Mid-Week Open Thread (2011-02-09)

Here is your open thread for the mid-week on February 9th, 2011. 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.

38 comments:

  1. 1
    Pegasus says:

    Bankster Vs Deadbeat

    Still confused about some of the key, shall we say, “dynamics” and “motives” prevalent during the build up phase to the housing bubble peak? The latest xtranormal cartoon explains it all.

    http://www.zerohedge.com/article/bankster-vs-deadbeat

  2. 2

    More nonsense from Zillow with bogus studies:

    http://seattletimes.nwsource.com/html/businesstechnology/2014166638_zillow09.html

    Zillow can’t determine the value of a house with very good accuracy, they can’t determine how much is owed on a house from the public records, but they think they can come up with a percentage of houses that are underwater. That is truly magical.

  3. 3
    David S says:

    RE: Pegasus @ 1 – Awesome link. Sent off to several people and posted it on my FB page. Thank you.

    A well put together, brief, concise synopsis with a sense of humor.

  4. 4

    KZOK News Reported This Morning

    That 33% of Seattle’s home loans are “underwater”. And my guess is the 67% that aren’t underwater are mostly the types not to use their home as an ATM machine.

  5. 5

    RE: softwarengineer @ 4

    Side Note

    I like classic rock music, but hate that “good news” slant hogwash that KJR emphasizes….KZOK on the other hand: calls the shots fairly clear, honest and pragmatically IMO….then adds dry humor to put a smile on my face….

  6. 6

    RE: softwarengineer @ 4 – I think you’re correct that a lot of people underwater used their homes as ATM, but that’s mainly because homes don’t really turn over that fast. Not that many as a percentage have sold since 2005. (BTW, the ATM thing is really true of the bankruptcies I review, but that’s a special subset of the population.)

    That doesn’t change the fact though that that study is pure cow manure.

  7. 7
    Blurtman says:

    RE: softwarengineer @ 4 – Nothing can be underwater as mark-to-market has been suspended. It is only upon resale that the loss is “suddenly” realized. That goes for seconds big time. as the banks are not recognizing these worthless loans.

    But the bulls are loving life. I was going to bail when the Dow hit 10,000. Now I am aboard for 14,000. That is the problem with bubbles, but you cannot fight expectations in the short run.

  8. 8
    Blake says:

    Getting ready for Fincrisis, round 2… When it’s a “bi-partisan” deal then you know it’s got trouble written all over it!
    http://www.huffingtonpost.com/rj-eskow/fannie-freddie-and-privat_b_820593.html
    -snip- “Doomsday. Mark your calendars. This may be remembered as the week our next financial crisis began, the moment when the Greenspan Republicans and Rubin Democrats who ruined the economy the last time around regained control… and the cycle began all over again. Only two short years after Wall Street’s fraud and greed brought down the world’s economy, a Beltway think tank is proposing to put taxpayers on the hook for mortgages written and administered by the same corporate miscreants.

    And that’s the Democratic proposal. The Republicans want to double down on a failed strategy of “privatizing” government mortgage financing, while at the same time cutting back on regulation and oversight. It all boils down to the same thing: bringing back the same sybaritic, taxpayer-backed greedfest that ‘s already shattered the economy more than once.”

    …geniuses I tell you… geniuses…

  9. 9
    WestSideBilly says:

    RE: Blake @ 8 – The pathetic bank “reform” bill from 2009 should have clued you in that neither party has any interest in reigning in the big banks.

  10. 10

    RE: WestSideBilly @ 9 – Not to mention the bankruptcy legislation from around 2005.

  11. 11
    Blurtman says:

    RE: Blake @ 8 – Excellent writing in the Huff Post story. Anyone who wonders how banks that comitted fraud did so to their deteriment and demise, here is the answer eloquently described. The exces filled their pockets on bonsues and salaries based upon fraudulent business generation. This should be easily understood.

    ” Mudd and Levin did what many executives would do in a similar situation: They lowered their underwriting standards, wrote a lot of bad mortgages, and walked away as rich men. Mudd now lives comfortably in Connecticut with $80 million in earnings, thanks to the American taxpayer, and is a director for an investment fund (Fortress Investment Group — a name we’re providing as a public service to unwary investors).”

  12. 12
    pfft says:

    By Blurtman @ 7:

    RE: softwarengineer @ 4That is the problem with bubbles, but you cannot fight expectations in the short run.

    The other problem is that your bearish viewpoints might just be wrong! same thing I guess?

    “There is only one side to the stock market; and it is not the bull side or the bear side, but the right side.”

    -Jesse Livermore
    Reminiscences of a Stock Operator

  13. 13
    Blurtman says:

    RE: pfft @ 12 – Rethink weather I am bearish on the stock market.

  14. 14

    A couple of weeks ago we were discussion possible fines to agents for nominal price reductions. That didn’t make the top 5 of automatic fines. ;-(

  15. 15
    David S says:

    RE: Kary L. Krismer @ 14 – This discussion was brought up on Redfin and answered wonderfully by one Janelle Saylor here:

    http://forums.redfin.com/t5/Seattle/bd-p/Seattle

    There must be a great deal of disgust among the veiwing public of these practices by listing agents. They keep digging themselves deeper.

  16. 16

    RE: David S @ 15 – Can you give a more specific link, or a title of the post?

  17. 17
    Pegasus says:

    Deadbeat Bank | Raw Video of Sheriff Serving Writ of Possession on Bank to Seize All Property Including ALL Cash

    Basically the background on this case is the bank was not able to prove it had the right to foreclose on the home, the case was dismissed and the court awarded the homeowner’s attorney his legal fees.

    After months and months of unsuccessful attempts to collect, the homeowner’s attorney received an order from the court to seize the banks property since the Deadbeat Bank did not pay their bill.

    http://www.zerohedge.com/article/deadbeat-bank-raw-video-sheriff-serving-writ-possession-bank-seize-all-property-including-al

  18. 18
  19. 19
    Scotsman says:

    Whoo Hoo- dad brag- child number two is a National Merit Finalist. Good work, kid! Now back to our regularly scheduled bear news.

  20. 20
    Blurtman says:

    Hero pilot Chesley ‘Sully’ Sullenberger suing Sonoma bank

    The pilot who earned international acclaim for safely landing a stricken airliner in the icy waters of the Hudson River in 2009 is suing officials at the former Sonoma National Bank and others for fraud related to a real estate deal that included a Jiffy Lube franchise.

    Chesley Sullenberger and his wife, Lorraine, claim that bank officials and a real estate broker duped the Danville couple into purchasing the property in the city of Paradise in Butte County for an over-inflated price of $935,000 in 2002.

    The couple is seeking to have the original loan nullified and to be reimbursed for what they contend have been overpayments.

    http://www.pressdemocrat.com/article/20110208/ARTICLES/110209508?source=patrick.net#article_text

  21. 21

    RE: David S @ 18 – That’s a slightly different issue. If the listing actually expires (as opposed to being canceled), I’m not sure that there’s anything that keeps the agent from changing the price by even one dollar on the new listing. I’m not even sure there’s a rule against listings that only last two weeks.

  22. 22
  23. 23
    Blurtman says:

    RE: Kary L. Krismer @ 22 – Whilst MBA’s might be a problem, in this case I think the lawyers bear some culpability. This “someone else must pay” mentality is only encouraged by the policies of the recent past and now current adminstrations.

  24. 24
    David S says:

    RE: Kary L. Krismer @ 21 – It seemed like both the list delist list delist list delist (that has a cadence to it) and the miniscule price changes were all addressed to me. Seemed like the viewing public was tired of seeing it and it also seems like the MLS is not doing it’s police work on the issues.

  25. 25
    Mel J. says:

    Time to stop buying….again?

    In 2010 I bought two properties locally, one 34% below its 2007 price, the other 48% below its 2005 price. Both were super deals.

    Factors are again conspiring to ‘stop cold’ additional purchases:
    1. With my first new residential vacancy in a year, I am finding a market glutted with more vacancies than ever and rents that have fallen roughly 6 to 8% from last year at this time.
    2. Interest rates are soaring, reducing the limited number of potential properties that will actually pencil out even further.
    3. Even though sales prices are significantly below tax assessed valuations, County Assessors are refusing to accept sales price as the true value and artificially maintaining assessed values (and resultant property taxes) higher than they should be.
    4. Having managed properties for over 30 years, both residential and commercial, it is clear things are getting worse, not better, in the Northwest. We are lagging the national market. We have at least another year before we hit bottom.

    Anyone else seeing things differently in their crystal balls?

  26. 26

    RE: Mel J. @ 25

    Mel, You and I Agree on Property Tax Assessment Fraud in King County

    Now the others bloggers will stampede us with, “the taxes will stay the same, even if the assessment plummets allegation(s)”…

    Trouble with that viewpoint, IMO, is what I see in writing on voter pamplet(s) that matches school, fire, etc tax increases to guess what….% of assessed value….LOL, not to worry, I read it all wrong….

  27. 27

    RE: softwarengineer @ 26 – When I’ve explained how tax assessments work I’ve almost always mentioned there are some items like fire districts and school levies that are based on price. For example:

    http://blog.seattlepi.com/realestate/archives/160881.asp

    In that piece those taxes totaled about 6% of the total tax.

    Also, I’d point out that the entity that does the assessments is one of those that does not benefit from the increase in value.

  28. 28
    Dirty Renter says:

    Amusing thread today.
    Sully wants a mulligan…and the bears are now making money hand over fist in the market.

    Oh, and RIP…. FASB 157. And to think it was only 17 months old, w/ so much promise.

  29. 29
    Scotsman says:

    RE: Mel J. @ 25

    Wages are the last thing to be hit in a contraction like the one we are in, and we haven’t seen that yet. Unemployment- yes, average wage reductions- those are still to come. Rents will neccessarily reduce.

    This won’t help either- CBO admits Obama Care will eliminate 800,000 jobs.

    http://hotair.com/archives/2011/02/10/video-cbo-admits-obamacare-will-kill-800000-jobs/

  30. 30

    RE: Kary L. Krismer @ 27

    Kary, Do You Think Seattle’s 8% 2011 Hike in Property Tax Isn’t Pure Fraud With Today’s Plummetting RE Values?

    http://www.seattlepi.com/local/435247_propertytax10.html?source=rss

  31. 31

    RE: softwarengineer @ 30 – Given the system, that is about what you would expect.

    The assessments are based on January values. January 2010 King County was within about 7k of January 2009, so basically flat countywide. Or you could use 154 to 145 for the three county Case-Shiller numbers. But that article is for Seattle proper, and we know that the prices have done much worse in outlying areas, so even if a Seattle home stayed even you would expect a tax increase. Then you add in other types of property that have done worse, such as condos, commercial, unimproved land, etc., and it’s amazing that the tax increase isn’t more!

    (BTW, I know the King County Assessor’s office has a statement that they use a three year moving average, but I’ve yet to see any statutory authority for doing that or any evidence that’s actually what they do based on the assessments I’ve seen.)

  32. 32
    pfft says:

    By Scotsman @ 29:

    RE: Mel J. @ 25

    Wages are the last thing to be hit in a contraction like the one we are in, and we haven’t seen that yet. Unemployment- yes, average wage reductions- those are still to come. Rents will neccessarily reduce.

    This won’t help either- CBO admits Obama Care will eliminate 800,000 jobs.

    http://hotair.com/archives/2011/02/10/video-cbo-admits-obamacare-will-kill-800000-jobs/

    you are such a hack. the jobs will still be there those people won’t be doing them.

    some people will no longer have to work just to afford health insurance.

    http://www.politico.com/news/stories/0211/49273.html

    as usual dean baker debunked your talking point days ago.

    That “Job Killing” Health Care Bill: AP Does Real Reporting
    http://www.cepr.net/index.php/blogs/beat-the-press/that-qjob-killingq-health-care-bill-ap-does-real-reporting

  33. 33

    RE: pfft @ 32 – Rather obviously it’s not going to kill any jobs. As of right now it’s unconstitutional and there’s been no stay pending appeal on that ruling. ;-)

  34. 34
    pfft says:

    By Kary L. Krismer @ 33:

    RE: pfft @ 32 – Rather obviously it’s not going to kill any jobs. As of right now it’s unconstitutional and there’s been no stay pending appeal on that ruling. ;-)

    actual the score is 2-2 as far as it’s constitutionality.

  35. 35
    pfft says:

    ron paul being his same old crazy self.

    As for inflation, “I think there’s plenty,” Rep. Paul says, citing “skyrocketing” commodity prices and rising food prices. One problem is the Fed’s reliance on core CPI, which famously excludes food and energy and relies on hedonic adjustments. “They rig that number,” he says. “[Bernanke] looks at government stats that are fudged to reassure him he doesn’t have to do anything.”

    CPI is pretty transparent. most of the zombie inflationists don’t know why inflation is overstated they just read it on the internet. I used to be one of those people.

    Ron Paul: QE2 Is a Total Failure and Bernanke Is Delusional About Inflation
    http://finance.yahoo.com/tech-ticker/ron-paul-qe2-is-a-total-failure-and-bernanke-is-delusional-about-inflation-535915.html;_ylt=AuJAiYmj2AtVqPHHgzW90My7YWsA;_ylu=X3oDMTE1NGFnMmh1BHBvcwM3BHNlYwN0ZWNoVGlja2VyBHNsawNyb25wYXVscWUyaXM-?tickers=%5EDJI,%5EGSPC,UUP,UDN,TBT,TLT,GLD

    MIT has their own CPI calculations that are similar to teh governments.

    http://bpp.mit.edu/daily-price-indexes/?country=USA

  36. 36

    By pfft @ 34:

    By Kary L. Krismer @ 33:

    RE: pfft @ 32 – Rather obviously it’s not going to kill any jobs. As of right now it’s unconstitutional and there’s been no stay pending appeal on that ruling. ;-)

    actual the score is 2-2 as far as it’s constitutionality.

    It doesn’t matter. There’s one ruling that has held the entire law unconstitutional. That ruling controls unless appealed and stayed. I have no doubt that will happen, but as of right now it has not.

    Stated differently, post 33 was a tiny bit of legal humor. Very tiny.

  37. 37
    EconE says:

    RE: pfft @ 35

    Where was RP wrong?

    The BLS even tells you about Hedonic Adjustment.

    http://www.bls.gov/cpi/cpihqaitem.htm

    You zombie morons just don’t seem to get it though.

  38. 38
    pfft says:

    By EconE @ 37:

    RE: pfft @ 35

    Where was RP wrong?

    The BLS even tells you about Hedonic Adjustment.

    http://www.bls.gov/cpi/cpihqaitem.htm

    You zombie morons just don’t seem to get it though.

    so what is so wrong with it and how much does it understate or overstate inflation?

    “The BLS even tells you about Hedonic Adjustment.”

    you would think they’d keep that a secret!

    this is a pretty good article. hedonic adjustments basically cancel each other out.

    Bill Gross’s `Con Job’ Was Inaccurate and Flawed: John M. Berry
    http://www.bloomberg.com/apps/news?pid=newsarchive&refer=columnist_berry&sid=a7yZyxZ7nrPU

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