Weekly Open Thread (2013-10-07)

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Here is your open thread for the week of October 7th, 2013. 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.

Note: I’ve upped the comment limit in open threads to 25 comments.

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.

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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

    This Should Help the Local Seattle Economy

    Especially near the Fort Lewis base where government shutdown DOD furloughs hit much harder….FOX news reported last Friday that furloughing DOD civilians when President Obama signed the “mandatory military pay continues during shutdowns bill”, was legally wrong per the bill’s mandates in writing. 400,000 civilians were put back on the payroll.

  2. 2
    pfft says:

    Poll: 70 Percent Disapprove Of GOP Approach To Gov’t Shutdown

    using republican math 30% is a majority.

  3. 3
    Blurtman says:

    Chilling NY biker gang video: https://www.youtube.com/watch?v=wwB_Mrnwr_8

  4. 4
    Blake says:

    RE: softwarengineer @ 1

    This is an excellent analysis of the tea party and their narrow self interest. They are not so much crazy, as desparate.

    btw: Michael Lind’s little 2002 book “Made in Texas” is one of the best books about American politics I’ve ever read and predicted this rise of the southern radicals with W…. (Lind is a former neo-con and is pretty much a “centrist” now.)

  5. 5
    pfft says:


    IT’S OFFICIAL: Obama Will Nominate Janet Yellen For Fed Chair Tomorrow — Set To Become Most Powerful Woman In American History

    Read more: http://www.businessinsider.com/janet-yellen-fed-chair-obama-larry-summers-2013-10#ixzz2hB8kFfg9

    this is good. Yellen favors lower unemployment as opposed to worrying too much about inflation.

  6. 6

    RE: Blake @ 4

    The Tea Party Reminds Me of the Wall Street Demonstrators

    It started out with a good reason, then got took over by brainless buffoons, IMO:

    Tea Party: Wide Eyed Conservatives screaming cut them, not me.

    Wall Street Demonstrators: Demanding better paying jobs by CLEARLY ignoring current American population density increases; obviously decreasing job opportunities in a scarce job market with much lower subsequent/recent wages.

  7. 7

    RE: pfft @ 5

    Pfft, Keep It Gender Neutral

    Otherwise you could get perceived as supporting discrimination in the job arena, that includes discrimination against white males. EEO protects them too, BTW.

    I’ve certainly seem my share of buffoon politicians from both parties though lately; irrespective of gender too.

  8. 8
    redmondjp says:

    By pfft @ 5:


    IT’S OFFICIAL: Obama Will Nominate Janet Yellen For Fed Chair Tomorrow â�� Set To Become Most Powerful Woman In American History

    Read more: http://www.businessinsider.com/janet-yellen-fed-chair-obama-larry-summers-2013-10#ixzz2hB8kFfg9

    this is good. Yellen favors lower unemployment as opposed to worrying too much about inflation.

    What does the central bank have to do with the unemployment level?

    And even if they do manage to create a bubble such as the housing bubble, which temporarily decreases unemployment, what is the long-term effect?

  9. 9
    Blurtman says:

    RE: redmondjp @ 8 – The Fed has dual mandate – to keep unemployment and inflation low.

    “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”

    Unfortunately, it seems that the Fed uses the fatally flawed unemployment rate metric, which terribly understates the jobless rate. And if you look at the value of the dollar over time, you might conclude that they have done a terrible job managing inflation.

    This last recession/depression caused by a financial meltdown caused by financial fraud has caused a terrible long term, chronic unemployment problem. While Greenspan and Bernanke’s low interest rate policies may have contributed to the meltdown, the lack of a functioning regulatory apparatus, a corporate controlled government (e.g., a financial criminal as Treasury Secretary) and a widespread lack of morals also played a significant part.

  10. 10
    Blurtman says:


    “So there we have it. The next chairman of the Fed is going to track the labour participation rate.”


  11. 11

    RE: Blurtman @ 10

    And the Concurrent Stagnant Total Labor Force With Accelerated Population Density Increase Anyway


  12. 12
    ChrisM says:

    Hi Tim – a story idea, but not sure how feasible it is: a report on the listing price history of bank-owned properties, specifically the price it went at foreclosure vs. the original listing price vs what it eventually sold for.

    I’m looking at a VA-owned listing, and it seems like their price is off in space. I’m also dubious in that the listing price is significantly higher than the auction price. If the auction hawks didn’t snatch it up, why should I then pay a 30% premium?

  13. 13
    ChrisM says:

    Saw this on a Redfin forum:


    Allegation is that lenders don’t care about mortgage pre-approvals. I have to wonder if the US will wind up adopting northern European lending standards, where there is no such thing as a 30 year mortgage…

  14. 14
    pfft says:

    By redmondjp @ 8:

    By pfft @ 5:


    IT’S OFFICIAL: Obama Will Nominate Janet Yellen For Fed Chair Tomorrow � Set To Become Most Powerful Woman In American History

    Read more: http://www.businessinsider.com/janet-yellen-fed-chair-obama-larry-summers-2013-10#ixzz2hB8kFfg9

    this is good. Yellen favors lower unemployment as opposed to worrying too much about inflation.

    What does the central bank have to do with the unemployment level?

    And even if they do manage to create a bubble such as the housing bubble, which temporarily decreases unemployment, what is the long-term effect?

    in the short-term now is the time to worry about unemployment and let inflation run a little higher than 2%.

    in the long run research shows that having an inflation target at 3 or 4% helps the economy.

    The case for 4% inflation

    “And even if they do manage to create a bubble such as the housing bubble”

    low interest rates didn’t cause the housing bubble.

  15. 15
    pfft says:

    By Blurtman @ 10:


    “So there we have it. The next chairman of the Fed is going to track the labour participation rate.”


    bernanke looks at that too.

  16. 16
    Blurtman says:

    What, not just anybody can foreclose on a home? You actually have to possess the loan? What nonsense! You know the guy down the street isn’t paying his loan, why can’t you foreclose on him? Regulations! Sheesh!

    “In particular, the borrower contended that because the loan was not transferred by the Securitized Trust’s cutoff date provided for in the Pooling and Servicing Agreement governing the Securitized Trust (which was 90 days after December 2005), the purported transfer to the Securitized Trust was void, resulting in the foreclosure being void as well. In order for the borrower’s allegations to succeed, and for the borrower to have standing, the borrower must have asserted a defect that would actually void the assignment of the loan documents, not merely render the assignment voidable.

    The Court of Appeal found that the borrower’s “factual allegations regarding post-closing date attempts to transfer his deed of trust into the WaMu Securitized Trust are sufficient to state a basis for concluding the attempted transfers were void. As a result, Glaski has stated a cognizable claim for wrongful foreclosure under the theory that the entity invoking the power of sale (i.e., Bank of America in its capacity as trustee for the WaMu Securitized Trust) was not the holder of the Glaski deed of trust.” 160 Cal. Reptr. 3d at 463.

    Although Glaski is a residential case that was decided at the demurrer stage, it is likely to be used by borrowers in “chain of title” challenges, and it may have opened the door to arguments that the pooling and servicing agreement has a place in a two-party dispute between a borrower and lender.”


  17. 17
    One Eyed Man says:

    RE: Blurtman @ 16

    The case is an important case that may affect many people including purchasers of foreclosures, title companies, MBS holders and others. But I believe your vitriol for the bankers makes your comment somewhat less than truly objective as to the standing of the various parties. An MBS trust with a legally void assignment of a deed of trust isn’t really analogous to a “guy down the street.” The MBS trust paid hundreds of thousands for a deed of trust and received an untimely recorded assignment (under NY trust law) of the note and deed of trust which was ruled enforceable through non-judicial foreclosure by a California Superior Court Judge on the trustee’s motion to dismiss the borrowers claims for wrongful foreclosure (which ruling has now been overturned on appeal and sent back to the Superior Court for trial). Unlike the MBS trustee, a “guy down the street” has no connection whatsoever to the property. He paid no consideration for the mortgage, he doesn’t currently hold a recorded assignment of the mortgage and he has absolutely no equitable claim to the mortgage, the note or the property.

    While the idiot bankers clearly messed up in not complying with the law, they clearly have more interest than “the guy down the street.” Even if the assignment from Chase to B of A is void as the Calif Ct of Appeals ruled, B of A probably still has legal and equitable rights against Chase and/or the FDIC for the consideration paid for the void assignment and Chase and/or the FDIC probably still have the right to sue the borrower on the note or foreclose on the deed of trust. In the future, perhaps B of A should bring in Chase and the FDIC as third party defendants in such cases for wrongful foreclosure and perhaps Chase and/or the FDIC should then file a cross claim to bring judicial foreclosure proceedings against the borrowers. That might limit the risk of such litigation in the future by making such suits uneconomical for defaulting borrowers and the attorney’s who represent them as the offsetting claims may more or less zero out any hope of defaulting borrowers recovering damages for losing possession of a house while they failed to pay the mortgage payments in such foreclosure litigation cluster f__ks .

  18. 18
    Blurtman says:

    @OEM: In spite of blatant criminality, there seems to be little that the average outraged citizen can do to demand that the law be fairly enforced. One can only hope that the incredible greed and untouchable status of these criminal enterprises will prove to be their undoing, as they create such a clusterf**ck that they destroy themselves.

  19. 19
    whatsmyname says:

    RE: Blurtman @ 18 – You choose a strange case to make your point. The defaulting borrower is the only party here that is unequivocally seeking to pervert the law or gain unjust enrichment.

  20. 20
    Blurtman says:

    RE: whatsmyname @ 19 – An irrelevant argument you make. “Yes, your honor, while it is true that my client has murdered hundreds, and in several cases, consumed the bodies of his victims, in this particular case, the record will show that he is innocent of the jay walking charge brought against him.”

    If you Google “Bank of America” and ” financial fraud” you will be overwhelmed by the large number of hits. The B of A is a criminal organization, and needs to be dismantled.

    “Bank of America Corp. agreed to pay $137 million in restitution for its involvement in a conspiracy to rig bids on 88 municipal bond contracts, the U.S. Securities and Exchange Commission and Justice Department said.”



  21. 21
    whatsmyname says:

    By Blurtman @ 20:

    Thank you for reinforcing my point. Despite the set up of your straw man defense attorney, guilt or innocence in a court should always be about the matter being tried.

    Otherwise, the (kangaroo) court will have no capability beyond decisioning based solely on who is in favor. Who knows, it might even punish an innocent 3rd party because it wasn’t sharp enough to differentiate between that party and its hired manager (i.e. “trustee”).

  22. 22
    Blurtman says:

    RE: whatsmyname @ 21 – Well, let’s hope the third parties go after the B of A. Pretty long line. And the third parties better have made as many campaign contributions as the criminal enterprise. You know, the world’s financial system is so fragile that Eric Holder may yet again, just have to look the other way.

  23. 23
    Blurtman says:

    “…injecting liquidity into already overheated speculative markets is tantamount to QE as rocket fuel. It both inflates securities prices directly while it also heavily incentivizes risk-taking and speculative leveraging. Couple rocket fuel QE with “transparency,” “forward guidance,” and a promise to backstop markets in the event of a “tightening of financial conditions,” and you’ve progressed all the way to reckless monetary policy. Is the Fed really promising the markets that they will remain ultra-accommodative for at least the next couple years in the face of conspicuously speculative securities markets and increasingly overheated asset markets generally?

    The Janet Yellen confirmation hearings could be an interesting affair. To what extent could it become a more general hearing on Federal Reserve doctrine and policy? Over the years I’ve highlighted the central bank “Rules vs. Discretion” debate that’s been around for generations.

    Our great nation’s brilliant Founding Fathers clearly appreciated the perils of unsound money. They understood the dangers of excessive power and the necessity for checks and balances. They would have never anticipated an American central bank printing money without restraint. There was a major flaw in the structure of the Federal Reserve System – and for central bank structures generally. I just don’t think anyone ever anticipated that central bankers might someday resort to creating Trillions of “money” as they do today – on a whim or academic theory. The Federal Reserve needs some basic concrete rules. It’s insanity to allow a small group of unelected officials the discretion to pump $85bn – or more! – of purchasing power into the markets every month. It’s undemocratic, highly risky and this has gone on for much too long. If there was one issue worth closing down the government and risking default, this would be it.”


  24. 24
    Blurtman says:

    Even in 1999 the creators and advisers of these electronic signature acts weren’t at all certain just how well they would fly. Whitaker writes, “[A]t this point, it is not clear whether or not it will be possible to have a true negotiable promissory note in an electronic environment, in the sense of a unique self-contained physical token.” Here we have homeowners thinking they are contracting for a traditional mortgage when in fact behind the scenes it has already been designated as a securities instrument. Voila! You sign a negotiable instrument that is “intended” to be whisked away and materially altered into a securities certificate under UCC Article 8 – but you don’t know it. It was not disclosed to you. Step two – no do.

    For nearly 14 years the banking industry has been stumbling, fumbling and fouling the homeowners and the American public in an un-perfected process that is full of holes. The courts are trying to navigate… but it’s like playing football in a swamp during a tsunami. Most attorneys slept during Uniform Commercial Code lectures (karma is a bear) and so now we are faced with challenging the validity and enforce-ability of contracts where there were no disclosures, no meeting of the minds and a future intent that had already taken place – but with no detail or disclosure to the homeowner. Don’t think for a minute that securitization didn’t take its toll which will be haunting the housing market for years.


  25. 25
    whatsmyname says:

    RE: Blurtman @ 24 – A little knowledge is a dangerous thing, Exhibit A.

    It should hardly surprise anyone that evolving business structures did and do require continual vetting of ongoing changes. This involves a lot of questioning and communication inside trade journals.

    The mortgage remains traditional insofar as the borrower’s rights and obligations are concerned. This “securities instrument” being “whisked away” is a meaningless emotional appeal to ignorance. Traditional mortgages have always been assignable.

    The article claims deception when the loan doc’s say the loan “may” be assigned, but the intention is that it “will” be assigned. The term “may” in a business contract is not about assigning probabilities. It is about creating an option or right. The term “will” would create an obligation. In the case of securitization, an originator could not be absolutely certain even at this point that the loan would be ultimately accepted into a securitization pool. (And using “will” would create a perfect opportunity for your same author to claim “breach of contract” when it ultimately wasn’t assigned.)

    C’mon Dude. We know you hate the banks, but remember the boy who cried wolf. All this coy outrage when the banks are the prey only diminishes your own credibility, and distracts from incidents where the banks are the predators. This is counterproductive to your aims.

  26. 26
    Blurtman says:

    RE: whatsmyname @ 25 – Let’s hope the IRS starts doing its job (not holding my breath) and that the pension funds and other defrauded investors go after the banks. Preferably with guns and pitchforks.

    “The IRS confirmed to Reuters that the review comes in response to mounting evidence that banks violated tax requirements by mishandling the transfer of mortgages to REMICs, short for Real Estate Mortgage Conduits.

    Should the IRS find reason to take tough action, the financial impact could be enormous. REMIC investments are held by pension funds, in individual retirement plans such as 401(k)s and by state and local government entities.

    As of the end of 2010, investments in REMICs totaled more than $3 trillion, according to data supplied by the Securities Industry and Financial MarketsAssociation.”


  27. 27
    whatsmyname says:

    RE: Blurtman @ 26 – Exhibit B; Neither the reporter nor his editors demonstrate a passing knowledge how REMICs work. You will always be able to find press and internet articles where factual information without adequate background or context appear to present a different conclusion than the reality. In this case, the syndrome is compounded with two “facts” which are incorrect. They are certainly not the most misleading part of the article, but can you find them?

  28. 28
    Erik says:

    RE: ChrisM @ 12
    That is too specific. Does not interest me.

  29. 29
    Blurtman says:

    RE: whatsmyname @ 27 – Do tell. And I hope you were not previously suggesting that MBS’ were a new “innovation.”. I believe that they have been around since the ’70’s.

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