Sunday, June 29, 2008

Bend Housing Market Hits Rock Bottom in 2012.

First of all, I'm ready to call The End of The Real Estate Crash:

March 2010.

A few things: First, it will inevitably happen several months later, so The Real End will be Oct 2010. But again, later, so March 2011. A few months after that.

Why?

Well, first of all, besides the fact that I AM ALWAYS EARLY, AND from Case-Schiller data & anecdotal observation, RE seems to move in big waves. Most macro-economic events seem to. It's our reactions that are hyper-magnified.

So here is The Biggie of the week, Case Schiller:

Case Schiller, April 2008


CS comes out on the last Tuesday of the month, with a 2 month lag. CS is considered the least "biased" measure of home price movements, as it uses sale pairs for the same house, with various adjustments & exclusions for excessive rehabbing & such.

So why am I even coming out with a call For The End? Well, it appears that things have maxed out their "stretch" on the downside. Before I explain, here's a graph that shows the YoY gains/losses in Case Schiller from inception:
CS, YoY gains/losses

Now, if you look close, you can see that Jul 2006 was The Top of The US Mega-Housing-Bubble. That was also a little ahead of when YoY returns sunk to 0%.

YoY returns actually maxed out June 2004 - Oct 2004, when they were +20%.

You can see from the top graph THAT was a pretty damn good time to own a home, or RE of any kind probably.

YoY returns finally hit 0% in Dec 2006. Nationwide that was probably past the prime. In Bend, where IQ's & the housing market are 18 months behind the times, that was STILL a pretty decent market. Things had slowed, but you could still actually sell, given sufficient incentives.

So in a shorter term sense, the housing bubble began in the Summer 2002. It hit it's max gain inflection point 2 years later. It was rising at it's fastest rate at that time. It finally peaked 2 years after that, in July 2006.

Conversely, we are now almost exactly 2 years off the top. We are also approaching a point of max pain, down 16% YoY. But the growth of max pain may be slowing here. That might imply that the downturn is half over. That means a July 2010 bottom for the housing bust.

Again, in Bend OR, Home Of The Worlds Biggest Cock fighting Ring, things move a little slower, and besides we are still one of only 8 markets nationwide deemed to be far overvalued.

We will, of course bust harder & farther than anywhere else, and will not pull out of this thing till Jan 2012. Medians will fall below $200,000.

Actually, it looks like we'll see 2001 prices, nationwide. And it really shouldn't surprise anyone if most places fall back, several markets excepted as they never really participated.

Where is Bend headed? Well, as a commenter over on BendBB is fond of saying, "Home prices will reflect local incomes"... or something. So here is the answer... or at least part of it:

Monday, June 23, 2008
Ratio: Median Home Price to Median Income

by CalculatedRisk

The Harvard Joint Center for Housing Studies report: "The State of the Nation's Housing 2008" is now online. Unfortunately the table I was really hoping they would update is the House Price to Income ratio by metropolitan statistical areas (MSA).

Here is the excel file from the 2007 report: Metropolitan Area House Price-Income Ratio, 1980-2006
Here is some price-to-income data from the 2007 report (data through 2006). I picked a few random cities and plotted the national average (dashed).

Check out the excel file for your MSA.
House Price Income Ratio Click on graph for larger image in new window. Different areas have different price to income ratios. There are several reasons for this (land restrictions, demographics), but on a national basis, the median price to median income ratio rose from around 3.0 to 4.6 by the end of 2006 (and has probably declined sharply since then).

This would suggest that a combination of falling prices and rising incomes would need to adjust this ratio by about 1/3 from peak to trough.
For Los Angeles, it is reasonable to expect the price to income ratio to fall to between 4 and 5 (the historical average).

This suggests price at the peak were about twice as high as normal.
Imagine buying a home at 10 times income. With 10% down, and a 6.0% 30 year mortgage, the P&I payments alone (pre-tax) would be about 54% of the homebuyers gross income. Add in taxes, insurance, maintenance and this homeowner is "house poor" from the get go.

And that brings us to table A-7 in the current report. This table shows that 8.8 million owner occupied households dedicate more than 50% of their income to housing in 2006. Another 13.3 million owner occupied households dedicate 30% to 50% of their income to housing.


Of those 8.8 million owner occupied households with housing a severe burden, approximately 3.3 million are in the middle 50% of household incomes - and this is the fastest growing segment - the middle class with housing a severe burden.


So "3.0 X median family income" was a long held historical standard, and it seems reasonable we'll return to that when all is said & done.

But that "said & done" part is a stickler. See, banks have a funny way of cyclically going bust. It's actually in their nature to go broke. Banks, from a historical perspective appear to be a pretty damn good investment, but actually there is a strong survivorship bias; ie a lot of banks from previous busts actually no longer exist. So current bank indexes (that passes the spell test Timmy, "indicies" doesn't so... ) exclude a lot of 100% losses.

So, as is starting to happen now, banks are actually exacerbating their own demise with STARTLING RAPIDITY. Yup, they are actually doing everything in their power to make things better, but they are making things worse. Far worse:

Credit scores hit by card limits

By Rachel Beck, AP Business Writer

Credit-card lenders lower borrowing levels, which hurts consumers' credit scores NEW YORK (AP) -- Just as Americans grow more reliant on credit cards to help pay monthly bills, they're being hit with a one-two punch: Card companies are reducing borrowing limits for tens of thousands of consumers, which then can lead to lower credit scores.

Those facing this predicament might not even know it until they apply for a loan or another credit card, and then get denied because their credit score has dropped.

This is an unintended consequence of the financial world's widespread ratcheting down of risk. Banks and other card lenders are trying to better protect themselves from more massive losses like those they've seen from subprime mortgages.

As a result, they are looking for ways to reduce their exposure to cardholders more likely to default. That's why they are lowering credit limits, which means they are reducing the maximum amount of credit extended to an individual, along with boosting card interest rates and allowing fewer balance transfers.

"This is what they have to do at this time," said John Hall, a spokesman for the American Bankers Association, a Washington-based trade group.

Such moves come as consumers are increasingly using their credit cards as a source of liquidity, especially since it's becoming harder to tap their home equity as much to pay for everything from renovations to vacations to trips to the mall. As the housing and mortgage markets have collapsed, lenders have also reduced the limits on what are known as home equity lines of credit, or HELOCs.

Net home equity extraction fell nearly 60 percent from a year earlier to $205 billion in the first quarter, according to Merrill Lynch. The investment bank also notes that some $1.2 trillion in equity and housing wealth was wiped out in the first quarter alone because of plunging home values.

At the same time, revolving credit usage -- which includes credit cards -- accelerated sharply to a year-over-year growth rate of about 8 percent in recent months. That's the fastest rate in seven years and well ahead of the 2 to 3 percent rate of growth from 2004 through 2006 when home equity lines of credit were a bigger source of cash for consumers, according to Merrill.

But as credit cards are used more frequently, that often results in bigger balances left on the cards. What's worrisome is that consumers who are faced with a number of ugly economic scenarios hitting at once -- falling home prices, surging commodities costs and a weak job outlook -- won't be able to pay their bills.

American Express warned Wednesday that more of its customers were falling behind on their payments. That led some Wall Street analysts to forecast that the card company may soon lower its predicted earnings growth for 2008.

"Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations," American Express' CEO Kenneth Chenault said in a statement.

That's why card companies including Washington Mutual, HSBC and Wells Fargo are lowering their credit limits, according to data from the consulting firm Institutional Risk Analytics.

Consumer advocates aren't saying that is bad news -- in fact, they believe it helps prevent cardholders from overextending themselves and is preferred to having a sudden surge in card interest rates.

"In the purest sense, it is the better way to manage the risk of a cardholder," said Linda Sherry, director of national priorities for Consumer Action, a national non-profit consumer rights and education group. "But a low credit limit can also unknowingly hurt a credit score."

Here's how that happens: Let's say a cardholder has a credit limit of $10,000 and a balance on the card of $4,000. The card company worries that large balance may increase the prospects for default, so it lowers the credit line to $5,000.

But in doing that, it completely changes what is known as the credit utilization rate, raising it from 40 percent to 80 percent. That is then factored into the calculation of one's so-called FICO credit score, which measures creditworthiness, according to Craig Watts, a spokesman for FICO-creator Fair Isaac Corp.

A lower FICO score could make it more expensive for someone trying to borrow money. For instance, someone taking out a $25,000 36-month auto loan would see an interest rate of about 6.4 percent and a monthly payment of $765 if they were in the highest range of FICO scores of 720 to 850, according to Fair Isaac's Web site myFICO.com.

That then jumps to an interest rate of 7.3 percent and a monthly payment of $776 for those with a score of 690 to 719 and as much as 15 percent or $866 a month for those with the lowest FICO range of 500 to 589.

According to the Comptroller of the Currency, one of the government agencies that regulate U.S. banks, companies must notify cardholders at least 15 days in advance before making changes in the terms of their account, such as lowering the credit limit. But they don't have to explain how that could change an individual's credit score.

That puts the burden on consumers to watch out for this. They better so they don't get blindsided.

See, in this Great Deleveraging, they are pulling in their marks as fast as possible. Well, no one ever thought it'd come to this (having to actually pay this debt back out of their own pocket), so people are defaulting far, FAR faster than ever in history. So they are flooding the market with stuff from the ASSET side of their balance sheet. See, when you owe, you either MAKE THE MONEY, or YOU SELL YOUR SHIT to raise the money. That's it. That's all you can do when you cannot borrow more.

And we, The Royal We, cannot borrow anymore. Minsky Moment. Tapped Out. Gotta Sell Our Shit. That's ALL WE CAN DO.

So banks are de-leveraging & will continue to de-leverage. And like they always do, they will go too far, and unnecessarily restrict credit from people who can almost certainly repay their debts. But banks are like jilted stupid broads, they go fucking whacko over the last mega-dump they endured. Cries of "NEVER AGAIN!", and all that frantic bullshit.

So banks will loan to Bill Gates & Phil Knight, and like 3 other white bitches, and that's it. You and I will not get squat. So the historical mulitplier of "3.0" will have to be scaled back for a time. Probably as long as my last fight with my wife. Like 10 fucking years, or something.

It'll probably hit 2.5X.

Now the other problem.

Bend's median family income is around $60K. But.... of course THAT figure has been built on a long, LONG history of a mini-bubble of sort. We have gone, in 25 years, from one of the most undervalued markets in the US, to the single most overvalued.

THAT takes a lot of excess gains not seen by anywhere else in this country for sure, probably on Earth likely as well. Norma DuBois stated some assinine thing like we'll return to a healthy "7-10%" annual returns, or some whacky-ass crap.

Norma: 7-10% is 1,000,000% UNSUSTAINABLE. We hit the fucking lottery.

And it AIN'T cuz we're special. No. As Taleb would tell you, given a sufficient starting population, there will almost certainly be a money that flips a heads 20X in a row. Literally a statistical certainty. We are THAT monkey.

But you will hear local deluded dumbfucks proclaim to High Motherfuckin Heaven that we are EXCEPTIONAL. No. We are not. Listen to this:

Bend Housing Market Second Highest in U.S.


The housing valuation analysis, released by Massachusetts-based Global Insight, says the average home price in Bend runs about $290,500, which is overvalued by 49.5 percent, a slight decrease from first quarter 2007 when median home prices reached $319,900 and were overvalued by 65.7 percent, the study says.

In other words, the study claims a house in Awbrey Butte appraised at $500,000 is really worth only $250,000.

At least one local real estate observer says that is ridiculous.

Bill Robie, director of government affairs for the Central Oregon Association of Realtors, said the results of the study, and others like it that are released from time to time, are misleading because the methodology leaves out huge chunks of information that need to be considered when determining market prices – land permit fees, system development charges, the time it takes to build and the price of the land where the house will be built, to name a few.

“These kinds of statistics have come out before and they do not take into consideration the many local factors that contribute to Bend’s housing market prices,” Robie said.

A local news story that came out a few months ago highlighting a similar report used a similar index, but the problem with those studies is that the index used is inappropriate, Robie said.

“I don’t know the elements, or how they were put together, but I can’t imagine they apply directly to Central Oregon,” he said.

WHEW! What a fucking moron!

Awesome. This Bill Robie guy is clearly a genius, naming several tenants of housing market values, such as SDC charges, land permit fees, and time to build. He left out donkey porno meth shack density, an anal capacity of local City Councilors to take a watermelon up the butt.

"Yes sir, I see you are asking $350,000 for the house. All well and good, but can you tell me about the local SDC charges, land permit fees, and whether my cock will fit in the mouth of COBA's chairman? All these things determine the market value of this home, in case you didn't know."

What a fuckin idiot. Of course you can immediately see the true motivations behind Cascade Business Cali-Bangers in quotes like this: They do not give 2 FUCKS about current residents selling their homes, or buyer looking to purchase an existing home. All they care about is BUILDERS SELLING NEW HOMES.

Land use permits? Did you give 2 fucks about that when you bought your last STD crapper?

Land costs? SDC charges? All that shit is BUILDER COSTS. That's ALL LOCAL MEDIA GIVES A FUCK ABOUT. Sucking Mike Hollern's mega-cock.

“I don’t know the elements, or how they were put together, but I can’t imagine they apply directly to Central Oregon,” he said.

Seriously. Read that. That was a quote from "Bill Robie, director of government affairs for the Central Oregon Association of Realtors".

"What? Where? Who? Whoa. OK, I don't who, what, where, when, what, why, how, who, when, where, how, who, why, what or what the fuck is going on, I just know that it applies to 99.6734% of the rest of this fucking country, just not where I live.

Why? WHY?


OK, I don't who, what, where, when, what, why, how, who, when, where, how, who, why..."


OK folks, we live in a place where THIS MOTHERFUCKER is the Director of Governmental Affairs for the local Association of Realtors. Unbelievable. And The Incredible Hulce sought out this walking schizoid embolism for a front page interview, because of his MOTHERFUCKING EXPERTISE IN REAL ESTATE. Fuck me dead.

OK, where was I... before I was torn off topic by Pamela The Incredible Hulce Andrews, who can leap over the truth in a single bound? Is that a mixed metaphor Dunc?

OK, needless to say we are in a state of dire fuckin straights. Yeah, I said "straights". I want my MTV, motherfucker.

We have had quite a few years of Sons Of the Soil (Burns Hillbillies) making $60K/yr. Why? We have been in the midst of a 25 year mega-mini bubble, that hopped onboard a national bubble in it's final death throes, and that pushed us up to 6.5X median family incomes locally, or almost $400K at one time.

OK, to reiterate, we ain't special. We are, many of us, like Bill "I put the MENTAL in governMENTAL director" Robie, 100% deluded into thinking what has happened in that period is the result of this places divine munificence. It ain't. Munkee flippin. It HAD to happen somewhere, it just happened to happen here.

National mutiples are going to 2.5 - 3.0X median family incomes. And we shall also go there. But... we will suffer from a horrendous shrinkage, not from Costanza shriveling cold water, but from a mass exodus of our population, which will happen because INCOMES ARE SHRINKING RIGHT NOW, AND THEY WILL CONTINUE TO SHRINK.

They will go to $50,000. Maybe less. And we will go to 2.5X medians.

When we bottom out in 2012, medians may go to $125-150,000.

Yup. We got another 50% from here to fall.

But even then, DO NOT buy Bend RE as some sort of "investment". It will, as it has always historically been, terrible. It will NOT outpace inflation. You will pay a higher interest rate than your home will rise in value.

The NOMINAL LOW will be in 2012. The real low will probably be 8-10 years after that. We will drag along the bottom, increasing at a rate well below the inflation rate. Your house MIGHT go up in dollars, BUT your purchasing power will be bled off as you pay interest that swamps any appreciation. Plus, you could have done better in stocks.

By 2020, we'll probably be close to breaching $200K again.

But we WILL endure the worst economic times this area has EVER SEEN. EVER. Timber Bust will look like a tea party. We'll actually be a smaller town, with everyone making LESS MONEY. It'll be a TECHNICAL DEPRESSION.

We will be in a full-fledged DEPRESSION.

You DO NOT want to buy a home here, unless you are fully cognizant that you will lose at least half your money, and have your purchasing power decimated as well. Bend is headed for The Greatest Bust Any US Town Has Seen Since The Great Depression.

If you believe these deluded whackos who are assuring you that All Is Well, then you deserve what you get. Bend is 100% DOOMED. It is worse than you ever thought possible.

For months, economic Pollyannas have looked beyond the dismal headlines and promised a quick recovery in the second half. They're dead wrong.

Daniel Gross
NEWSWEEK
Updated: 3:25 PM ET Jun 7, 2008

The forgettable first half of 2008 is stumbling to a close. On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job losses—an event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year. The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before. And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent.

Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that "home sales and prices in most of the country will improve during the second half of 2008." (Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, "We expect to see a faster pace of economic growth before the end of the year."

The cause for optimism: the U.S. has called in the economic cavalry, which has responded in textbook fashion. The Federal Reserve has aggressively cut interest rates, bringing the Federal Funds rate down from 5.25 percent last September to 2 percent. Earlier this spring, Congress and President Bush, in a rare moment of bipartisan accord, passed a stimulus package, which will shove nearly $100 billion into the pockets of American consumers by mid-July.

But this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm— a housing and credit crisis, and rising energy and food prices—have strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial news—a credit crunch and the global commodity boom—are blunting the stimulus efforts. As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11.

As it seeks to regain its footing in the second half, the U.S. economy faces two significant obstacles, neither of which was evident in 2001. The first is entirely homegrown: the self-inflicted wounds of the promiscuous extension and abuse of credit in the housing and financial sectors. The second is a global phenomenon that has comparatively little to do with American behavior: rampant inflation in commodities such as oil, food, and steel. These trends have conspired to inflict genuine economic pain and deflate consumer confidence. The Conference Board's Consumer Confidence Index in May slumped to a 16-year low.

While the treatment of the current malaise has been essentially identical to the reaction to the 2001 slump—aggressive Federal Reserve rate cuts and tax rebates—the symptoms are quite different. In 2001, an implosion in the technology sector and a slump in business investment pushed the economy over the edge. Even though some 3 million jobs were shed between 2001 and 2003, consumers soldiered on through the downturn. "We had a massive reduction in both long- and short-term interest rates, which set off the housing and consumption boom," says Ian Morris, chief U.S. economist at HSBC. (Remember zero-percent car loans?) This time, it's the opposite. While businesses—especially those that export—are holding up, the economy is being dragged down by the cement shoes of a freaked-out consumer and a punk housing market.

The difficulties today start—as they began last year—with housing and housing-related credit. Last Thursday, the Mortgage Bankers Association quarterly report showed that the percentage of mortgage borrowers behind on their payments—6.35 percent—was the highest since the MBA began tracking the number in 1979. It's not just subprime. In the first quarter of 2008, 36 percent of all foreclosures initiated were on prime adjustable-rate mortgages in California. Mark Zandi, chief economist of Moody's Economy.com, says the decline in home prices has slashed $2.5 trillion from household wealth, or about $25,000 per homeowner. The fall has also removed an important source of support for consumer spending, as Americans who grew accustomed to borrowing against rising home equity to finance car purchases or vacations now find themselves bereft. Banks are extricating themselves from the home-equity-line-of-credit business in the same way college students get themselves out of relationships gone bad: abruptly. Judi Froning, a second-grade teacher in San Diego, was surprised last week when she received a letter from Chase informing her that it was terminating her untapped HELOC. "In the light of declining home values, they said they are stopping, effective May 31, any draw on my line of credit," she says.

Despite repeated claims that the damage has been contained, the banks that recklessly financed the housing boom—and then traded mortgage debt even more recklessly—are still cleaning up the mess. But it turns out (surprise!) the same sort of clouded judgment led banks to excesses in commercial lending, and in loans to private-equity firms. The battered financial system, which has raised tens of billions of dollars on onerous terms from new investors to shore up balance sheets, is still likely to suffer more pain from the popped credit bubble, said Bruce Wasserstein, the CEO of the investment bank Lazard, speaking at a New York breakfast. "The harm will radiate for another year." The latest victim: Wachovia CEO G. Thompson Kennedy, cashiered after the North Carolina-based bank suffered a string of losses. Next up: write-offs for bad credit-card and commercial realestate debt. After a serene period between 2004 and '07 in which the Federal Deposit Insurance Corp. went without a single bank failure, four have gone under so far this year. FDIC chairperson Sheila Bair warned of the "possibility that future failures could include institutions of greater size than we have seen in the recent past." In preparation, the agency has brought staffers out of retirement.

The financial system is supposed to be a tube, transmitting lower interest rates. Banks borrow from the Fed, and pass through lower costs to customers and to the markets at large. But today banks are acting more like dried sponges, absorbing the liquidity the Fed is providing to shore up their balance sheets and make up for losses, rather than releasing the cash into the economy. The Federal Reserve reports that in April, 55 percent of commercial banks said they are tightening lending standards on commercial loans, up from 30 percent in January. Judy Eisenbrand, a Moorpark, Calif., real-estate agent, notes that buyers also can't get loans as easily today, even in strong markets. "The standards are so much stricter than they were during the boom days," she says.

The upshot: the Fed's adrenaline isn't really circulating through the commercial bloodstream. According to mortgage-data firm HSH, rates on conforming 30-year mortgages (under $417,000) have only fallen marginally since the Fed began cutting rates, from 6.4 percent on Sept. 21 to 6.17 on May 30, while jumbo loan rates haven't budged at all. Worse, this may be as good as it gets. Last Tuesday, Federal Reserve chairman Ben Bernanke indicated that the Fed may be done cutting rates. Why? "Inflation has remained high," Bernanke said, "largely reflecting continuing sharp increases in the prices of globally traded commodities."

Economists say it generally takes nine to 12 months for Federal Reserve interest-rate cuts to work their way into the system. By contrast, sending checks to consumers tends to produce quick results. Some retailers have reported a surge of business spurred by the tax rebates. But consumers are shopping for necessities, not discretionary items. Sales at Wal-Mart and Costco were up in May, while sales at Kohl's and Nordstrom were down. David Rosenberg, chief economist at Merrill Lynch, argues that higher food and gas prices are eating the rebate. Follow the math. The rebate checks will total about $120 billion. Studies suggest that about 40 percent of that total, or about $48 billion, will be spent in short order; the rest will be saved or spent later. Rosenberg reckons that higher energy costs—crude-oil prices are up 40 percent so far in 2008—are draining about $30 billion out of household cash flow per quarter, and that food inflation, running at a 9 percent annualized rate, drains another $20 billion per quarter. "So instead of the stimulus being filtered into real economic activity, it's being diverted into the checkout counter at Albertson's and the gas station," he says.

Last November, retired school principal Barbara McGeary, 75, of Camp Hill, Pa., switched from a Toyota Rav 4 SUV to a Prius. But the savings she realizes are eaten by a higher food bill. "When I go to the grocery store, I see prices have doubled on some of the things I'm purchasing," she says. Last year she paid $3.99 for a container of about two dozen brownies. Now that they're retailing for $8.49, she bakes her own. McGeary and her husband are also eating at home more than ever. "Restaurants, of course, have had to increase their prices," she says.

While the housing and credit crisis is homegrown, the higher prices for high-octane gasoline and corn chips are effectively imports. Historically, or at least since the end of World War II, if the U.S. sneezed, the world caught a cold. When we used more gas, oil prices rose, and when we used less gas, oil prices fell. As GM vice chairman Bob Lutz points out, "Usually petroleum prices were the first to react to a severe U.S. slowdown." In the past it would have been unthinkable for oil to spike if Americans were cutting back.

Many factors, from a weak dollar to rising speculation, are behind the higher commodity prices. But at root, $4-per-gallon gasoline and $20-per-pound steaks are largely a function of the changing economic geography, and the diminished stature of the U.S. Last January, the talk of the World Economic Forum in Davos (aside from the locale of the Google party) was the prospect of "decoupling"—the notion that India and China could maintain their breakneck economic growth rates even if the U.S. pooped out. Five months later, the global economy seems to have decoupled faster than Jessica Simpson and John Mayer. The world is growing without us. "My impression is that China and India both have sufficient domestic demand-led growth to continue to have vibrant growth even if the U.S. has a sustained period of difficulty," former Treasury secretary Robert Rubin tells NEWSWEEK. Producers of commodities are enjoying the fruits of higher prices. Sorry, Tom Friedman, the world is no longer flat. "It is upside down," says Mohamed El-Erian, co-CEO of bond mutual-fund giant PIMCO. "The growing robustness of the emerging economies enables them to step up to the global plate at a time when the U.S. has to take a breather in order to put its financial house in order." This rampant global economic growth—more people eating better, more people driving, more people using electricity—is translating into higher prices at the Stop & Shop.

The situation we're in is nowhere near stagflation—the consumer price index is rising at a 3 percent annual rate, compared with 13 percent in 1979. But it's still a shock to the system. Fuel surcharges have become de rigueur from exterminators to personal trainers. On May 28, Dow Chemical announced it would increase prices 20 percent to compensate for higher energy prices. The realization that the U.S. no longer controls its economic destiny is contributing to the widespread feeling of unease and crisis of confidence. Economically speaking, the 1990s belonged to the U.S. and New York and Silicon Valley. But as this decade motors toward its close, it seems powered by China, and Russia, and Dubai and Mumbai. It's as though we're home watching reruns while everybody else is out partying. Worse, some of those benefiting the most from the new tilt on the Risk board are hostile to the U.S., like Hugo Chávez of Venezuela. In a recent study, Mary Egan, a partner at the Boston Consulting Group, found that 71 percent of those polled agreed with the following statement: "Because the world has changed so much, the U.S. economy will not be as strong as it was—or at least not for the next several years."

Such surveys measure sentiment, and any analyst worth his weight in PowerPoint presentations will tell you that sentiment doesn't always translate into cash activity in the marketplace. But there's one marketplace where sentiment—and especially consumer confidence—matters greatly: politics. The last time consumer confidence was this low was in October 1992—the month before incumbent George H.W. Bush won 37 percent of the popular vote, the worst performance of any incumbent in history. "The economy is always the biggest issue in a general presidential election," says Tom Mann, a senior fellow at the Brookings Institute, because it's a referendum on the party in power. A recent CBS News poll showed more people identified the economy as their leading concern (34 percent) than identified oil prices (16 percent) and Iraq (15 percent) combined.

Yale economist Ray Fair has developed a formula in which particular economic factors can foreshadow election outcomes. Crude summary: when there's lots of good news on growth and inflation in a presidential term, it favors the incumbent party. With growth low and inflation high, John McCain comes out with 44 percent in November. (Before Obama-ites go making reservations for the Inaugural, consider that the formula misfired in 1992.)

All things being equal, the limping economy should favor Obama. While McCain has taken pains to distance himself from the Bush administration, he has heartily embraced the most significant component of Bush's economic legacy: the tax cuts. But in presidential elections, all things are never equal. Obama and McCain have staked out different economic turf. For Obama, it's middle-class tax cuts, and creating new jobs in environmental and tech fields; for McCain it is repealing the Alternative Minimum Tax, expanding free trade (a winner in an age of rising exports) and a summer gas holiday. But if the economy worsens significantly, if oil spikes to $150 per barrel and unemployment becomes more widespread, the campaign will likely take on a different tenor. The typical dialogues about taxes and spending, health care and pensions will assume a greater prominence. But a crisis atmosphere would require both candidates to come up with big-picture narratives about America's role in the world economy, and how the nation can re- assume financial leadership—something neither has yet done comprehensively.

It's not all doom and gloom. Businesses that thrive on a weak dollar are holding up nicely. "In fact many sectors are benefiting from strong growth overseas, including high-tech, capital goods, chemical and other raw materials, aircraft," says Nariman Behravesh, chief economist at Global Insight. Bob Toney, president of Ft. Lau- derdale, Fla.-based National Liquidators, which auctions repossessed boats and yachts, has doubled his staff to 78 employees to pick up around 120 boats a month. "Two years ago, we had 200 cases in our inventory and now we have 610," he says.

But it's the mainstream indicators—not countercyclical businesses—that will point to a recovery. For signs that tomorrow really is a day away, look to the thing that got us into this mess: housing. "Housing doesn't have to return to the bubble era. It's just that the rate of decline has to stop," says Lakshman Achuthan, managing director at the Economic Cycle Research Institute. Reductions in the level of housing inventories for sale will be a hopeful sign. Other tea leaves are the weekly reports on jobless claims, retail chain stores, and mortgage application activity. "This will give you an early read on potential trend shifts in consumption," says Ian Morris, chief U.S. economist at HSBC.

Just as sharp spikes in the price of oil and commodities have dented confidence, precipitous falls in the commodity markets could bolster consumer confidence. But that doesn't seem likely any time soon: on Friday, the price of a barrel of oil rose $10.75 to a record $138.54.

marge even gave me a link to the CS futures, and it ain't good:

Maybe you can't see it, but CS is predicting a peak-to-trough decline from $910K to $543K in San Fran medians. You can't yank $366K from each homeowner in a city of millions & think it'll all be OK. It won't.

And this scenario will play out MILLIONS of times in almost every city & town in this country. MILLIONS of people LOSING THEIR HOMES & everything they've ever worked for. All gone. It is 100% ARMAGEDDON. It's coming, it is inevitable.

And Bend Oregon is Ground Zero.

But there is a silver lining. It'll all be over by 2020.

Finally, chew on this. This is a broad banking index, 5 year chart:
Bank Stock index, 5 yr

Banks are in one of their "1,000 Year Markets", which just happens to occur about once every 10 years. Remember, the "1,000 Year Floods" of 1993? Yeah, we're dumbfucks.

Anyway, WHEN this thing is going to get bad, and many players will be gone at the end. But, as usual, the survivors will be one hell of a play. They will have to survive, of course, but those that do will do great.

Look for thick, THICK equity cushions. The ones that have done the most stringent cleansing of their balance sheet will be worth a look. I had a BUY screen open for CACB for a short time this week. Again, a PERFECT signal that a quick -10% is coming. I didn't buy, so it may well be -30% now.

These little regionals will be worth a look in a bit. CACB is already well below book value, and falling fast.

As a short aside, you will soon begin why banks go broke so fast. It is because, Young Grasshopper, they are Leveraged Beasts. And they are ALWAYS leveraged the most at exactly the WRONG TIME. Always. Except for Goldman. You leverage at the BOTTOM, and de-lever at the top. Or close. Banks ALWAYS do the opposite. ALWAYS.

They are at 20:1, and when that 20 drops to 19... welp, that's All She Wrote. Banks typically need to have assets impaired 5% and they are dead. This happens all the time. It will happen at a rate & scale in the coming years never witnessed since the Great Depression, in case you are curious.

There will be signals WHEN to buy these beaten down beasts. One might be a turn in the homebuilders:

Home builders, 5 yr.

You can see from the above bank & home builder charts, that housing topped out a full year & a half before the banks. And the builders appear to at least be trying to find a bottom. We're probably not there.

But the timing is interesting. If builders, hellish borrowers of money, can actually turn a corner, it might make sense that the lenders are also ready to turn. Look for builders to turn up markedly for a sustained time, and banks to sink ever lower & you might be able to pull the trigger on some decent bank stock buys.

Hell, even CACB may be worth a look someday. If they don't go broke.

One last thing:

I have been writing this blog, week in and week out since the end of 2006, or so. Whenever BEM quit. Maybe Jan 2007. Anyway, it's been a while.

And I have not wavered on my thinking that This Will Be Worse Than You Ever Thught Possible, and Bend Will Be Ground Zero. Never.

When I got started, things were still pretty fluid, people thought, "Hey, a quick dip & up, up and away", and I have resolutely said "No." to that.


And I've heard the old Contrarion Saw that "I will buy when everyone else is bearish", and I am starting to doubt THAT.

This isn't the stock market. The stock market has a precision to it, that homes & housing markets don't have. You can call a stock market bottom, TO THE SECOND. Not housing.

This thing is like turning the Titanic: It started turning 2 years ago, and we're only about 1/2 way through the turn. Everyone KNOWS this fucker is going lower. Look at that Case Schiller chart: You think that fuckin thing is going to STOP FALLING next month, and advance 4%/yr forever after?

Hell no. It's going to go lower for quite awhile. And EVERYONE knows it. Well, except for Bill Robie & every Realtor in town. Do not use traditional metrics of "bearishness" to gauge a bottom in this thing.

There won't be a statement from COBA about how great Bend homes are as an investment at the bottom. Why? COBA will have disbanded. COAR? Nope. Cascade Business Buttplugs? Same thing. Downtown will be 40% vacant. Cali-bangers will have retreated to Des Moines, cuz they have an uncle there who didn't lose 100% of his 401K in an adolescent pipe dream.

You will know The Bottom, because it will be accompanied by DEAFENING SILENCE.

There will be no one left to congratulate you on your great buy.

I have been saying THE SAME THING for over a year & a half, and local REAL ESTATE EXPERTS, AND BEND'S LOCAL MEDIA HAVE BEEN FEEDING YOU LIES.

Best Buyers Market in 20 Years? Remember that one?


I simply ask, Who Has Been Right? No. That ain't it. It's this:

WHO HAS BEEN 100% WRONG?

Right. It's been local experts. The local RE Industrial Machine. Local Bend Media. They don't give a fuck if you breath or suck goo. They have been persistently & consistently 100% DEAD WRONG.

And they are trying harder than ever to get you to listen to them & do what they want. How have they done so far?

A year and a half. Look at that bank chart. When did the shit hit the fan? This blog, and it's many commenters have persistently said It Is Bad And It's Going To Get Worse.

Bend RE said the Sun Will Come Out Tomorrow.

THINK FOR YOURSELF.

217 comments:

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IHateToBurstYourBubble said...

Actually a really good piece on the local health care inner workings...

In seeking partners, hospital alienates physicians

IHateToBurstYourBubble said...

Deleveraging, now only in early stages, will transform the banking industry
By James Saft
Reuters
Thursday, June 26, 2008

The process of taking leverage out of the financial system, only now in its early stages, will put an increasing drag on economic growth and corporate profits.

Deleveraging - cutting back on the amount borrowed as compared to equity - is the dominant theme in markets and economics in 2008, as the financial system recoils from the massive losses in structured finance and the housing bubble.

Those losses - which are still mounting and being recognized - have piled up faster than banks can raise new capital, leaving the system today more extended than it was before the crisis began.

JPMorgan Chase has estimated that banks have raised more than $300 billion in new capital, as compared with $400 billion in recognized losses, a figure others have estimated could ultimately reach $1.3 trillion.

And since markets are now more volatile, which requires more equity as a cushion, and in light of what will be huge regulatory pressure to take less risk, investment and commercial banks will be trimming their sails for a long time to come.

While banks and other financial companies scramble to cut back on lending, there is also pressure to make what debt financing remains longer-term, especially among investment banks chastened by the flameout of Bear Stearns.

"Broker-dealers were very reliant on short-dated funding," said Jan Loeys, head of global asset allocation at JPMorgan in London. "To avoid all going the Bear Stearns way, they are scrambling to get proper long-dated funding. That is an avalanche at the moment which the bond market is having trouble absorbing."

Borrowing short and lending long, the basis of all banking, was taken to extremes though numerous bank-affiliated programs that counted on the willingness of money market investors to provide a steady stream of funds for that little extra in interest.

Loeys thinks those programs, which provided $5.9 trillion in financing at their peak, were actually a large contributor to the "bond conundrum" that puzzled Alan Greenspan in 2005 when long-term rates fell even as he increased short-term ones.

So now that that's over, what will be the costs? Loeys argues that the cost of borrowing will go up across the board, but even more for those who wish to secure long-term funding. He expects inflation-adjusted government bond returns to return to their historic averages. That implies an extra 1.75 percent of yield on a 10-year bond above current rates at today's expected rate of inflation.

While a steeper and higher yield curve will help banks to make money, ultimately easing the credit crunch, structurally higher interest rates will be a big brake on economic growth, hitting both businesses and consumers.

To get a sense of exactly how early we are in the process of deleveraging, look at U.S. data on commercial and industrial lending.

Commercial and industrial loans by U.S. commercial banks are actually up almost 20 percent compared with May 2007, while consumer loans are up 9 percent. But much of that lending was either made under existing contracts that banks would love to be rid of, or was a result of banks not wanting to burn client relationships before they absolutely had to.

They now absolutely have to burn clients and preserve capital, so we can assume that the effects of deleveraging on the wider economy, particularly on corporations, are only beginning to be felt.

Credit spreads - the extra interest that lenders charge corporate borrowers - are likely to remain elevated until deleveraging runs its course.

"Credit investors have one very clear message for equity investors: The duration of the slowdown will be longer than the stock markets think, and the effects of the credit crisis will stay with us for many years," the Dresdner Kleinwort credit strategist Willem Sels wrote in a note to clients. "Tighter financing conditions and higher corporate defaults will directly or indirectly affect almost any corporate."

Money flowed freely during the credit boom, driving up asset prices and encouraging consumers to spend, thereby juicing up corporate profits and justifying the risks lenders took.

But now money is tight, property prices are falling, consumers are constrained and corporate profits are beginning to disappoint.

The U.S. Federal Reserve has acted decisively and it may not have to orchestrate any more bailouts, at least massive ones. But we have at least a year of financial deleveraging yet to come, a process that will transform the banking industry and make even modest economic growth an uphill slog.

Anonymous said...

Oh wow what a great post! But now I want to let you know about my next invention.

It's a green and orange environmentally friendly asshole cleaner.(It's solar powered.)

Bye bitches!

IHateToBurstYourBubble said...

U.S. Stocks Tumble, Sending Dow to Worst June Since Depression

By Michael Patterson
Enlarge Image/Details

June 26 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.

General Motors Corp., the largest U.S. automaker, plunged the most in three years as Goldman Sachs Group Inc. advised selling the stock and crude rose by $5 a barrel. Citigroup Inc. led the KBW Bank Index to an almost 10-year low as Goldman said the lender may report an $8.9 billion second-quarter charge and cut its dividend. Research In Motion Ltd., maker of the BlackBerry, posted its biggest drop since 2001 on concern competition with Apple Inc.'s iPhone is reducing earnings.

The Standard & Poor's 500 Index plunged 38.82, or 2.9 percent, to 1,283.15, its biggest drop in three weeks. The Dow decreased 358.41, or 3 percent, to 11,453.42, its lowest since September 2006. The Nasdaq Composite Index sank 79.89, or 3.3 percent, to 2,321.37, its worst loss since January. Almost nine stocks fell for each that rose on the New York Stock Exchange.

``Most investors are going to sit on the sidelines until they're more certain the sharks have left the waters and it's safe to go back in,'' said Bruce McCain, the Cleveland-based head of investment strategy at Key Private Bank, which oversees about $30 billion. ``The write-offs have been far worse than anyone would have imagined.''

Nike Earnings

All 10 industry groups in the S&P 500 retreated at least 1 percent as Nike Inc. said U.S. earnings dropped and Oracle Corp. predicted the slowest sales growth since 2006, adding to concern that consumers and businesses are cutting back as the economy expands at the weakest pace in five years.

Earnings at companies in the S&P 500 slid 18 percent on average in the first quarter, the third straight retreat, according to data compiled by Bloomberg. Analysts project profits will drop 8.9 percent this quarter, according to a Bloomberg survey last week.

The Dow has slumped 9.4 percent this month, its worst June since an 18 percent tumble in 1930 during the Great Depression. All 30 companies have posted losses in the month as oil surged, the unemployment rate jumped to the highest since 2004 and concern grew that global financial firms will add to $400 billion of subprime-related writedowns.

The Dow's retreat today erased all the gains since mid- March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.

Citigroup, Merrill

Citigroup dropped $1.18, or 6.3 percent, to $17.67 today, the lowest level since October 1998. Goldman added the biggest U.S. lender by assets to its ``conviction sell'' list and lowered its recommendation on U.S. brokerages to ``neutral'' from ``attractive,'' saying the pace of deterioration in the industry ``appears to be far worse than'' it originally anticipated.

Merrill Lynch & Co., the third-largest U.S. securities firm, declined $2.41 to $33.05, a five-year low. Goldman analysts predicted the company will post a $3.55-a-share loss in 2008, compared with their previous estimate for an 8-cent profit.

The Financial Select Sector SPDR Fund, a so-called exchange traded fund that tracks U.S. financial stocks, lost 3.6 percent to $20.90, the lowest since March 2003. The shares, known by their XLF ticker, were the fourth most-traded among stocks and ETFs in New York today. The KBW Bank Index of 24 companies dropped 3.9 percent to 60.20, the lowest since October 1998.

`Ugly Day'

``It's another ugly day,'' said James Dunigan, the Philadelphia-based chief investment officer at PNC Advisors, which manages $70 billion. ``Until we get through another round of disclosures and through earnings season, the safest place is on the sidelines.''

Research In Motion plunged $18.88, or 13 percent, to $123.46. Second-quarter earnings will be as low as 84 cents a share, the company said. That missed the average prediction by analysts of 92 cents, according to a Bloomberg survey. The report marked Research In Motion's first earnings disappointment in five quarters.

Apple shares declined $9.13, or 5.2 percent, to $168.26, the lowest since April 23.

GM fell $1.38, or 11 percent, to $11.43, the steepest slide since March 2005 and lowest price since 1974. Lear Corp., the second-largest maker of vehicle seats, lost $2.97, or 16 percent, to $15.15. Goldman downgraded both stocks to ``sell'' from ``neutral.''

`Escalating Headwinds'

``We expect escalating headwinds from volume/mix pressures driven by gas prices, falling confidence and tightening credit,'' Goldman wrote in a research note.

GM and Chrysler LLC may face a cash crunch next year as U.S. sales decline on a slowing economy and rising gasoline prices that push buyers toward more fuel-efficient vehicles, Fitch Ratings said yesterday.

Chrysler spokesman Dave Elshoff said in an interview today that the company has no plans to file for bankruptcy, countering speculation in financial markets.

Companies in the S&P 500 that rely on discretionary consumer spending lost 3.5 percent as a group after oil prices jumped to $139.64 a barrel on Libya's threat to cut production and OPEC's prediction that prices may reach $170 by the summer.

Nike retreated $6.47, or 9.8 percent, to $59.50, the biggest drop since February 2001. The world's largest athletic- shoe maker said pretax income in the U.S. declined 10 percent to $390.7 million in the three months that ended May 31. U.S. orders through November were unchanged.

Oracle, Lennar

Oracle slipped $1.13 to $21.42. The world's second-largest software maker expects first-quarter profit before some items of 26 cents to 27 cents a share. Analysts predicted 27 cents, according to the average of 16 estimates in a Bloomberg survey. Sales will rise between 18 percent and 20 percent, Oracle said.

Lennar Corp. spurred declines in homebuilders after the company reported a loss that exceeded analysts' estimates as it cut prices to attract buyers. The shares fell $1.23, or 8.4 percent, to $13.34. The S&P Supercomposite Homebuilding Index lost 5.6 percent as all 15 of its companies retreated.

The VIX, as the Chicago Board Options Exchange Volatility Index is known, climbed for the first time this week, gaining 13 percent to 23.93. The index, which measures the cost of using options as insurance against declines in the S&P 500, reached the highest level since June 11. The VIX is still 26 percent below its five-year closing high in March.

Economy Watch

The U.S. economy expanded at an annual rate of 1 percent in the first quarter, capping the weakest six months of growth in five years, the Commerce Department said today. The revised gain in gross domestic product was up from a preliminary estimate of 0.9 percent issued last month.

Initial jobless claims totaled 384,000 in the week ended June 21, unchanged from the previous week's tally that was higher than previously estimated, the Labor Department said. The total number of people collecting benefits rose by 82,000 to 3.139 million in the week ended June 14, the highest since February 2004.

Bed Bath & Beyond Inc. climbed $1.22, or 4.3 percent, to $29.79 for the top gain in the S&P 500. The largest U.S. home- furnishings retailer reported profit that fell less than analysts estimated because of higher sales.

European stocks tumbled, sending the Dow Jones Stoxx 600 Index down 2.6 percent, as Belgium-based lender Fortis scrapped its dividend and said it will sell shares. Asian stocks advanced.

Treasuries rose on speculation credit-market losses will prevent the Fed from increasing borrowing costs later this year. The dollar declined to the weakest level against the euro in more than two weeks.

The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, fell 2.8 percent to 13,125.12. Based on its decline, the value of stocks decreased by $477.5 billion.

``It's the end of the quarter, oil is up and you've got a continued bashing of financials,'' said David Heupel, who helps oversee about $60 billion as a portfolio manager at Thrivent Financial for Lutherans in Minneapolis. ``Plenty of fuel for the fire today.''

IHateToBurstYourBubble said...

Buffett Says He's Concerned About U.S. `Stagflation'

By Josh P. Hamilton and Erik Holm
Enlarge Image/Details

June 25 (Bloomberg) -- Billionaire investor Warren Buffett says he's concerned about ``stagflation,'' or slowing in the U.S. economy while inflation accelerates.

``We're right in the middle of it right now,'' said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., in an interview on Bloomberg Television today. ``I think the `flation' part will heat up and I think the `stag' part will get worse.''

Buffett, the world's richest person, runs a company with a $72 billion stock portfolio and businesses ranging from candy to corporate jet leasing and insurance. He's said the U.S. housing slump has been a drag on Berkshire's earnings, adding today he's unsure when the economy will recover.

``It's not going to be tomorrow, it's not going to be next month, and may not even be next year,'' said Buffett, 77.

The U.S. economy will expand 1.4 percent in 2008, the weakest performance since 2001, according to a survey by Bloomberg. The Federal Reserve today left its benchmark interest rate at 2 percent, saying ``uncertainty about the inflation outlook remains high.'' Consumer prices rose 4.2 percent in the 12 months ended in May, the fastest pace since January.

Buffett, whose Berkshire is the second-largest shareholder of Anheuser-Busch Cos., declined to comment on InBev NV's $46.3 billion bid for the St. Louis-based brewer. He disavowed comments in the media attributed to him about whether he favors the offer.

Mistaken Identity

``I've been reported to be in St. Louis, I've been reported to be at dinner with August Busch IV,'' Buffett said referring to the chief executive officer of the brewer. ``There must be some guy in St. Louis that looks a lot like me, because I have not been in St. Louis since this started.''

Federal regulators may not need to step in to help Lehman Brothers Holdings Inc., the securities firm that lost about 62 percent of its market value this year, Buffett said.

``The fact that they intervened on Bear Stearns prevents them from needing to intervene on other large investment banks,'' Buffett said. ``The very act of the fire engine showing up when there was a fire means that other fires won't break out in this particular case.''

The second-largest underwriter of mortgage debt last year, Bear Stearns Cos. sold itself after an exodus of clients and lenders threatened to plunge the company into bankruptcy. New York-based JPMorgan Chase & Co. agreed in March to buy Bear Stearns with backing from the Fed.

Buffett also praised Barack Obama, the Democratic senator from Illinois running for president against Republican John McCain, an Arizona senator.

Charity Lunch

``He will have more concern for the people who don't get the lucky breaks in life like I've gotten,'' said Buffett, ranked the richest man by Forbes magazine.

Buffett spoke before a scheduled lunch with two money managers who paid $650,100 last year for the privilege. The money goes to San Francisco's Glide Foundation, which provides food, medical care and other services to the poor.

The foundation ``takes people who have hit bottom, and brings them back,'' said Buffett.

The ninth-annual auction for lunch with Buffett began June 22 on EBay Inc. and runs through June 27. The high bid so far is $77,100.

IHateToBurstYourBubble said...

Emptying the attic to pay the bills

Desperate for cash, strapped sellers are using online auctions and flea markets to unload household goods, including possessions of great sentimental value.
By The Associated Press

For-sale listings on the online hub Craigslist have been coming with plaintive notices, such as one from a teenager in Georgia who said her mother had lost her job and pleaded, "Please buy anything you can to help out."

And a seller in Milwaukee wrote in one post of needing to pay bills -- and put a diamond engagement ring up for bids to do it.

Struggling with mounting debt and rising prices, and faced with the toughest economic times since the early 1990s, Americans are selling their prized possessions online and at flea markets with rising frequency.

To meet higher gas, food and prescription bills, they are selling off heirlooms like Grandma's dishes, as well as other belongings. Some of the household purging leaves sellers agonized.

"This is not about downsizing. It's about needing gas money," said Nancy Baughman, the founder of eBizAuctions, an online auction service she runs out of her garage in Raleigh, N.C. One formerly affluent customer is now unemployed and unloaded Hermes leather jackets and Versace jeans and silk shirts.
For-sale listings surge
At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70% since July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.

Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but he said the rate of growth is "moving above the usual trend line." He said he was amazed at the desperate tone in some ads.

In Daleville, Ala., Ellona Bateman-Lee has turned to eBay and flea markets to empty her three-bedroom mobile home of DVDs, VCRs, stereos and televisions.

She said she needs the cash to help pay for soaring food and utility bills and mounting health care expenses since her husband, Bob, suffered an electric shock on the job as a dump truck driver in 2006 and is now disabled.

* Talk back: Are you a buyer or seller these days?

Among her most painful sales: her grandmother's teakettle. She sold it for $6 on eBay.

"My grandmother raised me, so it hurt," Bateman-Lee said. "We've had bouts here and there, but we always got by. This time it's different."

Economists say it is difficult to compare the selling trend with other tough times because the Internet, in wide use only since the mid-1990s, has made it much easier to unload goods than, say, at pawnshops.
Other cash sources drying up
But clearly, strapped Americans are selling their belongings at bargain prices, with a flood of listings for secondhand cars, clothing and furniture hitting the market in recent months, particularly since January.

Earlier this decade, people tapped their inflated home equity and credit cards to fuel buying binges. Now, slumping home values and a credit crisis have sapped sources of cash.

Meanwhile, meager wage growth hasn't kept up with soaring fuel and food prices. Gas prices have already hit $4 per gallon in some places, and that could become more widespread this summer. The weakening job market is another worry.

Christine Hadley, a 53-year-old registered nurse from Reading, Pa., says she used to be "a clotheshorse," splurging on pricey Dooney & Bourke handbags. But her live-in boyfriend left last year, and she has had trouble finding a job.

Piles of unpaid bills forced her to sell more than 80 items, including the handbags, which went for more than $1,000 on a site called AuctionPal.com. Now, except for some artwork and threadbare furniture, Hadley's house is looking sparse.

"I need the money for essentials -- to pay my bills and to eat," she said.

Continued: Economic stress on the consumer

At AuctionPal.com, which helps novices sell things online, for-sale listings rose 66% from February to March, much faster than the 25% to 30% average monthly pace since the company was formed in September, CEO Maureen Ellenberger said. She said she was surprised to see that most of her clients desperately needed to sell items to raise cash.

For LiveDeal.com, a classifieds and business-directory site, for-sale listings for January through March rose 10% from the previous year.

"We can definitely detect economic stress on the part of the consumer," said John Raven, the site's chief operating officer.

On Craigslist, Buckmaster said, three of the four fastest-growing for-sale categories are tied to gasoline: recreational vehicles such as campers and trailers, cars, trucks and boats.

Raven noted more listings for furniture, particularly in areas around Miami and Las Vegas and other regions hit hard by the housing crisis.

Baughman, of eBizAuctions, said that over the past four months she's been working mostly with desperate sellers, rather than casual ones. Most are middle-class customers who can't pay their bills and now want to be paid upfront for the items instead of waiting until they are sold, she said.

The trend may be hurting secondhand stores. Donations to the Salvation Army were down 20% in the January-to-March period. George Hood, the charity's national community-relations and development secretary, said that was probably partly because people were selling belongings instead of donating them.

And with the surge in selling, secondhand buyers now command better deals, driving down prices. Secondhand merchandise online is going for 25% to 35% below what it commanded a year ago, estimated Brian Riley, a senior analyst for TowerGroup, a research firm.

"It won't hit the saturation point until the (economy) hits the bottom, and right now, we don't know when that is," he said.

In Alabama, Bateman-Lee said she had received only $30 for her TV and $45 for her DVD player at a flea market. She didn't have too much left to sell, but she was going back to "sort through more things."

Her $30 water bill was coming due.

IHateToBurstYourBubble said...

Desperate for cash, strapped sellers are using online auctions and flea markets to unload household goods, including possessions of great sentimental value.

I know it's Summer, but I'm seeing an inordinate number of garage sales around. I mean a lot. More than I've ever seen before, FAR MORE.

That's what happens in the Great Deleveraging: When you can't borrow anymore, you either MAKE MORE (Not gonna happen around here for 20 years), or you sell your shit. That's it.

People are gonna start selling their shit, by the ton.

IHateToBurstYourBubble said...

Brace for $1 Trillion Writedown of `Yertle the Turtle' Debt

Review by James Pressley
More Photos/Details

March 31 (Bloomberg) -- Be it ever so devalued, $1 trillion is a lot of dough.

That's roughly on a par with the Russian economy. More than double the market value of Exxon Mobil Corp. About nine times the combined wealth of Warren Buffett and Bill Gates.

Yet $1 trillion is the amount of defaults and writedowns Americans will likely witness before they emerge at the far side of the bursting credit bubble, estimates Charles R. Morris in his shrewd primer, ``The Trillion Dollar Meltdown.'' That calculation assumes an orderly unwinding, which he doesn't expect.

``The sad truth,'' he writes, ``is that subprime is just the first big boulder in an avalanche of asset writedowns that will rattle on through much of 2008.''

Expect the landslide to cascade through high-yield bonds, commercial mortgages, leveraged loans, credit cards and -- the big unknown -- credit-default swaps, Morris says. The notional value for those swaps, which are meant to insure bondholders against default, covered about $45 trillion in portfolios as of mid-2007, up from some $1 trillion in 2001, he writes.

Morris can't be dismissed as a crank. A lawyer, former banker and author of 10 other books, he knows a thing or two about the complex instruments that have spread toxic debt throughout the credit system. He once ran a company that made software for creating and analyzing securitized asset pools. Yet he writes with tight clarity and blistering pace.

The financial innovations of the past 25 years have done some good, Morris notes. Collateralized mortgage obligations, invented in 1983, saved homeowners $17 billion a year by the mid-1990s, according to one study.

Slicing and Dicing

CMOs transformed the business by slicing pools of mortgages into different bonds for different risk appetites. Top-tier bonds had the first claim on all cash flows and paid commensurately low yields. The bottom tier was the first to absorb all the losses; it paid yields resembling those on junk bonds.

What began as a good thing, though, soon spawned a bewildering array of new asset classes that spread throughout the financial system, marbling balance sheets with what Morris calls inflated valuations, hidden debt and ``phony triple-A ratings.'' The more the quants fine-tuned the upper tranches of CMOs and other collateralized debt obligations, the more dangerous the bottom slices grew. Bankers began calling it ``toxic waste.''

Guess where the toxins wound up? That's right: Credit hedge funds are now the weakest link in the chain, Morris says. Their equity stands at some $750 billion and is so massively leveraged that ``most funds could not survive even a 1 percent to 2 percent payoff demand on their default swap guarantees,'' he writes.

`Utter Thrombosis'

Morris sketches a scenario in which hedge fund counterparty defaults would ripple through default swap markets, triggering writedowns of insured portfolios, demands for collateral, and a rush to grab cash from defaulting guarantors. The credit system would suffer ``an utter thrombosis,'' he says, making the subprime crisis ``look like a walk in the park.''

As bankers and regulators try to prop up the ``Yertle the Turtle-like unstable tower of debt,'' Morris points to two previous episodes of lost market confidence.

The first was the 1970s inflationary trauma that prompted investors to suck money out of the stocks and bonds that finance business. Confidence returned only after Fed chief Paul Volcker slew runaway inflation by ratcheting up interest rates.

The other precedent is the popped 1980s Japanese asset bubble. In that case, politicians and finance executives tried to paper over their troubles. Two decades later, Japan still hasn't recovered, Morris writes.

We should be as bold as Volcker, he suggests: Face the scale of the mess, take a $1 trillion writedown and shore up regulatory measures. His recommendations include forcing loan originators to retain the first losses; requiring prime brokers to stop lending to hedge funds that don't disclose their balance sheets; and bringing the trading of credit derivatives onto exchanges.

What he fears is that the U.S. will instead follow the Japanese precedent, seeking to ``downplay and to conceal. Continuing on that course will be a path to disaster.''

IHateToBurstYourBubble said...

Small Banks: How Fragile Are They?
Credit troubles at many smaller institutions are mounting—and plunging shares make it harder to raise capital to cover losses

by Ben Steverman

A toxic brew of bad bets on ultra-risky debt, a weak economy, and plunging home prices could soon leave some U.S. banks short of the cash they need to stay afloat. Adding to their worries is a sense that it's getting harder and harder for institutions to raise funds.

As a result, concerns are rising that the U.S. could see a wave of bank failures in the next year. While big banks, starting with giants such as Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC) grab headlines, their financial standing is reasonably secure. It's the smaller banks that are in most danger, experts say.

Of about 8,500 banking institutions in the U.S., the most vulnerable are local banks in areas hard hit by the real estate slowdown, especially Florida, Arizona, Nevada, and California. And the most endangered of those specialized in real estate lending, with home-equity loans and loans to developers providing the most pain.

Few banking experts foresee a return to the full-blown banking crises of the 1970s, '80s, and early '90s—at least not yet. In 1990 and '91 alone, more than 650 U.S. banks went bust. In the past year only a handful of banks—seven, at last count—needed a bailout from the Federal Deposit Insurance Corp., which insures customers for losses of deposits up to $100,000.
A Growing Problem List

One smaller bank that has faced trouble recently is PFF Bancorp (PFB), a Rancho Cucamonga (Calif.) company that focused on loans to real estate developers. In the past year its stock has plunged 96%. On June 16 a privately owned bank-holding company, FBOP, agreed to buy PFF for the fire-sale price of $30.5 million, even though the bank reported almost $4.4 billion in assets on its balance sheet at the end of 2007.

Last quarter the FDIC said there were 90 banks on its problem list of troubled institutions, up 18% from the previous quarter, but still tiny compared with the almost 1,500 banks rated as troubled in 1990. Most of the banks on the latest list are small, with problem institutions holding just $26 billion in assets out of $13 trillion in assets in the entire banking system.

Still, the FDIC is adding staff to prepare for more bailouts. A few failures might not rattle the system, "but collectively they start to add up," says David Ellison, chief investment officer for FBR Mutual Funds.

Banks, most of them large, are still registering hundreds of billions of dollars in losses from mortgage-backed securities and other complex credit instruments, but that's just the first phase of the credit cycle, says Matthew Kelley, an analyst at Sterne Agee. Coming soon: the full effect of declining home prices and the weak economy, as borrowers find it harder to pay back loans. "That's phase two," he says.
Skittish Investors

The vast majority of banks should have no trouble navigating even a nasty recession if they can raise enough capital to cover losses. After all, most have "seasoned leadership who have gone through downturns before," says Robert Ellis of Celent, a financial consulting firm.

Because of toxic debt investments, many giant banks, including Citi and BofA, needed capital earlier than their smaller counterparts. Banks, which have already raised more than $200 billion (and counting) to cover losses, initially found capital-raising relatively easy, as evidenced by an Abu Dhabi sovereign wealth fund's $7.5 billion injection in Citi as early as November of last year.

"The bigger you are, the easier it is to raise capital," says Raymond James (RJF) analyst Anthony Polini. But now it's getting harder for banks of any size to raise cash. "The capital-raising window is starting to close," Ellison says.

Banks' unending credit troubles—and their insatiable need for capital—are spooking investors. Citi's stock is down 36% since the Abu Dhabi fund's investment in November. Fifth Third Banks' (FITB) plans to raise $1 billion, announced on June 18, sent its stock down 27% in one day.
Better Credit Quality

As bank shares drop, raising capital gets more expensive and is more likely to dilute existing shareholders' stakes. That, in turn, causes stock prices to fall further. "It's the death spiral of dilution," Ellison says.

Smaller banks do have some advantages over their bigger rivals. Tiny community banks often can raise extra capital from existing shareholders, who often live in their service area.

Also, credit quality has held up slightly better at smaller institutions. The percent of all loans and leases that were "noncurrent"—in which borrowers have fallen behind in payments—was 1.71% in the first quarter, according to the FDIC. That compared with 1.4% at banks with less than $100 million in assets and 1.53% at banks with $100 million to $1 billion of assets.

That suggests smaller banks were more conservative in their lending in the past decade. The 6,770 banks with assets of less than $1 billion represent 79% of the total number of banks in the U.S., though those institutions hold only 11.4% of the total assets in the banking system.
New Banks Vulnerable?

An advantage for all banks over previous crises: As banks have merged and expanded in the last few decades, the U.S. banking system has gotten much stronger, says Columbia Business School's Charles Calomiris. Spanning wide geographies and offering a variety of new products, bigger banks can prosper despite economic problems in particular geographies or credit problems in particular loan products.

Many smaller institutions, however, are paying for their lack of geographic and product diversity. None has indicated they are in danger of going out of business, but examples of institutions in hard-hit areas include Silver State Bank (SSBX), based in Henderson, Nev., which recently announced plans to raise $40 million in capital; BankUnited Financial (BKUNA) in Coral Gables, Fla., which will raise $400 million through a stock offering; and Downey Financial (DSL) in Newport Beach, Calif., which has seen its nonperforming assets soar from 1.3% to 14.3% in the past year. All of their stocks are down more than 90% in the past year. Conditions are especially bad for the vast array of new banks that sprang up in these once-hot real estate markets.

It may be inevitable that dozens of these banks ultimately fail or are sold off at deep discounts. The Federal Reserve tried to help by lowering interest rates and lending cash cheaply to troubled institutions through its so-called discount window. But the central bank, worried about inflation, is reluctant to lower rates further. And liquidity from the Fed is only a temporary salve to banks' big losses.

Ultimately, these institutions need capital to permanently repair their balance sheets. If they raise cash, broader problems for the banking industry could be avoided. But that is made difficult by the volatility of bank stocks and the uncertainty about the companies' futures.
Is the Market Overreacting?

Instead of raising capital to recover from credit troubles, banks are being forced to scrounge for cash to handle losses yet to come. And no one knows how big those losses could get, Ellison says. "We had a record number of people buy a record number of homes at record high debt levels," he says. "It's a problem that goes beyond any regulatory or governmental scheme to fix."

Columbia's Calomiris is confident the banking system is strong and that home prices are not declining as quickly as some doomsayers believe. But his optimism is shaken by what he calls the stock market's "overreaction" to the banks' troubles. If banks can't raise capital on reasonable terms, he says, they may be forced to save cash in other ways, such as sharply restricting their lending.

The "extreme price movements" of bank stocks are alarming, Polini says. "No matter how bad it is, it's going to be worse if we don't go through this process in an orderly fashion."

President Franklin Roosevelt took office in 1933 in the midst of a far worse banking crisis, yet his inaugural address still resonates today: "The only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."

And right now, many banks, and their investors, are very afraid.

IHateToBurstYourBubble said...

Beat the crunch: Why it can pay to rent

With house prices falling, many potential buyers are choosing to step off the property ladder. It's bad news for sellers, but the rental market's booming. Phil Thornton reports

Wednesday, 25 June 2008

House prices are falling, oil prices are soaring, the country has an unelected Labour prime minister and private renting has never been so popular. That might sound like 1975 but it actually describes Britain in 2008. According to Halifax bank, one in eight – or 12 per cent – of households rents privately, the highest share since Rising Damp, the classic sitcom about renting, was topping the TV ratings.

The idea of paying rent – often seen as money down the drain – had seemed ludicrous when one could use the same money to pay mortgage interest on a property whose value could only go up. And to be fair, from 1995 through to earlier this year that was true – prices trebled over that period. Renting became the domain of students, divorcees and the hard-up – the mainstays of Rising Damp.

But since the first weeks of this year when house prices started to fall, for many people the idea of renting has become a more attractive and rational option than risking buying a home just as the property market turns.

Predictions of house price falls of between 10 and 15 per cent have changed people's behaviour, says Jonathan Haward, managing director of The County Homesearch Company. "If you have seen a house for £1m that could soon be worth £900,000 or £850,000 if you buy it now – why do it?" he says. With banks offering almost 7 per cent deposit interest, that same £1m could yield £70,000 a year, easily covering rent payments. "A weakening sales market will always boost demand in the rental market, which is great news for landlords, who are in the enviable position of being able to cherry-pick prospective tenants and demand the full asking price – if not more," adds Haward.

According to home move service Moveme.com, the proportion of people moving out of a rented property and buying a home has fallen by almost a half in the first quarter of 2008. "Potential first-time buyers who previously would have been the largest group moving from renting to buying, are now delaying a purchase as an uncertain market and tougher lending criteria is making it harder for this group to step on to the property ladder," says Keith McNeilly, one of its founders.

Paragon, the leading buy-to-let mortgage lender, says this shift to renting is a long-term trend and is increasingly providing homes for people in their thirties and forties with families. "The lack of mortgage availability for first-time buyers, as well as a fall in confidence in the housing market has caused more people to stay in private rented homes for longer," says John Heron, Paragon's managing director. "If the situation doesn't improve for first-time buyers, we will soon arrive at levels of demand for private rented homes that we previously wouldn't have expected to see for many years."

Annual rents have risen almost 14 per cent over the last year to stand at £12,048 in April, having broken the £1,000-a-month barrier in March, according to Paragon. The rental market is even starting to take on some of the bad habits familiar to homebuyers. "Tenants who don't arrive prepared with a deposit at the viewing are finding themselves gazumped within minutes of making an offer," says Katy Waite, Surrey director of County Homesearch. "Landlords have people queuing up to rent their properties, ready to pay full deposits on the spot and the full rental price without question. If a client does not move quickly they face losing out."

Figures from the Association of Residential Letting Agents this month showed the proportion of agents reporting demand from tenants outstripping supply of properties was at a record high of 39 per cent.

Agents around the country are reporting a boom in rentals. "The bottom end of the market is flying – rents up, applicants up," Andrew Jourdain at Chancellors estate agency in Richmond, south-west London, told the latest survey by the Royal Institution of Chartered Surveyors. "One-bedroom flats are in high demand."

At the other end of the country, Paul Milling at Dacre, Son and Hartley of Ilkley in the Yorkshire Dales, said: "There is high demand for the larger family property from people who have sold and are choosing to rent rather than buy straightaway."

John Socha, vice-chairman of the National Landlords Association, said renting has become respectable. "It is the way the world has changed," he says. "The job for life no longer exists so people move for work more. Selling and buying a house each time is hard work whereas renting provides fluidity."

He says the huge surge in university student numbers has changed the market. "More people are going to university and they come from nice middle-class homes and expect carpeting, central heating and broadband access," he says. "They see renting as normal."

All this should make it a good time to become a landlord. That may be true for professional investors, says Martin Ellis, chief economist at Halifax, but not for a small-time landlord.

"The economics for the smaller investor no longer add up given that people no longer have a guaranteed capital gain to look forward, credit is being rationed and interest rates have risen."

This may in turn lead to a lack of supply of new homes for rent that will push up prices further. There seems to be little relief in sight.

"I would see this persisting because I don't think the uncertainty will disappear over the second half of the year," Ellis says. "People will be looking to rent as long as there's nervousness about owner-occupation."

Phil Thornton is lead consultant at research house Clarity Economics

How to survive the rental market

With people looking to rent now facing the same trauma of gazumping that homebuyers have done in recent years, potential tenants need to be prepared.

The County Homesearch Company offers some tips:

*Register your interest early on so you can keep track of the types of rental properties coming onto the market.

*To avoid disappointment, view the property as soon as you can.

*Assure the landlord or agent that you are keen to take it on if it matches up with your specifications.

*Be prepared to make an early decision.

*Have your deposit ready and even a pen to hand to sign the contract straightaway.

*Be prepared to compromise – with a competitive lettings market landlords are able to increase their rent, so you should be realistic about what you can afford in today's market.

Focus

Andre Douglas, 31, a scientific officer at a local council, Cambridge

Andre saw the potential for the current downturn in the housing market when he was house-hunting in Cambridge with his fiancée two years ago.

"We were putting in offers at the asking price and being knocked back," he recalls. "We got pretty disillusioned as it was clear there was a lot of big money from buy-to-let and cash buyers who were active."

He now pays £800 a month for a three-bedroom semi-detached house with a garden in the university town. He would have been looking at monthly repayments of between £1,000 and £1,300 to secure a property two years ago.

Now the surge in mortgage rates in the wake of the credit crunch has made buying even less of an option. "We are glad to be on the sidelines," says Douglas.

Fortunately, his landlord has indicated he is happy to continue to rent out the house. Douglas is using the opportunity to pay off other debts and allow the deposit to earn current high levels of interest while he monitors the property market.

"It is a question of wait and see," he says. "Will it be like 2005 [when prices dipped and rebounded] or a crash like 1990 and 1991? The news is changing week by week but nothing is happening that is making me say 'let's bring forward the day of buying'."

James Acreman, 28, marketing executive, London

When James moved to London after 18 months' travelling to take up a job as a marketing executive, it didn't even occur to him to buy.

"I have got a good, well-paid job but to get the quality of accommodation that I would like and to be able to afford somewhere to buy in zone two [for the Tube] was not possible," he says.

"I really did not see buying as an option because I had just got back from travelling. I did not have a deposit saved up and I was not interested in a 100 per cent mortgage, so renting was my only option."

He pays £550 a month excluding bills in a house that he shares with three other people in Brixton. Even a one-bedroom ex-council flat would cost around £180,000, which would cost him £875 a month for a 100 per cent interest-only mortgage.

But it was more than just the money. "I like the flexibility of renting and not being tied down by a mortgage," he says. "I have friends in Southampton where I am from and they have got mortgages and I say 'Why not join me in London or go travelling?' and they say 'I would but I've to pay the mortgage'."

He describes his house as a good quality property with a garden, a decent fitted kitchen, wooden flooring throughout and broadband access. "It is not as good as a family home but I have been through the university accommodation slums. Compared with that it is fantastic," he says.

Given the level of mortgage rates and the possibility of further house prices falls he does not expect to get into the property market. "I'm happy to carry on renting for the foreseeable future."

IHateToBurstYourBubble said...

Root cause

Michael Lehmann

Wednesday, June 25, 2008

Today the Census Bureau will report new-home sales for May. The collapse of new-home sales and prices has hit the Bay Area hard, but a glance at the chart at right reveals a national problem. New-home sales have fallen by half throughout the United States.

The chart also reveals the unprecedented nature of the 2000 - 2005 real-estate build-up. Home sales rose 50 percent beyond their earlier record. This was no ordinary cyclical upturn. This was the economic equivalent of a 100-year flood. Now the levee has failed.

Federal Reserve policy lies at the heart of the crisis. In response to a high-tech bust, the Fed lowered interest rates to stimulate a housing sector that already enjoyed boom conditions. That mismatch of diagnosis and treatment built the foundation of all that followed, including the Fed's current difficulty in resuscitating residential real estate.

Here's what happened.

Recall the dot-com expansion of the late 1990s. First, business capital expenditures soared. Then, the 2000-2001 crash hit. Orders for new plant and equipment plunged and the Federal Reserve came to the rescue by cutting interest rates to spur lending and spending. But the dot-com boom had been a technological phenomenon, not a response to reduced interest rates. Because falling rates had not instigated the boom, falling rates could not rekindle it. The Fed's medicine stimulated a sector that was in no need of help (the chart shows that real estate was already strong when it received the Fed's easy-money blessing in 2001).

Between 1960 and 1990, new-home sales had fluctuated in a range of 400,000 to 800,000 annually. Then they attained new records in the late 1990s and barely suffered during the 2001 recession. When the Fed lowered interest rates in 2000-2002 and held rates down, real estate exploded. New-home sales grew at an extraordinary rate. By starting at such a high level of activity, the boom was able to go where no others had gone.

Because the real-estate boom, like the dot-com boom before it, created a rise in the value of assets that was not adequately reflected in consumer price inflation statistics, few cared. Enjoying a boom without inflation was like draining the punchbowl without a hangover. Unfortunately, rising home prices encourage demand rather than discourage it. Speculation carried housing prices and supply beyond any reasonable relationship to the rental value of the underlying assets, while evolving lending practices contributed to the debacle. Thus, supply grew until it became a glut, and toppled under its own weight.

Now the hangover has arrived. And just as asset inflations perversely stimulate demand, asset deflations perversely discourage demand. Buyers will hang back, waiting for prices to fall further.

Today's overbuilding is very different from earlier booms, and falling interest rates will be less effective in dealing with over-supply and declining home prices. It will take time for the market to absorb the glut. Many lives and livelihoods will face ruin on the way.

Of course, this critique has the wisdom attributable to all hindsight. The Fed did meet most people's expectations in 2000-2002, and the chairman wasn't called "Maestro" because he disappointed. It is monetary policy - the way the Federal Reserve stabilizes the economy - itself that requires re-examination. Perhaps the textbook remedies are not applicable in every circumstance - like this one.

Michael Lehmann is professor emeritus of economics at the University of San Francisco. You can obtain the latest data by going to www.census.gov, clicking on "Economic Indicators" in the lower right and then clicking on "PDF" on the left under "Current Press Release" under "New Home Sales."

Marge said...

Great Rant!!!
But, don't forget, there is one RE broker that agrees with all of this! That would be me, Marge.
Since there is nothing to do at the office I read blogs and news 4+ hours a day. I tell ya it's scaring the shit out of me lately. I wish more people knew what we know is coming soon to a Bend near you. When other brokers ask me when the bottom will be hit I ususally blurt out 2012, they laugh and ask REALLY? I just nod yes. Then I ask how can they fell putting a buyer in a house right now is a good thing? The answer is, it's my job to help people buy and sell, it's their choice. I think part of my job is to educate buyers with my opinion of why they should wait 4 years. Why buy a $300k house now with 10% down and be underwater in 4 years by $120k, if they need to sell for any reason it just won't work. In 4 years the price will be a 40% off sale. Although interest rates may be higher. Can't predicte that part of the equation yet.
Listen...Realtors need to change careers unless they get an education about what is really going down. But they will stick their heads in the sand and say I had no idea the market was going to continue going down. ARGHHHH

IHateToBurstYourBubble said...

I say again (and again and again and again...), Rent & Invest The Difference is an investment thesis that literally cannot go wrong around here.

I am stuff 4 figures in the mattress each month from this. I am also into Month 9 of NOT using a credit card to pay for crap. Haven't put anything on credit since last Fall.

Starting to dip my toe in the Severely Beaten Sectors of the market. As usual, not out to time it perfect, I'm averaging in, a little at a time. Drugs look good. Also took the plunge (very small plunge) on Monaco Coach this week. That's good for -10%, as usual. Almost took a little flier on CACB! Went and lied down till the feeling had subsided.

There. That covers questions about the "INVEST" part of the equation.

IHateToBurstYourBubble said...

But, don't forget, there is one RE broker that agrees with all of this! That would be me, Marge.

My Lord marge... I never group you with those hyienas! Never!

IHateToBurstYourBubble said...

Sorta the way I never group Dunc with downtown Me-Too retailers. Leapin Lizards is another good one. Birkenstock is OK as well. Super Burrito & Toomies were pioneers, not Me Too.

Big diff between independent thinking pioneers & Me Too Cali-banger 401K busters downtown.

IHateToBurstYourBubble said...

Speaking of Super Burrito, I went there post-move & all is well. Had the best steak burritos ever, and still only $5.

Taco Shack on the other hand has ratched up to around $8 for lunch! I honestly don't think these places are just raising prices for the hell of it. It's economic necessity.

It's stagflation folks. Prices go up, incomes go down. Worst of all Worlds. Thank your local housing bubble touts.

THANKS COBA! Please, reflate this bubble! It's aftermath this first time is working out GREAT!

IHateToBurstYourBubble said...

I seem to recall a year ago, on a hot morning like this, we had a number of Cali bangers proclaim...

What The Fuck! I turned on the A/C last night and it's still hot as hell in my house this morning! So I got up this morning, and found out this STD didn't come with A/C! WHAT THE FUCK! Are you people fucking insane?

Ahhh yes. I love the smell of dumbfucks in the morning.

IHateToBurstYourBubble said...

From Cascade Business Buttplugs:

In other words, the study claims a house in Awbrey Butte appraised at $500,000 is really worth only $250,000.

At least one local real estate observer says that is ridiculous.


What's funny is THAT Robie is right, of course, this IS ridiculous. What's ridiculous is that neither he nor The Incredible Hulce can perform simple math.

And given Nat City's computation, Bend medians fair value are $194,314. If memory serves, this seems to be shrinking. It will no doubt continue to shrivel as the nation median falls.

IHateToBurstYourBubble said...

YoY returns actually maxed out June 2004 - Oct 2004, when they were +20%.

You can see from the top graph THAT was a pretty damn good time to own a home, or RE of any kind probably.


And just like 2004-2006 was a great time to own Bend RE when YoY gains were maxing out, RIGHT NOW is probably The Worst Time to own a house in Bend. If you have been trying to sell, it's too late. You're already on the Pain Train, and there ain't no getting off.

This is where I disagree with Buster: He says it's time to get to work fixing things... I say it is time to stand aside for 24-36 months and let this juggernaut roll thru & wreak its destruction.

THEN it'll be time to clean up... NOT BUY, mind you... just clean house. Reform this place so this doesn't happen again.

Duncan McGeary said...

"Is that a mixed metaphor Dunc?"

That metaphor was mixed in a mix-master, chewed over twice, and shot out a cannon.

IHateToBurstYourBubble said...

Here's someone going wholesale on craigslist:

61 Lots for Sale in Bend - Package Pricing Available (Bend)

Call or email for details. These lots have Mountain Views and are near the New Pine Nursery Park and Canal. Quiet nice location.

IHateToBurstYourBubble said...

These lots have Mountain Views and are near the New Pine Nursery Park and Canal.

That's over where they busted that gaggle of drug dealers, right?

Proof that HEROIN DEALERS ARE BAD FOR PROPERTY VALUES.

IHateToBurstYourBubble said...

Despite the fact that we are having the worst June in market history since the Great Depression, down 1,157 pts, there were 7 up days (37%), and 12 down days (63%).

Just goes to show, even when it's as bad as it can get, nothing ever goes straight down.

bruce said...

Barclays warns of a financial storm as Federal Reserve's credibility crumbles

Last Updated: 12:01am BST 28/06/2008

US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

"We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.


More: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml

bruce said...

OPEC has no influence on oil prices, according to Gazprom chief
By Emma Thelwell
Last Updated: 12:01am BST 28/06/2008

Russia's biggest energy company has warned that oil prices will end at a 'radically' new level and that OPEC has little influence over the price of crude.


Alexey Miller, chief executive of Gazprom, said that the global economy is facing "a great surge in oil and gas prices" that will "end with prices at a radically new level."

Gazprom's Alexey Miller expects the surge in oil to continue
His comments to the Financial Times came as oil surged to a new high of $141.98, leaving prices more than double where they were 12 months ago and casting a shadow over the prospects for the global economy this year and next.

Mr Miller also dismissed hopes that the Organization of Petroleum Exporting Countries can do much to bring prices down. "Not a single decision has been passed of late that would really influence the global oil market," he said.

Gordon Brown and President George W Bush have both lobbied OPEC, and in particular its biggest producer Saudi Arabia, to ramp up production.

Saudi's decision to increase production has done little to bring oil lower as fears for global supply and the weaker dollar help to drive prices higher.

Mr Miller expects increasing competition for the world's gas and other energy resources to drive oil to $250 a barrel next year.


More: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/bcngaz127.xml

bruce said...

Deschutes County NOD's are at 780--we should hit 800 for the first half of the year.

We could easily be looking at 2000 for the year.

ah693973 said...

That's over where they busted that gaggle of drug dealers, right?

Funny I was just trying to figure that out and so I did a google search on 62857 Bilyeu Way, the address on KTVZ.com.

Found the following craigslist ad:
http://bend.craigslist.org/roo/721681499.html

Two rooms will be available July 1 in a new 4 bedroom house in NE Bend. The other two rooms are occupied by 2 mid-20s guys that are responsible, mellow and very easy to get along with. Each room is $425.00/month + 1/4 utilitues. Gas/electric/cable/internet is split 4 ways (approx. $50 each in June). Water/sewer/garbage is covered by the landlord.

How would you like to have unknowingly moved into that house?

Anonymous said...

"I seem to recall a year ago, on a hot morning like this, we had a number of Cali bangers proclaim...

What The Fuck! I turned on the A/C last night and it's still hot as hell in my house this morning! So I got up this morning, and found out this STD didn't come with A/C! WHAT THE FUCK! Are you people fucking insane?"

***

in san francisco no one has air conditioning; everyone has the heat on all summer. i shut the heat off about three nights per year there. bend seems to have some sort of natural heat source--must be the lava :)

Anonymous said...

"Russia's biggest energy company has warned that oil prices will end at a 'radically' new level and that OPEC has little influence over the price of crude."

Russia's entire foreign policy is dedicated to destabilizing the oil producing regions of the world to prop up prices and enrich itself. From Iran to Venezuela to the Caucuses, it is arming every despot and rebel group and making trouble every way it can. It has been a stunning success.

prandmarketing said...

Hey,

Hope this isn't old news -- but Bend is one of 10 best ... only $340 for 900-1300 in NWXing. Oh Boy! Where do I sign up?

http://www.cottageliving.com/cottage/travel/article/0,21135,1808929,00.html

Anonymous said...

Excellent Lord of the Man-Twats.

You have 30 comments, and 25 of them from Homer.

You can hear a pin drop. Are all the man-twats and uber metro-sexuals of Bend leaving?

Will the 'pussy' and 'homer-lard-ass' be the last to leave??

IHateToBurstYourBubble said...

You have 30 comments, and 25 of them from Homer.

Actually they are all me. I have made up aliases so I don't feel so lonely.

Anonymous said...

It takes us several days to digest each of Homer's posts, which are longer than The Iliad.

bruce said...

Anybody know anything about the 8th Street Cottages up by Butler Market? Developer has a $3M NOD.

Perhaps most people spent their day actually outside, away from their computer...

bruce said...

Of course, if you are inside at 3:34 on a beautiful summer Sunday afternoon, you probably don't have much a life anyway. Best to try to piss on people actually trying to make things better. Anonymousely, as usual.

Pathetic.

BayAreatoBend said...

Long time reader, first time poster. I work in Silicon Valley and am close to moving to Bend. My workplace has agreed, my salary won't change, the job is stable, my mortgage will be less than half of what my rent is today, my kids will go to a good school, we'll x-country ski in the winter, and hike and bike in the summer. I am looking at homes that are 600k on the west side and plan to offer no more than 475. Most offers will get rejected but someone will eventually accept. Life/personal finances has never been brighter. Meanwhile, my folks, also from Cali, sold their home for 1.3 M and paid cash for a small, quiet, clean home north of town. They are beyond comfortable. I think the economy is f'd and going to get a whole lot worse, but I think there's lots of folks like myself and my parents. So ... though I generally agree with the themes of this blog, I am beyond optimistic for the future. In Bend.

IHateToBurstYourBubble said...

if you are inside at 3:34 on a beautiful summer Sunday afternoon, you probably don't have much a life anyway.

Yeah Buster. I know, I know. This blog is awful, it's terrible, and it's unpopular, and people should just stop reading & commenting.

OK? Happy?

But dude... realize that going to a blog and reading it & commenting on its terribleness, and unpopularness is the only thing worse than the terrible, terrible blog itself.

Dude, if its so awful, just don't read it. You're a fucking millionaire, supposedly. Go nuts on Phil's or something. Aren't you too good to even dignify this with a response? Cripes.

IHateToBurstYourBubble said...

I am beyond optimistic for the future

My workplace has agreed, my salary won't change


Hey, make sure the latter is true, and the former probably will be too.

But your optimism probably won't translate into rising median salaries in Cent OR. That's why I am "beyond pessimistic" about Bend. You'll see when you get here.

Dude, just don't decide you're going to "run this shithole", quit your job, and open a cookware store or some crazy shit. Been there, done it, and those bitches go broke.

Keep your job and milk it. If you get fired, go back to San Fran & beg for it back. Don't liquidate the 401K... they'll haul you out.

Marge said...

I am looking at homes that are 600k on the west side and plan to offer no more than 475

So if your life changes within 4 years and you have to sell, and can only net $375k, what do you do? Hope you have $100k to toss. By the by, no job is stable in this economy and the days ahead.

bayAreatoBend said...

I'll most definitely not quit my job. And I definitely acknowledge the risk that nothing is forever and things could change (my employer could decide to go a different direction) and then I'm stuck with a mortgage that suddenly looks less tenable. But I've got a good nest egg, can afford a further drop in home prices, and I'm treading water here (in the Bay Area)--renting a very modest rambler for $3100, schools are nothing special, adding nothing to savings beyond my 401k, and have never liked the money/status focus here (plus, folks are up there, and siblings, and we're about to have a third kid). Trust me, not an easy decision ... mainly, b/c of the lack of jobs up there and overvalued market, but it's worse (for us, at least) here. All that said, I'm still reading everything you're posting and haven't signed anything yet.

Anonymous said...

My workplace has agreed, my salary won't change, the job is stable, my mortgage will be less than half of what my rent is today, my kids will go to a good school, we'll x-country ski in the winter, and hike and bike in the summer.

*

DUMB FUCKING bitch, there are NO good schools in Bend. This post is a make-up, want your daughter to get fucked in the ass by a 45 year old Mormron name Bruce? Then come to Bend, where he'll be a personal mentor to your children.

Make up post, there are no good schools in Bend, there are no 1/2 MTG's, there is only desert, and drugs, and boredom.

Anybody that brings their children to the desert to deserves to get fucked by the pussy.

Anonymous said...

Dude, if its so awful, just don't read it. You're a fucking millionaire, supposedly. Go nuts on Phil's or something. Aren't you too good to even dignify this with a response? Cripes.

*

Homer wby is is that everyone that calls you a lard-ass metro=sexual is a 'buster'. How do you know I'm buster?

I could be a new gal in Bend, horny cougar, wants debt, and lots of debt, and I like over weight middle age men that are in to self deprecation.

WHOAMI? said...

WHOAMI?

I'm a mormon man.

My wife has bigger dick than me.

Did I mention I was mormon?

I'm new to Bend, but my friends call me the 'pussy'.

I can found near most schools.

I'm quite tolerant of middle age men hooking up women over 12.

Would you like to be a mormon?

I love Bend, it is a marvelous place. 25%/yr average appreciation it is, always has always will.

9 out of 10 mormons want to CUM to Bend, did I mention that I was mormon?

Who am I?

Anonymous said...

we can always tell it's you buster because every other word is a typo, and you have an unmistakable way of rambling. Funny shit though, always makes my man twat hurt.....sometimes itch.

Marge said...

Definitely a FAKE....No one can be stupid enough to move to Bend instead of Iowa when one should live where they can grow food for real. Eating pansies is not quite enough. What do we have a 45 day growing season. It is not 300+ days of sunshine. Most of them are when it is about 5 degrees below.

If it is real....change you plans and hit the midwest.
If you did move here , why a 600k house? can't you live cheaper than that? Why consume youself to death with a stupid house. It's just 4 walls.

IHateToBurstYourBubble said...

DUMB FUCKING bitch, there are NO good schools in Bend.

Welcome to The Downside of Bend.

I actually have an irrational fondness for the guy. He's smart, but it's buried under layer of psychosis or something. Plus, after Happy Hour he can be a real bitch.

IHateToBurstYourBubble said...

If you did move here , why a 600k house? can't you live cheaper than that? Why consume youself to death with a stupid house. It's just 4 walls.

...and the Upside!

IHateToBurstYourBubble said...

Yeah dude, don't come here & think you're Cock of the Walk. They see that shit, they can smell it 10 miles away.

And they hate you for it.

Rightly so.

And it's NOT jealousy, or anything. You are just one of a mass of hated DUMBFUCKS who have come & fuck up their paradise.

Come & be humble. Lie prostrate & beg forgiveness for ever invading this place.

Do that & you will live.

Do it not, and everyone of you will die here today.

Anonymous said...

"Make up post, there are no good schools in Bend, there are no 1/2 MTG's, there is only desert, and drugs, and boredom."

Woah, there, hold on. Your hyperbole is killing me. How would you define a "good" school? A private elementary school in Manhatten? A college-prep school for the Ivy League? All teachers have a Nobel prize? Field trips to the Met? Give me a break. Let's talk about normal schools with normal kids ... the ratings are on-line. It's mandatory by the state board of education. A person who actually does their research will know you're just a crazy talker.

Marge said...

Yeah...that. Whatever it was :)

bayAreatoBend said...

Umm, not sure how I suddenly became loud/obnoxious/ostentatious (me, who grew up in little ol' Buhl, Idaho).

Re Iowa, too far from Silicon Valley, where I'll be traveling once a month. Though your comment on the growing season does resonate, if one presumes peak oil has come and gone, like Dr. McPherson: http://www.azcentral.com/arizonarepublic/viewpoints/articles/0406vip-mcpherson0406.html.

Anonymous said...

I am looking at homes that are 600k on the west side and plan to offer no more than 475.

Maybe think about offering no more than $400k, which is what it will be worth if things don't go completely to hell.

Better yet, move here and rent something really nice for $1300-$1500 and see what happens to the market in a year.

Bend Economy Man said...

Someone needs to tell this guy about the First Law of Thermodynamics...

timothy said...

>>Someone needs to tell this guy about the First Law of Thermodynamics...

I'm... jeez... speechless. It's as if he implemented an idea his first grader came up with to save the world.

Usually, if you're smart enough to make something like that, you're smart enough to figure out why it's a dumb idea.

IHateToBurstYourBubble said...

Someone needs to tell this guy about the First Law of Thermodynamics...

Exactly. I'm pretty sure that's the law that says this sort of thing ONLY works if you're already driving to work or the grocery store.

Right BEM?

:-)

IHateToBurstYourBubble said...

What's truly CLASSIC is it was covered without one wit of critical questioning or thought.

Instead of a wheel, why not drag another car with these batteries hooked up? Then you drive the charged car home while dragging the other car... which you drive again to work the next day.

See, Free Energy FOREVER.

See Bulletin, you've gotta ask the TOUGH QUESTIONS! Why do I always have to think of this stuff!

IHateToBurstYourBubble said...

Six months ago, in the garage of his west Redmond home, Carl Ylvisaker started tinkering with a tire, a trailer hitch, an alternator, car batteries and a power inverter.

They forgot "a whole shitload of beer".

IHateToBurstYourBubble said...

Umm, not sure how I suddenly became loud/obnoxious/ostentatious...

Your predecessors have set a high mark.

Anonymous said...

Bayareatobend: I'd suggest you rent a nice house here for six months and see how you and your family like it here. There are plenty of rentals available and if you decide to buy in six months, houses will be even cheaper.

IHateToBurstYourBubble said...

European Prices Rise More Than Forecast as Oil Surges

By Ben Sills

June 30 (Bloomberg) -- Inflation in Europe accelerated more than economists forecast, eroding consumers' spending power and adding to pressure on the European Central Bank to increase borrowing costs even as economic growth cools.

The inflation rate in the euro area rose to 4 percent this month, the highest in more than 16 years, from 3.7 percent in May, the European Union statistics office in Luxembourg said today. Economists had forecast a 3.9 percent rate for June, according to the median of 38 estimates in a Bloomberg survey.

Inflation-linked bonds fell on the data, signaling investors expect faster price increases over the long term even after ECB President Jean-Claude Trichet last week indicated his support for the so-called hawks on the governing council who argue rising inflation risks require higher interest rates. The price gains stemming from record oil and commodities are clouding the outlook for economic growth in the 15 nations that use the euro.

``It's a bad figure,'' EU Economic and Monetary Affairs Commissioner Joaquin Almunia said in Brussels today. ``I wouldn't be surprised if the inflation figure for 2008 turns out to be above our forecast'' of 3.2 percent.

Europe's inflation rate has crossed ``a psychological threshold,'' said Gilles Moec, an economist at Bank of America in London. ``This will make it easier for the hawks to argue a rate increase is needed.''

Breakeven Rate

Investors' expectations of future inflation, as gauged by the breakeven rate on five-year inflation-linked French government bonds, rose to a record 2.67 percent following today's report, up from 2.57 percent yesterday.

``A change in long-term expectations is bad news for the ECB,'' Moec said. ``That's what they are really looking at.''

Crude-oil prices have doubled in the last 12 months and passed $143 a barrel for the first time today. Food commodities have also surged in the past year, boosting how much consumers are paying for staples such as bread and milk.

Inflation in Italy, the euro region's No. 3 economy, also accelerated more than economists expected in June to 4 percent, the fastest in over 11 years.

``The surge in inflation is the reason why we've seen the economy lurching downwards,'' said Ken Wattret, senior economist at BNP Paribas in London. ``The pipeline pressures are increasing and the news on the wage front has been very alarming.''

European retail sales plunged in June with the Bloomberg purchasing managers index falling to 44 from 53.1 in May. Consumer confidence is at record lows in France and Spain, while Germany and Italy also saw sentiment decline.

Energy Costs

Ludwigshafen, Germany-based chemical maker BASF SE is raising prices by as much as 20 percent and Dow Chemical Co., the largest U.S. chemical maker, by up to 25 percent to make up for surging energy costs. Rio Tinto Group said last week it agreed to increase iron-ore contract prices with Baosteel Steel Corp., China's largest steelmaker, by 80 percent to 97 percent.

Workers are demanding higher wages to compensate for the rise in the cost of living, a phenomenon central bankers refer to as ``second-round effects,'' which risks setting off an inflationary spiral. Ground staff at Cologne-based Deutsche Lufthansa AG are calling for a 9.8 percent pay increase.

``The projections we have under our eyes are making the working assumption that we don't have broad-based second-round effects,'' Trichet said June 5. At the same time, policy makers ``noted that risks to price stability over the medium term have increased further.''

The ECB this month raised its forecast for euro-area inflation next year to around 2.4 percent from around 2.1 percent. Inflation has exceeded the central bank's 2 percent limit the past 10 months.

The pace of price increases ``is of deep concern,'' the EU's Almunia said. ``We have to take care to avoid creating an inflationary spiral.''

The figures published today are an estimate. The statistics office will publish a detailed breakdown of the data and the core rate on July 16.

timothy said...

>>What's truly CLASSIC is it was covered without one wit of critical questioning or thought.

I'm thinking the reporters and editors were laughing it up in the newsroom, though.

I hope.

I should write a letter to the editor suggesting that Juniper Ridge be turned into a massive power generating racetrack, where people are paid excellent wages to drive in circles around a track, dragging Les Schwab tires behind them.

Anonymous said...

"Someone needs to tell this guy about the First Law of Thermodynamics..."

i doubt he'll have any problem getting the city council to pass an exception to that law for him

Anonymous said...

BA to Bend IS a made-up post. The word, "ramblers" gives it away. No one from the Bay Area talks about houses as "ramblers." It's a PNW term.

Next!

Bend Economy Man said...

I put this guy with the perpetual motion machine in the same category as the COAR guy who says that he doesn't know anything about the national index saying that Bend real estate is overvalued, except that he's sure it doesn't apply to us.

There's something sweet and naive about the crazy dreamers here, you just have to love 'em and it's a shame to burst their bubble, so to speak.

And it's great that no matter what harebrained idea you've got, The Bulletin will print an unquestioning story on it right along stories about healthcare and national security.

Anonymous said...

BA to Bend IS a made-up post. The word, "ramblers" gives it away. No one from the Bay Area talks about houses as "ramblers." It's a PNW term.

Dude he said he was originally from Idaho which would explain his use of a PNW term.

I put this guy with the perpetual motion machine in the same category ...

You can put yourself in the category of people who don't understand conservation of energy. He isn't building a perpetual motion machine, he's converting kinetic energy into stored energy using a process that's similar in concept to the alternator in your car. Is it practical to tow around a battery-filled trailer? Probably not, but that's a different question.

Anonymous said...

"You can put yourself in the category of people who don't understand conservation of energy. He isn't building a perpetual motion machine, he's converting kinetic energy into stored energy using a process that's similar in concept to the alternator in your car. Is it practical to tow around a battery-filled trailer? Probably not, but that's a different question."

Nowhere does it say that this device will be enabled only during braking, which would be slightly regenerative. It sounds like he plans to have it engaged whenever the vehicle is moving. It is screamingly obvious that the additional drag introduced by the device will cause the vehicle to burn additional fuel in excess of the energy that is eventually retrieved, due to various inefficiencies. Even in the impossible, theoretical world when such inefficiencies can be eliminated, the best you can hope for is break-even--but in the real world is it by definition a losing proposition.

PopGoesBend said...

"You can put yourself in the category of people who don't understand conservation of energy. He isn't building a perpetual motion machine, he's converting kinetic energy into stored energy using a process that's similar in concept to the alternator in your car. Is it practical to tow around a battery-filled trailer? Probably not, but that's a different question."

This device will cause more drag on the vehicle and will decrease the MPG. They already make a device that turns gasoline into electricity - it's called a generator. Honda makes some nice ones, and you don't have to drive around to make it work. It's probably a lot more efficient as well.

Really bad reporting.

And yes, I've taken a few classes in thermodynamics.

timothy said...

The guy is certainly off the beaten path. While everyone else is trying to figure out how to use less gas by using more electricity in cars, this dude wants to burn more gas to generate less electricity.

His next invention will be a formula that causes male pattern baldness in men who don't have it.

Anonymous said...

It is screamingly obvious that the additional drag introduced by the device will cause the vehicle to burn additional fuel in excess of the energy that is eventually retrieved, due to various inefficiencies. and This device will cause more drag on the vehicle and will decrease the MPG.

As the Rolling Stones sang "what a drag it is getting old", but since you studied thermodynamics in your youth why don't you pull out your old physics books and bone up on drag. The only type of drag that applies in this case is parasitic drag which is commonly called wind resistance, and a small trailer being pulled behind a bigger vehicle won't add much wind resistance. Maybe you're talking about the extra energy required to accelerate the trailer?

PopGoesBend said...

"Maybe you're talking about the extra energy required to accelerate the trailer?"

Nope. In order for it to generate power the energy needs to come from somewhere. Think about the alternator that is being used - pick one up and spin it. You need to put energy into it to get electricity out of it - there is resistance to spinning. In this case the wheel on the trailer is spinning the alternator. Here's an experiment - pick up the trailer so the wheel is off the ground and give it a spin. How quickly does it stop? If there were no drag on the system you could get the wheel moving and it would continue to spin forever. Unfortunately it won't. The mechanical resistance of the bearings will take energy out of it and the alternator will take the rest. In the real world there will be friction of the tire on the road as well. It may be small as a percentage of the power the car is putting out, but it does exist. Imagine if you had a wheel on your car that had bad bearings and required more effort to spin - that would hinder your MPG, as will this. Add on top of that the extra mass you are accelerating each start and stop and your efficiency goes down more.

What this trailer is doing is a rube-goldberg of turning gasoline into electricity by burning it in the engine, transmitting the power through the drivetrain to the road (losing much of the energy due to mechanical losses) and then dragging a wheel to put some of that energy into the batteries.

A more efficient way to do it would be to jack the car up and hook the alternator up to the driven wheels.

A more efficient way to do it than that would be to buy a HONDA generator.

Energy in is greater than energy out due to losses. The more complex the system the more the losses will be.

A good book to read is "Voodoo Science"

Anonymous said...

"The only type of drag that applies in this case is parasitic drag which is commonly called wind resistance, and a small trailer being pulled behind a bigger vehicle won't add much wind resistance. Maybe you're talking about the extra energy required to accelerate the trailer?"

the drag associated with spinning the wheel on the trailer while it is hooked up to a load; the load, of course, is turning the generator while it is charging the battery. try cranking a generator while it is charging a battery and you will find out about a real drag . . . .

the trailer is acting as a continuous brake. continuously using a brake while driving will decrease your gas mileage.

is this really that complicated?

bruce said...

Re: driving generator guy

It could possibly make sense with a tilt sensor to only anable charging on significant downhills, but even then the energy loss from carrying the batteries and generator unit to the top of the hill probably more than cancels out any overall gain.

Kind of like ethanol...

Anonymous said...

If there were no drag on the system you could get the wheel moving and it would continue to spin forever. and the drag associated with spinning the wheel on the trailer while it is hooked up to a load;

Dudes, those examples don't qualify as parasitic drag. Next thing we know you'll be claiming there's induced drag and wave drag in the system. You really need to go back and study your physics.

still renting . . . said...

your thoughts on the Oregon housing market can be on OPB radio tomorrow. see here:
http://action.publicbroadcasting.net/opb/posts/list/1267412.page

Anonymous said...

"Dudes, those examples don't qualify as parasitic drag. Next thing we know you'll be claiming there's induced drag and wave drag in the system. You really need to go back and study your physics."

so what are you suggesting? that you can get more energy out of a system than you put in? if so, you can build a perpetual motion machine.

that stupid trailer will cause more energy to be burned in the form of gasoline than it will make available in electricity from the battery. that's because spinning the generator increases the load on the vehicle engine. you don't get something for nothing.

it doesn't matter what technical terminology you use, the end result for the "invention" is the same: pure stupidity.

PopGoesBend said...

"the end result for the "invention" is the same: pure stupidity."

What's funny is this guy is doing the opposite of the folks who have modified their Prius to be a plug-in hybrid. They realize it's cheaper to run on electricity than gas. This uneducated fellow is turning the expensive gas into electricity.

WAIT!!! maybe he's right and we can hook one of these trailers up to a Prius. then we can use the energy from the trailer to charge the batteries and not have to have the gas engine and get infinite milage. Oh. Nevermind. Idiot.

tewert said...

The morons are on a run tonight.

Talk about dragging a generator behind a car on wheels, and tie a generator to those wheels and call it a perpetual motion machine.

I would like to see all Bend She-Male Metro-Sexual Man-Twats have a 12 yr old mormron virgin running down the street and have the man-twats pull said trailer with generator. Then the BULL could talk about how Bend has become an energy source.

Not since the Pussy's Anal Turbine generator has their been so much swamp gas in Bend. What is new?

So long as City-Hall can fund new 'ideas' there will be no shortage of cooks at the pig trough with new ideas.

Earth to PUSSY, there has never been a better time to sell CapStone Anal Power Generators to City Hall.

Come Cali's to Bend, and bring your 12 yr old daughters, and have them run through the streets, and MT's & MS's will chase them as prospective wives. Right out of 'BORAT'. Only in Bend can you have such a picture of the perfect perpetual motion machine.

timothy said...

Is there some reason people in Bend are willing to believe every ridiculous idea that comes along?

Anonymous said...

Tonight I want to talk about camel toes.

I'm talking Grace Jones Came Toes, I'm talking She-Male Bike Camel Toes.

Let's here it for the Women that make Bend the town it is, and have husbands like Bruce, that make Bend the town it is.

So long as the Man-Twats can pull generators on carts through the city chasing 12-yr old cali 'virgins' the Grace-Jones 'bikers' of Bend can do as they wish if all of the city-hall coffers.

It's a good time to be in Bend.

Here's an idea, put all the Camel-Toe Mormon Icon wives of Bend on stationary bikes with generators, and put something of value out in front of them, and generate perpetual power.

Now the question of the night, what 'carrot' could possibly attract a Grace-Jones slash Janet Reno wanna-be??

Mix weak males, and Camel Toe Fem's on Bikes, in the New-Bend, and all hell's going to break out, even old Homer has to enjoy the show, on a monday 'happy hour' night in Bend.

Anonymous said...

Blogger timothy said...

Is there some reason people in Bend are willing to believe every ridiculous idea that comes along?


*

Ok, TIMMY-TWAT I'll play DUMB, I have had too many brewskis tonight.

1.) I will not piss in your mouth.
2.) Bend RE always goes up 25%/yr, always has always will.
3.) Bend is exceptional.
4.) I'll NOT cum in your mouth.

Bend is the town of broken dreams, and every two bit con-artist can con the BULL, because there is NO GOOD news for the BULL, they have to print any POSITIVE copy that comes their way.

Besides, those that have been here for over a year, know that perpetual motion machines are not a new idea here in Bend, only a year ago, Juniper-Ridge was going to turn garage into oil via coal, ... all of these 'perpetual energy' devices are heat-sinks, and ONLY when you have a DUMB FUCKING public that can subsidize waste can these machines perpetuate.

Like the Man-Twats chasing 12yr-old cali 'wives', even that machine only last as long as the grace-jones ( janet-reno ) wive are willing to feed their bruce-pussy's.

I expect to see a lot of this the next four years in Bend, 2012 is a long way off, and the show has only begun.

Bend is the city of broken dreams, and until this town is flat-ass broke, and a dead beat debtor of a town, some KURATEK will sell has CAPSTONE butt-plug to city-hall, if not the PUSSY some other MORMRON.

Anonymous said...

"I would like to see all Bend Metro-Sexual Man-Twats have a virgin running down the street and have the man-twats pull said trailer with generator."

I have a really funny visual of that in my head, right now.

As a kid in the 1980s I saw a show where the father rigged up the family's TV set so that his kids had to power it by running two stationary bicycles sitting in front of the TV.

Ah, the good old days, when people were thrifty and parents were strict.....

Anonymous said...

it doesn't matter what technical terminology you use, the end result for the "invention" is the same: pure stupidity.

A decade ago guys like you were saying gas-electric hybrids wouldn't work and GM was crushing their EV1's. Now Toyota has sold over a million hybrids and GM is frantically trying to get back into the game. Having a closed mind is pure stupidity.

BayAreatoBend said...

BA to Bend IS a made-up post. The word, "ramblers" gives it away. No one from the Bay Area talks about houses as "ramblers." It's a PNW term.

Hmmm, if I was to make something up, I'd be a bit more creative than that. Besides, you're wrong about "California ramblers," which is a really common term for the long, low homes that are everywhere around here. Also called ranch-style...

I'm just saying that it makes economic sense for me to move to Bend (keep high salary in Bay Area, buy rapidly depreciating home in Bend). Could home prices fall further in Bend? Sure, I think they've got a ways to go. Is the Bend economy and infrastructure f'd? Absolutely. Will me and my family's quality of life improve over present situation (where I rent a dated "rambler" for $3,100 and where the neighborhood school is very very average)? Definitely. Will I tread lightly, speak softly, keep my recent Cali roots under wraps? Yea, sure, whatever.

Anonymous said...

"A decade ago guys like you were saying gas-electric hybrids wouldn't work and GM was crushing their EV1's. "

There is a difference between not having the battery technology to make it work well and violating the laws of science.

Guess which this is?

Anonymous said...

Will me and my family's quality of life improve over present situation (where I rent a dated "rambler" for $3,100 and where the neighborhood school is very very average)?

*

If your in San Jose, paying $3100/mo, maybe.

But, Bend schools are infested with drugs, some 25% of parents provide drugs and alcohol to their children and their friends. It's virtually impossible to keep drugs and alcohol away from 12+ yr kids in Bend. The high school's here are a mess.

EVERY single parent I know has a GPS enabled cell phone on their kids 24/7 so they know where the kids are at via a website, and if the kid turns off the the phone the kid is grounded.

Summit High is FULL of drugs. Bend is about BOREDOM for kids, like Grass-Valley CALI a few years ago tele-commute parents like yourself moved to the highlands/desert, and the kids 'hung-out'.

Sure there are a 'few' kids that hike/bike, ... but today with video games most kids are sedentary and bored.

The percentage of kids in Bend that go on to real college is pathetic. Only a self obsessed man-twat type parent would drag his children to Bend. The result? More Man-Twats.

Then lots talk about the METH.

In Bend the average 12 yr-old girl is giving head in the bath-room, so say my friends who have kids, and they hear that from their kids.

You only have to go to Drake Park all summer long and walk around deep in the park to see kids bored, and stoned.

So MORE man-twat men will bring their CALI children to be raised 'latch-key' to Bend, and Bend will become MORE the New-Bend.

Sure there is the geometric growth of MORMONISM in the area, and they do have programs for kids, but its not enough. It just means that in a generation the MORMRONS will be the economics captains of Bend, as ONLY their children will not be slovenly man-twats.

Bend, I can't tell you how many people I know in Bend with 24+ yr-old sons&daughters living at home and NOT working in Bend. Something has to give. It's a paradise for HELOC lifestyle, DUMB-FUCKING calis came to Bend on DEBT, dragged the johnny in tow. Kid grows up, and moves out for a awhile and moves back in, can't function in another town. Parents think they're in paradise, because everyone else just counts the equity at BBQ's, ... wine groups every night, party, golf, ... all the time, all on DEBT.

Now the calis that didn't CUM, are looking up to BEND saying "Now is the time to buy low".

Yes, now is the time to BUY LOW, but then what? If you want low buy think BURNS-OR, or North-Nevada, or East-Cali, there is desert all over the West-USA that is cheap.

Easy Money is over, now in Bend you have a foreclosure and there are four adults on the street ( two parents&two+ 20+ yr-old adult-children ).

Crime skyrockets in Bend. 20+ yr-old dysfunctional boys can only get pussy by hanging out at near high-schools ( & jr-high ) and getting little girls stoned, ... METH is the cheapest drug in Town, ... Crime Sky-Rockets.

This is FUCKING BEND.

Anonymous said...

"A decade ago guys like you were saying gas-electric hybrids wouldn't work and GM was crushing their EV1's.

*

The HYBRIDS are a tax gimmick, take it away, and the biz would fold.

Only one solution to the AUTO problem, and that is $20/gallon fuel.

It's never going to be effortless to transport your rotting corpse, it never has. Moving +180LB's requires ENERGY, for every down there must be an up.

I'm sure man has dreamed of free ride for ever, dreams are the stuff that SELLS, its something everyone wishes for like eternal youth, The perpetual motion machine is as old as the 'wheel'. Physicists long ago proved that its an impossible dream, but the un-educated continue to propose that they can exempt physics from their invention.

The FOREVER obsession with perpetual motion machines in Bend makes perfect sense. We're a desert Island of debtors dependent upon everything being imported, everyone in Bend dreams of cargo being dropped for free at their door.

The easy and continual sale of perpetual motion machines to the Bend public is a perfect example of why Bend is-was the #1 most over-valued RE for the past 5+ years in the USA. No where else is there such a density of dumb fucking man-twats.

The desert will take care of things in TIME, the cost of dragging your largess out in the desert, and all your disposables will liquidate your capital rather quickly. Like Marge says above 'our growing time is like 40 days'.

I'm actually quite surprised there isn't MORE solar contraptions in Bend, but then the panels cost real money, and setting the stuff up requires brains, and battery's don't last long, and are highly toxic on disposal.

Anonymous said...

Blogger timothy said...

Is there some reason people in Bend are willing to believe every ridiculous idea that comes along?

*

Timmy-Twat this 'mystery' your asking is the rhetorical answer to the question why was BEND the #1 over-valued RE in the post 2000 RE bubble? We have the highest density of NUTS in the country who BELIEVED in the PERPETUAL-MOTION MONEY MACHINE.

That if you just 'bought in Bend' you only made money, even in 2006 realtors at NWXC'ing were still selling that idea.

If YOUR SO fucking stupid to believe in perpetual money trees, then why is not hard to believe in perpetual motion??

Bend is Man-Twat & Metro-Sexual dreamers. A town where every asshole has had a full Bend Salon Anal-Wipe in the last 72 hours.

I think that if you study history, and look at collective society's where the general population became obsessed by how clean and pink their anus was it was a good indicator of imminent collapse, or at least a good flood, I'm thinking Bend as Sodom&Gomorrah.

Perpetual motion machines, and perpetual money machines go hand in hand. I think that is why 1-2 years ago Homer, BEM, and most of us came to these blogs to find other people who would agree that Bend is NUTS.

The NUTS are still running the show, and 100% of the people who RUN Bend, see the city treasury as a perpetual money tree, ...

My gut feeling is that when you toss in HELOC, and self-obsession Salon lifestyle, you get people who feel they have a 'right' to said lifestyle. They all believe, and BROOKS & CO, sold that dream, and Bend became #1. The dream lives on, until Bend again becomes a ghost town.

timothy said...

By the way, there have been reasonable attempts a regenerative braking. The Ballard brothers (I think, I'm going from memory here) had an encased ceramic flywheel system they were working on. This took advantage of braking. I believe they ran out of funding. Among other problems, people were worried about the deadliness of an insanely fast spinning object slicing through the scene of a crash. I'd imagine there'd be gyroscopic considerations as well (can't turn this damn car!) but I'm not a physicist, so I'm not sure.

What I am sure of is that the idea that you could ever get back in electricity even close to what you lost in gasoline by adding the weight and friction of a tire is nuts.

timothy said...

You're right Buster. Bend was marketed to people who were willing to believe despite all evidence.

timothy said...

The anecdotes are starting to hit home.

Saw a guy I know on the Notice of Default list. That's the first case of someone I know personally.

Know a gal that moved here last year based on the Kool-Ade who got a job, bought a house, and who now is packing up and moving back to where she came from.

Know Realtors doing odd jobs now.

A year ago, stuff was happening to people you didn't know. Now everyone must know someone in trouble.

Anonymous said...

Can someone tell me where I can look at the Notice of Default list? Thanks

bruce said...

Re: Know Realtors doing odd jobs now.

Seeing well known realtors on the NOD list.

Anonymous said...

"A decade ago guys like you were saying gas-electric hybrids wouldn't work and GM was crushing their EV1's. Now Toyota has sold over a million hybrids and GM is frantically trying to get back into the game. Having a closed mind is pure stupidity."

Please, please, please tell me you are joking! That contraption is a guaranteed energy waster unless one of the most fundamental laws of the universe can be broken.

I seriously hope you are joking so I can be proud of my species once again.

bruce said...

First half 2008 NODs vs 2007 NODs, all of Deschutes County:

1/1/08-6/30/08 789


1/1/07-6/30/07 192
7/1/07-12/31/07 398

1/1/07-12/31/07 590

bruce said...

A rather large increase this year...isn't that more than a 400% increase for the first six months of '08?

bruce said...

And while our economy melts down, what is the City Council worrying about tomorrow night? What else:

Communications Audit Review Executive Summary

In May 2008 the City of Bend received a Communications Audit from DVA Advertising and Public Relations. The purpose of the audit was to examine existing city
communications activities, including evaluation of how all of the city’s existing tools do or do not complement each other, where efforts are being duplicated, and where there may be opportunities to combine resources and/or messaging for efficiency. The audit identified primary issues facing city communications as budget and staff limitations, diverse department locations, and historical practices.

The audit made several broad recommendations, including:

1. Increase communications department staffing: “The department would ideally
include at the very minimum a communications manager as well as a communications coordinator who would assist the manager and handle public involvement activities and web-based communications.”

2. Establish individual department communications liaisons: “Each city department should designate a communications liaison who would work with the communications manager, representing their department communications needs. The communications manager would not be expected to execute or manage each department’s outreach projects, but would assist by providing options.”

3. Incorporate design consistency: “The greatest opportunity for the City of Bend to immediately upgrade the lever of quality in its communications materials is to build consistency into every outreach tool that originates from the city.”

4. Improve design quality: “Every piece of communication disseminated by the city should be professionally produced.”

5. Upgrade the city’s Web site: “Generally speaking, the site has become too cumbersome to navigate and is intimidating to the user. In addition, the look does not reflect the professional, high quality nature of the city government or the city brand itself.”

6. Establish email database and communication: “The most efficient means of communication in terms of cost, ease and speed is via e-mail.”

7. Strengthen/add evaluation methods: “The primary tool that is already in place is the Community Survey…include questions relating to the awareness of various communications tools utilized by the city and the public’s impression of the effectiveness of those tools.”

8. Assist staff and council in strengthening their public presence: “One way to help staff and council be as successful as possible is to offer media and public speaking training.

Source: http://www.ci.bend.or.us/city_hall/meeting_minutes/docs/Communications_Audit_Review_Summary.pdf

So how much do you think DVA is going to bleed us for implementing these recommendations? Hell, professional production of every piece of communication should be a steady revenue stream in itself.

bruce said...

This gets even richer. From the associated Issue Summary:

CURRENT YEAR BUDGET IMPACTS (Department):
This effort will result in expenses to the City; however, the costs will be determined as the customer service program is developed.

FINANCIAL PERSPECTIVE & RECOMMENDATION:
The action before the Council is the adoption of the Customer Service Policy, which will not have any financial implications at this time. Development of the Customer Service Program will have expenses associated with it which will be determined as the program is developed.

FINACE REVIEW & RECOMMENDATION:
Reviewed by: NA Date: ___________

LEGAL REVIEW & RECOMMENDATION:
Reviewed by: NA Date: __________

COMMUNITY INVOLVEMENT PROCESS:
The policy before the Council has not gone through a public process; however, Council members have reported that they hear from constituents that improvement in customer service needs to be made.

Source: http://www.ci.bend.or.us/city_hall/meeting_minutes/docs/IS_Customer_Service_July_2.pdf

...

An open-ended policy? Sounds like the City is tightening its belts, allright.

bruce said...

Oh, and there is this little item, with no supporting documentation, on the list of issues for the Work Session:

"Discuss Development Stimulus Package Concept (Staff and COBA)"

LavaBear said...

Here is a graph by quarter of the NOD's.

timothy said...

Development Stimulus? Are you fucking kidding me?

Anonymous said...

On the subject of Prius's and other hybrids.

Has anyone else noticed that the same people who groom their anus at salons and fuss about their body's in general are those to be seen in Hybrids? Some of the biggest man-twats and metro-sexuals I know drive these fucking politically correct cars. Its a fucking status symbol that say's "I'm Better than anyone else, cuz I care about the environ", ... Shit if you cared about the environ, you wouldn't be living in the fucking desert.

Sure its ONLY about a tax write-off. It's the new NAZI politically correct patriotism to be GREEN, trouble is-was GREEN was CO-OPTED by CORP-USA twenty fucking years ago.

Again I say, want to solve the auto crisis? $20/gal fuel, problem solved, when we start paying $5/litre like most of the world, then 'our' problem will be solved.

Anonymous said...

Great graph lava, and you ain't seen nuttin yet, wait until 2009, that's when the shit will really hit the fan.

Right now the SMART insiders are walking away, cuz its the smart thing to do early, next year the NOD's will be the people who don't want to leave.

The pain, the pain, the pain.

Bend is going down, and hard. City Hall continues to spend MILLIONS on communication and VISIONING their message.

Talking about dis-connect, but when you have a hairless butthole, that's pink anything is possible. Bend burns, city halls gets a free anal wipe.

Anonymous said...

"Discuss Development Stimulus Package Concept (Staff and COBA)"

*

Let's think about this for a moment. A city-hall ran by people who 'believe' in money trees and perpetual motion machines.

Thus you have the perpetual development machine. Keep Brooks cranking out siberian (STD) crap shacks, whether they'll ever be occupied or not.

PDM - Perpetual Development Machine, that is Bend, runs for free, just debt, e.g. MUNI-CDO-BOND money. Who cares if the homes sit empty, everyone wins!!!!

Bend really is exceptional! No other fucking place in the world would put good money into a rat hole going down. OK, fine Bend keeps the SDC cost low, and approves any COBA project, but WHO IN THE FUCK IS GOING TO LOAN REAL MONEY???

This all goes back to PR&VISIONING, DEMAND MUST be created, BUT WHOM? WHERE? HOW DO YOU GET NEW DUMB FUCKS to Bend???


Our PDM is self feeding and ever running. Vested interests KNOW nothing else. The godfather HOLLERN, owns all the media sources in town, hell will build ourselves out of this crisis.

We got to keep the builder's in dodge, we got to keep building, what a great story, every where else is stagnant, but Bend keeps building because we're exceptional. Where in the HELL do they hide all the empty homes, tracts, and STD's??

FUCKING INSANE, It's going to implode like nothing anyone has ever seen. At some point when CACB or equiv goes down, all the banks and investors will say NO TO BEND, until then city-hall will continue to HARD SELL the dream, the belief that all of Bend is not subject to the laws of economics or physics.

In Bend RE only goes up 25%/yr forever, and machines generate more energy than put in, drop $10 bucks on an STD, and get $100 back. Only in Bend, no one ever goes wrong.

It's all the BIG LIE, so long as boss hogg HOLLERN controls the BULL&SORE and all media the lie will continue, we simply just wait for the boss-hogg to implode, and over-night all of BEND will become a ghost-town.

timothy said...

Prius is stop gap for the type of person who wants to assuage their guilt for being aalive.

On the other hand, I am excited about the plug-ins, once they get the kinks worked out. Plugins make a lot more sense to me than current hybrids.

timothy said...

>>FUCKING INSANE, It's going to implode like nothing anyone has ever seen.

Pissing out the last water in their bodies. No thought of what makes sense to do in a tricky time.

Anonymous said...

"want to solve the auto crisis? $20/gal fuel, problem solved"

Umm, I'm not sure how that will 'solve' anything, unless you are a bicycle salesman. Can you imagine the cost of goods transport at those prices? What an incentive to grow LOCAL.

Regarding hybrid cars: A regular Honda Civic gets 25 city, and 36 highway. It also performs far superior to a Prius, Civic Hybrid, or most other hybrids.

Hell, I just watched an advertisement for the 1984 Plymouth Voyager on youtube. Something like 25 city and 36 highway. Of course, you had zero to 60 in like 12 seconds, but back then the speed limit was only 55 anyway. The secret was light weight -- no safety equipment, squeaky structure, and lifeless handling. Nowadays every car drives better and accelerates faster than a 1980s Porsche.

Anonymous said...

Prius is stop gap for the type of person who wants to assuage their guilt for being aalive.

Jealousy rears its ugly head again. I wonder, are a million Prius owners lying about their gas mileage or are timothy and buster trying to assuage their guilt for driving cars that consume more gas and spew more pollution?

On the other hand, I am excited about the plug-ins, once they get the kinks worked out. Plugins make a lot more sense to me than current hybrids.

You won't be so excited when the price of electricity goes up.

bruce said...

While, in last night's Work Session, they were planning a roll call vote on a resolution establishing a five-person "...creation of a management advisory board that would provide oversight on the on-going development of Juniper Ridge and advise Council accordingly."

Why a roll call vote would be held during a work session is a puzzle, and I blew it off as I'm on a project deadline right now. And judging from the requirements for board members, if you're not RE or COBA, don't bother:

"The Committee shall be made up of 5 members who are residents of Deschutes County and have expertise in the areas of real estate, finance, development, business, education and other fields relevant to the successful implementation of the Master Plan for Juniper Ridge Conceptual Master Plan."

Source: http://www.ci.bend.or.us/city_hall/meeting_minutes/docs/Res__Forming_JR_Advisory_Board.pdf

Another old boys network overseeing city-owned development.

Duncan McGeary said...

Buster on a roll. Nothing like a handy metaphor.

Anonymous said...

clic

Anonymous said...

Bend was marketed to people who were willing to believe despite all evidence.

They were willing to believe despite Bend's history, but that was easy because they didn't know its history.

Anonymous said...

Know Realtors doing odd jobs now.

Saw one of them behind the popcorn counter at the Pilot Butte 6 the other day. No joke.

Anonymous said...

Has anyone else noticed that the same people who groom their anus at salons and fuss about their body's in general are those to be seen in Hybrids?

My hard-core Republican neighbor has a Prius, has had it for years and years. I haven't ASKED him about his anal grooming, but he doesn't appear to be the type who would be very concerned about it.

Anonymous said...

Shit if you cared about the environ, you wouldn't be living in the fucking desert.

Good point. So what are you doing here?

Anonymous said...

I never claimed to care, nor do I own a hybrid, nor do I wave the NAZI 'Green' patriot flag of the week.

"Whenever I see a man wave a flag, I expect to get a bill" - HL Mencken

Anonymous said...

Plugins make a lot more sense to me than current hybrids.

You won't be so excited when the price of electricity goes up.

*

Yeh, just fucking plug it in, and have them burn coal somewhere else to make the electricity, classic fucking NIMBY 'plug-in' is, just like fuel cells, and HELL HYBRIDS.

My #1 problem with hybrids is the fucking battery, they don't last long, cost $8k to replace, and contain the most toxic fucking materials known to man. This is MY fucking problem with HYBRIDS, is HYPOCRISY.

Yes, buster-fuckhead is on a roll, I guess its the weather, or things have finally slowed down where I can beat-off on the net again with you fellow circle jerkers.

All these 'new' technologies are pollutant generators. The simple fact is petro is the most portable and dense form of energy known, I'm talking oil, kerosene, diesel, problem of course is their are too many fucking assholes in auto's, $20/gal fuel will solve that problem, and a nice TDI ( 60+ mpg ) in my auto and planes, and I'm set, fuck the rest of you.

Anonymous said...

"want to solve the auto crisis? $20/gal fuel, problem solved"

Umm, I'm not sure how that will 'solve' anything, unless you are a bicycle salesman. Can you imagine the cost of goods transport at those prices?

*

Having traveled and lived virtually everywhere in the world.

I can tell you that the majority of the world can't even afford to own a fucking bike.

The day of Henry-Ford and every fucking man-twat having his on model-t is FUCKING OVER. That's what $20/gal solves, the roads and ski will be empty.

Cost? Yeh, big fucking deal tools will be made near you once again, shit will cost too much to be made in China, once again there will be fucking JOBS, cuz stuff will have to be made. There will be jobs for machinists everywhere.

YOUR PROBLEM, e.g. the cost of our current system, is the SIMPLE result of CHEAP fuel, we're going back to the feudal system, where everything is fucking local, and I love it.

The USA might have been great for a short time POST WWII where everybody got to live like a millionaire in most third world country's. The game is UP, and BEND is classic example of what happens when the HELOC piggy bank goes dry.

The good news is most of you will sell your bikes before you leave Bend. The better news is most you will leave by 2012.

Bend is my base, I'm a rich man, I think like a rich man, and I look forward to empty roads.

All beer will be local, folks will figure out how to grow ingredients locally in hot-houses, ... there is a lot of stuff coming down. All is local.

YOUR COSTCO is going to the way of the DODO and so is your FUCKING walmart all you CALI CUNTS.

Anonymous said...

Anonymous Anonymous said...

Bend was marketed to people who were willing to believe despite all evidence.

They were willing to believe despite Bend's history, but that was easy because they didn't know its history.

*

There is NO history, Bend was discovered by HOLLERN in 1968. He promoted and marketed the new vision in 1998. The Calis came post 2002, and settled what we now call Bend. That's all you need to know.

The calis came and brought their values, their porn, their latch-key children, and their lifestyle of COSTCO, WALMART, and endless turn-about driving.

That's all anyone needs to know about Bend history.

All that matters is the future. The future is that BEND fuel will cost so much that even mentioning 'Bend' in CALI and you'll be considered a moron. My how things change.

Like ALL the NOD's right now, those are the smart folks getting out now, its 2009, and 2010 when the DUMB FUCK-HEADS still here and stuck, are going to look like real fuck-heads.

"STUCK in BEND"

U-HAUL will be charging $1k/day for a one-way trailer out of Bend by 2010.

Anonymous said...

My hard-core Republican neighbor has a Prius, has had it for years and years.

*

If you had spent anytime on this forum, you would know that here in OREGON, that Republicans are the biggest fucking metro-sexual fudge packers around.

A few years ago the chairman of the republican party was an open faggot.

Your telling that republicans in Bend are not girly-boyz, and buy HYBRIDS.

ONLY FUCKING GIRLY-BOYZ BUY hybrids, and MY definition of a girly-boy is a fucking dreaming idiot. That buys into the latest fucking bullshit of the week, like the 'green nazi' agenda. The DEMOcrats are no better, the whole DEMO convention is about GREEN, and its ALL fucking bullshit.

The simple fact is that ALL americans are the most wasteful mother fuckers on the planet. So the whole green thing is a collective attempt for everyone to feel good about killing millions of Arabs for our lifestyle, and to feel 'green'.

Republicans, take deschutes brewpub, owned by the biggest hard-core republican in Bend. All golfers, which is CODE for metro-sexual man-twats in Bend.

Yeh, I have no doubt there are tons of republican's in Bend with a prius. I'll stick with old diesel pick-ups, thank's,

Anonymous said...

I'll say one more thing about the HYBRID, its a 100% disposable car, when the battery system is done, the car goes to the wrecking yard, ... e.g. recycling, and they make another out of the scrap.

The hybrid is NO more, than disposable car to be replaced every 4-6 years, I myself will stick with cars I can fix myself, and make my own parts if need be. No way in hell would I buy a car whose intended purpose is to be destroyed after 4-6 years and to buy another, gone is the day when you could drive a car forever.

In airplanes we got planes over 80 years going strong, if we took care of cars like we do planes they would last forever. Yeh, just buy your disposable hybrid at costco, every few years, and make sure its made in China.

The main issue is how we waste fuel in this country, like going to Walmart six times a day, I know folks that do that shit. Just to find stuff to sell on EBAY to other man-twats. Bend is insane.

Anonymous said...

"I'll say one more thing about the HYBRID, its a 100% disposable car"

I was shopping for a new car in fall 2003 when the Prius had just come out. I thought it was great but was afeared about what happens when that expensive battery pack needs to be replaced someday. I went over to the Honda dealer and got a plain old four-cylinder vehicle -- simple, lightweight, phenomenally reliable - built to last 300,000 miles. Ahhh, nothing like simplicity.

What I really miss is the small Japanese pickups of the 1980s, however. Nowadays, Toyota's "compact" Tacoma is essentially a full sizer, and sucks gas like one too.

I have a feeling that SUPER-SIZE IT is on the way out, and small and simple is on the way back in.

Anyway, I'm shocked by the number of people who think that the best way to deal with high gas prices is to trade in their Expedition or Tahoe and buy a NEW car. No problem - I'll be taking out a 6 year car loan, but think of all the gas money I'll save!!

Anonymous said...

"I'm shocked by the number of people who think that the best way to deal with high gas prices is to trade in their Expedition or Tahoe and buy a NEW car."

Or what's worse -- people don't get rid of the old gas guzzler, but simply add an additional car to their portfolio.

A neighbor of mine is now idling her Suburban during the week -- leaving it parked on the street -- while she bought a late-model Passat for her daily 10 mile round trip to work. So she spent $14,000in order to save $40 on that weekly fill up.

Anonymous said...

yet another sign of the times. Starbucks is closing 600 of it's underperforming stores. I wonder how many in Bend?

Anonymous said...

I bought a 1995 corolla fixed it up, air cond was blown so I disconnected it No sense in wasting power turning that.threw a paint job on it, I have 1500 dollars invested and can get 38 to a whopping 41mpg and it is a really nice car it has 189.000 miles on it and runs strong.I think it has paid for itself owning it for a year now.I am now looking at electric conversions for the pickup

Anonymous said...

Just read that Ernesto's abruptly closed their doors.Not surprised, many more restaurants in Bend to follow I'll bet.

Anonymous said...

So your cost per mile is 1500/189,000, cents per mile.

Now think about the actual cost per mile for a hybrid, when you consider your $30k car is disposable, and $8k for those battery's. Given the corolla at cents per gallon and 25 cents/mile fuel ( $5/gal ), that's still about 25 cents a mile to drive.

Now look at the Hybrid, its DOLLARS/MILE to drive. Note what your paying for here is toxic material to be manufactured 'elsewhere', and inefficient energy systems else-where to manufacturer those materials. Then to boot you get a disposable car, and most of the material cannot be re-used.

Anybody that tells you a HYBRID is green, is a BEND SHIT-EATER of the first order.

Then there is the maintenance cost, your hybrid is epoxy sealed non-maintainable disposable auto. The 20 yr old corolla, you can fix it for free, and get parts at the junk yard for almost nothing if U-PULL.

Anonymous said...

model Passat for her daily 10 mile round trip to work. So she spent $14,000in order to save $40 on that weekly fill up.

*

Yes, do the MATH, folks talk about fuel cost, but its total cost per mile to drive, and the newer the car, the less likely it can be driven forever.

I think old cars will become invaluable like old Cessna airplanes, which now can sell 2-4X of cost or even 10X in some cases. Anything made 'old-school' was designed to last forever. Anything new school is designed to last no longer than the car payment.

Reason 101 why folks like buster are rich, and bitches and bastards of Bend driving NEW SUV's are nigger rich ( no pun against black working men, you know a nigger when you see one, and Bend is full of white niggers ).

{ For those post politically correct, nigger-rich is all you own is on your back, and on your fingers, in Bend, its all in their auto, except in Bend the auto ain't paid for, and neither are the clothes so in Bend its white-nigger rich }

Quimby said...

Yeah!!!!! Buster is BACK!!!

Anonymous said...

Buster sure loves to pontificate about things he knows nothing about.

*

And Toyota claims that not one has required a battery replacement due to malfunction or "wearing out." The only replacement batteries sold--at the retail price of $3000--have been for cars that were involved in accidents. Toyota further claims that the nickel-metal hydride (NiMH) battery packs used in all Prius models are expected to last the life of the car with very little to no degradation in power capability.

According to Toyota, the life of the Prius battery pack is determined more by mileage than by time, and it has been tested to 180,000 miles. Supporting this are first- and second-generation Prius taxis in Canada that have reportedly traveled more than 200,000 miles without suffering any battery problems.

Anonymous said...

"Yeh, just fucking plug it in, and have them burn coal somewhere else to make the electricity, classic fucking NIMBY 'plug-in' is, just like fuel cells, and HELL HYBRIDS."

Yes, the pollution from making the electricity is generated elsewhere but it is still far less pollution per mile than burning gasoline in your car. If your power is from a fairly clean or very clean source (100% renewable is available here, mostly wind) than it is so vastly cleaner that there is no comparison.

If all Americans had plug-in hybrids then our energy and pollution problems would be reduced dramatically. 80% of car trips are short enough to use the batteries alone.

Anonymous said...

living with batteries causes you to conserve and be aware of the energy you are using. At least it does with me. So to use an electric car I would plan my trips very carefully and make each trip count . I do that anyway, Not like some they go to the store to buy a slice of bread and then make another trip to buy butter.

Anonymous said...

"living with batteries causes you to conserve and be aware of the energy you are using."

Yes, I'm with you, but this won't work with modern Americans, who demand instant gratification, seating for 8, towing capacity of 5000 lbs, plus zero to 60 in less than 8 seconds -- oh, and did I mention 12 cupholders, including one big enough for a 64 ounce drink?

I grew up in rural community in the 1970-1980s where we were just lucky to drive into town on a Saturday afternoon/night to do shopping and eat out. Nowadays people in my subdivision drive back and forth all day long always running to the store or to the school for something.

timothy said...

The simplest thing is to drive cars longer. I'm driving my grandpa's 15-year old car. He bought great cars. Leather seats & all. People are ridiculous with their cars.

Anonymous said...

Sure a hybrid is green, if you buy it used... I am with everyone that goes insane with "green consmerism" americans use f'ing 25% of the worlsd resources. Wanta a green house, rent a used one. Green car..keep yours and ride a bike. Save your money and stop feeding the consumer mashine that has killed this country. Think global, act local...

Anonymous said...

"I'm a rich man, I think like a rich man"

Yeah, right, Buster. And I could say I'm the Sultan of Brunei and wipe my ass with $100 bills you'd have no way to prove I'm lying.

"On the Internet nobody knows you're a dog."

Anonymous said...

Nowadays people in my subdivision drive back and forth all day long always running to the store or to the school for something.

Friends of ours who have middle-school or early high-school-age kids who are too young to drive themselves seem to spend every waking moment chauffeuring the brats around to soccer practice, baseball practice, softball practice, riding lessons, music lessons, etc., etc., etc. Not only is this a huge waste of gas, it's an enormous waste of time.

A few years ago Sears auto department had a TV ad with the line "Because your life revolves around your car ..." Having your life revolve around your car is a shitty way to live -- more like a living death. I'd rather have my life revolve around my family, my work, my faith, my politics, volunteer work, fishing -- anything but my car. Maybe if gas gets expensive enough, Americans' live will stop revolving around their cars. And that will be a good thing.

eyepublius said...

she bought a late-model Passat for her daily 10 mile round trip to work. So she spent $14,000in order to save $40 on that weekly fill up.

At that rate the Passat will pay for itself in 6.7 years -- less if the cost of gas rises higher, which I'm sure it will.

Don't understand why she kept the Suburban, though. As far as that goes I don't understand why anybody would want one in the first place.

Quimby said...

>> Yeah, right, Buster. And I could say I'm the Sultan of Brunei and wipe my ass with $100 bills you'd have no way to prove I'm lying.

>> "On the Internet nobody knows you're a dog."

We all KNOW Buster is a dog! Buster exists online and is someone's alter ego. Who Buster is in real life is unknown (and we don't really care). That motherfucker is the MASTER of "my-kind-of-rants" and we're glad to have him back.

RANT ON BUSTER-MAN! I haven't laughed so hard in weeks......

Anonymous said...

"Don't understand why she kept the Suburban, though."

Well, you can continue to spend $100 for a fill-up, sell the vehicle for a fraction of the original cost, or park it in the driveway for occasional use. A lot of people are doing the latter.

Anonymous said...

Well, you can continue to spend $100 for a fill-up, sell the vehicle for a fraction of the original cost, or park it in the driveway for occasional use. A lot of people are doing the latter.

*

How about riding the fucking bike to the store? How about going shopping once a week. I know fucking women in Bend, who go to Newport Market 4-6 times a day!!

The whole fucking 'CALI' lifestyle of Bend is to be driving.

Why buy the 20 gal fuel fill tank in the first fucking place? Why do these bitches need 8LB fucking road-hogs just to go back & forth to the market all day?

Sorry to be vulgar and hard, but the mother fuckers of BEND aren't even asking the right questions.

p.s. don't get me fucking WRONG, I live with one I'm a few blocks from Newport and my fucking wife will drive there!!! I always walk. Period.

Anonymous said...

>> Yeah, right, Buster. And I could say I'm the Sultan of Brunei and wipe my ass with $100 bills you'd have no way to prove I'm lying.

*

This is an essential truth, but essentially I had made my first million by twenty, and for the life of me I could never understand fame or fortune, I want anonymity. On the street I'm frequently mistaken for homeless. The cops always fuck with me on my 30+ yr old mtn-bike when riding along the river. They always stop me for some stupid fucking reason. That is how fucking low I dress and act. It's my comfort zone.

Essentially for me its IDEAS, I don't give a FUCK about people or myself.

I don't care WHO I am or WHO Homer is, all I care about is ideas. The gist of the idea is someone TELL BUSTER when he's wrong about what he says about fucking BEND!!! That is the issue.

Instead we have BEM saying "How vulgar", or some other fucker saying "Who is this pinball wizard". Let's get back to debating the fucking BEND ECONOMY. All else is fucking BULLSHIT.

It's obvious to me that NONE of you fuckers are rich men, if you can't tell from my world perspective. No I don't wipe my ass with $100 bills, especially knowing the 'pussy' was quite likely blowing coke the night before with said bill with all the normal man-twats.

I rarely spend money, except on toys, and I'm a firm believer that he with the most toys wins. I maintain ALL my own toys.

Anonymous said...

Nowadays people in my subdivision drive back and forth all day long always running to the store or to the school for something.

*

I concur it drives ME fucking crazy in this town. Not like it used to be.

I frequently eat all over town with friends at their homes. I live almost next to Newport, and I always say "Can I pick something up?" They say "NO", then I get their and the wife is just left "SHOPPING" for some stupid thing like pickles or mayonnaise, and I scratch my head thinking I just offered to pick up stuff. It's always like this, I'm confident that 90% of BEND just drives to the fucking store because its a habit like picking the nose.

Almost all my friends in Bend live in BUM-FUCK suburbia, I live near downtown. When I go to friends houses its easy to bring stuff. When they come to my house its easy to walk to any Bend restaurant. I never fucking DRIVE unless I'm heading out of town. Even when I go to the airport to fly up to Canada to fish I ride my bike to the airport. I fly because I hate to fucking drive, I hate traffic. I hate the nut-cases passing on all the blind passes crossing the cascades.

I pray for $20/gal gas everyday so the madness ends.

Anonymous said...

Yes, the pollution from making the electricity is generated elsewhere but it is still far less pollution per mile than burning gasoline in your car.

*

Most electricity produced in the USA is by coal, and it is one of the most inefficient means available of producing electricity. Its only favorable because the USA has some of the largest coal deposits in the world.

Burning coal in someones else's hood so you can 'plug-in' your EV, is a crock of fucking shit if you think your GREEN.

Anonymous said...

Toyota further claims that the nickel-metal hydride (NiMH) battery packs

*

"Toyota says" thats the give-away right there.

I'm a fucking physicist. I have been working with NiMH battery's for +20 years and they have a 4-6 yr life, and the cycles aren't that many ( discharge&charge ). Sure some cunt can drive a new one back & forth across the country 15 times and put on 200k and they can say got 200k on a set of battery's.

These hybrids aren't even 5 yrs yet, just fucking wait another few years.

The battery problem is the NUMBER-1 problem in this biz, batterys really haven't gotten that much better than the 1800's. Probably the paladium sponge hyrogen fuel cell is-was the best possible, but the volatile problems are incredible.

"Toyota says" that says it all, I'll say one thing "TIME SAYS IT ALL".

These are all disposable cars, and the batterys will fail all it once, and most of these people will not afford to replace the batterys so the auto's will get junked. Look at the fucking laptops, even the apple 6 mos, and its warranty time, get 1-2 yr's, and these are the best batterys we can make.


It's all about toxicity, all these batterys as someone earlier said so that all you pigs can continue to drive 10 times a day shopping and do 0-60 in 3 seconds on a elec car. These batterys are the most toxic thing on the planet, the burial of this shit is going to be as BIG as spent nuclear fuel. ALL this talk about todays GREEN is tomorrows FUCKING ECO-NIGHTMARE.

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

"Burning coal in someones else's hood so you can 'plug-in' your EV, is a crock of fucking shit if you think your GREEN."

Unless you sign up for Pacific Power's Blue Sky program - www.pacificpower.net/bluesky/ - where all of your power is from renewable sources. It costs more, but I've been paying it for a few years. With energy we need to either pay a little more now, or a lot more later.

Anonymous said...

Anyone heard about hondas new hdrogen powered cars?

Anonymous said...

These hybrids aren't even 5 yrs yet, just fucking wait another few years.

*

Dude you may be a fucking physicist, but you sure don't know how to do subtraction. The Prius has been on the road since 2000 and it's now 2008. Try again.

$20/gallon gas will send even more of our money to the Saudis, so keep praying to Allah if you want.

timothy said...

>>Unless you sign up for Pacific Power's Blue Sky program - www.pacificpower.net/bluesky/ - where all of your power is from renewable sources. It costs more, but I've been paying it for a few years. With energy we need to either pay a little more now, or a lot more later.

That makes no sense to me. It's just accounting, isn't it? Electricity is fungible. You're just making a voluntary donation to your power company.

Quimby said...

>> You're just making a voluntary donation to your power company.

Ain't this the truth? It's the same with this Carbon Credits BS. I can't believe people are so gullible. And the guilt complex they carry. Unbelievable.

Anonymous said...

Pacific Power's Blue Sky program - www.pacificpower.net/bluesky/ - where all of your power is from renewable sources.

*

Boy we got a live one here. Yeh, all sign up for bird killing and other high-tech solutions to basic problem of power gluttony.

Fuck, since we're on the subject, and I did this years ago for the fuck, and its still setup to go whenever I want.

Buy a couple solar panels on the net, and a charge controller, and a few old car batterys, and go to harbor-frieght and buy a 2k inverter for $100, and you can run your WHOLE FUCKING house for free 24/7. At a cost of about $600 for two panels ( sq-meter 3AMP ), and a $50 each for battery, $5 for charge-controller, and $100 for inverter if you must have 110. Toss in a few radio-shack diodes so your panels don't drain the battery's at night, and your fucking DONE. YOUR OFF the grid.

The diodes are required so your battery gets charged during day, and the batterys don't feed back the panel at night. The controller is too regulate the voltage to the battery, as the panel puts out 18v-24v depending on solar energy.

The number of battery's is dependent upon how late you stay up reading at night using lamps. The system pump will power water for solar heating. If you want a fridge just use a propane fridge, and use a low current model that has a solenoid on the gas line for temp-control. A tight ass can get one at any RV junk-yard for almost nothing.

Works fine for me, but the wife couldn't IRON.

She could have done it the old fashion way of a block of metal on the wood-stove, but NO,

Anyway, for not much money anybody can be completely off the grid, and generate plenty of power for basic needs in a typical home. I have tested my system all over Oregon, and AZ, and lots of places and it always works fine.

The fact that people bitch and moan about being dependent on utilities boggles my mind.


Quite often when I'm alone at home I switch over to my solar system when the wife isn't home. If I take off on the road in my RV, I'll toss it all in a box, and then set the system up on the roof of the RV camping out in eastern-oregon or wherever weeks at a time, and never have a power problem.

In town I never have a power problem. I find that I can never drain two 1200 AMP-HOUR batterys during the night, unless I leave all the lights on, which is stupid. Power management like a boat is essential so you don't drain both battery's, as you'll always need current in the system to keep the fridge solenoid activated. I was serious about 24/7 off grid I would have two sets of batterys, and alternate daily, so there was always automatic power backup in case of a failure or over-drain of a set. Power management such as this can add years to the batterys. Good high AMP-HOUR batterys can be found at any truck stop, just ask around. I'm very fond of CAT 4D battery's which are almost impossible to drain.

Note I'm talking good old fashion lead-acid here, which are highly recyclable, and generate no toxic waste like most 'modern' battery systems. This is what I mean when I say battery 'R&D' hasn't improved since the 1800's.

Anonymous said...

The Prius has been on the road since 2000 and it's now 2008. Try again.

$20/gallon gas will send even more of our money to the Saudis, so keep praying to Allah if you want.



*

Bitch The SAUDI's is the HOUSE-of-BUSH. Any money sent to the Saudis is a donation straight to the CHENY-BUSH tribe.

Who was the only people allowed to fly post 911, the royal saudi family staying with bush, who financed bushes baseball stadium years ago? Saudi? What was the family name? Bin Laden.

Bin Laden is the largest construction company in Saudi, and great grandy daddy bush post WWII setup the bin-Laden family. Usama (Osama) is one of 50 sons of the current Bin-Laden patriarch. Usama got his engineering degree from a US university.

In summary most of that $20/gal is staying right here in Nazi-Land, it just takes a circuitous route.

Regarding my math, I didn't start seeing any PRIUS pussy around here until 4-6 years ago, they might have come out whenever, but they didn't really become popular until four years ago. When I say '4' years ago I'm talking critical mass, that is all that matters. The fact there are a few proto-types cruising around in cali in 2000, is an irrelevant fact in my book.

Anonymous said...

Anyone heard about hondas new hdrogen powered cars?

*

Nobody knows how to dispense hydrogen safely.

You just can't have it in bottles, the best thing is a solid metal substrate that can sponge hydrogen like palladium, a very expensive proposition.

Talk about 'terrorism' holy Sheeet, when folks start driving around with hydrogen bombs in their cars we're going to see hindenbergs every few days, its some scary fucking shit.

Like a lot of things there are a lot of good ideas, an if YOUR RICH you can do it today.

This is all an old argument. Like I said six months ago on this argument. Just get a top of the line TDI diesel engine, and build your own auto that gets 60-80mpg, you'll not get any better or safer. Kerosene ( diesel ) being a flash-point is effectively non-explosive, and there is no higher source of energy density that PURE OIL, and FUCKING OIL.

In EUROPE almost everybody has TDI's in their autos getting incredible mileage, only here in the FUCKING USA where everyone is fed shit, and the WHOLE system is designed for MAXIMUM consumption do you find such fucking waste.

A light composite frame/chassis with a TDI, can easily do 100 mpg. There's people doing it today.
Just make sure it looks like all rest of the cars on the road and nobody even knows what you got.

Anonymous said...

"Burning coal in someones else's hood so you can 'plug-in' your EV, is a crock of fucking shit if you think your GREEN."

Generally incorrect; see here:
http://news.cnet.com/Plug-in-your-hybrid,-pollute-less/2100-11389_3-6066360.html

Further, even in areas that are heavily dependent on coal for electricity, plug-in hybrids recharge overnight when the power plant is generating excess electricity anyway that is not otherwise stored anywhere.

Anonymous said...

"That makes no sense to me. It's just accounting, isn't it? Electricity is fungible. You're just making a voluntary donation to your power company."

The power company adjusts its input mix based upon usage by its customers who signed up for renewable--so it really does make a difference.

PopGoesBend said...

"That makes no sense to me. It's just accounting, isn't it? Electricity is fungible. You're just making a voluntary donation to your power company."

It is accounting, and the power I am using may or may not be the power from renewable sources. BUT... they are agreeing to buy the amount of energy I use from renewable resources. If half the customers did this than they would buy half their energy from renewable resources.

"Yeh, all sign up for bird killing and other high-tech solutions to basic problem of power gluttony."

Show me the real stats that show that slow-speed turbines kill birds. Those things aren't spinning like an airplane prop.

And no, just because I pay for renewable power does not mean I feel like I can leave lights on and use inefficient appliances. It's all part of the solution. Just like eating local produce from the farmer's market, parking your car and riding a bike. Parts.

As far as solar - yes, I plan on doing solar when I own my next home. But to tie this into the original context of the blog - I sold my house last year and until it's a much less fucked up time to buy a house I will continue to rent.

http://www.endofsuburbia.com/
http://escapefromsuburbia.com/

bruce said...

The Pentagon has drafted a secret plan that would send U.S. special forces into the wild tribal regions of Pakistan to capture or kill Osama bin Laden and his top lieutenants, but the White House has balked at giving the mission a green light, The New York Times reported today.

The Bush administration, which has seven months left in its term, gave the go-ahead for the military to draw up the plan to take the war on terror across the Afghan border and into the mountains of Pakistan where bin Laden is believed to be hiding, according to the newspaper.

Intelligence reports have concluded that bin Laden has re-established a network of new training camps, and the number of recruits in those camps has risen to as many as 2,000 in recent months from 200 earlier this year.

Although the special forces attack plan was devised six months ago, infighting among U.S. intelligence agencies and among White House offices have blocked it from being implemented, the Times reported.


Source: http://abcnews.go.com/GMA/story?id=5275304&page=1

"WASHINGTON — Late last year, top Bush administration officials decided to take a step they had long resisted. They drafted a secret plan to make it easier for the Pentagon’s Special Operations forces to launch missions into the snow-capped mountains of Pakistan to capture or kill top leaders of Al Qaeda.

Intelligence reports for more than a year had been streaming in about Osama bin Laden’s terrorism network rebuilding in the Pakistani tribal areas, a problem that had been exacerbated by years of missteps in Washington and the Pakistani capital, Islamabad, sharp policy disagreements, and turf battles between American counterterrorism agencies.

The new plan, outlined in a highly classified Pentagon order, was intended to eliminate some of those battles. And it was meant to pave a smoother path into the tribal areas for American commandos, who for years have bristled at what they see as Washington’s risk-averse attitude toward Special Operations missions inside Pakistan. They also argue that catching Mr. bin Laden will come only by capturing some of his senior lieutenants alive.

But more than six months later, the Special Operations forces are still waiting for the green light. The plan has been held up in Washington by the very disagreements it was meant to eliminate. A senior Defense Department official said there was “mounting frustration” in the Pentagon at the continued delay."


Source: http://www.nytimes.com/2008/06/30/washington/30tribal.html?ref=world

Anonymous said...

Regarding my math, I didn't start seeing any PRIUS pussy around here until 4-6 years ago, they might have come out whenever, but they didn't really become popular until four years ago. When I say '4' years ago I'm talking critical mass, that is all that matters. The fact there are a few proto-types cruising around in cali in 2000, is an irrelevant fact in my book.

*

Dude you may be stupid but at least you're consistent. The Prius prototypes were back in the 90's. I bought a production Prius from a Toyota dealer in Portland in 2001 and it's the best car I've ever owned. Far from being a "disposable car" as you suggest, it's well made and hasn't had any problems. Your comments about the Prius are so far off base they're laughable.

bruce said...

Judicial Watch Releases New FBI Documents: Osama bin Laden May Have Chartered Saudi Flight Out of U.S. after 9/11

(Washington, DC) -- Judicial Watch, the public interest group that investigates and prosecutes government corruption, today released new documents from the Federal Bureau of Investigation (“FBI”) related to the “expeditious departure” of Saudi nationals, including members of the bin Laden family, from the United States following the 9/11 attacks. According to one of the formerly confidential documents, dated 9/21/2001, terrorist Osama bin Laden may have chartered one of the Saudi flights.

The document states: “ON 9/19/01, A 727 PLANE LEFT LAX, RYAN FLT #441 TO ORLANDO, FL W/ETA (estimated time of arrival) OF 4-5PM. THE PLANE WAS CHARTERED EITHER BY THE SAUDI ARABIAN ROYAL FAMILY OR OSAMA BIN LADEN…THE LA FBI SEARCHED THE PLANE [REDACTED] LUGGAGE, OF WHICH NOTHING UNUSUAL WAS FOUND.” The plane was allowed to depart the United States after making four stops to pick up passengers, ultimately landing in Paris where all passengers disembarked on 9/20/01, according to the document.

Overall, the FBI’s most recent document production includes details of the six flights between 9/14 and 9/24 that evacuated Saudi royals and bin Laden family members. The documents also contain brief interview summaries and occasional notes from intelligence analysts concerning the cursory screening performed prior to the departures. According to the FBI documents, incredibly not a single Saudi national nor any of the bin Laden family members possessed any information of investigative value.

Moreover, the documents contain numerous errors and inconsistencies which call to question the thoroughness of the FBI’s investigation of the Saudi flights. For example, on one document, the FBI claims to have interviewed 20 of 23 passengers on the Ryan International Airlines flight (commonly referred to as the “Bin Laden Family Flight”). On another document, the FBI claims to have interviewed 15 of 22 passengers on the same flight.

“Eight days after the worst terrorist attack in U.S. history, Osama bin Laden possibly charters a flight to whisk his family out of the country, and it’s not worth more than a luggage search and a few brief interviews?” asked Judicial Watch President Tom Fitton. “Clearly these documents prove the FBI conducted a slapdash investigation of these Saudi flights. We’ll never know how many investigative leads were lost due to the FBI’s lack of diligence.”

U.S. District Court Judge Richard W. Roberts ordered the FBI to resubmit “proper disclosures” to the Court and Judicial Watch, having previously criticized the adequacy of redaction descriptions, the validity of exemption claims, and other errors in the FBI’s disclosures. Incredibly, the FBI had previously redacted Osama bin Laden’s name from the records in order “to protect privacy interests.”

The latest version of the FBI documents, obtained under the provisions of the Freedom of Information Act and through ongoing litigation (Judicial Watch v. Department of Homeland Security & Federal Bureau of Investigation, No. 04-1643 (RWR)) is available below.


Source: http://www.judicialwatch.org/6322.shtml

Ever feel like a pawn?

Anonymous said...

Bruce -- are you really, seriously posting that shit about special operations forces right now -- when we're in the middle of a dialogue on another completely different topic? Where, I repeat, where is the segue to this topic?

bruce said...

Re: Where, I repeat, where is the segue to this topic?

In Buster's inimitable style:
Bitch The SAUDI's is the HOUSE-of-BUSH. Any money sent to the Saudis is a donation straight to the CHENY-BUSH tribe.

Who was the only people allowed to fly post 911, the royal saudi family staying with bush, who financed bushes baseball stadium years ago? Saudi? What was the family name? Bin Laden.

Anonymous said...

bruce pussy, just one variance on your bullshit posting of usama-bin-laden (OBL) ( daily-kos mis-information )

First all all the FBI has NO fucking warrant for his arrest, as the FBI has long said, there is NO conclusive proof that usama had anything to do with 911, and the fbi has said so, I repeat OBL isn't even on the most wanted list.

Second, it was ISRAEL from day one of 911 that said "Al-Queda". By Israel I mean the MOSSAD, the CIA within ISRAEL that was setup by the CIA.

Three, in Persian "Al-Queda", means the "Base", and the base was the CIA base setup by CIA lead BUSH#2 when he was CIA director under RAYGUN. Thus to say Al-Queda did 911, is simply in PERSIAN to say that the CIA did 911. OBL was the money man for Al-Queda, BUSH (CIA-DIR) having long family history of working with saudi family, used bin-laden money and OBL as a courier.

Israel of course wants OBL out, but BUSH family setup the bin-laden biz back post WWII in the first place, and old grand-daddy #1-BUSH was a hard core fucking nazi, like ford, like hearst.

Things are a lot more fucking complicated than your little posts copied from the daily-kos implies.

I have been involved in the military since the 1960's, and I know a lot about internal op's I had the pleasure to work with Delta Force father beckwith on his return of the failed Iran hostage fiasco in late raygun/carter transistion, so called october surprise. Beckwith himself told me that the helicoptors were designed to fail, that they wanted machines that could tolerate a dust storm which was common in that season, and his request was denied. Top dog of the Army father of DELTA, and his mission was a planned failure.

Ever since Charlie Beckwith was murdered by the CIA/FBI the entire US special-op fraternity has been mad as hell in this country. I'm quite surprised there hasn't been 'military take-over' in the USA.

I personally believe that ALL the US-MIL fratracide going in IRAQ is about killing as many special-ops people as possible, to prevent a military-takeover.

Post WACO delta force men were used to kill the branch-davidians, beckwith was so pissed he went down there and pulled his boyz out as their was NO drug nexus. Within a fews months of his actions, he died of natural causes. I repeat he died of 'natural causes'.

McViegh was a real special operations guy, and was trained by the army in explosives, and took took out the FBI office that had sent DELTA the bogus drug nexus violation of posse-commitatus.

Things are much more complicated than they appear.

In answer to your question, yes special OPS WANTS OBL, but more as a goal, of course BUSH doesn't want him out, because the bin-laden family would be outraged,

Personally my bet right now today OBL in Saudi, creating his own 50 sons, and having a good life, laughing his ass off at the whole show.

Lastly, I just want to say that Charlie Beckwith was one of the greatest soldiers that I have ever met. That taking him out proved to me that ANYONE can be taken out at anytime.

Anonymous said...

That's credible information buster, thanks for posting. I'm surprised BUSH hasn't taken you out yet. Watch your back buddy!!!

Quimby said...

>> Watch your back buddy!!!

He won't have to as Homer doesn't just roll over when the feds come asking for IPs. BendBB on the other hand......

That said, it's getting DEEP in here.

Regarding this Bin Laden dude having 54 children, jeez. What is it with men.

It seems that the end goal for all men is power, money, and about 20+ wives to screw. Whenever you get a whacky religion, it usually circles back to diddling kids or having lots of pussy close at hand.

Anonymous said...

"It's obvious to me that NONE of you fuckers are rich men, if you can't tell from my world perspective."

I may not be a rich man but I know a rich man when I meet one and I know bullshit when I hear it.

Lance Armstrong said...

"Even when I go to the airport to fly up to Canada to fish I ride my bike to the airport. I fly because I hate to fucking drive, I hate traffic."

Fuck'n-A dude. You the man! Me too. I ride my bike to RDM if I'm catching a flight somewhere far away, like China. But dude, really, Canada? It's not that much further. I just keep pedaling and I'm over the border in no time. Don't be such a pussy.

Anonymous said...

The Pentagon has drafted a secret plan that would send U.S. special forces into the wild tribal regions of Pakistan to capture or kill Osama bin Laden and his top lieutenants, but the White House has balked at giving the mission a green light, The New York Times reported today.

The oiligarchy (sic) doesn't want OBL captured or killed -- they'll need him again the next time they want "another Pearl Harbor" to gin up support for a phony war.

Anonymous said...

Fuck'n-A dude. You the man! Me too. I ride my bike to RDM if I'm catching a flight somewhere far away, like China. But dude, really, Canada? It's not that much further. I just keep pedaling and I'm over the border in no time. Don't be such a pussy.

*

Remember buster is rich but he's also old so he doesn't have the energy to bike all the way to Canada after servicing his 50 wives. How does this relate to the housing bubble? All those 1000 sf "rentals" buster claims to own are actually housing for his wives, one for each of the 50. That's why we had a real estate bubble in Bend, because buster kept adding more wives so he had to buy more houses.

Quimby said...

wife=toy

Now I get it!

Anonymous said...

wife=toy

Now I get it!

*

A photo of buster and 21 of his wives.

http://tinyurl.com/48luq9

bruce said...

Buster, I agree with you. Except that wasn't dailykos stuff, if you checked the sources. Our one mainstream media and Judicial Watch docs from the FBI.

We're fucked. But that doesn't mean we can't yell and scream and fight against it a little.

I'm really curious about how the next 8 months or so is going to play out.

bruce said...

Buster, I'm jealous you actually got to know Beckwith. The guy is a legend, and spoke bluntly. It still makes me laugh a little thinking about his "...me and my boys think you are as tough as woodpecker lips" comment right to Jimmy Carter. I couldn't believe that one.

Anonymous said...

Just heard an unconfirmed as yet rumor that Bend city council is considering deferring sdc charges for builders in order to "stimulate" the local economy. Anybody else heard this? If it is true, they have sunk to an all time low on the IQ scale.

Anonymous said...

"Just heard an unconfirmed as yet rumor that Bend city council is considering deferring sdc charges for builders . . . ."

There have been a couple of articles in the Bulletin about this already--one on 6/3 and one on 6/28.

Excerpt from 6/3:

"In a move that could save builders thousands of dollars and have a small effect on new home prices, Bend and Redmond may defer the collection of growth-related fees on new buildings.

The cities collect the fees, which are called system development charges, on all new homes and businesses to pay for the increased demand on infrastructure created by the projects.

On a typical single-family home in Bend, that totals nearly $13,500, which is money many builders must finance with a high-interest construction loan, said Andy High, the government affairs director of the Central Oregon Builders Association.

Right now, builders must pay those fees, which can include those for streets, sewers, water lines and parks, when they pick up their building permits — before construction begins.

Redmond and Bend are both considering plans that would give builders at least six months to pay, after a heavy lobbying effort on COBA’s part."

Excerpt from 6/28:

"The Bend City Council will get a look at a new plan Wednesday that would give builders a nine-month window to pay system development charges, a move designed to help residential and commercial builders get through the current economic downturn.

While many of the efforts have been in place for a while, there are two new options the city is extending to builders for at least the next year, Community Development Director Mel Oberst said. The council will get a briefing on the issue at a work session Wednesday evening.

Builders currently have to pay their SDCs, which can top $13,000 for a single-family home, when they pick up construction permits.

A new plan the council would first have to approve would give builders up to nine months after picking up permits to pay their SDCs, Oberst said.

For homes that can be built in that amount of time, builders hope they would be able to pay the SDCs with revenues from selling the completed homes, rather than financing the SDCs upfront with high-interest construction loans."

There is also an editorial in today's Bulletin:

"Builders in Central Oregon are having a tough time of it these days, although a proposal that will be discussed today by the Bend City Council should give them at least temporary relief. The result of discussions between city officials and the Central Oregon Builders Association, the proposal won’t cost the city anything, but it will give builders a bit of breathing room.

As things now stand, builders must pay all the city’s systems development charges up front, before permits can be issued. If the council accepts the Community Development Department’s proposal, that will change. Builders could take as long as nine months after receiving permits to pay SDCs.

It’s a good deal for builders. No longer will they have to finance as much as $13,000 — more for buildings other than single-family residences — when they begin work on a project. Rather, they will have nine months to come up with the fees, and in some cases they’ll likely be able to have a home sold and fees collected from the purchaser before they do. The change will save them money by reducing or eliminating the time they’ll owe SDC funds to their lenders.

And, while the change will delay the collection of fees temporarily, there will be no reduction. City officials are confident they can handle any temporary dip that might result if most builders opt to hold on to SDC money for as long as they can. Meanwhile, the city will place liens on properties until SDCs are paid, an insurance policy against default.

A second change the Community Development Department wants also makes sense. Currently, builders of commercial projects must complete roads and other utility work before actual construction begins. If the council approves, they will be able to work on those things even as they’re building their projects. Again, the shift is likely to save builders money and, as an added bonus, time.

Both changes are the result of continuing talks between the city and area builders, both of which have been willing to compromise. The changes will give builders a bit of breathing room at a time when it’s most appreciated, while the city will have contributed to the good health of a vital piece of the local economy that supports it."

Anonymous said...

Thanks for the info. A buddy mentioned it to me but I couldn't find anything on it.

timothy said...

Just went through the Shevlin Meadows neighborhood. Holy moly. That has to be the highest concentration of houses for sale in the city that I've seen.

Cheapies on the bottom for sale. Scads of them. And the expensive houses up top, too. For sale for sale for sale. Anyone else seen that scene?

timothy said...

Trouble in Britain...

British households are now more indebted than those of any other major country in recorded history, it has emerged.

Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.

Michael Saunders of Citigroup warned that - at 173pc of household incomes - the debt burden is higher even than Japan's when it peaked in 1990, before more than a decade of deflation. Philip Shaw of Investec said: "Although we take the view that the economy will avoid a recession, our confidence is ebbing."

Anonymous said...

I worked on a lot of those houses in shevlin ridge and always wondered how half of those people were able to afford them. Several of them that I talked to had just moved from cali and didn't even have jobs. One guy in there was a "consultant" for a company in california. I was always suspect of a lot of folks in there. It seemed like they all had sold houses somewhere else and sank a ton of their equity gains into those plces. I would often find myself thinking,"what in the hell are these people going to do for work when they run out of money". I thought I had missed the boat just being a regular working stiff, but now I suspect that there are some seriously desperate people trying to unload those places.places

Marge said...

Hey,
I am sure I saw Buster today on the Portland Av bridge. The bike was there and some guy that dresses down with a fishin pole and line hung over the bridge.
Buster was that you? Must not like the Bend Fish Place....gotta catch yer own!

timothy said...

Bend Considers Builders Stimulus Package

http://www.kohd.com/article.aspx?id=43588

Anonymous said...

‘We might be an anomaly’
Bookings for the holiday weekend are reportedly strong, and businesses are seeing a surge of last-minute activity
By Jeff McDonald / The Bulletin
Published: July 03. 2008 4:00AM PST advertisement:


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Despite soaring gas prices and a lackluster national economy, Central Oregon’s tourism purveyors are expected to start making up some lost ground this weekend, according to tourism officials and businesses who say reservations for the Fourth of July weekend are on par with last year’s holiday.

That would be good news for the region’s estimated $570.7 million-a-year tourism industry, which relies on a brisk summer trade for a majority of its revenues, said Alana Audette, president and CEO of the Central Oregon Visitors Association, which markets tourism for the region.

The region’s resorts and vacation rental companies reported occupancy ranging from 70 percent to 80 percent for the weekend, which is comparable with last year, Audette said.

“We might be an anomaly,” said Audette, comparing Central Oregon with a national travel forecast last week by AAA Oregon/Idaho that predicted Fourth of July travel would decline for the first time this decade. “There’s still (room) availability out there, but we’re hearing solid projections,” Audette said.

Hoteliers are offering incentives and room discounts this summer, which is in contrast to last year when they were able to book higher summer rates because of the steeper demand, she said.

“Without a doubt, people are shopping around and negotiating for the best value,” Audette said. “It doesn’t come as a surprise for us. People are pretty savvy when they’re in the driver’s seat.”

At Fairfield Inn & Suites by Marriott, room rates are down 15 percent this summer and customers can get a $50 gas card by staying Friday, Saturday and Sunday, said Amy Reynolds, general manager.

“Sundays are hard to fill,” Reynolds said. “We’re going to sell out for the weekend, but our rate is lower than in years past.”

Other tourism-related businesses are seeing last-minute bookings and a surge of business now that summer weather has arrived.

“Our local business has had a slow start this year, and we never really had a spring,” said Brian Sykes, owner of Ouzel Outfitters, which provides one-day and multiday whitewater rafting trips on seven rivers in Oregon and Idaho.

Bookings are down 10 percent this weekend for single-day trips from last year but could match 2007 if the trend of last-minute reservations continues, Sykes said.

The region’s campgrounds have not seen any signs of slowdown this summer, according to two companies managing sites around the region.

“We’re not expecting any slowdown at all,” said Matthew McFarland, general manager of Hoodoo Family Recreation, which manages about 1,500 campsites around Central Oregon.

Hoodoo’s Central Oregon campsites are located at Lake Billy Chinook, on the Metolius River and in Sisters, as well as the Three Creeks area and the McKenzie River area, McFarland said.

“People aren’t flying from back East,” he said. “These are all local campers, but it’s more affordable for families to meet and go camping than to meet at Disneyland or Hawaii.”

The trend of vacationing closer to home is a significant part of what’s expected to be a busy weekend for campgrounds around the region, said Chris Havel, spokesman for the Salem-based Oregon Parks and Recreation Department.

The state agency manages Central Oregon campgrounds in La Pine and Tumalo, and at Prineville Reservoir and The Cove Palisades, Havel said.

Higher gas prices and the slowing economy haven’t affected campsite reservations in the region or around the state, Havel said.

The average camper travels about 95 miles from home, he said.

“It’s something we’re watching,” Havel said of the effect of gas prices on travel. “Much of the traffic in state parks is coming from Oregon rather than people coming across the country. We’re still doing very well.”

At Cultus Lake Resort, the stay-close-to-home approach to travel could provide more business from area residents seeking a cooler place to recreate, said Dan Campbell, co-owner.

The nine-week stretch between Fourth of July and Labor Day is critical for the resort, which generates revenue through cabin and equipment rentals and restaurant sales, he said.

Heavy snow delayed the opening of the Cascade Lakes Highway, which serves Cultus Lake and several other properties west of Mount Bachelor, until mid-June.

Typically, the road is open before Memorial Day weekend, Campbell said.

“Starting this weekend, there’s no doubt we’ll be busy,” Campbell said. “When the weather gets nice and the water warms up, we’ll get going.”

Interesting article I was at the lakes last weekend and most of the campgrounds - lava, cultis- crane that we checked out had tons of spots open and that might be because of the race but i don't think so.I camp a lot and have lived here 16 years compared to the last five and at this time of year there are not as many people in the woods. But time will tell.

IHateToBurstYourBubble said...

Bend looks to give builders break with 'stimulus'


Bend is working with builders on proposal to defer development fees, interest-free, in hopes of spurring more projects

Development fees could be deferred, without interest

By Jennifer Burns, KTVZ.COM

The economic slowdown has hurt nearly every industry and city across America.

Here on the High Desert, it's no different.

Bend City councilors were introduced Wednesday night to a local stimulus package for developers and builders to get the economy rolling again.

If you look far enough down any street in Bend, you'll see construction. But in recent months, some of the sites have been sitting at a standstill, leaving lots vacant.

Mike Murphy, an employee of Schumacker Construction, said, "At our office, we have subcontractors doing cold calls on a daily basis, just trying to get more business."

Murphy says the slow housing marketing is directly affecting the amount of work available to people in the trades.

He says hopes the city council will look at the stimulus package as a way to pick up speed in the commercial and residential building industry.

The main incentive in the package is to defer payments of system development charges for water, sewer, parks, and roads to later in the construction process.

"They are fees builders and homeowners pay that make up for the impact they have on the system," said Andy High, vice president of the Central Oregon Visitors Association.

The payments would be deferred for up to nine months, without interest.

Murphy says it would directly impact the cost of homes.

"It's especially effective in affordable housing, where we can transfer the savings to the owner," he said.

COBA officials hope it would sell new homes faster, and in turn get new housing projects under way.

High said, "The development we are at here, if you pull 20 permits on the houses, that $200,000 you have to borrow from the bank just to pay for SDC costs."

City officials say the package could potentially bring in additional revenue in the planning and building departments through permits, property taxes, and building fees.

Bend City Manager Eric King says it's an attractive proposal, but the city will be cautious in its decision, so it doesn't end up with a financial burden.

King also says officials will have to find other places to get money to pay for the SDCs, until the builders deferment period is up. That would stretching the budget in the near future, but possibly bring in more revenue down the road.

If the stimulus package is adopted, it would be in place for the next 12 months, in hopes the market will pick back up by then.

The Central Oregon Association of Realtors is also in support of the stimulus package.

IHateToBurstYourBubble said...

OK, here's a low-hangin' prediction:

1) They adopt this boondoggle.
2) Virtually EVERY SINGLE builder who does build a house, will BORROW TAXPAYER MONEY
3) THEY WILL NEVER PAY IT BACK.

IHateToBurstYourBubble said...

Look at how local builders ever view SDC charges: They're OPTIONAL, something to be avoided, and THEY WILL BE AVOIDED, because City Council is a bunch of builder LACKEY'S. Remember electing Cappell?

Builder bought & paid for schill. That's bascially this whole towns local gov't.

Awesome though, is the fact that NOTHING WILL CHANGE except there will be more supply of homes, making the current glut WORSE, and NO ONE will buy these homes.

This is about as bad as the perpetual motion machine guy: A complete lack of understanding about supply & demand. These dumb butts have never had a single day of real world ANYTHING.

timothy said...

Why don't we just get it over with and start a huge gov't program that pays builders to sit at home and pick their noses?

timothy said...

>>‘We might be an anomaly’

Headline sounds optimistic. Actual story makes it all sound like a disaster. FACTS quoted suck, but opinions and quotes are gleeful.

It's sort of like, "It's been awful, but it'll be awesome tomorrow."

timothy said...

What's funny is you could make the BendBulletin a completely different paper by replacing just the headlines. The travel story could have had this headline:

Bend's Travel Economy Strains as Rafting Bookings Down 10%, Room Rates Down 15%

Duncan McGeary said...

Not only that, but they're only getting these results after discounting, which is often a case of one step forward, two steps back.

Anonymous said...

The Bulletin

Bend homebuilder makes staff cuts

Published: July 03. 2008 4:00AM PST

Bend-based homebuilder Pahlisch Homes said Wednesday it laid off nine of its employees in June, close to 30 percent of its staff, as a result of the housing slowdown.

“We were holding on as long as we could, and now we have to have a work force that corresponds with the work out there,” said Pahlisch sales manager Dan Pahlisch.

Eight of the employees were site supervisors. The company also laid off one office worker. Pahlisch said the employees will be invited back once market conditions improve.

Pahlisch said construction is continuing at its 10 active housing developments around Central Oregon, including StoneGate in Bend, Crescent Creek in La Pine and FieldStone Crossing in Redmond.

Duncan McGeary said...

So the actual guys who supervise the actual building sites are laid off; and one office worker.

Kind of tells you what's going on....

Quimby said...

>> FieldStone Crossing

Cripes....what is it with this shameless ripping off of homesite names? Have some originality.

Fucknut Crossing
Tuscany Crossing
California Crossing

What's next?

Knott Crossing at the Shops of the Old Landfill District????

bruce said...

Re: builder's SDC deferral

Nobody asked the obvious question: even though the city plans to put liens on the housing to guarantee payment, what happens when they don't sell.

Anonymous said...

"And, while the change will delay the collection of fees temporarily, there will be no reduction."

More bullshit math from The Bullshittin. The city will be giving a nine-month, interest-free loan of $13,500 per house to the builder. The only collateral will be the house. At best the city loses nine months interest on the $13,500. Worst-case scenario, the city loses the $13,500 PLUS the interest and ends up owning a crapshack that nobody will buy.

Yeah, looks like a real "win-win" here ...

IHateToBurstYourBubble said...

Not only that, but they're only getting these results after discounting, which is often a case of one step forward, two steps back.

It is an easy feat to lose money. Selling a dollar for 50 cents.

But, by God, they filled 'em!

bruce said...

Re: So the actual guys who supervise the actual building sites are laid off; and one office worker.

Just saw the guy who rented our first place on Baltimore for awhile, Ryan, on the NOD's list. He was a site supervisor for one of the Portland-based builders, and bought in LaPine 12-18 months ago...

Anonymous said...

Knott Crossing at the Shops of the Old Landfill District????

"The Crapshacks of Knott Crossing at the Shops of the Old Tuscan Landfill District in the Village by the River"

Anonymous said...

"The Crapshacks of Knott Crossing at the Shops of the Old Tuscan Landfill District in the Village by the River"

Yes, yes, I like it . . . I'll even suggest some street names:

Arezzo-Deschutes Avenue
Grosseto-Jefferson Way
Pistoia-Klamath Drive
Prato-Cascade Boulevard
Siena-Malheur Road
Livorno-Crook District

You, see the trick is to combine a province of the Tuscan Region of Italy with a county in Oregon. I call it "Mediterranean Rustic."

timothy said...

More building won't merely create more empty houses, it will create more foreclosures as the selling situation gets more hopeless.

IHateToBurstYourBubble said...

More building won't merely create more empty houses, it will create more foreclosures as the selling situation gets more hopeless.

Well, I guess there is some upside.

But I'm still not totally convinced.

Anonymous said...

excerpt from the WSJ:

Bear Stearns Assets Accepted
By Fed Lose $1 Billion in Value
By SUDEEP REDDY
July 3, 2008 8:11 p.m.

Assets the Federal Reserve agreed to accept in March from Bear Stearns Cos. to facilitate its sale to J.P. Morgan Chase are now worth about $1 billion less than estimated at the time of the transaction.

The decline, to $28.9 billion from $30 billion in mid-March, is not yet enough to put U.S. taxpayers on the hook for any losses; J.P. Morgan, under an agreement with the Fed, would take the first hit once the assets are sold. In addition, the assets are expected to be sold over the coming decade in a way that's designed to minimize losses and market disruption.

Late last month, the Fed contributed $28.8 billion to a newly created firm, Maiden Lane LLC, to finance the assets and provide a loan. J.P. Morgan supplied $1.15 billion, which would cover the first losses from any decline in the assets' value. Maiden Lane is a street running alongside the New York Fed's headquarters.

The Fed agreed to extend the loan in March with Bear Stearns on the brink of bankruptcy. Central bank officials feared that the sudden downfall of the nation's fifth-largest investment bank would wreak havoc on broader financial markets and the economy.

The Bear Stearns portfolio at the time largely contained mortgage-related assets, which are riskier than other investments, but did not include subprime mortgage debt. It was originally valued in part by Bear Stearns, while the recent valuation was conducted by the Fed and its adviser, BlackRock Inc. The Fed plans to release an updated value of the portfolio quarterly.

Lawmakers have appeared uncomfortable with the transaction. "What it looks like ... is that we've socialized risk and we've privatized reward," Sen. Christopher Dodd (D., Conn.), chairman of the Senate Banking Committee, said at an April hearing while acknowledging that the Fed had little time to carry out the deal. "We're on the hook. Hopefully it doesn't happen, but we're on the hook."

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