Even the Banks are Doing It

THE NYTimes has captured another unintended consequence; Failure to Foreclose.

Imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

Anyone remember all the crap I took from the ballonistas a few years ago when I predicted that some of this real estate would have negative value? Be sure to read the entire sad article.

Craigslist Laugh of the Day

Wanted: Internet Marketing Courses will trade Real estate investing c (Ventura)
Date: 2009-03-29, 7:29PM PDT

I have almost every real estate investing course made. I'm looking for internet marketing courses to trade.

please email me back if you're interested.
Thanks! Janet

Moratoria = Delinquencies

The FBs of the world are learning the rules of the game quickly. File this one under perverse incentives.

Wall Street Journal:
Mortgage Defaults, Delinquencies Rise
By JAMES R. HAGERTY

Defaults on home mortgages insured by the Federal Housing Administration in February increased from a year earlier.

A spokesman for the FHA said 7.5% of FHA loans were "seriously delinquent" at the end of February, up from 6.2% a year earlier. Seriously delinquent includes loans that are 90 days or more overdue, in the foreclosure process or in bankruptcy.

...
As of January, the cities with the highest FHA default rates in January were Punta Gorda, Fla., at 18%; Detroit, 15.6%; Flint, Mich., 15.1%; Fort Myers-Cape Coral, Fla., 15%, and Elkhart-Goshen, Ind., 12.1%, according to a HUD report.

Foreclosed FHA homes owned by HUD totaled 39,687 in January, up 22% from a year earlier.
----

Delinquencies are not "curing" so expect more and more to default. Get ready for another leg down. Or two truly stunning legs as our government gets schooled as to the dangers of touching the goods.

HT "w" for this craigslist find:
I will pay $7,000 cash if you buy my House (Ventura)

Reply to: sale-xdzge-1092016863@craigslist.org
Date: 2009-03-25, 3:28PM PDT


I'm looking to rent someone's credit and make it worth your while. I will pay $7,000 if you can buy my house and I will continue making all the payments after the purchase. I will remain the owner and a contract will be in place, and eventually transfer the house back to my name. I make enough to where I cannot get help but received a pay cut that I'm in a bit of trouble so I'm left with looking to make a short sale.
----
Just exactly is he "renting?" Where does he get $7000 to pay you at close. What do you want to bet that once you "own" "his" house complications develop.

California Gambles and Loses

Higher taxes, deeper cuts ahead, state officials decide

California will sustain $948 million in spending cuts and $1.8 billion in higher taxes after fiscal leaders announced Friday that the state will not receive enough federal budget relief to avoid those measures.

As part of a $40 billion deficit solution, state lawmakers and Gov. Arnold Schwarzenegger asked state Treasurer Bill Lockyer and Department of Finance Director Mike Genest to determine by April 1 whether California will receive $10 billion in federal budgetary aid through June 2010.

Here are the Propositions:
Proposition 1A
State Budget. Changes California Budget Process. Limits State Spending. Increases "Rainy Day" Budget Stabilization Fund.
Proposition 1B
Education Funding. Payment Plan.
Proposition 1C
Lottery Modernization Act.
Proposition 1D
Protects Children's Services Funding. Helps Balance State Budget.
Proposition 1E
Mental Health Services Funding. Temporary Reallocation. Helps Balance State Budget.
Proposition 1F
Elected Officials' Salaries. Prevents Pay Increases During Budget Deficit Years.

Guess what. Only 1F has a chance to pass.

Add it up. $6b from vote failures, $8b from Fed shortfall vs assumed, $8b from revised revenue expectations.

Laugh of Cry?

inland empire craigslist > cds / dvds / vhs
Date: 2009-03-27, 10:49AM PDT

I HAVE A VAN FULL OF DVD MOVIES BRAND NEW AND SEALED CALL ME NOW,, I NEED QUICK CASH I WILL NEGOITIATE ANY PRICE....PLEASE OR I WILL LOSE MY HOME...I HAVE THOUSANDS OF DVD'S TO CHOOSE FROM CALL FOR TITLES...
----

And this:
HUGE DVD YARD/GARAGE SALE - 3000 DVDS COLLECTION LOT - $3 (HESPERIA, CA 92345)
Date: 2009-03-26, 10:18PM PDT

I'M SELLING ALL MY DVDS AT A YARD/GARAGE SALE THIS WEEKEND. IT WILL BE HELD ON SATURDAY MARCH 28TH AT 17915 MAIN ST HESPERIA, CA 92345. IT WILL BE FROM 9AM TIL 2PM. NO EARLY PEOPLE KNOCKING PLEASE. IF IT GOES WELL I MAY DO SUNDAY MORNING AS WELL.

THESE ARE ALL USA ORIGINAL DVDS, ALL BLOCKBUSTER TITLES WITH ORIGINAL CASES. THERE ARE WELL OVER 3000 DVDS TO CHOOSE FROM INCLUDING CHILDREN'S TITLES, DISNEY, ACTION, HORROR, DRAMA, COMEDY, ETC. THIS IS BY NO MEANS A FIRE SALE. THESE ARE GOOD DVDS AND PRICES BELOW ARE FIRM.

REGULAR DVDS ARE $4 EACH, UNLESS YOU BUY 2 FOR $7 OR 3 FOR $10

CHILDRENS/DISNEY DVDS ARE $6 EACH, UNLESS YOU BUY 2 FOR $10

SEALED/BRAND NEW DVDS ARE $6 EACH, UNLESS YOU BUY 2 FOR $10

SOME BOXSETS/SEASON SETS AVAILABLE AT $10 EACH.

THESE ARE THE PRICES, NO HAGGLING NO NEGOTIATING WHETHER YOU BUY 1 OR 100. THE PRICES ARE FAIR FOR THE PICK OF THE LITTER. I WILL SAY THIS IF YOU BUY 100 REGULAR DVDS I WILL DO $300 OR IF YOU MIX AND MATCH I WILL DO 100 DVDS FOR $400
----
350 DVDs - $2 (Escondido)
----
82 DVDS $1.50 EACH (REDLANDS)
----

Sad? Karma? Kismet?

GDP? NFW!

Bloomberg: U.S. Economy Contracts 6.3%

March 26 (Bloomberg) -- The U.S. economy shrank in the fourth quarter more than previously estimated, leading to the biggest plunge in corporate earnings in a half century and underscoring why companies are slashing payrolls this year.

Gross domestic product contracted at a 6.3 percent annual rate from October to December, the weakest since 1982, the Commerce Department said today in Washington. Profits dropped 16.5 percent from the prior quarter, the most since 1953.

Amazing. Yet another "revision" to the downside. When we start seeing upward revisions it might be time to start looking for a bottom.

Well Equipped

It isn't just about having the right equipment. There's timing and location and leverage. Seems Sports Chalet (SPCHA is having trouble with the later. From the LATimes article:

With all of its stores in California, Nevada, Arizona and Utah, Sport Chalet "can hardly have been in a worse geographic location to weather the housing crisis," said Sean McGowan, an analyst at Needham & Co. "They're just right in the cross hairs."

Recession effects aside, Sport Chalet has made some missteps of its own. Analysts questioned the placement of several of the chain's latest locations, such as stores opened last year in Menifee, Calif., and Queen Creek, Ariz.

"Those are stores that were driven by the fact that there were a lot of new homes being built in that area," Mintz said. "And now that's the area where homes are standing empty and being foreclosed on."

More paintball and indoor flying model clubs coming soon.

MIT CRE TU

March 23 , 2009 update: The latest results of the Moodys/REAL CPPI show a return of negative 5.5% in December for the all properties national index.
Data available at the website.

The contagion is in CRE now too.

Diving Back In

Peripheral Visionary says:

Rob, I have to give you credit on the market calls: you don't worry about timing, but the direction has been right more often than not.

I'd love to get back into this market, but volatility and irrational exuberance being what it is, I'm having to sit it out. Still in gold, I hate it as an "investment" (it's not), but what choice do I have? In twelve months it will be one huge round of monetary authorities trying to debase their currency faster than their neighbors, no choice but to try and hedge for now. If oil takes another leg down I may switch to it as my currency hedge, but I'm not completely decided on that.

----
Thanks. It should be noted that you can either call market direction or you can call times but not both. I've been lucky with my calling the direction and I'll take that. The good news about 7800 is that it isn't being labelled an Obama bounce.

I'm with you PV. There's going to be an entry point eventually. If S&P goes to 550 it would be hard to pick a bad stock from the survivors. I've mentioned before the possibility of Microsoft selling for less than their cash on hand. We may get double luck with Apple if it experiences its usual big giveback at the same time the market goes down in general. Maybe something in the $60s? Wood products are beaten down as well.

So. Anything I like now? No. nothing. I'm not going to even look at anything with an eye to buying now. Too many elephants dancing for my tastes. When I dive in I'll make sure I'm well equipped and I'll announce my intentions in advance.

Beazer Bounce

+37% in one day. Hoocoodanode?

Let's be clear here. Beazer is a zero. This is nothing but traders trading.

Forget Normal Sales

Here's a Redfin search of a neighborhood in Hesperia, California:


Those little purple spots are REOs. The green spots are supposedly regular MLS listings but it is often hard to really tell. Short sales are such a pain sellers don't mention it anymore. Flips 6 weeks out of foreclosure are looking to appear normal. Certainly in this neighborhood anyone who bought retail is severely impaired.

It's raining knives. Let's drill down on some of these.

9001 Seal Beach Dr
Wow! lowest price in the area, Just reduced.

$175k.

Lowest priced? Really? Check out:
9120 Seal Beach Dr
Price: $170,500
Or:
13032 Napa Ct
$139k.

You all need to go to the Redfin search and look at the original purchase prices and first sale dates and such. 13032 Napa Ct; Last Sale: $345,000 (03/01/2006)

Near new, sitting unsold for 5 months at less than $50/sf. Of course if you pick up this sweet deal expect to pay $500/month in taxes. Yep, California, land of the 1% Prop 13 tax and you get saddled with 4%, higher than Texas.

Better To Be Lucky

There's an old saying "It is better to be luck than smart." Perhaps but there's a superlative.
"It's better to be inside than anything else."
Take this guy, Roberto Hernandez. Mr. Hernandez is director at Citicorp and this is the story of his incredible luck.

Way back in 2006, Nov 9th exactly, Roberto "Lucky" Hernandez sold some stock. Some Citicorp stock. For $50.54. 14,596,100 shares for a $74m payday. Apparently our friend "Lucky" saved some of that windfall because luck was about to strike again. In 2009, March 3rd exactly in a feat of market bravery crafty Roberto scarfed up some shares. 6 million shares at $1.25. $7.5 million invested. Here's the round trip. So. How lucky? That investment is now worth $15.7m. Here's a chart covering the period:

Don't hate him because he's lucky.

Aloha No Moah

No, this is not the absolute end and despite the picture no bottom is in sight.
Hawaii tourism marketers regrouping

Six months ago when Hawaii's major tourism marketers gathered the outlook was bleak; however, now most of the performance graphs for the state's major visitor source markets look like red lightning bolts that have hit ground and begun to burrow deeper.

Hawaii hotel room rates tumble

The statewide average daily room rate fell 8.2 percent to $196.38, the steepest monthly decline in room rates since January 1993, according to Hospitality Advisors LLC. The statewide hotel occupancy rate, meanwhile, dropped to 66 percent in January, the lowest rate for the month since 2002, when Hawaii was recovering from the Sept. 11, 2001, attacks.

Bears repeating: "...markets look like red lightning bolts that have hit ground and begun to burrow deeper."

Plus Ca Change...

Sacramento. An interesting name:

1 Baptism,... It removes the guilt and effects of Original Sin and incorporates the baptized into the Church, the Mystical Body of Christ on earth.

2 Confirmation perfects our baptism and brings us the graces of the Holy Spirit that were granted to the Apostles on Pentecost Sunday.

3 While Catholics in the West today normally make their First Communion before they receive the Sacrament of Confirmation, the Sacrament of Holy Communion, the reception of Christ's Body and Blood, was historically the third of the three sacraments of initiation. This sacrament is the source of great graces that sanctify us and help us grow in the likeness of Jesus Christ.

4 The Sacrament of Confession is one of the least understood, and least utilized, sacraments in the Catholic Church. In reconciling us to God, it is a great source of grace, and Catholics are encouraged to take advantage of it often, even if they are not aware of having committed a mortal sin.

5 Marriage, a lifelong union between a man and a woman for procreation and mutual support, is a natural institution, but it is also one of the seven sacraments of the Catholic Church. It reflects the union of Jesus Christ and His Church.

6 Holy Orders is the continuation of Christ's priesthood, which He bestowed upon His Apostles. There are three levels to this sacrament: the episcopate, the priesthood, and the diaconate.

7 Extreme Unction or Last Rites, the Sacrament of the Anointing of the Sick is administered both to the dying and to those who are gravely ill.

And this from the City of Sacramento:

Sacramento city officials will convene a second meeting this afternoon to discuss the growing homeless population and the tent city north of downtown.

Mayor Kevin Johnson, city and county leaders, service providers, landowners and neighborhood activists will discuss short-term strategies such as expanding homelessness programs and setting up committees to address long-term solutions.

The group also met last week and is working on drafting recommendations to take to the City Council. Those recommendations could be presented to the council as early as Tuesday.

"We are tackling the homelessness issue head-on with a coordinated effort," Johnson said in a statement. "These meetings have been essential in focusing our efforts and developing viable and compassionate short term solutions to this complicated and regional social issue."

I'm willing to entertain which of the sacraments cover these actions.

What the Heck is a TEU?

TEU = Twenty-foot equivalent units, a standardized maritime industry measurement used when counting cargo containers of varying lengths.

The Port of LA has the February data. The LATimes reports as well.

Needless to say the results are catastrophic. No milder word will do. Down 35.30% from Feb 2008 which was already off the peak. The reasons they cite:

• Continued worldwide economic crisis contributing to a decline in trade volumes.
• Consumer sales are down due to high unemployment rates.
• 15 less vessel calls this February due to this decline and the consolidation of services in order to fill up the existing services.
• Chinese factories closed for an extended periods of time (beyond the normal time period) for Chinese New Year.
• Due to the lack of volume and Chinese New Year, Maersk 6700 TEU/week vessel did not make any calls in LA during the month of February (which is traditionally a low volume month).
• Anticipate this year’s volumes will continue to be below last year’s volumes because sales are still slow with most economists predicting there will not be any recovery before the second half of the year.

The fabled "second half recovery."

Why Is Casey Quiet?

Easy. GoldSpring closed at 1.23¢ today.

Oh, and Tav... no one cares.

Not Even Close

People have been asking about a bottom. We aren't even had the spanking yet. Then comes the crying and the pain but no doubt in time the lesson will be learnt and subsequently forgotten.

What do we need to see? A return of honest corporate earnings. An end to government plans. No more of these 10% monthly changes in economic indicators. That means oil prices, port activity, auto sales. That means plus and minus. That means foreclosures, home prices, jobless claims. We are still digging the hole. By mid summer the fine folks in Washington D.C. will be discovering a new concept. New to them that is. There are limits to government. That will be a good first sign.

California Comes Up Short

I love it when I make some outrageous claim and then sit back quiet waiting for it to come true. Once again California is in financial trouble. No, new financial trouble. If you blinked you missed the part where our fearless leaders fixed the budget less than three weeks ago.
Ahh but that was before the February revenue numbers were totaled. As it is now we are $9 billion more revenues trailing expenditures. Imagine how bad it would be without the $31b guarantee from the Feds. What? What's that? The $31b isn't guaranteed? Details, details. One crisis at a time, take a number... a really big number.

At least enjoy Fishnet Friday. Like California the young lady appears to be trying to put too much into the container she has.

A recent converstion

Rob_Dawg
we don't bite but I've been known to say bad things about Portland. You gonna use any stimpak to expand MAX?

otishertz
dawg are you anti max?

StewPDX
Rob: It would be a decent use of the money I believe. Not that I'm pro-stim.

StewPDX
But I don't know the answer to your question. I read national and foreign news, wife reads the local. We both accuse the other of knowing nothing on a regular basis.

Rob_Dawg
I am very much antiMAX not for what it is but for how it is portrayed

StewPDX
How it is portrayed?

SomeArmchairEconomist
i know a guy who owned a game store in portland...he had to close it because the construction took so long he lost too many customers

SomeArmchairEconomist
its portrayed as a folly by a city that's a bit too granola for its own good

Rob_Dawg
MAX is not as successful as is claimed in either congestion , urban sprawl or cost.

SomeArmchairEconomist
(incidentally I hear great things about portland and wouldn't mind living there)

StewPDX
I rode it for a solid 2+ years, and thought it was great. Always on time, clean, well managed.

otishertz
the trains in town are the best thing going. i use them all the time

StewPDX
I only wish it went more places. The good news is they do expand it, regulary. Seattle needs lightrail like ours in the worst possible way.

Rob_Dawg
would you use them if you paid anywhere near what they cost to run?

StewPDX
Rob: I'm not sure. What would a ride be? $5?

otishertz
just gotta watch out for the crazy disaffected types

SomeArmchairEconomist
would you use the roads if that were the case?

SomeArmchairEconomist
freeways?

StewPDX
SAE: If that question is directed at me I don't understand it?

SomeArmchairEconomist
sorry stew, that was a riposte to dawg...i disagree with that argument against money losing transit

Rob_Dawg
A little under $4 yes but for every ride, no passes, no Fareless Square

StewPDX
Rob: At $4/ride I would use it for long trips but not short, which is how I usually use it. At $5+ I'd bitch hard if I did, and might now.

StewPDX
er, might not.

SomeArmchairEconomist
if it went more places and you didnt need a car...seems like it could be a good deal

Rob_Dawg
Here's the MAX 2007 data in pdf form:
http://204.68.195.57/ntdprogram/pubs/top_profiles/2007/agency_profiles/0008.pdf

StewPDX
long trips = my usual on max (I was not clear).

SomeArmchairEconomist
$0.40/mile...cheaper than a cab!

otishertz
the trains should be subsidized. it is a better mode of transportation for the environment and your spirit. people smile at eachother, help others, get up for old ad mommies, comment, READ.

Rob_Dawg
MAX fares cover 23% of operating costs

SomeArmchairEconomist
that's a pretty hefty subsidy

Rob_Dawg
how much would the cab ride cost if the company got free cabs and fares were 25% of operating costs?

otishertz
you can take your bike on the trains (and buses) going uphill and roll down

RayOnTheFarm
nice writeup about AIG at econbrowser

StewPDX
I gladly pay tax dollars to subsidize that. The majority of people I see on mass transit can use the help with the fare costs - I don't feel used.

Rob_Dawg
otis, what makes you think light rail is energy efficient?

otishertz
i see well dressed people on the streetcar. it is packed during rush hour

otishertz
l8r ray

Rob_Dawg
otis, look at the pdf. The average streetcar carries 28 people. 20% of capacity about the same as an auto.

SomeArmchairEconomist
not seeing where you get that number

otishertz
what makes me think it is energy efficient is me looking at a car, figuring it has 160 horsepower, is filled with plastic and oil, weighs two tons, and took a lot of energy to make. then i look at the people on the trollies and see they only have one or two bags. all that car to carry one person and their bag seems like a lot

SomeArmchairEconomist
a lot of energy goes into construction of the system

otishertz
true, but the tracks remain for long periods of time

otishertz
generations

Rob_Dawg
divide passenger miles by vehicle miles to get occupancy.

SomeArmchairEconomist
ah

SomeArmchairEconomist
it really takes 28 times as much energy to move the train than a car?

SomeArmchairEconomist
i guess the question is, does it weigh 28 times as much as a car

Rob_Dawg
Light Rail and POVs use about the same amount of energy per passenger mile. I know that seems hard to believe but true.

SomeArmchairEconomist
(assuming they reach the same speed)

otishertz
28 people per train has to be like 20 less cars per train

SomeArmchairEconomist
haha you think people carpool

otishertz
well, if they are equal then i am for more trains

SomeArmchairEconomist
yeah, if you have more trains then you should get more riders, no? biggest argument against transit is always it doesn't go where you want

otishertz
we must change the car world

SomeArmchairEconomist
LA is really screwed on transit...no body rides it because it sucks, and it sucks because nobody rides it and they're in their cars, causing traffic that makes transit suck!

Napolean
Public transit in southern california is a roving insane asylum

Napolean
that is why so few use it

SomeArmchairEconomist
haha

otishertz
between trains and buses you can get nearly anywhere you need to be. i can get to my office on three different routes within an two block area. that means with triptracker on blackberry i more orless have a ride waiting all the time

otishertz
i could always drive, but why?

Napolean
plus it rarely goes anywhere near where you want it to.

otishertz
its not as if the train money spent is less useful than money spent on stadiums and such BS

SomeArmchairEconomist
i feel ya otishertz...i usually take the bus everyday

Rob_Dawg
TEDB 27 http://cta.ornl.gov/data/download27.shtml for anyone interested in modal energy intensities.

StewPDX
Don't get me started on the f*king stadiums.

Rob_Dawg
LA has a higher transit share than Portland

SomeArmchairEconomist
thanks dawg

otishertz
when snowmageddon 2008 happened i had alternate routes when certain roads closed down
i did not want to be driving in that
hell, my truck was snowed in

Rob_Dawg
Oh and LA the land of sprawl is denser and getting denser while Portland is not.

Rob_Dawg
Oh, and light rail uses the same amount of energy per passenger mile while travelling at half the speed of POVs

SomeArmchairEconomist
someone doens't care much for light rail

SomeArmchairEconomist
how do buses rate?

otishertz
shouldn't commercial be closer to financial

Rob_Dawg
Buses are a smarter idea than LR. Lower buy in cost, more flexible, serves a necessary social function. Still expensive but so aren't cops and clean water.

SomeArmchairEconomist
are there casual carpools in LA?

Rob_Dawg
Casual? I don't know. I wouldn't do it.

otishertz
what are the costs of drunk drivers, car accidents. sprawl. how many resources are diverted to pay for car insurance, car repairs, gas, fees. what of the loss of freedom you accept when stopped in a vehicle by police, depreciation. what about all that asphault on the ground, bridge maintenace, traffic enforcement. i just do not see trains as being more expensive when you consider all the...

otishertz
...support apparatus the car world requires.

SomeArmchairEconomist
trains also have the advantage of shifting the pollution
assuming they're not diesel electric that is

Rob_Dawg
Otis, now you are entering rougher waters. Externalities are slippery critters. A POV centric transport network has positive externalities as well as the negative. Care to wait for a transit ambulance? Thing is POVs more than pay for themselves while we can't even get transit users to pay half the operating costs.

SomeArmchairEconomist
gas taxes pay for all of the road maintenance?

SomeArmchairEconomist
they need to start doing some maintaining!

Rob_Dawg
If you have to shift pollution then that is a profoundly anti-urban characteristic and a hit to claims of sustainablity.
Okay another huge multi hundred megabyte web location. This time the HM and HF series from the FHWA
http://www.fhwa.dot.gov/policyinformation/statistics/2007/index.cfm

SomeArmchairEconomist
holy data overload batman

SomeArmchairEconomist
how much does the IRS let you deduct for car mileage? something around $0.48?

Rob_Dawg
Hey, you guys beginning to get a suspicion that I've got my facts all lined up and I've heard all these questions and claims before?

SomeArmchairEconomist
no i just figured you googled really quickly

otishertz
well since no one has a personal train i think the comparison, while illuminating, is not a direct one. trains are a community wide thing and the cost of a train is the cost to the community while the cost of a coar is one born by individuals. so, you have to consider the cost to the communities of the car world. also, i wuld hope that ambulances could find room on the roads that are already...

otishertz
...there.

Rob_Dawg
2008 IRS 50.5¢ per mile

SomeArmchairEconomist
according to the MAX thing you sent their operating cost is like $0.40/ppm

SomeArmchairEconomist
er, dont need to "pers" in there but you get the idea

SomeArmchairEconomist
instead of 1, make it like 3 of 5 lanes

otishertz
highway usage statistics frighten me. i'm standing down.

SomeArmchairEconomist
I have not yet begun to fight!

Rob_Dawg
MAX lies. The real cost is closer to 70¢ but that's graduate forensic transit accounting. The IRS assumes at 50.5¢ per vehicle mile so that's 32¢/pass mi

SomeArmchairEconomist
why is the ppm less than pvm?
other than more passengers

SomeArmchairEconomist
does everyone get 1.7 passengers?

otishertz
i bet it was the one about all your stocks are belong to us

SomeArmchairEconomist
haha

StewPDX
"ALL YOUR STOCKS ARE BELONG TO U.S." posted 10.01.08 - 5:13 PM. That help?

Rob_Dawg
the average POV has 1.58 passengers. [ewwww, the blood, the gore, the horror!]

otishertz
hee he

SomeArmchairEconomist
honestly, im really surprised by that number
means that no more than 50% of cars have 1 person in them, no?

otishertz
i knew the one, stew.

Rob_Dawg
everyone is always surprised at tht number just like discovering buses average 11 passengers and transit does not save energy.

SomeArmchairEconomist
ok, so if 50% of cars have 1 passenger, then the other 50% should qualify for HOV
and at least half the lanes should be HOV

SomeArmchairEconomist
buses averaging 11 doesn't surprise me
except of course the bus i ride which is constantly packed

Rob_Dawg
HOV are peak load leveling devices. During peak periods the occupancy goes down.

SomeArmchairEconomist
ahhh ok now we're getting somewhere then

Rob_Dawg
imagine ten buses, 9 with 1 passenger, 1 with 40. 80% of the people will swear the buses are packed.

SomeArmchairEconomist
good ol stats

whats the major cost in running buses, the bus or the driver?

ie if you run smaller buses for lighter lines, and bigger buses for more traveled lines, does it work out?

Rob_Dawg
I used to think corellation was causation then I took a statistics course and now I know better. Did the course help? I can never be sure.

SomeArmchairEconomist
someone reads xkcd

Rob_Dawg
The bus is probably 80%. You can verify that by looking at hourly salaries to hourly operating costs

SomeArmchairEconomist
what if instead of asking "whats more efficient" we instead ask "what option will reduce congestion, commute times, and increase urban air quality"

Rob_Dawg
Economies of scale dictate fleet makeup. If you are big enough a system then yes. Smaller agencies one model saves lot costs.
You don't want to know that answer. It isn't pretty. More roads but we lack the will for that presently.

Deadnafornia

Lot's of news. Three must read articles. All from "liberal" sources which tells you just how serious things are getting. First up the LATimes top story:

Cities brace for revenue losses as property values continue to drop

Even with the decline in home values, the property tax base in five Southland counties grew last year thanks to continuing sales and the completion of construction begun during the 2003-2006 building boom. But assessors in those counties said they have reduced the value of more than half a million properties and expect to make deeper cuts to their rolls by the summer.

This is bad news for local governments that have been relying on property tax proceeds to help make up the shortfall from reduced incomes and spending in their areas. Already, cities and counties across California have been freezing jobs, imposing work furloughs and pay cuts, postponing repairs and reducing some public services.

The next two are from Calitics. Readers are urged to vist there often for some excellent "inside baseball" for California issues. Just keep your liberal bias filter set to "11".

Statewise, Yeah, We're Still Well And Truly Screwed

John Chiang: We always borrow at the beginning of the year, 25 out of the last 26 anyway and then in April we make up the difference. But this year we walk in with weakness into the next fiscal year. There are less tools in the tool kit. We'll need a massive RAN or RAW (Revenue Anticipation Warrant).

Remember these last budgets borrow $16.5 billion from (state) special funds to backfill the general fund. So if we have any emergency in the state requiring aid from one of those special fund departments, the state is in trouble. Over 1,100 special funds in the state and we borrowed from over 650 of them. Part of this last budget solution gives us the ability to borrow another $2 billion more. The governor's budget has us borrowing $11 billion from special funds over the next 18 months.

So we're going to have to do some outside borrowing for the next fiscal year. Period.

Localwise, The Next Budget Crisis: City and County Governments

LA's budget gap might hit $1 billion, owing to factors largely outside of city government's control. Monterey County faces $163 million in deficits over the next three years even if cuts in salaries, benefits, and services are made. County health centers may close, cuts to already-stressed hospitals are likely to be made, and of course, more people will be put out of work.

As predicted here oh so very long ago raising taxes will not result in increased revenues.

Ch 9 Primer

Chapter Nine? WTF is Chapter 9?

Municipal Bankruptcy.

Get ready or get buried. Look, This link is how it is supposed to work. Note the following passage:

The purpose of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.

• extending debt maturities
• reducing the amount of principal
• reducing the amount of interest
• refinancing

Got that? There is no authority for new taxes. Good news but unfortunately the only good news. Reading further:

Different types of bonds receive different treatment in municipal bankruptcy cases. General obligation bonds are treated as general debt in the chapter 9 case. The municipality is not required to make payments of either principal or interest on account of such bonds during the case. The obligations created by general obligation bonds are subject to negotiation and possible restructuring under the plan of adjustment.

Special revenue bonds, by contrast, will continue to be secured and serviced during the pendency of the chapter 9 case through continuing application and payment of ongoing special revenues.

GO (General Obligation) debt is worthless. Stand in line with all the other debtors. Special revenue bonds are only protected to the limits of revenue received. Reassuring no?

Market Leader

1143 Corte Riviera Camarillo, CA 93010
Price: $669,000
Beds: 4
Baths: 3
Sq. Ft.: 1,928
$/Sq. Ft.: $347
Lot Size: 3,753 Sq. Ft.
Property Type: Detached, Single Family Residence
Year Built: 1996
On Redfin: 6 days
----
Okay. Stop laughing. After all it has only been on the market for a week. Maybe they feel the spring bounce in the air. 1143 Corte Riviera. What about something... oh I don't know. Maybe nearby, maybe remotely similar, that kind of stuff? How about;

1108 Corte Riviera Camarillo, CA 93010
Price: $549,900
Beds: 4
Baths: 2.5
Sq. Ft.: 1,928
$/Sq. Ft.: $285
Lot Size: 3,204 Sq. Ft.
Property Type: Detached, Single Family Residence
Year Built: 1996
On Redfin: 170 days
----
One hundred and seventy days and $100,000 less. Here's the listing and sales history:

Property History for 1108 Corte Riviera
Date Event Price
Mar 07, 2009 Price Changed $549,900 cut and run
Feb 11, 2009 Price Changed $649,000 mayday, mayday
Dec 11, 2008 Price Changed $699,000 time to move this sucker
Sep 20, 2008 Listed $775,000 hoping for a payday
Aug 01, 2003 Sold $500,000 8.3%/yr
Nov 21, 1997 Sold $318,000 sold new
----
Poor 1143 woke up yesterday at least $100,000 poorer than when he went to bed.

Billions And Billions

111,609,629 Houses
75,072,666 Owner Occupied Units
51,164,197 Houses with mortgages
$1500 Average monthly mortgage payment
$80b Every mortgage in the US for one month
$720b (after deductibility) for one year

Anybody still think this is about people and homeownership? The last freaking "bailout" could pay every mortgage for a year. Less than 10% are even in trouble.

Irrational This Irrational That

Markets face 'irrational pessimism'
New extreme in US stock sales leads to 'irrational pessimism' among investors

Rachel Beck, AP Business Writer Friday March 6, 2009, 1:45 pm EST
NEW YORK (AP) -- You've heard of "irrational exuberance," right? That's the expression Alan Greenspan coined more than a decade ago when he warned that investors could be bidding stock prices too high. His worry was that escalating asset values were trumping reality.

These days, the opposite seems to be the case. Call it "irrational pessimism," a fear that stock prices are headed in only one direction -- lower and lower -- because asset values and profits seem certain to fall.

Yeah, Alan Greenspan was warning about excessively high stock prices. December 5th 1996 when the stock market DJIA was at 6437. Snigger.

By Will Alone

It is by will alone I set my mind in motion. It is by the juice of sapho that thoughts acquire speed, the lips acquire stains, the stains become a warning. It is by will alone I set my mind in motion.

"The current level of unemployment is something I am unwilling to accept."

Platinum Busts

Either gold is becoming a commodity or ...?

California Suicides
The Good:

California is by nature the most richly endowed region in the world. Nowhere else is there so much fertile land, watered by gravity-fed winter runoff from the majestic Sierra. California has ample supplies of oil and natural gas. Millions of acres of timber abound in its coastal and mountain forests. Temperate climate and weather allow outdoor activity almost year round. The coastline is over 1,300 miles long — with two of the great natural ports of the world at Los Angeles and San Francisco Bay.

The bad:

But less discussed is the underlying culprit: a weird sort of utopian mindset. Perhaps because have-it-all Californians live in such a rich natural landscape and inherited so much from their ancestors, they have convinced themselves that perpetual bounty is now their birthright — not something that can be lost in a generation of complacency.
...
In short, after Californians sue, restrict, mandate, obstruct, and lecture, they also get angry that there is suddenly not enough food, fuel, water, and money to act like the gods that they think they have become.

Personally, I think it is more fundamental. The productive class has been outvoted by the consumptive class for decades.

Hat tip to PV for calling this article to our attention.

CNBC Drops The Peacock

Bill Gates Cripples His Kids

Report: Bill Gates Won't Let His Kids Have iPods

Wednesday, March 04, 2009
You'd think the children of the world's richest man could get anything they wanted.

But Bill Gates' kids aren't allowed to have any Apple products, the Microsoft founder's wife tells Vogue magazine.

"There are very few things that are on the banned list in our household," Melinda Gates, a Microsoft millionaire in her own right, tells interviewer Michael Specter. "But iPods and iPhones are two things we don't get for our kids."

What more can I add?

Meme Du Jour

There is a new meme out there. If you rad or listen or watch you've undoubtably heard it already.

"The mortgage crisis is limited to only three States; California, Arizona, Nevada and Florida."
No doubt there are several reasons for spreading this lie. One it establishes the "contained" theory. Second, it makes the other 46 States feel good. Third, political cover.

Why? Because the new executive feels like this is not crisis but opportunity. An opportunity to Federalize ever greater aspects of the nation. Pick a few States while they are down and do a partial takeover. It's been working for decades. Look at Medicaid and education.

Next we'll see initiatives promoting certain State behaviors; renewable energy, transit, universal health care.

The pusher is handing out free samples.

Questions Are Asked

Over on CR I was specifically asked:

Rob Dawg,

Need some help, I must be missing something....
1) these investment banks are allowed to keep these CDO's etc off balance and not mark them to market...

2) this means they virtually do not show up as asset or liability on books

3) Banks are , every quarter, writing off losses

4) What are these losses on if its not this off balance sheet shit?

5) If they are losing money and needing more , while not counting off balance shit, then should we be propping them up...

6) Again, where are these written down losses coming from?

7) and if there are this many losses without off balance sheet shit, then if you count losses on off balance sheet stuff, arent these banks virtually insolvent?

The big banks are without doubt insolvent. Call it all of them and not worry about the vanishingly small few caught incorrectly in that wide net.

Yes, the books are cooked and even with the understanding that they are cooked the banks still cannot meet the liar standards anymore.

Move all the deposits to the Credit Unions and run off the "assets" to new banks in a massive reset.

Port St. Lucie jumps the shark

Hat tip NHSteph.

MSNBC PORT ST. LUCIE, Fla. - Just five years ago, Port St. Lucie was America's fastest-growing large city. Then the foreclosure crisis slammed it like a hurricane.

Today it sits in one of the hardest-hit counties in the nation. Thousands of houses are empty or unfinished. Neighborhoods are littered with for-sale and foreclosure signs and overgrown, neglected yards. Break-ins are on the rise.

But one politician believes he has a unique solution: Declare St. Lucie County a disaster area as if it had been hit by, well, a hurricane.

"This is a manmade disaster," County Commissioner Doug Coward acknowledged. But he said that is why "we've got to do something. Clearly, the economic crisis of the country far exceeds the ability of local governments to solve it, but we're trying be a part of the solution."

The declaration would act like a mini-stimulus plan, giving government officials access to a $17.5 million county fund usually reserved for natural disasters.

...

Emergency relief
Coward, who hopes to put the disaster-declaration idea to a commission vote within a few weeks, said that the laws regarding the emergency fund refer to manmade as well as natural disasters, and that the county attorney believes the idea is legal. He said the money could go toward new roads, a courthouse expansion, utility improvements and other projects.

...

'Band-Aid on cancer'
The idea may or may not help folks like the Derek and Kellyanne Baehr. They are six months behind on their $2,160-a-month mortgage and struggling to avert foreclosure.

Derek, 40, has been unemployed for the past 10 years after being diagnosed with a rare neurological disorder that will eventually put him in a wheelchair. The couple have lived in their modest, single-story stucco home for four years, and admit they got in over their heads with the $209,000 purchase. They said the house is now worth just $135,000.

After months of trying to work with their lender, they got a slight reduction in their interest rate, but "it was like putting a Band-Aid on cancer," Derek said.

"We can't continue to go on this way," said Kellyanne, 37, who fears she could soon lose her job as an accounting clerk because another round of layoffs is coming. "I cry about every day."

History Judges

Jan 22nd 2001 10,578 DJIA
Jan 22nd 2009 08,228 DJIA
Mar 02nd 2009 06,763 DJIA

First absolute xx.x% (over 8 years)
Second absolute yy.y% (over 1 month)

First delta xx.x% (not compounded)
Second delta yy.y%

Who owns the depression baby?

Banking's Future

Chavez orders temporary seizure of rice mills
Associated Press March 1, 2009

Caracas, Venezuela -- President Hugo Chavez on Saturday sent troops to temporarily take over rice processing plants in the South American nation, his toughest move against industry since winning a referendum last month.
...

"I will expropriate them. I have no problem with that, and I'll pay them with bonds. Don't count on me paying with hard cash," Chavez said.

In the past, Chavez has paid reasonable compensation for takeovers, but falling oil prices may limit his ability to pay this time.

"I'll pay them with bonds. Don't count on me paying with hard cash." Isn't that sweet. Sound familiar? Yep, exactly what we are doing with our banks and for exactly the same reasons. Just substitute lenders for rice mills and lending for rice.