There’s no Santa or Tooth Fairy, and no quick fix for economy

NegativeEquityStatesQ22010-1

Wow.

That explains a lot, economically as well as politically.

The chart above, from Calculated Risk, breaks out housing equity by state. In Nevada, for example, almost 70 percent of homeowners owe more on their mortgages than their homes are worth. How many of those folks are going to be in the mood to spend money, generating the demand needed to restart the economy? Compounding the problem, Nevada also happens to have the country’s worst unemployment rate, at 14.3 percent in July. A lot of those jobless Nevadans couldn’t relocate for a job even if they found one, not without taking a huge financial hit on their home. That’s a lot of pain and sleepless nights, and cause for a lot of anger as well.

Georgia is sixth, right after California, with almost 30 percent of homeowners under water and another good chunk barely staying afloat. (Ga. unemployment rate: 9.9 percent). An economy that for years was fueled by homeowners who used their houses as ATMs has become an economy in which housing has become a huge anchor, in more ways than one. Millions of homeowners face the difficult choice of continuing to dump money into a house that they know is a bad investment or just walking away.

That also puts into perspective the latest “regional snapshot” from the Atlanta Regional Commission. “Since the recession began more than two years ago, the 10-county region has added approximately 56,000 people, which is the slowest growth period in the region since the 1950s,” ARC reports. “The Atlanta region’s slowdown is directly attributable to the national economy. During weak economic periods, people don’t move as much for several reasons. Job opportunities are slim, meaning people don’t move to take new jobs. And, with the housing market in such disarray, it is hard to sell a house, which tends to keep people stationary.”

There ain’t no Santa Claus, there ain’t no Easter Bunny, and there ain’t no easy, quick solution to problems like this one.

UPDATE: In an analysis of Michael Lewis’ best-seller “The Big Short,” economic analyst Paul Willen of the Federal Reserve traces the collapse of the Wall Street bond market to the same basic problem: housing prices.

“Subprime bulls bought the bonds because careful research based on vast amounts of loan-level data using state-of-the-art models … showed that if house prices continued to behave as they had for the previous ten years, the bonds would perform well. The research also showed that if house prices collapsed, investors would lose big, but, after ten years of solid appreciation in house prices, researchers viewed a big fall as unlikely.”

Willen and his co-authors also cite an August 2005 analysis of the housing bond market by researchers at Lehman Brothers. The researchers estimated only a 5 percent chance of a “meltdown scenario,” which they defined as a market in which housing prices fell by 5 percent a year.  The actual meltdown — only months away at the time — saw housing prices fall by 10 percent a year, twice as bad as the worst-case scenario. It also saw Lehman Brothers disappear altogether.

Here’s another chart, documenting the housing boom and subsequent collapse, by Steve Barry via Barry Ritholz and The Big Picture. Ominously, it suggests that housing values are STILL well above historic levels of the past century, after adjusting for inflation.

case shiller

797 comments Add your comment

Peadawg

August 27th, 2010
9:16 am

“There ain’t no Santa Claus, there ain’t no Easter Bunny, and there ain’t no easy, quick solution to problems like this one.”

Just more excuses for the lack of action the past 2 years by Obama. Good luck in November this year. Let’s just hope Obama doesn’t start vetoing every bill the Republicans try to pass.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:16 am

Bush lied about this problem way back in 2002 but the Barney Frank, Chris Dodd groupies said “All is Well”. Guess who was right? Welcome back to 2010, Jay! We’ve missed you for the last eight years!

barking frog

August 27th, 2010
9:19 am

One easy partial fix would be to stop banks from buying
government or private securities which would force them
to “invest” in loans to businesses and individuals.

Lord Help Us

August 27th, 2010
9:19 am

Unfortunately the ‘fix’ is not politically viable…

If someone suggests raising taxes…they are eviscerated, and unelectable.

If someone suggests cutting Medicare, SS, etc…they are eviscerated, and unelectable.

Until voters start using their brains, we will keep doing the same things and expect differenct results…

Granny Godzilla

August 27th, 2010
9:20 am

But But But Phil Gramm said it was just a mental recession.

And McCain suspended his campaign….

And we’ve all been standing for 30 plus years holding a bucket to catch the trickle down but our buckets are dry….

jm

August 27th, 2010
9:21 am

True. I’ve been saying for months now, state law can help circumvent this from happening in the future. Increasing minimum down payments from 3% now to 25% in 20 years and making cash out refis illegal.

No one at the state is fixing this problem, and they have the power to do so. The reason Texas and Canada aren’t bad is because they have requirements like this.

USinUK

August 27th, 2010
9:22 am

it’s gonna take a generation, not an election cycle.

Tommy Maddox

August 27th, 2010
9:23 am

Who’s been running Congress the past four years?

jm

August 27th, 2010
9:24 am

I might also add that the existence of (adjustable) growth boundaries similar to what exists in Oregon would help as well. That will never, ever happen in GA though.

USinUK

August 27th, 2010
9:24 am

“There ain’t no Santa Claus, there ain’t no Easter Bunny, and there ain’t no easy, quick solution to problems like this one”

did anyone else read this and immediately think “this ain’t no party … this ain’t no disco … this ain’t no foolin around” … or was it just me?

http://www.youtube.com/watch?v=QXgMhnI3QOI

USinUK

August 27th, 2010
9:25 am

“Who’s been running Congress the past four years?”

:roll:

fercryingoutloud. do you honestly think this problem started in 2007???

barking frog

August 27th, 2010
9:25 am

as always figures may lie, if you reduce the negative equity
by the amount of rent the homeowner would have paid if
he didn’t own the home you get a different picture completely.

Paul

August 27th, 2010
9:25 am

“there ain’t no easy, quick solution to problems like this one.”

And fixes designed to help people and lessen these effects don’t work out so well. What is it, about half of the people who applied for the administration’s mortgage relief program have withdrawn? Add to that I read this morning (Associated Press) “One in 10 American households with a mortgage was at risk of foreclosure this summer as the government’s efforts to help have had little impact stemming the housing crisis.”

Add to that talk of a second recession…. time to move the retirement savings to cash, I think.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:25 am

Granny Godzilla
August 27th, 2010
9:20 am

But But But Phil Gramm said it was just a mental recession.

And McCain suspended his campaign….

And we’ve all been standing for 30 plus years holding a bucket to catch the trickle down but our buckets are dry….

GG aka ctcuker,

Is the beach sand between you’re ears? When did trickle up poverty become successful in ANY country in the HISTORY of the world. That’s millions of years!

Southern Comfort

August 27th, 2010
9:25 am

Don’t even talk about negative equity. There’s a house on the corner in my neighborhood that I think just sold for $107k. Great deal for the new buyer, but truly f’ed up for me. That house was originally $160-$170k when first built. It’s a different floor plan from mine, but nearly the same everywhere else. It just means that my deflated house just deflated even more. :(

Bosch

August 27th, 2010
9:25 am

Oh, it’s the fault of all those damn poor people who bought those houses they couldn’t afford through CRA loans and Freddie and Fannie and ACORN –

Thought I’d save the wingnuts some typing time this morning. No need to thank me.

Tommy Maddox

August 27th, 2010
9:27 am

Nothing was being done to correct anything beginning in 2007, correct?

jm

August 27th, 2010
9:27 am

By the way, Bill Gross at PIMCO has a fix. He wants the feds to reset everyone’s mortgage rates to essentially 0% by fiat.

That would help to a large degree, but it has a host of bad repercussions. The fact of the matter is the people underwater should default and move to take any decent job that comes along. The appreciation necessary to bail these folks out isn’t going to happen any time soon (could be 15 or 20 years in some place, never in others).

Soothsayer

August 27th, 2010
9:27 am

Despite the relevance of macroeconomic factors for explaining the financial crisis, there is resistance to such an explanation. In part, this is because such factors operate indirectly and gradually, while microeconomic explanations that emphasize regulatory failure and flawed incentives within financial markets operate directly. Regulatory and incentive failures are specific, easy to understand, and offer a concrete “fixit” agenda that appeals to politicians who want to show they are doing something. They also tend to be associated with tales of villainy that attract media interest (such as Bernie Madoff’s massive Ponzi scheme or the bonus scandals at AIG and Merrill Lynch). Finally, and perhaps most important, a microeconomic focus does not challenge the larger structure of economic arrangements, while a macroeconomic focus invites controversy by placing these matters squarely on the table.

–Thomas Palley, America’s Exhausted Paradigm

USinUK

August 27th, 2010
9:27 am

SoCo – which is a big part of the employment problem right now – even if people DO find job opportunities, they can’t move because of the financial hit they’d take (even if they could find a buyer for their house)

The Tough Questions that no one Cares to Ask

August 27th, 2010
9:28 am

Since Republicans are so much more educated than Democrats (or is it conservatives versus liberals or something else), I suppose that means that they’re all doing real good with their mortgages and probably don’t even have a mortgage and don’t have any money tied up in no teetering Georgia bank either for that matter. And they all have jobs and are all current on their credit card debt and mortgage payments, etc. In fact, all they need to make their lives just plain perfect is another tax cut. Right. Am I right?

AmVet

August 27th, 2010
9:28 am

Tommy, do you honestly think this recession/depression is the result of the policies of the past four years?

http://www.fotosearch.com/bigcomp.asp?path=UNX/UNX007/u20448868.jpg

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:29 am

USinUK
August 27th, 2010
9:25 am

“Who’s been running Congress the past four years?”

fercryingoutloud. do you honestly think this problem started in 2007???

Correct, it started in the 90’s with Mr. Bill “I did not have sexual relations with that women” Clintax. Thanks Bill, the vast right-winged conspiracy is smiling!

USinUK

August 27th, 2010
9:29 am

“Nothing was being done to correct anything beginning in 2007, correct?”

the economy didn’t start to collapse until the June of that year with Bear Stearn hedge funds announcing losses due to subprime – which then spread to ML, JPM, GS and Citi

Kevin

August 27th, 2010
9:29 am

Upset there is no Santa Claus but I assume we could blindly throw a dart at the board and get a better, more competent leader. One perhaps that knows the role of government.

Obama’s policies are hurting the lowest income earners.

Southern Comfort

August 27th, 2010
9:30 am

jm

How would you explain someone like me then. The only money I put down was to make sure I got the lot I wanted. I financed my house 100% with nothing down, and I’ve never been late on any payments. At the time I got the house, I didn’t have 25% to put down, but I was able to make mortgage payments. My initial mortgage payment was only $200 more than what I had been paying for rent for 2 yrs. It’s not about down payments or anything, it’s about financing beyond your payable limits.

stands for decibels

August 27th, 2010
9:30 am

The chart above, from Calculated Risk

Which is, for the record, not the Mudd Club nor CBGB. (I haven’t the time for that at present.)

Bosch

August 27th, 2010
9:31 am

AmVet,

:-)

That picture is funny.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:31 am

barking frog
August 27th, 2010
9:25 am

as always figures may lie, if you reduce the negative equity
by the amount of rent the homeowner would have paid if
he didn’t own the home you get a different picture completely.

Dumbest Post of the day but it’s early!

If a bullfrog had wings he wouldn’t bump his ass! There! We’re even in dumbness! :)

USinUK

August 27th, 2010
9:31 am

“Correct, it started in the 90’s with Mr. Bill”

wait … wait … don’t tell me … the CRA, right???

(I think we need a corollary to Godwin’s law for discussions about economics and someone who brings up the CRA)

Tychus Findlay

August 27th, 2010
9:31 am

Get over it SoCo. Houses in my neighborhood were sold for $500-$750K in the 06-08 era. Now some of them are going sub 3.

Southern Comfort

August 27th, 2010
9:32 am

UnU

Tell me about it. I’ve wanted to relocate for logistical reasons, but there’s no way I’d be able to sell this house right now without taking a sledge hammer over the noggin’. I’m not ready to do that yet.

USinUK

August 27th, 2010
9:32 am

AmVet – 9:28 – golf clap … well said.

Doggone/GA

August 27th, 2010
9:32 am

“It just means that my deflated house just deflated even more.”

SoCo – I’m sorry to hear that, but I can only offer a limited amount of sympathy. I realize it’s not your fault…but I’ve sat here in my house watching houses around me sell for $250,000 to a million $ that wouldn’t have sold for $80,000 20 years ago.

I’ve known for a long, long time that housing prices were WAY out of whack. It’s one reason I bought a manufactured house, the price was much more in line with that actual value of the house.

stands for decibels

August 27th, 2010
9:32 am

There ain’t no Santa Claus, there ain’t no Easter Bunny, and there ain’t no easy, quick solution to problems like this one.

But whatever you propose, don’t include even the possibility of cramdowns, because it makes Alan Greenspan cry, or something.

uga_b

August 27th, 2010
9:32 am

Perhaps if we bailed them out with more irresponsible mortgages we could ensure ourselves a voting bloc!!!

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:33 am

Bosch

Welcome to my world!

stands for decibels

August 27th, 2010
9:33 am

New York’s low percentages surprise me.

Bosch

August 27th, 2010
9:33 am

Sigh. I love it when USinUK talks finance and hangs the wingnuts out to dry. It’s better than music on Fridays…..

Sigh.

Finn McCool

August 27th, 2010
9:34 am

Interesting that the states on the left are the more recent American economic powerhouse states. NY and PA, over on the right, are old school economic power states. The states over on the left are where the jobs have been going to the last 15 years.

Bosch

August 27th, 2010
9:35 am

I’m here…..

I’ve read your posts and um, I don’t want to go into your world, but thanks for the invite.

Scout

August 27th, 2010
9:35 am

But, but, but ………… but that jolly elf Obama said he had all the answers !!

Peadawg

August 27th, 2010
9:35 am

It must be nice being the President though. He gets to go on the nice lavish vacations while we sit here and struggle. Like Letterman said, “He’ll have plenty of time for vacations when his one term is up.”

barking frog

August 27th, 2010
9:35 am

i’m here from the government and i’m here to help 9:31
a well deserved name.

uga_b

August 27th, 2010
9:35 am

Barney Frank was playing Santa Claus with Fannie and Freddie being the Easter Bunny. Also, Jay this graph is misleading. Of course when people lose their jobs they can’ pay mortgages or buy houses so prices drop so mortgages valued at higher prices become “underwater” when marked to market versus book value. I would like to see how many were underwater at the start of the loan.

Bosch

August 27th, 2010
9:36 am

“but that jolly elf Obama said he had all the answers”

Really Scout? When?

stands for decibels

August 27th, 2010
9:36 am

that jolly elf Obama said he had all the answers !!

Well no, he didn’t.

Who here “secretly despises” the military, as you claim Obama does, Scout? Name names, please.

Paul

August 27th, 2010
9:36 am

“Using houses as ATMs”

And generally buying depreciating assets (toys).

I wonder how many of these people view themselves squarely in the ’self reliant, free market, government stay out of my way camp” but in this instance, will not admit their own contributory responsibility and are mad at the Administration instead?

AmVet

August 27th, 2010
9:36 am

Bosch, yes it is. And apropos on several levels.

Correct, it started in the 90’s…

Yes, and “Clinton’s bombs” killed 50,000 innocent civilians in Yugoslavia.

(I wonder if there are any openings on the Glenn Beck Program?!)

Bosch

August 27th, 2010
9:37 am

“He gets to go on the nice lavish vacations while we sit here and struggle.”

Really Peadawg? Griping about Obama going on vacation? How….hypocritical of you. Were you all a swoon when Bush went on vacation when our soldiers were dying?

Bruno

August 27th, 2010
9:38 am

“How many of those folks are going to be in the mood to spend money, generating the demand needed to restart the economy?”

I have to disagree that “Mortgage Negative Equity” is a primary dampening factor in this economy, since a home is first and foremost a place to live, and an investment second. The concept of negative equity only applies if you are planning to move soon, so at best it may have a dampening effect on mobility.

While I applaud Jay for trying to even the score between the number of columns devoted to the Cordoba Project vs. the economy (6:4 in the last month now), I have to still criticize him for not acknowledging what many financial experts feel is the real culprit behind companies’ reluctance to hire: the uncertainty created by Obama and the Dems with their anti-business legislation/rhetoric. If my theory is correct, we won’t see much of an upturn until at least next year after the Repubs sweep the elections this November.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:38 am

The Tough Questions that no one Cares to Ask
August 27th, 2010
9:28 am

Since Republicans are so much more educated than Democrats (or is it conservatives versus liberals or something else), I suppose that means that they’re all doing real good with their mortgages and probably don’t even have a mortgage and don’t have any money tied up in no teetering Georgia bank either for that matter. And they all have jobs and are all current on their credit card debt and mortgage payments, etc. In fact, all they need to make their lives just plain perfect is another tax cut. Right. Am I right?

Your very close but not cigar. Most educated people saw this coming years ago. We learned you can not live beyond your means. If I need to translate that , let me know. We also learned to put down more than 3%. In my ghetto houses asking prince is $600,000 and the last five sold for $550,000 to $585,000. We’re feeling your pain, just in a different light.

USinUK

August 27th, 2010
9:38 am

oh, stoppit, Bosch … you’re making me blush …

larry

August 27th, 2010
9:38 am

Does anyone remember the Bankruptcy Law that was passed in 2005 and signed into law making it harder to file for bankruptcy?

That and the fact in this state that you become even late one payment, the lender can start foreclosure procedures will make foreclousures go up.

Bubba Bob

August 27th, 2010
9:39 am

Jay,

No quick fix?!? The stimulus was supposed to fix it all. Lower unemployment and create jobs! Don’t tell me that I was mislead by Obama….I don’t think I could believe it.

USinUK

August 27th, 2010
9:39 am

“The states over on the left are where the jobs have been going to the last 15 years”

plus, they’re retirement / holiday home states

Jay

August 27th, 2010
9:40 am

Actually, UGA_B, it was the other way around. Check the update I posted above: It was the collapse of housing prices that set off the larger collapse on Wall Street and the rest of the economy, not the other way around.

jm

August 27th, 2010
9:40 am

Southern Comfort – income ratios obviously matter as well, and should be verified instead of the permitted liar loans. But every other civilized and advanced country in the world has minimum down payments in order to protect against events like these. Without a government subsidized process, these loans would exist.

By the way, the land you purchased (assuming you didn’t use a loan to buy the land) effectively works as the equity.

Soothsayer

August 27th, 2010
9:40 am

Economic crises should be understood as a combination of proximate and ultimate factors. The proximate factors represent the triggering events, while the ultimate factors represent the deep causes. The meltdown of the subprime mortgage market in August 2007 triggered the current crisis, which was amplified by policy failures such as the decision to allow the collapse of Lehman Brothers. However, a crisis of the magnitude now being experienced requires a facilitating macroeconomic environment. That macroeconomic environment has been a long time in the making and can be traced back to the election of Ronald Reagan in 1980 and the inauguration of the era of neo-liberal economics.

The Post-1980 Neo-liberal Growth Model

The impact of the neo-liberal economic growth model is apparent in the changed character of the U.S. business cycle. Before 1980, economic policy was designed to achieve full employment, and the economy was characterized by a system in which wages grew with productivity. This configuration created a virtuous circle of growth. Rising wages meant robust aggregate demand, which contributed to full employment. Full employment in turn provided an incentive to invest, which raised productivity, thereby supporting higher wages.

After 1980, with the advent of the new growth model, the commitment to full employment was abandoned as inflationary, with the result that the link between productivity growth and wages was severed. In place of wage growth as the engine of demand growth, the new model substituted borrowing and asset price inflation. Adherents of the neo-liberal orthodoxy made controlling inflation their primary policy concern, and set about attacking unions, the minimum wage, and other worker protections. Meanwhile, globalization brought increased foreign competition from lower-wage economies and the prospect of off-shoring of employment.

The new neo-liberal model was built on financial booms and cheap imports. Financial booms provide consumers and firms with collateral to support debt-financed spending. Borrowing is also sustained by financial innovation and deregulation that ensures a flow of new financial products, allowing increased leverage and widening the range of assets that can be collateralized. Meanwhile, cheap imports ameliorate the impact of wage stagnation, thereby maintaining political support for the model. Additionally, rising wealth and income inequality
makes high-end consumption a larger and more important component of economic activity, leading to the development of what Ajay Kapur, a former global strategist for Citigroup, termed a “plutonomy.”

–Thomas Palley, America’s Exhausted Paragigm

This is what is wrong with our economy. Until we change it, nothing will change.

Southern Comfort

August 27th, 2010
9:40 am

Tychus

Anybody who paid that much for a house in 2008 should have seen the writing on the wall. If I’m paying that much for a house, there’d better be land, water or something else thrown in. The homes in my area that were selling in that price range were either golf course or lake homes. That’s cool, but I wouldn’t pay that much for a home that sits on .5 acres just to send my child to Parkview HS.

USinUK

August 27th, 2010
9:41 am

“The stimulus was supposed to fix it all”

no it wasn’t – it was meant to plug the hole and help prime the pump, not be the be-all / end-all for the economy.

jasper

August 27th, 2010
9:41 am

One can only hope that we will learn from all of this that our Federal Gubmint can sure get us in a mess they can’t get us out of. Pardon the ending preposition. And that we the people may do something to limit its powers. Term limits would be a good start. For all of you constitution purists out there, the framers didn’t address this because they could never imagine that someone could or would want to make a career out of politics. A grave mistake on their part to underestimate corruption and greed.

Scout

August 27th, 2010
9:41 am

I doubt if these comedians said all of this but there still funny ……… and mostly true.

The liberals are asking us to give Obama time. We agree . . . And think 25 to life would be appropriate.
–Jay Leno

America needs Obama-care like Nancy Pelosi needs a Halloween mask.
–Jay Leno

Q: Have you heard about McDonald’s’ new Obama Value Meal?
A: Order anything you like and the guy behind you has to pay for it.
–Conan O’Brien

Q: What does Barack Obama call lunch with a convicted felon?
A: A fund raiser.
–Jay Leno

Q: What’s the difference between Obama’s cabinet and a penitentiary?
A: One is filled with tax evaders, blackmailers, and threats to society. The other is for housing prisoners.
–David Letterman

Q: If Nancy Pelosi and Obama were on a boat in the middle of the ocean and it started to sink, who would be saved?
A: America!
–Jimmy Fallon

Q: What’s the difference between Obama and his dog, Bo?
A: Bo has papers.
–Jimmy Kimmel

Q: What was the most positive result of the “Cash for Clunkers” program?
A: It took 95% of the Obama bumper stickers off the road.
–David Letterman

Scout

August 27th, 2010
9:41 am

Excuse me ……… “they’re”

Bruno

August 27th, 2010
9:43 am

“That house was originally $160-$170k”

“Houses in my neighborhood were sold for $500-$750K”

Y’all are making me feel puny–I paid less than $80,000 for mine.

Bubba Bob

August 27th, 2010
9:43 am

USink,

It wasn’t sold that way to the masses. Specific unemployment numbers were given. They didn’t happen. As with almost all government programs they fed the sheep one thing and did another.

I didn’t believe it would do anything but further our debt. So far, I’ve been right.

Bosch

August 27th, 2010
9:43 am

“the uncertainty created by Obama and the Dems with their anti-business legislation/rhetoric.”

Like what Paul?

USinUK

August 27th, 2010
9:43 am

“He gets to go on the nice lavish vacations while we sit here and struggle.”

are you hating on the wealthy?

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:44 am

larry
August 27th, 2010
9:38 am

Does anyone remember the Bankruptcy Law that was passed in 2005 and signed into law making it harder to file for bankruptcy?

That and the fact in this state that you become even late one payment, the lender can start foreclosure procedures will make foreclousures go up.

Please!!! Live within you’re means period. Is that too hard?

barking frog

August 27th, 2010
9:44 am

G Man 9:38 private loans or government backed?

@@

August 27th, 2010
9:45 am

The rule of thumb used to be….have two years of income readily available, just in case. I’m thinking it’s changed to 5 now.

So, jay…if there’s no easy fix, will the federal government stop throwing good money after bad? I’m thinking about my daughter, your daughters, and everyone else’s kids. Why saddle them with the cost of past mistakes?

It just don’t seem right, but that’s just my opinion.

Southern Comfort

August 27th, 2010
9:45 am

jm

I put down $500. I don’t think that would fit your description.

Doggone

I thought the same about home prices. That’s one of the reasons I bought where I did as I thought they were undervalued compared to everything else. When I bought this house, it was between $30-$50k cheaper than what the buyer was getting for it in other areas. There has been mabe 3 foreclosures in my subdivision. What’s hurting us is that other nearby subdivisions that were way overpriced are now like Foreclosureland and dragging our values down with them.

Scout

August 27th, 2010
9:45 am

USinUK @ 9:43

How about the hypocrisy !

Out of here for the day ……….. you all be nice.

larry

August 27th, 2010
9:46 am

Well, i have to pay for more of the wealthy’s tax cuts ………..

( And so he (Bush) bowed, lied and kissed their hands and faces)

andygrd

August 27th, 2010
9:46 am

Good Morning Jay,

I think your analysis and comments are spot on, and I am a conservative…

There is no quick fix. Greed I think really caused many of the problems. Lending institutions made a great number of bad loans to individuals that did not have income to support the home purchase, or homes were purchased at a price that resulted in almost a negative monthly cash flow.

As artificial property values rose, individuals refinanced and spent the money rather foolishly. Now with the drop in the market, people are facing higher debt and lower property values. This happened in Houston in the late 80’s when the oil market went belly up…..

What bothers me, is the lack of responsibility of some of these homeowners that are just walking away. They didn’t walk away when the refinanced and foolishly spent the money… now we have the boo hoo’s and whining… Well, you can’t have it both ways.

On a sadder note, we have individuals that have lost jobs and are struggling to make the payments. I don’t believe in debt forgiveness, but I think we need to really have some type of financing program to assist them. IT WOULD NOT BE APPLICABLE TO PEOPLE THE REFINANCED AND TOOK THE MONEY AND AS YOU SAY, USED IT AS AN ATM.

While I don’t support all the spending programs, I think we need a program to help in the refinancing of homes for out of work individuals… We should not punish these people because of current economic conditions.

Bosch

August 27th, 2010
9:46 am

Scout,

Q: You wrote that Obama said he had all the answers. When did he say that?

A: ???????

USinUK

August 27th, 2010
9:46 am

“It wasn’t sold that way to the masses”

show me one quote where Obama said that this would fix the economy –

yes, he thought that the unemployment numbers would be 1.5% lower – but nowhere did he say “this will make everything better” – this was meant to stop the free-fall

Bubba Bob

August 27th, 2010
9:46 am

USink,

The president is elected to lead. One way to do that is lead by example. So discussing his vacations is not hating on the wealthy. It’s questioning his ability to lead.

However, I agree a man with that kind of pressure needs time to rest and relax. It’s not like his job ever stops. At the same time, he could do a better job of showing that he get’s ‘it’ by doing his vacations a little differently.

Paul

August 27th, 2010
9:46 am

Morning, Bosch

““the uncertainty created by Obama and the Dems with their anti-business legislation/rhetoric.”

Like what Paul?”

You may want to reach for a second cup of coffee. ’twasn’t me.

Granny Godzilla

August 27th, 2010
9:46 am

I’m Here From
The Government And
I’m Here To Help

A

“GG aka ctcuker,

Is the beach sand between you’re ears? When did trickle up poverty become successful in ANY country in the HISTORY of the world. That’s millions of years!”

B

Correct, it started in the 90’s with Mr. Bill “I did not have sexual relations with that women” Clintax. Thanks Bill, the vast right-winged conspiracy is smiling!

C

Dumbest Post of the day but it’s early!

If a bullfrog had wings he wouldn’t bump his ass! There! We’re even in dumbness!

Wow! what in depth and fact filled responses! how amazing! what a fount of knowledge! years of expertise crammed into so little, and yet so bountiful in it’s perfection

Not

Doggone/GA

August 27th, 2010
9:47 am

“What’s hurting us is that other nearby subdivisions that were way overpriced are now like Foreclosureland and dragging our values down with them.”

yep, that’s what’s happening around here too.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:47 am

USinUK
August 27th, 2010
9:41 am

“The stimulus was supposed to fix it all”

no it wasn’t – it was meant to plug the hole and help prime the pump, not be the be-all / end-all for the economy.

GREAT PLAN TOO! Tell that to your creditors and see what they say! Good f’ing LUCK!

Normal

August 27th, 2010
9:47 am

I don’t know much about the national economy except for what I learn here. Shoot, when I took Econ 101, credit cards were just starting, but I had parents who taught me basic things like “don’t spend what you don’t have”. “Always put a little away for a rainy day”. You know, the old fashioned “penney saved, penny earned” stuff. But it works.

I saw the signs in ‘07 and took out enough savings to pay off my autos and my main house. It was just in the nick of time. I do have a rental property that I owe more than it is worth, but I have a tenent who isn’t going anywhere and the rent pays the mortgage. I also never keep a balance on my credit cards. I say this because yesterday, I received an e-mail from my bank that my credit rating is 806. They want in my pockets soooo bad, but nah!

I am looking for a motorcycle though…. :)

stands for decibels

August 27th, 2010
9:47 am

Funny that Scout appears to have missed this:

Who here “secretly despises” the military, as you claim Obama does, Scout? Name names, please.

…as he has the past coupla times I’ve asked.

Tychus Findlay

August 27th, 2010
9:47 am

HAHA. I wouldn’t pay that much to send my kids to Parkview either. I send mine to Marist and that’s what it costs to live in Buckhead/Sandy Springs.

USinUK

August 27th, 2010
9:48 am

Scout – 9:45 – what hypocrisy? what is hypocritical about going on vacation with your family?

jm

August 27th, 2010
9:49 am

Southern Comfort – yeah, not quite. Minimum downpayments in Canada are 25% and are often 35% depending. Ie, the old adage you have to save up to buy a house would apply again.

Canada doesn’t have any housing problem. I’m not a huge fan of canadians, but on this one they got it right.

USinUK

August 27th, 2010
9:49 am

“Tell that to your creditors and see what they say! ”

so, it’s the government’s fault you carry debt???

whatever happened to personal responsibility???

The Leg Lamp is a "major award" much like Cynthia Tucker's Pulitzer and Obama's Nobel.

August 27th, 2010
9:49 am

‘RECOVERY SUMMER’ ENDS SICK GDP REVISION: 1.6%

Let’s start hearing the lib excuses.

Redneck Convert (R--and proud of it)

August 27th, 2010
9:50 am

There ain’t no Santa Claus, there ain’t no Easter Bunny, and there ain’t no easy, quick solution to problems like this one.

Well, don’t tell little _____ Zell George (I ain’t mentioning his 1st name till I can get a judge to strike it, cause I’m ashamed of this do-nothing Guvner.) I aim to keep him in the dark till he’s 13 or so. Same way I ain’t mentioning You Know What or letting the schools teach him You Know What. Kids deserve to have a childhood.

Have a good day everybody.

Bosch

August 27th, 2010
9:51 am

Paul,

What the hell? I know I read that somewhere! I think I’m hallucinating.

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:51 am

Bosch
August 27th, 2010
9:46 am

Scout,

Q: You wrote that Obama said he had all the answers. When did he say that?

A: ???????

In EVERY speech he gives or EVERYDAY!

Southern Comfort

August 27th, 2010
9:51 am

what it costs to live in Buckhead/Sandy Springs

That’s why I live on the south side. I still think prices are bloated up there. Then again, what I paid for my house here would get me at least 3 homes back in my hometown. :)

Peadawg

August 27th, 2010
9:51 am

“How….hypocritical of you. Were you all a swoon when Bush went on vacation when our soldiers were dying?”

When people are struggling to pay their bills and the President is going on vacations to other countries, yes I’ll complain. Atleast go on vacation here in the US for crying out loud. NY, LA, Vegas, Orlando.

Bubba Bob

August 27th, 2010
9:52 am

USink,
“whatever happened to personal responsibility???”

Whatever happened to the government showing they can be responsible?

Bosch

August 27th, 2010
9:52 am

OH, it was BRUNO!!! Sorry Paul……

USinUK

August 27th, 2010
9:52 am

leg lamp – exports were down because the dollar strengthened against Sterling (1.5%) and the Euro (9.4%)

USinUK

August 27th, 2010
9:53 am

Bubba – 1) what does the government have to do with “calling your creditors”? (I’m here’s 9:47)

and 2) supporting the economy IS part of the government’s responsibility

AmVet

August 27th, 2010
9:53 am

In place of wage growth as the engine of demand growth, the new model substituted borrowing and asset price inflation.

BINGO! We have a winner!!

Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.

Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

The top 10 percent of Americans now earn around 50 percent of our national income.

You trickle downers and fiscal conservatives got what you’ve worked thirty years or more for – the American plutocracy.

Way to go…

I'm Here From The Government And I'm Here To Help

August 27th, 2010
9:53 am

Granny Godzilla
August 27th, 2010
9:46 am

Thanks for the confirmation. I knew eventually you would come out of you’re shell and be exposed.