Mid-Week Open Thread (2012-12-26)

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Here is your open thread for the mid-week on December 26th, 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!

NOTICE: If you have comments to make about politics or economics that do not somehow directly relate to Seattle-area real estate, they may be posted in the current Politics & Economics Open Thread. If you post such comments here, they will be moved there.

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.


  1. 1
    ChrisM says:

    Ray is right?


    The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages aren’t backed by the government and who owe more than their homes are worth, according to people familiar with the discussions.
    Because such a move would transfer billions of dollars of these mortgages to the government-backed mortgage companies, it would require congressional authorization to temporarily change Fannie’s and Freddie’s charters. Under the proposal, Fannie and Freddie would be allowed to charge higher rates to borrowers in order to compensate for the risk of guaranteeing refinanced loans that are underwater and more likely to result in default. Some economists argue that those borrowers could be relatively good credit risks because they have been paying their mortgages through the financial crisis, and that Fannie and Freddie could turn a profit on such mortgages while helping the housing market.
    But industry officials say such a program would work only if banks were given immunity from having to buy back any loans they refinance that subsequently default, and that such a shield would boost the risk for the taxpayer-backed companies.

  2. 2
    blurtman says:

    Obama sucks.

    The following are 75 economic numbers from 2012 that are almost too crazy to believe…

    #1 In December 2008, 31.6 million Americans were on food stamps. Today, a new all-time record of 47.7 million Americans are on food stamps. That number has increased by more than 50 percent over the past four years, and yet the mainstream media still has the gall to insist that “things are getting better”.

    #2 Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.

    #3 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

    #4 According to one recent survey, 55 percent of all Americans have received money from a safety net program run by the federal government at some point in their lives.

    #5 For the first time ever, more than a million public school students in the United States are homeless. That number has risen by 57 percent since the 2006-2007 school year.

    #6 Median household income in the U.S. has fallen for four consecutive years. Overall, it has declined by over $4000 during that time span.

    #7 Families that have a head of household under the age of 30 have a poverty rate of 37 percent.

    #8 The percentage of working age Americans with a job has been under 59 percent for 39 months in a row.


  3. 3
    Chris says:

    Interesting BBC story on the Spanish Crisis and how lending on real estate helped cause it. Keep in mind they have much lower national debt than the US but its local governments are about as bad as California. They tried massive stimulus (“counter cyclical”) spending for a few years. Didn’t work and now they have an enormous debt and worse problems.


  4. 4
    softwarengineer says:

    RE: blurtman @ 2

    Yes, the World’s Economy is in a Mess

    I wouldn’t blame it all on Obama….the WTO ovens were heated up for American wage degradation during Clinton’s regime, allowing foreign/corporate Facism historic overpopulation gains in America today anyway….irrespective of America’s ASSIVELY lower 1.7 birthrate the last three years, Mexico’s too, BTW.


  5. 5
    wreckingbull says:

    RE: blurtman @ 2 – Someday in the future, life in the US will resemble that of Mexico. Walled enclaves for the elite surrounded by sprawling masses of poverty. I just did not think we would be progressing to that end at such a fast pace.

    As someone who lived in Mexico, I can assure you this is not fun for the elite nor the poor.

  6. 6
    redmondjp says:

    RE: softwarengineer @ 4 – You’re right – the gutting of the once-mighty American economy has been going on for decades, regardless of the political party in charge. Delco Electronics (where I worked as a co-op student while in college) opened their first plant in Matamoros, Mexico in 1979, followed by a second one in Reynosa in 1987. They already had operations in Singapore by the mid-1980s as well. The writing was on the wall back then, and few bothered to stop and read it. I recall somebody at the plant telling me (with some amazement) that in the recently-signed labor agreement, the union had agreed to export jobs in exchange for more break areas and drinking fountains for those remaining stateside.

    When Walmart’s customers are too poor to even shop there and are going to the dollar stores instead, you know that we have some bad times ahead of us.

    Ross Perot was right. The sucking is over, and now we are listening to an erie silence wondering what comes next.

  7. 7
    Macro Investor says:

    RE: redmondjp @ 6

    By the late 80s it was clear what was happening. There was no stopping it then or now.

    Consider this… 80% of the world population (over 5 billion people) live on $10 a day or less. Another way of putting that is there is not enough productive work available for many billions of people. All they can really do is grow their own food. You cannot possibly have a global economy with that many un-used hands. It simply has to drive down wages everywhere much, much further.

    If you are lucky enough to have a good job, it’s crazy not to be saving like a maniac instead of buying junk, like $400k shabby wooden boxes.

  8. 8
    ARDELL says:

    RE: Macro Investor @ 7

    Where I was sitting it was clear in 84 and a done deal by the late 80’s…drop was 89 and flat was 91 to 95. Tiny climb to 98 then straight up to 2005…which is about when Seattle area started exploding on the upside for a couple of years.

    Seattle Area got beat up by the lending industry. Jumbo Loans and zero down mortgages were like a faucet that got turned off. Time was suspended for about 6 months before the steep decline in 2008 to 2/09. Bouncing along the bottom since. We will not get back to peak until 2018…if ever.

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