1. 1
    Herman says:

    Does anyone have a POV about whether housing will be a good asset when we get back to an inflationary environment?

    If you read my posts from like a year ago, you’ll remember me as the guy who forecast “inflation” via currency devaluation. Meaning rising prices due to the lower power of the US Dollar to buy imported goods and of course oil/gasoline. I think I am right about that and will be even moreso over the next 3-5 years.

    If you’d agree with me, even just for sake of argument, I’m wondering whether RE is going to be a good asset in that environment.

    I’m not clear as to whether all the extra USD that’s been pushed into the Fed, corporations, and banks is going to have an impact on residential RE. I mean, RE would only rise if we saw increasing employment and incomes — those dollars have to make it into Joe Sixpack’s paycheck if he’s going to have it ready to blow on a house. Right?

    On the other hand, rising costs of imported goods and foreign energy would drive up construction costs, so maybe a higher cost of new construction will impact RE as the existing stock depreciates and excess stock is absorbed.

  2. 2
    Pegasus says:

    RE: Herman @ 1 – WE are still in deflation and will be for a few more years. Here is the latest housing price forecast…..

    U.S. home prices expected to slide another 8%

    http://money.cnn.com/2010/11/01/real_estate/housing_market_state/index.htm

  3. 3
    johnnybigspenda says:

    maybe we are climbing the Wall of Worry just as the stock market has done since last year?

  4. 4
    EconE says:

    RE: johnnybigspenda @ 3

    Of course. And all the other good quotes. Don’t fight the tape. And while you’re at it, pick up a couple Buffet books!

    Inflation won’t help housing. It will however help peoples waistlines as they become even hungrier.

    Hunger is good discipline.

  5. 5
    Dirty_Renter says:

    Interesting article….without political spin. 15M home underwater….4M > 25% underwater.
    Sorta reminds me of my favorite Bubble quote: “We’re so far underwater, the fish have no eyes.”

    http://www.latimes.com/business/la-fi-economy-mortgages-20101101,0,7338975.story

  6. 6
    Chris says:

    RE: Herman @ 1

    I agree that in the long run real estate will be a good hedge against inflation but that won’t come in to play until the excess supply of housing is absorbed which could take 3 or 4 years or more. I thought this graph of historical supply of housing units per household was a good illustration of the oversupply.

    http://www.schwab.com/public/schwab/research_strategies/market_insight/mi_popups/market_commentary_popups/smp_chart2.html?cmsid=P-3303774&lvl1=research_strategies&lvl2=market_insight

  7. 7

    RE: Chris @ 6 – I would agree inventory is an issue, but I would question that graph. If I’m reading it right, it seems to have number of houses needed as being a straight line trendline. In the past year or two I would guess the number of houses needed has been growing slower than normal, or possibly even decreasing, due to people renting rooms, moving in with family, etc. If the economy improves, that could reverse. The point is, it’s not a straight line.

    On the demand side, if you’re just looking at the cost of a house, it’s the demand to purchase that is most relevant, not the demand to rent. If inflation rears its head, you could see the demand to purchase rise while the demand to rent stays stable. Remember, just a very small percentage of the population determines the current price for real estate–those in the market.

  8. 8
    Chris says:

    RE: Kary L. Krismer @ 7
    I agree – I ignored the trendline in the graph as it didn’t make sense to me either, but the absolute ratio of housing units to households seems compelling.

  9. 9
    deejayoh says:

    By Pegasus @ 2:

    RE: Herman @ 1 – WE are still in deflation and will be for a few more years.

    The bond market seems to disagree…

    Treasury Draws Negative Yield for First Time During TIPS Sale

    The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in sparking inflation.

  10. 10
    David Losh says:

    RE: Herman @ 1

    Housing units are always a good investment, and hedge against inflation if they are owned free, and clear.

    it’s only money, but if you pay off a property in five years you will be ahead of the curve in terms of price.

    Buying out of area, say in a smaller community, you can buy for less, rent it out, and pay the principle down, quickly. The rent to purchase ratio is higher. Some people buy a place, rent it out, pay down principle, until it becomes an asset, then sell it for cash that they use as a hefty down payment on the next place.

    The game now, is how little you give the lender in interest payments.

    There are thousands of strategies today if you beat the bank on the amortization schedule.

  11. 11

    RE: deejayoh @ 9

    The Stock Market Last Week Was Expecting the Feds to Buy Like $1 Trillion

    In treasuries and even with a Stimulus II, this bond purchase would like be a Stimulus III. China, America’s real bank, is riding a 5 month manufacturing gain [autos and gym equipment] to date…..American stocks go up as they ride the outsourced labor. No wonder stocks go up with American unemployment increases. The $55B you mentioned is not what Wall Street wanted for domestic inflation to rekindle, it’s not near enough.

    I’d add too, without domestic job base increases [forget moot point China manufacturing, they don’t drive our purchasing with domestic stagnant incomes] with simultaneous household income increases [Social Security’s 60 million American recipients got no COLA], it will be deflation forever in America. That’s good news by the way, if you’re the main segment of America on frozen SS.

  12. 12
    Pegasus says:

    RE: deejayoh @ 9 – That must be why the 30 year Treasury is still trading below 4 percent with all of those inflation fears raging thru the market ;>)

  13. 13
    Hugh Dominic says:

    RE: Herman @ 1 – your question is whether housing is the best choice right now if you’re betting on inflation in 3-4 years.

    I will say yes, with a caveat. Yes, because compared to the other means to bet that scenario (e.g. gold), housing is the least-overpriced. It’s also subsidized in ways that are available to consumers, ways that institutional investors can’t use.

    The caveat is the uncertainty of government intervention… Or cessation of government intervention actually. I can’t predict what happens to housing when the suppressed mortgage rates rise, and property and interest tax deductions are eliminated.

  14. 14
    Pegasus says:

    If you wondered why many real estate related individuals posted copious times here trying to defuse legitimate questions about pricing, commissions, government support at taxpayer expense, predatory mortgages, foreclosure fraud, etc perhaps this is why…….

    Real Estate Brokers’ Commissions Lowest since 1982 as Percent of GDP

    http://www.calculatedriskblog.com/2010/11/real-estate-brokers-commissions-lowest.html

  15. 15
    Scotsman says:

    RE: deejayoh @ 9

    Um, deflation is what negative yields are all about. Given falling prices your dollars are worth more with every passing day- the interest is just the frosting on the cake. A negative yield just takes back some of that increasing purchasing power. While the fed may want to “spark” inflation I don’t know anybody who thinks they will be successful. There is no mechanism in place to increase wages, a necessary component of sustained inflation. Witness today’s report that spendable income has dropped. Deflation is winning and will for some time.

  16. 16
    Pegasus says:

    For clowns that proclaimed the foreclosure fraud is almost non-existent…..I give you…

    “Where’s The Note” Update

    “We’ve already started to hear back from some of the 200,000 homeowners that have gone to our site. So far, the responses are troubling.

    Some banks claim they have no idea where the note is. Others have sent what they claim is the note, but closer inspection shows that it’s a completely different document.

    But, the most troubling of all is the response that many homeowners have gotten from Bank of America. They’re telling customers they have no legal right to see their own note. Think about how absurd that is; your mortgage note is a contract you signed with your bank – and they’re telling you that you can’t see it?”

    http://www.zerohedge.com/article/wheres-note-update

  17. 17
    Chris says:

    RE: Scotsman @ 15

    Treasury bonds create a definitive market for inflation expectations. The inflation protected 5 year bond (TIPS) is selling at a yield of -.29% while the non-protected 5 year bond is selling at a yield of 1.23% – so the market is saying in no uncertain terms that it expects inflation over the next five years to be the difference between the two or 1.52%. Someone convinced of higher or lower inflation could short one and buy the other all day long – personally I think the market is efficient with its current view of inflation.

    http://www.federalreserve.gov/releases/H15/update/

  18. 18

    By Pegasus @ 16:

    But, the most troubling of all is the response that many homeowners have gotten from Bank of America. They’re telling customers they have no legal right to see their own note. Think about how absurd that is-

    What makes you think you have a right to see the note? Cite some law. Come on, you can do it. You’ve read the Internet!

    Face it, you don’t know what you’re talking about. You call something “absurd” without the slightest understanding of anything because you spend your days reading NUTCASE websites.

  19. 19
    Scotsman says:

    RE: Chris @ 17

    “personally I think the market is efficient with its current view of inflation.”

    Disagree, only because I don’t think you can separate out the influence of inflation/deflation expectations from other pricing factors. TIPS purchasers obviously have different fears and expectations about future volatility from those who purchase traditional bonds. My guess is that both interest rates are more a reflection of supply verses demand for liquidity and capital preservation along with opportunity costs than they are indications of expectations for future inflation rates. And let’s not forget that initial rates only capture a moment in time, not trends.

  20. 20
    Scotsman says:

    RE: Kary L. Krismer @ 18

    Kary jumps the shark?

  21. 21

    RE: Scotsman @ 20 – I just think Pegasus’ Tyler Durden has “20 days” tourettes syndrome. But in any case, I really doubt Pegasus can do anything more than copy and paste.

    Note sure if this link will work, but it’s worth a try:

    http://www.google.com/search?q=%22tyler+durden%22+%2220+days%22&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

  22. 22
    2kt says:

    RE: Scotsman @ 15

    Inflation is all about demand. So, you can have inflation in some goods and services, while deflation can take hold in others.

    At this point homes are in ample supply, hence the price declines.

    Bonds are in ample demand. This has nothing to do with low inflation expectations, but it is a case of higher demand due to investment allocation changes in both institutional and individual portfolios, as well as major risk avoidance. It has little to do with low inlation expectations.

    Speaking of which. You have higher food prices, higher commodities prices. Both are supposedly canaries of inflation. Then there’s gold, a supposed inflation hedge. So, Mr. Big Head, life is far more complicated that you are pitching here.

  23. 23
    Scotsman says:

    RE: 2kt @ 22

    Inflation has nothing to do with demand. You are confusing inflation/deflation, which is a measure of the changing relationship between the total supply of money and the total supply of goods and services, with price changes. Price changes are not inflation or deflation- they are simply price changes. Price changes do represent a delta in supply/demand considerations. Go do some more reading and come back when you’ve figured out some basic econ 101 definitions. Then we can have a meaningful discussion.

  24. 24
    2kt says:

    RE: Scotsman @ 23

    You have a very limited understanding of inflation. In terms of reading, most of the sources you so frequently quote are nearly worthless.

  25. 25
  26. 26
    Scotsman says:

    RE: 2kt @ 24

    No, I have a precise and correct understanding of the difference between systemic inflation and market price changes. You appear to be lost in the fog and fishing for some sort of redemption. Just admit you need to learn more and get to work, it plays better in the long run. Good night.

  27. 27
    Pegasus says:

    RE: Scotsman @ 20 – “The Federal Reserve Board (FRB) has announced final rules to implement a statutory amendment to the Truth-in-Lending Act (TILA) requiring that consumers receive notice when their mortgage loan has been sold or transferred. The new disclosure requirement became effective in May 2009, upon enactment of the Helping Families Save Their Homes Act.”

    http://nationalmortgageprofessional.com/news19658/new-rule-requires-customer-notification-upon-transfer-mortgage-note

    “Under federal law, your mortgage servicer must respond promptly to written inquiries, known as “qualified written requests” (see Sample Complaint Letter). If you believe you’ve been charged a penalty, late fee or some other fee by mistake, or if you have other problems with the servicing of your loan, write to your servicer. Include your account number and explain why you believe your account is incorrect. Send your correspondence to the address the servicer specifies for qualified written requests.

    The servicer must send you a written acknowledgment within 20 business days of receiving your inquiry. Then, within 60 business days, the servicer must correct your account or determine that it is accurate. The servicer must send you a written notice of the action it took and why, as well as the name and phone number of someone to contact.”

    http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea10.shtm

  28. 28
    wreckingbull says:

    RE: Pegasus @ 26 – Thanks Pegasus. Not only did Kary jump the shark with that comment, but I think BOA jumped the shark with their own comment. They could very well find themselves in the situation of needing more public-funded welfare, and I don’t think that statement they made is going to do them any favors in a senate hearing, especially considering today’s political climate.

  29. 29

    RE: wreckingbull @ 28 – If you think that, cite some law that says you have the right to see the note. Keep in mind that the original story (linked in Pegasus’s link) on this applied to all mortgages, not just those in default. But if you want to deal with just those in default, cite some law. ____ U.S.C. ____

  30. 30

    RE: Pegasus @ 27 – If you think that does it, you’re wrong. Where does that say they have to show you the note, even say where the note is physically located?

    Prove that you can do more than cut and paste. Show that you show even the slightest understanding of the things that you do cut and paste.

  31. 31

    By Pegasus @ 14:

    If you wondered why many real estate related individuals posted copious times here trying to defuse legitimate questions about pricing, commissions, government support at taxpayer expense, predatory mortgages, foreclosure fraud, etc perhaps this is why…….

    Real Estate Brokers’ Commissions Lowest since 1982 as Percent of GDP

    http://www.calculatedriskblog.com/2010/11/real-estate-brokers-commissions-lowest.html

    I didn’t have time to deal with this post last night. See the 9th post here:

    https://seattlebubble.com/blog/2009/09/09/quick-look-august-ytd-pending-and-closed-sales/

  32. 32
    Cheap South says:

    From Yahoo News –
    Nothing unexpected; but I think the most impressive number is the amount of empty homes (18.8 million nationwide). It would be nice to be able to find that number for the PS area.

    Homeownership at lowest level in a decade
    By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer 5 mins ago

    WASHINGTON – The nation’s homeownership rate is at the lowest level in more than a decade, hampered by a rise in foreclosures and weak demand for housing.

    The percentage of households that owned their homes was unchanged at 66.9 percent in the July-September quarter, the Census Bureau said Tuesday. That’s the same as the April-June quarter.

    The last time the rate was lower was in 1999, when the rate was 66.7 percent.

    The nation’s homeownership rate was around 64 percent from 1985 through 1995. It then rose dramatically during the Clinton and Bush administrations, hitting a peak of more than 69 percent in 2004 at the height of the housing boom.

    After the housing bubble burst, the rate has been declining gradually.

    About 18.8 million homes, or 14.4 percent of all houses and apartments, were vacant, according to the government survey. That was down slightly from the second quarter of the year, when 18.9 million houses and apartments were vacant.

    About 2.5 percent of all primary residences were vacant and for sale and 10.3 percent of all year-round rental units were listed as vacant and for rent.

  33. 33

    RE: Cheap South @ 32 – A 10% vacancy rate is killer! That’s the number I’d like to know locally, but I doubt anyone tracks that (as opposed to apartment vacancies).

  34. 34
    2kt says:

    RE: Scotsman @ 26

    Inflation is about money velocity just as much as its mass. Without demand, there’s no velocity. You probably could not trade your way out of a paper bag, so you stick to lecturing others on the blogs. Get a life.

  35. 35
    David Losh says:

    RE: 2kt @ 22

    You’re talking market price, rather than inflation. Inflation is what the currency does.

  36. 36

    By David Losh @ 35RE: Scotsman @ 23 – :

    RE: 2kt @ 22

    You’re talking market price, rather than inflation. Inflation is what the currency does.

    I would agree, at least as it pertains to what was said in post 22.

    The problem is, the CPI numbers can pick up that type of change and indicate inflation when it doesn’t exist, or at least increase the number. The best example of that was in the 70s during the oil crisis. Reduced supply of a major commodity increased prices of that commodity and many other items, but that doesn’t mean it was inflation–or at least the type of inflation you should do anything about by clamping down on the economy. My theory is that’s how we ended up with stagflation.

  37. 37
    David Losh says:

    RE: 2kt @ 34

    I missed this while posting the other comment about currency. Velocity is something entirely different.

    Number one, there is always demand. If the price declines to a point, or if it is free, or you are paid to take something, there will always be demand. That’s why it’s referred to as supply side economics.

    Just saying, there’s actually no point that I’m making one way or the other.

  38. 38
    David Losh says:

    RE: Kary L. Krismer @ 36

    As long as I’m here, the price of oil filters into everything, and that’s why it is commonly, now removed from quoting “core” inflation.

    In my opinion, the inflation that most people refer to today is when the government floods the currency markets with dollars that have no backing, no economic backing. Why we still have a gold market is way beyond my understanding.

  39. 39
    mukoh says:

    RE: Pegasus @ 16 – Nothing troubling about it in fact, even if the note is lost, and the bank can only produce a copy even, the whole fact that the borrower was paying on the note implies that he was complying with its terms. :)

  40. 40

    RE: mukoh @ 39 – I think he’s also trying to get to the issue of who the holder of the note is.

    I hope no one who is current on their mortgage stops paying because of such nonsense. The risk to them would probably be at least $1,000 if they go much longer than 3 months.

  41. 41
    deejayoh says:

    By Scotsman @ 15:

    RE: deejayoh @ 9

    Um, deflation is what negative yields are all about. Given falling prices your dollars are worth more with every passing day- the interest is just the frosting on the cake. A negative yield just takes back some of that increasing purchasing power. While the fed may want to “spark” inflation I don’t know anybody who thinks they will be successful. There is no mechanism in place to increase wages, a necessary component of sustained inflation. Witness today’s report that spendable income has dropped. Deflation is winning and will for some time.

    you’re just plain wrong on that one. Did you understand these were TIPS?

  42. 42
    Herman says:

    RE: deejayoh @ 41 – TIPS behave strangely when inflation is near-zero. It turns out that TIPS are alright in deflation because they don’t adjust the return if the CPI goes negative – they always return at least the face value of the bond.

    TIPS are good if you expect deflation or high inflation. Not very good if inflation hangs around 0-2%. My impression is that betting on TIPS is what you’d do if you think the Fed will lose control of the economy and succumb to either deflation or hyperinflation and you’re not sure which.

  43. 43
    wreckingbull says:

    RE: Kary L. Krismer @ 29 – Try reading my post again. My point is that it was a politically asenine statement make, regardless of anyone’s interpretation of the Real Estate Settlement Procedures Act, and ESPECIALLY from a bank that is holding the turd known as Countrywide. Your Tourette’s Syndrome statement holds a close second.

  44. 44

    RE: wreckingbull @ 43 – Okay, I read it again and your statement still seems to presume that BOA has to provide the documents. I don’t see how it’s going to cause them political trouble to deny invalid requests by debtors. Please explain.

  45. 45
    ChrisM says:

    Does NAR offer creative writing classes? Opening sentence from a listing: “Contingent offer, but this buyer can be bumped, so bring your offers! ”

    Days on market: 141

  46. 46
    One Eyed Man says:

    RE: wreckingbull @ 43

    The relevant text is at 12 USC 2605 (e).

    Subsection (e) is several paragraphs and about a page in total. You can read it at:

    http://www.hud.gov/offices/hsg/ramh/res/resp2605.cfm

    My personal interpretation of the statute would be that the borrower has a right to get copies of documents, but the borrower has no right to the actual original (until they pay off the note). Most courts require that the original be tendered to the court when you sue on a note, unless you prove up the note thru the lost note procedure.

    Under 12 USC 2605(e), the bank has 20 days to acknowledge receipt of the borrowers request and 60 days to provide a substantive response. For most of the requests, the 60 days probably hadn’t run yet.

    The article on zerohedge is generally weak sensationalism rather than facts and statistics. I’m not going to give a long explanation. I will say this. They haven’t provided the actual text that BAC sent to the borrower. If BAC said “we won’t produce the ‘original’ but we will provide you a copy” I think they are complying with the statute. That may be what they said, but there’s no way to tell from what’s on SEIU’s site or zerohedge or anyone else I looked at. It appears from their site that the SEIU request letter literally asks to see the “original” note, but I did’t find an actual copy showing the text of the letter.

    There’s also nothing that shows how many truely bad responses (or the percentage of bad responses) that came back from the banks. The info on the responses discussed by zerohedge also comes 3rd hand only if the borrower goes back and fills out another form telling SEIU what the bank did. Without specifics and statistics, the zerohedge article is just a lot of smoke. Just like somebody needs to pull back the curtain on the banks to make sure they’ve got the goods, somebody needs to pull back the curtain on the actual responses the banks sent rather than rely on the anecdotal BS being spread by zerohedge.

  47. 47
    deejayoh says:

    By Herman @ 42:

    RE: deejayoh @ 41 – TIPS behave strangely when inflation is near-zero. It turns out that TIPS are alright in deflation because they don’t adjust the return if the CPI goes negative – they always return at least the face value of the bond.

    TIPS are good if you expect deflation or high inflation. Not very good if inflation hangs around 0-2%. My impression is that betting on TIPS is what you’d do if you think the Fed will lose control of the economy and succumb to either deflation or hyperinflation and you’re not sure which.

    It’s fine if you want to disagree with the sentiment of the bond traders – but the signal of buying inflation-adjusted bonds at a discount from the fed clearly indicates an expectation of increased inflation on the part of the buyer. There is no wishy-washy, might be inflation, might be deflation signal to be taken from this. And as for the suggestion that there is some historical precedent for how TIPS perform in periods of low inflation – they were introduced in 1997 – so I am not sure what fact base you might be citing. Inflation has always been low. Have they always behaved strangely? I don’t think so.

    In general, bond traders are considered to be some of the smartest and most logical guys in the marketplace. With what’s going on in the junk market, maybe they have lost their minds. But there is really no other intrepretation for their actions other than increased expecations of inflation.

  48. 48

    Oct 2010 Investment Wrap-up Data to Impact Real Estate

    CD Bond Stock Foreign Foreign

    Oct 0.18% 0.36% 3.80% 4.48% 3.63%
    YTD 2.42% 8.46% 7.84% 16.70% 4.91%
    Last 12 mo 2.94% 8.16% 16.53% 29.17% 9.78%

    Looks Like a good year, if you were the small elite minority gambling heavily in bonds or stocks.

    Real estate prices not getting any of the take, most is getting hoarded away in safes by a wealthy few. Scotsman would say, the collapse is imminent…..but I like the actuals to date too.

    Unemployment worsening as the rich get richer outsourcing all our jobs…LOL….IMO, it’s likely the higher oil price impact too. The base get’s more expensicve with high energy prices, hence the fixed profit % sky-rockets too [until the underemployed American consumer can’t afford the markups anymore, like we saw when gas got to $4.5/gal].

  49. 49

    RE: One Eyed Man @ 46 – I think you’re being generous to state that they need to provide even a copy under the servicing statute. As a practical matter I suspect most any bank would provide a copy upon request, assuming it wasn’t a seemingly bogus request produced by a website, but I’m not seeing anything in that language that requires the bank to provide a copy. Is there something you saw in the language that would require that, either explicitly or implicitly?

  50. 50
    wreckingbull says:

    RE: One Eyed Man @ 46 – I’ll state it one final time. It does not matter how the statute is interpreted. Bank of America needs to get out in front of this from a policital and public relations standpoint. If they don’t, they will be in a very difficult situation if, and some would now argue when, they go back to our lawmakers for their next bailout.

  51. 51
    Pegasus says:

    RE: Kary L. Krismer @ 49 – The simple answer is, for the obfuscators, is every time the note changes hands the borrower must be notified within 30 days. Each transfer of ownership must be on paper not some mythical recording in most states. I am sure asking the servicer to provide the current owner and where the note resides will be considered a legitimate request especially when in foreclosure. You can’t foreclose unless you have the right to. Even most fools have figured that out by now as have most courts.

  52. 52
    David Losh says:

    RE: Kary L. Krismer @ 40RE: mukoh @ 39

    People should pay attention to this sage advice. No one has to provide you a copy of a Note after you start making payments. You are consenting to the contract.

    Did you get a reciept? Did you put a loan number on a check? Do you keep a record of your payments, or can you at least figure out where you are in repayment?

    I’m sure some bank, somewhere can prove you were given money, the terms of repayment may be in question, but the fact you took the money most assuredly is a matter of record.

  53. 53
    David Losh says:

    RE: Pegasus @ 51

    Yes, there are policies, procedures, laws, and fines, but are you going to spend the money to fight that? Probably not. What people should spend time doing is rearranging debt to get rid of it.

  54. 54
    David Losh says:

    RE: wreckingbull @ 50

    Bank of America doesn’t need a bail out.

    What’s interesting is that from another point of view these big banks saved our economy. Chase, Bank of America, and Wells Fargo stepped in to take over all of these bad old loans, and are now helping the American People sort it all out.

    From that point of view banks think they are heroes.

  55. 55
    Scotsman says:

    RE: deejayoh @ 47

    “but the signal of buying inflation-adjusted bonds at a discount from the fed clearly indicates an expectation of increased inflation on the part of the buyer. ”

    No, it doesn’t. All you can really say is that it indicates they didn’t like the initial coupon or interest rate, so they bought the bond at a price less than face value in order to increase the effective interest rate. Maybe they thought deflation was coming and that the interest payment would be adjusting downward so they wanted to start an a higher effective rate of return to hedge their bets. Maybe they were looking at other investment opportunities and the discount was required to bring the total returns on the bonds up to parity with other choices. But to pick one aspect of one factor and extrapolate it out to being the lead characteristic of an entire market is a bit too much.

  56. 56
    One Eyed Man says:

    RE: wreckingbull @ 50

    Just so you know wreckingbull, I directed the reply to you cause you were the last in the string when I wrote it and Kary had asked you for a cite to the law earlier. I could have just as easily posted it as a reply to Kary or to both.

    I don’t disagree with you that BAC would be stupid not to do it right with the appropriate PR. But from what’s been put out by SEIU so far, I’m not sure that’s something one can tell for sure yet. As far as I know, nobody has produced the actual text of the BAC letters. I find it hard to believe that even BAC would be stupid enough to pull down there pants, present their BA and say “kiss it” given the obvious shit storm already going on.

  57. 57

    By Pegasus @ 51:

    RE: Kary L. Krismer @ 49 – The simple answer is, for the obfuscators, is every time the note changes hands the borrower must be notified within 30 days. Each transfer of ownership must be on paper not some mythical recording in most states. I am sure asking the servicer to provide the current owner and where the note resides will be considered a legitimate request especially when in foreclosure. You can’t foreclose unless you have the right to. Even most fools have figured that out by now as have most courts.

    The post that started this exchange was you claiming that they had the right to see the original note. Is this your way of admitting that post was incorrect? Or do you still believe they have some right to see the original note?

    And I don’t see how asking the servicer where the note resides would be a reasonable request. They don’t have it! The bank who they are servicing, or some other third party on that bank’s behalf, would be holding the note. To ask the servicer of a mortgage where the note is would be like asking a tenant what the income and expenses are of an apartment house.

  58. 58

    By wreckingbull @ 50:

    RE: One Eyed Man @ 46 – I’ll state it one final time. It does not matter how the statute is interpreted. Bank of America needs to get out in front of this from a policital and public relations standpoint. If they don’t, they will be in a very difficult situation if, and some would now argue when, they go back to our lawmakers for their next bailout.

    I’m sorry, but the percentage of the population that reads nutcase websites is far too small for this to be a concern.

    This thread reminds me of something Tom Brokaw (sp?) said on Meet the Press last Sunday (paraphrasing): “Some people today don’t believe anything that a large government or business entity tell them, but they believe everything they read on the Internet.”

  59. 59

    RE: David Losh @ 54 – Bank of America may need a bailout if what they took on with Countrywide (and others?) was too much to swallow.

    I would add that BoA may very well have taken some funds at one point. Many banks that didn’t need to took funds to not be at a competitive disadvantage. That tended to be reversed though once the House and President Obama started threatening action against such financial entities.

  60. 60
    Pssing Match says:

    By Kary L. Krismer @ 58:

    By wreckingbull @ 50:

    RE: One Eyed Man @ 46 – I’ll state it one final time. It does not matter how the statute is interpreted. Bank of America needs to get out in front of this from a policital and public relations standpoint. If they don’t, they will be in a very difficult situation if, and some would now argue when, they go back to our lawmakers for their next bailout.

    I’m sorry, but the percentage of the population that reads nutcase websites is far too small for this to be a concern.

    This thread reminds me of something Tom Brokaw (sp?) said on Meet the Press last Sunday (paraphrasing): “Some people today don’t believe anything that a large government or business entity tell them, but they believe everything they read on the Internet.”

    Why not follow the money trail to determine what is truth and not truth? If you live in a world of fascist government and corrupted media, what other avenue will you have for determining truth? The Internet is a start. It’s not perfect, but it’s better than automatically trusting the words of a corporation or fascist government. Like-minded individuals may share truth and document it, once it is found. Corporations and fascist governments will not do that for you.

  61. 61

    RE: Pssing Match @ 60 – An Internet site where the author tries to sound important by throwing out “20 day” deadlines and provides no details is very unlikely to be a website that gives you “the truth.”

    But think about it for even a moment. The law is typically what you think it should be. Why should your bank be required to show you the original note within 20 days any time you request to see it? You received a copy of the note when you signed it, and you have some legal right to get it back when you pay it off. Why would the law possibly burden a lender with a requirement that they track down an original note every time a debtor asks? It makes no sense at all.

  62. 62

    By Kary L. Krismer @ 59:

    RE: David Losh @ 54 – Bank of America may need a bailout if what they took on with Countrywide (and others?) was too much to swallow..

    Countrywide is actually in the news today. A blogger started bankruptcy rumors.

    http://www.cnbc.com/id/39969666

  63. 63
    deejayoh says:

    By Scotsman @ 55:

    RE: deejayoh @ 47

    “but the signal of buying inflation-adjusted bonds at a discount from the fed clearly indicates an expectation of increased inflation on the part of the buyer. ”

    No, it doesn’t. All you can really say is that it indicates they didn’t like the initial coupon or interest rate, so they bought the bond at a price less than face value in order to increase the effective interest rate. Maybe they thought deflation was coming and that the interest payment would be adjusting downward so they wanted to start an a higher effective rate of return to hedge their bets. Maybe they were looking at other investment opportunities and the discount was required to bring the total returns on the bonds up to parity with other choices. But to pick one aspect of one factor and extrapolate it out to being the lead characteristic of an entire market is a bit too much.

    You still have it backwards, my scottish friend.. “Negative Yield” means paying more than the stated rate for the bond. So they are paying $101 for a bond with face of $100. Why? Because they assume inflation will be higher than forecast and increase the value of the bond.

    And I didn’t extrapolate. All I said was that the bond market disagreed. Any assumptions on extrapolations are on your part. All I did was correct those with fundamental misunderstandings of how bond pricing works….

  64. 64

    RE: deejayoh @ 63

    Here We Go Again: a $500B Stimulus II in the Planning by Bernanke

    Doesn’t sound like it will reduce income taxes, increase social security COLAs, reduce unemployment or bring down the deficit….LOL….no wonder the voters have become “enemies” of those who support “more too big to fall bailout status quo failures”.

    It’s all for the “false god”, lower interest rates for real estate…..

    http://www.bloomberg.com/news/2010-11-01/fed-likely-to-announce-500-billion-of-purchases-survey-shows.html

  65. 65
    Scotsman says:

    I assure you I understand how they work. But we do have some confusion over terms, probably because you take a more traditional/common perspective as an investor. Economists tend to look at things in terms of discounted rates of return, so I view the price/value of the bond as the face value plus the interest and then work it backwards. So I see it as someone paying less for the whole, but you are correct that they pay more than face value to get a reduced return. Unless it’s an extreme situation the total return isn’t negative, it’s just less than originally structured. They still get the face value of the bond back at maturity. I have to admit I don’t know the specific terms/discounts of the TIPS that were reported as going negative, so maybe it wasn’t just a reduced rate, but truly negative. But I’d be very surprised. Would investors take the negative hit just to get the inflation protection? Maybe, but I think there are better choices, so it’s hard for me to see it that way. But that’s what makes a market.

    I stand by my assertion that there are too many factors feeding into pricing right now to make broad assumptions about bonds accurately reflecting future expectations about inflation. Inflation concerns may be #1 or #7 depending on a whole host of other factors. If we were operating in a rational, fundamentals based economy such a claim might have merit. But it’s hard to see how that’s the case in our wildly unpredictable, heavily manipulated, perhaps fraud laced current situation.

  66. 66
    Hugh Dominic says:

    By deejayoh @ 63:

    And I didn’t extrapolate. All I said was that the bond market disagreed.

    Hmm, I also disagree. TIPS spreads can become distorted in a near-deflationary environment. You can read about this effect online, such as at the SF Fed, StL Fed, or Seeking Alpha web sites. Here’s one excerpt:

    “… This led to what at the time appeared to be a dislocation in the market for inflation-indexed Treasury bonds, or TIPS. As a result, very unusual price patterns in TIPS yields were observed during this period, as shown in Figure 1. … Needless to say, a dislocation of this magnitude in the TIPS market can seriously distort the inflation expectations readings from breakeven inflation rates.

    To understand the spread between seasoned and newly issued TIPS, I focus on an aspect of the TIPS market that did not receive much attention prior to the financial crisis—the value of the deflation protection embedded in the TIPS contract. In the TIPS contract, deflation protection comes from the fact that the investor is paid at maturity the greater of the original principal or the inflation-adjusted principal. But the payout is never adjusted downward, which means that deflation can’t reduce an investor’s principal. When net inflation over the life of a TIPS security is positive, the investor gets the full inflation-adjusted principal. But, when net inflation is negative, no adjustment takes place. The investor gets the original principal, not a smaller amount reduced for deflation.”

    http://www.frbsf.org/publications/economics/letter/2010/el2010-32.html

    TIPS are a complex instrument and you can’t jump to a one-dimensional extrapolation like you did. You have more work to do to prove your point. But that’s OK, you learned something new today and there’s no shame in admitting that.

  67. 67
    deejayoh says:

    RE: Scotsman @ 65 – I think I said “discount” when it wasn’t what I meant, so that could have been a source of confusion.

    That said, “official” goverment stats that show low inflation, And “unofficial” ShadowStats that show even higher levels of inflation

    http://www.shadowstats.com/alternate_data/inflation-charts

    So either our gov’t isn’t lying to us – and we have inflation, or it is lying to us – and we have higher inflation.

    But I don’t understand assertions like

    WE are still in deflation and will be for a few more years

    That’s just made up..

  68. 68
    Pegasus says:

    RE: Kary L. Krismer @ 57 – It does not matter whether they(the servicer) have it or not.You have a right to ask the servicer to provide proof that your monthly payments are going to the proper owner. Asking the servicer for proper proof by not only giving you the name and address of the current owner but where the underlying note is not only logical it is the way to verify who really owns your note and who has standing or not. Sending an QWR starts that action. Whether the servicer has the doc, twas ate by a dog, lost, destroyed purposely, transferred on, the real owner has it, etc. will have to be disclosed. That is why all of the fabricating, forging, back dating, lost note, etc. has been going on. Some say a lost Deed of Trust can’t be faked away but must be resigned by the original signers. Wot happens if the bank is banko? Hehe.

  69. 69
    Blurtman says:

    Early R.E.M housing related song. From the 1982(!) Chronic Town EP. Enjoy!

    http://www.youtube.com/watch?v=cLh9rs5JXyE&feature=related

  70. 70
    Pegasus says:

    By deejayoh @ 67:

    RE: Scotsman @ 65
    But I don’t understand assertions like

    WE are still in deflation and will be for a few more years

    That’s just made up..

    Actually when you remember the world’s asset base took a 35 percent hit it is not only logical that we deflated …it is a fact. Artificially pumping the stock market has only fixed a small portion of that lost equity. By increasing debt instead of decreasing the leverage just means on thing when it does unwind….massive deflation as the remaining assets are sold to pay down the debt. Fire sales and foreclosures everywhere will not push prices up.

  71. 71
    Pssing Match says:

    By deejayoh @ 67:

    RE: Scotsman @ 65 – I think I said “discount” when it wasn’t what I meant, so that could have been a source of confusion.

    That said, “official” goverment stats that show low inflation, And “unofficial” ShadowStats that show even higher levels of inflation

    http://www.shadowstats.com/alternate_data/inflation-charts

    So either our gov’t isn’t lying to us – and we have inflation, or it is lying to us – and we have higher inflation.

    But I don’t understand assertions like

    WE are still in deflation and will be for a few more years

    That’s just made up..

    Shadowstats offers alternative data that was **originally** at one time provided by the government, albeit from prior administrations. The “alternative” data shown on Shadowstats is therefore official government data. The site merely shows how sequential administrations take it upon themselves to re-engineer the numbers to make the economy look better during their time in office. Over time, this ultimately ends up creating different algorithms for measuring the same data. Choose the algorithm depending on the story you want to tell, which means the raw data no longer matters.

    BTW, please read this article from economist Michael Hudson for the broad view of inflation vs. deflation, and what is happening worldwide to create current conditions…
    http://michael-hudson.com/2010/10/why-the-imf-meetings-failed/

    It seems the BRIC countries are now paving the way for the eventual collapse of the US dollar, unless something intervenes to prevent this.

  72. 72
    Pegasus says:

    RE: Kary L. Krismer @ 62 – Amazing how this “nothing” has exploded to massive talk about large bank failures coming because of it……

  73. 73
    Lurker says:

    RE: softwarengineer @ 64

    My opinion is that the purpose of QE2 is to repair bank balance sheets, keep interest rates low, fight deflation and make the dollar more competitive. QE2 may hope to help some of those items you mentioned in an indirect manor by strengthening the economy.

  74. 74
    Pssing Match says:

    By Pegasus @ 72:

    RE: Kary L. Krismer @ 62 – Amazing how this “nothing” has exploded to massive talk about large bank failures coming because of it……

    And also Ambac Financial Group is expected to go bankrupt by 2010 end –
    http://www.fiercefinance.com/story/ambac-seek-prepackaged-one-bond-insurer-left/2010-11-01

    http://news.coinupdate.com/potential-ambac-bankruptcy-will-likely-affect-gold-and-silver-markets-0516/

    “Ambac and its subsidiaries were one of the two major companies that sold insurance to guarantee payments on mortgage-backed debt. As you are no doubt aware, the company has experienced unprecedented levels of claims as record numbers of homeowners have defaulted on their mortgages since 2007.

    In March, the Wisconsin insurance commissioner, whose office regulates the Ambac Assurance Corp. subsidiary, seized $64 billion of Ambac’s most troubled assets. Last month, he filed a plan to establish a segregated account of these assets so that they could only be used to pay off Ambac’s bondholders. Hedge funds holding more than $1 billion of residential insurance mortgage debt have filed suit to prevent that subsidiary from using these assets to repay bondholders instead of for settlement of claims.

    Ambac and MBIA were the two largest companies selling policies to insure against bond and other derivatives defaults. Their losses in 2008 helped spark the early leg of the financial meltdown. Along with insurer AIG, the US government (meaning the taxpayers) provided hundreds of billions of dollars to prop up these insurance companies.

    Besides providing insurance on derivatives, Ambac also issues policies that guarantee repayment of municipal bonds. The losses from residential mortgages could impair Ambac’s ability to cover the growing level of losses in this market niche.”

  75. 75
    Pssing Match says:

    RE: Pegasus @ 72

    Something else to be aware of that will likely affect markets in a big way… the expected bankruptcy of Ambac Financial Group before 2010 end. Look it up… remember what AIG did to the market?

  76. 76

    RE: Pegasus @ 68 – By Pegasus @ 68:

    RE: Kary L. Krismer @ 57 – It does not matter whether they(the servicer) have it or not.You have a right to ask the servicer to provide proof that your monthly payments are going to the proper owner. Asking the servicer for proper proof by not only giving you the name and address of the current owner but where the underlying note is not only logical it is the way to verify who really owns your note and who has standing or not. Sending an QWR starts that action. Whether the servicer has the doc, twas ate by a dog, lost, destroyed purposely, transferred on, the real owner has it, etc. will have to be disclosed. That is why all of the fabricating, forging, back dating, lost note, etc. has been going on. Some say a lost Deed of Trust can’t be faked away but must be resigned by the original signers. Wot happens if the bank is banko? Hehe.

    I’ll just take that as an admission that the debtor doesn’t have the right to see the original note. I’m tired of asking you to admit that, but since you haven’t restated that position, I think it’s pretty clear at this point.

  77. 77

    By Pegasus @ 72:

    RE: Kary L. Krismer @ 62 – Amazing how this “nothing” has exploded to massive talk about large bank failures coming because of it……

    You do realize that there can be many reasons for mortgage putbacks, right? It’s probably doubtful that your reason would be one of them since the remedy would be merely to correct the documentation.

  78. 78
    deejayoh says:

    By Pssing Match @ 71:

    Shadowstats offers alternative data that was **originally** at one time provided by the government, albeit from prior administrations. The “alternative” data shown on Shadowstats is therefore official government data. The site merely shows how sequential administrations take it upon themselves to re-engineer the numbers to make the economy look better during their time in office. Over time, this ultimately ends up creating different algorithms for measuring the same data. Choose the algorithm depending on the story you want to tell, which means the raw data no longer matters.

    BTW, please read this article from economist Michael Hudson for the broad view of inflation vs. deflation, and what is happening worldwide to create current conditions…

    Yes, my understanding is that the US government has long had an economic interest in understating inflation in order to minimize payments under SS COLA provisions. That the pimary political motivation for changing the definiton of inflation over time. Less money spent on old people means more money to spend on things we don’t need. But by either explanation, it has not been a random effect. It is decidely trended to understate inflation – which seems to me further reinforce the view that in a historical context, we are not experiencing deflation.

    Never heard of Michael Hudson, so not sure what to make of the article. He mentions debt deflation one time, which is not the same thing as monetary deflation.

  79. 79
    deejayoh says:

    By Pssing Match @ 74:

    Something else to be aware of that will likely affect markets in a big way… the expected bankruptcy of Ambac Financial Group before 2010 end. Look it up… remember what AIG did to the market?

    Things that are expected generally don’t move markets.

  80. 80
    EconE says:

    So TIPS point to inflation.

    Big deal. I would expect investors to hedge themselves both ways.

    Commodities?

    How’d those ramp ups end in 2008?

    So what points to deflation?

    Companies hoarding cash at record levels.
    Low 10 20 and 30 year treasury rates.
    Low mortgage rates.

    Banks aren’t going to loan 30 year money to people at record low rates if they are in the inflationary camp. Period.

  81. 81
    Scotsman says:

    RE: deejayoh @ 67

    “That’s just made up..”

    Well I’ll give you this- traditional inflation stats are showing an upward trend in their market basket of goods, the numbers that the government reports. But my economist brain defines inflation as a change in the relationship between the available money supply and the available goods and services in the market. If money is the sum of available cash and mortgageable assets then we’ve taken a real hit and are still headed down. But the market basket statistics pick up a lot of temporary price changes, currently in commodities (thanks to speculation) and energy. I doubt those will last as unemployment stays high and spending remains restrained. There’s also the issue of the falling dollar which hits energy and other imports pretty hard. We’re looking at 20% down or so in the last couple of years. But none of those are really inflation by strict definition, and they won’t have a lasting impact the way a huge increase in the money supply will. I know I get too picky here as I wade off into the deep end, but the differences can be significant in terms of how the longer term structure of the economy plays out. We’re still looking at little bursts of price increases that report as inflation but won’t neccessarily have the staying power.

  82. 82
    David Losh says:

    RE: Kary L. Krismer @ 62

    Bank of America, as a servicer, is collect fees. They are busy, and even if X number of loans default they are still coming out ahead. It’s a pool of funds.

    The whole Pegasus mess goes back to loan servicers who have ended up with huge amounts of fee collections. The question is, couldn’t say, Wells Fargo send out a bunch of loan servicing notices and start collecting payments, and fees?

    I don’t really want to get into it, other than to say keep your receipts.

    And by the way the loan portfolios are so broad, in my opinion, we dodged the bullet on over all banking defaults of the big three, or four.

  83. 83
    Pssing Match says:

    By deejayoh @ 78:

    By Pssing Match @ 74:

    Something else to be aware of that will likely affect markets in a big way… the expected bankruptcy of Ambac Financial Group before 2010 end. Look it up… remember what AIG did to the market?

    Things that are expected generally don’t move markets.

    No one knows about it yet. It’s not on the TV…

  84. 84
    Pssing Match says:

    By deejayoh @ 77:

    By Pssing Match @ 71:

    Shadowstats offers alternative data that was **originally** at one time provided by the government, albeit from prior administrations. The “alternative” data shown on Shadowstats is therefore official government data. The site merely shows how sequential administrations take it upon themselves to re-engineer the numbers to make the economy look better during their time in office. Over time, this ultimately ends up creating different algorithms for measuring the same data. Choose the algorithm depending on the story you want to tell, which means the raw data no longer matters.

    BTW, please read this article from economist Michael Hudson for the broad view of inflation vs. deflation, and what is happening worldwide to create current conditions…

    Yes, my understanding is that the US government has long had an economic interest in understating inflation in order to minimize payments under SS COLA provisions. That the pimary political motivation for changing the definiton of inflation over time. Less money spent on old people means more money to spend on things we don’t need. But by either explanation, it has not been a random effect. It is decidely trended to understate inflation – which seems to me further reinforce the view that in a historical context, we are not experiencing deflation.

    Never heard of Michael Hudson, so not sure what to make of the article. He mentions debt deflation one time, which is not the same thing as monetary deflation.

    Michael Hudson is research professor of Economics at University of Missouri, Kansas City (UMKC). He is also a Wall Street analyst and consultant as well as president of The Institute for the Study of Long-term Economic Trends (ISLET) and a founding member of International Scholars Conference on Ancient Near Eastern Economies (ISCANEE).

    He has been economic advisor to the U.S., Canadian, Mexican and Latvian governments, and to the United Nations Institute for Training and Research (UNITAR).

    Hudson is a former balance-of-payments economist for Chase Manhattan Bank and Arthur Andersen, and economic futurist for the Hudson Institute (no relation). For Scudder, Stevens & Clark in 1990, he established the world’s first Third World sovereign debt fund, which became the second best performing international fund in 1991.

    Professor Hudson is the author of several books. Professor Hudson received his Ph.D. in economics from New York University in 1968.

    The bailout liquidity created by the Federal Reserve was created in the form of debt (treasury bonds) which were then auctioned off to convert this to US dollars (creating dilutionary US dollars out of thin air, via debt/bond creation). This is why he refers to debt and credit instead of US dollars (money).

  85. 85

    RE: David Losh @ 81 – I wouldn’t worry about Wells Fargo sending out a bunch of false notices, but it is somewhat surprising that some totally fictitious entity hasn’t tried that. That’s not really what Pegasus is talking about, however.

    My guess is it doesn’t happen because they don’t have enough information to send out a proper notice, and collecting would be risky since you’d have to set up a PO Box and website.

  86. 86
    David Losh says:

    RE: EconE @ 79

    Absolutely, interest rates should be telling you everything you need to know.

    Deflation is global.

    We’re calling it currency wars, but in even looking for the G20 link to show you that deflation is a currency issue rather than a basket of goods issue I had to wade through a bunch of conspiracy theory carp including Ron Paul.

    http://www.nation.co.ke/News/world/G20%20summit%20confronts%20currency%20row/-/1068/1038906/-/14pi7oqz/-/index.html

  87. 87
    David Losh says:

    RE: Kary L. Krismer @ 84

    This is what Pegasus is talking about, because there is no mention about how many times the same Note has been used to collateralize any set of securities, which is the ultimate issue.

  88. 88
    Blurtman says:

    “Middle class wages have been declining for ten years and stagnant for thirty years, and if you have a financial system that allows people making $15,000 a year to take out $400,000 mortgages, I don’t think that’s the fault of the guy making $15,000. I think it’s the fault of the financial system.

    “But, let’s say I’m a guy who makes $15,000 a year. I realize, wow, I can get a $400,000 mortgage and I can live in this house for a few years, and if housing prices go up, I can flip it and I can actually make a couple hundred thousand dollars. And let’s say I’m really clever, and I say, if housing prices go down, I’ll just walk away and I will have gotten to live in a really nice house for three years at no cost to myself. I mean, that’s the worst, most cynical spin you can put on it, right? But this is exactly what people on Wall Street do. The person who is criticizing the janitor for doing this is the same person who thinks that businesses should exploit every legal opportunity to make profits. So even if you attribute the worst possible state of mind to the guy making $15,000, he’s still just doing what any businessman should do under the circumstances. But our national ideology somehow doesn’t allow us to think about it in those terms.”

    http://baselinescenario.com/2010/11/01/interview-in-the-straddler/

  89. 89

    By Blurtman @ 87:

    �Middle class wages have been declining for ten years and stagnant for thirty years, and if you have a financial system that allows people making $15,000 a year to take out $400,000 mortgages, . . ../

    I think your numbers are a bit off, but I agree with your first statement about real wages declining.

    My first job in high school in 1974 started at $3.00 an hour at Safeway. That was significantly higher than minimum wage, and a lot more than what the baggers made. The regular clerks topped out at about $8.00 an hour or so, over 3x minimum wage. In college in 1981 I topped out at UPS at about $12.64 an hour, and the drivers made about $14.00 an hour. That was a lot more than what most workers made at the time. Now the minimum wage is apparently over $8.00 an hour, but the wages paid at Safeway and UPS have not increased anywhere near the same on a percentage basis. That those are union jobs (although admittedly retail clerks is a very weak union). The average Joe simply doesn’t make that much money now, relative to the not so distant past.

  90. 90

    By David Losh @ 87:

    RE: Kary L. Krismer @ 84

    This is what Pegasus is talking about, because there is no mention about how many times the same Note has been used to collateralize any set of securities, which is the ultimate issue.

    I don’t recall any allegation that a note has been collateralized more than once. There are allegations that the assignments have not been done properly and/or are unperfected, but that’s an entirely different issue.

  91. 91
    wreckingbull says:

    RE: Kary L. Krismer @ 58 – Perhaps. Interesting to note that “The Internet” told me that real estate agents were full of crap back on 2006. Turns out “The Internet” was right. Go figure.

  92. 92

    RE: wreckingbull @ 91 – No, just turns out you believe what you read on the Internet. Ironic that you’re the example, not the example you tried to give. ;-)

  93. 93

    RE: Kary L. Krismer @ 89

    Check Out Your Local Grocery Stores Lately Kary Today

    10-20 years ago all the checkers were middle aged union workers making great pay. Lately, I see most of them were weeded out and replaced with lesser paid, minimum wage or there-abouts youth replacement workers. Where did the older senior paid workers go?

    The Fred Meyer union litigations lately were on this topic….unfair firing of senior workers for innocuous reasons, then replace ’em with cheaper ones. I see grocery stores like QFC go out of business and all the senior workers lose their jobs, another way to sift them out permanently.

  94. 94

    RE: softwarengineer @ 93 – I thought it was just me getting older! ;-)

  95. 95
    David Losh says:

    RE: Kary L. Krismer @ 90

    Obviously you don’t follow the conspiracy theories the way we older folks do.

    The whole point of the “lost documentation” was that those documents allegedly collateralized multiple securities. The other conspiracy is that good docs could replace defaulted docs to make a package look good, and banks could just keep up this trading to make the balance sheets look good. There’s a million of them.

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