My fellow Americans – I thought Republicans would fare better than they did in the recent midterm elections. My reasoning was that Joe Biden and his administration have taken so much away from us that Americans would never vote to continue down the same path. Some of my readers may be financially well-to-do. If you fall into that group, I ask that you consider some of what I’m about to say from the perspective of the majority of your countrymen who live near, at or below the median level of income. Biden has taken away the ability to buy a tank of gas at an affordable price. the ability to buy groceries without gasping in shock at the total cost. the ability to retire comfortably. Retirement accounts have been drained due to the performance of the investment markets and inflation rates have gone through the roof. The ability to retire… Read more →
EppsNet Archive: Housing Market
Let’s Go, Brandon!
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Get Rich Making Dumb Decisions
The people on the short side of the subprime mortgage market had gambled with the odds in their favor. The people on the other side — the entire financial system, essentially — had gambled with the odds against them. Up to this point, the story of the big short could not be simpler. What’s strange and complicated about it, however, is that pretty much all the important people on both sides of the gamble left the table rich. . . . The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their public corporations into bankruptcy or were saved from bankruptcy by the United States government. They all got rich, too. What are the odds that people will make smart decisions about money if they don’t need to make smart decisions — if they can get… Read more →
EppsNet Book Reviews: The Big Short by Michael Lewis
I worked in the information technology department of a mortgage bank in the run-up to the 2007 implosion of the subprime mortgage market . . . Given that it was fairly evident at the time that complicated financial instruments were being dreamed up for the sole purpose of lending money to people who could never repay it, it’s remarkable that very few people foresaw the catastrophe and that even fewer actually had the nerve to bet on it to happen. Long story short, the major rating agencies — Standard and Poor’s and Moody’s — were incompetent in their rating of subprime mortgage bonds, giving investment-grade and, in some cases, triple-A ratings to high-risk instruments. A lot of people took the ratings — which implied that subprime mortgage derivatives were no riskier than U.S. Treasury bonds — at face value and acted accordingly. But there were also some interesting psychological factors in play, not… Read more →
The Moreno Valley: Junkyard of OC Dreams
The Moreno Valley is now the poster child for American housing gone wrong, and the New York Times weighed in with one of their stock magisterial pieces, the kinds that read purty but don’t say jack shit about reality. The Orange County connection is that two of the homeowners profiled in the piece moved to the MV because they couldn’t afford apartments in OC, which should clue the rest of the nation into how stupid they were to buy into Moreno Valley. Reporter Jennifer Steinhauer doesn’t note that even people in Colton ridicule Moreno Valley residents for living there. It’s not an area “filled with people priced out of Los Angeles and Orange Counties, or looking to escape louder, less-safe cities,” as the Times notes; it’s a place for fools who weren’t smart enough to buy a house in Calimesa. Shit, even Beaumont is better than Moreno Valley, and Beamount… Read more →
Now It’s Tomorrow
Phoenix has achieved the unwelcome distinction of becoming the first major American city where home prices have fallen in half since the market peaked in the middle of the decade, according to data released Tuesday. — Home Prices Continued Their Decline in February – NYTimes.com Money quote from Greg Swann, a Phoenix real estate agent: “We were living during the boom like there was no tomorrow. And guess what? Now it’s tomorrow.” Read more →
Signs of the Times
The house two doors down from us is for sale. The house across the street is empty and for sale. The woman behind us and the woman next door, who was recently laid off, have asked my wife if she knows anything about loan modification . . . Read more →
Thomas Jefferson on the Financial Meltdown
ALBANY, N.Y. (AP) — If anyone could emerge from the AIG bonus debacle looking good, it could be New York Attorney General Andrew Cuomo. — “NY’s Cuomo wins praise for pursuing AIG on bailout” Cuomo. KWOH-moh. Italian, I suppose. I have no personal animosity toward Mr. Cuomo, but despite his favorable write-ups in the press, he is certainly no hero in these matters. Americans have short memories. Even members of the press — or “the media,” as you now call them — who should provide context and perspective, have short memories. Set the Wayback Machine to 1995. Bill Clinton is president and Henry Cisneros, the Housing and Urban Development (HUD) secretary, institutes a requirement that 42 percent of the mortgages financed by government-sponsored entities (GSEs) Fannie Mae and Freddie Mac serve low- and moderate-income families. Things only got worse under Cisneros’ successor, Andrew Cuomo: Cuomo raised that number to 50… Read more →
Outside the Lines
It’s the last high school roller hockey game of the regular season. One of the kids’ dads shows up for the first time and asks questions like, “Do they win most of their games?” Do they win most of their games?! Are you kidding?! You should know that. Even if you don’t come to the games, you could ask your kid when he gets home. Another dad has a great answer. “Come over here,” he says. “I want to introduce you to your son.” Over on the moms’ side of the bleachers, they’re talking about financial matters. One woman is sad because they bought their house at the peak of the market and they’re financially stuck in it for the foreseeable future. Another woman almost cries describing how 14 years of contributions to her husband’s 401k have been totally wiped out. Meanwhile on the rink, Northwood dominates Capo Valley pretty… Read more →
Good News, Bad News
First the bad news: ARE YOU KIDDING ME?! THERE’S NOTHING BUT BAD NEWS! THE HOUSING MARKET HAS COLLAPSED! GLOBAL MARKETS ARE IMPLODING! EVERYTHING IS SPINNING OUT OF CONTROL! THE FALCON CANNOT HEAR THE FALCONER! THE CEREMONY OF INNOCENCE IS DROWNED! THE BEST LACK ALL CONVICTION WHILE THE WORST ARE FULL OF PASSIONATE INTENSITY! EVERYBODY PANIC! OK, now the good news: Hmmm . . . well . . . as long as I have a job, I can make enough to live on . . . I think . . . Read more →