Monday, April 7, 2008

Why Medians Are Going Below $200K In Bend Oregon.

There is NO Surplus Of Homes In Bend. None.

OK, the caveat is when you compare the number of homes for sale vs bare lots. Bare lots is what we have piles of, and BARE LOTS... NOT HOMES... will be the undoing of this place.

And since a picture is worth a 1,000 words, let's have a little looksie at a few places where the matter is so dark... welp, they could barely be photographed.
A Triad Homes Big Empty Waiting "for the market to improve"

This right here? Yup, this is your standard nightmare. The Old Builder with 10ac waiting for the market to improve so they can slice & dice this thing into the smallest allowable lot sizes possible. Triad is still in True Believer mode, because they will STILL buy plots of land.

Triad is "waiting" for the slightest uptick & they will build this thing out with 80 homes. In a sec, you might start to see why the former (the uptick) will NOT happen, but the latter (the building) WILL.

I'll give you three guesses on the name of this place...

The above nightmare had it's naming committee swept away by the Italian-themed mania sweeping this idiotic town. Is it:
  1. Merenda
  2. Mercato
  3. Mirada
  4. Murder, She Wrote
Give up? I know, it's tough.

In the housing resale biz, this is MURDER... she wrote.

Yup, this right here epitomizes, distills & clarifies just exactly what's going to happen to this town. Mirada is going to unleash 250+ homes on land that was repossessed by the former deluded Kool-Aid holics. BUT, unlike others, Mirada is NOT going to wait...
Mirada is building NOW.

Here's another little favorite of mine, Eagle's Landing.
Eagle's Landing, the land of Busted Dreams

Now, it's hard to see, but you can actually see the 2 homes that been sold & built over the past few months here. The first is the 2 story maroon job directly below the Butte, the other is the single story cream colored job, just to the right of the 2 spec homes on the left, which you can see are far larger. Here's a close up:

Eagle's Landing, opposite perspective.

See, that maroon job, a nice little 2,500 +/- sqft job was actually the first home that's sold here in over a year. Something tells me it was a "plant"... a fakeroo done to grease the skids. What was it that made me think that... hmmmm... oh right! It was the $75,000 Mercedes out front. And it was out front every day while this place was being built. I don't know many people who can afford a $75K Mercedes, and sit on a job site every day supervising the crews. Except a developer or one of their friends.

But apparently, this worked to some extent, because then we do see an apparent non-developer home go up a few lots away:

Uh oh. Laborer shit shack, Meth Lab goes up.

Yeah, THIS is The Real Future Of Eagle's Landing, and almost everywhere else in Bend. Yup, Ye Olde Meth Lab whose 800sf carcass will almost certainly be blown all over the neighborhood within the first year.

Lemme MC Hammer what happened here, and BREAK IT DOWN: Eagle's Landing had rapturous delusions of grandeur, and thought the UNLIMITED SUPPLY OF MILLIONAIRE CALIFORNIANS WHO LOVE LIVING WALL-TO-WALL would soak up this inventory overnight. Alas, this has not come to pass, and the powers that be began to DOWNSIZE their dreams. Even this was not moving dirt, so Eagle's Landing OPENED 'ER UP; Uh huh, now you can pretty much bring in your own builder, and build whatever you want!

Yup, these developers don't realize this is essentially like shooting yourself in the face. The Ultimate Fuck You To Those Who Came Before. And that reminds me....

"Tetherow... The Ultimate Fuck You!"

Yup, had a go through Tetherow. A few observations:

First, the fucker is HUGE. This fuckin place is gigantic. I hadn't ever been up there and figured there were a few acres, some fairway, little clubhouse, and that's it. No. This badboy is HUGE. It's EVERYWHERE you wanna be. Unless you're in Broken Top:
One of the many pleasant cul de sacs between BT & Tetherow

I actually got a picture of that sign pointing towards Broken Top:
A census taker once tried to test me. I ate his liver with some fava beans and a nice chianti.

I actually thought Tetherow is an inspired idea. They took the cream of the crop, the best & brightest Bend has to offer... and fucked them right in the ass! This is the Classic Way That Bend Works: If you are already here, you're fucked, you'll be used as fodder to get the next crop of rubes. They of course, will then be fucked like the rest of us.

When you wanna know why long-time Benders are fuming over Cali-Bangers, it is this. THEY have been fucked more than the rest of us combined.

And then there is the long-time Bendites who are basically selling us out to this onslaught of Cali-locusts. These are The Jews (Realtors) who are selling out Jew friends & family (the rest of us) to The Nazi's (Californians) to ingratiate their own ass to the enemy, and the enemy will ultimately follow their nature & destroy you as well. This is why you fuckers are reviled almost as much as Cali-bangers.

I was a little confused about what the hell these things are over in Tetherow:
There's a lady who's sure all that glitters is gold
And she's buying a stairway to heaven

And when she gets there she knows if the stores are closed

With a word she can get what she came for


My guess was they were hunting-hides used by Tetherow Minutemen to shoot illegal aliens, or possibly Broken Toppers trying to get a freebie hole or two in. These little stairways to nothing are all over the course up there.

They are definitely already thinking about how to keep the rabble out up there:
All kinds of fencing & gates up at Tetherow

Yup, Tetherow is still just a gleam in David Kidds eye, but they already figuring out ways to exclude, and possibly shoot, The General Public.

I'll give 'em this: It's Impressive. There ain't shit up there, except a half built club, but the scale of the thing is impressive as hell. And the course DOES look like it holds the possibility of some sweet ass rounds. But they're going to have to keep it from going to hell 24/7. How they will maintain that monster, even at $250/round, is beyond me. That course looks like it is going to be a maintenance nightmare.

Anywho... enough about Tetheorw...

"But we have only so much land inside the UGB! We'll run out. Then we're screwed!"

Uh huh. Yeah, if you think we'll even remotely soak up existing in-UGB inventory, you're nuts. But you know what? We're covered!
34.3 acres, ready in the UGB reserve for homebuilding in 2038.

Yeah, for every acre inside the UGB, there are at least 50 outside READY to be built. And they're some sweet ass acreage. The above ~40/ac spread will get you some desirable neighbors:

Why pay for trash collection, when you can leave it in the driveway?

Yup, when you move to Bend, you are moving to a sweet ass place, where people just throw their shit out a window. This place is STACKED with crap just sitting out on the driveway. And they've left their neighbors (the 34.3ac owners) with the Hard Sell, of trying to get some idiot to live The Bend Millionaire Dream, by developing a 'hood right next door. Good Call. They could probably get twice what the place is worth by selling out to the developer, who would summarily burn the site & it's garbage filled driveway down. That's strategic thinking there.

It becomes part of your genetic code to fuck over your neighbors here. It's real nice.

And don't think we don't have our intellectuals, we do.

My name is Buck, and I like... this truck

People in Bend go beyond just personalized license plates. We paint our fuckin' names on the back of our cars. Why? Cuz we are smart as shit. Other acceptable possibilities are:

  • Pussy Wagon
  • Friends Don't Let Friends Drive Chevy's
  • They Can Have My Gun When They Pry It From My Cold Dead Fingers
  • I swerve to kill Man-Twat faggots
Yeah, if you are coming from Cali with a mill or two to spend on a macro-shack, you are in good hands.

I stopped to have a bite during this photo-fest and I overheard 2 dudes talking about recent RE buys:

Hipster 1: Dude!
Hipster 2: Dude!
Hipster 1: What up Dude!
Hipster 2: Nut'n Dude, just hangin! Dude! How 'bout you... DUDE!
Hipster 1: Dude, nut'n Dude, just hangin' at my new crib over at The Mews.
Hipster 2: The What?
Hipster 1: The Mews, Dude! It's shagadelic!
Hipster 2: The Mews, what the fuck is that?
Hipster 1: I bought a crib over at Tedstone Mews, Dude. It's killer!
Hispter 2: Dude, you live in a place called "Tedstone Mews"? Really?
Hipster 1: Yeah Dude, it's cool. It's like an English neighborhood, and the first floor is this adobe facade.
Hipster 2: Yeah Dude, I know that adobe stuff worked out real well for The Phoenix Inn. It was covered in parachute pants for like 3 years.
Hipster 1: Yeah... well... The Mews is pretty tight.
Hipster 2: Uh huh, yeah it sounds real "tight". I gotta go dude.
Hipster 1: Dude, gimmee a call later we'll do something!
Hipster 2: Dude, I'm sorta busy from now on... uh... hmmm yeah
Hipster 1: DUDE! Why the cold shoulder! Is it The Mews?
Hipster 2: Dude, I gotta go, cuz I don't wanna be around when someone uses the term, "The Mews". OK, later....

Yeah, Good Call. This is in a tight race with "Garag-Mahol" as the stupidest name ever.

Tedstone Mews is just so damn strange, it might just work. I mean you get a nice little water-stained shit shack that has been placed atop an adobe base:

Adobe always works as a building material in Cent OR

Yeah, The Tedstone Fucking Mews is a great idea. It's just weird enough that it'll give The Shire a run for it's money.

Well, I have quite a few more pictures, and for every pic I snapped there were about 10 similar "FOR SALE" signs that I just passed by.

Back to the first sentence: The number of homes in Cent OR for sale has NOT really gone up. Really! Here are the stats:

Mar 07 lots for sale: 1,246
Mar 08 lots for sale: 1,520

Mar 07 all listings: 4,065
Mar 08 all listings: 4,375

So the total number of listings is UP 310 from last year at this time. Lots account for 274 of this increase, or 88%. There are not many more homes for sale. It's LOTS that are FLOODING the market.

And it will be LOTS that are the undoing of the Bend market.

Remember Eagle's Landing? Breaking down & basically saying ANYTHING GOES! Build whatever you want, where ever you want. The first Free Market house to go up there looks to BARELY be 1,000 sf, if that. They've taken down the signs & flags (remember: WHITEY LOVES FLAGS) stating that home sizes were between 1,800 and 3,400 sf. Now there is NONE of that.

This is the Fundamental Nature of Bend Development: Zero demand, so they are NOT building spec homes anymore. Sounds good right? No. They are building PIECEMEAL, whatever anyone wants, WHERE EVER they want it.

Of course then it takes 5-6 shit shacks to queer the entire fucking deal. Everyone wants out because the developer insists on turning shotgun towards their own face & pulling the trigger. Bend turns into a pock-marked nightmare of dog crap. This is what is happening.

YOU WILL ALWAYS BE THROWN UNDER THE BUS IN BEND, IF IT MEANS SOMEONE CAN SELL A HOUSE TO SOMEONE, EVEN IF YOU ARE SCREWED IN THE PROCESS.

The collapse in Bend homes has not really started yet. It will start because raw land prices are IMPLODING. Bare land listings represent 34.7% of all the listings in BendBB's data, 1,520 of the 4,375 total listings.

But bare land listings make up 55% of all the listings with 25% or greater price cuts.

In fact in the rarefied atmosphere of listings with price cuts over 50%, bare land makes up almost 90%.

Yup, we had ourselves a good old fashioned land rush. And the Land Bust is what'll take down EVERYTHING. Why? Think about it:

1) Cali-banger arrives
2) Cali-banger announces they are going to, "Own This One-Horse Shithole!"
3) Cali-banger wants to max out 401K buying power
4) Cali-banger goes shopping, and leaves cart square in the driving lanes.
5) Cali-banger looks at pre-existing homes for sale
6) Cali-banger declares these hovel's too crappy to house their awesomeness
7) Cali-banger looks at bare-land
8) Cali-banger arbs-out the fact that they can get EXACTLY the home they want, even if it busts CC&R's for A LOT LESS MONEY than buying a house right next door
9) Cali-banger RENTS, while shack is erected.
10) Cali-banger walks dog, and leaves dog shit everywhere.
11) Dog is poisoned, Cali-banger is confused

This is EXACTLY what will happen. This is why we can go DOWN 75% and other places CANNOT. This scenario CANNOT happen in Mahattan. No Bare Land. The closest thing to bare land in a big city is a teardown, or possibly a crane collapse.

Remember just a few scant months ago when it was declared that there was NO LAND IN BEND, and you'd better by God BUY before it was all gone? Well, builders drank that Kool-Aid to the bottom, and strangely there is now NO END TO THE LAND IN BEND. It's everywhere.

Every square inch has been sliced & diced & is available for a home. 90% of this stuff is OFF-MLS. 100% DARK MATTER. And THAT is what will collapse the prices of existing homes. More homes will be BUILT, and THOSE homes will be The New Comps.

And they will be killer comps. Mirada itself is going to take $100K RIGHT OUT of the pockets of hundreds of owners on the East side. And that's $100K minimum.

Imploding lot prices, and people's desire to own THEIR OWN home (not yours), is the death knell for Bend. It'll be slow & grueling, but it WILL HAPPEN. Noob's will be able to own for A LOT LESS if they build it themselves, and skip your 10 yr old shit shack. They don't want yours, they want theirs.

THIS is WHY Bend homes prices are headed below $200K. The onslaught of building will continue. East siders will be fucked over by New East Siders. The West sieeeede will be fucked in one fell swoop by Tetherow.

And so it goes... In Bend Oregon, the mantra is:

Go ahead and hate your neighbor,
Go ahead and cheat a friend.
Do it in the name of Heaven,
You can justify it in the end.
There won't be any trumpets blowing
Come the judgement day,
On the bloody morning after....
Mike Hollern rides away.

Paul-doh! feeling a little religious on a Sunday morning....

Addendum:

OK, I was going to write about the whole Bulletin Sellout by Selling RE in the Sports Section, with their lame NWX Is A Great Place For Runners/Bikers BS. But my main question is this:

Who is This Woman? Why was her picture in the article? She's not even mentioned.

Heather Clark? Hot or Not?

128 comments:

Anonymous said...

That is just funny as hell!

My Name Is Buck, And I Like To Fuck.

Duncan McGeary said...

Err, Paul-doh. Seems to me a year ago you were arguing that we needed more affordable land? And remember arguing about this; one that there was PLENTY of land, and two, that more land would become available when the boom busted.

Anyway, I love your observation about cheap land and build it the way you want.

I have a friend who is behind the "Equity Homes" idea, and that's exactly what he's doing --offering 'affordable' plans for do-it-yourselfers...

IHateToBurstYourBubble said...

Seems to me a year ago you were arguing that we needed more affordable land?

Oh, we do. This isn't something where I'm saying it's "bad". This is a counter-point to people who say that mind-numbing drops in prices are just unrealistic.

Most current home owners who are trying to sell in Bend, don't realize that prices can easily drop 50% in the next few years.

Best Buyers Market in 20 Years... and such....

This will be good... in about 15-20 years. It'll be hell in the meantime.

IHateToBurstYourBubble said...

one that there was PLENTY of land, and two, that more land would become available when the boom busted.

Yup.

Do you remember people saying this was RIDICULOUS?

"There's NO LAND in Bend! Oh no!"

And so that patch of crap at 15th & Wilson was sold for a completely ridiculous sum... 28ac for $14MM or something.

Fast forward to today, and there's MILES of bare lots. They're everywhere. And them badboy's are 50% OFF.

What's funny is there isn't a square inch of EXTRA bare land inside the UGB that wasn't there when there were howls about LAND SHORTAGES. But by God, there are hundreds & thousands of unwanted lots that have mysteriously appeared in the meantime.

Anonymous said...

Those stair steps to heaven look more like stair steps to a hangmans noose. Is it possable thats the new security system to keep the working class at bay in Bend?

Anonymous said...

Tetherow is da bomb.

Only classy places erect up a stairway tower to survey your vast kingdom.

I bet the Highlands at Broken Top, with their minimum 10 acre plots, didn't have these great stairways. I bet that Drew Bledsoe whishes he was a Tetherow junkie, instead of a dweeb at the Highlands. Poor shmuck!!

Anonymous said...

For newbies here is what is going on in Bend during the past six months.

1.) There are no jobs for construction, they'll now work for nothing. Labor in Bend down 80%

2.) Material costs are down. Its now cheaper for Canada to BUY lumber sitting at a USA lot, than to cut it down in Canada. Material Cost in Bend down 1/2, and dropping.

3.) Lots, its wasn't long ago that you could buy land around Bend for $500/acre (40k sqft), in 2005 it hit about $2.4M/acre ( $300k per 5k-sqft lot ). Cost of land down 90%, 99% of land cost will be SDC's.

4.) New SDC rule will require that the city charge the actual to the builder, and passes to purchaser. It will be $60k on average, payable by buyer over 30 years. Typically $500/mo payable to City-of-Bend.

Take the crowded close together crap at Shevlin and every where. Why buy a 2-4 year old house that costs more to heat, on a lot looking in your neighbors window.

You go and buy a double lot, lets say 10-20K-sqft for $50k, and build a real nice 1200 sq-ft home at today labor/material cost. You get a real nice place for $150k, NO realtor, deal directly with the developer, he keeps his crew busy, everybody wins.

ALL the existing BEND homes become worthless. In times the existing of course become deals at $120k, but when considering costs of maintaining the +3k-sqft 'mcMansion' nobody wants then, especially for second home.

( Real cost would be $180k = $120k + $60k But only $120k will be advertised, the SDC will be a hidden pass-through )

Bend reverts back to big-lots, small homes. In dense areas the homes are bulldozed, as the lots are worth more as yards, than as homes, because nobody wants high-density.

It's TRUE, there's NEVER been a better time to BUY a lot and BUILD a custom home in 20 years.

All the homes built between 2001-2006, they're fucked. Walk-Away, or simply perish. 20,000 401k's gone, people wiped, retirees impoverished.

In time they'll all dies, and all these dilapidated BOOM HOMES will become tomorrows 'mill-shacks'. The mill-shacks today become yuppy homes close-in, the Siberian stuff becomes the homes of the working-poor. The 'riche' know that Bend was always a fucking con-job, quietly leave.

Builders / Developers try to get their money out, and gradually leave.

The END RESULT is that Bend becomes one huge WALMART / KMART QUALITY subdivision. Call Centers come to Bend to take advantage of low-rent, and english speaking population accepting low wages.

Change? None really, Bend is simply reverting to it old self.

Gated Communitys will be for those wishing to hide 'real wealth'. In town you'll not want to show wealth. Downtown will once again be all sleazy bars, and third all strip-bars. Prostitution will flourish, it will become the best way for a white woman to make money.

Mexicans will quit coming to Bend, as they'll not work for the the low wages.

Fuel costs will continue to rise, and it will cost Millions to develop each acre in rock-outcropping areas like Juniper-Ridge.

A MT-B lift will fail, killing dozens of people, they become un-insurable and close. Nobody cares about the MTN, and everything returns to the 'anything goes days', as all the liberal control freaks leave Bend for Colorado.

Eventually because of the cost of developing on rock land, folks quit building in the Bend area. ALL construction equipment leaves, fewer & fewer jobs, workers move on to higher paying areas.

People look to the midwest for jobs, and $100k homes with $10k SDC costs, because of 'soft soil'. The $100k premium for 'Bend' becomes a fools game.

Anonymous said...

ALL construction equipment leaves, fewer & fewer jobs, workers move on to higher paying areas.
***

Then about that time Bend's citizens will be crying again for someone to "fix them" and the next scam artist will move to town and the whole thing will start over.

The Natives Are Restless said...

So I guess the name of the developer of "Tedstone Mews" is Andrew Spittle. He's from San Francisco!?!? What a dumb fuck.

I predict he's going to have a little spittle running down his chin and a little shittle running down his leg after he sits on those stupid, ugly sons of bitches for a year or five. He'll be singing the Tedstone Blues.

It took a serious pair of Tedstones to think he could make any money on those shit shacks. His Tedstosterone levels must be quite high. Or maybe he's just quite high.

Good luck, Andy.

timothy said...

As someone who has lived in the midwest, the south, and the NW, it seems to me that right now and for the next 10 years you move to the South for jobs. But in 15-20 years, Ohio, Pennsylvania and Michigan will come back to power because there are tremendous universities in all three states. Remember how many people are in those states--they have to empty out (all the people who used to have manufacturing jobs) before they can build back up.

Could be even sooner because I know people making stuff in China now who are wanting to bring labor back here because they are sick of moving factories around. Why? Japan and Hong Kong used to be cheap. Then Mexico and Malaysia and China. You're always moving them because the poor countries get rich on you before you know it, and you don't know what kind of shit you'll running into.

Some jobs will come back to the Midwest, but it'll mostly be robot babysitting and repair. But also quality handmade stuff when people get sick of buying crap on credit.

IHateToBurstYourBubble said...

A pretty good piece from... The Nation.

Is This the Big One?

by JEFF FAUX

[from the April 14, 2008 issue]

For more than a decade, we Americans have been living on an economic San Andreas fault--a foundation of fracturing competitiveness covered by unsustainable consumer spending with money borrowed from foreigners. A financial earthquake was inevitable. We don't know how high on the recession Richter scale the current crisis will take us, but it increasingly looks like, as they say in San Francisco, "The Big One."

Since the last Big One, the Great Depression of the 1930s, we have had eleven small to medium recessions, lasting an average of ten months. The most severe--two back-to-back downturns that began in 1979--drove price increases and the unemployment rate to double digits.

We're not at those levels yet. But the structural supports underneath our shop-till-we-drop economy are considerably weaker. For starters, we have a historic depression in the housing market. Americans' total mortgage debt now exceeds their home equity, for the first time since 1945. Housing prices have dropped 10 percent since last spring, followed by record foreclosures. Most economists expect them to drop at least another 10 percent, which could leave more than 14 million households--at least 16 percent of the total--better off if they just walked away from their homes. Prices could go even lower.

Until last year, housing prices in most places had risen rapidly since the 1990s. This enabled middle-class homeowners with stagnant wages and maxed-out credit cards to keep spending by refinancing their mortgages. The housing boom also spawned the now infamous subprime mortgage--a scheme devised by Main Street realtors and Wall Street bankers to finance home buying with loans that let the borrower buy in with little money down but carried high interest rates. The expensive payments would be made later by refinancing the mortgage as prices continued to rise. These subprimes were sold to middle-class strivers upgrading to McMansions as well as to the working poor.

The increased demand pushed housing prices further into the stratosphere--until, inevitably, they fell back to earth. When the subprime borrowers could no longer make their payments, foreclosure signs went up, lowering the value of other houses in the neighborhood. The refinancing spigot shut off, retail sales sputtered and by January the economy was shedding jobs.

But it is not the squeeze on homeowners that is giving our central bankers nightmares. It is the blowback of housing deflation on the country's massively overleveraged financial markets, which has seriously constricted the flow of credit--the lifeblood of the world's largest debtor economy.

In a typical deal, subprime mortgages were sold to investment companies, where they were commingled with prime mortgages to back up new securities that could be touted as both safe and high-yielding. This new debt paper was then peddled to investors, who used it as collateral for "margin" loans to buy yet more stocks and bonds. At each change of hands, fees and underwriting charges added to the total claims on the original shaky mortgages. The result was a frenzied bidding up of prices for a bewildering maze of arcane securities that neither buyers nor sellers could accurately value.

Giant Ponzi scheme? Not to worry, responded the Wall Street geniuses. By spreading risks among more people, the miracle of "diversity" was actually turning bad loans into good ones. Anyway, banks were buying insurance policies against default, which in turn were transformed into a set of even murkier securities called "credit default swaps" and marketed to hedge funds, pension managers and in some cases back to the banks that were being insured in the first place. At the end of 2007 the market for these swaps was estimated at $45.5 trillion--roughly twice as large as all US stock markets combined.

This huge pyramid of debt was made possible by thirty years of relentless deregulation of financial markets, culminating in the 1999 repeal of the Glass-Steagall Act, which had prohibited banks from dealing in high-risk securities. In effect, Washington regulators became passive enablers to Wall Street's financial binge drinkers. When they crashed--for example, in the savings-and-loan and junk-bond debacles of the 1980s, the Long-Term Capital Management collapse of 1998 and the Enron and dot-com crashes of the early 2000s--the government cleaned up the mess with taxpayers' money and let them go back to the bar.

So here we go again. When subprime homeowners stopped paying, the prices of the mortgage-backed securities used as collateral fell. Banks demanded that their borrowers pay up or cover their margins. Panicked selling by borrowers further lowered the securities' prices, triggering more margin calls and more defaults. Massive losses piled up at places like Citigroup, Countrywide, Merrill Lynch and Morgan Stanley, and cascaded back into the insurance companies. At the end of February, the huge insurer American International Group reported the largest quarterly loss, $5 billion, since the company started in 1919.

After some delay, the Federal Reserve Board last summer started lowering interest rates on loans to the banks. But in a phrase from the bank crisis of the 1930s, it was like "pushing on a string." The bankers' problem was not that money was too expensive to lend out; it was that they were afraid they wouldn't get their money back. When they did lend, they jacked up the rates to compensate for the higher perceived risks--even to solid customers. The Port Authority of New York and New Jersey suddenly had to borrow money at 20 percent. The State of Pennsylvania couldn't finance its college student loan program. Fannie Mae, the fund created by the federal government to support perfectly sound middle-class housing, struggled to sell its bonds.

In mid-March, after anguished discussions between Federal Reserve officials and Wall Street moguls, the Fed agreed to provide $400 billion in new cash loans to banks and investment firms. Days later came the shock of eighty-five-year-old Bear Stearns going belly up. In an unprecedented deal, the Fed immediately lent JPMorgan Chase the money to buy Bear Stearns, taking suspect mortgage-backed paper as collateral. Bear's stockholders had already taken a hosing when the stock crashed. The big winners were the company's creditors and insurers, who were saved from the consequences of their bad business judgment.

We are now staring into the abyss. The Bear Stearns bailout has created a presumption of a safety net under any major stockbroker, in addition to any major bank. Rumors are that Lehman Brothers and Citigroup may be next. The Fed could handle a Lehman crash. But the collapse of Citigroup, the world's largest bank, would be catastrophic, bankrupting businesses, other banks and consumers and cutting off credit for state and local governments. And it could stretch the Fed to the limit of its resources.

There is a widespread assumption that there is no bottom to the pockets of the Federal Reserve. Not quite. The Fed has a finite amount of actual assets--mostly Treasury obligations backed by the "full faith and credit" of the government, which is a commitment to raise taxes if necessary to pay the debt. These assets total about $800 billion, some $400 billion of which have been obligated to back up loans. If the loans default, the Fed has to sell the Treasury notes in order to settle. If there are enough of these failures, the Fed could exhaust its assets. It would then have to resort to really "printing money"--issuing promissory notes not backed up by anything--or get bailed out by the Treasury, putting taxpayers further in the hole. Long before the Fed is down to the last of its stash of Treasury notes, more skittish domestic and foreign investors will flee the dollar. Interest rates would balloon and prices of oil and other imports would skyrocket. Credit would freeze, investment would plummet and tens of millions of Americans would be out on the street, with neither a job nor a roof over their heads.

Unlikely? Yes, still. Unthinkable? Not anymore. Estimates of Wall Street's losses already run well up to $500 billion. A 20 percent drop in housing prices would translate into a $4 trillion drop in the value of housing assets. A large chunk of that loss would destroy the value that underlies the mortgage-backed securities the Fed has now agreed to guarantee.

But well short of such a worst-case scenario, the country seems headed for major economic damage that will severely test whatever we have left of safety nets. It took five years from the time the recovery began in 1983 for the unemployment rate to return to pre-recession levels. Once we reach the bottom of this trough, it could be a very long time before American consumers, whose spending accounts for some 70 percent of our economy, crawl out of the debt hole and back into the shopping mall. The Japanese have still not recovered from their similar housing/debt crash in the early 1990s.

Virtually everyone who has studied Japan in the 1990s and the United States in the 1930s concludes that in both cases the government acted too late with too little in order to stop the debt dominoes from tumbling through the entire economy.

But the American political system seems as seized up as the credit markets. As the Federal Reserve tries desperately to put an overdosed Wall Street on life support, President Bush remains dizzily detached, periodically repeating his moronic mantra against government intervention in the free market. At a press conference that is impossible to parody, Treasury Secretary Henry Paulson announced the Administration "plan" to safeguard the nation against a future crisis. It boiled down to a hope that the finance industry would do a better job of policing itself and that individual states would see to any new laws that might be needed. In what the New York Times dryly reported were his "most extensive comments to date about the credit and market problems," Paulson, formerly co-chair of the investment firm Goldman Sachs, firmly told reporters that he was not interested in finding "scapegoats." No kidding.

In response to pressure from Democrats, the White House at the end of January did reluctantly agree to a fiscal stimulus. But Bush demanded that it be limited to the only economic policy he understands: tax cuts. Democrats caved, and the government started printing up $160 billion in a one-time rebate to consumers and businesses, which will be sent out in May. Too little, too late, and likely to be spent paying down debt and buying more Chinese imports.

Senate majority leader Harry Reid has proposed a second round of stimulus--this time through public investment, putting people to work rebuilding bridges, schools and other infrastructure. But no one is talking about a level of fiscal injection needed to counterbalance the drop in consumer and business spending.

If we use the 1979-83 experience as a guide, we'd need some $600 billion to $700 billion in deficit spending. But in those days, the United States was still a creditor nation. Thanks to three decades of trade deficits, topped by the costs of the Iraq War, we now depend on foreign lenders, increasingly worried about the value of their US bonds. As Lee Price, chief economist of the House Appropriations Committee, put it, "We need as big a stimulus as our foreign lenders will allow us to get away with."

To give some relief to those at the bottom of this tottering financial edifice, Barney Frank and Chris Dodd, chairs of, respectively, the House Financial Services and Senate Banking committees, are proposing updated versions of a Depression-era housing rescue program. The government would furnish $300-$400 billion to buy up existing home mortgages at prices marked down to reflect the current lower values. The plan could refinance 1-2 million homes. It may not be enough, but it probably represents the outer limit of what is possible in the twilight year of a White House whose economic competence is in the twilight zone.

Given the way Washington works, the Frank/Dodd proposal would need business support. Yet despite the fact that it would bring desperately needed trust back to the system, the capos of the Wall Street mob are unenthusiastic. Being forced to acknowledge losses on their books could toss a few more of them out of their jobs at a time when the supply of golden parachutes may be getting thin. Better to hunker down and whimper for more welfare from the Fed.

Some are already getting direct bailouts from big government. But it's not coming from the US government. Foreign-government-owned "sovereign wealth funds" are now buying sizable equity shares to shore up battered firms. Citigroup, where the Saudis are already the chief stockholder, sold roughly $20 billion of itself to Abu Dhabi, Singapore and Kuwait. The Chinese just bought 10 percent of Morgan Stanley, and Merrill Lynch sold a 9 percent stake to Singapore. With oil above $100 a barrel, more of Wall Street is certain to wind up owned in the Middle East. Some members of Congress still warn that these countries are looking for political influence in America's financial heart, rather than optimizing their rate of return. They are probably right, but the nationalist fires that flared up against Dubai ownership of US ports in 2006 have largely been banked. Beggars can't be choosers.

Another hope is that the Europeans, the Chinese, whoever, will take over our role as the world's consumer of last resort. As the recession slows US imports, countries that have grown fat on exports to us will certainly have to shift more of their growth to their own domestic market. But to expect that the leaders of other nations would put their own economies at risk by running up trade deficits in order to save us Americans from the consequences of our own folly seems stunningly naïve.

So if this is not The Big One, it is likely to be A Big One--and a long one.

We could still get lucky, of course. Republicans facing re-election might persuade Bush to support a big fiscal stimulus and housing rescue. Home prices may miraculously stabilize. Tomorrow, bankers may wake up like Scrooge on Christmas morning and just start lending. The Chinese may start importing American-made cars...

Otto von Bismarck once remarked, "There is a Providence that protects idiots, drunkards, children and the United States of America." Let's hope it's still true.

IHateToBurstYourBubble said...

And what would life be without Yet Another Article On How Buying Home In Bend Is So Easy, Even Single Mothers Can Do It!

Programs bring homes into reach
Various state and federal financing options are available for homebuyers
By Andrew Moore / The Bulletin
Published: April 06. 2008 4:00AM PST

A single mother of three children, Jena Christiansen never imagined she’d be able to afford a home in Bend. She watched from the sidelines as home prices climbed through most of the decade, resigning herself to life as a renter.

When home prices started to dip last year, the 32-year-old Christiansen — who had recently earned a nursing degree and filled a full-time job at St. Charles Bend — barely noticed. But officials at Housing Works in Redmond, the state’s regional housing authority, turned Christiansen on to state and federal home-buying programs, some of which require little or no money down despite the stricter lending guidelines and tightening credit requirements most banks and mortgage brokers are implementing around the country.

In January, Christiansen bought a 1,200-square-foot home in east Bend for $200,000, with only 8 percent down, thanks to one such government program.

She still can’t believe she did it.

“I never thought I’d own a home,” Christiansen said. “It was so shocking I was able to do it.”

Median housing prices in Bend and other parts of Central Oregon haven’t declined as sharply as in some parts of the country — the median price for a single-family residence (excluding mobile homes, condominiums and townhouses) was $323,000 in Bend and $230,000 in Redmond in February, according to the latest Bratton Report. But opportunities do exist for low-income or first-time buyers who might not have 20 percent to put down or good enough credit for a conventional loan with a low fixed-rate, say local housing professionals.

Some income and purchase price restrictions apply, but with the federal Rural Development Loan program, homebuyers can potentially secure a low, fixed-rate loan from the government with no money down.

There’s also a mortgage guarantee program provided by the Federal Housing Administration that enables homebuyers to purchase a home with less than 20 percent down and not have to pay the additional mortgage insurance premiums traditionally required for such loans.

Also, there is the Oregon Bond program, which allows qualified first-time homebuyers to purchase a home with 3 percent down and pay a less-than-market interest rate on a fixed-term mortgage.

In addition, the state offers two separate programs — the Home Purchase Assistance Program and the Purchase Assistance Loan — to help homebuyers secure funds for a down payment or pay closing costs.

It’s also possible to use more than one program, said Craig Tillotson, a residential loan specialist with the Oregon Housing and Community Services Department.

Homeownership has been at the root of the American dream since the country’s founding, said Kelly Fisher, homeownership coordinator at Housing Works. In many cases, it’s the biggest investment a person or family makes, she said, and can bring people out of poverty, anchor them in their community — to the community’s benefit — and improve the quality of life for buyers. But it doesn’t always come cheap.

“Everyone’s saying it’s the best buyer’s market in 20 years, but for who?” asked Fisher. “If prices are still at $350,000, people making $15 an hour still can’t afford it.”

Which is why the following government programs are such a help, Fisher added.

Oregon Bond

The Oregon Bond program began in 1977 and is targeted toward first-time buyers, although any Oregon resident who hasn’t owned a primary residence for more than three years qualifies, Tillotson said. The state sells tax-exempt revenue bonds and then uses the proceeds to purchase loans from private lenders that have been packaged for first-time homebuyers at a discounted interest rate. The state uses the proceeds from the loans to pay back the bondholders.

The current interest rate for the Oregon Bond program’s 30-year fixed loan is 5.625 percent. By comparison, the national average reported by Freddie Mac for the same loan was 5.88 percent on Thursday.

Eligible borrowers who don’t have a 20 percent down payment can apply for an FHA loan (see below) that allows them to put down as little as 3 percent of the purchase price.

In Deschutes County, a couple or individual interested in the program can’t have a combined income greater than $70,560. It rises to $82,320 for families of three or more. In Crook and Jefferson counties, the income limit is $70,440 for one- or two-person families and $82,180 for families of more than three.

There also are purchase price restrictions. In Deschutes County, the program is good for homes that cost less than $402,750. In Crook and Jefferson counties, the limit is $289,705. The homes can be new or previously owned, and either site-built or manufactured and permanently affixed to acceptable foundations. Condominiums or units in a planned development also are eligible.

A homeowner who uses the Oregon Bond program may be subject to what’s called the recapture tax if he or she sells the home within nine years of the purchase date, said Tillotson. It only applies in cases where the homeowner’s income increases substantially within the nine-year period.

Tillotson said the state has nearly 8,200 such loans in its portfolio, with a principal balance of more than $970 million.

In 2007, 52 Oregon Bond loans were made in Deschutes County, in the amount of $10,106,753, Tillotson said. In 2006, the state made 56 such loans in Deschutes County, for $9,972,126, he said.

Federal Housing Administration

The FHA, part of the U.S. Department of Housing and Urban Development, does not make loans but instead guarantees loans made by private lenders to FHA-eligible homebuyers. Such a loan is typically called an “FHA loan.”

The down payment can be as low as 3 percent of the purchase price, and most of the closing costs and fees can be included in the loan, according to www.hud.gov. The borrower must meet standard FHA credit qualifications, which includes a two-year examination of the borrower’s credit history but does not include consideration of a borrower’s FICO credit score.

Ron Smith, a mortgage banker at First Horizon Home Loans in Bend who specializes in FHA loans, said they are generally more liberal in terms of credit requirements and other restrictions, including the use of gift money for making a down payment. An FHA loan also allows parents to co-sign for a loan and use their income to help qualify the borrower, Smith said.

The terms are generally 15 to 30 years and there are no prepayment penalties, Smith said.

The government recently increased the mortgage limit on FHA loans to $447,500 for single-family homes in Deschutes County. The limit is $271,050 in Crook and Jefferson counties.

“For years, people have been coming in and getting subprime loans in lieu of these loans and lots of people could qualify for these,” Smith said.

To learn more, Smith suggested interested homebuyers attend home-buying education classes.

“Anyone that is thinking of looking for a home, (homebuyer) classes should be the first place to start,” Smith said. “Go get educated about the process.”

SOFCO Community Credit Union, a HUD-certified housing counseling agency, offers homebuyer education classes in Central Oregon. Its next class is an eight-hour workshop set for April 19 in Redmond.

Local nonprofit NeighborImpact also is a HUD-certified housing counseling agency that offers homebuyer education classes.

Rural development housing loans

Overseen by the U.S. Department of Agriculture, the rural development housing loan program helps homebuyers purchase property in rural areas. In Central Oregon, that means everywhere outside Bend’s Urban Growth Boundary, said Drew Davis, a housing specialist at the USDA service center in Redmond.

The program originates loans at subsidized rates and guarantees loans made by private lenders. For eligible applicants, that can mean conventional loans of up to 100 percent of the home’s purchase price, Davis said.

There are income and purchase price limits.

For loans originated by the USDA, the income limit is 80 percent of the county’s family median income. For loans guaranteed by the program, the income limit is 115 percent of the median.

In Deschutes County, the 2008 estimated median family income is $58,200, according to HUD. It is $49,200 in Crook County and $47,000 in Jefferson County.

The median income changes based on household size, Drew said.

Purchase price restrictions are $273,100 in Deschutes County and $200,160 in Crook and Jefferson counties.

Davis said the number of loans guaranteed through his office are up more than 500 percent from last year, and that his office also is originating more loans. Davis credits the surge to the drying up of the subprime mortgage market.

“When the mortgage industry has done some significant changes, as to who is available to do 100 percent loan-to-value products, and with the tightening of Fannie Mae/Freddie Mac guidelines, it’s caused (lenders) to remember we have been out here marketing to them, and the ones already using us are using us significantly more,” Davis said.

Housing Works

Joy Johnson, 81, purchased a newly built home in Redmond last month using a rural development loan from the USDA. She put $1,000 down on a loan that charges 1 percent annual interest.

Johnson also was able to convert her Section 8 rental voucher into a homeownership voucher.

Johnson lived in a home for many years but was more recently living in an apartment in Redmond with her four cats. At risk of losing her cats due to rental restrictions, Johnson found her own home with the help of Housing Works.

“I either had to pay $250 for each one for a deposit or take them out and have them put to sleep and you don’t do that with cats you have grown from kittens,” Johnson said. “With my own place, I can have my cats and go out the back door and sit on the back step and do what I doggone want to.”

Housing Works’ Fisher said her organization offers a number of ways people can qualify for housing-assistance programs. Although the organization doesn’t lend money, it offers home-buying education classes and assists people in finding lenders with experience underwriting loans that conform to the applicable programs.

It can also help people sign up for a 3-to-1 savings matching program run by the nonprofit CASA of Oregon. Participants who save $1,000 in the program, called VIDA, then qualify for a $3,000 matching payment. It lasts up to three years, meaning participants can potentially put away $12,000 to be used for a down payment, Fisher said.

“It’s wealth-building, and what that means is people can save for home ownership,” she said.

The VIDA program is open to anyone in the community who earns up to 80 percent of the county median income, Fisher said. It is administered by the Newberg-based CASA of Oregon and uses funds provided by foundations and the federal government.

Housing Works also has developed an affordable housing program, called HomeQuest, that works with developers to remove the cost of land from a home purchase, meaning an eligible buyer only buys the improvements — mainly the house — on the land.

In partnership with West Bend Property Co., the developer of NorthWest Crossing, Housing Works made its first HomeQuest sale this winter in the west Bend neighborhood, where a single mother is in the process of purchasing a home for roughly half the cost of other properties in the development. The property was donated to Housing Works, and volunteers built the Craftsman-style house.

The different programs demonstrate the various ways people can get into homes, Fisher said.

For Johnson, who moved into her new home in Redmond last month, her rural development loan was a life-changer.

“I was ready to say, ‘Oh well,’ but now I can come home and open the door and know this is mine,” she said.

IHateToBurstYourBubble said...

“Everyone’s saying it’s the best buyer’s market in 20 years, but for who?” asked Fisher. “If prices are still at $350,000, people making $15 an hour still can’t afford it.”

Yeah, see, here's the rub. This is simply a financial IMPOSSIBILTY.


Which is why the following government programs are such a help, Fisher added.


NONE of these programs can possibly help in the above situation. NONE.

Trying to put people who make $15/hr into $350K homes is a recipe for FORECLOSURE. Of course, neither Costa nor COBA nor anyone else cares whether it is financially prudent for you to buy a house that is beyond your means or not; They just know that THEY DON'T WANT THEM. If you get foreclosed on and lose the house, well that's not their problem.

Ohhhhhh right. I guess in a roundabout way it is. Cuz it's exactly this sort of Teflon thinking that got us where we are today.

Right. COBA & COAR are one-trick ponies and literally DO NOT realize that what they want to do today (put people in UNAFFORDABLE HOMES) is exactly the root cause of WHY THEY CAN'T SELL A FUCKING HOUSE TO SAVE THEIR LIVES TODAY.

Good call dumbfucks.

IHateToBurstYourBubble said...

And I think you should check out the Bulletin story, if only for the hot cougar MILF-age in the picture.

She's 32 and has already squashed out 3 kids, Boys.... that there means Hottie McHomeowner is a member of a Coalition of The Willing....

IHateToBurstYourBubble said...

And anyone notice that CACB fell a full $1+ from Wed afternoon, to Fri close? Fri was the lowest closing price in several years....

This bodes poorly for Q1 earnings...

bruce said...

RE: We are now staring into the abyss. The Bear Stearns bailout has created a presumption of a safety net under any major stockbroker, in addition to any major bank. Rumors are that Lehman Brothers and Citigroup may be next....


There is a widespread assumption that there is no bottom to the pockets of the Federal Reserve. Not quite. The Fed has a finite amount of actual assets--mostly Treasury obligations backed by the "full faith and credit" of the government, which is a commitment to raise taxes if necessary to pay the debt. These assets total about $800 billion, some $400 billion of which have been obligated to back up loans. If the loans default, the Fed has to sell the Treasury notes in order to settle. If there are enough of these failures, the Fed could exhaust its assets.


That fucking article is required reading, folks. Smoke and mirrors only lasts until the nut gets too big to ignore.

bruce said...

Re: A single mother of three children, Jena Christiansen never imagined she’d be able to afford a home in Bend.

Have you ever seen an article so fed to a reporter?

Good PR work.

Anonymous said...

Oh yes, Heather Clark is THAT HOT! The picture doesn't even do her justice. She puts little Hottie McHomeowner to shame.

bruce said...

But don't get me wrong, some of those programs are great. Just as long as the housing is priced right. Meaning 3-4 times median incomes.

bruce said...

Re:
In January, Christiansen bought a 1,200-square-foot home in east Bend for $200,000, with only 8 percent down, thanks to one such government program.


$16,000 down. That is very good. And at $167/sq ft. I wonder how this will look in three years...

bruce said...

Re:As the Federal Reserve tries desperately to put an overdosed Wall Street on life support, President Bush remains dizzily detached, periodically repeating his moronic mantra against government intervention in the free market. At a press conference that is impossible to parody, Treasury Secretary Henry Paulson announced the Administration "plan" to safeguard the nation against a future crisis. It boiled down to a hope that the finance industry would do a better job of policing itself and that individual states would see to any new laws that might be needed. In what the New York Times dryly reported were his "most extensive comments to date about the credit and market problems," Paulson, formerly co-chair of the investment firm Goldman Sachs, firmly told reporters that he was not interested in finding "scapegoats." No kidding.

Reality. You elect a moron and bad shit happens.

So someone tell me how we managed to elect him twice?

The guy who wore his National Guard flight jacket around Harvard Business School...

Un-fucking-believable.

bruce said...

Re: Heather Clark is THAT HOT!

The cyclist journalist?

Patti Buerkle is way hotter :)

And that girl has a smooth pedal motion that I can only dream of. It's like water flowing downhill.

IHateToBurstYourBubble said...

Why was she even in that article? She was in the "print" version only, that I could see. And she wasn't mentioned at all.

Damn, she is just white hot good lookin'.

OK, so a link to "Patti Buerkle" would be appreciated...

Anonymous said...

Um.. that is Heather... and hope you don't actually meet her. Her personality is a mess.

IHateToBurstYourBubble said...


Have you ever seen an article so fed to a reporter?


Actually this piece would have some credibility had it not been preceded by the most ham-handed, idiotic, and obvious piece of PR Crap ever to hit this swill-hole.

Best Butthole Market In 20 Minutes

This is at least informative, in some way. But yeah... it's some nasty spoon fed BS.

IHateToBurstYourBubble said...

Um.. that is Heather... and hope you don't actually meet her. Her personality is a mess.

Mmmmmm, now I'm interested.

Is this gal actually in Bend? What's her story?

I say again: She Hot.

Anonymous said...

Her story; married. But has offended or turned away pretty much everyone who gets to know her. Sweet as honey on the surface... a terrible soul underneath.

And.. sorry.. that picture doesn't show the sun damage that she has..

Timmy Crawford said...

Long time lurker, never posted a comment though. Pure comedic genius this week, nice work.

Thought I'm a bit upset you didin't include "COWBOY UP" as a slogan to paste on one's tailgate. I saw some rad bro that had it across his upper wind shield at greenwood and 3rd this afternoon. He was obviously on his way to meet up with his buddy in the pussy wagon to get out to prineville to cut wood with some 15 year olds.

awordtothewise said...

I say again: She Hot.

***

Paul D -- your RE pictoral and commentary is A++ this week, but -- just FYI -- you lost several points with your excessive panting over that plane-jane psycho. Just in general, reduce salivating so much in the future or you will risk losing your cool factor (not to mention your wife!).

IHateToBurstYourBubble said...

your excessive panting over that plane-jane psycho.

Dang, this gal done pissed off a lot of people.

And actually I really loathe psycho's, that stuff is a real turn off.

And my wife would probably agree with me that this gal is dang hot. And I don't think I have an "cool factor".

But I'm still curious; why was this gal even in this article? She's not mentioned. It's just her picture. What's up with that? Was she in the print version? Why?

IHateToBurstYourBubble said...

Chewing Through the Credit Crunch

There is so much that is happening each and every day as the Continuing Crisis moves slowly into month eight. So much news to follow, so many details that need to be followed up that it can get a little overwhelming.

Where to begin? Maybe with a "minor" change of the rules on how we value assets, then a look at the proposed changes in regulations, some comments to my hedge fund friends, a quick look at the employment and ISM numbers which are clearly showing we are in a recession and then finish up with some thoughts as to what it all means. There's a lot of ground to cover, so we'll jump right in without a "but first" today.

If the Rules are Inconvenient, Change the Rules

Several times in the past few months I've reminded readers of the problem that developed in 1980 when every major American bank was technically bankrupt. They had made massive loans all over Latin America because the loans were so profitable. And everyone knows that governments pay their loans. Where was the risk? This stuff was rated AAA. Except that the borrowers decided they couldn't afford to make the payments and defaulted on the loans. Argentina, Brazil and all the rest put the US banking system in jeopardy of grinding to a halt. The amount of the loans exceeded the required capitalization of the US banks.

Not all that different from today, expect the problem is defaulting US homeowners. So what did they do then? The Fed allowed the banks to carry the Latin American loans at face value rather than at market value. Over the course of the next six years, the banks increased their capital ratios by a combination of earnings and selling stock. Then when they were adequately capitalized, one by one they wrote off their Latin American loans, beginning with Citigroup (C) in 1986.

The change in the rule allowed the banks to buy time in order to avoid a crisis. It didn't change the nature of the collateral. They still had to eventually take their losses, but the rule change allowed both the banks and the system to survive. I have made the point that the Fed and the regulators will do whatever they have to do to manage the crisis.

All the major new multi-hundred billion dollar auctions at the Fed where the Fed is taking asset backed paper as collateral for US government bonds does not make the collateral any better, of course. It just buys time for the institutions to raise capital and make enough profits to eventually be able to write off the losses.

Thus it should not come as a surprise to you, gentle reader, that the rules have been changed in much the same way as in 1980. In an opinion letter posted on the SEC website last weekend clarifying how banks are supposed to mark their assets to market prices is this little gem (emphasis mine):

"Fair value assumes the exchange of assets or liabilities in orderly transactions. Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale. Only when actual market prices, or relevant observable inputs, are not available is it appropriate for you to use unobservable inputs which reflect your assumptions of what market participants would use in pricing the asset or liability." (The full letter is available here.)

So, now banks can simply say that the low market prices for assets they hold on their books are actually due to a forced liquidation or distress sale and don't reflect what I believe is the true value of the asset. Therefore I'm going to give it a better price based on my firm's models, experience, judgment or whatever. In today's Continuing Crisis, nearly every type of debt and its price can be classified as a forced liquidation or distressed sale.

Does this make the asset any better? Of course not. But it buys time for the bank to raise capital or make enough profits to eventually take whatever losses they must. And who knows, maybe they'll get lucky and the price will actually rise?

There are two problems with this rule. First, it clearly creates a lack of transparency. The whole reason to require banks to mark their assets to market price rather than mark to model was to provide shareholders and other lenders transparency as to the real capital assets of a bank or company.

Second, can a forced liquidation or distress sale be from a margin call? Obviously the answer is yes. But as Barry Ritholtz points out, this opens the door for some rather blatant potential manipulation. If a bank makes a margin call to hedge funds or their clients to make the last price of a similar derivative on their own books look like a forced liquidation, do they then get to not have to value the paper at its market price? Is this not an incentive to make margin calls? One price for my customers and a different one for the shareholders? If a hedge fund was forced to sell assets and then it found out that the investment bank is valuing them differently on its books than the price at which it was forced to sell, there will be some very upset managers and investors. Cue the lawyers.

Is this a bad ruling? Of course. But is it maybe necessary? It just might be. My first reaction was that this tells us things are much worse than we think. The struggle to get the mark to market ruling only to abrogate it in certain circumstances less than a year later has to gall a lot of responsible parties. It seems like it's 1980 and Latin America all over again. Let me repeat: The Fed and the Treasury (which oversees the SEC) will do what it takes to keep the game and the system going.

Treasury Secretary Hank Paulson put forth a number of "new" ideas for changes in the regulatory structures. Nothing I saw will help all that much in the current crisis. It's more like rearranging the deck chairs as the ship is going down. It seems like most of it is being proposed to prevent another crisis like the one we're in from occurring in the future. That simply insures that Wall Street will have to invent whole new ways to create a crisis in the future. I'm sure it will be up to the task.

Most of the proposals are basically good ideas that have been discussed for a long time, like merging the CFTC (Commodity Futures Trading Commission) and the SEC. We're the only country with such a bifurcated regulatory system. Good luck with getting that through Congress, though. The Agricultural Committees in the Senate and the House oversee the CFTC and futures trading, dating back to the 1930's when all that was traded was agricultural products. Now the CFTC oversees a vast derivatives market, which of course makes campaign donations to members of those committees. Think those Congressmen want to see their major campaign donors go away? Of course, that means the Finance Committees would get new donors. It'll be amusing to watch and see who "wins."

The really interesting item is the potential for the Fed to regulate investment banks, which makes some sense if they're going to loan them money at the discount window. Left unsaid and up for future negotiation is whether that would mean investment banks would have to reduce their leverage. Right now, investment banks utilize about twice the leverage as commercial banks. That leverage is what makes them so profitable. Take that away and they lose a lot of their profit potential.

A great part of the continuing crisis can be laid at the feet of too much leverage in too many places. The world is de-leveraging fairly rapidly. In some circles, it looks more like an implosion. The Fed and the SEC have made it very clear they want to have more authority to oversee all sorts of funds and investment banks so they can get a handle on the amount of leverage in the system. What you do with that information is another thing, but they want it and will use the Continuing Crisis to get that authority. My bet is that investment banks are going to be forced to reduce their overall leverage "for the good of protecting the system from itself" or some such twisted logic.

So, let's sum it up. The problem is so severe with the financial companies' assets that the SEC is going to allow some of them to "cook the books" so they can survive. That means there are going to be large and continuing write-downs for many quarters to come. There's a minimum of another $300-400 billion in write-downs (and maybe a lot more) coming from mortgage related assets, not to mention credit cards and other consumer related debt. And the investment banks may be forced to reduce their leverage and thus their profitability?

Putting money in the major financial stocks is not investing. It's gambling on a very uncertain future. There is simply no way to know what the value of the franchise is. There are other places to put your money.

Regulations Coming to a Hedge Fund Near You

The SEC pushed through rules last year to regulate hedge funds. The courts ruled (properly, I think) that the SEC did not have congressional authority to do so. The hedge fund industry fought tooth and nail to avoid regulation and dodged the bullet.

I think the mood in Congress is going to be such that as the authorization for many of Paulson's proposed changes make their way through Congress, some of them are going to allow the SEC the authorization it needs to regulate hedge funds. The Continuing Crisis almost makes it a sure thing.

So, a quick note to my friends in the hedge fund industry. Forget fighting regulation and start negotiating. Recognize that regulations are coming and do what you can to make them as rational as possible. Also, make sure you (we) get the rights of other regulated funds, like the ability to advertise and not be so secretive, at a minimum. And maybe a more reasonable interpretation of the research analyst rules, which I note that many seem unaware of the implications on hedge funds and private offerings of the research analyst rules.

I'm regulated by FINRA (the former NASD) which is overseen by the SEC, the NFA (the self-regulatory arm of the CFTC) and various state financial authorities. It seems like my firm gets a regulatory audit almost every year from someone. My small firm survives, and so will hedge funds. Does it cost a lot of money and time to be regulated? Sure. But that's the price of doing business.

Will making hedge funds register make them any safer? I doubt it. Think of Enron and WorldCom. REFCO was registered and somehow hid a $500 million dollar bogus loan from regulators, investment bankers and auditors. But it will make them more transparent. If we're going to have to pay the costs of being regulated let's make sure we get the benefits.

More Fun in the Unemployment Numbers

Payrolls tumbled by 80,000 last week, more than forecast and the third monthly decline, the Labor Department said today in Washington. The unemployment rate rose to 5.1%, the highest level since September 2005, from 4.8%. The household survey shows the number of unemployed people rose by 438,000 (that's not a typo!). In March, the number of persons unemployed because they lost jobs increased by 300,000 to 4.2 million. Over the past 12 months, the number of unemployed job losers has increased by 914,000. And of course, when you look into the numbers it's worse than the headlines implies.

Prediction: we'll see 6% unemployment before the end of the year.

There were negative revisions totaling 67,000 job losses for the last two months, making those months even worse. This means that the Bureau of Labor Statistics (BLS) is clearly over-estimating the number of jobs in the first announcement. That's because it has to extrapolate based on recent past data. And as I continually point out, as the economy softens, it's going to continue to overestimate the number of jobs. It's one of the problems of using past performance to predict future results.

Job losses since December are now at 286,000 in the private sector and 232,000 overall, counting for growth in government. What was up? Health care (23,000) and bars and restaurants (23,000 also). Initial unemployment claims are up by almost 25% for the last four weeks over last year, and this week were over 400,000. Given the job losses, this isn't surprising.

This month the BLS hypothecates 142,000 jobs being created in its birth/death model. You can guarantee this will be revised down. For instance, BLS assumes the creation of 28,000 new construction jobs as the construction industry is imploding. Total construction spending has fallen for the last four months in a row. Somehow it estimates 6,000 new jobs in the finance industries. Does anyone really think we saw a rise in employment in mortgage and investment banks?

Buried in the data is a picture of a squeezed consumer. Inflation is now running ahead of the growth in wages. As the chart below shows, average hourly earnings were up just 3.6%, but inflation was 4.5%. That means consumers must struggle to maintain their standard of living. No wonder retail stores shed 12,000 jobs last month. Light vehicle retail sales are down by 20% form last year. This all paints a picture of a very challenged consumer.

A Muddle Through Recession

The business sector is clearly in recession. The ISM manufacturing index came in at 48.6. Anything below 50 means manufacturing is in decline. There was a sharp drop in new orders. New orders have been below 50 for four months. Employment has been below 50 for four months. Backlog of orders has been well below 50 for six months. Yesterday the ISM service index was again below 50 for the month of March.

Given all the data, why then do I still think we won't see a deep recession? Because corporate America is in much better shape than in the beginning of past recessions. Lower inventories, better cash to debt ratios, not as much as excess capacity, and so on. As Peter Bernstein notes in his latest letter, nonfinancial corporate debt is at its lowest level in 50 years, and four standard deviations below the average from 1960 to 2000.

The recession we're now in is a consumer spending led recession driven by a falling housing market which is infecting the entire country. Can anyone still claim that the subprime problems would be contained as many did just last summer? Consumer spending is going to fall even more as credit becomes harder to get.

The situation is neatly summer up by Bernstein:

"The debate over whether we are or are not in a recession continues. There is, however, no debate about resumption of rapid economic growth in the near future. That's without question the most unlikely outcome. Yes, there are some bright spots, such as exports in the governmental largess that lies just ahead - and the likelihood of additional government assistance in some form. The Federal Reserve is also doing its part to lubricate the snarls in the financial markets.

But the household sector is in deep trouble and will remain in trouble for an extended period of time. The combination of falling home prices, the complex problems in the mortgage area, limited financial resources and high debt levels, new constraints and higher costs on consumer installment credit, and probably rising unemployment already sluggish growth and jobs tend to restrain spending by the largest and most important sector of the economy.

Imagine what would happen if all of these adverse forces struck a business sector stuffed with inventories, busy installing a massive amount of new productive capacity, with labor costs rising and productivity falling, and an overload of new debt to service. A difficult situation in the rest of the economy could be rapidly converted into a deep recession. But the business sector has kept inventory accumulation to a moderate pace, has limited in capacity growth, and has been conservative in adding to debts outstanding. How lucky can you get?

Some observers are convinced that we are heading toward a deep depression in any case. We are not so sure. We believe the likely duration of these troubles is a greater concern than the depths the system might reach. The condition of the business sector as pictured above is the primary reason for this more hopeful outlook."

But a recession for at least two quarters and a Muddle Through Economy for at least another 18 months is not going to be good for consumer spending, job creation and most especially corporate profits. I continue to predict more disappointment for corporations that are tied to consumer spending and industries that are associated with housing.

S&P analysts continue to project earnings to be up by 15% in the third quarter of this year and by almost 100% for the fourth quarter this year over last year. Yes, I know there are a lot of one time charges and write-offs in the last two quarters of last year which make comparisons difficult. But in a recession and a slow recovery, how likely is it that we will not see even more "one-time" write-offs. And as noted above, there are more than twice as much subprime losses in our future as we have written off as of yet.

As I have written about at length in past issues, bear markets are made by continued earnings disappointments. It typically takes at least three difficult quarters to truly disappoint investors. We're just in the early stages. The recent drop in the stock market has been primarily caused by the Continuing Crisis in the credit markets, and only modestly by disappointing earnings. We need a few more quarters of disappointment to really get to a bottom in the stock market. It could be a long summer.

How Much to Borrow for a $1 Growth in GDP?

Finally, I want to give you a chart from my old friend Ian McAvity from his latest newsletter Deliberations, which he's been writing for 36 years! Basically, it makes the point that the amount of new debt in relation to GDP is rising. We borrowed in one form or another $5.70 for each $1 rise in GDP last year.

Debt in all forms rose $7.86 trillion for the previous eight quarters to $48.8 trillion dollars. Nominal GDP was only $14.1 trillion. This is of course unsustainable. At some point, debt growth must slow dramatically. As the world deleverages, decreasing debt and the resultant slowing of consumer spending will become a head wind for GDP growth.

Anonymous said...

And my wife would probably agree with me that this gal is dang hot...

***

I think she'll slap you silly! Please ask her and report back with her response -- thx.

Anonymous said...

But I'm still curious; why was this gal even in this article? She's not mentioned.
***
She's just a damn Bull reporter -- contact her here for date:
Heather Clark can be reached at 541-383-0352 or at hclark@bendbulletin.com.

bruce said...

Heather's pic is normally above her weekly Cycling column in the BULL.

Patti had her pic in the print version of the story on the Sunrise to Summit race last fall (she entered on whim because me wife was doing it, won and set a new record time) but I just checked and she's not in the online version.

I know her because they worked together at Webcyclery a while back. A real sweetheart and a great athlete, a late 20-something that just plain grows on you. She was over for Thanksgiving dinner, but lately she's been working at Greatoutdoors.com in Redmond and between her commuting their and training (she races as a pro mountain biker) I haven't seen much of her for awhile.

Heather doesn't like her much.

Here is a pic of her racing cross last fall:
http://www.dbrannen.smugmug.com/gallery/3473562_eVgeg#196639225_PFxyT-A-LB

A little dirty and still smiling, just the way I like them :)

Here are the results from the Thrilla cross series, where she won the three races she entered of the four in the series. In two of the three she lapped the entire women's field. http://www.webcyclery.com/pages.php?pageid=82

But she's still intimidated by the "real" pros, as she puts it. Something to work on...

Go to the Cascade Classic and check out some fine buns this year. Girls who ride hundreds of miles a week tend to have some nice ones.

IHateToBurstYourBubble said...

OK, OK. Cool, I just wanted to know this chicks story. She hot.

So I have removed my own personal fawnings for her hotness, and reduced it to something most dudes can comprehend:

HOT OR NOT.

My wife's hot like this Heather chick, that natural Colorado hottie thing is what I like. She gets extra points for the red hair, and a few for the freckles. My vote:

HOT.

IHateToBurstYourBubble said...

She's just a damn Bull reporter -- contact her here for date:

That is sorta weird though. I don't think I've ever seen any other reporters pic in the Bull.

bruce said...

It's kind of funny because Heather will write about the boys, Adam and Ryan, etc., but then pretty much ignores Patti's results sometimes, and Patti gets a little upset...

Anonymous said...

..but then pretty much ignores Patti's results ...

***
Hot, Not, or Bitch?

Bitch!

Anonymous said...

All those lots? That would have happened to the whole State of Oregon had Measure 49 not passed.
It's flippin' ugly, you're right. It's what Californians do. I should know... I used to be one of them.

Anonymous said...

your excessive panting over that plane-jane psycho.
***

Okay I do not really think she's a psycho -- I was actually just annoyed that you were over-hyping a person you don't even know. I'm sure she's sane enough, but might not be the nicest person, esp. if she disses other girls in her reporting. Typical Bendite though? Lots of the girls who grew up there seem to be bitches. What's up with that?

87th best place said...

http://money.cnn.com/galleries/2008/fsb/0803/gallery.best_places_to_launch.fsb/87.html

100 best places to live and launch a small business, from CNN/Money


100 best places to live and launch
87 of 100

87. Bend, Ore.

Population: 64,917
Pros: Sunny and peaceful, pro-business tax environment
Cons: More isolated than towns closer to the coast, few direct flights to major airport hubs

Bend began as a logging town, endured a bad slump in the 1980s, and has emerged with a diversified economy and a rapidly growing population. The dominant industry is tourism - many of the biggest companies are resorts and vendors that cater to the many skiing, beer-drinking, rock-climbing, fly-fishing, and rafting enthusiasts that visit the city's mountains, microbreweries, and neighboring Cascade Lakes.

Other industries include computer software and hardware, medical equipment, aerospace, and recreational-equipment manufacturing, in addition to a growing tech sector. These startups can benefit from Oregon's small-business friendly tax environment: The state aids startups by reducing property tax rates, worker compensation rates, income tax rates, and regulatory red tape. For green companies, there's also a business energy tax credit for 35% of eligible projects, aimed at encouraging conservation and recycling.

Unlike Oregon's coastal cities, Bend, which sits on the banks of the Deschutes River between the eastern slopes of the Cascade Mountains and the high desert, is bathed in sunshine all year long. All the better for the aforementioned extreme sports fans, as well as locals looking to enjoy the city's 71 parks and 48 miles of trail. -Elizabeth Bland and Mina Kimes

Duncan McGeary said...

Man, I want to live THERE.

timothy said...

What a coincidence. I was just about to go take my daily sunshine bath.

Anonymous said...

BB2 made the big time -- MONEY REPORT. Read the comments to that Money article -- they are a riot. It seems Bend's not the only ruined small American town.

1. Bend? You the Bend where unemployment is near 8.2%? Where home prices have dropped and there are foreclosures on every block? read: crime attractants). Is this the same city of Bend which is 20 MILLION dollars short in the budget?

Um, yeah… let’s just say that the tax incentives aren’t going to be around for long, as the city council does quite a few “behind closed doors” deals that have bled us dry.

Stop drinking the “Bend is great” koolaid and start reading one of the local blogs who are NOT pimped out to realtors.
http://bendbubble2.blogspot.com/index.html
http://bendoregonbubble.blogspot.com/
http://bendbubble.blogspot.com/index.html

If the links disappear, just google Bend Bubble and blog. You’ll see them.

Posted By Bend Gurl, Bend, Oregon : March 29, 2008 7:08 pm


2. Here's one on Bend (must be on Bend's PR rolls):
WE LOVE BEND!!! We bought land there in Feb, 2008 and we are moving. We are soooo tired of California, the crowds, graffiti…..

Bend is clean, uncrowded (compared to California) and everyone is pleasant! And Bend has sunshine!

Housing is still affordable and all the best shops, restaurants and services are there.

Posted By P&D, Huntington Beach, CA : April 7, 2008 11:18 am


3. Another on Bend:
You have to be kidding me about Bend. Sure it has nice weather but there are no jobs here and it is quickly becoming the next sub-prime capitol. The unemployment rate is inching toward 9%. The city has enormous budget issues. The realtors have tremendous influence over the local newspaper so any articles that have negative information related to the housing bust are eliminated. A writer for the Bulletin was fired for not keeping the happy BS real estate stories alive and well. Go to Oregon Public Radio’s website for more information. Skip it and go to Boulder!

Posted By judy, Bend, OR : March 30, 2008 9:34 pm

4. AND THE TRUTH COMES OUT:
Why did you have to put Bend, Oregon on the list? We really don’t want anyone else to move here…
Bend just about has it all — fishing, skiing, biking, golfing, kayaking… We love being able to walk five minutes to the Deschutes River and fly-fish. 300+ days of sunshine are wonderful each year.

Winter gets tough for 2-3 months each year, but there’s XC skiing just ten minutes from our front door and Mt. Bachelor is twenty minutes away for downhill skiing/boarding.

Posted By EJ, Bend, Oregon : March 26, 2008 12:18 pm


5. Here's on on Boise (which sounds a lot like Bend):
I’m a 3rd generation resident of Boise and have a little different view of the town than this article portrays. Yes Boise used to be a well kept secret but articles like this one have definitely let the cat out of the bag. The sudden increase in population has spoiled some of the once enticing reasons why so many have moved here in the last 10 years. For one, the housing market is crashing right into the ground. This has left anyone seeking employment in the residential construction industry is scrambling for work and those who jumped ship from their former jobs to sell real estate and flip houses are quickly finding themselves in massive debt. I have friends in the mortgage business that haven’t been able to approve a mortgage for almost 6 months! The economic downturn has also lead to mass layoffs in our budding tech industry. I’ve had two neighbors in my apartment complex alone get laid off in the last 2 months. Notice that I mentioned that I live in an apartment complex. I make a very decent living but wouldn’t even dream of attempting to buy a house in this volatile market, yes it’s that bad. Sure the city is clean and the mountains are close for those interested in recreational activities, but who can afford it with the ever increasing cost of living brought on by the housing market crash? I know I can’t. So if you’re looking to move to a nice clean city with unstable job opportunities and a housing market that has reached its breaking point, go ahead. Please, feel free to add to the problem by moving here, buying nice new house on an adjustable rate mortgage, then foreclosing 2 years later after a job layoff.

Posted By Matt, Boise, ID : April 2, 2008 4:52 pm

Anonymous said...

Heather Clark is the girl in the photo. A Bulletin "reporter" who was gifted with a cycling beat, but has no actual journalism skill or experience. I worked with her for 2 years, and she is, in fact, a bitch. She's nice to those people she has to be nice to. Nothing more. Ask any attractive young ladies working at the Bulletin if they've had trouble obtianing any advancements in employment when they ask John Costa "pretty please," and you will know how Clark got this job. Most of the sports journalists I know who are working lesser jobs have more talent in one ball sack.

But seriously, she's a cool gal. Whatever.

bruce said...

Re: We love being able to walk five minutes to the Deschutes River and fly-fish.

Umm, there are actually trout in that warm, low-flowing river in the Bend area? I haven't seen any.

I know there are plenty of geese...

Anonymous said...

First of all JEEBUS FUCKING CHRIST homer, I have 12MB/s cable, and it takes fucking over a minute to LOAD YOUR FUCKING YOUTUBE and GMOD's, do you have to fucking do this, all I want is fucking TEXT. ALL your links SUCK, if I want to watch TV, I would be watching TV.

24/7 Bruce-Pussy & Timmy-Twat, don't know who is more interesting, at least we don't have TT telling us when his wife change her underwear.

I have completely GIVEN fucking up on scrolling YOUR SHIT, now I simply do a 'search' for comments. Could you put a fucking 'go to comments' at the TOP?? God forbid those poor fuckers on DSL & POTS, or even an iphone or blackberry, ... Do you realize as our economy goes to shit, that MOST of your followers will not be able to purchase cable internet?

Anonymous said...

The Straw has broke the camels back, this is FUCKING big, from todays WSJ, McMansions are fucking dead, folks in homes over 2500 sq-ft aren't happy, and the maintenance cost is fucking killing the. The DEPRESSION is here, and ALL fucking existings +2500 sq-ft BEND-HOMES are doomed, again I say DOOMED.

***

Are McMansions Making Some Americans Unhappy?

More Americans are eschewing the “bigger is better” rationale and are purchasing smaller homes, writes Scott Lindlaw for the Associated Press.

He notes that according to the American Institute of Architects, the size of U.S. homes is leveling off. The average is expected to level off at 2,500 square feet, he quotes Gopal Ahluwalia, staff vice president at the National Association of Home Builders, as saying. (Which is still fairly large, but not quite a McMansion.)

In the article, Mr. Lindlaw highlights one New Jersey couple who sold their 6,100-square-foot Victorian, which cost them $20,000 a year in property taxes and maintenance. They bought a home for half the size in Connecticut. The couple now has more time to share together because they spend less time working around the house, Mr. Lindlaw says.

This got us thinking: Do bigger homes makes us less happy? In a column on happiness and income in Wednesday’s Journal, columnist Jonathan Clements noted, “Despite the sharp rise in our standard of living in recent decades, Americans today are little or no happier than earlier generations.” One reader, commenting in an online forum on the column, wrote: “I think if people spent less time working and more time enjoying the things that work should enable us to do then we would all be happier. Instead we buy all these things thinking they will bring happiness, then we work all day long trying to afford them.” In the case of larger homes, we sometimes work all weekend long, too — on home improvements, renovations and maintenance.

Of course, the state of the economy may force some Americans to downsize regardless of ‘happiness.’ But perhaps, regardless of necessity, scaling back on home size would free up our time and, as a consequence, make us happier. Readers what do you think? — Lauren Baier K

timothy said...

CACB looks ready to take on its 52-week lows. It's hovering around 9 today.

Bet they don't smile at headquarters like they did two years ago.

If Buster is right about golden Bend heading down to despair, part of it will be due to the psychological effect of a lot of hot shots having the rug pulled out from them.

It's bearable to have always been poor. It's intolerable to be forced to downgrade the wine you're drinking.

dartagnan said...

LOL! Great post! Especially love the quote from Hannibal Lecter. And Tedstone Mews -- priceless! But at least faux English cottages are a change from faux Tuscan villas -- and the English theme is more appropriate to our shitty climate.

Speaking of which: Is the fucking snow EVER gonna stop????

dartagnan said...

"folks in homes over 2500 sq-ft aren't happy, and the maintenance cost is fucking killing them"

Well, hell yes. When the fuck did it ever make sense to buy a 5,000 sf, 5 BR, 5 bath crap shack to house one man, one woman, one kid and a dog? It was never about anything but ostentation. About time some rationality is returning to the market.

Anonymous said...

RE: First of all JEEBUS FUCKING CHRIST homer, I have 12MB/s cable, and it takes fucking over a minute to LOAD YOUR FUCKING YOUTUBE and GMOD's, do you have to fucking do this, all I want is fucking TEXT. ALL your links SUCK, if I want to watch TV, I would be watching TV.

**

Hey complainin' lil' bitch... SHUT THE FUCK UP. Nobody cares what you want or what problems you have with your internet... again, SHUT THE FUCK UP. It's obvious you're a very unhappy little man if you're bitchin' about shit like this... funny.

dartagnan said...

"You have to be kidding me about Bend. Sure it has nice weather ..."

Are you frickin' SERIOUS??? Nice compared to what -- Tierra del Fuego?

dartagnan said...

"I say again: She Hot."

She not. She's cute, but "hot" is something else entirely.

THIS is hot: http://i.a.cnn.net/si/features/2007_swimsuit/images/photos/07_beyonce_10.jpg

dartagnan said...

Unlike Oregon's coastal cities, Bend, which sits on the banks of the Deschutes River between the eastern slopes of the Cascade Mountains and the high desert, is bathed in sunshine all year long.

Yeah. Right.

I'm gonna slip into my Speedo and go out on the patio for my daily sunbath right now.

Do the idiots who write this bullshit every actually COME here?

timothy said...

>>What a coincidence. I was just about to go take my daily sunshine bath.

>>I'm gonna slip into my Speedo and go out on the patio for my daily sunbath right now.

Is this a case of "great minds?"

Anonymous said...

Do the idiots who write this bullshit every actually COME here?

*

Yes, the CITY-HALL using the VCB/COVA/COBA budget, brings them all in by the bus-load, to ski, stay at the area hotels, ... all in favor of a story, note the story is all in the city-hall website under 'marketing the bend brand'.

The reason the stuff is always the same, is that they have to verbatim print the highlights to the 'bend branding' website to get invited back next year to the free junket.

This will continue so long as VCB ( city-hall ) has a budget for PR&Marketing. See 'Bend Brand' on city-hall website, its all there.

bruce said...

MST, can you post the comment the rules nazi's removed from BendBBWorld? The one concerning North Bend?

IHateToBurstYourBubble said...

re CACB:

Yeah, damn that has gotta hurt. And that is a straight telegraph that the earnings report will be hell. Remember last Q? They were going to "split" the losses between that quarter & this.

I guaran-damn-tee you that the losses have subsequently gotten worse than MossCo thought possible.

YouTube

You can please NONE of the people ALL of the time.

Dude, you search for comments exactly how I do. Timmy actually clicks the title & scrolls.

I'll look into anchors that go right to comments... don't hold your breath though.

In the mean time, dump BendCableBullshit. They suck my grama's ass. But they are also near the top of my Favorite Businesses To Own In Bend.

Snow:

I mean please, what the hell is up with that? It's supposed to be in the low 60's at this time of year! This wend BETTER be nice.

CNN/Money

Talk about me making YOU naigate thru hell! I googleed that, and got billions of results....

Dude, just paste a link.

IHateToBurstYourBubble said...

Damn... that comment had almost as many misspellings as Buster does...

IHateToBurstYourBubble said...

And notice how we had to use the FULL MEASURE of the range of this FSB "study".

Bend media is Very Very used to Bend being TOP 5, or at worst TOP 10, and the phrasing of the stories ALWAYS made that clear.

Phrases like "Bend is in the Top 100..." is a tacit admission of COMPLETE FAILURE.

And you can tell that those EBULLIENT bullshit comments about Bend... yeah, 100% REALTORS. Good going you Marketing Whores.

IHateToBurstYourBubble said...

Timmy, I am reading that "Fooled by Randomness" book.

Actually pretty good.

timothy said...

>>Dude, you search for comments exactly how I do. Timmy actually clicks the title & scrolls.

Allow me to clarify.

What I do upon seeing the current title is quickly click on it. That way I get the current story only and the page loads much faster. In addition, the current story will load COMPLETE WITH COMMENTS. Just hit the computer's END key and you'll be at the end of the current comments, which is where you usually want to be.

Another advantage to this tactic is that the comments are displayed in normal page format and not in that funky pop-up window.

If you like, you can bookmark the current story and hit it all week andd never worry about the old stuff even trying to load.

Example:

http://tinyurl.com/59j9z4

Bend Economy Man said...

CACB about to drop below the $9 per share mark.

Its share price is now at 2002 levels. In terms of its stock price, it has given up all gains it made in 6 years.

In case there are any Bank of the Cascades defenders left out there, I know that there have been some stock splits so the market cap at $9/share is still more than twice what it was in 2002.

IHateToBurstYourBubble said...

there have been some stock splits so the market cap at $9/share is still more than twice what it was in 2002.

Even accounting for splits, it's still gone below where it was in 2002. It's actually coming up on levels it saw in 1998.

IHateToBurstYourBubble said...

Yeah.... CACB hit $10.68 on June 21, 2002.

It's not exactly knocking on 1998 levels, which were in the mid $5's. Hard to tell on a graph that spans from $5 to $32. $9 looks pretty close to $5.50.

IHateToBurstYourBubble said...

Hmmmm... actually Google finance has the 1998 yearly high for CACB at $7.2188 on Feb 6. Yahoo states an "adjusted" price of $5.71 on that date. I know it's adjusted for splits, and maybe dividends. Reinvested or not, I'm not sure.

But $7.21/sh is pretty close now...

IHateToBurstYourBubble said...

The all-time closing high on CACB was on Dec 28, 2006 at $30.71. Intraday it went to $31.90 that day.

So we're DOWN 71% over the past 15.5 months.

I'm a little surprised Moss is still there.

IHateToBurstYourBubble said...

PIMCO'S Gross-Treasuries are most overvalued assets


NEW YORK (Reuters) - U.S. government bonds are the most overvalued assets in the world and it is tough to justify them as an investment given the level of inflation expectations, the manager of the world's biggest bond fund said on Friday.

Bill Gross, chief investment officer of Pacific Investment Management Company, or PIMCO, said he was starting to take on a little more risk and had bought some bank and investment bank bonds.

Speaking in an interview on CNBC, he added that it was too early to consider high-yield bonds since recession tends to produce defaults. However, he said it was not time to consider Treasuries.

"I think Treasuries are the most overvalued asset in the world, bar none," Gross said.

Treasuries have rallied almost non-stop since the middle of last year, when it became clear that the troubles in the housing market were growing into serious problems for financial markets and the economy.

This safe-haven buying has coincided with a shake-out in credit markets that may now have created opportunities to buy beaten down assets.

"I think we can move out a little bit on the credit spectrum," said Gross. "We bought some banking bonds and some investment banking bonds."

"So we are moving into the arena of double-A I suppose and single-A types of bonds, though it's still a little early for high yields and the real risk areas in the bond market, simply because a slow economy or a recessionary economy tends to some produce defaults on the corporate side and that's ahead of us."

IHateToBurstYourBubble said...

I am in total agreement with Gross on this. The yield on treasuries is just ridiculous, especially given the fact that Bernanke is printing money like it's nothing.

There's a HUGE flight to safety mentality going on, which will soon be abated when people realize the currency they are receiving is eroding rapidly.

Hell, buy muni's in the oil belt. They got money, they'll probably pay it back.

timothy said...

>>There's a HUGE flight to safety mentality going on, which will soon be abated when people realize the currency they are receiving is eroding rapidly.

Well, people don't know what to buy. Nothing looks safe. Commodities could crash hard if the global economy slows enough. Just wait until people decide gold has topped and gov'ts start selling their reserves off to get top dollar.

IHateToBurstYourBubble said...

IMF: Credit crunch losses could approach $1 trillion
Effects of current crisis likely to be broad, deep and protracted
By Greg Robb, MarketWatch
Last update: 11:26 a.m. EDT April 8, 2008

WASHINGTON (MarketWatch) -- The total potential global losses from the credit crunch could top $945 billion over the next two years, the International Monetary Fund estimated on Tuesday, suggesting more pain for the financial sector and more headaches for governments struggling to contain the crisis.

Losses tied to the housing market could top $565 billion, including the complex derivative products tied to mortgages, the IMF said in a new report on global financial market stability.

But the weakness from the housing sector is spilling over into broader sectors, the IMF said. More losses will appear in loans tied to credit cards, commercial real estate and corporations, the IMF said in a new report on global financial stability.

Banks and investment banks have so far written down just over $200 billion from the subprime mortgage sector.

"These estimates, while based on imprecise information about exposures and valuation, suggest potential added stress on bank capital and further writedowns," the IMF said.

The current market turmoil uncovered "fault lines" in the financial sector in the form of weak balance sheets and a general lack of capital.

"It is now clear that the current turmoil is more than simply a liquidity event, reflecting deep-seated balance sheet fragilities and weak capital bases, which means its effects are likely to be broader, deeper and more protracted," the IMF report said.

Nobody is immune

Few in government or business had a handle on the risks before the crisis exploded in August.

"There was a collective failure to appreciate the extent of leverage taken on by a wide range of institutions," the IMF report said.

The U.S. remains "the epicenter" of the crisis, but financial institutions in other countries have been impacted.

Some emerging markets remain vulnerable, although so far most have been resilient, the IMF said, in a new reporton global financial stability.

"Nobody is immune, they will be tested," said Jaime Caruana, director of the IMF's division of monetary and capital markets.

The IMF report was released ahead of the meeting of central bankers and financial ministers from around the globe in Washington this weekend as part of the IMF's spring policy meeting.

The G-7 finance ministers and central bank governors will meet on Friday.
Just ahead of the meeting, the IMF announced it plans to sell 12% of its total gold reserve.

The plan is subject to the approval of the U.S. Congress.

Greg Robb is a senior reporter for MarketWatch in Washington.

IHateToBurstYourBubble said...

people don't know what to buy...

Yeah, it is pretty weird. I think consumer non-cyclical stocks (!!) look best.

Non-gov't debt is Russian roulette, gov't debt is a ripoff. Commodities... well, I just don't go there, although my feelings about inflation indicate I should.

Foreign stocks? Well, it seems too late for that party. That leaves US stocks, and there are some sectors with decent bargains. Pharma, and even biotech has been killed.

At some point though, even CACB is worth something. But I remember the early 90's when Bank of Boston went to $1-2/sh, down from like $40. It can ALWAYS get so much worse than you think possible when your debt to equity ratio is 25:1. Even CACB will be interesting at $5 though.

Marge said...

bruce said...
MST, can you post the comment the rules nazi's removed from BendBBWorld? The one concerning North Bend?

Not sure what you are talking about!

bruce said...

Re: Not sure what you are talking about!

There was a thread yesterday afternoon about the new commercial development in North Bend. It's all been deleted now, but when I saw it then there was post from you that was removed, with a post following stating you had broken the rules on meanness or some such thing.

bruce said...

Washington Mutual Gets $7 Billion From TPG-Led Group (Update6)

April 8 (Bloomberg) -- Washington Mutual Inc., the largest U.S. savings and loan, got $7 billion from a group of investors led by David Bonderman's TPG Inc. after losses on subprime loans ate up capital and erased 74 percent of its market value.

Washington Mutual sold 176 million shares at $8.75 a piece, 33 percent below yesterday's closing price on the New York Stock Exchange, and $5.5 billion in convertible preferred shares, the company said in a statement today. TPG will buy $2 billion of the shares. The lender also slashed its dividend and announced 3,000 job cuts.

Chief Executive Officer Kerry Killinger, struggling to reassure investors the lender has enough capital to stay afloat, said the dividend cut will preserve $490 million annually. Seattle-based Washington Mutual, which said today it lost $1.1 billion in the first quarter, will stop making loans through mortgage brokers and close 186 home-lending offices.

``The question is whether this is enough to stop the bleeding,'' said Matthew Paschke, a portfolio manager at Leuthold Weeden Capital Management in Minneapolis. ``It's a high-risk bet.'' Leuthold no longer holds shares in Washington Mutual and isn't betting that the stock will decline through a short position.

Washington Mutual, known as WaMu, fell $1.34, or 10 percent, to $11.81 a share at 4 p.m. in New York Stock Exchange composite trading.

The new stock means earnings per share may drop by half, Merrill Lynch & Co. analyst Kenneth Bruce wrote in a research note today. He raised his rating on the shares to ``neutral'' from ``sell.''


Much more at http://www.bloomberg.com/apps/news?pid=20601087&sid=apkrxoCkiOxM&refer=home

Doubling the number of shares you have outstanding? That's ugly.

Marge said...

bruce said...
Re: Not sure what you are talking about!

There was a thread yesterday afternoon about the new commercial development in North Bend. It's all been deleted now, but when I saw it then there was post from you that was removed, with a post following stating you had broken the rules on meanness or some such thing.

Oh Yeah. What I said was "Doliout" (Dolazol) was the biggest Jackass I had ever done business with.

Marge said...

Just posted again att BEBB..Iam sure he will remove this statement also.

bendbb said "MST, your participation on this bulletin board is appreciated, but I removed your previous message because it violated the rule against posts that insult others."
To which I say:

"Fine....I'll just take my pottey mouth elsewhere! But they guy is still a jackass."

timothy said...

Technically, jackass isn't potty mouth. It is an insult, though.

Deleting posts is the surest way to get people to stop posting. It's no fun to make the effort to post something if your post is going to evaporate into the ether.

Anonymous said...

>>> There was a thread yesterday afternoon about the new commercial development in North Bend. <<<

Do you mean "North Bend" over by Coos Bay or "northern Bend" here in Bend? I wonder what North Bend is like--I hear it is very small. Seems odd that it should have that name.

Jessie said...

I used to live in North Bend and Coos Bay. As I recall, it was named for the north bend of the Coos River.

Anonymous said...

YO BENDOS CAL THRASHER HERE.
I CAN'T BELIEVE THIS BLOG IS STILL ALIVE.
MAN IT IS LAMER THAN EVER, YOU GUYS MUST HAVE NO LIVES.
WELL I HEAR SOME PEOPLE HAD SOME TROUBLE WITH THEIR MORTGAGES LATELY.
THEY JUST TIMED THE MARKET ALL WRONG, THOSE BOZOS.
I GOT OUT WHEN THE GETTING WAS GOOD,
SOLD MY CALI SHACK FOR MILLIONS
AND STILL LIVING THE GOOD LIFE HERE IN BEND. CATCH YOU SOMETIME AT KANPAI. THRASHER OVER AND OUT.

Anonymous said...

"YOU GUYS MUST HAVE NO LIVES."

Ah ha! If you're so smart you would have noticed that we now have a girl on this site, and her name is Marge. Marge thinks that we're kool and she likes to hang. So there.

*

timothy said...

>>SOLD MY CALI SHACK FOR MILLIONS
AND STILL LIVING THE GOOD LIFE HERE IN BEND.

Then throw away your damned Apple ][ and get a computer that supposrts lower-case letters.

Anonymous said...

Are you SURE Marge is a girl?

bruce said...

Am I the only one that missed this in late January--it's about Mirada, one of PaulDoh's catches last Sunday:


Low-cost houses in Bend's future


Big question is whether development will portend a drop in land prices

By David Fisher / The Bulletin
Published: January 23. 2008 4:00AM PST

A bank foreclosure on a 38-acre chunk of land in northeast Bend has dropped land costs to the point where a group of Bend developers say they’ll be able to sell new houses again this summer for as little as $189,900 apiece, or a little more than half the 2007 median Bend sale price of $349,000.

Whether buyers will buy remains to be seen: At the moment, they’re not snapping up Bend houses very quickly at any price.

But developer Jay Audia said he and his partners are confident that they’ve found a price range that will attract first-time buyers to a market that was skewed by a three-year bubble that pushed local home prices to record heights, at least partly due to soaring land prices.

“I see a lot of people trying to find a bottom,” Audia said Tuesday. “They’re dropping their prices maybe $5,000 here, then $10,000 there. But we’re jumping ahead of the market, and this is going to find the market.”

One thing is certain — Audia and his partners in Edge Development Group, including Jim Yozamp, owner of Bend-based Pacwest Homes, and Clackamas developer Jim Robinson, got their land at a price well below the market’s frenzied peak. And, depending on how things go, Audia said, it may presage a general drop in raw land prices, with a potential lowering of new home prices throughout much of the city.

The land, on the southwest corner of Butler Market and Eagle roads, sold to a partnership called Proterra Development Ventures out of Vancouver, Wash., in January 2006 for $16.5 million, or about $429,352 per acre, when the bull market in Bend residential real estate was at its peak, according to records on file in the Deschutes County Clerk’s Office.

Umpqua Bank filed a pre-foreclosure notice on the property in May 2007 when the partnership failed to pay back its $10 million loan, plus interest, according to the records.

The bank sold the land for $10 million to Edge Development in October, according to the records, getting back the amount of its original loan to Proterra, but not much more.

Proterra’s Washington state corporate filings showed the corporation as “inactive” Tuesday and no representatives of the group could be located for comment. The company has no relationship to the similarly named Proterra Bend I and Proterra Bend II partnerships.

Meanwhile, Edge Development ended up with a chunk of land — one of the largest left within Bend’s existing city limits — for a little more than $260,000 per acre...


It's actually a pretty good article, probably one of Fisher's last.

There's more if anyone wants it: http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20080123/BIZ0102/801230377/1006&nav_category=

Anonymous said...

This link to a YouTube video has nothing to do with Bend, Oregon real estate, and therefore should not be posted here:

http://www.youtube.com/watch?v=ZA1NoOOoaNw

bruce said...

Can any of you old timers give me the approximate date the new Bulletin building was built? It's quite amazing that there is such a paucity of information about it.

BTW, putting 2+2 together, this article matches up nicely with the article about a potential northwest crossing bridge needed to provide sewer that I simply can't find right now:

http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20070223/BIZ0102/702230353/1011/BIZ01&nav_category=BIZ01

Now doesn't that future Brooks development just look like a perfect place for housing Juniper Ridge workers?

I think so. With Brooks it's inevitable it will get done. We just have to keep hammering on the Council to cut back on housing acreage and focus on jobs land.
Period.

Anonymous said...

I'm already sick of that raisin face PD is so hot for. My eyes hurt.

Marge said...

Anonymous said...
"YOU GUYS MUST HAVE NO LIVES."

Ah ha! If you're so smart you would have noticed that we now have a girl on this site, and her name is Marge. Marge thinks that we're kool and she likes to hang. So there.

and
Are you sure Marge is a girl?

Hell yes, I'm a girl or at least female of the 50 something crowd, might not qualify as a girl or a lady but definetly female.
And now I join the elite group of deleted from bendbb. Yahoo!! And YES I like to hang here, at least I can call someone a jackass here without being deleted. Jackass is mild compared to what you boys call each other. This is a fun place to hang most of the time.
Don't know how I can prove that I am a woman however. Not my problem I know what I am.

bruce said...

Re: Don't know how I can prove that I am a woman however.

Yeah, rile them up, will you ;)

You know, I work every day with this woman named Terri Treadway, who rides a touring cycle. I imagine that you two are quite alike. Strong, singular (if need be) women.

Marge said...

Strong, singular (if need be) women.

Could be true. Leaving soon on a new adventure to warm blue salty water. As usual, with me, myself and I. Might find a sailfish or marlin offshore of the Bahamas or Puerto Rico. Can't wait to get warm for a while. Must listen to Kenny Chesney on the plane.
Sorry, off topic. Well maybe not. We all need to leave Bend once in a while for sanity and warmth.

Anonymous said...

How do we REALLY knowif Marge is female?

Could be she is that pregnant shemale with the hairy armpits and the stapled on penis, eh?

And know Marge was to go somewhere tropical, just like the shemale did right after filming Oprah! Aha! We have discovered that marge is pregnant, and had to get outta town until he squeezes out the baby.

And pauldoh was all happy that we had us a real live female type commenteer; instead we just got a pregnant male with ovaries and hairy armpits and a sqeeky high voice.

Marge said...

I am insulted!! Please remove the above comment:)

Anonymous said...

Double-digit price drops for Redmond, Bend homes
Sunriver, Crook County prices rise
By Jeff McDonald / The Bulletin
Published: April 10. 2008 4:00AM PST
Median home sales prices in the first three months of 2008 fell almost 12 percent in Bend and 14 percent in Redmond from the first quarter of 2007, according to a report Wednesday from the Central Oregon Association of Realtors.

Bend’s median sales price — the price at which half the homes sold for more and half for less — for single-family homes on less than an acre was $306,500 in the quarter. Redmond’s median was $220,000.

Elsewhere in the region, home prices dropped 15.5 percent in Sisters, 27.5 percent in La Pine and 9.1 percent in Jefferson County, but prices rose 16.5 percent in Sunriver and 8.1 percent in Crook County, the report said.

The number of homes sold in Bend in the quarter dropped 44 percent, to 222 units, and 30.3 percent in Redmond, to 92 homes, according to the Realtors association’s report of data provided by the Central Oregon Multiple Listing Service.

===================


Sunriver, prices rose 16.5%!!!

Dude, people love dem gated communities. More golfers, less dorks. It's a flight to quality here, folks!

Anonymous said...

and there's more:

"The region’s two highest-priced markets — Sunriver and Sisters — both maintained year-over-year gains in median sales prices, according to the MLS data."
-----------

+

More flight to quality. Including Sisters, that high quality haven for rich cone-lickers and their McMansions, who love to golf at Aspen, and BlackButte.


and the Bull's Jeff continues:
"Sunriver’s price gain was based on 11 sales, however, a 65 percent drop from the same period in 2007."
---------

+

Aha, the law of tiny numbers. With 11 sales, all you need are a few multi-million dollar sales to skew the numbers.

But still, folks, its a flight to quality! And Sunriver's (and Sisters) got it, and BendRedmond don't.

Anonymous said...

*



"Dude, people love dem gated communities. More golfers, less dorks. It's a flight to quality here, folks!"

If "gated" is so great, why not put gates on highways 97 and 20, and call the entire city a "gated" community?

Wouldn't that make property values go up? Just sayin...


*

Anonymous said...

Oregon father, son facing sex charges involving young girls

The Associated Press

WILSONVILLE, Ore. (AP) — A father and son are facing sex charges involving at least six underage girls at their Wilsonville home.

Fifty-year-old Russell Hamblen was charged with sexual abuse, sodomy and encouraging child sexual abuse.

His 18-year-old son, Paul Hamblen, was charged with sodomy.

Bail was set at $775,000 for the elder Hamblen, and $250,000 for his son.

Clackamas County sheriff's deputies say the victims range in age from 14 to 17.

Investigators say there may be more victims.
----------

+

More fodder for brucey-pussy.

Another 18 year old doing 14 year olds... while his dad was watching.

So, brucey-pussy, do you have an 18 yr old?

Ever live in Wilsonville?

Ever used "Russell" as an alias?

just sayin...

bruce said...

Re: just sayin...

No, no, no, and no, asshole.

I got my full fill of such BS living in Utah for almost 20 years. This bullshit sucks.

Marge said...
This comment has been removed by the author.
Marge said...

Someone here is really, really off topic. Can you keep this to Debating the Bend Oregon Real Estate bubble, its implications for Bend residents, businesses, and the economic outlook for this area.
Enough with the totally useless pieces of societies shit that has nothing to do with this blog.
Opps...like I have anything to say about it. Oh please delete me.

Marge said...

WWII at bendbb?
What does it mean..cut and pasted before it is deleted.
"Guest..what goes around comes around linda and bill you are gonna get yours cut me off and it will enforce people from the valley and general dynamics/ please fuck with me."
Next"bendbob if you delete this this will be an act of war"
Who is warring? about what?

a fan said...

Someone here is really, really off topic.
***

Well, it's been a slow "news" week (comments are WAY down from the norm). Maybe people just got sidelined by PD's lust over raisin face. Can't get more off topic than that (original post). Just saying ......

(I still luv ya homie.)

Anonymous said...

It's NOT slow, the problem is the bend-bubble is old news.

It's its all about timmy-twat, bruce-pussy, ... 'man-twats' 24/7.

It's pretty fucking boring.

Nobody gives a fuck about trivial details of bruce-pussy's personal life. If his original goal showing up here six months ago was to destroy this blog, he has done a very good job.

That said, its clear that bruce-pussy & timmy-twat don't have a life. TT says he's an 'ex' reporter, bruce-pussy is a wanna-be reporter. HBM for the SORE is also a 'man-twat' that works for free. The real issue here is that all sources of information in Bend come from man-twats.

There was one thing I did find interesting this week, three days after the news of WAMU getting bailed out, bruce-pussy posted the story. If one should buy on rumor, and sell on news, what is the significance of bruce-pussy posting a story?? What does that say about timing? In the past when brucey gets around to doing something or posting, it meant that all the bodies had been buried.

What's the fucking point? At least we got the Pussy's to quit posting daily-kos, and selling Capstone Butt-Plugs.

Is it really about news? Is it really about Bend?

Then there is the man-twat Nazi, aka BendBB. Most likely TT & BB are the same person.

This site sucks bad.

There is lots of News in the BULL, & SORE. There is blogger-fodder everywhere.

Man-Twats want to talk about man-twat stuff, Bruce-Pussy dreams about fucking watching 14yr old girls get fucked in the ass, its a Mormon thing. The world is un-fair. BB2 is/was always a bunch of 'loser-renters'.

If you have a life, own your own house, and make money, you'll learn nothing from this site. If you want to learn how 'loser-renters' think then this site is for you.

PopGoesBend said...

"If you have a life, own your own house, and make money, you'll learn nothing from this site. If you want to learn how 'loser-renters' think then this site is for you."

Last fall when I owned a house I learned to sell that house, and do it quickly before the shit-storm hit.

If you still own you should be using this as well as every other piece of information you can find to make an educated guess at how much more it's going to tank. You can then make the decision if you want to sell your house at 20-25% off peak pricing (now), wait until it bottoms out (40-50% off), if you can wait it out, or if you have to walk away.

95% of the shit posted in this blog is useless. Lots of name calling and lots of stuff that is off topic. If you can't filter that out and get to the real information then you don't have anything you CAN learn. It's hidden in all the name calling, you just have to find it. It's still the only place you can find those nuggets that are worth something. It's better than the 99% useless Bulletin.

At some point the term will be "loser owner." If you own now you are definitely losing money and will be for a while. I'm fine using the term now.

Marge said...

Has anyone heard they have turned the Pape fiasco at the Inn over to the State Attorney General this week? And Friedman's book have been looked at and found that Pape doesn't pay the same amount of HOA dues as the other owners?

timothy said...

>>TT says he's an 'ex' reporter

Actually an ex-editor at a large magazine. Wasn't a reporter. I wrote some features and reviews and did a lot of editing.

I wouldn't correct you, expect that you did say that this blog was all about me.

Anonymous said...

I wouldn't correct you, expect that you did say that this blog was all about me.

Ummmmm, do ex-editors use "expect" where everyone else would use "except"? :)

timothy said...

>>Ummmmm, do ex-editors use "expect" where everyone else would use "except"? :)

I went through some angst trying to figure out if I should fix that. :-)

But the answer is, of course, yes. When I was a real editor, I had two copy editors backing me up, so that kind of finger-swizzle got fixed by someone who made even less than I did.

In my experience, the best copy editors were ex-teachers. They were very good at catching those things, and very grateful for being rescued from the world of brats.

IHateToBurstYourBubble said...

95% of the shit posted in this blog is useless. Lots of name calling and lots of stuff that is off topic. If you can't filter that out and get to the real information then you don't have anything you CAN learn.

Given the choice between that inevitability & actually moderating this thing... well, we got what we got.

So, I guess noone is interested in my Realtor Hottie Lineup post I was thinking about? Have to do it while Marge is gone... that minx.

IHateToBurstYourBubble said...

Man, and the Heather Clark chick, while hot as hell, must be a real bitch. Some here really don't like her....

Or did she dump you?

Anonymous said...

Heather Clark is NOT hot as hell... she's a mild chili pepper. She's kinda cute, as in neighbor girl. Maybe a two or three drink kinda cute, but NOT hot. Dude, you really need to get out a bit more. and PLEASE spare us the Hot Bades of Bend Real Estate.

Anonymous said...

"Nobody gives a fuck about trivial details of bruce-pussy's personal life. If his original goal showing up here six months ago was to destroy this blog, he has done a very good job."

+++

So true.

He comes in here blabbing his crap, selling his butt-plugs like a multi-level Amway drone.

Then bragging his ass off about how all his Exec Session Complaints (has he even submitted a single Exec Session complaint yet?, I mean it's mid-April '08!!) were going to take down the evil City Council.

And then spewing his child rape beliefs as if he was a Jeff's polygamy husband with 10 child prepubescent brides.

What's up with that, anyway?

Anonymous said...

And then spewing his child rape beliefs as if he was a Jeff's polygamy husband with 10 child prepubescent brides.

What's up with that, anyway?

+

The 'Pussy' is what we call a front man, he's the first our 'alan alda' man to soften up the town for Mormonism.

What is it with the man-twats in this town? Sure boss hogg hollern ain't a man-twat, but what is it about this town? Friedman, Abertnethy, TT, BP, ... Bendbb, you name it; HBM, Aaron Switzer, Fisher, Costa, ... All man-twats.

Then you got a couple real men like Mike Hollern & Hap Taylor running the town.

Old Jeff ran his camps by intimidation, keep the troops fed shit like mushrooms and in the dark, and fuck the hell out of them. Want to see the future of Bend? Take a long look at these Texas Mormon 'camps' the bruce-pussy's of the world are bringing them to Bend, and not a fucking person in dodge cares.

So long as Hap Taylor & Mike Hollern make money, its good for all.

Mike Hollern runs this town, but its clear he only lets man-twats be his spokesmen.

IHateToBurstYourBubble said...

Friedman, Abertnethy, TT, BP, ... Bendbb, you name it; HBM, Aaron Switzer, Fisher, Costa, ... All man-twats.

Oy... Friday night... how was The Silver Moon?

bruce said...

Re: Oy... Friday night... how was The Silver Moon?

Yeah, sounds like some have been drinking the bitters again.

So if we're all man-twats, what's the correct term for sour old losers who are bitter about their RE holdings losing value? You know, those faithfull Americans who mortgaged their insanely overpriced homes to the hilt and are bitter that some of us with a little more sense decided to wait the bubble out. You know, us loser renters.

Been following the short sales and auctions online (search recordings for AFFIDAVIT OF MAILING/PUBLICATION to find the actual upcoming auctions) and the haircuts are happening. Pinebrook is one area I wouldn't mind living, and a house there that was foreclosed upon went from an Oct. 2005 sale of $329,000 down to $220,001 at auction a few days ago.

Reality is setting in--and will become entrenched as these auctions become the new comparables. And the rate of auctions is rising fast. Their were 251 AFFMPs in 2007, there have been 197 so far in 2008, and 34 so far in April alone.

OK, I thought of one: bitter underwater deadend dumbasses just waiting for that dreaded AFFMP...

Duncan McGeary said...

Angry and bitter? Hey, Obama's been reading our blogs!

timothy said...

Get with the program Buster. I was saying this place is boring last month. Try to keep up.

Marge said...

It is a little boring this week. Even with the Q-1 RE reports. We all knew it was going to finally happen and get printed in the Bull. Wait til you see all the price reductions now that the realitors know what happened. Why don't they run stats? Sales may pick up a bit at lower prices. The median is going to $225k soon.

Anonymous said...

Mike Hollern runs this town, but its clear he only lets man-twats be his spokesmen.

(*)

Looks like the man-twats have spoken.

Boring Marge?? Just wait until this summer when the Bendbb trailer party's start again, and all our MT's are pulling crabs off their groins in the AM. Boring? I guess its all relative.

bruce said...

I can't wait to see what Paul-Doh comes up with tomorrow. We are kind of in an uncomfortable holding pattern, just waiting for the other shoe to drop....

bruce said...

...and all our MT's are pulling crabs off their groins in the AM.

Hmmm...you know about crabs? It seems they are quite familiar to you...

Anonymous said...

My man twat tells me that chick in the photo is a little weatherbeaten for my taste. Too many freckles..... a little too pipi longstockingesque.

bruce said...

Hey deadend bitter assholes, I've got something for you, something from our splendid president and his acolytes:

"Died hanging from wrists and gagged, with over 25 rib fractures"

It's about how our tax dollars are being spent in the Global War On Terror.

Yes, it completely pisses me off. Far more than our local BS (which I am following up on, as I seem to have the only pair of real gonads around here sometimes) and that is why I wrote it.

If you are a bitter old Bush supporter, don't bother. You are simply fucking stupid anyway. Just keep borrowing, that's one of the American ways...

bruce said...

And yes, I am intent on riling things up...this kind of shit done in our name sickens me.

What does it have to do with the Bend Bubble? Very little. Mostly it's just about caring for your fellow humans. Or not.

Flame away, Buster.

Anonymous said...

"...local BS (which I am following up on, as I seem to have the only pair of real gonads around here sometimes) and that is why I wrote it."


+


Ah yes, our very own brucey-pussy following up on the local BS, like the violations that the city council keeps doing in Exec Sessions.

And that is because the pussy has balls. I mean BIG ball, gonads even. Not just balls, or gonads, but REAL GONADS. The pussy (American Dictionairy: pussy is a female vagina without any testicals) has grown a pair of gonad balls.

What a twat (no, not a man twat! you are just a twat-pussy)!! First you come here bragging about your butt-plug, then bragging about your she-man biker skier chick (who now has to work the bike-shop gig to feed her pussy), then bragging about your Exec Session complaints that will never be filed, then your bragging about the one complaint that you did file, showing how stupid you are since cousins don't qualify for conflict of interest, and now you are bragging about the size of your mice-nuts.

Spare us your idiotic drivel, pussy-mouse-nuts!

dartagnan said...

From this morning's NY Times:

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

To avoid bankruptcy some chains are closing stores. Foot Locker said it would close 140 stores over the next year.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.


IT'S THE BIG ONE ELIZABETH!!!

Anonymous said...

"Died hanging from wrists and gagged, with over 25 rib fractures"

And a fractured sternum, and covered with shit from the waist down.

But, hey, it's okay 'cuz he wuz a turrist. Or a suspected turrist. Or a potential turrist. Or somethin. Our gummint said so.

Bush, Cheney, Rice, Rumsfeld, Wolfowitz, Perle and all the other neo-con pukes deserve to go in front of a goddam firing squad.