Zillow: Underwater Mortgages May Reach 30%
Housing bottoming? Things improving? Worst behind us?
Well, not exactly.
According to a recent Zillow study, the combination of unsold, vacant homes and underwater mortgages will likely pressure the markets further.
Bloomberg:
“Almost one-quarter of U.S. mortgage holders owed more than their homes were worth in the second quarter and that figure may rise to as much as 30 percent by mid-2010 as job losses and foreclosures climb, Zillow.com said.
Homeowners are being hurt by price declines. The estimated median value for single-family houses slid to $186,500 in the period, a 12 percent drop from a year earlier and the 10th consecutive quarterly decrease, the Seattle-based real estate data service said in a report today…
A glut of unsold homes is also pushing down prices. The 3.8 million homes for sale in June would take 9.4 months to sell at the current pace of transactions, according to the National Association of Realtors. The inventory turnover rate averaged 4.5 months in the six years from 2000 to 2005.
More than 18.7 million homes, including foreclosures, residences for sale and vacation homes, stood vacant in the U.S. during the second quarter. That compared with 18.6 million a year earlier, the U.S. Census Bureau said July 24.”
If you prefer your housing porn in bullet point format, this is lifted directly from the Zillow news release:
• U.S. Home values fell 12.1 percent year-over-year, marking the 10th consecutive quarter of declines
• Q2 was the first quarter where national declines are not growing.
• Total home sales fell 23.7 percent in June versus a year earlier. In the short term, total home sales rose 3.8 percent in June versus May.
• Negative equity: More than one-fifth (23 percent) of all owners of single family homes with mortgages owe more on a mortgage than their home is currently worth.
• Foreclosure re-sales made up 22 percent of all home sales in June.
Homes sold for loss: 29.2 percent of sellers sold homes in June for less than the previous purchase price.
Of course, you can believe the usual NAR releases/MSM articles that ignore seasonality if you want to put a happy face on it . . .
>
Sources:
Home Values Flatten in Short Term; Yearly Declines Shrink, but High Rates of Foreclosure, Negative Equity Expected to Delay True Recovery
Zillow, Aug. 11 2009
http://zillow.mediaroom.com/index.php?s=159&item=142
U.S. Underwater Mortgages May Reach 30%, Zillow Says
Dan Levy
Bloomberg, Aug 11 2009
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a2p_zMYkFQFg
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August 11th, 2009 at 9:38 am
I also saw 50% underwater as things get worse more slowly, I think it was Deutsche bank assessment
August 11th, 2009 at 9:41 am
When do we start calling this the CAPTAIN NEMO economy?
August 11th, 2009 at 9:44 am
@TC
While I was watching the Sunday morning shows like Meet the Press, the pundits were basically describing the new Healthcare Package as a future FNMA…
So we have THAT going for us too!
~~~
BR: And you listen to talkshow pundits why? The same group of clowns who pretty much got EVERYTHING wrong — from Iraq to Housing to Credit to the Markets — have what credibility ?
August 11th, 2009 at 9:46 am
The long end and the US$ are stronger again. I wonder if we have seen the turn? I believe that oil will sell off this week or next on a slightly firming dollar, especially after the lower OPEC demand forecast for 2010.
August 11th, 2009 at 9:46 am
So what’s keeping this “owners” from buying a foreclosed home near their current address and then default or BK on the current one? Please FICA score is not really a determining factor these days
August 11th, 2009 at 9:50 am
S&P breaking the 60 minute trend. Let’s see if it continues to decline. Market is perhaps preparing for the outcome of Fed meeting.
August 11th, 2009 at 9:51 am
@LB
I hope so LB cause I’m getting kind of tired of this…
I for get what they’re auctioning today…TIPS, 10′s?, 30′s?
August 11th, 2009 at 9:53 am
@manhattanguy
Yeah…I have 996, 988, & 982 as minor support…does that jive with you?
August 11th, 2009 at 9:55 am
cvienne/LB/AT-
did you catch Prechter’s analysis that the USD has hit the 5th wave down and has bottomed and should increase for next 1 to 2 years-
http://finance.yahoo.com/tech-ticker/article/298957/Dollar‘s-Hit-a-”Major-Bottom”-Prechter-Says-Why-That’s-Not-Such-Good-News
what is your impression of a $ trade before any Fed announcement or after- such as UUP or possibly an inverse on the euro or oil
August 11th, 2009 at 9:55 am
Not to worry, Ginnie Mae, the government’s own subprime mortgage funder, has virtually ensured that the lost equity will be absorbed by the taxpayers, and not the banks, nor the homeowners:
“Much to their dismay, Americans learned last year that they “owned” Fannie Mae and Freddie Mac. Well, meet their cousin, Ginnie Mae or the Government National Mortgage Association, which will soon join them as a trillion-dollar packager of subprime mortgages. Taxpayers own Ginnie too.
Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount of 2007. ”
http://online.wsj.com/article/SB10001424052970204908604574334662183078806.html
The trashing of the national balance sheet continues apace.
~~~
BR: While I agree with you about the despicable wealth transfer from taxpayers to incompetent bankers, I hasten to point out this is a WSJ OpEd — an ideologically rigid and extreme group — their track record for accuracy and forcasting acumen leaves much be desired…
August 11th, 2009 at 9:56 am
@Cv
I think we will zig zag between 980 and 999 until early Sep and then comes a “better than expected” correction.
August 11th, 2009 at 9:57 am
@cv:
USG is selling a record $23 billion in 10-year debt on Wednesday and $15 billion in 30-year bond on Thursday.
August 11th, 2009 at 10:01 am
The Fed will say we are not “out of the woods” and “inflationary pressures” are weak. They need to sell this debt.
LB is feeling better about all of the stronger dollar trades. Since the Fed will not indicate a rate hike is imminent, one would probably stay away from shorting the banks until later. Any HINT of tightening would be very negative for the banks. Will probably short heavily after any post-Fed equity rally that might ensue. For the time being, mainly short oil and gold. FXE seems to have topped out. Oil, CSI look like tops have/are forming.
August 11th, 2009 at 10:01 am
@ahab
Andy T put out some nice scenarios on the dollar (one included a version of the “Prechter” call that you refer to)…
I like Andy’s take on things because he’s careful to play out “what if” scenarios…
Bottom line: Could be that it’s bottomed, but it’s not officially confirmed yet…Looking pretty good so far though…
One thing that I really like about Treasuries at the moment is that it has been such an “uncrowded” trade most of the summer…ben & lefty have alluded to this…
I have been inclined to BUY treasuries in this period simply because any flight from equities is likely to end up there…If fund managers have been fortunate enough to lock in double digit gains in ’09, or better, why not LOCK THAT IN for the rest of the year…All you’re hoping for is that the dollar or Treasuries don’t collapse in the meantime…I can’t see that happening…YET (in ’09)
August 11th, 2009 at 10:02 am
@manhattanguy
Mobius himself tossed out 30%
August 11th, 2009 at 10:06 am
@manhattanguy
A move to 982 would form a nice H&S…Which in my estimation would get supported & rally (for a bit)…
It might be the farewell headfake before a wicked move down…
August 11th, 2009 at 10:11 am
Look at that move in the 5-year this morning!! Haven’t had this much fun in a while… oil crumbling… TASTY.
“If fund managers have been fortunate enough to lock in double digit gains in ‘09, or better, why not LOCK THAT IN for the rest of the year…All you’re hoping for is that the dollar or Treasuries don’t collapse in the meantime…I can’t see that happening…YET (in ‘09)”
Agreed 100%.
August 11th, 2009 at 10:14 am
[...] From The Big Picture… Posted in Real Estate « Housing Mess Is Not Over Yet – Bloomberg [...]
August 11th, 2009 at 10:22 am
Please note, when lending to Robespierre, make sure you have a cross-default clause in your lending agreement… (LOL!)
August 11th, 2009 at 10:31 am
did you catch Prechter’s analysis that the USD has hit the 5th wave down and has bottomed and should increase for next 1 to 2 years
Doesn’t that mean lower oil prices and a likely tumbling stock market?
August 11th, 2009 at 10:36 am
And I was hoping that housing had bottomed, BR. Thanks for harshing Mannwich’s summer green shoots mellow! Back to reality from summer vacation la-la land for Mannwich. Still sitting mostly idle watching the set up for, and awaiting, the Fall in the fall part deux.
August 11th, 2009 at 10:40 am
calvin-
check out the link- the LH side has Prechter’s interview where he says just that
http://finance.yahoo.com/tech-ticker/article/298957/Dollar’s
August 11th, 2009 at 10:40 am
This market doesn’t have much in the way of firm technical support until SPX 890 and the big one at 880-875.
We just might be in for another move that no-one expected. LB will be a rip-seller not a dip-buyer down to 875.
August 11th, 2009 at 10:41 am
calvin- botched the last post- here you go
check out the link- the LH side has Prechter’s interview where he says just that
http://finance.yahoo.com/tech-ticker/article/298957/Dollar’s
August 11th, 2009 at 10:43 am
Barry,
Actually, if you told me that ONLY an additional 5% of mortgage holders were going to go under water, I would think that would be great news (I don’t really believe that, though.) Especially when the air lets out after the $8000 credit expires.
-Chris
August 11th, 2009 at 10:44 am
@Manny
Not that housing has bottomed IMO (not by a long shot)…Actually, my personal estimate is somewhere between 15% – 20% more of declines but it’s almost SILLY to even come up with numbers because the reality can get skewed so many different ways…
- Another huge loss in CONFIDENCE and they could tank further.
- There is likely to end up a “disconnect” in the range of house prices (i.e. the pricier houses decline another 40% whereas more affordable houses only frop another 15%, etc.).
In any case, we’re probably right on the cusp of another “echo” from last March, where the rate on the 10y comes down to, say, below 3%, and you get another wave of re-fi’s…It’s starting to shape up that way…
August 11th, 2009 at 10:48 am
@ahab
One thing that Andy T pointed out…(why he wasn’t ready to go 100% with the completion of the 5 wave – were some of the oddities of how the 5 wave looked)…
In any case, Andy T did make the point that the final (most recent) days of dollar decline didn’t look so much like “capitulation” (which was something I was looking for)…but more like simple “exhaustion”…
Which is also an important factor…
Andy – jump in here whenever you want…
August 11th, 2009 at 10:51 am
Sort of related but I am wondering- is there a REIT bubble?
BR made a mention of this the other day- 40% possible air.
August 11th, 2009 at 10:52 am
“the rate on the 10y comes down to, say, below 3%, and you get another wave of re-fi’s”
This will indeed be an important part of the strategy and they will crash the stock market to achieve it, if they have to. Back later, chaps. Enjoy the day.
August 11th, 2009 at 10:55 am
Hello TBP Bredren,
I and I got SPX sights on 982 then wait and see. No equity market positions at the moment.
As per USO, looking for a move down to 35.50 then wait and see. Still rockin SCO from 8/3 and feeling serene about it. Thank you, Mr Greenback!
Dread is running a one position ship for the duration. Looking to get short the SPX when its time to get jiggy with it… probably after the bounce that should ensue after the tap of 982 and take us to a lower high. Until then… take it as it comes.
If I wanted to play elsewhere, I’d be looking for longs in FXP, TLT. I wouldnt be touching any trades at all in the ‘nancials, CRE, banks, any of that shit…
August 11th, 2009 at 11:08 am
BR: While I agree with you about the despicable wealth transfer from taxpayers to incompetent bankers, I hasten to point out this is a WSJ OpEd — an ideologically rigid and extreme group — their track record for accuracy and forcasting acumen leaves much be desired…
Yeah, I get that it’s op-ed, but this portion of it is verifiable, and to their credit, the R&O in the WSJ was harping on the dangers of Fannie and Freddie long before (starting in about 2005) it was fashionable.
I try not to exclude information just because it comes from a biased point of view. I just try to discount it according to whatever direction I think the bias runs. And the stuff I pulled out of the article is independently (and in my case, anectdotally) verifiable.
http://www.ginniemae.gov/about/ann_rep.asp?subTitle=About
August 11th, 2009 at 11:09 am
@I-Man
There he is…U’ve been kinda quiet these days brah…
I like TLT as well…I’ve been trading in and out of the “out of the money” January 2010 options on that…
I’ve got more on board than I probably need right now, but the 2-day move on that has the look of extending out at least to 94-95 which would make for some nice juicy profits…
August 11th, 2009 at 11:09 am
cvienne-
appreciate your observations- LB’s as well-
taking a bike ride now- and cvienne- you should appreciate this- it’s pretty nice to hop on a bike and ride along the Potomac any time I want- the river is right behind my house-
later
August 11th, 2009 at 11:13 am
Meanwhile, 29 percent of homeowners say they would be at least somewhat likely to put their home on the market if they see signs of a turnaround, . . . signaling an abundance of potential shadow inventory waiting in the wings.
It’s hard for me to get a handle on exactly what “30% underwater” really means, given that borrowers will fall along a spectrum. IOW, the number doesn’t distinguish between borrowers who are 1% underwater vs. 20% underwater for purposes of predicting their future behavior. Income differences are another important factor. Someone’s $1 mil McMansion is now valued at $700k and they still owe $800k but can swing payments because there’s sufficient income.
I’m not saying this is a good datapoint by any means, but I think its usefulness is limited.
On the other hand, I find the figure of 29% wanting to sell their homes a very interesting indicator of pent-up supply. I could see people who are otherwise solvent but reluctant to sell homes at a loss hanging out in this limbo for a few years.
August 11th, 2009 at 11:18 am
@ahab
Have a nice ride…
I’m about 500 yards to the Potomac…no real bike trails where I’m out…So I just jump in the boat :-)
August 11th, 2009 at 11:19 am
@Thor
Agreed…I doubt they’ll let any of these things expire…
This is the USG version of 0% financing (that the car companies used during all previous recessions)…They NEVER expire…
August 11th, 2009 at 11:24 am
A little surprising to see the market down this much the day before the Fed meeting. But I still think tomorrow is when the fireworks will really show up in the currency and bond markets. The most important issue, in my view, is if the Fed changes its language at all about QE and fighting deflation versus potentially withdrawing stimulus given the stabilizing economic data.
August 11th, 2009 at 11:28 am
@ CV-
Yeah… I-Man was out in the desert for a few days for a spirited gathering of friends and electric guitar.
Was able to avoid being stopped out of SCO by 8 cents on Friday morning. Isnt that just the best feeling in the world? Usually I’m stopped out at the lows. Must be learning some things about stop placements… ie: just how far to go below the obvious without pulling a Plaxico.
I enjoyed lurking through your guys’ banter yesterday, but didnt feel like digging out my wordpress pw.
August 11th, 2009 at 11:30 am
@jturner
This is why I believe inflation will be a multi headed monster in a year or 2.
August 11th, 2009 at 11:35 am
“MORE credits to get people to buy homes, maybe even second and third homes”
But only for bankers, Manny in Minny.
August 11th, 2009 at 11:45 am
Nice run for the $ but it slammed into resistance first thing this morning.
A 1-2% pull back is probable following the Fed announcement tomorrow, before the rally continues.
August 11th, 2009 at 11:45 am
Deflation first…Inflation to follow…
The USG needs some deflation right now to finish it’s $2 trillion in funding for ’09…
- Equity sell off, dollar rally, Treasury rally
- The “timing” of when inflation starts to kick off will come sometime around next February (when they have to look at projected revenues for 2010, realize we’re not going to see 3.5% GDP growth, look at their polling numbers, and battle it out deciding whether they have the balls to ask for ANOTHER $2 trillion (after not seeing much progress from the first backhoe scoop)…
If they manage to approve the spending, then let the INFLATION song begin…Another factor will be whether Bernanke is still in his seat, or someone else…
A dollar collapse at that point might not be so bad…
A wave of foreigners who can pool their cash together and buy up cheap real estate in the US might just be thing needed to put a floor under housing…Remember when the Japanese were buying up Manhattan in the 80′s?
August 11th, 2009 at 11:46 am
SRS finally took out it’s 20 day decline trendline…
August 11th, 2009 at 11:51 am
@I-Man
“If you are going to play the gold dance in this scenario, you best do it in bullion, because if the shit does hit the fan enough for gold to moonshoot, thats the only way you will keep your hands on it.
Good luck trying to pay for groceries with a chunk of gold though. At that point, better be long “dirt, water, and sun… and seeds and hoes.”
—
uuuummm…check, check, check, check…don’t forget the pick-up truck with the nat gas burning engine…
August 11th, 2009 at 11:52 am
This is INDEED the likely scenario, my farming friend. Inflation always seems more palatable immediately after a stock market crash. The USG will in fact need to engineer another CRASH if the Treasury are to maintain foreign purchases of our debt and then they can ask Congress to approve further STIMULUS. Don’t bet against it.
Deflation of housing/paper assets, inflation in unimpaired assets is likely to be the result in the end.
August 11th, 2009 at 11:59 am
@cvienne: I was (again) being snarky. I’d written off that vampire ETF a long time ago, which means it might be time to get back in! ;-)
August 11th, 2009 at 12:05 pm
Dollar hit an unsustainable bearish emotional extreme. So, it had to bounce. It would be nice to decisively take out 80.50-81.10 zone to confirm that was the low for the year.
On the very short term charts, the move off the lows has an “impulsive” look about it, which is bullish. If it is a bullish “five” off the lows, it should definitely hold a 50-62% retrace, 78.52-78.28 based on the current range. Bullish impulses should not retrace too deeply…if this move is to have the power I think it will have, it has no business retracing all the way back to 77.50 ish….
I’m a dip buyer of Sep DX, but would be disappointed (short term) with action below 78.28….
~~~~~~~~
Sidenote: Wow, the 10 year rallied and stocks got beat up a little bit to start the week out….who would’ve thunk it?!?!? There’s not to many easy trades, but betting on a counterintuitive US debt rally going into “the biggest weekly debt offering of all time!”….wasn’t that difficult. I’m out of that day trade now, but the Sep 10 yr futures above 117-13 would start to look really bullish…you would have snapped a pennant and broken back above the 62% retrace of the most recent decline….
August 11th, 2009 at 12:11 pm
@Andy
” it should definitely hold a 50-62% retrace”
Feels to me like a 50 is what we’ll get…That would be nice to see…
August 11th, 2009 at 1:03 pm
I-Man, perhaps this will cheer you: http://www.ft.com/cms/s/0/0e7071d0-85ca-11de-98de-00144feabdc0.html?nclick_check=1
August 11th, 2009 at 1:10 pm
Troubled Assets May Still Pose Risk NYT
http://www.nytimes.com/2009/08/11/business/11toxic.html?th&emc=th
“The nation’s banks continue to hold on their books billions of dollars in assets about whose proper valuation there is a dispute and that are very difficult to sell,” the panel said in its latest monthly report.
As a result, it warned, many banks could find themselves short of capital if the economy suffered another downturn and their losses on troubled loans soared.
In an encouraging note, the panel said 18 of the 19 biggest bank holding companies would probably have enough capital even if economic and financial conditions deteriorated more than they have already. That conclusion essentially backed up the results of the Federal Reserve’s stress tests in April.
But it warned that thousands of small and medium-size banks, which it defined as those with assets of $600 million to $100 billion, might find themselves short a total of $21 billion if the conditions matched its worst-case assumptions.
———————
Great. Let’s hear it for free market capitalism.
The big banks get TARP and interest free money. The smaller banks get ripped with exploding FDIC fees.
The oligopoly strengthens its grip on the economy.
But me thinks the biggies are due a fall as well.
August 11th, 2009 at 1:10 pm
@ karen:
Thanks… but in the words of Bob Marley:
“Rasta dont work for no CIA.” :)
http://www.rasta-man-vibration.com/rat-race.html
“In the abundance of water, the fool is thirsty.”
August 11th, 2009 at 1:14 pm
I-Man, ha! thanks for cheering me up!
August 11th, 2009 at 1:17 pm
BR, Just wanted you to know:
-Couldn’t agree with you more about turning off the bobble heads on talk TV. I did it a few weeks ago, and am down to a few blogs for information and analysis, obviously yours included.
-Am just finishing “Bailout Nation” on audio. I listen to a chapter while working out. On days I don’t feel like it, I drag my fat butt to the gym looking forward to hearing another chapter. You have to write another book to keep me mentally as well as physically toned. I’ve talked about it so much I now have to search for my iPod, usually with my wife, who is now listening to it also. Great job!
-Heard you speak at the Agora/Vancouver conference. These days, I feel like I’m channeling with Diagones, stumbling around in a strange land with a lantern, looking for an honest man. When I heard your comments, I knew I had found one. Believe it or not, and notwithstanding the message from the book, I find it comforting. Why? It’s not me who has gone insane. It really is us as a nation. Your message is like a backwards GPS. It tells us where we’ve been and how we got here. Write another book looking forward, with the direction we should be going. Keep the message out there, and great job so far.
August 11th, 2009 at 1:20 pm
@ beaufou:
Ha! I tried that and it was too big to fit in the box… thats why I was hoping CV could link it to a page… I guess I could link it to his post…
August 11th, 2009 at 1:47 pm
From Marketwatch top story:
The decline in volume started on Friday and suggests the S&P 500 will make a new low beneath its July 8 bottom of 869.32, probably next week — on the way to a test during September or October of its March 6 intraday low of 666.79, said Tony Cherniawski, chief investment officer at the Practical Investor LLC.
“In a normal breakout you get rising volume. In this case, we had rising volume for a while; then it really dropped off last week,” said Cherniawski, who ascribes the recent rise in equities to “a huge short-covering rally.”
Pretty much in alignment with my views, although I am not sure about a retest of March lows. I feel around mid 800s where it would bottom.
August 11th, 2009 at 2:00 pm
Out here in flyover….I don’t think we are near 25-30% underwater on residential….yet.
The folks that bought after 2005 might be in trouble…but because we never got the massive price runups….less damage now. But things tend to lag the coasts in the MW….the market is NOT getting better by any stretch…despite the NAR canaries.
CRE is a trainwreck looking for a place to happen.
Seriously. Ugly.
Overall I think we have AT LEAST 2-3 more years of pain and/or flat valuations out here….even if the coasts show signs before that.
August 11th, 2009 at 2:07 pm
Anytime when you introduce such a major change it was always met with resistance. U.S is the only nation in the OECD countries that does not provide universal health care to its own citizens. Drug and insurance industry have a strong stranglehold on the congress with their enormous lobbying power (much like the Oil industry). I think its about time we take the next step.
Agree timing is tricky given the number of changes happening already in this country.
I recommend reading this article from The Ecomomist
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13899647
I think we need the U.K style NHS system in this country. It’s long overdue in my opinion.
August 11th, 2009 at 2:09 pm
@leftback: That was precisely ONE reason I was against the Wall Street bailouts to begin with and said so from the outset. I truly thought, and still think, they would/will derail O’s entire agenda, some of which I’m on board with, including overhauling health care in any meaningful fashion that actually has a chance of passing and working reasonably well.
August 11th, 2009 at 2:13 pm
@manhattanguy
“The decline in volume started on Friday and suggests the S&P 500 will make a new low beneath its July 8 bottom of 869.32, probably next week — on the way to a test during September or October of its March 6 intraday low of 666.79″
—
Interestingly, the FIBO retrace scenario back to 666 goes as follows:
23.6% retrace = 941 (where we spent a good solid week in May)
38.2% retrace = 880 (where some lines were drawn and there was the eventual rally at 869)
50% retrace = 840 (the low print on “capitulation day” 10/6/08)
61.2% retrace = 798 (the January – March ’09 head & shoulders)
78.6& retrace = 740 (the November ’08 low, plus the “mini” weekly H&S right at the March low)
…and my personal favorite…566…our next low…
August 11th, 2009 at 2:15 pm
Bruce, a book for you addressing America’s number-one public health issue:
http://www.amazon.com/End-Overeating-Insatiable-American-Appetite/dp/1605297852/ref=sr_1_3?ie=UTF8&qid=1250014421&sr=8-3
put a copy in your waiting area : )
August 11th, 2009 at 2:17 pm
You guys are brutal :-)
Note to self: Always list my source if I post something from another site.
August 11th, 2009 at 2:22 pm
@Manny
I generally don’t watch TV (except for sports, mainly football)…I do watch a lot of Discovery & Science channel (or DVR the shows, in any case)…
Never watch network or local news…
Used to watch business news (but stopped watching those about 6 months ago)…
Sometimes, on a slow Sunday, I’ll catch these shows like Meet the Press…
does that satisfy your curiosity?
August 11th, 2009 at 2:50 pm
Christopher; its actually when you lose your job that most people get concerned about health care (unless young, naive and healthy). Having lost your job and income you either have to come up with some hefty COBRE payment to keep the health insurrence or let it go and hope not to get seriously sick. If you let it go you will now be facing “pre-existing condition” problems if you get new employment. The reason Wall Street is targeting seniors in their current campaign against healt care is that seniors have permanent government health care so they don’t have that kind of problems. Not that it has stopped the more senile of them screming against government taking over their health care :-)
PS: Thery have actually done as much fixing of the economy as they will be allowed to do, and it has stopped the free fall; so it is natural for them to continue with next item.
August 11th, 2009 at 2:51 pm
@hope:
yes, I’ve even offered that idea months ago…
August 11th, 2009 at 2:52 pm
I-man you from Eastern Washington? Learn how to speak Spanish and all will be well at the DMV.
August 11th, 2009 at 2:55 pm
Manhattanguy – I agree, I’m taxed on my cigarettes as a way to both discourage me from smoking and to partly offset the extra burden I might someday put on the health system (so they say). Why not have a fat tax – I just read an article that said the average obese person costs the medical system an extra 1400 bucks a year. When you multiply that by 50% of the US population you get a very big number indeed.
August 11th, 2009 at 2:56 pm
I understand about complaints with the current health care system, but please understand, it is a regulated industry, and special interests and lobbyists have paid into the system to get their peice of the pie. Yes, patients do not have a piece of the pie. But what the heck makes anyone think this new special interest sponsored health care program will be any better? We have a government program for health care. It’s called medicare. There is also medicaid. There is also the plan for congress, there is also a plan for other government workers. Why can’t any of these be expanded to cover the uninsured? Oh yeah, I forgot. They can’t be expanded because of special interests!
August 11th, 2009 at 2:57 pm
Jeff, I’m not arguing against the health plan or a health plan. also, i am one of the uninsured..
August 11th, 2009 at 2:57 pm
@manhattanguy:
The article is just to say that government, once it gets involved, REALLY gets involved. Of course, and extension of this sort of idea would be….testing for HIV before residence is granted…hepatitis B….adenomatous polyps of the colon???(pre-malignant..)….
…life can get a little strange..
August 11th, 2009 at 2:57 pm
Bruce @ 2:32
I guess they just don’t want foreigners from countries with second rank health care systems to come and suck on their precious taxfunded system. Kinf of sounds familiar, doesn’t it ?
August 11th, 2009 at 3:08 pm
pmorrisonfl – We don’t have any of the new MacBook Pro 13′inch machines in the office yet but looking at the specs from Apple I would say that you’d be safe in getting one. They are slightly slower than the 15″ versions but unless you’re going to be running Photoshop or working with very large (15MB or more) excel files I’d say buy it.
The only thing you should be sure to get is more RAM – be sure to max it out, especially if you plan to use either VMWare or Parallels to run windows. Whatever you do though, don’t buy the RAM from Apple, you can get it much cheaper from either CDW.com or Best Buy.
August 11th, 2009 at 3:10 pm
pmorrisonfl – PS – the graphics card for all the MacBook Pro’s seems to be the same – you can opt for a different one when you go through to make the purchase but unless you’re a heavy gamer I would stick with the default NVIDIA GeForce 9400M.
August 11th, 2009 at 3:31 pm
Geez…
Dont say “s o c i a l i s t” in any posts if you dont want them to be eaten.
August 11th, 2009 at 3:31 pm
@karen: If you have them in Orange County, I would suggest joining an Ultimate Boxing class. I joined one here about 6 weeks ago (a 12 week program) and can honestly say I haven’t worked out this hard in years, maybe since high school or ever. It’s really knocked me off of my workout plateau in a brutal, abrupt, yet welcome, fashion.
August 11th, 2009 at 3:32 pm
Too late, I-Man. Already had one long post eaten about 15 minutes ago.
August 11th, 2009 at 3:32 pm
“About 12 million U.S. homeowners owe more than their homes are worth, compared with 6.6 million at the end of last year and slightly more than 3 million at the close of 2006.” Already, U.S. consumer spending is slumping as homeowners find they can no longer take equity out of their homes to fund their lifestyles.
In a slowing economy, it doesn’t take much to push an underwater mortgage into default.
Read More : http://www.housingnewslive.com
August 11th, 2009 at 3:32 pm
Mannwich – Anger is increase everywhere except the government and bailed out financials. It’s amazing how insulated some can be. Congressmen should not be acting like deer in the headlights at these town hall meetings. It was kind of predictable.
August 11th, 2009 at 3:33 pm
@hope,
I agree completely with your 3:20 post. That’s the way I’m seeing it as well. Something is happening with mood change right now. The market, as Prechter says, is our barometer to measure that mood change. Time will tell if we are right, but I don’t think it will take much time.
@Thor,
No harsh at all man, I think you are just making a point, it’s all good. I have tried very much to stay out of the health care debate, when I made my comment above it really had nothing to do with health care at all, just my observation about what I see going on. The media, left or right media, can tell me whatever they want about why it is happening at the town halls, but when I go to Subway today to buy a hoagie and the two schmoes behind me are having a pissing match about health care I know it’s something more than manufactured.
@Karen,
I am a proponent of term insurance if there ever was one. Nothing bothers me more than the rep that manipulates clients into thinking that if they buy term, instead of say, a VUL, they will never collect.
August 11th, 2009 at 3:59 pm
@OT AndyT
You’ve got a point… to a point. I had the exact setup you described. Your solution addresses the demand side of the equation… and I was/am perfectly happy with ‘walking it off’ when that’s possible. But what about the supply side of the equation… there are those who want to sell as much health care as possible, whether for profit or malpractice protection. That’s a factor in why the US spends so much on this, and it lies unaddressed by such an approach. And you can’t walk off a pregnancy (we actually intended to go the mid-wife route, until complications arose and we wound up in last-minute 18 hour hospital stint that there was no planning around… try walking that off!).
@karen/manhattanguy… you sound like wealthy people when you talk about food. I’d guess most of what you eat doesn’t pass through a factory on its way to the stores and restaurants you frequent. If so, good for you. But there’s a whole part of the food industry dedicated to maximizing profit and minimizing expense and its products line much of the shelves of the stores and restaurants from which we eat. Unless you grow your own arugula, it probably costs more per-calorie down at the supermarket than the high-fructose potato crisps the masses are having as their vegetable. It’s that per-calorie cost that is relevant to how many/most people spend their food budgets, and the processors have that down to a science. Individual choice is certainly a component… but much of economics and industry is warring against our health for the food dollars people spend… I think that point gets missed smaller food expenses are as a component of one’s wealth.
I’ve got a theory that fast food and much of what’s produced for the grocery stores
August 11th, 2009 at 4:00 pm
@LB
I didn’t say EQUAL, I said “akin”
a·kin (-kn)
adj.
1. Of the same kin; related by blood.
2. Having a similar quality or character; analogous.
3. Linguistics…Sharing a common origin or an ancestral form
I’m referring to it’s “origin”,and, that it is NOT simply H2O but that had salinity
August 11th, 2009 at 4:00 pm
since we are talking about it, and some of you seem to know, what is a good cheap way to measure body fat? The p90x program I’m doing had you measure it at the beg. which I never did. Can you buy something simple for this?
August 11th, 2009 at 4:01 pm
Bruce I have worked in it and with it and in different regions of the country and my wife’s chronic disease as well as my own minor issues have given me pleanty of experience. You may have a shitty Medicare/Medicaid office in your town but in my experience they are no worse than the private plans, especially when you start costing the private plan more than your employer pays to them.
August 11th, 2009 at 4:02 pm
Ben – you just became twice as interesting to me buddy – and you were pretty interesting to begin with ;-)
Oddly enough, it’s not Mc D’s I really miss, it’s Taco Bell. I had to watch that whole Bacon something or other they came out with come and go – talk about self control!
Cvienne – I can see your strategy to beef up the user comments has indeed worked!
August 11th, 2009 at 4:02 pm
AT is right…what the government proposes is not health insurance, per se, but a health benefit with health benefits at minimal prices to users.
Insurance is for spreading catastrophic risks that would financially destroy an individual entity (e.g., a house fire in the case of homeowners, leukemia for health care) but that is rare enough that buying into a pool insuring against those risks can be affordable and wise. This is what the federal government needs to provide–insurance of the last resort for catastrophic health problems that are necessarily rare. It does not need to provide a benefit for everyone that has the sniffles to go see a doctor.
It can do this by simply offering insurance with a high ($5,000?) deductible per person, per year. For folks that can’t afford even that, it should just hire and staff local public health clinics–emergency rooms effectively serve that role now.
With that done, it can leave the rest alone. Rich people will get better health care, particularly for the minor stuff, yes, but short of taking their money from them at the point of a gun, they will get better health care anyway, because they will find a way to waste their money.
Outside of that, there is charity. My son had leukemia. We had excellent health insurance, but there were many of his cohorts during treatment that didn’t. No matter. Children’s Hospital in Birmingham never turns away a sick kid for lack of money because the community so generously supports it. It operates like St. Judes in Memphis, which has the same policy. And guess what? Nobody makes them treat sick cancer patients that don’t have money. It is their mission to treat everyone, and they do.
My son was seven when he was diagnosed. He just started his sophomore year of high school.
August 11th, 2009 at 4:03 pm
“It seems to me that it would be doctors, clinics and hospitals who wouldn’t make as much money, no? ”
BINGO. We have a winner. Doctors make taxi driver wages in some countries. We don’t want that so we will have to be judicious about the reductions in service. Nevertheless there is obvious over-consumption and waste.
But most H/C insurers would literally be OUT OF BUSINESS as they would be undercut. Our next target will have to be the ODIOUS malpractice lawyers and insurers. Bruce in TN needs a break for his practice, guys.
cv: once you begin experimenting with this CAPITAL style of communication it can become HABIT-FORMING…
August 11th, 2009 at 4:04 pm
Ben – RE Body Fat – I will defer to Cvienne on this one.
August 11th, 2009 at 4:06 pm
@pmorri
“you sound like wealthy people when you talk about food. ”
Dude, I don’t consider myself wealthy. I spend $30 in groceries a week buying fresh food from the farmers market in USQ. Why do I need to buy stored/processed food when we can still find nature’s best? I am pretty sure you can find fresh food in Grocery stores.
One doesn’t need to be wealthy in order to be healthy. Again I fail to see a connection here. Majority of people are under the control of Food and Drug industry. Most of them are either lazy to cook or too dumb to get sucked in to marketing messages.
August 11th, 2009 at 4:08 pm
@leftback: It seems to me that we’ve turned our entire economy into some kind of a racket that creates high costs (but no inflation if we don’t count food, energy or housing, or most important items, right Greenie?) for everyone? Without high health care costs, the health care industry couldn’t afford to pay the lawyers for malpractice suits and that means lawyers would be out of work.
Without fraudulent schemes on Wall Street, millions of fraudulent jobs are lost, including, ahem, again lawyers who help package/approve these schemes (no offense to lawyers, of course)…..
So here’s my point – - since we’ve sent many of our actual production-based jobs elsewhere, perhaps the only thing we can do to “create” jobs and maintain some sort of an economy is to have a Racket-based economy where the winners are the ones who are smart enough to lead or participate in the rackets, but at everyone else’s expense, of course. This always leads me back to the saying, “where there’s great wealth, there’s a great crime”.
August 11th, 2009 at 4:10 pm
pmorrisonfl, i hope cvienne takes your head off. in the meantime, if overeaters drank half their body weight in FREE tap water (as I do) they probably wouldn’t spend so much money on junk food and have more money available for better quality foods..
August 11th, 2009 at 4:10 pm
Thor-
quit smoking- absolute worst thing you can do to yourself- not one upside- all downside- unless you like the idea of dying slowly attached to a morphine drip- and I do know what I am talking about- besides that- when i see someone smoking i question their intelligence
dedude-
get over yourself- you don’t have it all figured out- emigrate if need be- if they’ll take you- because you might not fit into their medical plan
August 11th, 2009 at 4:39 pm
NO green shoots for these people. Sign of the times, my friends. Grapes of Wrath, here we come:
http://www.nakedcapitalism.com/2009/08/real-cities-in-uneasy-truce-with-tent.html
August 11th, 2009 at 4:54 pm
I feel like sharing my own green shoots story mostly in part because I hope it’s an example of how good savings and being responsible does actually pay you back, I don’t see any stories like this in the msm, too often lately it seems that people are throwing in the towel with regards to this and saying instead that they’ll just be like all the other financial misfits in this country.
Store in the mall here in DE, which we pay no sales tax on anything here btw, going out of biz. Store sells high end watches and I have a bit of a thing for watches. I was able to purchase a beautiful Tag link with diamonds for my wife at a 65% discount and a David Yurman for myself for a 75% discount, both for cash. I would also mention that she and I are on pace to save roughly 32% of our gross income this year and will pay the final balance on her car by November leaving only a small balance on our mortgage as our only debt.
That’s a real green shoot in my book.
August 11th, 2009 at 5:10 pm
@karen
“no surprises there but what i’m really talking about is over-eating.. calories in less calories burned becomes body fat whether the calories are from fat, protein, or carbs…”
I like to KISS (keep it simple)…What you just said there is about 90% of the holy grail…It doesn’t need to get much more complicated…Especially from the STARTING POINT of most individuals…
August 11th, 2009 at 5:12 pm
@Thor – Glad you caught the difference, I have been to TBP for a couple months now and have enjoyed (Most) of your guesses posts, even my little bro 411 has interesting points every once in a while, but most often I think he is stoned – Henceforth 420.
Anyway about Oct and twinkies, any chance we get some if you don’t quit?
August 11th, 2009 at 5:15 pm
Twinkies?
August 11th, 2009 at 5:18 pm
I-man,
I’ve seen some of those Garden’s North Philly, while not a preferred traffic route, there are short cuts up there that I sometimes take, in any event, the urban gardens, very cool indeed.
@ Karen,
the DY watch I bought above was secondhand which is why I got more off on it, it had been returned by someone as they didn’t like the color of the leather strap after using it for 30 days, I didn’t find a scratch or mark on the whole thing. I also didn’t get a box when I bought it (who cares), you would not believe how cheap I got it. I still can’t believe it. I love the strap too, the face is not too large, which I find classy, and the winding shaft is covered by blue sapphire which I think looks very cool. The back of the watch is open as well so I can see all the parts inside, which I also like.
Outside of cuff links watches are one of the few pieces of flare that guys get to sport.
August 11th, 2009 at 5:20 pm
Christopher
I have TriCare coverage also as retired military. But even though it doesn’t affect me I see HC as a huge issue that needs to be addressed or it’s going to sink our country due to the drain on national resources. And I feel greatly for those who are caught out in the cold due to the way we’ve allowed the insurance companies to completely take control over every thing and dictate the terms and screw certain individuals. As Manny has alluded to re: pre-existing conditions and having health care coverage so inextricably linked to employment.
If you’re unlucky in this country and run into health problems, especially through no fault of your own (i.e. not due to poor eating/exercise practices), you’re just screwed. You may get lucky enough to be the recipient of some charitable folks and institutions out there, but that’s more the exception.
August 11th, 2009 at 5:20 pm
Real guys dont need material flare Mistress… its in our energy.
August 11th, 2009 at 5:21 pm
Here’s another.
http://www.scientificpsychic.com/fitness/diet.html
I’m getting ready to start training again very soon. Tore a ligament in my left ankle last winter and it has taken a long time to feel strong enough for running.
I like the KISS attitude on personal fitness myself.
Eat less and move more.
Drink lots and lots of water.
There you have it.
If you want to lose bodyfat quickly hit your local park and start sprinting the hills.
Up silly….
:)
August 11th, 2009 at 5:21 pm
LeftBack yea, dude twinkies, Thor said he is quiting smoking in Oct, we need to give him some insentive to incourage him.
So if he doesn’t quit he gets to buy all of us a box of twinkies – Makes since to me.
Heck it was either twinkies or Doritos. Both help take the edge off the munchies.
August 11th, 2009 at 5:22 pm
Christopher – Very interesting story. My partner and I were just talking about this last night in reference to doctors and medicare. Doctors will see a medicare patient for a sore throat, spend 10 minutes with them but will bill for all sorts of tests and time spent. I don’t know what the rate of this is nationwide but my partner seems to think it’s very common.
August 11th, 2009 at 5:22 pm
@ben22
Watch out Ben…Your Eric Bolling side is showing ;-)
August 11th, 2009 at 5:26 pm
LOL!
Gotta unbutton the top three buttons too brah… and hit the tanning bed at the Borgata.
August 11th, 2009 at 5:47 pm
Ahab – hah, good story. Someone you know?
August 11th, 2009 at 5:49 pm
I am VERY pissed off about these thread hijacks.
100 comments were just deleted
DO NOT POST OFF TOPIC JUNK
August 11th, 2009 at 5:49 pm
@Ahab, sounds like you are wanting me to spend more like with my little bro 411.
August 11th, 2009 at 5:50 pm
@Ben22:
I’ll ask one of my partners about the body fat thing. I generally just go by height and weight, the pinch test and so forth. I would agree with Andy T that some muscular peeps can be heavy and still not be obese. I frankly don’t look at this particular aspect of medicine very much.
August 11th, 2009 at 5:51 pm
Sorry Barry
August 11th, 2009 at 5:57 pm
Barry,
I understand your consternation about off topic posts, but you should rethink that…most of the time the traders here are staying away from you last post or posts and just use this as a chat room. And frankly, when you post pictures of yourself, and say that “these are the best I’ve had taken”…er, what are you expecting use to think, economics-wise?
Just wondering where your head is man…
August 11th, 2009 at 6:00 pm
Barry – yes indeed, you should absolutely rethink your decision. I for one will not bother to post here anymore if I feel like the conversation can’t take on it’s natural course.
If you want to police the conversation then do so at your own risk – I don’t see how doing so makes you at all different than the MSM you constantly rant about.
August 11th, 2009 at 6:30 pm
@Thor
from Barry’s terms of use:
“A lot of thought goes into what gets posted here; If you want to comment, I suggest you do the same.”
I’m not a frequent commenter here, but I generally read the longish threads while I eat dinner, and I appreciate the quality of the comments – I’ve learned a ton about the markets and the economy(and that they’re not the same) both from Barry and from you guys chattering. I don’t post often because I don’t think I have much to add. That said, I think probably what Barry wants is some thought behind the comments – if that’s there, he has seemed more willing to tolerate “the natural course” of conversation. Just throwing it out there based on my observations – shoot me down if I’m wrong, Barry. And thanks for the great blog!
August 11th, 2009 at 6:47 pm
barry also does the open threads from time to time where we can say anything under the sun if only he had the same passion about the bile constantly being spewed by a certain regular poster, he has accused BR of having blinders on, after all, and that was on more than one occasion.
August 11th, 2009 at 7:21 pm
Barry,
I think you’ll find that one thread per day has been “hijacked” for many days now. It usually becomes some sort of a market/trading oriented hijacking, but by the end of the thread it takes off in all sort of directions.
It’s your blog, but perhaps you should attempt to toss out some sort of market/trading oriented thread in the morning where there will be a ton of trading oriented comments with an “open thread” feel. If you simply want to kill those sorts of long discussions/threads, then so be it….it’s your business and your decision.
What has struck me the last several weeks is the “spontaneous organization” that tends to occur with the hijackings. i.e. the “group” takes over only one thread and generally respects the other threads. I found that to be interesting….
Good Luck. AT
August 11th, 2009 at 7:26 pm
I always try to do at leats one Open Thread a week — plus the “10 Links” is an opportunity to reference whatever you want anywhere else in the world wide web.
But if a Market or a Housing or a Derivatives post goes up, I want to keep it at least tangentially related to the subject at hand.
Even worse, the political debates are all heat no light — and even worse, it attracts the crazies.
No thanks
August 11th, 2009 at 7:27 pm
Barry – understood – I’ll try to be good from now on ;-)
August 11th, 2009 at 7:29 pm
Well this is a tough situation.
About 2 months ago, I discovered TBP and it has been a wonderful relief from the song and dance the main stream media pushes into the minds of the masses.
It was the articles and links on TBP that drew me, but it was regular posters (YOU) who have kept me and I have learned much.
Barry’s site helps to shed light where others don’t want light to be shown – YOU the regular posters help spread that light and through and because of your personal experiences, have helped to illuminate subjects that people like myself had no idea were hiding in the dark.
As I just stated I have learned much, but for each question you here at TBP answer, there are 2 or 3 more questions that emerge. I am a novice as far as the world of economics is concerned, but even a novice can smell the stench of how this economic malaise has been and is being handled.
I can not and will not answer pretend to answer for Barry, but he has been providing a service for many who would otherwise not receive these services. YOU the readers and posters have been the steroids that help to build this service – Seems like we need one to have the other.
I believe Barry wants to keep his services as clean and clear as possible, but with that being said, there is a lot of intellectual growth being born in the free speech and exchange of ideas on this sight and some of that is because of “Off Topic” posts.
My two cents – This is Barry’s sand box. His sand box is enjoyable because of YOU! If no rules are set the sand box will be over run, if too many rules are set, no one will show up.
Good luck Barry and the rest of ya’ll.
August 11th, 2009 at 7:34 pm
Barry can’t be QB and takes his football home, typical long islander
August 11th, 2009 at 7:35 pm
BR says-
“Even worse, the political debates are all heat no light”
very true- well said- short and to the point
August 11th, 2009 at 9:05 pm
Guilty as charged….My apologies BR.
August 11th, 2009 at 9:59 pm
“Bring me the broomstick of the wicked witch of the west!”
There is no longer joy in Mudville…
August 12th, 2009 at 2:45 am
BR, late to the party as usual. But I would say, that, what I do is to look for the thread with the most comments to see what is going on with the traders. There tends to be a “gravity well” on one thread that emerges and where most of the market-related commentary is happening. So that’s where I look for starters.
I fully expect that there might be some politics in those threads also — Austrians vs. Keynesians, etc. OK by me. However, I fully respect that this is your sandbox. I just wanted to echo the general idea that “flash communities”, or whatever you’d like to call them, tend to develop here at TBP, and that can be a good thing.
August 12th, 2009 at 10:48 am
Sorry about that Barry; I think you have been very tolerant so far, and I understand that it can reach a limit where you get mad about OT posts. I agree with Andy T @ 7:21 there is a lot of valuable information in those daily trading comments and they could get a lot more valuable if guided into a daily thread so people knew where to post and where to find it. Your site does lose value if its debate lose structure, so its in everybodies interest to try helping you with keeping it structured. I will try to do better in the future.
August 12th, 2009 at 4:14 pm
Apologies. Though topics swing wildly, it’s still fun discussing other topics with this crowd. As you said, the 10 links thread is as good a place as any to do that.