Wednesday, November 28, 2007

For Want Of A Nail

In 1363, to ensure the continued safety of the realm, King Edward III commanded the obligatory practice of archery on Sundays and holidays! The earliest known written version of the rhyme is in John Gower's " Confesio Amantis dated approximately 1390.


Benjamin Franklin included a version of the rhyme in his Poor Richard's Almanack.

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.

Updated:
For want of a rate freeze the payment was lost.
For want of a payment the profit was lost.
For want of a profit the tranche was lost.
For want of a tranche the rating was lost.
For want of a rating the economy was lost.
And all for the want of a rate freeze.

Not. These people are going to walk because they are upside down. The solution to owning houses you cannot afford is to stop owning not make them no less affordable.

41 comments:

wagga said...

Nailed it First!

Adam said...

Historically, just being upside down doesn't highly correllate with foreclosure, that could change (correllation increased during the depression).

Rob Dawg said...

Bluto,
Yes, -historically-. I think we are all aware that this time is different. In SoCal renting is 1/2 to 1/3rd the monthly cost of ownership. Add to that the near irresistable urge to stop all payments for 6 or more months. By the time you are evicted and foreclosed you could have 2 years worth of rent payments saved up. I'm talking places losing $100, $200, $250 per day. The kind of people who bought 2005-07 are the kinds of people who cannot think long term anyway. They will walk and keeping them with teaser freezers won't change their personal mathematics.

Anonymous said...
This comment has been removed by the author.
Peripheral Visionary said...

Hmm, I'm pretty sure that the picture isn't from Edward III; Timur the Lame maybe, or possibly Mehmet II, but definitely not Edward III.

;)

Anonymous said...

Hey diddle diddle, Bush and his fiddle,
The flipper jumped over the ARM,
Edgar laughed to see such sport,
And the bankster ran away to the farm.

Peripheral Visionary said...

On topic, a lot of considerations factor into the "to walk or not to walk" decision, but I think you've hit on one of them: the six months of "free rent". That alone is a tremendous incentive, especially for a family under extreme financial duress. It may not be a conscious decision; more often it may simply be a confluence of events, but one missed mortgage payment would be enough for a family to realize that there may be a way they can get by financially--if only for a few months, even if there are ugly consequences.

Peripheral Visionary said...

Wee Bennie Bernie runs through the town
Up stairs down stairs in his professor's gown
Talking to the cameras, checking at the store,
"Are the consumers still a-spending, for it's now Quarter Four?"

Rob Dawg said...

"Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich."

Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.

"But we have also," continued the Management Consultant, "run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship's peanut."

Murmurs of alarm came from the crowd. The Management Consultant waved them down.

"So in order to obviate this problem," he continued, "and effectively revaluate the leaf, we are about to embark on a massive defoliation campaign, and . . . er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances."
- Douglas Adams

Rob Dawg said...

PV,
In addition to the timeless quote from that great social observer above I agree with your "walk/not" analysis. I would only add one really deep problem all the so called economists are ignoring.

The treat of pain only applies to people who know what pain is. These people don't know pain. You cannot get them to accept "some pain" on penalty of "great pain" when they have no reference. We also send mixed signals. Casey has made out as a bandit with his slouching towards foreclosure. Me? I got out of the housing market as an investment a little before our anti-hero. What did I get? A freakin' tax bill enough for a Lexus to the Feds and a Toyota to California. He is way ahead of me in that regard.

Rob Dawg said...

...possibly Mehmet II, but definitely not Edward III.

Deliberate to illustrate that the concept was not unique to western culture.

Bears repeating that my choices of picture are not wanton. The 1950s era phone booth of the previous thread was an oblique referent to Levittowns. This time the international nature of the coming troubles.

Old said...

So, I opened a 401 (k) today on advise of my girl. Big step for me. I never thought about the future before. You chaps can make jokes about Casey and your tax bills, meanwhile I am wondering if the chap who owns the house our apartment is in can afford those mortgage payments, and what will happen if those payments are not made. It will be pretty damned comical to get evicted when you did nothing wrong because someone else decided to bite off more than they could chew. Kind of like rain on your wedding day.

Rob Dawg said...

Old,
Check up on your landlord. Repeatedly.

Old said...

rob dawg said...
Old,
Check up on your landlord. Repeatedly.


How?

Old said...

How do I find out where the landlord has his mortgage, and if he is making the payments? Are these public records?

H Simpson said...

Old

Use the Casey Serin method of financial health evaluation.

You basically take out a credit card in their name. If they are tapped out, you know bad times are a-coming. If you get the card, Sweet!

Win-win for sure..

h.

Rob Dawg said...

Seriously, the county tax records for free and public knowledge are the easiest way.

H Simpson said...

After attending the science fair with the little one, I walked into the abode to find my wife watching one of those "what do you get for your money" shows. Only this lawyer was really buying.

He was looking for a small place in NYC since he is in the big apple a lot of the time (he already had a beautiful house in DC).

Anyways, house #3 was above a Jamba Juice outlet. I was wondering if KC watched this and said "Hummm, maybe I ought to head back East to start anew. That looks like the perfect location to start my corporation.."

Rob Dawg said...

My little ones have been going to county and State with their science projects for years. How did yours do?

My sister finally got the "big message." The income/vacation property on Cape Cod screamed "run away" and she did. What part of crumbling foundation and illegally excavated cellar makes anyone here think "opportunity?" At least it was enough to break the escrow. IMO she dodged a bullet as I'm thinking primo Cape Cod/ Long Island properties are liable to some really big corrections.

Old said...

@Rob Dawg said...
Seriously, the county tax records for free and public knowledge are the easiest way.

So, do me a favor here and let me know how. I, do what. Go to the local tax office and ask to see the landlord's tax records?

How do I do the due diligence?

Old said...

@Rob Dawg said...
Seriously, the county tax records for free and public knowledge are the easiest way.

So, do me a favor here and let me know how. I, do what. Go to the local tax office and ask to see the landlord's tax records?

How do I do the due diligence?

Old said...

<--please ignore duplicate.

Rob Dawg said...

Old,
Sorry. I was vague because every place is different. My county, Ventura is online like many others.

you need to know what your landlord's taxes and monthly nut are.

AnonyRuss said...

If you wanted property/lien info in say, Maricopa County, Arizona (Phoenix), you would go here:

http://recorder.maricopa.gov/recdocdata/

But, since your profile reads Afghanistan, check with your local prefect.

Unknown said...

Rob,

In another post you said this:

"Sprezz,
The LA Urban Area is by far and away the densest in the United States"

That's not correct - Manhattan at 66,940 residents per square mile, is over eight times more dense that the LA area. The second densest county in the US is Brooklyn.

Santa Flipper Clause said...

Ho Ho Ho - It's Santa Flipper Clause

This will be about as interesting as the government trying to save Enron.

Santa F. Clause

Winston said...

Neil,

You have to look at terms very carefully. Rob said Urban area, which includes the city and surrounding suburbs. Comparing Manhattan to LA county is meaningless because of the differences in size (California Counties are firggin huge) He is correct that when you look at the total urbanized area, LA is much denser than NYC. The reason is that while the peak density is quite a bit higher in NYC, the population density drops off pretty rapidly, while L.A. is dense even very far from the center. If you're interested in comparing something smaller than Urbanized areas, then census tracts or groups of census tracts are probably the way to go.

Rob Dawg said...

Winston is exactly correct. Thank you.

This is part of the reason I'm going through this 6 part exercise. There are myths; LA is sprawled, misconceptions; New York is just 5 boroughs, etc.

We need a common language to go forward. One of the interesting things is that nearly all urban planners love to use the phrase "we don't want to be like LA" when in fact LA has the most planner advocated characteristics of any place in the US. Name a planner goal and LA probably has more of it than anyplace else.

I'll get the next installment up soon. Sorry I've been so busy earning money to be the attentive blog host you people deserve.

Lou Minatti said...

As I type this, an FB two houses down from me has a moving van out front and they are loading up. They just barely made it a year.

I don't feel sympathy, just outrage at what this is doing to my neighborhood. They got to live in a nice house for a year, quit paying after 9 months (a guess), and it's likely that the bank gave them a few grand to just walk away without damaging the property.

So it's back to an apartment for them.

Sometimes I just want to say "fuck it." Sometimes I want to go apply for every credit card I can get my hands on and go apeshit crazy. Sometimes I want to do a HELOC and go buy an RV and just haul ass. Why not? What penalty is there?

FlyingMonkeyWarrior said...

I guess Monica z troll,was right
The Government should make housing a right and every one should have a home.
This way the banks all get rescued, and everyone with a deposit of $100,000 and under keeps their money, no skin off FDIC insurance.

FlyingMonkeyWarrior said...

LOL at Edgar's nursery rhyme.

ha38349 said...

You should do it Lou!
We need more people willing to sacrifice their future by borrowing and spending now to keep the economy going.

FlyingMonkeyWarrior said...

and PV's rhyme.
(-:

Rob Dawg said...

alright, alright. i get it. you all want friday night soft porn snark and such. so be it.

ha38349 said...

FMW,
The Government should make housing a right and every one should have a home.
Unfortunately a lot of those homes are in places like Detroit.

Ogg the Caveman said...

I was about to say something like "well, it's Fishnet Friday after all". Then I looked and saw that it really is. (NSFW)

FlyingMonkeyWarrior said...

@ ha38349,
Well, Monica z troll must be from Detroit, then.
Heh

Rob Dawg said...

Ogg,
NSFW? You need a new j-o-b. ;-)

Ogg the Caveman said...

No Dawg, I need some sweet passive income so I can sit at home and do as I please.

Rob Dawg said...

Oggy my friend. If my medical illustration of mouth to mouth resuscitation gets you in trouble then it is the j-o-b not the income. Of course searching for the right picture... well that would even get me in trouble with Mrs. Dawg.

Bill in NC said...

Who needs a j-o-b when you've got:

http://photos1.blogger.com/blogger/7892/1162/1600/FEMA%20Gold%27N%20Ticket.jpg