US Foreclosure filings (default notices, scheduled auctions and bank repos) were 321,480 U.S. properties during May 2009. Total foreclosures from April 2009, however, decreased 6%.

One in every 398 U.S. housing units received a foreclosure filing in May, the third highest month on record.

RealtyTrac said they expect REO activity to “spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.”


RealtyTrac, June 11, 2009

See also:
U.S. Foreclosure Filings Top 300,000 as Bank Seizures Loom
Dan Levy
Bloomberg, June 11 2009

Category: Credit, Legal, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

187 Responses to “Foreclosures Up 18%”

  1. California had the highest total number of filings at 92,249, 23 percent more than a year earlier. Scheduled auctions rose 18 percent from the previous month while bank seizures fell 1 percent and defaults fell 18 percent.

    Florida had the second-highest total with 58,931 filings, up 50 percent from May 2008. Nevada was third with 17,157 filings, up 83 percent, as bank seizures there rose 23 percent from the previous month.

    Arizona, Michigan, Ohio, Illinois, Georgia, Texas and Virginia rounded out the top 10, which accounted for 77 percent of total U.S. filings, according to RealtyTrac.

    New Jersey had the 24th highest rate, one in 794 households, and 4,408 filings. Connecticut ranked 33rd, with one in every 1,301 households in some stage of default. The state had 1,106 filings. New York was 37th, with one in 1,646 households getting a filing for a total of 4,825.

  2. Marcus Aurelius says:

    We’re all red states, now.

  3. Marcus Aurelius says:

    It’s interesting to note that places with few people fared much better than the population centers.


  4. karen says:

    Marcus, too funny on the red states comment. I just checked listings for my town and couldn’t believe all the new multi-million $ homes on the market.. many just built in the last 2 years… not enough reductions on the ones that have been sitting on the market for over a year, though… and the St. Regis in Dana Point is near bankruptcy…

    and one of the big lenders was, guess who? C

  5. Andy T says:

    I’m sure it’s all going to be just fine…..

  6. karen says:

    Come on, Andy! It’s gonna be better than fine! Just look at the market.. : ) I’m on the edge of my seat in anticipation.. of glory days..

  7. Mr. C. Cheese says:

    Because al-Waleed bin going to take care of us….
    How did ol ‘awbt’ get his coin …from the Bin Laden Construction Company [correct me if wrong]

  8. call me ahab says:


    my man Volcker says-

    “A long slog, with continuing high levels of unemployment, seems to be in store,” Volcker, a former chairman of the Federal Reserve, said.

    “This is not an environment in which inflationary pressures are at all likely for some time to come,” he added.”

    hmm . . .why do I think you do not agree

  9. karen says:

    I respect Volcker, but… lol. do you have a link? did he say more?

  10. leftback says:

    1 in 400 homes in foreclosure is really a shocking statistic no matter what your point of view might be.

    OT: The annual commodity Pump ‘n’ Dump seems to be coming to a head, reaching a crescendo, a climax as it were, as oil exceeds $72. Do I remember correctly or did the last oil bubble pop after Juy 4 last year?

  11. call me ahab says:


    here you be-

  12. john6pack says:

    It’s been 50 years since the U.S. had only 48 states.

  13. karen says:

    hey, oahu john, thanks for the reminder!

  14. leftback says:

    But one of them is so close to Russia you can see it.

  15. call me ahab says:


    after Hawaiian independence there will be 49- and maybe when Texas becomes a Republic again- then we’ll have 48- and I have heard of Vermont trying to secede- so who knows-

    countries come and go

  16. karen says:

    ahab, far be it from me to argue with Volcker… guess i’ll just laugh, then.

    leftback, i tried to post the $wtic chart but couldn’t get the link to work… 2nd week of July it was.. i wish you had tipped me off to that before i shorted crude nearly $10 ago… thanks a lot.

  17. john6pack says:

    I’m a Texas native and an oahu local, so I’ll have a bag full of passports if that happens.

  18. Andy T says:

    I’ll tell you what is sobering about that chart is that even in ol’ Houston, home of a ton of oil and gas companies and related firms, is facing some high foreclosures…

    Also, anyone else notice the foreclosure rates are only high where a bunch of people live….scary.

  19. call me ahab says:

    for you $ followers- compliments of Jesse’s Americain Cafe-

  20. john6pack says:

    Yes, I thought Dallas, Houston, San Antone were immune to bubble due to endless supply. Kind of the opposite of oahu. Guess I thought wrong.

  21. karen says:

    Andy, yes, Marcus @ 12:06 noted that as well : )

  22. call me ahab says:


    i know it’s not Friday night- but here is some IZ for you- he was definitely for Hawaiian independence- I agree- one of my favorite songs (the way he sings it)-

  23. karen says:

    what’s odd for me today, is my shippers are down.. only my sso is up, oh and one resource (gold/copper) stock.

  24. I-Man says:

    Whats that distant rumbling sound…

    Oh yeah, its the bond market.

  25. willid3 says:

    here is a list of banks with the largest problem loans

  26. karen says:

    I am officially scared now, thanks, willid3.. do you realize how much money will be printed to backstop all those banks?! I need to catch my breath, too much activity this morning.

  27. john6pack says:

    Mahalo Ahab. That one is classic. My brah did a version on ukulele at my wedding. Love it.

  28. karen says:

    Either the rise is crude is short covering, or the rise in crude is telling us the dollar is about to collapse… and gold isn’t telling us anything, yet.. oops, take that back… up $7+ now.

  29. karen says:

    No worries, though. The Banks will be fine. They are backed by the full faith and credit of the US Government.

  30. call me ahab says:

    why would the $ collapse?- it isn’t like people are laughing when our own Treasury Sec says “don’t worry your investments are safe”

  31. brianinla says:

    Who would casually say the Fed will print the money to backstop all the banks without going into the repercussions of much higher treasury yields? Higher borrowing costs to a debt-based economy are suicidal.

  32. dead hobo says:

    So why is the market spiking? Idiots that can’t read past headlines? Did I miss something. Nothing looks that good to me. Giddy computers?

  33. call me ahab says:

    here some great news- although they will probably get bailed out by the federal government-;_ylt=AuhiAr43En8Q8FSlVqh8OmC7YWsA?tickers=dia,spy,CB,NVC,IQC,NXC,BJZ?

    Karen- your thoughts- you live in California

  34. dead hobo says:


    the rise in crude is probably just a bubble like last year’s only not as big yet. There’s no reason for it other than money chasing a rising asset and a positive feed back loop. Since no part of this market reflects any form of reality, I’m keeping out until something looks real again. Anything else is just flipping a coin. Cash may be trash, but a phony market is just stupid to play with. Never play someone else’s game.

  35. The Curmudgeon says:

    “countries come and go”

    A little nugget of wisdom…thanks, Ahab.

  36. schoolsout says:

    expecting the monetization of debt from the Fed today?

  37. Thor says:

    Ahab – Someone else made a good point on a thread yesterday. If foreign countries do eventually take their money out of dollars where exactly would they move that money to? Who could absorb that kind of money? I don’t really know much about this (or anything else for that matter ;-) but it seemed logical to me. Anyone have any thoughts on that?

  38. karen says:

    ahab, i saw that earlier… really, as CA goes, so goes the nation. Can you spell Zimbabwae or say Inflation South American Style faster..

  39. karen says:

    brianinla, i think you left off a “la” on your log in name.. the fed can buy the treasuries… this is a monopoloy game afterall.. and the rules are being made up as we go along now.. lol. s

  40. Thor says:

    I live in CA too, scary news yes, but anyone who has lived here for any length of time can tell you that the only thing unusual about this is the amount of the deficit. Every time there’s a recession we have this kind of problem, budgets are severely out of whack, the government threatens to shut down, blah blah blah. I don’t mean to poopoo the issue, just saying for the average Californian this is just more of the same problem we’ve had for years.

  41. call me ahab says:

    Thor Says-

    “If foreign countries do eventually take their money out of dollars where exactly would they move that money to?”

    my guess is hard assets- but your best asking real traders like leftback, Karen, Andy, DL, I-Man . . .

  42. karen says:

    Hark and take heed. One of the Oz’s has spoken:

    UPDATE:Fed’s Lockhart: Rising Tsys Yields May Signal Market Fears
    1:42 PM ET 6/11/09 | Dow Jones (Adds additional Lockhart quote.) By Emily Barrett

    ATLANTA (Dow Jones)–The latest spikes in government bond yields may reflect investor concerns that warrant careful monitoring, the President of the Federal Reserve Bank of Atlanta said Thursday.

    The recent exodus from the Treasurys market – which has sent benchmark yields to multimonth highs – may reflect increased confidence in economic recovery, Lockhart said, though he saw other possible causes.

    Lockhart said investors may be getting worried that U.S. policymakers are risking higher inflation with their increased spending to pull the economy out of recession.

    “I do not dismiss these concerns out of hand,” he said, in prepared remarks for a speech at a conference sponsored by the Association of Securities Professionals.

    “But I have full confidence in the Federal Reserve’s ability and resolve to meet its inflation objectives in whatever environment presents itself,” Lockhart said.

    “Of the many risks the U.S. and global economies still confront, I firmly believe the Fed losing sight of its inflation objectives is not among them.”

  43. Andy T says:

    Well. We got our little “breakout” on some “good news”…..wonder if we get a Wile E. Coyote moment…got pretty close to 962…..should be an interesting afternoon….

  44. call me ahab says:

    thanks Karen- money quote-

    “The key to secure durable growth, he said, is for the U.S. to “correct profound structural imbalances,” which means tackling its ballooning fiscal deficit and the longstanding dominance of consumption over investment.”

  45. globaleyes says:

    Best Kept Secret: Baby Boomers have been subsidizing their parents since July 30, 1965.

  46. The Curmudgeon says:

    Dollars are priced in oil, is all you need to know about the oil prices. No inflation? Right. So long as you use the CPI or other government-bamboozled indices. The US government, not even with its military and political might, can make the price of a barrel of oil on an international market do what it wants to. Cue the stupid congressional hearings.

    Oil prices are all about the Fed’s balance sheet, and the fiscal chicanery of deficits to oblivion. Want a number? $12 trillion. That’s how much the Fed has either borrowed, invested or back-stopped in this so-called “crisis” which really isn’t, at least not yet. Want another? $50 trillion. That’s roughly the amount of unfunded liabilities on the US gov balance sheet.

    Once the economy has been completely nationalized and thereby destroyed–that’s when the real crisis will come. Then we’ll have to borrow money in rubles to buy oil. It appears we actually lost the Cold War. Elsewise, why do we appoint a new fucking government Tzar every other day to manage some aspect of the economy?

    You green shoot people are fucking nuts. This is the end game to America as we’ve known it the last century. It would have changed anyway eventually (countries come and go, as Ahab pointed out), but the government’s feckless attempt to save the roof covering the rotten beams and joists is hastening the collapse.

    Gravity explains the government. The more massive it becomes, the more powerful is its pull, until eventually it becomes like a black star, where nothing can escape.

    That’s my rant for the day.

  47. karen says:

    Andy, did you attempt to catch any knives? : ) You can bet I did. I’d only be having more fun today if I weren’t so accidentally hedged… I hate hedging… especially with no whiplash. Not my usual way… but, unusual times call for unusual methods.

  48. Mr. C. Cheese says:

    Wow, there’s real traders in here..God bless there soul!

  49. I-Man says:

    Nice rant Curmudge!

    So Jah seh… woe be unto the sheperd…

  50. call me ahab says:

    Karen and Andy

    I wonder- if the $ continues a slow death spiral whether oil is the right trade- I was always thinking that oil was being manipulated- but- maybe- it’s a transition into a hard assets-


  51. Thor says:

    Curmudgeon – What would happen IF – taxes were raised to what they were in the 80′s, both wars were ended, military spending was cut by 10%, and the age to collect social security was moved up a few years?

    I understand the doom and gloom, reality is reality, but I think your assuming that nothing will be done. I think everyone is in agreement that there is no possible way for the US to continue these deficits indefinitely, there is simply not available money in the world to finance our debt (never mind all the other countries now running deficits).

    One thing I’ve learned in my short life so far is that if you hear someone make a prediction about the future 99% of the time they will be wrong. No one knows what our future holds so making a prediction about it is no better than throwing darts.

  52. call me ahab says:


    you feel like I do today- it’s like I am an alternate universe- black is white, night is day . . .

  53. karen says:

    nah, forget oil.. short covering imo… and gold is actually weak.. had me wondering for a few minutes, though. they will save the dollar at all costs… the 30 year bond auction was successful… that means somebody wants it, at least for today…

  54. willid3 says:

    ahab, whats a hard asset? commodities? gold? neither of these will do much with out the dollar. to get a replacement for the dollar as reserve currency wouldn’t we need some thing as safe? and that would be exactly what? just curious i hear the same thing the dollar will tank because it won’t be the reserve currency. but since there is no currency that is any safer and commodities are completely at the mercy of the consumer buying, it becomes problematcial. and appears to be more of a diplomatic saber rattling game or a political one.

  55. call me ahab says:


    shit I don’t know- i am so fucking confused at this point I don’t know what i’m thinking- the market has my head spinning

  56. Andy T says:

    Ahab, oil has a fairly decent history of putting in seasonal peaks during May…and then taking a dip during the summer months (need to get the retail prices up as people begun to do their summer trips). Alternatively, the dollar has a history of putting in summer lows and then rallying….

    So, the best time to get long energy is during Dec-Jan….the market has now rallied well more than 100% off those lows….by all means jump in if you feel it the right thing to do, but after this kind of move I’d be cautious…. WTI has cleared some nice hurdles this week, but there could be some robust in front of 77 bucks. Also, there is some rather serious 60 min RSI divergence building….so some sort of rapid 3-4 buck drop is probably coming next 24-48 hours….

  57. karen says:

    willid3, gold is not a commodity. so there is your answer. and some of the other precious metals… platinum and palladium may become money as well..

  58. pmorrisonfl says:

    @Karen not sure if this was intentional, but ‘Can you spell Zimbabwae ‘ would make a great T-shirt!
    @Curmudgeon: Want another? $50 trillion. That’s roughly the amount of unfunded liabilities on the US gov balance sheet.

    I recently read a post on Angry Bear that put a different spin on ‘$50 Trillion unfunded liabilities’… it identifies that as the sum of all future social obligations while ignoring the fact that they are spent/paid/owed over time. The analogy used was with food; At present, I have an unfunded liability for all of the food I will eat for the rest of my life (and utility bills, etc…), but that doesn’t necessarily mean the money won’t be there when the time comes to buy my 90th birthday dinner. In that light the $50 Trillion number seems a bit more like a talking point than a serious critique. Not that we don’t have problems, or that I didn’t enjo your rant.

    Back to topic, do you think the option ARM resets have to happen before foreclosures return to ‘old normal’ levels?

  59. karen says:

    Check the chart of $gaso for big negative divergence… of course, we know it can stay overbot and irrational for longer…

  60. thetanman says:


    You have been posting links about CC defaults. AXP & V near LOD with the overall market way up.

  61. call me ahab says:

    thanks Andy-

    rhetorical question on my part- wanted some perspective on what was causing the run-up- my impression was manipulation as I have voiced in the past- but was thinking maybe the $ was in a slow death spiral and maybe the oil play was the result of that-

    wouldn’t trade it though

  62. pmorrisonfl says:

    From the (my) continuing education department:
    @AndyT On a thread last night you wrote: “FAZ hit the top of the downtrend line from 5/14 and reversed…it seems like it has one more lower into maybe 3.84….would love to see it break out of the falling wedge pattern to the upside…that’ll be a very clear buy at that point. ”

    I pulled up my charts and failed to figure out ‘the top of the downtrend line’… I can see the trend, but I’m imagining there’s some DMA or other line you’re refering to. Could you illuminate that for me?
    My interest in FAZ is only idle curiousity at this point, though it is spurred by big wins and losses in past relationships with it.

  63. The Curmudgeon says:


    –taxes rates were actually lower in the 80′s than they are today, at least at the highest brackets, which were 70% when Reagan took office

    –both “wars” are really low-intensity-conflicts that could drag on for years, at great cost without much return. Afghanistan is the graveyard of empires. It will likely be ours, as well, if only because there is no metric by which we pack up and leave.

    –I have no confidence that anything real will be done because of what I’ve seen so far. Printing money is not a panacea that solves all ills, or really, any ills. It just changes the accounting. Borrowing money to stimulate the economy just slices more off the present value of future earnings. Saving jobs and industries that by every right should die is just throwing good money after bad. The empire is crumbling from within, yet we seem hell-bent on shoring up its weak foundations with weaker ones.

    –My rant really wasn’t a prediction, except of trends for the very long term. I don’t do short-term predictions, (except I did say a couple of weeks ago that I bet GM would file bankruptcy:) Empires rise and fall. This one is tottering. Will it fail completely? Probably not in my lifetime. Is it headed that way? Definitely, like every empire in history. Could it grow more powerful? Not likely in its present configuration, if only because of a) demography, and b)it is already as powerful as any empire in history. There is only one way from here, and it is down. The question is whether it falls gracefully, sorta like the British Empire did after World War Two, or it falls with a splat, like the Ottoman Empire after World War One, to use two imperfect, but recent examples.

  64. karen says:

    thetanman, V only processes, not a lender. another one to watch is COF… and C, of course..

  65. thetanman says:

    AXP up 2% in 20 min. Forgot to mention, when I dis a stock that is a buy signal!

  66. Transor Z says:

    Looked at a bank-owned property a few weeks ago. The guy who showed it was an arrogant prick. The place had been at auction a few months back and was re-posted on MLS. List price was ~ -40% of assessed value. Guy was trying to tell me that home prices in Mass. are going back up. “Oh, we’ve bottomed,” he said smugly. I asked him what the reserve price was at auction and avoiding the question he said, “If you offer the bank that they’ll come down $5,000 and that’s it. They’re the biggest bank in the country. They don’t care. They’ll hold on to it for a year, two years. They don’t care.”

    Then I got all Steve Barry Case-Shiller chart on his ass and got up in his grill and said, “Hey, loser! I read The Big Picture! DO YOU EVEN KNOW WHO I AM???”

    Okay, so maybe I didn’t do that. I just nodded politely and tuned him out. And left because the place sucked and smelled like a homeless shelter.

  67. hopeImwrong says:

    Curmudgeon – I wish I didn’t agree with you. Maybe the US “power” in the world is the final bubble?

    I think we have been weakened as a country through many means, the culture has a seriously broken attitude, and can only reverse course through unhappy painful times (which would change the mindset of the culture). We are currently avoiding as much discomfort as possible, so it doesn’t look good for the future.

  68. Christopher says:

    Funny….first I see this as the top headline on the Google Business page…

    Than I come over to TBP and see the OPPOSITE.

    I wish I could tell you how many times that has happened lately.

    Thank you BR for providing a shelter from the spin.

    PS….BR or anyone remember that Goethe quote about a man’s hell is regrets or something along those lines?? I couldn’t seem to find it when I looked around.

  69. Onlooker from Troy says:

    ahab re:

    No kidding. But we can’t have any of that. That would involve all too much pain and sacrifice. Won’t do that until our national credit card is revoked. In the mean time we’ll just keep building up those structural imbalances, thank you very much.

    All’s well, don’t you know. All the doomsdayers really got all worked up over nothing. (snark)

    It’s really amazing to hear just that line being bandied about now. It does feel surreal.

  70. Thor says:

    Curmudgeon – good points (I was mostly playing devil’s advocate).

    Didn’t Reagan lower taxes across the board and then raise them again later in his term? Don’t know a lot about this but faintly recall something to that affect in a Frontline episode not long ago.

    Agree with you on our longer term prospects. I think we’re at an inflection point and how we handle the present crisis will determine whether or not we remain the world power that we are today. Not sure who would take our place though. A lot of people talk about China but I can’t see how much of the data coming out of China right now is any more honest than most of our data. I think things there are much worse. As for their future, again, who knows – everyone was worried about Japan in the 90′s (remember Rising Sun?) and look how that ended up. . .

    Personally, I’m not comfortable with the US being the hyper-power that it’s been the last 60 years – so if China does indeed rise and/or we fall, I think it will be a good thing for us as a nation in the long run. Britain is no longer the Empire that it was but post Empire England is not such bad place imho.

  71. call me ahab says:

    Transor Z Says-

    “Then I got all Steve Barry Case-Shiller chart on his ass and got up in his grill and said, “Hey, loser! I read The Big Picture! DO YOU EVEN KNOW WHO I AM???”

    Okay, so maybe I didn’t do that. I just nodded politely and tuned him out. And left because the place sucked and smelled like a homeless shelter.”

    funny story- although I won’t ask what homeless shelters you were comparing it to

  72. cjcpa says:

    I know.

    Employment numbers seemed good last week, then I came over here for the revelation of massive B/D adjustment..

    later, I looked at econompic and they had a great descending chart that seemed to confirm beyond a doubt that small businesses are shedding jobs. (like the rest of the economy).

    Cue the matrix analogy.

  73. Onlooker from Troy says:


    “We are currently avoiding as much discomfort as possible, so it doesn’t look good for the future.”

    Exactamundo. Pain is the best teacher. It’s just an unfortunate human truth. Our ability to borrow endlessly, and now print money, just puts off the learning.

  74. Thor says:

    hopeImwrong – YES! That is exactly what I’m thinking. As a nation we’ve been through far worse (Depression followed by WWII) and we came out of it ok. I totally agree that the average American needs a serious kick in the ass to get him to change his ways. In a perverse kind of way, I’ve been hoping that this crisis ends up being just as bad as the Depression – if we have a decade of hard times it will hopefully change an entire generation of attitudes towards money, savings, and consumption. If things get “better” too soon it’s just going to be another post .com event for us.

  75. karen says:

    Now I would have said that Macy’s would be bankrupt soon but Soros likes it:

    NEW YORK (MarketWatch) — Investor George Soros’ Soros Fund Management expanded its holdings of retailers from Macy’s Inc. and Wal-Mart Stores Inc. to Home Depot Inc. and Lowe’s Cos. during the first quarter, according to a regulatory filing. The firm bought about 9.3 million shares of Macy’s stock during the quarter, making it the firm’s top buy by the number of shares during the period. Best Buy Co. was the top sale by the number of shares. Soros sold 7.59 million shares of the electronics retailer to end the quarter with 1.9 million shares. Best Buy shares fell 3.3%.

  76. Onlooker from Troy says:


    My thinking exactly. Amen. But of course many people would think that we’re just gloomy doomsters with sadistic and/or masochistic leanings. But they miss the point entirely. It’s exasperating.

    We’ll see how this turns out in the near future, but I’m starting to get that sick feeling that they’ve succeeded in kicking the can and avoiding the hard lessons from this. Feelings that are shared by many who frequent these pages, I’m sure.

  77. pmorrisonfl says:

    @TransorZ “got all Steve Barry…” lol. We’re renting next subdivision over from a development we’d like to buy in, once prices return to sanity. A villa’s on the market now, and they’re asking for the 2005-2006 price. My wife called to set up a showing, and got turned down after discussing price with the realtor. Nevermind that we’re downpayment in the bank, no debt, two income, high credit score people… it’s all about the big bucks! Unfortunately for them, we can wait.

  78. Onlooker from Troy says:


    But maybe he bought at 7 and sold at 14. Hmmm. I guess we’ll find out later.

  79. call me ahab says:


    we as a country were never meant to be an Empire- that was a happenstance- which we accepted- I say- good riddance-

    let’s push onto other things- we can be a great country without wrapping ourselves in the flag- and saying we are the best in the world- hey- I’ve seen the world- and there’s a lot of cool places- different vibes- it’s all in what you like-

    we can be better- let’s stop all the nonsense about the sole Superpower- who gives a shit- I don’t

  80. Count me a skeptic but 1 in 398 is still only .25%. Had the US been an economics class that would be all the people that scored a D on average I think. Yes, it is bad but had the spin been 99.75% of homes did not file for foreclosure it might not have been noticed

  81. Thor says:

    Tranzor and pmorrisonfl – So you guys are in the market for property right now? I should be coming into some money in July and was thinking about buying some income property on one of the golf courses in Palm Springs. They’re fairly easy to rent out to vacationers and I would be buying it to hold for income indefinitely.

    You guys think it’s safe to buy now? I’m slightly nervous myself but I figure I wouldn’t sell it for decades unless I absolutely had to. Hopefully in the long run it would be a better place to park some money than a CD or equities. . .

  82. Cursive says:

    @ pmorrison 2:12

    Bad analogy. We are already on the hook for everyone else’s lunch money. It’s not your lunch money, it’s people who already think that they’ve earned their lunch. So, continuing the analogy, you’ve got to feed all of these ofther folks before you can eat. That’s why the standard of living is going to fall. There has been an orgy of consumerism and credit expansion. Something has to give and the second law of thermodynamics should assert itself soon enough.

  83. Transor Z says:

    @ahab: Haven’t you ever volunteered at a shelter at Thanksgiving? It’s good for the soul and gives positive karma points to counter the bad karma points I incur professionally. ;)

    @pmorissonfl: Unfortunately for them, we can wait. I’m with you. We’re happy to wait ‘em out. Increasing mortgage rates don’t scare me. Just means prices will go down.

    General question, OT: Who thinks the DTV conversion is going to boost 2Q retail numbers noticeably?

  84. danm says:

    If foreign countries do eventually take their money out of dollars where exactly would they move that money to? Who could absorb that kind of money? I don’t really know much about this (or anything else for that matter but it seemed logical to me. Anyone have any thoughts on that?
    The Fed.

  85. hopeImwrong says:

    dollar at 79.383


  86. pmorrisonfl says:

    @Thor “You guys think it’s safe to buy now? I’m slightly nervous myself”

    Oh, I’m nervous alright. I think we are in a historically unstable situation right now, and would want to see employment rising, inventory and foreclosures back inside ‘normal’ levels, rents back in line price-to-own and a bunch of other things before I was convinced things were stable. Buying real estate is probably for the very brave, thevery informed or the nuts.

    Meanwhile I’ve got a wife and son and we’d like to stay put roughly where we are for, well maybe as long as we both shall live. So my metric for a fair price is something like: what would the price be now if the bubble hadn’t happened? or ‘what did this place sell for in 1999′?, not exactly the same thing, but approximations. So as we go about our business we take note of the places we like, and take note of their current asking prices, current selling prices and former selling prices to get an idea of where we are.

  87. Thor says:

    Cursive – about standard of living – would our standard of living falling be such a bad thing? Does every family really need two cars, a giant 5 bedroom house, a vacation home, TV’s, cell phones, and cars for all their kids?

    I’ll never forget one of the best pieces of advice my grandparents gave me when I graduated college – Live the lifesytle you need, not the one you want. I’ve lived by it ever since.

  88. The Curmudgeon says:

    @Thor & Ahab:

    I’m with you…no more empire…no more standing armies standing around. Reinstate the draft just to make dying as egalitarian as possible when politicians want to play army with other peoples’s children.

    ….and bad news is good news….we’re like an alcoholic that needs to hit the gutter before he has any hope for recovery. Bring on GD II, which I think is coming soon, if only because of the idiot things we did in the panic of ’08.

  89. Bruce N Tennessee says:

    Nice fall in the initial claims this morning, huh…down to 601k

    What about non-adjusted numbers?…..


    “The advance number of actual initial claims under state programs, unadjusted, totaled 576,695 in the week ending June 6, an increase of 76,312 from the previous week. There were 373,046 initial claims in the comparable week in 2008.”

    Yes, these things do jump around…but I thought it was interesting anyhow…that the adjusted numbers dropped by 24,000 and the non-adjusted numbers increased by 76,000….


  90. Thor says:

    Curmudgeon – “if only because of the idiot things we did in the panic of ‘08.” Dont’t forget the prior 30 years. That’s not a partisan comment by the way, I mean that I think the nation as a whole (both government and population) has been living the high life on credit since the 80′s.

    That would be a fascinating sociology thesis when you think about it. Something changed in our culture to make us consume the way we do. I’ve often wondered if it was partly from the Boomers. A generation that has pretty much been spoiled since the day they were born.

  91. Cursive says:


    Considering that I have been living within my means, yes, any retrenchment would suck. However, I agree with you that a combination of self-control and self-denial, you always have the capacity to be happy. What concerns me more is that many people don’t have adequate self-control or self-denial and these people are going to go ape-shit crazy. I’d prefer not to be around for that, but that is the social bomb that we have collectively created and when it explodes, it will be nasty.

  92. Transor Z says:


    If you have the cash now and plan on holding on to some RE for “decades,” I think you might have answered your own question. But obviously I don’t know your situation and I’m not a financial planner. Depending on the market (don’t know CA at all) I would probably plan for further declines over the next few years, just to be conservative, and would finance any purchase accordingly. Do you want to own RE for personal reasons or are you just looking for a longterm place to park your money?

    As a homebuyer, I’m not concerned about buying “at the bottom” if it’s a home and neighborhood I really want and plan on living in for a long time — but I’m talking primary residence, not income property. Apples and oranges.

  93. skardin96 says:

    “… were reported on 321,480 U.S. properties during the month, a decrease of 6 percent from the previous month but an increase of nearly 18 percent from May 2008″

    Sorry, I wouldn’t consider a six figure an improvement. We need to stop this “oh, we are not bleeding as badly” as a sign of getting better.

  94. Thor says:

    Transer and pmorrisonfl – thanks so much for the comments. Why do I want to own real estate? Again, another piece of advice from my grandparents. They always held on to a home when they moved. The kept every home they’d ever lived in and rented them out. Over time, the homes were paid off and they not only owned the property but had a monthly income in addition to their SS and pensions. I would be buying for exactly this reason. I would be paying cash and just holding the property as a place to park my money for the long term.

    I also own a home in LA (Hollywood baby!) that I unfortunately bought near the top – luckily I put a good amount down on it so I’m not upside down in my mortgage. Again, advice from my grandparents, I bought what I needed, not what I wanted (although I do live my little house) or could ‘technically’ afford. I’m with you Tranzor, I would never sell this house unless I absolutely had to. If I ever move I’d rent it out so I’m not too concerned with where the market is going to be in 10 years.

  95. Christopher says:

    Eisenhower called bullshit on the superpower crap in 1961….the only guy that could have set a different course got shot in Dallas.

    I think Clinton had a good opportunity to do the right thing….but expecting a politician to do the right thing is akin to pixie dust and unicorns.

    Now I think most Americans are too fat and stupid to notice they are being led by the nose to the abattoir.

    My household is on a three year plan to be completely free from all debt and contracts by April Fools Day 2012. I’m still not sure what we will do at that point…but we’re looking at all our options.

  96. hopeImwrong says:

    Thor – “Something changed in our culture to make us consume the way we do. ”

    It’s the theory of the free lunch, gaming the system (struggle for survival), and keeping up with the Jones.

    You see your neighbor getting a free lunch by gaming the system, and nothing bad happens, they get away with it. You see it repeatedly until you are a fool if you don’t join in. You join in, and get seduced by the free lunch, until you feel entitled, and the politicians help promote what you want so they can get elected.

    This is played out everywhere in a society in decline (when the decline is due to hyper-prosperity, thus survival is no longer an issue, just keeping up with the Jones’ and satisfying your wants is an issue).

  97. Mannwich says:

    @hope: Bingo, and this little game is still going on. Hasn’t stopped one bit. When it does, that’s when things will get ugly, but this could go on for quite a while.

  98. hopeImwrong says:

    No one really wants to live a life of sacrifice once they get used to hyper-prosperity. Thus, head in the sand syndrome.

  99. The Curmudgeon says:


    I think it all got started (or at least, really going) after the fall of the Berlin Wall. Without the existential threat provided by the Soviet Union, we lost all sense of self-discipline and became unmoored from reality, thinking we were “exceptional” as if every empire smoldering on the ash heaps of history didn’t think the same thing.

    Remember Fukyama’s proclamation of the “End of History” back in the 90′s? Sounds a bit trite these days.

    The Boomers exuded exceptionalism and a hubristic belief that they were not subject to the same vicissitudes of fate that every age before them had suffered and endured, but I think they were just a product of the times, which were fat and stupid. Now they are beginning to die off and fade away. And history ain’t over. Soon enough, their era will be but a fly-speck in its eye.

  100. Steve Barry says:

    Total credit per GDP as of 3/31…52903T credit/14.09T GDP = 375%, up from 370%…still haven’t begun to deleverage yet.