Entries Tagged as 'Housing'
Neighbor vs. Neighbor In HOA
I’ve written about this before, but homeowners associations (HOA) keep breaking in to my consciousness. Yahoo reports today: “Neighbor vs. neighbor as homeowner fights get ugly
As more are unable to pay homeowners’ fees, associations pit neighbor against neighbor.”
I was once again reminded of a book I read, titled “The Association” by Bently Little. This book scared me enough that I will never willingly join such a group. Cahners Business Information, Inc. describes the book:
Barry and Maureen Welch are thrilled to exchange their chaotic California lifestyle for the idyllic confines of Bonita Vista, a ritzy gated community in the unincorporated fictional town of Corban, Utah. But as Bonita Vista residents, they’re required to become members of the neighborhood’s Homeowners’ Association, a meddling group that uses its authority to spy on neighbors, eradicate pets and dismember anyone who fails to pay association dues and fines. Maureen, an accountant, and Barry, a horror writer who is banned by the association from writing at home, soon find themselves trapped in the kind of deranged world that Barry once believed existed only within the safety of his imagination.
Inflating The Money Supply Causes Problems!
Many of you have seen this chart of the adjusted monetary base:
I was reminded of the chart when I received the latest “Early Warning Report” written by Richard J. Maybury. He writes,
When the FED inflates the money supply, the money does not descend on the economy in a uniform blanket. Some areas receive a lot of new cash, others receive less, and still others none at all.
Areas that receive a lot become hot spots. The hot spots deceive business managers and investors, who create new firms or expand existing ones in those areas.
Key point: these firms become dependent on the influx of fresh money.
If the influx slows or stops, the firms go broke.
If you want proof, just look at the housing industry and all that depend on new housing from suppliers, architects, interior designers, furniture stores, mortgage brokers, real estate agents and banks. All have experienced the worst times of the last ten years.
Remind me again why we allow government to help us!
The Joke Is On You!
Hat Tip Tyler Durden at Zero Hedge.
Kaletsky Worries About Inflation In 2008!
Now that I’ve written my review of Anatole Kaletsky’s Capitalism 4.0, I have time to see what others have said about him in the past. I searched Forbes for “Kaletsky”and found a blog quoting an article written by Kaletsky in May of 2008: “Could oil mania be coming to an end?” Don’t you just love this opening second paragraph:
While the slowdown in Britain and Europe has only just started, the US economy now seems likely to avoid an outright recession as Washington’s huge tax cuts, interest rate reductions and bank and mortgage bailouts appear in the nick of time over the economic horizon, just like the US cavalry riding to the rescue in a classic cowboy film.
This was before Obama was elected and before Kaletsky knew the U.S. would spend trillions and before he knew it would have little effect on recovery or employment. It was also before he knew that Obama wanted to rescind those tax cuts while still in the recession.
As these measures start gaining traction we should see fewer of the panicky headlines about a return to the Great Depression…
When he writes about commodities, he suggests trend followers are just speculators and will get hurt, but doesn’t acknowledge the trend following speculators in housing. Kaletsky is worried about commodity prices:
…there is now only one key uncertainty marring the signs of improvement: the huge increase in energy, food and other commodity prices since the start of this year. This now poses a far greater danger to the world economy and financial system than the correction in US and British housing markets and the related credit losses suffered by leading banks.
Don’t you just want to laugh at such nonsense! He doesn’t see the risk in housing, but sure is worried about inflation just before prices fall off the table. When he wrote the article West Texas crude (WTIC) was about $125 per barrel and soon peaked at $147.90 in July, 2008. Six months later the price had fallen to $35 per barrel. Corn peaked with WTIC at $7.50 a bushel and by December was below $3.00. Copper peaked at $4.00+ and fell to $1.25. Gold was testing $1,000 about the time of this article then pulled back to below $700.
It seems obvious that Kaletsky regards Gold as just another one of the commodities and I suspect if he’d known the depth of the coming recession and how we did start to invoke the Great Depression, he would have trouble justifings Gold rise from $700, through $1,000 and peak over a year later at $1,200.
He writes that “Commodity inflation is worse than housing and bank deflation for three main reasons.”
- First, rising prices of food and energy hit poor people hardest and stir to action those who are politically apathetic. If I may, I think the premise is correct, Tea Party members for example, but they are really upset about housing and bank deflation brought about by government meddling.
- Secondly, inflation is inherently harder for governments and central banks to deal with than deflation. No it’s not! The FED is trying like crazy to inflate asset prices, but the deflationary tide is nullifying their efforts.
- Thirdly, the countries most exposed to the risks of commodity inflation - China, India and other large consumers of energy and food - are precisely the ones that the world economy now depends on for most of its growth. I suspect that China is most scared of deflation, a collapse of housing and a collapse of demand for their products. Unemployment is probably their biggest concern.
- To make matters worse, the political pressures caused by energy and food inflation in developing countries is provoking panic reactions such as trade restrictions, price controls and credit rationing schemes that now seriously threaten the progress towards global market liberalisation and will almost certainly make commodity shortages even worse in the long term. This I just don’t believe. I think a collapse in currencies and deflation might cause more panic.
The problem with elitists, economists and even pundits like me, is that we try to tell you what is bad and good and warn about events, but most of don’t know anything beyond our little existence. It is arrogant to try to manage an economy as large and as complicated as ours were at home. It’s hubris to try to manage the global market.
Now There’s Wallet Blog
Back in January I wrote in a post “Here’s an idea I like a lot: CardHub.”
Now I see that Card Hub has a blog called Wallet Blog. Part of the reason I liked Card Hub was our ability to search for the best credit card for us including the best interest rates. Wallet blog seems devoted to make us smarter with credit. Take this post 2010 Starts with an Alarming Debt Trend.
CardHub.com released the Q1 2010 Credit Card Debt Study this week, which revealed that consumers are on track to end up with more debt at the end of 2010 than 2009, despite positive signals in the economy
One of the reasons for the depth of this recession was that consumers had more debt than could be justified by their income. Because of the recession, debt is down from “$973.2 billion at the end of 2007 to $829.4 in April of this year,” but most of the reduction has come from the write off of bad debt. Now consumers, it’s feared, are reverting to pre-recession behavior.
Wallet blog has this important piece of advice:
With the unemployment rate at 9.7 percent (seasonally adjusted) – almost twice what it was three years ago – our economy simply cannot sustain pre-recession debt levels. Other fundamental weaknesses in the economy, such as a huge federal deficit, make it even more important that consumers remain fiscally responsible and are diligent in paying down their credit card debt in order to avoid future hardships.
Indeed!
2010 First To Fail: Horizon Bank In Bellingham
This bank failure makes me sad. Horizon Bank in Bellingham, Washington (HRZB) is the first bank to fail in 2010. Horizon Bank was one of the banks that was in my portfolio of bank stocks when I was a broker. They were one of the more conservative banks and they did not sell off their loan portfolio as many other banks did. They originated their loans and serviced their loans.
Horizon’s deposits and assets were assumed by Washington Federal, at that time another conservatively run bank. I don’t know how long the website will be up, but it says that Horizon Bank was 136 years old,
- “Healthy Banking for 136 years - How about them apples”.
- Horizon named “Best Investment Firm” by Northwest Indiana Business Quarterly Magazine.
- Horizon Named in Top 200 Community Banks by US Banker
- We’re Prepared for Emergencies. Are You?
The FDIC statement says that “As of September 30, 2009, Horizon Bank had approximately $1.3 billion in total assets and $1.1 billion in total deposits”, yet FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $539.1 million. That means the assets weren’t worth $1.3 billion only $560,9 billion, less than 50% of what Horizon claimed they were worth.
How many more banks are out there with over-valued assets?
Are They Really “No-hopers”?
Some stunning utterances by retailing billionaire Gerry Harvey. Harvey lamented that Australian charity is being wasted on “no-hopers”.
Asked in a new book about his community role, Mr Harvey said giving to people who “are not putting anything back into the community” is like “helping a whole heap of no-hopers to survive for no good reason”.
He said it was arguable that giving charity to the homeless was “just wasted”. “It might be a callous way of putting it but what are they doing?” he said. “They are just a drag on the whole community.”
He emphasised that he and his retail chain, Harvey Norman, had given “plenty away over the years … the more quality individuals you develop in the community, the better off the community should be”.
Seems pretty callous. We have potentially a lot of people that could become homeless through foreclosure, have lost their jobs and may go hungry. You could say they are a drag, but where’s his brotherly love, helping hand, a hand up?
I would prefer that private charities provide shelter and food, but can the problem get so big that only government is able to step in? Then again how has it worked for us after Katrina?
I’m not one to give money to beggars on the freeway exit ramps, but I do give to various foodbanks.
John Embry Says We Are Getting Close
John Embry is a real straight shooter and his take on Gold is woth watching more than once.
Sprott Asset Management’s chief investment strategist, John Embry, went on Business News Network in Canada this morning and, interviewed by Amanda Lang, discussed, among other things, the suppression of the gold price on the New York Commodities Exchange. Embry speculated that long contract holders may call for delivery of enough December contracts as to prompt a claim of force majeure when the exchange cannot delivery enough real metal. The interview with Embry begins at the 11-minute mark and continues for about 6 1/2 minutes at the BNN Internet site here:
The Electric Mini
Zcars has a first look at the electric Mini:
