Mid-Week Open Thread (2012-02-01)

Here is your open thread for the mid-week on February 1st, 2012. 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.


  1. 1
    ChrisM says:

    Inflation v. deflation. One thought would be to see what the Fed Presidents are personally holding in their own portfolio.

    On the other hand, given their inability to see the housing bubble and resulting crash, that may not be such a good idea…

  2. 2

    By ChrisM @ 1:

    On the other hand, given their inability to see the housing bubble and resulting crash, that may not be such a good idea…

    It would still be useful. It would just affect whether you do the same thing, or the opposite.

  3. 3

    High Real Estate and Rent Costs in Seattle Breed Desparation?

    I’m sure the average of 5% of America’s workers working two jobs is far worse in high rent/mortgage cities like Seattle, its a logical assumption.

    “…In 2010 there were about 6.8 million people or 4.9% of the population working two jobs.

    Hmmm… at the same time about 10% of the population was unemployed. Those dual job workers are hogging jobs! I’m mostly kidding here. I’m sure most people working multiple jobs are not doing so for fun and they likely have to work multiple jobs to support themselves and their families.

    A little over half of the people with two jobs have a full time job and a part time job. About a quarter have two part time jobs. A small amount of people actually work two full time jobs (80 hours a week)….”


  4. 4

    RE: ChrisM @ 1

    We Create Inflation/Deflation Through Item Shortages or Gluts

    Its a basic supply and demand economic rule.

    Rents go up when the supply of rentals go down, and/or home buying decreases.

    Homes go down in price when no one will buy the items at today’s prices. Same with gasoline, etc…

    When money supply is crimped or all saved and not spent, prices go down too.

  5. 5
    Sweet Pea says:

    Ta-da! Fannie/Freddie foreclosure sales to investors is greenlighted.


    “Those investors meeting the qualifications set by the Federal Housing Finance Agency could purchase homes and then convert them into rental units under the new program. They would be required to use the properties as rentals for a specific number of years.”

    Anyone know what the qualifications are? I didn’t find them posted anywhere obvious, but I don’t surf the Fannie/Freddie/FHFA sites.

  6. 6

    RE: Sweet Pea @ 5 – Please post if you find something more on that, including things beyond the qualifications. Just what that is, well that’s very unclear.

    Fannie has been very good letting investors buy their REO listings with their Homepath financing. This seems to be something more than that, perhaps requiring buying multiple properties.

  7. 7

    RE: Sweet Pea @ 5

    I Read the Article

    The key word is “plan” regarding it, not immediate implementation? Also, in regards to qualified buyers, no details. I agree with Kary, we need more to chew on.

    What we know recently last month about Freddie/Fannie:

    “….While the companies’ collective future hangs in the balance, so does U.S. housing policy in general. Last week, the Federal Reserve released a white paper emphasizing the importance of the housing sector to an overall economic recovery. Though the Fed usually doesn’t comment on the subject of housing, the paper identified possible ways to aid the struggling market and and drew supportive comments from three top Fed officials. In response, Sens. Orin Hatch (R-Utah) and Bob Corker (R-Tenn.) spoke out against the Fed, with Corker, claiming it “absolutely egregious” that the Fed would even suggest such remedies which, in Corker’s opinion, would result in a “substantial cost to American taxpayers and responsible borrowers everywhere.”

    The debate over the Fed’s white paper is like that over housing policy in general, with elected officials disagreeing over what, if anything, should be done to help struggling homeowners and how. The lack of a cohesive American housing policy is sure to be exacerbated by the loss of leadership at Fannie Mae and Freddie Mac, two agencies whose sheer size and role in the market make them integral to any recovery….”


    I also remember an article last month, re: bi-partisan imminent federal deficit budget cuts plans for 2012, Obama wanting unplugging federal support to Fannie/Freddie by this Summer….we can’t afford it. To just say cut them [like the Tea Party, IMO], not all of us equally in unison, is ludicrous too.

    Another wrench in the gear works to this type of desparation plan is history too, President Johnson tried his “Great Society” housing all the poor in rentals on the federal tax dime….a complete failure and waste of money BTW, the lower class tennants tore them apart in no time.

  8. 8
    Scotsman says:

    Should they stay or should they go? Obama’s newest refi scheme. And why am I expected to pay for this?


  9. 9
    ChrisM says:

    RE: Sweet Pea @ 5 – There’s a PDF that describes a little more here:


    which eventually directs you here:

    The “pre-qualification request”

    is nine pages of legalese designed to weed out the 99%. Or am I too cynical?

  10. 10
    Sweet Pea says:

    RE: ChrisM @ 9

    Hmm, I just skimmed the first couple of pages of the pre-qualification request and looks like they are limiting offerings to “sophisticated investors”, similar to requirements for investing in hedge funds. So, basically investment-type or investment-leaning companies and rich people. Appears to be treating the potential purchases more as alternative investments than rental properties. Are we surprised?

  11. 11

    RE: Sweet Pea @ 10
    Its a Big tax Write-off for the Rich Most Likely Then

    Just what our federal deficit needs, another Buffet billionaire paying less % income tax than his low paid adminstrative help.

  12. 12
    ChrisM says:

    RE: Sweet Pea @ 10 – That was my take as well.

    I ran across this while trying to get more info:

  13. 13
    pfft says:

    no recovery here. nope.

    I remember taking a lot of crap about cash for clunkers and about how car sales would collapse after it. car sales have steadily gained just like I said. I rule!


  14. 14
    pfft says:

    By Scotsman @ 8:

    And why am I expected to pay for this?

    so there is a greater chance you keep your job.

  15. 15
    pfft says:

    By softwarengineer @ 11:

    RE: Sweet Pea @ 10
    Its a Big tax Write-off for the Rich Most Likely Then

    Just what our federal deficit needs, another Buffet billionaire paying less % income tax than his low paid adminstrative help.

    contact your Congress people and tell them to support the Buffett/Romney rule.

  16. 16
    Blurtman says:

    RE: ChrisM @ 9 – Not quite 99%. 85%…??

    (d) The undersigned is a natural person whose individual net worth, or joint net
    worth with that person’s spouse exceeds $1,000,000.

    (f) The undersigned is a natural person who has an individual net income in excess
    of $200,000 in each of the two most recent years, or who has joint net income
    with such person’s spouse in excess of $300,000 in each of the two most recent
    years, and who has a reasonable expectation of reaching the same income
    level in the current year.

  17. 17
    Blurtman says:

    RE: pfft @ 14 – Let’s not only keep our jobs, but give everyone a big raise.

    – Principal loan mods for everyone, including above water, employed folks.

    – And $200,000 to every renter.

    This is not a communist society, is it? Give everybody some. And give the drummer some.

  18. 18
    pfft says:

    By Blurtman @ 17:

    RE: pfft @ 14 – Let’s not only keep our jobs, but give everyone a big raise.

    – Principal loan mods for everyone, including above water, employed folks.

    – And $200,000 to every renter.

    This is not a communist society, is it? Give everybody some. And give the drummer some.

    you’re trolling again…

  19. 19
    Blurtman says:

    RE: pfft @ 18 – Your definition of trolling: anything anti-Obama.

  20. 20
    pfft says:

    By Blurtman @ 19:

    RE: pfft @ 18 – Your definition of trolling: anything anti-Obama.

    no because I’ve posted about things I don’t support that obama does. Like how there have been no wall street prosecutions.

    if Obama said we’d raise how much in food stamps the poor get you’d say why don’t we just give everyone $200,000 dollars in food? you’re using hyperbole to make a bad point that doesn’t advance the discussion. you could use that example for every program that is tweaked and it would add zero to the discussion.

  21. 21
    pfft says:

    Now THIS Is Why Interest Rates Are So Low

    Want to know why yields are lower than ever before? It’s because people are putting money in banks like never before.

    Not only are people not spending they are taking out loans they are taking that savings and putting it into the bank!

    we have an oversupply of savings.

  22. 22
    David Losh says:

    RE: Sweet Pea @ 10

    No we aren’t surprised. The idea was to offer blocks of properties, “bundles” if you will, to hedge funds to manage in the form of REITs that will be used for rental income.

    The problem is the properties will be poorly maintained by out of area owners. At the end of the term agreed to the properties will be sold for a profit. The over all intention is to prop up property prices.

    God forbid individuals should buy these properties at the same discounted prices that will be offered to hedge funds.

  23. 23

    RE: David Losh @ 22 – They seem to be doing two things.

    1. Selling multiple units as a group, which would justify a discount.
    2. Restricting the resale of the units for 3 years, which props up the market by kicking the can down the road.

    I do wonder though about whether this program covers SFR at all, or just multi-family.

  24. 24
    David Losh says:

    RE: Kary L. Krismer @ 23

    It’s for individual housing units. It was tried before. Hedge funds may have the cash to invest, they may want to recoup losses from Mortgage Backed Securities, which would be another incentive.

    It takes blocks of properties off the market, which isn’t good for any one.

  25. 25
    ChrisM says:

    Housing wire states on the FNM/FRE deal:

    “Investors who participate have to sign agreements, promising to keep certain aspects of the deals confidential.”

    What a fiasco. Who wants to step up and defend the Obama administration on this?

    I wonder if I could file FOIA requests on FNM/FRE deals?

  26. 26
    Sweet Pea says:

    RE: ChrisM @ 25

    Yes, I saw the confidientiality clause in the doc, which benefits both the gov’t and a hedge fund, but not the end-consumer / taxpayer.

    Le sigh. This plus Obama’s supposed plan to fend off foreclosures are just more reasons for me to stay out of the ponzi scheme called the housing market. What a disappointment, in so many ways.

  27. 27
    mukoh says:

    RE: ChrisM @ 25 – Chris, this has been on for 2+ years since the bubble burst. They are making it more public as the cherry picking times are done. Thats all.

  28. 28
    Dirty Renter says:

    An early valentine card to Pfft, Ira, Peg & Blurt…. xoxoxoxo
    Goldman Sachs likely to avoid criminal charges in DOJ probe, insiders say
    Posted: 11:31 PM, February 1, 2012

    Goldman Sachs is ready to turn over a new gold-plated leaf.
    Nearly nine months after the Justice Department launched a probe into whether the Wall Street firm misled clients and lied to lawmakers, executives are increasingly optimistic that the bank will avoid criminal charges and focus on what it does best: minting money……..

  29. 29
    Pegasus says:

    RE: David Losh @ 22 – The good thing is that the investors will be given below market rates funded by tax payers to purchase said properties with lots of risk that will eventually be borne by the tax payers. it’s all good. Property management firms will experience a boom. Has anyone seen pfft?

  30. 30
    Pegasus says:

    Former MF Global Chief Risk Officer Sacked For Doing His Job, Disagreeing With Corzine

    Michael Roseman, who was ousted in January 2011 from the now-bankrupt futures brokerage, said he rang alarm bells about the firm’s exposure to European sovereign debt a year before the firm collapsed in late October of 2011.” Roseman’s statement on whether his skepticism to Corzine’s get rich quick scheme was the reason for his termination? “”My views on risk certainly played a factor in that decision,” Roseman told a House Financial Services subcommittee, about why he was asked to leave the firm.”


  31. 31

    The Valentine Angel is Really a Tax Devil?

    Before ya all swamp Home Depot to fix up your underwater homes you’re stuck in anyway; keep this in mind for this month:

    “…“The Making Work Pay credit was created with the passage of the American Recovery and Reinvestment Act, Public Law 111-5, signed into law Feb. 17, 2009, (also known as the stimulus law). The credit equaled 6.2 percent of a taxpayer’s earned income up to a total credit of $400 for individuals and $800 for joint filers. Last year, the IRS asked employers to use the new withholding tables to adjust workers’ take-home pay to account for the new credit as soon as possible emphasizing that employees did not have to fill out a new W-4 withholding form, and that the adjustments would automatically be made based on the 2010 withholding tables. Those withholding tables also affected federal retirement payments. With the expiration of the temporary credit, IRS tax withholding tables have changed for 2011, and many retirees may see an increase in the amount of federal tax being withheld from their monthly annuity payments as a result….”


    In other words, your paycheck’s gonna get smaller….

  32. 32
    Blurtman says:

    RE: Dirty Renter @ 28

    Renault: I’m shocked, shocked to find that gambling is going on in here.
    Croupier: Your winnings, sir.
    Renault: Oh. Thank you very much. Everybody out at once.


  33. 33
    Blurtman says:

    RE: pfft @ 20 – You cannot not at all equate the right to food with the right to own a house. Here is a hint – you can rent! And the government will assist those who require financial assistance to rent. There is no right to home ownership.

    If the recipient of a principal modified mortgage loan can afford to make the reduced monthly payment, he/she can also afford to rent.

    Bailouts encourage negative behavior by encouraging the expecation of no consequence for excessive risk taking, criminal behavior, and ignorance.

    There is also a basic issue of fairness. Why should renters and responsible borrowers not also receive federally directed financial compensation?

  34. 34
    Pegasus says:

    RE: softwarengineer @ 31 – I know it is Groundhog Day but this info was for last year and is no longer valid. They stopped the credit at the end of 2010. The article you link is a year old. The credit was replaced with the payroll tax cut for 2011 and that now is temporarily extended in 2012. Unfortunately that does not help retired folks who no longer have SSN withheld. I am surprised the retired are not revolting over the slight.

  35. 35
    Pegasus says:

    What a surprise. Vegas default notices down substantially after new law.

    Notices of default were down 82% year over year for December in Clark County following a Nevada law that creates additional requirements for lenders trying to foreclose on properties.

    The law, which went into effect Oct. 1 of last year, made it a FELONY for a mortgage servicer or trustee to make false representations concerning a title, and levies fines on servicers if FRAUD, such as robo-signing, is detected. The law also requires servicers to provide a new affidavit that provides the amount due on the mortgage, who is in possession of the note and who has the authority to foreclose.


  36. 36
    Scotsman says:

    Quality or quantity? Republicans get it done:

    “Confirmed: Republicans have least amount of sex, highest frequency of orgasm”


  37. 37
    David Losh says:

    RE: mukoh @ 27

    Number one the housing bubble burst in 2006, 2007. That was five years ago.

    Second is that two years ago Fannie Mae, and Freddie Mac were known to be broke, and unable to maintain properties. The Homepath Program is dragging, and the Real Estate industry has made a game of the REOs they supposedly represent.

    This program was trotted out in 2011 as a way of doing bulk transfers. It’s never worked before, and is another waste of time.

    It’s a way to bundle the sales into REITs. In my opinion there will be no corresponding sales data per unit which in turn will help to prop up pricing.

  38. 38

    By Scotsman @ 36:

    Quality or quantity? Republicans get it done:

    “Confirmed: Republicans have least amount of sex, highest frequency of orgasm”


    This would explain that:


    For you single people out there, Android users are more fun on the first date.


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