Builders may get more time to pay Bend SDCs
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"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."
I just sit & shake my head at this sort of thing. From the comments:
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 ...
Anonymous said...excerpt from the WSJ: Bear Stearns Assets Accepted By Fed Lose $1 Billion in Value "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."
What the hell is going on in this country? We are doing exactly what Dodd said. For the love of Christ, this guy is Democrat!
We are trying to turn fundamental economics on it's head. Commenter "wsj" posted a really great piece about Ted Forstmann. Here's one of several great lines:
"You've got [Treasury Secretary Henry] Paulson saying 'Oh, you see the good news is it's over.'" The problem, according to Mr. Forstmann, is that it's far from over. "I think we're in about the second inning of this." And of course, the credit crisis wasn't even supposed to last this long. "This all started in August [of 2007], and it was going to get cleared up by October. It hasn't gotten cleared up at all."
Actually, this really started in March 2007, when the short-lived subprime implosion came to light.
DJIA - 2 yearYou can see this thing has not been all that bad. I think it became clear early on, that Wall Street billionaires would be taken care of. My thinking at the time was that No One could possibly bail out a situation like the one we were facing. No One.
And they did put a band aid on things, and that seemed to assuage fears of Total Collapse, for a bit. And we had a quick run from the Bear Stearns low of 11K to 13,000 on the DJIA. If you remember, I said fade that thing at 12,500, which we seemed to hit just 2 DAYS after the BS panic lows.
Anyway, this ties back to COBA, Bend City Council, and the imposing of RISK on Bend taxpayers, and cordoning off of PROFIT to builders. What we are doing is actually FAR WORSE than the BS bailout: The purpose of the BS bailout was to calm markets & restore some semblance of normal functioning AFTER the essential collapse of one of Wall Streets cornerstone players.
We, as in TAX PAYING BENDITES, are expected to financially SUPPORT an industry that has simply built itself into a glutted supply situation. And as I have said before, BUILDING is NOT really an industry at all. It's DUDES. Yes, it's just DUDES in pickups who know other DUDES, who know Mexicans, who do NOT KNOW SHIT, except they will work for fucking peanuts so they can expend 112% of their annual earning blowing off illegal fireworks.
Because think about it: Most companies will demand that The Corporation somehow benefit from such a boondoggle. But COBA & Bend builders KNOW FULL WELL that their little incorporation bullshit is a thin veil that allows them to appear to be building PRODUCT for the ILLUSION of somehow making a profit ON SALE.
There is NO SUCH THING. Builders are FUCKING DUDES. Just Dudes. The LAST THING they care about is selling the house they are building. They just want to siphon off money by PAYING THEMSELVES some sort of hourly rate. NO ONE HERE cares one wit about selling the homes they are building.
So what happens? Ultimately, it appears Bend is looking to become a landlord, just like The Fed. When The Fed bought Bear Stearns toxic waste, they were buying mortgages. You'll recall I quoted a pretty decent piece by Bill Fleckenstein who was pretty outraged that the US Government was going into the loan servicing business. This is where the City of Bend is headed.
Again, what happens? This country, and this town, are headed down the same path: towards Democratic Socialism.
Democratic Socialism - A leftist political ideology that emphasizes the principle of equality and usually prescribes a large role for government to intervene in society and the economy via taxation, regulation, redistribution, and public ownership.
As usual, I just sort of wonder how can I benefit from this. How? Seems the answer is similar to How do I benefit if I am living in commie Russia in 1975?
Leave. Get the hell out.
I'm not sure there is anything to do when government bodies CAN & WILL bail out private investor losses of any and all types. The City of Bend will INEVITABLY begin to have a stake in the private ownership of homes, government housing. Believe me, government housing DOES NOT WORK. It is synonymous with DRUGS & HOMOCIDE. That's ALL that goes on in gov't owned housing.
We are entering a dark, slippery slope. The loaning of money is really only meaningful if there is some onerous, burden of repayment. Paying it back is THE ONLY sufficient impetus for the RE-LOANING of money. When borrowers default en masse, and there appears to be no further real enforceable incentives for repayment, the jig is up.
The whole depositer & borrower scheme just implodes. And banks are just middlemen in this process, who don't REALLY have anything of their own. They have OUR money, that's it. And they all hopped on the "abstraction of ownership" bus over the past 3-4 years, taking PROMISES TO PAY, cutting, slicing, dicing, and reselling them between each other, and making a hell of a lot of money doing it. THIS PROCESS was pivotal in creating the credit bubble.
No one knows who owns what, or who owes what to who.
The Great Deleveraging is going to sweep away this entangled mess. There is more collapse waiting in the wings.
THERE IS ANOTHER BEAR STEARNS COMING. Mark my words. Bernanke, Bush, BendBB and other PERENNIAL OPTIMISTS will tell you over & over & over that this thing is NEAR OVER.
Ain't NEAR OVER. This thing is the Greatest Financial Calamity of All Time. Hell, Forstmann says we're in the Second Inning. He's even more pessimistic than I am.
For the love of Christ, we are in the throes of some sort of Biblical Seven Horsemen of the Apocolypse. We can't eat CORPORATE PROCESSED FOOD, for Gods sake! They can't even figure out what's the root cause of the biggest poisoning of Americans EVER.
I mean marge & them were talking about GARDENING AS A FOOD SOURCE, something about which I sort of chuckled about 2 months ago.
Now? Fuck, now I am asking my wife about how to plant OUR FOOD in the back yard.
THIS is another trend that I think is very interesting, and it has less to do with a poisoned food supply than it does gas & transport costs.
The One Thing PRE-SOCIALIZED America could do pretty well, was look at their own income statements, look at the high-cost items, and DISINTERMEDIATE THEM. Get rid of them.
Now, The High Water Item Everyone Wants To Get Rid Of, is fuel costs. Transport. We pay billions to ship all sorts of stuff All Over The Place. We pay a hell of a lot to ship food to this country. Timber? Again, millions to ship here, mainly from Canada. Look around your desk; there was probably $.10-20 of every dollar spent to ship that stuff around, INCLUDING your gas money to go get it at the store.
Think about what Exorbitant Transportation Costs mean. Can you think of a time when transport costs were truly mond-boggling? Try 1,000 years ago. Overland treks could cost you your life. They took major chunks of your life.
What about space travel? Going to Mars or something.
OK, when transport costs become outrageous, we do it FAR LESS, and we try to be Internally Self Sufficient; ie we bring all our shit with us. We have to be able to make stuff, fix stuff, and soldier on By Ourselves.
This seems to be where we're heading. Communes. The Texas Polygamists. Internally self suffiecient units that make & build they're own supply of just about everything, including food.
Small lots, small runs of production of a wide variety of items. No HUGE corporate industrial food suppliers trucking & shipping stuff Worldwide, because the ALTERNATIVES are cheaper: buy seeds & plant it. Little socialized farms. Rural China is what we're turning into.
I don't know. I just try to look at what is happening & deduce from Standard Human Nature & what I know about it, to figure out The Big Picture. We might be real shitty at a lot of stuff, but Americans as a group are a damn crafty bunch, and our economy, with its heinous inherent flaws, is pretty good at allowing people to do what the hell they can to make a living.
And we will beat this fuel problem not really by any sort of Reduction Planning, but by Elimination. We simply will NOT ship things. We'll produce it locally.
An example that just popped into my head is produce in Alaska. You wanna see truly ridiculous costs & poor value, head up to the outer reaches of Alaska & (try to) buy produce. It's awful, barely edible stuff. And it costs a fortune.
What to do? Small greenhouses? Social gardens protected by the elements somehow? There's money in them thar hills.
A LOT of people have gotten on here & said that I am trying to somehow INFLUENCE PEOPLE'S DECISIONS, OR SOCIAL POLICY, or some weird ass shit like that. Of course I am not. I am trying to read The Big Picture, INTERPRET social policy, and combine it with my ideas about human nature (self-centered searching for utility optimization) & figure out WHAT WILL BE BOUGHT in response, if anything.
We are socializing the building of homes in Central Oregon, taxpayers will own, in part, several homes as a result of tragically flawed City Council enactments. What to do? Property management? I've said before I think this is a good way to go in Cent OR. Move out cleanups? Again, the methers LOVE to turn on the water & plug the sink 2 days before their lease is up. Motherfuckers LOVE to leave landlords a swimming pool.
There seems all sorts of Management & Remediation Businesses that will result of bend City Councils actions.
This rationale also seems to apply at the Federal Gov't level: We are BUYING MORTGAGES at an untold rate. What to do? The Fererales LOVE to hire contractors to manage their messes for them. Fuck, that's really ALL Soviet Russia was.
Speaking of which, they also produced & consumed ENORMOUS amounts of alcohol. Buffett, you sly devil!
We're in the throes of transforming the US Economy folks. I know it doesn't seem like it, but have you actually considered GARDENING a proper use of your time in ANY past years? I NEVER have. It's STILL sort of on the border.
But fuck, that means we're entering into a WEIRD ASS AGRARIAN phase. I mean, WHAT THE FUCK? AGRARIAN? That shit was put down 200 years ago, right?
Again, the after effects of this fucking housing bust are going to be weirder & more severe than we ever thought possible.
OK, you might think that all this talk about the deleterious effects of High Costs as sort of abstract & maybe irrelevant, but there is an industry in the country that has stoically maintained ridiculous wage levels for it's rank & file, far above the competition. Here's an excerpt:
With barely four months to go to the day of the US presidential election, the BBC's James Naughtie finds Americans worse-off than they were seven years ago - and worried about the future.
East Grand Boulevard in Detroit is still handsome, in its way. There are wooden and brick houses on spacious plots, with trees front and back. They have that early 20th Century confidence that American architects were able to exploit, with high chimneys, wide porches and plenty of room inside.
You can find plenty of prosperity around the edges of Detroit. But take a trip down East Grand Boulevard and into the enclave of Hamtramck, which was the heart of the American car industry, and you can sense the economic angst that's gripping the country.
It's not simply that there is poverty in Detroit - which you can find at the busy soup kitchens that were established in the Great Depression - but that a city which once boasted some of the best-paid industrial workers in the US is in steady decline.
Politics in Detroit is a mess - the mayor has just been deposed by his own Democratic supporters over his use of public money to try to cover up an extra-marital affair - and economic prospects are bleak.
People who thought they would remain reasonably comfortable are discovering that rising medical bills, falling wages and petrol at $4 a gallon are making life difficult. Add to that the pressures from the banks and mortgage lenders, and you find trouble.
Watershed
More than 73,000 homes were repossessed in the city in the second half of 2007 because the owners couldn't keep up with loans: Detroit is a prime example of a contagion that's sweeping the whole country.
This is one of the painful facts that lie behind the rhetoric of the presidential campaign. The reason why both John McCain and Barack Obama talk about "change", is that most Americans feel that this election year marks some kind of watershed.
They're not agreed, of course, about which way the country should turn. But there is a general sense that after the eight Bush years, in which the country has been tormented by post-9/11 national security worries and war, and in the course of which government spending has soared and personal debt has become an obsession, this electoral choice will be important.
Searching for the worries that give rise to that belief, you first of all confront the lack of economic optimism.
Although you can find those who talk of a cycle that will turn once again, about the long-term inevitably of recovered prosperity, it's much easier to find people who are starting to question their birthright. Is it true, as they've always been taught, that the next generation will always be better off than the one before it, that hard work will produce rewards and the freedom to choose a lifestyle?
In short, is the American Dream still in business?
'Katrina-like crisis'
I found in Detroit that there are doubts. Among car workers, who were once the elite of the labour force, there is deep gloom.
Talking to some of those who are losing their homes through foreclosure, having stumbled into loan agreements that allowed interest rates to be ratcheted up, I became quickly aware that the problem is not one that is confined to what might be called, over-simplistically, an "underclass".
As one woman put it, it's a "Katrina-like crisis" - the waters are lapping around the feet of those who never thought that their homes would be inundated.
In America, it's always important to balance bad news or public anger with the country's innate capacity for ingenuity and recovery. But, as Joe Stiglitz, Nobel-prize winning economist, put it to me: "The reality of each generation being better off than the last is becoming destroyed."
Most Americans, he says, are worse off than they were seven years ago. So, when they come to make their political judgements this autumn, this is what will affect them most.
They know that China holds much of America's public debt, and that jobs are going overseas. And they're aware that the weakness of the dollar overseas can be seen a measure of the troubles of the superpower.
They wonder, therefore, whether they can assume that in the 21st Century their country will remain an economic superpower, even if its military strength is still unmatched.
It's a deep question, lying far beneath the surface of a presidential campaign in which the personalities of the candidates and a speech here or there often determine the headlines and the tone of the exchanges.
The truth is, this is a troubled nation. And one of the problems is this: change may be necessary but where should it lead? In the next four weeks that's what I'll be trying to find out.
You might say, "Hey, the car business is a TERRIBLE EXAMPLE! It's old & industrial, it was bound to fall apart"!Umm, no. Look at Honda & Toyota.
The market cap of GM is $5.8BB. Ford is $9.9 billion. Yes, Ford is worth about twice what GM is. Weird.
But Toyota is worth $144.9 BILLION. Toyota is worth 25X what GM is. Honda is worth $61 billion.
There is HUGE amounts of value being created in auto assembly. But US automakers have had to deal with a century-old suckerfish: UNIONS. Unions have jacked up the cost of every single car made in this country to the point that the industry has been destroyed, AND THE ENTIRE SURROUNDING AREA where they are built has been 100% destroyed.
If you're a freaked out self-delusing liberal, keep telling yourself that THE UNIONS ARE NOT THE PROBLEM, IT'S THE GREEDY CORPORATIONS! OK, settle down Tim Robbins.
All corporations are greedy. You're greedy. I'm greedy. And corporations are JUST US.
Anyway, if you want a PRESENT DAY example of what non-competitive cost dynamics can do to a city, state or country, just look at Detroit. It becomes less & less relevant, less & less able to sustain itself, and decays more & more until it is simply abandoned.
WE, Bendites, are living in the Next Detroit. Oh yes, the Auto Unions succeeded brilliantly, but they have killed the hosts. Bend City Council will succeed in perpetuating the Suckerfish, BUT THE HOST WILL DIE. Iran and Russia are succeeding brilliantly in feasting off the host, but it will INEVITABLY DIE. The Saudis understood this.
Massive hyper-inflation, and stagnating growth; Worst of all Worlds. We're headed for disaster. What to do?
Remember the fundamental: People in a "free" society maximize their own utility. We get the most for our money. We purchase the low cost to disintermediate the high cost. And salmonella is a COST, just like oil.
So what are The Costs? What is Their Origin?
It is BIG BUSINESS. Corporations. We've endowed these things with sustaining our lives. Big Oil. Big Food. Big House. Big Computer. We're going to start disintermediating these enterprises. Small lots. Short runs. All is Local. Can't afford even to pay South American peasants 2 cents to pick bananas, cuz it costs $20 to ship them here. All is LOCAL.
We will work in Bend. We will be taxed to pay builders for unsaleable homes. This is a fact. What to do? Leave. Leaving is all we can do to disintermediate the cost. WE will be Detroit. We'll still be here; Detroit is still here. But things will look different.
Bend circa 2015On a different tack: I will ask again, does anyone want to write a Guest Post? C'mon! It's got all your standard chunks of Reaping The Goodness Of Fame! Getting whaled on by Buster! Being Told Your A Lunatic! Absolutely NO Monetary Payoff!
It's fantastic. I wanna hear from YOU! I'm going to setup an anon email, & YOU TOO can be the next contestant on BendBubble2. I truly suck, and I know it. I think my strengths lay in CONVINCING people that The End is Nigh, but that phase is clearly over. The Chronicling of The Calamity is where we are, and I question my ability here.
AS you can tell from my recent comments, I play the other side of stuff: I load up at the bottom... and typically unload somewhere just off the bottom, about 1% above my breakeven. So I tend to become progressively more optimistic as things collapse. THAT is why I believe in Detroit: ALL THE BAD NEWS IS OUT THERE. TWICE. Can't really get worse. Even an open field is worth more than what is there now.
I am actually starting to fade the oil hysteria. I bought a bit of Monaco Coach this week.
MNC, 1 yearTo repeat, this ain't for everyone. I have sort of a Taleb-esque approach to things: Spread 10-20% of your portfolio across a thin veneer of lottery-ticket style holding, and hold the rest in cash. And going from $16 to $2.86/sh in one year qualifies as a lottery ticket in my mind.
I am becoming more optimistic AS THINGS IMPLODE, as is my nature. I am compelled by LOW COSTS to buy things I wouldn't touch a year ago. And things are beginning to get cheap, fast.
So I wonder if I am The Prophet Of Doom this blog seems to require. I am STILL HORRENDOUSLY BEARISH ON BEND. I can't possibly understate that. Bend is the Detroit of the 1960's: Doing OK now, but literally facing it's own long term doom. Barring a complete cleaning of house, Bend will self-destruct.
We need to adopt the Economics of Small Lots & Short Production Runs Of a Wide Variety of Goods. We need to become Self Sufficient. We are an island. We're a spaceship headed for Mars. Well, we need to act like we are, because we are incurring all the same costs.
I don't know. Costs need to fall precipitously here for me to switch from Rent & Invest The Difference, to Buy Bend. So maybe I can gab on about the Fall of Bend, which will stay the course for at least 5-10 years.
But I would like to post different ideas here. What will work? What will kill this place? Some people seem to have a good handle on things that I don't. I'd like to post pieces that present a variety of positions. Even RE-friendly stuff. If I got enough, I could post more than once a week.
And this blog is getting tough for me to keep up. I've eaten my own pudding, and positioned myself "delta negative" on this housing collapse, and I am also Renting & Investing The Diff. And I am busy because of it. I am working more than ever. I used to have a spare couple of hours to even think about housing issues. Now, I am just working all the time. It's becoming difficult to take 5 seconds to write anything.
Anyone want to help? Write a guest piece? Doesn't have to be totally agreeable to me or the bent of this blog. I just want a diversity of thought & opinion.
183 comments:
And Doug Farmer-Foster has just posted:
MAY 08
Listings Sold: 120
Listings Expired: 84
Avg Square Footage: 2077
Avg Days on the Mkt: 209
Avg Sale Price: $ 370,150.
Median Sales Price: $ 302,500.
Active Listings May 31: 2295
JUNE 2008
Listings Sold: 137
Listings Expired: 126
Avg Square Footage: 2170
Avg Days on the Mkt: 181
Avg Sale Price: $ 419,263.
Median Sales Price: $ 325,000.
Active Listings Jun 30: 2461
June 07
Listings Sold: 165
% of Inventory Sold: 7.69%
Listings Expired: 84
Avg Square Footage: 1989
Avg Days on the Mkt: 157
Avg Sale Price: $ 418,017.
Median Sales Price: $ 345,000.
Active Listings June 30: 2314
Medians only off 5.8% from last year, unit sales down just 17%, and the AVG actually up. This will be hearalded as The End Of The Slump by almost everyone.
And of course, the Month-to-Month comparisons, since they are positive, will be the OVERWHELMING FOCUS.
Morons.
The City will never be able to collect SDC's from the builders that can't sell. What a crappy idea. I think we should vote on it.
I walked thru my garden this AM and all seems to be on schedule. The spuds are getting huge, radishes, beets,chard,spinach and lettuces are up now. Tomatoes and basil..lookin good. I planted the squashes in where I would usually put petunias or pansies. I need to cut down one juniper tree and I will have another 200 sf of full sun garden. This fall I will move or remove the perinial flowers to make more room for vegetables next year. It just doesn't make sense anymore to water flowers when I can acutally grow food in place of them. I forgot to plant garlic last fall, so I will order that soon to plant in September.
I wnet to 3 nurseries last week and all of them were out of some vegies that I wanted. Their seeds are gone. They commented they have never sold so many. Which is reflective of others doing what I am doing. Next year I will be starting seeds instead of buying plants. I will order the seeds on the internet so that I get them on time and get the ones I really want. Buying a basil plant for $3.99 is stupid if you can start one for pennies.
I will be much more organized next year.
IHTBYB says: "in Bend .... we will be taxed to pay builders for unsaleable homes."
There is a reasonable, philosophical argument that SDCs are not strictly necessary. In theory, property taxes should be able to take care of this, right?
SDCs are a one time charge, but most expenses (fire, police, schools) are on-going costs that can be supported by a one-time charge.
On-going charges (including sewer and water installation, operation, and maintenance) should in theory be financed by on-going property taxes (and other municipal taxes).
Were there SDCs when many towns were established when the U.S. was a British colony?
Somehow I doubt it. Why doesn't someone do a history of when SDC charges were introduced in America. Have we always had them? Are they strictly necessary to have a successful municipality?
"Were there SDCs when many towns were established when the U.S. was a British colony?"
You mean when people had wells and outhouses? What was there to be charged for?
Expanding water/sewer systems and maintaining them are two different things and it makes sense to tie the two different expenses to the two different activities that give rise to them.
Same with schools. Building a new school for a new neighborhood is an expense well above and beyond the operating costs of an existing school. Some municipalities charge accordingly.
We all have questions about the veracity of NON PROFIT BOOKSTORES started in the Old Mill:
"Thus conscience does make cowards of us all."
"And thus the native hue of resolution, is sicklied o're with the pale cast of thought."
Oh, I like that..."the pale cast of thought."
I've been hesitant to say much critical of non-profit enterprises, who after all, are trying to do good. There is nothing in it for me, except to make me look like a piker, and besides...there is that pesky thought that I could be wrong. Better to say nothing at all...except in the broadest of terms.
Some of the thrift store closings didn't make a whole lot of sense, based on the figures provided by the paper.
Some of the shelters seem to have their priorities a little backward.
Some of the arts events look to be permanent white elephants.
I think it's also fair to ask; if the enterprise would have no chance of making a profit if it was a 'real' business, then what sort of revenues is it likely to raise?
And finally, non-profit doesn't seem to me to be a blanket excuse to lose money.
I have a saying, if you set out to 'break-even', you're almost guaranteed to lose money. After all, I'm trying my damnedest to make money and often I don't. There is nothing particular wrong with the profit margin, and being a non-profit doesn't grant you a halo. What are your motives? Are you just perpetuating the enterprise? Are you a church? Where is the money going?
Those questions are as far as I'm willing to push.
Never trust the man who will GIVE YOU the shirt off his back.
THE MOST CORRUPT PEOPLE I know of mold their craft under the guise of NON PROFIT.
All those RAISE MONEY FOR THE POOR WALK-O-THONS? All those I AM SELFLESS I AM FIGHTING FOR BREAST CANCER BY GOING TO HAWAII VIA KAYAK dumbfucks?
It's a 100% SHAKEDOWN. A way to do what you want, call it selfless giving, and take a HUGE TAX DEDUCTION.
Not coincidentally, you'll find Cali-Bangers at its white hot center.
I am curious HOW MANY people took 100% TAX FREE trips to New Orleans in 2006?
Hi, my trucks full of water. Grab it, I'll be at the whorehouse.
Uh huh. NON PROFIT, my ass. That's like taking a scalpel to human nature.
Mum's the word.
Re: comments over on BEBB from Happily Bearish?
I was kind of wondering the same thing.
Democratic Socialism - A leftist political ideology that emphasizes the principle of equality and usually prescribes a large role for government to intervene in society and the economy via taxation, regulation, redistribution, and public ownership.
What COBA and CORA are proposing is not "democratic socialism" and is not "leftist." It is what Sen. Dodd described: a RIGHT-WING policy of socializing the risks and capitalizing the rewards, i.e. redistributing wealth (via taxation) UPWARDS from the working class to the owner class. This shit has been going on quietly in America for decades but has become completely, brazenly open under the Smirky McChimp regime.
There is a reasonable, philosophical argument that SDCs are not strictly necessary. In theory, property taxes should be able to take care of this, right?
The idea behind SDCs is that new growth pays for the new road, sewer and water line construction made necessary by new growth. Otherwise the existing property taxpayers get handed the bill for all that shit. (Of course they do anyway because the SDCs don't begin to cover the full costs.) So maybe it would be a good thing to do away with SDCs, let taxpayers experience the real costs of growth and eliminate the myth that "growth pays for itself." It doesn't, never has and never can.
This shit has been going on quietly in America for decades but has become completely, brazenly open under the Smirky McChimp regime.
I'll admit this is having less & less the smell of left-wing reflexive conspiracy theory each day.
I realize these neo-con turds wanna save their buddies, but we're starting to go in strange directions in this country.
All is bile and flatulence and I love it, I'm home with my own people.
I love Bend.
Before I lose my 'train of thought'.
I propose we pay the builders to build.
I propose that the existing people of Bend pay an old timers tax.
Make the people already here, explicitly subsidize ALL hollern hotels.
Build, keep the perpetual building machine moving, no energy required, just the good credit of the existing population.
Bend is different.
Pay builder's up front $13k if they take out a building permit.
This is what we need to do.
"socializing the risks and capitalizing the rewards ... this shit has been going on quietly in America for decades but has become completely, brazenly open."
I suppose no one cares as long as the economy is expanding and adding jobs -- hence a "grand social bargain". I mean, who cares if Wall Street tycoons become billionaires so long as I have a chance to make my $70,000+ per year and buy a house, truck, big TV, boat, etc.
The problem is that the latter dream appears to be falling apart for many people, so we're starting to care about bailouts of the big guys -- in the present situation, the waiving of SDC charges for rapidly failing builders.
Upon closer inspection, Doug F's data shows that the per square foot median price dropped a pretty decent 13.6%, down to below $150/sf, from $173.45.
, the waiving of SDC charges for rapidly failing builders.
*
As always, we're missing the elephant, and only thinking about the foot or trunk.
Think of it this way, I want to build a single-family home, I get my SDC @ $13k deferred, that means NO UP FRONT cost, I can borrow the money to build, hell I already own land, hell builders are giving land away in Bend.
It's not really single-family, I think its the BIG stuff HOLLERN has a 200+ multi-family going in at NWXC, and a whole bunch of other stuff is coming in, apartments are now the RAGE, condos are dead.
I'm sure that what we're missing is that big apartment complex projects are now SDC deferred, and most likely a whole bunch of other stuff owned, by Bends best citizens.
It's all quite cool, almost two years ago the debate was, how can we keep subsidizing? The actual cost in Bend for a home for roads, schools, and infrastructure is $60k, and they were only charged about $10k, thus the people already here pickup the bill, so the very rich can get richer.
Now the argument has gone to the VERY rich pay NOTHING, they get unlimited gain, but zero loss. Heads I win, Tails you lose.
This is NOT new to Oregon, in Portland, REACH and other city 'investment' projects own tons of real-estate. The city is one of the biggest land-lords in the city. Thus its NOT surprising to see Bend go this route, you must have been here in Oregon 30+ years to know the real picture, a city owning most of the real estate is not new.
The next step is to tax defer or tax exempt the special city owned real-estate. It's not enough to defer or eliminate SDC's, the real important thing to do for builder preferred property is property tax deferral or exemption.
The question begs in the FUCK is going to pay the BILL in Bend??
Like we have said for a awhile here, the costs are going UP, Bend is already the MOST expensive water,sewer,...utility in eastern-oregon.
The fat-cats don't care they'll be tax exempt, and there property SDC exempt. Nobody ever cares. Most of this racket was setup in 1972 by the Republicans in Oregon, so lets all make this clear that this is NOT social-democracy.
This is unlimited profit, with zero-risk.
Sustainable? Who gives a fuck, so long as they can play the game until 2012, by then even a clown can run this town, new money, new morons will arrive, its almost 2009, and the city rather than halting development to clear inventory is throwing fuel on the fire. How can they go wrong? If you know you OREGON history, you would know that this ONLY adds to the political power.
I remember years ago in Salem, a lobbyist friend got a bill passed that let people not pay their property tax when over 62, and the city/state got the RE at death, it turns out the government makes out like a bandit. The government wants to own RE.
Thus this latest keep building, all knowing that the GUY is going to lose his house, is a clear setup racket to federalize, or socialize a large portion of Bend RE, but so fucking what, it happened in PDX in the 1960's, and life just moves on. The city can always fill their housing with low-life, as there is NEVER a shortage, welfare folks are some of the best voters ever created for the political class.
Where is BEND going?? 10-20 years BEND will be a sewer, hardly a paradise, I think homer's picture of detroit is quite apt, as I have described above. City housing in Oregon is the pits, just go look at 'REACH' homes in PDX, the worst maintained homes in the city, ghetto shit, if a landlord ran his op like this he would get a letter and fine, but the city? A dog rarely bites its own tail. This is where BEND is going.
Absolute control, in time BEND will have two tiers for SDC, one for preferrable, and the other for commoners. Insiders will pay nothing, and outsiders will be reamed, friends of HOLLERN will get richer, and suckers will pay.
When in ROME do as the romans,
KEEP the wheel turning keep building, keep costco, lowes, walmart humming, keep builders moving, keep knife-river dump-trucks moving, ...
Probably no choice, if the city doesn't take action to create jobs, then the ghost town effect will ensure total collapse of political favoritism, can't have that, thus WE as in the 'bruce-pussy' WE, we must keep the perpetual building machine moving.
What the fuck do we do with the inventory? Mexicans! Its doesn't really matter who lives in a STD ( siberian crap shack ), hell we could see a return to SQUATTING like they have in UK. What's important is that builder's build, and raw land doesn't collapse in value, because if that happens that LORD-HOLLERN collapses, and that would mean the END of the SORE & BULL, and WE cannot have that.
What really is BEND? I can see SERFDOM, gated community's that matter like PRONGHORN, all of the rest of central-oregon, a poverty pimp palace.
Perfect for HOMERS own people.
Where HOMER is the king of the poverty pimps, all can be renters of city owned RE, what a perfect fucking world.
What will work? What will kill this place? Some people seem to have a good handle on things that I don't.
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Homer, its a slow process we're here now. Food places are shutting down weekly, every place is dead. That said there is a ton of money in this town, and folks will keep starting new food places. There will be new businesses. New hobby shops for house-wives. More old people moving to Bend to retire to ride road-bikes, and hike, ...
It's NOT going to end, yes Bend will be like 1983, will it become like Detroit? NO, and the reason is RACISM, Detroit, got the blacks from the South, and they came, and there was NO work, it is-was the welfare end of the road, just like East-LA today in So-Cal. Bend is going to be geezer-ville.
I really think its going to be EXPENSIVE to live in BEND, these SDC's costs are going to get passed on to the little people, which means Bend will have some of the highest living costs around, but that's a good thing, if you don't want poor people, aka Negroes. Oregon has always been white. I think Bend will continue to be what it is, a place where calis with money can escape the rat-race and bring it up here with them.
You seem to dwell on the final call, the great date, the big inspiration. There isn't any, Bend is a Vacuum, and there will always be politicians, and out of town hustlers to create new myths in bend.
The real problem is its almost been two years, and your write, you can be still writing this blog in five years saying the same thing, ...
A short history lesson of Oregon.
Let's look at recent years in Bend, about 10+ years ago the richest guy in PDX Homer Williams ( NOT OUR HOMER ), created Broken-Top, later he sold.
Homer is a great guy, when stuff is cheap he buys it, usually from the city. In PDX he sells large housing complexes top of the dollar to city in good times, and buy them back from city in bad times on ten cents on the dollar, then in good times, the city buys back for 10X, ... Homer has been doing this forever in PDX, and he's been behind some of Bends biggest projects.
The point is that Homer helped setup the original PDC ( portland development commission ) a city budget authority with 100's of millions that buys RE, and many other institutions.
This is the game in Oregon, this is why Homer is worth Billions of dollars. When I see the city now paying ALL the SDC's I think Homer Williams, when I see ALL of Homers property EXEMPT from property tax, I know why he's worth Billions.
The very rich of Bend ( think Hollern ), will always use city-hall to BUY their property at the top of the market, and then they'll buy it back at the bottom, and they'll lobby to exempt themselves from taxation, and all the while the 'press' will say NOTHING. This is the OREGON game. Life moves on.
I'm simply trying to explain how things work in Oregon. Right now Bend is being setup. The biggest most wealthy people are making sure they pay NO SDC's on their projects up front, and they're making sure they'll pay NO property tax.
You'll never hear a word. This shit has been going on since the 1950's in Portland, and the same guys have been operating in Bend since the 1960's when THEY, e.g. JD-GRAY, and HOLLERN, and the PDX boyz created Sun-River and Black-Butte, all these TYCOONS of OREGON have homes in Black-Butte, and Sun-River. The RUN everything, and have continually since the 1960's.
Their survival is all that matters, and that requires property tax exemption, and SDC deferral. End of story.
In good times they PAID almost nothing, and in BAD times they pay nothing. In the worst of times they get a tax credit for being stewards.
Who's up for circulating recall petitions against any city councilor who votes for the SDC giveaway for builders?
I will sign that one. I will circulate it. Although my circle, being RE folks may not have a huge impact, I 'll give it a shot
"I remember years ago in Salem, a lobbyist friend got a bill passed that let people not pay their property tax when over 62, and the city/state got the RE at death, it turns out the government makes out like a bandit."
Crazy. I'd rather get a reverse mortgage, as expensive as they are, and pay the taxes and leave the remaining equity in the house to someone in my will.
Buster, good stuff.
A recall petition thing would at least get the issue out there. That's the most frustrating fucking thing about this place--it's too big to talk to everyone, and the media doesn't ask the real questions. The BULL position on the SDC issue is so gung ho it's stunning.
"UNIONS. Unions have jacked up the cost of every single car made in this country to the point that the industry has been destroyed, AND THE ENTIRE SURROUNDING AREA where they are built has been 100% destroyed."
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Yes, they have destroyed the American Auto industry, and Japan has moved into America to show America how to build autos (without Unions).
Maybe the Japanese will move into the US Educational industry and show us how to teach kids?
The Unions have destroyed the K-12 educational system in America. Zero accountability. Pedophiles on school payrolls, only to be shifted to other districts when parents complain. Massive benefit increases, with zero cost containment. And of course, minimal to zero competition. At least when Detroit gave us the Pinto and Vega automobiles, we could buy a Toyota or Honda.
Than is why the best US companies are now populated with names like Uday, Sergey, Ashok, Ramamurthy, etc. We need to import our scientists, engineers and business people, since American educated people can't compete against Indian educated, Chinese educated, and almost any other country.
Unions killed the US auto industry, and they have also killed the K-12 educational industry. Our kids are becoming serfs and peons to the rest of the world. Thank you, Unions!
Sad, but many of the idiot, liberal Union appologists will attempt to blame Bush, but it ain't Bush, or even the Republican's fault.
The Democrat's and the Liberal Union lovers are to blame.
Fun on the water vs. reality of the fuel tank
Despite summer’s pull, many boaters have cut back
By Erin Golden / The Bulletin
Published: July 07. 2008 4:00AM PST advertisement:
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LAKE BILLY CHINOOK — As Hank and Donna Bosak and their two teenagers drove from Portland to Central Oregon for their annual family camping trip last week, they took turns guessing how much it would cost to fill up their boat for a day on one of the area’s most popular lakes.
Their estimates ranged from $5.49 to more than $6 per gallon, so when they arrived at Lake Billy Chinook’s Cove Palisades Marina and found gas selling for $5.19, the Bosaks were relieved — or at least as relieved as they could be about the prospect of paying $135 to fill up their boat’s 26-gallon tank.
Despite the high prices, the Bosaks said they had no plans to shorten their vacation or leave their boat docked. But as she looked around the nearly empty marina on a recent sunny afternoon, Donna Bosak said it looked as if other boaters might have decided to stay home.
“There are a lot less people here this week,” she said “We’re camping, and the campground is really empty right now.”
With regular gas prices at more than $4.30 per gallon at several local service stations and upward of $5 at area marinas, many drivers aren’t just rethinking their trips in the car — they’re cutting back on their time on the water, too. At several local boat dealerships, sellers say they’ve seen an increase in people trying to get rid of used boats and a dip in sales of new boats — particularly larger gas guzzlers that can burn hundreds of dollars of fuel in just a day or two.
“I think that everybody is just watching every dollar they spend, that’s the bottom line,” said Mike Alvarez, the general sales manager at All Seasons RV and Marine in Bend. “They’re not coming out and buying that stuff, and we’ve got more consignments than we’ve ever had.”
Alvarez said the downturn in the boat market has been substantial, with sales at just 50 percent of what they were a year ago on boats of all sizes. At other dealerships, sellers said they’ve had a bumpy summer so far but are still making sales — usually of smaller, more efficient boats.
“You go to the lakes and see hundreds of boats out there, so we know it hasn’t really affected us that much,” said Terry Rayl, the owner of Central Lakes Marine in Bend, which deals mostly in fishing boats. “Most of the boats being sold right now are the smaller boats, boats that don’t have high (powered) engines.”
Rayl said many buyers are now paying more attention to boats’ engines and the type of fuel they require.
Though some high-end models require premium, most boats can run on regular gas. But because most of that gas contains ethanol, which mixes easily with water and can damage engines and dissolve fiberglass fuel tanks, some boaters are shelling out extra for non-blended fuel.
In 2007, the Oregon Legislature passed a law requiring all gas to contain 10 percent ethanol, but under a law passed earlier this year, owners of boats, ATVs, antique cars and machines with small engines, like lawn mowers, can still buy and use ethanol-free fuel. But according to Paul Donheffner, the director of the Oregon State Marine Board, only a small number of dealers carry the non-blended gas, which means boaters have to do extra searching — and spend more — or purchase a fuel filter.
Expensive or not, several boaters at Lake Billy Chinook said they plan to keep cruising on the lake — if perhaps a little slower than usual.
“If anything, we might float a little more, or maybe not go as far out,” said Erin Smith, 39, of Happy Valley. “We might do more boarding than tubing, but we’re not going to not go — we’ve made the investment in the boat.”
And with several weeks of summer left to go, boat dealers said they’re remaining optimistic, hoping that summer fun will remain a priority, even as consumers hold tight to their wallets.
“Since last weekend, it’s been busy, and customers are out doing their thing,” said Aaron Lee, the general manager of Culver Marine. “It’s very evident to me that consumers out there aren’t willing to sacrifice family time, time on the water with friends.”
Erin Golden can be reached at 541-408-2836 or at egolden@bendbulletin.com.
But just last week the bull said everythings picking up? This article said the campgrounds were empty and boy are they we saw several sites open this weekend. On a 4th of july weekend . In one way it's really nice no crowds to deal with like years past.
Than is why the best US companies are now populated with names like Uday, Sergey, Ashok, Ramamurthy, etc.
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1) Because right wing business leaders wanted the cheapest warm bodies to fill the slot.
2) Because people with names like Smith don't have advanced tech degrees and don't know math.
3.) Because white folk have been going towards cpa,legal,medicine, and such for years, and all engineering is now a blue-collar vocation.
You got kids? Don't let them waste their time with a EE, or CS degree; Go straight to law or medical, or CPA and make some money.
Most people who RUN biz are right-wing. Sure there are a few lucky gooses that own large company's, but in GENERAL YOU must be Machiavellian to run a biz, which means you MUST think conservative.
Unions killed the US auto industry, and they have also killed the K-12 educational industry. Our kids are becoming serfs and peons to the rest of the world. Thank you, Unions!
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The above is true, but you can't deduce that unions killed all from these two examples.
US-AUTO killed itself by refusing to re-tool for the econo-box back i the 70's, that let JAPAN take the market.
EDoocation I agree, NEA destroyed ED, but you still got to blame the parent who let it become high-paid baby sitting. ED used to be low-paid school-marm work, post WWII it became political pork. End of story.
Everything is this way, everything is carved up by different groups, but this doesn't mean that the UNIONS fucked all of the USA.
The AMERICAN PEOPLE fucked all of the USA.
Buster, good stuff.
FuckN A right.
I think we have our first volunteer for a Guest Post!
Merrill raids its rainy-day fund
Commentary: Thain taps Blackrock and Bloomberg nest egg
By MarketWatch
Last update: 9:59 a.m. EDT July 7, 2008
NEW YORK (MarketWatch) -- Merrill Lynch & Co., faced with mounting losses from the credit fallout, is doing the equivalent of borrowing against its 401(k).
The nation's biggest brokerage reportedly is close to selling its stake in Bloomberg L.P. and BlackRock Inc. amid a cash crunch. Merrill is expected to report a $6 billion write-down, exceeding analysts' expectations, when it reports second-quarter earnings next week.
Though Merrill could raise up to $17 billion from the sale of those stakes, it's likely only to sell a fraction of that in order to value its existing stakes. Merrill carries Bloomberg at zero. If it sells part of it, it can hold the rest on its books at a value set by the sale price.
Still, any sale represents a significant blow to the firm. The Bloomberg stake has been paying returns to Merrill, and a sale will not only eliminate that boost to the bottom line, but require additional taxes.
The BlackRock stake, acquired in 2006 under then-Chief Executive Stanley O'Neal, was considered a strategic marriage between the retail-strong Merrill and the institutional power of BlackRock.
Now, current CEO John Thain is backtracking in both strategy and words.
In January he told analysts "It [BlackRock] remains a strategic asset from my perspective. It is not something we would look to sell."
That he's doing so now represents a firm desperate, but also betting it can make it back in the long run, kind of like someone borrowing against their future.
As I said, when you OWE and you cannot borrow anymore, you either MAKE MORE MONEY, or you start selling your shit.
And it's telling when people & companies start selling their shit, it means the first 2 options are off the table, or they are spanking the buyers. Seems clear the latter is not happening much nowadays.
"Everything is this way, everything is carved up by different groups, but this doesn't mean that the UNIONS fucked all of the USA.
The AMERICAN PEOPLE fucked all of the USA."
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Okay, so it is EVERYBODY'S fault!
Yeah, right!! EVERYBODY is at fault, so that way NOBODY is at fault. Fucking sycophant, liberal appologist!
The Unions are to blame. And the political party most tied to Unions is the Democrat party. And the people most tied to Democrats are the liberals.
Liberals and their redistributionist ways (ie Communistic ways) took and took and took so that they could give and give and give to the auto workers, gave it all away, and the US auto industry is the classic example. And the Edu industry is just another industry ruined by the Unions.
And it ain't the parents' fault. Nope, the blame lies with the Unions and their sycophant supporters, the liberals and Demos.
you can be still writing this blog in five years saying the same thing, ...
Hence the call for some new writers...
"UNIONS. Unions have jacked up the cost of every single car made in this country to the point that the industry has been destroyed ..."
I see you've been quaffing the right-wing Kool-Aid. What killed the auto industry was the Big Three automakers' insistence on building pieces o' shit that fell apart after two years. They got away with it as long as they had no foreign competition, but when Germany and Japan entered the US market they were fucked.
Have you noticed that foreign-made cars are any cheaper than comparable US-made cars these days? I haven't.
Unions are far stronger in Germany than in the US, and the German auto industry is healthy. Explain that, union-haters.
And just an aside, it seems like 2 years ago there was MUCH inbound buying of Bend homes outright from "immigrants".
Most of the people I know who are buying/selling are interested in upsizing/downsizing within Bend. I don't know anyone really leaving. Or coming here.
I know LOTS of people who want to move within Bend, but are unable/unwilling to take the hit on their current residence, but want the next guy to get killed.
So here we all sit....
Maybe another point is that MANY of the current sales are "doubles"... one family selling a current property & buying another...
Unions are far stronger in Germany than in the US, and the German auto industry is healthy. Explain that, union-haters.
Maybe one explanation is that it's not true...
The (Parlous) State of German Unions
This paper traces the profound decline in German unionism over the course of the last three decades. Today just one in five workers is a union member, and it is now moot whether this degree of penetration is consistent with a corporatist model built on encompassing unions.
The decline in union membership and density is attributable to external forces that have confronted unions in many countries (such as globalization and compositional changes in the workforce) and to some specifically German considerations (such as the transition process in postcommunist Eastern Germany) and sustained intervals of classic insider behavior on the part of German unions.
The ‘correctives’ have included mergers between unions, decentralization, and wages that are more responsive to unemployment. At issue is the success of these innovations.
For instance, the trend toward decentralization in collective bargaining hinges in part on the health of that other pillar of the dual system of industrial relations, the works council. But works council coverage has also declined, leading some observers to equate decentralization with deregulation.
While this conclusion is likely too radical, German unions are at the cross roads. It is argued here that if they fail to define what they stand for, are unable to increase their presence at the workplace, and continue to lack convincing strategies to deal with contemporary economic and political trends working against them, then their decline may become a rout.
Fleetwood (FLE) is Yet Another RV Maker that seems to be targeted for doom.
$1.97/sh, down 50% in about 10 days. Yearly high of $11.41. Market cap $140MM, annual rev around $1.6BB, too much debt, but a net worth of about $90MM.
So bought a few shares.... probably still paid too much.
You don't need guest writers. You throw one paragraph up there on Sunday and we'll still have 100 comments by the next Sunday.
Unions are far stronger in Germany than in the US, and the German auto industry is healthy. Explain that, union-haters.
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German engineering is the best in the world. Want a high quality tool think swiss, and given its the same language, its all the same to me.
USA is what it is, a bunch of lucky HICKS post WWII caught the worlds AUTO market and all else, cuz all else was destroyed, but for the USA the lead only lasted until the 1960's, since then it was DOWN-HILL. In the 1970's we all DEMANDED small auto's, fuel efficient, and ONLY HONDA followed the market. Today HONDA IMHO makes the best engines/autos for petrol, I prefer the GERMAN TDi for oil.
Today the USA makes HARBOR-FRIEGHT quality pure&simple. USA is KMART/WALMART. The average USA customer is a WALMART shopper, and a WALMART worker, even intelligent US citizens vote with their wallet and ignore 'USA' autos, because they're CRAP.
I blame the hicks, e.g. lack of edoocation, and pure lack of care about quality. Germans & Swiss DEMAND quality, USA is KMART, delivers KMART, and gets KMART.
Unions are just one more group in the USA pandering, to blame unions is like blaming JEWS. It's just PURE intellectual laziness.
Sure you can build autos in the USA using JAP or GERMAN management, but the the unions will not tolerate perfection, as they demand everyone works at the lowest common denominator.
USA is FUCKED, but what's new? Not a fucking thing.
Whose fault?? Look in the fucking mirror.
Quality starts with YOU, in government, and in work, want quality, go work for a german tool company, and learn how its done.
When I say 'german' I'm talking the language, they have many words for quality, just like eskimos have many words for snow. The USA doesn't give a FUCK about quality, there was a day when ALL US products would last forever, if you took care of them, today everything is designed to fail in 3 months or less.
MOST wasteful fucking society in the history of the WORLD, the USA.
Hey guys! I just thought you were all wondering what my next invention is. Well, it's a big machines that turns turd-gas into water vapor. Viola! Instant water vapor without having to burn hydrogen. And hippies freakin' love it!
Bye bitches!
You don't need guest writers. You throw one paragraph up there on Sunday and we'll still have 100 comments by the next Sunday. - TT
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I think what homer needs to do is edit ( cut & paste ) the most 'on topic' comments, and re-cycle to keep people on useful thread's. Also posting the good comments will put the material on the web search engines, where the comment stuff generally gets lost.
The other thing cuz obviously homer doesn't need to work so fucking hard, is to post questions every sunday, and comment highlights, and then let everyone respond, and then the following week post conclusions, and MOVE ON. ( More of a socratic method )
What homer is trying to do is what duncan does, which is post daily/weekly, but at the end of the day nothing is said, cuz nothing is new. When you have to publish on schedule, there is not much to say. This group has ALWAYS been BULL&SORE led, when there is no news to laugh at generated by the bull or sore, then we always drift towards circle jerking.
Even if HOMER just posted a synopsis of what the BULL&SORE said that week, it would be enough fodder for the group.
Every fucking week its "Bend is near the end", yes homer it gets old, we all know, ...
The fact is Bend will go down to post 2012, and then gradually come back towards 2018 or later, its ten long years, and nothing written every sunday will change this fact.
We need to stay on target, debate the bubble in bend, and focus on the boss-hogg bullshit.
As the economy collapses more&more golden parachutes will be handed to TEAM-HOLLERN, or the HOLLERN-TRIBE here in Bend. These are SDC deferrals, and tax exemptions, and outright credits. This is the kind of shit that needs to be talked about, loud and fucking clear.
Perhaps its time that homer changed his banner? Given that we're NOT talking about the Bend-Bubble, and what the fuck does the pussy dead JR issue, or dunc comic book shop have to do with the bubble?
I think this group, if it focussed on core issues, could be useful for 'surviving the collapse of bend'. Too often its intellectual self serving of wannabe 'writers'.
Unions are probably unnecessary institutions in this day and age. But it's silly to blame them for the downturn in the auto industry. Just a few years ago the big 3 were making record profits under more onerous union contracts. And management signed the contracts that they knew were probably unsustainable. Giving the production workers a 20% pay/benefit cut isn't going to turn around an industry building inappropriate product types.
Maybe one explanation is that it's not true...
The (Parlous) State of German Unions
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That's probably true for most information in Bend. Nothing you see or hear, and or hold dear is true.
Bend is a cigar smoking, right-wing faggot golfing man-twat metro-sexual shit-hole. Pure & simple, and nothing else.
Sure their are token liberals working for free at the SORE, and a few parasites like Abernethy ( another bruce pussy ) sucking the city tit, but most of Bend is ran by right-wing thugs. Team-HOLLERN is 100% right-wing, Deshutes brewery Fish is 100% rush-limbaugh.
Every fucking thing in Bend is a mirage, all of the old-mill dump is a mirage, but all here already know that.
I'll just say one thing about unions, in-efficient, I remember back in the 60's I was interviewed by Hughes to do physics work, during the interview I was told that should my desk light go out, I would have to call an electrician and wait most of the day for them to replace the light-bulb. Union Rules.
That was enough for me to get run, not walk away from aero-space.
Germans are generally fucking smart people, I'm sure at some point they too, saw the writing on the wall that 'Unions' were designed to maximize critical path. Want to take a long time? Go over cost? Unionize, the Concorde comes to mind, all the EU country's got a piece, and it was 99% meetings, what did they get?? Another Hindenburg.
My light bulb story says all I needed to know about a union company it was the first & last union company I ever interviewed.
Too each his own, I wanted to get things done, I avoid unions, want to sit on your ass like a cop?? Then go union, to each his own, I'm not suggesting either is bad, I just don't like sitting on my ass, waiting for a man-twat to change my light-bulb. For many folks this would be their idea of the perfect work day. It takes all kinds.
Unions are probably unnecessary institutions in this day and age.
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Unions were short lived pre WWII auto didn't need them, as they had the best wages, around.
Post WWII auto didn't need them cuz, they had NO competition.
During the early 1970's during the gas crisis, ONLY the japs sold small cars. Only the japs were willing to re-tool, and listen to customers.
Ford said you can have any color, as long as it was black. The US auto has this attitude to this day, which is why they're fucked, blame the union for fucked auto? NO, but my light bulb story is also true for auto, in a competitive world, you can't compete union & non-union. That is the essential problem, thus to the loser it would appear that the union is the problem, and they would be correct.
Of course like all things a collective combination, managements desire to only sell BLACK, unionism in-efficiency, add it all together and you get a pig that nobody wants to buy.
I hate fucking hybrids, but the Japs are delivering them, and US auto is-was late as always to the fucking market. ... Deja vu, is-was it unions fault?? hell no, ...
Unionism is just another racket, post 1960's almost ALL union mob is public government union. Here in Oregon PERS is the biggest kleptocracy in the State 100% financed KKR ( junk bond ) which destroyed all private unions in America, ... Just read Bartlette&Steele "America, what went wrong", 1986
"Nope, the blame lies with the Unions and their sycophant supporters, the liberals and Demos."
Interesting that the countries we are losing too are all more socialist than the USA. When the government takes care of health care, education and pensions the companies don't have to and they can focus on business, and the workers don't need a union.
GM is just a giant health care and pension administration firm for retirees. It tries to slap a few cars together on the side but is very distracted.
"When the government takes care of health care, education and pensions the companies don't have to and they can focus on business"
This is exactly right -- how can U.S. firms be competitive when the onus of health and retirement benefits falls on them? This is partly why job creation during the last 8 years has been so weak compared to the 1990s -- in the 1990s health care costs had not yet got out of control.
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"Here in Oregon PERS is the biggest kleptocracy in the State"
I had the opportunity to join PERS with my current job but didn't, because I didn't trust that the pension would be there when I retire. I didn't realize that it had the advantage of being a kleptocracy, however. What's its racket?
"Interesting that the countries we are losing to are all more socialist than the USA."
Interesting indeed. How many dollars is the Euro worth today?
We have let our infrastructure, our education system and our social safety net all go to hell while pissing away trillions on a bloated "defense" establishment and an unnecessary war. Meanwhile we have shipped all our manufacturing jobs to Third World shitholes and turned the workers who once held those jobs into minimum-wage burger-flippers.
And you wonder why our economy is in the crapper?
I didn't realize that it had the advantage of being a kleptocracy, however. What's its racket?
*
Ok, bitch, the rhetorical answer is here, read the fucking book "American, what went wrong", Bartlette&Steele, 1986,
In a gist KKR a tiny little junk bond firm, was allowed to use PERS cash for LBO's all during the RAYGUN/KEATING years of early 1980's, and bought private companys, placed IOU's in lieu of pension cash, and dilluted said companys ALL using PERS cash.
Late 1980's, and early 1990's, OREGON PERS was the richest, fastest growing PUBLIC pension system in the WORLD, all buy robbing PRIVATE unions, on the behest of PUBLIC. KKR bought NEWHOUSE ( OREGONIAN NEWSpaper ), and FRED-MEYER, and VIRTUALLY every major biz in Oregon, it owned PERS, it owned all, all maintained by GOLDSCHIMDT & CO, the kingmaker, now busted for fucking 12yr old girls.
NOTE public unions in OREGON had NO fucking crocodile years during the golden years, in the mid 1990's PERS went to shit, and they voted themselves the famous 15%/yr guarantee, since then PERS went to shit and ALL new public employees are tier 3, which means you get nuttin, but the early folks got the PONZI load.
You don't know this shit? This is why KKR/HOLLERN, ... et-al own ALL newspapers in OREGON, and use all public money for their own, this is why SDC's are now going to be deferred for the HOLLERN-TRIBE.
OREGON Government is ran by a few rich people who are king-makers for the government insiders, and the well connected like goldschmidt became millionaires, this is why no matter how many abernethy ( bend mayor ) you recall, it will never end, cuz HOLLERN-TRIBE has an infinite number of soldiers more than willing to suck the government tit.
As you all know by now in the 2008, post 20+ years after ALL private unions were robbed by public employees ( cops&fireman ), that everyone is picking the last meat on the bones from everyone else.
In the USA & Oregon, there isn't much left to steal. Prior to the 1960's, OREGON was a resource colony, post 1960's it was a public/private kleptocracy, today its a HOLLERN mythological retirement trap for active geezers.
NOW FUCKING HOMER ( our mentor, not homer-williams of pdx ) use the kind of shit above in your posts and print some fucking OREGON HISTORY so I don't have to keep writing this shit over&over for all your lazy fucking renter losers.
Given that the average folk here is an idiot, lets remember what a kleptocracry is, ...
A kleptocracy, is a government ran by common criminals, now have I not just defined Bend??
I didn't trust that the pension would be there when I retire. I didn't realize that it had the advantage of being a kleptocracy, however. What's its racket?
*
Poor government bitch's never realize, like a good chimp in the 1980's when PERS was doing 200%/yr APR nobody asked where the money was coming from, just kept the smile.
Not until mid 1990's when the good returns evaporated ( KKR ran out of private pension funds to LOOT ), did the fucking ponzi scam collapse, and the State declared PERS to be toward imminent collapse.
Yes all PERS chimps, your not part of the kleptocracy, in good times you keep your fucking mouth shut, and in bad times you opt-out of PERS either way your cool,
REMEMBER fellow cunts, what OREGON is is NATIONAL-SOCIALISM, e.g. FUCKING NAZISM. ALWAYS REMEMBER THIS!
So yes, its socialism all-right, but the Fascist kind, remember old Grand-daddy BUSH ( Bush-Tribe ) was fascist, and so was henry-ford, and so was Randolph Hearst, and they all helped bring Hitler to power, and they all brought NEW-WORLD-ORDER to the USA, POST-WWII.
REMEMBER that TRIBE-BUSH is NEW WORLD ORDER.
FASCISM is BEND, HOLLERN is a National-Socialist. The biggest fucking Nazis in the USA run Oregon.
Welcome to Oregon.
"The essence of government is beating, killing, and imprisoning. Those that ask for MORE government, are always asking for MORE totalitarianism" - VonMises
Interesting indeed. How many dollars is the Euro worth today?
*
The USA is the world's self appointed police-man, the ONLY thing that has kept the dollar up since Bretton-Woods ( 1970's ) the USA-NUKE gun to the worlds head.
The WORLD is sick of the shit, and voting with its wallet, and nobody wants dollars, and thus the EURO looks sweet, and it doesn't have a fucking thing to do with politics, or shit talk like demo vs repub, the OIL-WORLD, and DRUG-WORLD is moving away from the dollar, and thus the dollar is becoming worthless.
FASCISM is BEND, HOLLERN is a National-Socialist. The biggest fucking Nazis in the USA run Oregon.
*
All Nazis loved to watch little boyz swim naked, thus they started the boy-scouts.
Thus you have the Bend man-twats, thus you have the Bend metro-sexual, thus you have the Bend anal-wipe.
Bend is clean, racially pure, and a fucking Nazi Heaven.
On a different tack: I will ask again, does anyone want to write a Guest Post? C'mon! It's got all your standard chunks of Reaping The Goodness Of Fame! Getting whaled on by Buster! Being Told Your A Lunatic! Absolutely NO Monetary Payoff!
I'll do it if you pay me, or Buster will do it until you pay him to stop.
"since 1990s PERS went to shit and ALL new public employees are tier 3, which means you get nuttin, but the early folks got the PONZI load."
True, but the PERS system is pretty generous -- a guaranteed income depending on how many years you worked and what your last salary was. The problem is that it only works if you plan to stay in Oregon pretty much indefinitely, and more than that, I just don't trust the legislature for exactly the reason you said -- in the 1990s PERS was going bankrupt and Oregon's future prosperity is not a guaranteed thing. Better to take the mutual fund route and spread the investments more widely (wisely).
if you plan still pretty generous. They have a formula where you get your benefits
Per this site, I bought three prius's today, now how does a guy meet guys in this town??
Shit they just announced 'solar' AC for the Prius today, anyone want to buy a new Prius??
I found a new boyfriend last night :)
A kleptocracy, is a government ran by common criminals, now have I not just defined Bend??
At the very least can't we say Bend is ran by 'Exceptional' criminals? I hate to think of anything about Bend being common. After all we're special, we're #1.
Bend is clean, racially pure, and a fucking Nazi Heaven.
You're right. There is no real downside to this place.
timothy said...
You don't need guest writers. You throw one paragraph up there on Sunday and we'll still have 100 comments by the next Sunday.
Luke, you can destroy the Emperor. He has foreseen this. It is your destiny. Join me, and together we can rule the galaxy as father and son.
Oops. Sorry. You are destined to be a Guest Writer, Timmy. I have foreseen it.
Darth Vader: There is no escape. Don't make me destroy you.
[pauses]
Darth Vader: Luke, you do not yet realize your importance. You have only begun to discover your power. Join me, and I will complete your training. With our combined strength, we can end this destructive conflict and bring order to the galaxy.
Luke: I'll never join you!
Darth Vader: If you only knew the power of the Dark Side. Obi-Wan never told you what happened to your father.
Luke: He told me enough! He told me *you* killed him!
Darth Vader: No. *I* am your father.
Luke: No. No. That's not true. That's impossible!
Darth Vader: Search your feelings, you *know* it to be true!
Luke: [anguished] No! No!
CACB is perilously close to breaking into the $6's...
The "Band-Aid" becomes a permanent full-body cast:
Bernanke Says Fed May Continue Lending Into Next Year
By Scott Lanman
Enlarge Image/Details
July 8 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation's financial system, said the central bank may extend its emergency-loan program for investment banks into next year.
``The Federal Reserve is strongly committed'' to financial stability and is ``considering several options, including extending the duration of our facilities for primary dealers beyond year-end,'' Bernanke said in a speech to a conference in Arlington, Virginia.
The Fed chairman's comments, the first time he has indicated how long he'll extend the lending programs, come a day after an index of bank shares reached its lowest level since 1996.
Bernanke also endorsed proposals to set up a federal liquidation process for a failing investment bank. The Treasury should ``take a leading role in any such process'' in consultation with regulators, he said. Such a resolution mechanism may help reduce concern that investors and dealers begin counting on Fed aid in case their bets go wrong.
The Fed started the unprecedented lending programs for investment banks in March under its authority to lend to nonbanks in ``unusual and exigent circumstances.'' Officials said at the time the Primary Dealer Credit Facility, which provides direct loans, would last for ``at least'' six months.
Rate Outlook
Continued lending to investment banks may make it harder for the Fed to raise interest rates this year. Traders estimate 74 percent odds of at least quarter point increase in the 2 percent benchmark rate by year-end.
``There was some speculation that, come September,'' the lending programs ``might be allowed to expire,'' Dominic Konstam, head of interest-rate strategy at Credit Suisse Securities USA LLC in New York, said in a Bloomberg Radio interview. ``A lot of people would have thought that might be a prelude to the Fed beginning a tightening cycle. Now, that is obviously that much more uncertain.''
The Standard & Poor's 500 Banks Index, a measure of 22 firms including Fannie Mae and Freddie Mac, the largest sources of U.S. home financing, fell to 155.48 yesterday, its lowest level since 1996.
The Fed chairman didn't comment on the outlook for the economy or monetary policy in his remarks today to a Federal Deposit Insurance Corp. forum on mortgage lending. Treasury Secretary Henry Paulson and JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon are also scheduled to speak at the event.
The PDCF and the Fed's Term Securities Lending Facility, which auctions as much as $200 billion in Treasuries are both aimed at the 20 primary dealers in U.S. government debt.
Capital `Buffers'
The Fed is working with the Securities and Exchange Commission and securities dealers ``to increase the firms' capital and liquidity buffers,'' Bernanke said.
Securities firms have cut back on their use of the programs in recent weeks. The balance of loans outstanding from the PDCF dropped to zero as of July 2, the first time that's happened since the program began. On March 26, the end of the first full week of operation, the PDCF had a balance of $37 billion.
Bids in the TSLF's weekly auctions, in which dealers swap securities such as mortgage-backed debt for Treasuries from the New York Fed, have declined since the start of the program. In the July 3 operation, firms submitted bids for $26.1 billion out of $50 billion of Treasuries offered.
Financial Strains
One gauge of financial stress watched by the Fed has remained elevated. The difference between the overnight indexed swap rate, a measure of what traders expect for the Fed's benchmark rate, and three-month interbank loans in dollars was 0.78 percentage point yesterday, about the same as the start of May.
``Although short-term funding markets remain strained, they have improved somewhat since March,'' Bernanke said.
Bernanke's comments on the resolution authority are in line with Treasury Secretary Henry Paulson's July 2 statement that ``any commitment of government support should be an extraordinary event that requires the engagement of the executive branch.''
FDIC Chairman Sheila Bair has also said an agency should be given such liquidation authority for investment banks. The FDIC has that power over lenders whose deposits it insures. In the case of commercial banks, the use of taxpayer funds in an emergency requires the approval of two-thirds majorities of the FDIC and Fed boards, and of the Treasury secretary in consultation with the president.
`Worth the Effort'
``Despite the complexities of designing a resolution regime for securities firms, I believe it is worth the effort,'' Bernanke said today. ``In particular, by setting a high bar for such actions, the adverse effects on market discipline could be minimized.''
Bernanke endorsed several ways for the Fed and other U.S. agencies to gain more oversight of investment banks and financial markets. Congress should legislate ``consolidated supervision'' of investment banks and other big securities firms, with the unspecified regulator having authority over capital, liquidity holdings and risk management, he said.
The Fed itself should also get ``explicit oversight authority'' over payment and settlement systems, putting the Fed on par with counterparts from around the world, Bernanke said.
Congress may consider giving the Fed responsibility for ``promoting the overall stability of financial markets,'' Bernanke said. Still, ``it would be particularly important to make clear that any government intervention to avoid the disorderly liquidation of firms on the verge of bankruptcy should use clearly defined tools and processes,'' he said.
The Fed will play a part in setting capital cushions at securities firms under an agreement yesterday with the SEC designed to dispel concern a failing financial company without central bank oversight could threaten the economy.
The Fed and SEC will collaborate in determining ``guidelines or rules concerning the capital, liquidity and funding'' arrangements of investment banks, the accord said. They will also cooperate in designing ``risk management systems and controls'' for securities firms.
AP
Pending home sales fall 4.7 percent
Tuesday July 8, 11:05 am ET
By Alan Zibel, AP Business Writer
Pending sales of existing homes in US fall 4.7 percent as housing market troubles continue
WASHINGTON (AP) -- A measurement of pending home sales fell to the third-lowest reading on record in May as the housing market's recovery continued to prove elusive.
The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell 4.7 percent to 84.7 from an upwardly revised April reading of 88.9. The index was 14 percent below year-ago levels.
"The overall decline in contract signings suggests we are not out of the woods by any means," NAR Chief Economist Lawrence Yun said in a statement.
Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month lag before a sale is completed.
Wall Street economists surveyed by Thomson/IFR had predicted the index would come in at 87. The index, which sunk to a record low of 83 in March, stood at 98.5 in May 2007. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.
Pending sales fell around the U.S., sinking the most -- 7.1 percent -- in the South, and the least -- 1.3 percent -- in the West.
Sales of existing homes edged up in May, indicating that buyers were taking advantage of deeply discounted prices. But many economists believe prices must drop further before the housing industry can mount a sustained recovery.
The Realtors projects existing U.S. home sales will fall 6.1 percent in 2008 to 5.31 million, though the group expects sales to rebound in the second half of the year.
It projects median prices -- the point at which half of the homes sell for less and half for more -- will fall 6.2 percent to $205,300. It would be the second straight year in which that measurement has fallen nationwide.
Much of the downward pressure on prices comes from foreclosures and so-called short sales, in which a lender accepts an offer less than the value of the mortgage. These distressed sales can be discounted by up to 50 percent, forcing home sellers to slash their listing prices to compete.
"The speed at which home prices has declined in a few select markets is unprecedented, but the large price declines in those areas have enticed bargain hunters back into the market," Yun said.
A furious lightsaber duel is underway. DARTH VADER is
backing LUKE SKYWALKER towards the end of the gantry. A
quick move by Vader, chops off Luke’s hand! It goes
spinning off into the ventilation shaft. Luke backs away. He
looks around, but realizes there’s nowhere to go but straight
down.
Darth Vader: Obi Wan never told you what happened to
your father.
Luke: He told me enough! He told me you killed him!
Darth Vader: No, Luke… I am your father!
Luke: No. It can’t be. That’s not true. That’s impossible!
Darth Vader: Search your feelings Luke… you know them
to be true.
Luke: NOOoooo!
Darth Vader: Yes, it is true… and you know what else?
You know that brass droid of yours?
Luke: Threepio?
Darth Vader: Yes… Threepio… I built him… when I was 7
years old.
Luke: No! … Wait, huh?
Darth Vader: Seven years old. And what have you done?
Look at yourself. No hand. No job. And you couldn’t even
levitate your own ship out of the swamp…
Luke: But… I destroyed your precious Death Star!
Darth Vader: But that was when you were 20! When I was
10, I single-handedly destroyed an entire Trade
Federation Droid Control ship!
Luke: Well, it’s not my fault…
Darth Vader: Oh, here we go… “Poor me… my father never
gave me what I wanted for my birthday… boo hoo, my
daddy’s the Dark Lord of the Sith… Nobody loved me…
waahhh wahhh!”
Luke: Shut up!
Darth Vader: You’re a slacker! By the time I was your age,
I had already exterminated the Jedi knights!
Luke: I used to race my T-16 through Beggar’s Canyon.
Darth Vader: Oh, for the love of the Emperor… 10 years
old, winner of the Boonta Eve Open… the only human to
ever fly a Pod Racer… right here baby!
Luke looks down the shaft. Takes a step towards it.
Darth Vader: I was wrong… You’re not my kid… I don’t
know whose you are, but you sure ain’t mine.
Luke takes a step off the platform, hesitates, then plunges
down the shaft. Darth Vader looks down after him.
Darth Vader: And get a haircut!
Holy cow, Tim. You and Sally are just too talented to be wasting your time on 'tech' blogs.
You should be writing!
Vader Strikes Back
Holy cow, Tim. You and Sally are just too talented to be wasting your time on 'tech' blogs.
You should be writing!
*
You should be plaguarizing recipes for Cindy McCain!
O.K. O.K.
But I still think he should have a blog.
We blog converts are the worst.
"Hey guys! I just thought you were all wondering what my next invention is."
Suggestion: Please invent a device that creates a new Sunday column using the most interesting stuff of the last week, so that IHTBYB doesn't have to keep working so hard on the weekend.
And don't pretend like you're going to need land to set up this device -- we know the best company's get started in someone's mother's garage.
I didn't write that. It's as old as the hills (in other words, about half as old as Love Trek).
No one has mentioned this but its been taken off of the Nugget's front page. He was a prominent Sisters developer. What gives? Not to speak ill of the dead but "Fall" from a cliff with no other information? Maybe he was a rock climber?? Anyone have more details?
http://www.kohd.com/article.aspx?id=42650
Two of the Newport Moderns are pending again. Bookends--the outermost ones.
"Two of the Newport Moderns are pending again. Bookends--the outermost ones."
The one next to Newport Market supposedly foreclosed June 30. There was an Affidavit of Mailing / Publication filed on June 25th, so I assume it went through. When the one in the middle foreclosed a couple months ago the real estate agent put a "pending" up on it after it had already foreclosed.
The middle one that foreclosed 2 months ago has been marked pending in the MLS as well.
"The middle one that foreclosed 2 months ago has been marked pending in the MLS as well."
To clarify - it's been marked pending by the new agent as an REO. And the new agent probably isn't as sketchy as Ms tenBroek
A near-calamity Monday niggt:
"A fire has caused an estimated $30,000 in damage to the Old Mill Martini Bar in Bend's Old Mill District."
Fortunately, no cougars were harmed.
“He dawned some scuba diving gear and went down and try to fix it,” Mischke said.
http://www.kohd.com/article.aspx?id=42650
...not realizing that he was in the sunset of his life...
WTF is going on with these mysterious deaths?
Search over: Bend doctor's body found in Deschutes
OPB News (excerpt):
Body Of Bend Doctor Found In Deschutes
BEND GENERAL NEWS
By Ethan Lindsey
Bend, OR July 8, 2008 10:53 a.m.
The Deschutes County Sheriff's Department is continuing to investigate the death of a Bend doctor.
The body of emergency room physician Lynn McDonald was found in the Deschutes River Monday after a two-day search.
McDonald is the second person to drown in the Deschutes this year, but sheriffs say it is not known whether this most recent death was an accident or a suicide.
McDonald was known to be in financial trouble. He owned several unsold properties in Bend's wilting housing market and he was close to losing a mobile home park he owned.
Deschutes County Sheriff Larry Blanton says foul play is not suspected, but investigators' work continues.
The Bulletin (excerpt):
Doctor’s body found below Benham Falls
McDonald worked in ER for almost 30 years
By Cindy Powers / The Bulletin
Published: July 08. 2008 4:00AM PST
The body of a physician who worked in the St. Charles Bend emergency room for nearly 30 years was found Monday night in the Deschutes River after a search that spanned two days.
Divers and boat crews located Dr. Lynn Barton McDonald, 58, below the Benham Falls area in the Deschutes National Forest south of Bend about 7 p.m., said Capt. Marc Mills of the Deschutes County Sheriff’s Office.
McDonald, of Bend, disappeared in the area sometime over the weekend. A U.S. Forest Service employee found his bike abandoned just above the falls Sunday.
“He was just an active guy,” said close friend Greg Stuman, of Bend. “He enjoyed skiing, windsurfing, and he was just an outgoing, athletic, fun guy with a set of beautiful kids.”
McDonald was married and the father of 16-year-old fraternal twins, Stuman said.
He said McDonald recently took a vacation to Hawaii with his son and Stuman’s family.
“He was so happy; it was like a father-son bonding experience,” he said.
McDonald’s family declined to make a statement Monday.
But Stuman said McDonald was on the verge of getting past some financial problems related to real estate investments. He owned the Parrell-Sisters Mobile Home Park, which was placed in receivership in May, as well as unsold properties in The Shire subdivision in Bend.
“He was actually getting over some big hurdles in his life,” Stuman said. “The last e-mail I got from him on that subject was last Friday, and it was just kind of like ‘Let’s get the investors paid off, except me, and move on.’”
Cindy Powers can be reached at 541-617-7812 or cpowers@bendbulletin.com.
The Shire?
Oh God.
I'm so sad for his family. Mania is ruinous.
Hey There-
Just found your blog. I do disagree withthe idea about the oncoming socialist bent- if anything, we just went through a combination of Fascism-Lite plus a truly horrid economic policy that thought cheap credit coupled with consumption of cheap, foreign made goods would make everything okay.
On Detroit's decline- that's a city that is has been in a slow death spiral for the last 30 years or so. GM has lurched along, not learning the lessons of the foreign carmakers ( and yes, the Japanese and American workers for Toyota and Honda have unions)and either giving away or destroying technology that does not sastify short term profits ( electric car, anyone?) so sad to say, I really don't feel sorry for the region in general. Detroit needs toeither declare itself dead and rename itself, or be brave enough to shrink the city and try to attract new technolgies and businesses to the area. Given the corruption of the area, I doubt that would happen.
This country was built on people wanting good for cheap, and for the first half of this country history, we did depend on very cheap labor ( indentured servants, slaves, immigrants who did know no english or who was utterly poor and dumb). Now we need new ways of thinking about and taking care of our economy, and it is not communism, or Socialism nor is it depending on Captialism. It might take pieces of all three. Yikes!
Anyway, this is very long. you are doing really good work here- you are a corrective tonic needed for the nonsense this state and country is going through.
IF it was suicide, man, get a hold of yourself. It's just money.....
I bet his kids will miss him :(
over stupid piddly $$$$
I've been noticing a trend in advertising lately. It is geared towards mainly upwardly mobile individuals (Calis) who deserve a better lifestyle. "Living the dream" etc. That whole lifestyle seems predicated on living off of someone else's back. Something-for-nothing motherfuckers are everywhere.
Has anyone else seen this trend pick up? Is this the latest ploy to lure "cali locusts" as Paul-Doh calls them?
>>and yes, the Japanese and American workers for Toyota and Honda have unions
Do they have medical costs and pensions for workers who retired 25 years ago?
“He was actually getting over some big hurdles in his life,” Stuman said. “The last e-mail I got from him on that subject was last Friday, and it was just kind of like ‘Let’s get the investors paid off, except me, and move on.’”
That's cuz insurance don't pay off for suicide.
Good job. They'll never figure that out.
Lynn was a great guy that got caught up in the frenetic greed of Bend. His family will miss him terribly as will those of us that hit the ER once in awhile. This is so sad and likley will not be the only suicide by bad investment that we see over the next few years.
Have it ALL in Bend. Live the Dream.
Cum to Bend and BUILD.
When times are good, its ok to pay low SDC, but you get the profit.
When times are bad, you can defer the SDC cost on us.
You can't lose in Bend, everyone is a winner, and we'll build until we have more empty STD's than any other city in the world.
Privatize your profit, socialize your loss, it's Bend. We're special a Republican wet dream. A Cialis in every Prius. I love Bend.
The FUCKING 'SHIRE', the FUCKING SHIRE is fucked?
Imagine. That be Fall of 2006 the news the was heard around the world, a Hobbit Village right in Bend, OR - paradise on earth it is-was.
Now folks who passed out the kool-aide have drank it themselves, and all of Bend is imploding.
Who would have guessed we lost the Shire, what will become of Bend?
"That's cuz insurance don't pay off for suicide."
I don't know about Oregon but in the states that I am familiar with there is only a two-year exclusion for suicide. Life insurance will not pay if the subject commits suicide within two years of obtaining the policy. After the exclusion period, it is covered. I thought most states were similar to that.
This is so sad and likley will not be the only suicide by bad investment that we see over the next few years.
Right-O marge.
If you want a reason to NEVER become involved in a greed-fueled bubble folks, go & talk to this guys surviving family.
I mean he is dead because of the Bend Housing Bubble.
Placed order for a few Lithia Motors shares, based in Medford. Car dealership, 109 outlets, about $27MM sales each, selling for under $1MM per store.
This seems worth far more... even if half their outlets closed down.
Valuations are "pulling" me into the car/RV market... despite my loathing of the industry. Many will not survive.
Oh well. Rent & Invest The Diff rolls on...
>>Valuations are "pulling" me into the car/RV market...
I've been thinking the same thing about airlines. Hate the fuckin fuckers but if oil takes a summer holiday then some of these have to jump.
If you want a reason to NEVER become involved in a greed-fueled bubble folks, go & talk to this guys surviving family.
The tragedy of speculative manias is that they pull in naive people who know nothing about investing. They're the last ones in and the first to lose their shirts, as in any Ponzi game.
My own rule of thumb is that by the time the news of a good deal gets to people like me it isn't a good deal anymore, so I stay the hell out.
Is the RV market viable, at all, without cheap oil? I can't figure out how it makes a comeback unless T Boone's dream comes about and we have electricity switching to wind & nuclear and we have a NG infrastructure for vehicles.
That's 15 years+.
So RV is a disaster. Do you just think they've been beaten down too much?
IF it was suicide, man, get a hold of yourself. It's just money.
In our culture there's a great deal of shame attached to financial failure. That, more than just the loss of money, is what drives people to suicide.
>>Is the RV market viable, at all, without cheap oil?
This past weekend I passed an extra large variety Monaco. Not a big deal in itself except this guy was pulling a full size Suburban as his get around town car. Damn I had about a million questions for that guy. Then I thought perhaps "not butter's" flyer on Monaco could have some hope if fuckers like this still exist and obviously they do.
There are going to be a few RVers, no matter what the cost.
But that kinda conspicuous consumption is going to be embarrassing soon.
The RV industry was gearing up for a multitude of baby boomers who have all of the sudden gotten turned off by SUVs, let alone RVs.
I wouldn't be surprised if they lost 9/10 of their market.
Is the RV market viable, at all, without cheap oil?
Hey, second-hand RV's might be our best hope for affordable housing! City could buy a bunch cheap, stick 'em out in the puckebrush somewhere.
A former neighbor of ours was a snowbird who used an RV as a second home. Had it permanently parked in Arizona. Good way to avoid paying property taxes.
"Hey There-
Just found your blog. I do disagree withthe idea about the oncoming socialist bent"
Thanks, but you should know that if you stick around, you'll need to get used to being called the C word, the B word, the T word, the S word, and all other kinds of special "words" that I haven't heard since I worked in the service end of a car dealership in the 1980s.
From "1929: The Year of the Great Crash"
The wife of a Long Island broker shot herself in the heart;
a utilities executive in Rochester, New York, shut himself in his bathroom and opened a wall jet of illuminating gas;
a St. Louis broker swallowed poison;
a Philadelphia financier shot himself in his athletic club;
a divorcee in Allentown, Pennsylvania, closed the doors and windows of her home and turned on a gas oven.
In Milwaukee, one gentleman who took his own life left a note that read, 'My body should go to science, my soul to Andrew W. Mellon, and sympathy to my creditors.'
CBBO had a rough day. will it follow IMB to penny stock status?..
WSJ:
Fewer Americans
Are Relocating
Within the U.S.
By CONOR DOUGHERTY
July 10, 2008; Page A3
Movement into and out of U.S. cities slowed sharply last year as the housing bust forced more Americans to stay put, according to new Census Bureau data.
For years, cities in the Sunbelt and the West have had hefty population gains while cities in the Northeast and the Midwest have lost residents or posted slight increases.
The same demographic trend occurred between July 2006 and July 2007, the new data show, but the gains and losses were smaller. Fast-growing cities such as Phoenix and Orlando, Fla., had smaller population increases, while many Midwestern and Northeastern cities had smaller declines.
In the Midwest, some cities gained residents. Chicago's population, which had decreased in each of the five previous years, rose 0.3% in the most-recent survey period. The population of St. Paul, Minn., increased 0.4% after several years of losses.
Demographers attribute the migration slowdown to the slumping housing market, which is making it harder for sellers to unload houses and is encouraging buyers to wait for prices to fall further. Many Midwestern and Northeastern cities continue to attract new young residents, many of them renters, who move there for jobs. But because the housing market is so weak, some young urban couples who would normally be headed to the suburbs to start families are staying put, as are retirees hoping to move to the South.
"Sunbelt cities that depend heavily on retirement migration either barely held their own or slipped," said Kenneth Johnson, senior demographer at the University of New Hampshire's Carsey Institute.
In Florida, Orlando's growth rate was cut in half, to 1.9% last year. Tampa had 0.8% growth, compared with 2.3% growth a year earlier. Phoenix, Las Vegas and Houston all had growth rates slower than in the year-earlier period.
The Census data are estimates of urban populations between July 1, 2006, and July 1, 2007. The data are limited to cities, and don't include the entire metropolitan areas.
The stall in migration last year could be a blip in a long-term trend of Americans' moving to the South and West. The slowdown was also reflected in state- and county-level data released late last year and earlier this year. The trend could reverse when the housing market is healthier.
But population gains in some cities could persist as long as gas prices stay high, says William Frey, a demographer at the Brookings Institution, a Washington think tank. "Some of the population increases in Los Angeles, Chicago and Boston reflect residents' decisions to not move to the suburbs and pay commuting costs," he said.
The report also showed New Orleans was the U.S.'s fastest-growing large city last year. Its population increased 13.8%, as residents returned in the aftermath of Hurricane Katrina. (The city lost more than half its population after the storm hit in August 2005.) Houston, which picked up 39,000 new residents, had the largest increase in population of all cities in the report.
WHAT IS WRONG WITH BEND:
http://www.jendotcom.com/
Fuckin' Calis....
Don't worry. UHaul soon for these STD buyers.
WHAT IS WRONG WITH BEND:
http://www.jendotcom.com/
Fuckin' Calis....
Don't worry. UHaul soon for these STD buyers.
At least two of the people in the pictures on that site (including the site owner) I went to elementary school, junior high and high school with here in Bend and, for all I know, were born here. Good guess though.
Damn, fooled me...
I've been thinking the same thing about airlines.
Me too. US Airways (LCC) is practically free. $11.5BB revenue, probably looking at large losses, but still $1.2BB in equity, and the whole mess sells for $238MM.
Some of this stuff is just so cheap. Lithia could probably do a private sale of each dealership for 5X what it's selling for today. Maybe 10X.
The RV industry was gearing up for a multitude of baby boomers who have all of the sudden gotten turned off by SUVs, let alone RVs.
I wouldn't be surprised if they lost 9/10 of their market.
I never considered RV'ing "conspicuous consumption". You see a lot of cheap bastards RV'ing. Like me.
Thing is, you still have to pay gas one way or another to get around, whether car, RV, or plane. And RV'ing is still at or below the cost of a hotel in many places. Plus RV'ing is fun. I'd do it even if it cost a little more.
I think the high end will have a slow down... but there are still people who CAN afford it. And will. Gas could go to $10 & they could still easly afford it.
They're pricing a lot of BIG GAS GUZZLER makers for extinction... I don't think that is universally the case.
You guys need to get over your hatred for calis I was born in eastern oregon and am fith generation native. I have known a lot of good and bad people from oregon, The people in these photos looks like they are having a good time, And they have a life, doesn't matter where they are from. Mabe you are just jealous of them.
Houston, which picked up 39,000 new residents, had the largest increase in population of all cities in the report.
TX is The Place To Be. Big revenue, low costs. TX is a paradise... until the next oil bust.
CBBO had a rough day. will it follow IMB to penny stock status?..
Yeah. CACB broke to the $6's. Umpqua got killed, going from $14 to the $9's in just a few days.
They're catching on that the NW is NOT a Lone Survivor, but just The Last Domino To Fall.
And they have a life, doesn't matter where they are from. Mabe you are just jealous of them.
Them hving a life, doesn't mean they are a life-sucking hoarde of locusts, killing, eating and destroying everything in their path. I am not jealous of a locust swarm.
You're claims of Eastern Oregon origins seems dubious dude. Not impossible, mind you. But dubious as hell. I never, EVER met an Eastern Oregonian who did not want to choke the life out of any Cali-banger they met.
Cali's have wrecked everything they've touched. If you love them so dearly, move down there. You'll be scratching out the eyes of those motherfuckers in 5 minutes.
They're intolerable & I hate the bitches.
doesn't mean they are a life-sucking hoarde of locusts...
I meant, doesn't mean they aren't a life-sucking hoarde of locusts...
WHAT IS WRONG WITH BEND: http://www.jendotcom.com/ Fuckin' Calis....
Quimby, you sound like an old man sitting in a rocker on the front porch of the rest home mumbling into his drool cup. Get a fuckin life, man.
Cali's have wrecked everything they've touched.
Most of the people who have moved to Bend in the last 25 years are not "Calis"; they came from Portland, the Valley and Seattle. And those who sold the land that they built on were good old Central Oregon boys -- third or fourth generation in some cases. So saying Central Oregon was wrecked by "Calis" is a little off the mark.
Or is "Calis" just your personal shorthand for "people I hate because they have more money than me"?
FNM from $20 to $12's this week, so far. FRE almost cut in half in 4 trading days.
Jimmy Rogers said Freddie & Fannie were the worst of the bunch. Prescient bastard...
I mean, fuck. What the fuck happens if Freddie & Fannie go down?
You ain't seen nut'n yet...
Fannie has $850 BILLION dollars in assets. That's one hell of a bailout.
So saying Central Oregon was wrecked by "Calis" is a little off the mark.
Or is "Calis" just your personal shorthand for "people I hate because they have more money than me"?
OK, listen Cali: You are loathed because instead of going to a place & wanting to leave it pristine, you are compelled by forces beyond your control to desstroy it.
My brother is a Cali-banger of the worst kind, an he knows how awful he is. He knows full well that living in CA has turned him from a fairly awful person, to an intolerable bastard.
Cali-bangers HATE themselves. They migrate trying to solve that problem. But they can't help but bring the urge to turn the places they go into Cali-replica's.
OK, I have met some reformed Cali's that came here & are beginning to live relatviely normal lives. But it's tough sledding, and they must self-medicate.
Dude, just move there & get your libreal-ass Cali-banger American Idol sympathizing Trader Joes butthumping bullshit out of your system. You're almost certainly young, and the 1,000% selfish, narcissistic Cali bullshit appeals to you right now. Go there, indulge in paparazzi star-adoring, consumption fueled mania. Fuck James Woods in the ass. Do whatever.
But don't sympathize with those locusts motherfuckers. You dilute the decency of real Oregonians when you do.
In the horserace to the next Billionaire Bailout, I got my money on Lehman.
I mean, fuck. What the fuck happens if Freddie & Fannie go down?
At this point I think it's a done deal. We're gonna see soon enough and I can't imagine it's good. I think we're gonna be the new Communism. Not just implied but full on Government sponsored home ownership.
"Dude, just move there & get your libreal-ass Cali-banger American Idol sympathizing Trader Joes butthumping bullshit out of your system. You're almost certainly young, and the 1,000% selfish, narcissistic Cali bullshit appeals to you right now. Go there, indulge in paparazzi star-adoring, consumption fueled mania. Fuck James Woods in the ass. Do whatever."
sounds like when you say california, you really mean L.A. it's a big state and most of it is totally unlike L.A.
Cali-bangers HATE themselves.
A little PROJECTION there, Bubble Boy?
Damn, what a flood of venom! You need to figure out what you're really so angry about and deal with it instead of blaming everything wrong with the world on "Cali-bangers." Whatever the fuck they are.
My brother is a Cali-banger of the worst kind, an he knows how awful he is. He knows full well that living in CA has turned him from a fairly awful person, to an intolerable bastard.
Sounds like he was a prick to begin with. If you're a prick and move to CA you will remain a prick. But the same holds true wherever you move.
You impress me as one intolerable, self-righteous bastard yourself.
sounds like when you say california, you really mean L.A. it's a big state and most of it is totally unlike L.A.
Bubble Boy just rolls everything he dislikes into one big ball and calls it "Cali-banger." Don't waste time trying to be rational with him on this subject.
Quimby said...
WHAT IS WRONG WITH BEND:
http://www.jendotcom.com/
Fuckin' Calis....
Don't worry. UHaul soon for these STD buyers.
_____________________________
Quimby...bitter much?
With all of your vast knowledge on the implants here, you sure haven't refined your Cali-radar much. I'm as native as it gets... born and raised and bringing up my kids here as well. You may have noticed them on my site as well, participating in everything I loved about growing up here. Go take a nap, you're crabby.
Yup, Bend Economy Man... We went to school together? Identify, identify!
>> Quimby, you sound like an old man sitting in a rocker on the front porch of the rest home mumbling into his drool cup. Get a fuckin life, man.
FUCK! COVER IS BLOWN!!!!!!
Paul-Doh, Buster, Timmy, lavabear, "The Eagle Flies At Midnight". Initiate Plan Y from outer spaaaaaace.
BEM, damn man, my Cali-dar is way off I guess.
To all you serious posters....take it easy, you know how I like to stir the pot :)
Shit, or is it Plan 9?? Can't remember....senility strikes.
>> With all of your vast knowledge on the implants here,
With all the tit-grabbing in the pics, I was thrown off a little bit.
I hope your kids don't look at your website....
>>Bubble Boy just rolls everything he dislikes into one big ball and calls it "Cali-banger." Don't waste time trying to be rational with him on this subject.
Are you new here? Haven't gotten out much? It's not bubble boy who does this. It's every Oregonian you'll ever meet. I can't even count the hundreds of examples. Cali-banger sells house and makes some cash. Thinks they are a real estate genius. Moves to Bend and overpays for a house because they can. Since they are a genius they will show these local hayseeds how to live. Prehaps they'll open a restaurant because lord knows we need one. A few years goes by and Cali Banger is flat ass broke slinking out of town. Real fucking genius. Being a Bend Native I've seen it hundreds of times. So sorry if being lumped into the Cali Banger group offends some. But that stereo is not going away.
Oooh parenting advice, that's rich.
You just never know what you're going to get, putting a bunch of 33 year long Bend residents together ... you know the ones that grew up together, went to school together, raise their kids together, own local businesses, and volunteer --- mixed with some BBQ and a couple margaritas, wooo boy, better watch out. We're working hard at overcoming that horrible Bend-stereotype you have going and going straight for the Cali Banger tag. It's what we all strive for.
Jen, you seem like a nice gal. I was hammered last night and I shouldn't have posted that. Sometimes I get a little too excited with the pot-stirring.
My sincere apologies.
Still don't like them Cali-Bangers though......(hurumph)
Are you new here?
LOL! Hardly. Been here for close to 25 years. (And no, I didn't come here from CA.)
Blaming the trashing of Bend (and yes, I agree it has been trashed) on "Cali-bangers" is just fucking stupid because, as I said before, (a) most of the people who have moved here and trashed it are from Portland, the Valley and the Seattle area rather than California, and (b) the trashing was aided, abetted and promoted by the local good ol' boys (who made a shitload of money doing it) and their pet politicians with their pedal-to-the-metal growth-at-any-price policies. If you want to get pissed at somebody, get pissed at THEM.
Busy days, but this made me laugh (along with Jen showing up to prove Quimby wrong):
Thanks, but you should know that if you stick around, you'll need to get used to being called the C word, the B word, the T word, the S word, and all other kinds of special "words" that I haven't heard since I worked in the service end of a car dealership in the 1980s.
Shit, I've read stuff here I've never heard. And to add another term of endearment, from a female wildlands firefighter: "mangina". As in "...their fucking mangina was whimpering!"
Cali Haters..have ya been there? Ever looked at a map?
Ever been to Alturas? Cloverdale? Red Bluff? Anywhere in the middle of the state? Spent any time in small northern coastal towns? Even the TOURON places that have been taken over from outsiders ,such as Sonoma are full of good earth minded rednecks, Men and woman that have seen their town which was once full of orchards and cheap vineyards be taken over. People that are cheaper than those on the post that think they live in a better way than the CONSUMTION MONSTERS (which they do,….the mistake is to think you are the only ones) Cali is that brew there beer, make their wine, grow there vegetables and kill their own meat instead of supporting the Corporate food and travel industry….hmmmm I wonder where IHTYB and the like shop? Safeway?
What’s happened to Bend is a shame. I moved here recently, from yes California. I love it for all the reasons in this blog and am very excited to watch the changes take place the next 5 years. I am sure you don’t really HATE me as mentioned over and over, but if you do? Well that’s ok, I kind of feel sorry for you, but actually find your ignorance more humorous.
ALL Cali’s are rich, live on the ocean, support art galleries, moved here because Outside magazine, play golf etc, etc. We don’t have small towns in Cali, no one ever stays in the same town they grew up in, we don’t have farmers, everyone watches American idol and we are all pretty.
You have so many awesome points, but your Cali Hate is 2006 Bend Builder Ignorance
"Jen, you seem like a nice gal...... My sincere apologies."
Awww, thanks. I AM a nice girl, even within all of my Californiaesque-ness (still trying to figure that one out) but thanks for redeeming yourself... next time, wait to post once you're fully rested or fully caffeinated, that's what I do. Makes for a much more peppy and happy post -- and at the end of the day, don't we just want to be peppy and happy :)
Dubious? Logged in lagrande in 79 for beleive it or not and check it out dick clark logging. I can show you the barn my great grandfather built next to spoffard in between walla walla and milton freewater in 1903. Yes i am a native. And still know a lot of people out there. You see those people accept people for who they are if youre an asshole then we have no liking for them but if youre nice we will accept you. Again some people just hate everyone.
Freddie & Fannie seem headed to towards insolvency...
Another one I didn't see coming.
June uptick ‘good news, but barely’
Local market faces too many uncertainties to expect a rebound soon, officials say
By Jeff McDonald / The Bulletin
Published: July 11. 2008 4:00AM PST
June produced a glimmer of hope for a Bend real estate industry that reached its lowest depths in early 2008, according to a report this week from Bratton Appraisal Group.
But the Central Oregon market still faces uncertainties that make an immediate rebound unlikely, say real estate industry officials who are worried about what’s on the horizon in the national economy.
The monthly report measures real estate data for single-family homes on less than an acre and excludes condominiums, townhomes, duplexes and mobile homes.
After Bend hit at least a three-year low with 56 sales of single-family homes in February, home sales rebounded slightly and have been ticking upward since. The city had 114 sales in June, still a far cry from the boom years of 2005 and 2006, when the city had 296 and 248 sales in June, respectively, according to the Bratton Report. The report charts real estate data for Bend and Redmond on a monthly basis and other Central Oregon communities quarterly.
“We’ve hit some lows, but it appears the trend is going the other way,” said Michael Hinton, president of HSI Mortgage and president of the Central Oregon chapter of the Oregon Association of Mortgage Professionals. “It’s still too early to tell” how much more the market will improve.
Tighter credit guidelines have become reality, but customers who have good credit, a down payment and a job can still get a home loan, he said. Lending standards have reverted back to 2000, Hinton added.
Rates on 30-year fixed-rate mortgages, which rose this week, remain lower than a year ago, according to numbers from Freddie Mac, the mortgage company, that were reported Thursday by The Associated Press. The mortgages averaged 6.37 percent this week versus 6.73 percent a year ago, AP said.
In Bend, the median sales price crept up to $315,000 in June, while the number of sales rose from 102 to 114. Days on the market dropped from 176 in May to 114 in June, according to the report.
The sales price per square foot of single-family homes sold, which is a better gauge of industry trends than median sales price because it factors in the size of the home, also crept up from $155 in May to $166 in June.
The one-month gains, however, are not enough to signal the market has corrected completely — either nationally or regionally, Hinton said.
“The numbers in June were positive, but not radical,” he said. “It’s good news, but barely.”
On a six-month basis, Bend’s sales price per square foot averaged $160 from January through June, down from $181 per square foot in 2006 and $184 in 2007.
Despite the late surge in June, Bend’s 529 home sales during the six-month period from January through June were down 60 percent from the same period in 2005 and 39 percent from 2007, according to the Bratton data.
“It’s obvious there’s been a falloff on the year-to-date basis,” said Al Eastwood, principal broker with Coldwell Banker Morris Real Estate in Bend. “It’s just that kind of year, but we’re working through it.”
Prices have come down “tremendously” the past six to eight months, said Julie DeVoe, a broker with Century 21 Gold Country Realty in Redmond.
More offers are being made, but many of them are short sales, which require a bank’s approval because the sales price is less than what is owed on the home, she said.
“There are a lot fewer sales than last year,” DeVoe said. “We’re writing plenty of offers, but I’m wondering if they’re going to close.”
Redmond averaged 37 home sales per month over the last six months, according to the Bratton data. By comparison, the city averaged 88 home sales per month for the same six month-period in 2005 and 2006. The city’s average price per square foot for the first six months of the year has dropped 16 percent from $153 in 2007 to $129 in 2008, according to the data.
The lower prices are a hopeful sign, real estate officials say, because lower prices will help reduce some of the inventory that amassed during the building boom in 2005 and 2006.
Building inventory
Building permits also have flattened in Central Oregon markets. In Bend, builders submitted an average of 25 new building permits per month from January through June, according to the report.
During the same period, an average 88 homes were sold each month in Bend, fewer than were being built, said Kirk Schueler, president of Brooks Resources Corp., which has several communities in Central Oregon, including two new subdivisions in Prineville and Madras where home sales have stalled.
“It’s exactly what needs to happen, Schueler said of the building slowdown. “(Builders) are not building more than are being sold. We need to start to work the inventory off.”
Bend has an estimated 16 months’ worth of housing inventory on the market, according to the Bratton data. Redmond has 17 months of inventory, while other Central Oregon communities have between 18 and 30 months of housing supply on the market, according to the report. Typically, about six months of inventory is considered healthy, real estate officials have said.
Data released Thursday by the National Association of Realtors suggest U.S. home sales might not surge upward this summer as they have in the past.
The Pending Home Sales Index, which projects national home sales 30 to 60 days into the future based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April. The index remains 14 percent below May 2007, when it stood at 98.5.
“The overall decline in contract signings suggests we are not out of the woods by any means,” Lawrence Yun, the association’s chief economist, said in a news release.
Bend’s pending home sales for July and August do not look much better, said Tom Greene, president of the Central Oregon Association of Realtors and principal broker for Re/Max Equity Group Inc., in Bend.
Pending home sales have dropped from 199 at the end of May to 170 at the end of June, Greene said.
“I would have expected June to be over 200,” Greene said.
Home sales for the first six months were less than had been expected, said Greene, who had hoped to reach at least 150 sales in Bend.
“Bend seems to be mirroring what’s happening nationally,” he said.
A mix of a slowing economy with soaring energy costs have raised fears of inflation and helped slow home sales nationwide, Greene said.
“We’re in a holding pattern because of the general economy,” Greene said. “Sellers need to be realistic about their asking prices if they want to get their houses sold.”
We also find in Cascade Business Buttbangers that the whole $200 MILLION INDIAN LIBERACHE CASH INFUSION FOR NEVER ENDING GROWTH AT EPIC AIR has died a quick, ignominious death.
As I thought, it was probably 100% BULLSHIT from Day 1.
10 bucks says Epic will soon start announcing layoffs.
And you read that CBN piece, and you can SMELL that they felt like they'd hit the lottery, and had already started planning huge hiring & buying binges.
Here is my take on the pre-announcement of Liberache's monster investment in Epic Air:
How To Make $100 Million A Year In Bend, Oregon
Which one of these guys apparently invested $200,000,000 in a Bend aircraft maker this week?
1) Peter Tork of "The Monkees"
2) Rip Taylor
3) Liberace
4) Indian Billionaire, Vijay "Jazzy Jeff And The Fresh Prince" Mallya
I know, it's hard to figure cuz each has One Sweet Ass Fuckin' Hair Doo! I mean, WTF?
Did anyone else see that pic in The Bulletin, and wonder what the hell is up with that dudes hair? I mean, DAMN.
ATTENTION INDIAN DUDE: That sweet-ass tight fro may have landed the ladies in 1973, but that thing is just weird!
Anyway, this is YET ANOTHER STORY THAT DOESN'T PASS THE SMELL TEST. I wrote in the comments:
This whole thing SMELLS BAD. $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee. No freakin' way is that real.
Boeing market cap is $82.52BB
Employees: 153,000
Value/Employee: $540,000
Is this Indian Dude INSANE? He's valuing a po-dunk little maker of kit planes out in the desert at more than 5X the per employee value of BOEING?
Man, if this Rick Schrameck guy actually convinced this nut to pay $200MM for 50%, he is One Hell Of A Shyster. Valuing Epic at well over 5X the relative value of Boeing on an employee basis is straight up INSANE.
That Rick Schrameck dude has pulled off the Bend Enterprise Investment Marketing Boondoggle Of A Lifetime. He got rocks. Bangin' a friend of his for $200MM, for only HALF of Epic, a podunk nut'n out in the desert. That's one thing. But he did it while RIGHT NEXT DOOR, there is a much larger competitor GOING BANKRUPT! Holy Shit! That is just brutal!
Seriously, it is stuff like this that reaffirms my faith in The Impossible. If this is true, which I seriously doubt, this guy has pulled off a dot-com era boondoggle the likes of which this town will never see again. Good job Rick!
And the guy is INDIAN. If Glengarry Glen Ross (The Greatest Salesperson Movie AND Real Estate Movie EVER MADE) has taught us anything, it's that selling to Indians is gat damn impossible:
Williamson: [handing Roma lead cards] I'm giving you three leads...
Ricky Roma: Three? No, I count two.
Williamson: There's three leads there.
Ricky Roma: "Patel"? Fuck you. Fucking Shiva handed this guy a million dollars, told him "Sign the deal!" he wouldn't sign. And the god Vishnu too, into the bargain. Fuck you, John! You know your business, I know mine. Your business is being an asshole. I find out whose fucking cousin you are, I'm going to go to him and figure out a way to have your ass - fuck you!
[throws the cards at Williamson]
Ricky Roma: I'm waiting for the new leads.
I'm telling you RE types right now, watching Glengarry Glen Ross ought to be de rigeur in Monday morning RE meetings! It's awesome!
Blake: You see this watch? You see this watch?
Dave Moss: Yeah.
Blake: That watch costs more than you car. I made $970,000 last year. How much you make? You see pal, that's who I am, and you're nothing. Nice guy? I don't give a shit. Good father? Fuck you! Go home and play with your kids. You wanna work here - close! You think this is abuse? You think this is abuse, you cocksucker? You can't take this, how can you take the abuse you get on a sit? You don't like it, leave.
Blake: And to answer you question, pal, why am I here? I came here because Mitch and Murray asked me to. They asked me for a favor. I said the real favor, follow my advice and fire your fucking ass because a loser is a loser.
Blake: We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize?
[Holds up prize]
Blake: Second prize is a set of steak knives. Third prize is you're fired.
Ricky Roma: You ever take a dump made you feel like you'd just slept for twelve hours?
Oh God... every line in that movie is just a classic. I actually know an extremely successful salesperson who watches this movie 2-3/month.
Anyway, this should bring us full circle to How To Make $100 Million A Year In Bend, Oregon. Rick Schrameck has already done the legwork, and has proven the Concept.
1) Start UNPROFITABLE business
2) Fly to Bangkok for Freaky Sex Junket
3) Approach Indias Answer To Liberace
4) Ask for 10X what the company is worth
5) Fire up the Automatic Cash Spanker
6) Bail out with Golden "Shower" Parachute 2-3 years later
It is AMAZING how there are people who can ask, and somehow receive, HUGE sums of money around here for some of the lamest-ass projects EVER. Becky Breeze and Lafky come to mind. Granted, I went to Epic Airs website, and they got some Sweet Rides, and had I the means, I would possibly consider buying one. But is Epic really worth $400 million, or even close? My God, this is another Malaysian Mambo, where some Far East Elvis Impersonator/Government gets whacked for not just millions... BUT HUNDREDS OF MILLIONS!
Rick Schrameck, I salute you. If you have in fact secured $200 million from an Indian Dude wearing Liberaces prized toupee, then you my friend, are KING OF THE WORLD.
Here is my take on the pre-announcement of Liberache's monster investment in Epic Air:
How To Make $100 Million A Year In Bend, Oregon
Which one of these guys apparently invested $200,000,000 in a Bend aircraft maker this week?
1) Peter Tork of "The Monkees"
2) Rip Taylor
3) Liberace
4) Indian Billionaire, Vijay "Jazzy Jeff And The Fresh Prince" Mallya
I know, it's hard to figure cuz each has One Sweet Ass Fuckin' Hair Doo! I mean, WTF?
Did anyone else see that pic in The Bulletin, and wonder what the hell is up with that dudes hair? I mean, DAMN.
ATTENTION INDIAN DUDE: That sweet-ass tight fro may have landed the ladies in 1973, but that thing is just weird!
Anyway, this is YET ANOTHER STORY THAT DOESN'T PASS THE SMELL TEST. I wrote in the comments:
This whole thing SMELLS BAD. $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee. No freakin' way is that real.
Boeing market cap is $82.52BB
Employees: 153,000
Value/Employee: $540,000
Is this Indian Dude INSANE? He's valuing a po-dunk little maker of kit planes out in the desert at more than 5X the per employee value of BOEING?
Man, if this Rick Schrameck guy actually convinced this nut to pay $200MM for 50%, he is One Hell Of A Shyster. Valuing Epic at well over 5X the relative value of Boeing on an employee basis is straight up INSANE.
That Rick Schrameck dude has pulled off the Bend Enterprise Investment Marketing Boondoggle Of A Lifetime. He got rocks. Bangin' a friend of his for $200MM, for only HALF of Epic, a podunk nut'n out in the desert. That's one thing. But he did it while RIGHT NEXT DOOR, there is a much larger competitor GOING BANKRUPT! Holy Shit! That is just brutal!
Seriously, it is stuff like this that reaffirms my faith in The Impossible. If this is true, which I seriously doubt, this guy has pulled off a dot-com era boondoggle the likes of which this town will never see again. Good job Rick!
And the guy is INDIAN. If Glengarry Glen Ross (The Greatest Salesperson Movie AND Real Estate Movie EVER MADE) has taught us anything, it's that selling to Indians is gat damn impossible:
Williamson: [handing Roma lead cards] I'm giving you three leads...
Ricky Roma: Three? No, I count two.
Williamson: There's three leads there.
Ricky Roma: "Patel"? Fuck you. Fucking Shiva handed this guy a million dollars, told him "Sign the deal!" he wouldn't sign. And the god Vishnu too, into the bargain. Fuck you, John! You know your business, I know mine. Your business is being an asshole. I find out whose fucking cousin you are, I'm going to go to him and figure out a way to have your ass - fuck you!
[throws the cards at Williamson]
Ricky Roma: I'm waiting for the new leads.
I'm telling you RE types right now, watching Glengarry Glen Ross ought to be de rigeur in Monday morning RE meetings! It's awesome!
Blake: You see this watch? You see this watch?
Dave Moss: Yeah.
Blake: That watch costs more than you car. I made $970,000 last year. How much you make? You see pal, that's who I am, and you're nothing. Nice guy? I don't give a shit. Good father? Fuck you! Go home and play with your kids. You wanna work here - close! You think this is abuse? You think this is abuse, you cocksucker? You can't take this, how can you take the abuse you get on a sit? You don't like it, leave.
Blake: And to answer you question, pal, why am I here? I came here because Mitch and Murray asked me to. They asked me for a favor. I said the real favor, follow my advice and fire your fucking ass because a loser is a loser.
Blake: We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize?
[Holds up prize]
Blake: Second prize is a set of steak knives. Third prize is you're fired.
Ricky Roma: You ever take a dump made you feel like you'd just slept for twelve hours?
Oh God... every line in that movie is just a classic. I actually know an extremely successful salesperson who watches this movie 2-3/month.
Anyway, this should bring us full circle to How To Make $100 Million A Year In Bend, Oregon. Rick Schrameck has already done the legwork, and has proven the Concept.
1) Start UNPROFITABLE business
2) Fly to Bangkok for Freaky Sex Junket
3) Approach Indias Answer To Liberace
4) Ask for 10X what the company is worth
5) Fire up the Automatic Cash Spanker
6) Bail out with Golden "Shower" Parachute 2-3 years later
It is AMAZING how there are people who can ask, and somehow receive, HUGE sums of money around here for some of the lamest-ass projects EVER. Becky Breeze and Lafky come to mind. Granted, I went to Epic Airs website, and they got some Sweet Rides, and had I the means, I would possibly consider buying one. But is Epic really worth $400 million, or even close? My God, this is another Malaysian Mambo, where some Far East Elvis Impersonator/Government gets whacked for not just millions... BUT HUNDREDS OF MILLIONS!
Rick Schrameck, I salute you. If you have in fact secured $200 million from an Indian Dude wearing Liberaces prized toupee, then you my friend, are KING OF THE WORLD.
The Bend Ponzi Scheme, Perpetual Motion Machine of Infinite Wealth rolls on....
OK, why the hell did that post twice?
This whole thing SMELLS BAD. $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee. No freakin' way is that real.
And Liberache went STRAIGHT TO EPIC'S BIGGEST COMPETITOR, and is now offering THEM $200MM.
WTF? Does this dude just go from company to company, jerking them around?
Semi-interesting tidbit: If you wanna see the utter implosion of the 2 quasi-government backed holders of over half of all US mortgages go from $15 to $4.50 in one trading week, it's here, and here's the other stalwart, going from about $20 on Monday to $8's today.
But I'm sure all that talk about things TURNING THE CORNER, AND WE CAN SEE THE LIGHT AT THE END OF THE TUNNEL is 100% right, and I'm wrong.
Stupid bitches. They don't understand when you take close to 40-50% of the net worth from just about all the inhabitants of the wealthiest country to ever grace this planet, that the result won't play out quick & it won't be pretty.
And if you recall the Bear Stearns bust, it took place over 2 days really. BSC went from $60 to $30 one day, then from $30 to $2 and change the next.
But it really took place predominantly on Day 2. Going from $60 to $30 is just a cut in half. That happens all the time.
Day 2 though, that was The End, cuz it went $30 to $2, which is a 93% haircut.
The total 2 day loss was 96.6%, but Day 2 alone was 93.3%. Day 2 was the zinger.
So when Big Ben and Hanky are spending the weekend trying to figure out the FRE and FNM bailout who is working overtime to figure out what to do with LEH? It's getting damn close to Bear Sterns territory.
Freddie & Fannie appear to be having a "Day 1" experience.
The other shoe has really yet to fall.
It's getting damn close to Bear Sterns territory.
Dang right. man, this just shows that when you're leveraged up 20:1, just how fast HUGE, HUGE leveraged companies can go 100+% BROKE. These fuckers can go from HUGE capital bases, to enormous Negative Net Worth in the blink of an eye. From making billions one day, to not making payroll or rent or bank repayments or anything, the next day.
It's really pretty fucking amazing what is unfolding.
Witness the Horror, boys & girls. We shall NOT come this way again.
Fannie, Freddie May Need to Lose $77 Billion Before Bailout
By Caroline Salas and Dawn Kopecki
July 11 (Bloomberg) -- Fannie Mae and Freddie Mac shareholders, battered by losses of more than 80 percent this year, shouldn't bet on an imminent government bailout of the biggest U.S. mortgage finance companies.
Fannie Mae and Freddie Mac would have to post pretax losses and writedowns of about $77 billion before the U.S. would be compelled to start a rescue, according to estimates by Fox-Pitt Kelton and Friedman, Billings, Ramsey & Co. analysts. The government-chartered, publicly traded companies have already raised $20 billion to cover losses amid the highest delinquency rates in at least 29 years. Fannie Mae and Freddie Mac shares plunged for a third day on concern shareholders would be wiped out even if the companies are rescued.
A government takeover of one or both companies is among several options that have been considered by White House officials, Joshua Rosner, an analyst at Graham Fisher & Co., said after meetings with administration officials. The U.S. is reluctant to step in before Fannie Mae and Freddie Mac, which own or guarantee about half the $12 trillion in home loans outstanding, exhaust their options for raising capital, according to Rosner and U.S. Representative Spencer Bachus of Alabama.
``The administration is considering all options in its contingency planning,'' Rosner said. ``That doesn't mean to say that we're at an inflection point where any decision is required immediately.''
Shares Plunge
Fannie Mae and McLean, Virginia-based Freddie Mac tumbled in New York Stock Exchange composite trading to their lowest in more than 17 years on concern the companies don't have enough capital to withstand the biggest housing slump since the Great Depression.
Fannie Mae dropped $6.05, or 46 percent, to $7.15 at 9:33 a.m. and Freddie Mac fell $3.61, or 45 percent, to $4.39. A year ago, Fannie Mae and Freddie Mac were trading at about $60.
``Shareholders, investors and creditors need to step up to the table,'' Bachus, the top Republican on the House Financial Services Committee said in an interview with Bloomberg Television. ``They profited in the good times and they will need to assume those liabilities, not the taxpayers.''
Bush Administration officials are considering putting at least one company under the full control, or conservatorship, of government regulators, Rosner said.
Under a conservatorship, the companies would be run by their regulator, the Office of Federal Housing Enterprise Oversight, which could require them to raise capital ``through any means,'' New York-based Fox-Pitt analyst Howard Shapiro said in a report yesterday. ``This is the situation that would put common shareholders at risk of complete dilution,'' Shapiro wrote.
Critical Capital
Conservatorship would be triggered if the companies fell below a so-called critical capital level. That threshold is defined as half of minimum capital, which is 2.5 percent of assets plus 0.45 percent of balance sheet obligations, mainly guaranteed mortgage securities, Shapiro said.
Fannie Mae is $26 billion above that level and Freddie Mac is $24 billion above, Shapiro said. Adjusting for tax, that means Fannie Mae would need to lose $40 billion and Freddie Mac $37 billion ``immediately'' to fall below that limit, he said.
Arlington, Virginia-based Friedman Billings analyst Paul Miller estimates losses of about $45 billion and $30 billion before they would fail.
For Fannie Mae, house prices would need to decline 40 percent nationally and delinquency rates would need to rise as much as 10-fold to 12 percent on loans from 2006 and 2007 to reach those levels, Shapiro said.
`Very Unlikely'
``We believe this is very unlikely,'' Shapiro said.
In the meantime, Fannie Mae and Freddie Mac are also increasing revenue, Shapiro said. Total claims paying resources, measured by adding the statutory surplus, current loss reserves and estimated revenue, are $56 billion to $92 billion for Fannie Mae and $52 billion to $88 billion for Freddie Mac, he said.
Freddie Mac is technically insolvent under fair value accounting, which measures a company's net worth if it had to liquidate all its assets to repay liabilities, former St. Louis Federal Reserve President William Poole said in an interview. Fannie Mae may become insolvent this quarter, Poole said, increasing pressure on the government to instigate a rescue.
Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules. The fair value of Fannie Mae's assets tumbled 66 percent to $12.2 billion and may be negative next quarter, Poole said.
`Too Big to Fail'
Freddie Mac currently has Ofheo's highest capital rating and ``holds a surplus above our regulatory requirement that will enable us to continue to support the nation's housing markets,'' spokeswoman Sharon McHale said. Fannie Mae is ``maintaining a capital position'' to help fulfill its mandate of supporting the housing market, spokesman Brian Faith said.
Fannie Mae and Freddie Mac make money by borrowing in the bond market and reinvesting the proceeds in higher-yielding mortgages and securities backed by home loans. Congress created Freddie Mac and expanded Fannie Mae in 1970 to promote home buying in the U.S. The companies' charters give the Treasury the authority to buy as much as $2.25 billion in each of their securities in the event of possible default, implying the government will stand behind the companies' debt.
The U.S. is counting on Fannie Mae and Freddie Mac, which have $5.2 trillion of debt outstanding, to help revive the housing market. Congress lifted growth restrictions on the companies, eased their capital requirements and allowed them to buy bigger so-called jumbo mortgages to spur demand for home loans as competitors fled the market.
The companies bought or guaranteed 81 percent of all mortgage securities created in the first quarter, almost double their share of a year earlier, according to Ofheo data.
Fannie Mae and Freddie Mac ``are the definition of too big to fail,'' said Ajay Rajadhyaksha, head of U.S. fixed income strategy at Barclays Capital in New York.
Fannie Mae is $26 billion above that level and Freddie Mac is $24 billion above, Shapiro said. Adjusting for tax, that means Fannie Mae would need to lose $40 billion and Freddie Mac $37 billion ``immediately'' to fall below that limit, he said.
Sounds like a lot, until you realize Fannie has $843BB in assets, and Freddie has $803BB. That's about $1.65 TRILLION, and $77BB is only about 4.5% of $1.65TT.
US housing prices have lost that in a month.
You, you're too big to fail. You...you are HUGE definitely too big to fail. You, fuck you not big enough.
But, but, but I'm bigger than Bear Stearns and you said Bear Stearns was too big to fail.
Sorry...I was wrong. The rules of too big has changed.
Fannie Mae and Freddie Mac ``are the definition of too big to fail,'' said Ajay Rajadhyaksha, head of U.S. fixed income strategy at Barclays Capital in New York.
I gotta agree with that.
Sorry...I was wrong. The rules of too big has changed.
The Fed will liquify the American Economy before they let holders of well over half the US mortgages go down. They just won't allow that.
We'll have Zimbabwe-esque inflation as well.
I wrote several US hyper-inflation pieces to HOWLS of derision about a year ago. Look at me now!
The Fed will liquify the American Economy before they let holders of well over half the US mortgages go down.
Oh I agree with that. But Lehman...I'm not sure anymore. Wamu, Wachovia??? I think Indymac probably has had the FDIC in house for a few weeks now.
The $5 trillion mess
Fannie Mae and Freddie Mac were created by Congress to help more Americans buy homes. Now their shaky condition threatens the entire housing market.
By Katie Benner, writer
Last Updated: July 11, 2008: 10:51 AM EDT
NEW YORK (Fortune) -- They own or guarantee $5 trillion worth of mortgages - nearly half of all the country's outstanding home loan debt - and they're crashing. Big time.
If Fannie Mae and Freddie Mac go under, it will wreak yet more havoc on an already wrecked housing market - making loans tougher to come by and possibly pushing hundreds of billions of dollars in cost on to U.S. taxpayers.
How could such a disaster have come to pass?
The two companies are so-called government-sponsored enterprises, created by Congress in 1938 (Fannie) and 1970 (Freddie) to help more Americans buy houses.
The companies' mandate is to maintain a market for mortgages - buying loans from banks, repackaging them as bonds, and selling those securities to investors with a guarantee that they will be paid. This makes lending more tempting for banks because Fannie and Freddie take on risks like missed payments, defaults and swings in interest rates.
But the companies are also publicly traded and try to maximize profits for shareholders.
As quasi-government programs, they've long carried an implicit guarantee that the feds wouldn't let them fail.
Their hybrid nature created both the opportunity and the temptation for the enterprises to take on more risk and to make themselves ever larger, more important and thus more profitable players in the mortgage market.
Very special treatment
The market and ratings agencies have treated Fannie and Freddie as bulletproof, even though the actual business of dealing with interest sensitive loans is very risky. This is in large part because of the very special perks granted to the mortgage giants, but to no one else.
Each may borrow up to $2.25 billion direct from the Treasury. They are exempt from state and local income taxes and from Securities and Exchange Commission registration requirements and fees. And they can use the Federal Reserve as their bank.
One result of all this special treatment was AAA credit ratings. That means Fannie and Freddie could borrow at super-low rates, a benefit they used to purchase - and hold -high-yielding mortgage loans. The spread between the two provided an irresistible earnings stream and the companies just kept getting bigger.
The mortgages they hold on their books alone total about $1.4 trillion, said Mike Stathis, managing Principal of Apex Venture Advisors, a research and advisory firm.
In the meantime, the companies were allowed to operate in this manner, piling on risk after risk, with virtually no capital cushion (Wall Street speak for the rainy-day piggybank financial companies keep should one of their investments blow up.) As the company's loan portfolio loses value and the mortgage market continues to crumble, it's easy to see why this was a fatal misstep.
Some saw the crisis coming before this week. For example, Alan Greenspan famously warned in 2004 that Fannie and Freddie's rapid growth needed to be curbed because their expansion threatened the financial markets.
Still, the cocktail of high credit ratings, domination of the mortgage securities market, and preferential government treatment led to the sort of shenanigans that go hand in hand with excessive privilege.
Fannie overstated its earnings by $10.6 billion from 1998 through 2004, and its chief executive Franklin Raines lost his job. Freddie Mac had understated its profit by nearly $5 billion from 2000 through 2002. Both companies missed earnings filings while their overhauled their books.
"If Fannie and Freddie had been created in the private sector, they wouldn't look like this," says Christopher Whalen, head of research firm Institutional Risk Analytics. "They have a public sector mission to expand housing and run what is essentially an insurance company. But they also have a conduit to securitize and sell loans, which is what broker-dealers like Lehman do; and they have an interest arbitrage piece (making money on the spread between interest rates) that looks like a hedge fund."
Robert Rodriguez, the founder of First Pacific Advisors, hasn't bought Fannie for Freddie bonds for over two years. "With the recent issuance of their financials, we were still uncomfortable with their leverage," Rodriguez says. "We believed there was considerable balance sheet risk in both of these companies.
Now the dwindling pool of mortgages, higher foreclosure risk, and a shaky interest rate environment have the companies on the ropes; and investors are beginning to lose faith in Fannie and Freddie.
Both firms told Fortune that they have enough capital to weather the storm and continue to support the nation's housing market.
And yet, Fannie has fallen 32% this week and 65% since the beginning of the year. Freddie plunged 47% so far this week and is down 75% since January.
Investors have lost faith that the companies can operate in their current incarnation without running into major problems.
If investors abandon these companies, what do we learn from this odd Frankenstein of a business model?
"Nobody every believed that Fannie and Freddie were truly private and they never should have been," says Whalen. "Now we will all have to pay for a company that has gone astray."
The http://money.cnn.com/2008/07/09/news/companies/benner_fanniefreddie.fortune/index.htm?postversion=2008071108Fannie and Freddie doomsday scenario
It's time to wonder what would happen if Fannie Mae and Freddie Mac failed.
By Katie Benner, writer-reporter
Last Updated: July 11, 2008: 8:46 AM EDT
NEW YORK (Fortune) -- Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect you, the taxpayer?
It's been a brutal week for Freddie (FRE, Fortune 500) and Fannie (FNM, Fortune 500). A Lehman analyst report Monday kicked off a stock rout that had shares in the mortgage finance giants hitting fresh multi-year lows Thursday. Freddie plummeted 22% Thursday, to $8.00 a share; Fannie was down nearly 14%, to $13.20.
The beating is expected to continue Friday. Freddie shares were down 38% and Fannie was off nearly 50% in premarket trading.
The stock plunge, together with Fed Chairman Ben Bernanke's downbeat housing outlook on Tuesday, is forcing investors to consider what would happen if a bailout is needed - a prospect raised Thursday when William Poole, the former president of the St. Louis Federal Reserve, told Bloomberg the companies are already "insolvent."
Also on Thursday, The Wall Street Journal reported that officials at the U.S. Treasury Department have been monitoring the companies for months as part of its normal contingency planning, but that discussions about what to do should they collapse have picked up in recent weeks.
A grim outlook
Fannie Mae and Freddie Mac are government-sponsored enterprises that help the mortgage market function by purchasing pools of loans and packaging them into securities. If one or both couldn't function, the result would be chaos.
At the end of last year, Fannie alone had packaged and guaranteed about $2.8 trillion worth of mortgages, approximately 23% of all outstanding U.S. mortgage debt. And these securities are highly rated and sold to investors all over the world.
"If Fannie or Freddie failed, it would be far worse than the fall of [investment bank] Bear Stearns," says Sean Egan, head of credit ratings firm Egan Jones. "It could throw the economy into depression or something close to it."
Clearly, investors are concerned. Credit default swaps - a kind of insurance against the possibility of Fannie and Freddie defaulting on their corporate bonds, are at their most expensive levels in 14 weeks; both companies are expected to report steep losses for the second quarter; and their main business, mortgage securitization, is under pressure as home price values decline and foreclosure numbers rise.
"The major issue is that these are very leveraged financial institutions, leveraged much more than any other bank, and they have lots of mortgage assets. As real estate values decline every day, the value of [the mortgages that it bundles, guarantees, and sells] are called into question," says Dalton Investments co-founder Steve Persky, who has been focused on distressed mortgage assets.
The possibility of government aid looms because it's hard to see how the private market can help the companies. Their stock market values have dropped so low that it would be difficult for them to raise money. For example, Egan estimates that Freddie alone will need to raise $7 billion over the next two quarters due to writedowns and losses. But the company's market capitalization - the number of outstanding shares times the share price stands at $8.7 billion.
"An investment banker would be hard pressed to raise an amount of money nearly equal to the value of the entire company," Egan says.
What's more, both companies have already raised a total of $13 billion by issuing preferred stock at the end of 2007; and they reduced their dividend payments to conserve cash.
The disaster scenarios
The Federal Reserve and the Treasury have taken great pains to point out that the government is not obligated to bail out either Fannie or Freddie if they face insolvency.
It's debatable where the legal obligations lie, but as a practical matter, the government can't let these institutions fail because they are being counted up on to help fix the mortgage mess. If Fannie and Freddie were unable to buy and back loans, banks would stop originating them and the pool of homebuyers would shrink, causing home prices to fall even further.
"If the government believes the companies serve an essential role in the market, which they do, they cannot let them fail," says Joseph Mason, an economics professor with the University of Louisiana who focuses on the mortgage markets.
So what would force the Treasury and Fed to step in?
Fannie and Freddie are among the most highly-leveraged companies around, meaning the amount of capital they have on hand is nowhere close to the level of assets they control.
Fannie and Freddie must constantly borrow money in order to operate; if for any reason borrowing costs rose sharply they would not be able to make good on their guarantees or even fund their day to day operations. This is when the government would feel intense pressure to step in and, at the very least, pay contracts in a timely manner.
In an April report, Standard & Poor's said an Armageddon scenario whereby Fannie and Freddie are insolvent is unlikely, but that the mere possibility of failure at either is a greater threat to the economy than the actual collapse of any investment bank.
The bailout scenarios
So what might it look like if the government had to lend a hand? Outright nationalization is an unlikely option given that neither the current administration nor the presidential candidates could afford to support such a move in an election year.
More likely, the Treasury Department or the Federal Reserve would come in and provide a liquidity backstop, in the form of a loan or guarantee to bondholders that they will be paid. Fannie and Freddie could even do a preferred stock deal with the government, much like the deal forged by Citigroup with the Abu Dhabi Investment Authority, says Egan.
That would allow give officials the ability to argue that they weren't bailing out the companies, but rather making an investment that would pay off in the long run.
Mason has a diffferent twist on a possible intervention. If either were to face insolvency, he says the government should purchase a large voting block of equity in the institution and use that as a tool to eliminate any dividends, replace officers and manage the firms back to solvency.
"But [a rescue] would be a political situation, so it would be messy," says Mason. "Fannie and Freddie would fight against having officers replaced. They would want to keep the dividend."
The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States.
Crap, here's a good link to that CNN piece:
The Fannie and Freddie doomsday scenario
"Fannie and Freddie would fight against having officers replaced. They would want to keep the dividend."
Myopic dumbfucks. Rome is burning and these stupid bitches are out campaigning to stay in office...
>> How To Make $100 Million A Year In Bend, Oregon
Yes Paul-Doh, one of my favorite posts by you EVER. Good stuff.
I fear for Epic too, their LT is a sweet machine but I don't do experimentals :(
Glass half full. Evening in America. Last one to leave turn off the lights. Nation of whiners.
What's with all the Mighty Morphin' Power Rangers costumes? You people can't wear shorts and T-Shirts to ride your bikes?
You look like clowns. Ridiculous.
IndyMac just went down, $4-8 billion loss to be picked up by FDIC.
Who's next?
Fannie and Freddy are in deep shit. It's going to take a huge pump to keep them afloat.
Is Bush going to be known as the idiot who destroyed the American financial system or the guy who started a war for the fun of it?
IndyMac Seized by U.S. Regulators Amid Cash Crunch (Update3)
July 11 (Bloomberg) -- IndyMac Bancorp Inc. became the second-biggest federally insured financial company to fail today after a run by depositors left the California mortgage lender short on cash.
The Federal Deposit Insurance Corp. will run a successor institution, IndyMac Federal Bank, starting next week, the Office of Thrift Supervision said in an e-mail today. Customers will have access to funds this weekend via automated teller machines.
The Pasadena, California-based bank specialized in so-called Alt-A mortgages, which didn't require borrowers to provide documentation on their incomes. Its home state has been among the hardest hit by foreclosures.
``Given their focus on Alt-A and a heavy concentration in California, they would have suffered meaningful losses in almost any scenario,'' Brian Horey, president of Aurelian Management LLC in New York, said before the seizure was announced. Aurelian is short-selling IndyMac shares to gain from declines.
IndyMac becomes the largest OTS-regulated savings and loan to fail and second-biggest financial institution to close behind Continental Illinois in 1984, according to the FDIC.
The lender racked up almost $900 million in losses as home prices tumbled and foreclosures climbed to a record. California ranked second among U.S. states, with one foreclosure filing for every 192 households in June, 2.6 times the national average.
Needed `Common Sense'
Had IndyMac ``applied some common sense and changed their approach to underwriting as the housing market peaked, they might have lived to see the next cycle,'' Horey said.
After peaking at $50.11 on May 8, 2006, IndyMac shares lost 87 percent of their value in 2007 and another 95 percent this year. The stock fell 3 cents to 28 cents at 4 p.m. New York time today.
IndyMac came under fire last month from U.S. Senator Charles Schumer, who said lax lending standards and deposits purchased from third parties left it on the brink of failure. In the 11 business days after Schumer explained his concerns in a June 26 letter, depositors withdrew more than $1.3 billion, the OTS said.
``This institution failed due to a liquidity crisis,'' OTS Director John Reich said in the statement. ``Although this institution was already in distress, I am troubled by any interference in the regulatory process.''
Schumer blamed IndyMac's own actions and regulatory failures for the bank's seizure.
``If OTS had done its job as regulator and not let IndyMac's poor and loose lending practices continue, we wouldn't be where we are today,'' Schumer, a New York Democrat, said in an e-mail today. ``Instead of pointing false fingers of blame, OTS should start doing its job to prevent future IndyMacs.''
IndyMac announced on July 7 that it was firing half its employees. The lender agreed to sell most of its retail mortgage branches to Prospect Mortgage, giving the Northbrook, Illinois based-company more than 60 branch offices with 750 employees. IndyMac also has a retail bank network with 33 branches and $18 billion in deposits, mostly insured by the FDIC.
dubious? remember my 21st birthday joseph OR what a time 1979. Old time me and my fellow grads from mac-hi am a grad from milton- freewater. Free drinks all night long. this was a old logging town at the time. We rode the canal off the lake what a time it was.
You look like clowns. Ridiculous.
Listen, we ain't joining COBA or buying a house, so chill.
And we sure ain't puking out $200MM on some bullshit micro-company.
Ain't advertising in CBN, either.
And guess what? WE BEEN DEAD ASS RIGHT SINCE DAY 1.
dubious?grandad graduated in 1926 mom graduated 1949 and me well 1976 all from the same fucking high school mcloughlin union high mac-hi. we kicked crook- countys ass in football prinvile our backfield. but they were hell for hard hitting a lot of concusions that night. the boys could grow full beards. 1976 we kicked there ass.
http://www.last.fm/music/Steve+Morse/_/Tumeni+Notes chill
An interesting read on Fannie Mae
Re: interesting read on Fannie Mae
That's scary. Fannie Mae is the largest buyer and owner of it's own bundled mortgage securities, which it buys with discounted debt issuances due to their implicit government backing. IIRC, it's about $880B with right now.
FM makes money on the spread between the interest income from the mortgages they own and the interest cost of the debt issued to buy those mortgages.
The lax lending standards were also endorsed and capitalized upon by Fannie Mae. They wanted to make more money, so they had to have a bigger pool of mortgages. Presumably their is a significant percentage of toxic paper in their portfolio as well.
This is highly likely to end very, very badly. It will make Bear Sterns and IndyMac look like tiny problems. The Fed is going to have to "print" a gusher of money to keep FM afloat when the toxic paper going bad starts to make it impossible to cover ongoing debt costs.
Bruce said: "This is highly likely to end very, very badly."
I thought that Brad DeLong has an interesting perspective, especially his opinion that "teaching feckless financiers a lesson is simply not worth destroying the jobs of millions of Americans"......
The chance that American taxpayers will actually lose any money if Ben Bernanke and Henry Paulson decide that Fannie and Freddie need government support is very low:
The interest payments they have coming in are greater than the interest payments they have going out.
Their government guarantee is itself a very valuable asset that they have made a lot of money off of in the past and will make more off of in the future.
They are not even in liquidity trouble--unless they begin to have problems rolling over their discount notes...
As long as it is generally understood that they are too big to fail, they should not even have liquidity problems--absent a depression that bankrupts many currently-solvent homeowners, that is.
Nevertheless, there is now a risk that Fannie and Freddie will need some form of government support in the next month:
The situation could require a lot of government-provided liquidity at any moment
It and might even require more liquidity than the Federal Reserve can provide with its current balance sheet. Either the Fed needs to be given the power to pay interest on reserves immediately--so that it can swap interest-paying reserve deposits for mortgages next week--or this has to become not Fed but Treasury business.
The game the Fed and the Treasury are playing right now is as follows:
Keep risky asset prices from collapsing...
So that the flow of savings to finance construction and manufacturing expansion continues...
So that employment declines in construction and supporting occupations are roughly balanced by employment expansions in export and import-competing manufacturing and supporting occupations...
So that the economy does not fall into a depression deeper than that of 1982...
In which case all bets are off
Supporting Fannie and Freddie may be something Ben Bernanke and Henry Paulson decide we need to do in order to win this keep-the-economy-near full employment game:
They are not in the business of rescuing feckless financiers from bankruptcy.
If their actions do have the consequence of rescuing some feckless financiers from bankruptcy, that is a side effect of their keeping the financial crisis from spilling over and destroying the jobs of millions of Americans.
To have the government step back in order to teach feckless financiers a lesson is simply not worth destroying the jobs of millions of Americans.
They are grownups with good judgment and as much experience in this business as anybody.
They are backstopped by committee chairs--Chris Dodd and Barney Frank--of equally good judgment.
Bernanke and Paulson have asked for additional regulatory authority:
They should get it.
Fannie's and Freddie's troubles make it more and more clear that the financial-market deregulation agenda of the late 1990s that Phil Gramm spearheaded was a more serious mistake than almost of any of us realized back at the time...
There are a bunch of options if push comes to shove:
Having the government formally guarantee GSE debt.
Having the government provide capital to the GSEs.
Having the government guarantee GSE preferred.
Putting the GSEs into "conservatorship."
The moral-hazard worriers in the Treasury will probably favor the last--that option penalizes GSE shareholders in the same way that Bear Stearns and LTCM shareholders and principals were penalized. The cautious will favor the first option, as running the least risk of aggravating uncertainty.
>>The chance that American taxpayers will actually lose any money if Ben Bernanke and Henry Paulson decide that Fannie and Freddie need government support is very low:
At the moment. If house values continue down, I doubt this will be the case. If this were the bottom, maybe they'd be OK.
Just a few months ago Fannie and Freddie were supposed to be the answer to the problem--they were given the green light to go ahead with jumbo loans on houses that are depreciating.
Now they don't look like a solution to anything, do they?
what will we wipe our asses with? grandad said they used old newspapers
one thing indeed tumulum school stateline wash ore border grandad did say they had a teacher named miss peehole. can you imagine that. in this day would they hire someone named miss peehole, unbelievable,but coming from him I know it is true. also my uncle ed troyer born 1898 did tell us stories of the blue coats riding on their horses to target meadows a spot on youre way to jubilee lake this is a journey in eastern oregon
one more thing in 1969 my brother and i went to an old timers place he would not drink beer cold he put it on the stove to warm it up?
http://www.youtube.com/watch?v=Mk_GMvIea6s
How do I submit a guest blog post for your consideration? I'm clueless!
mumstheword
Mr. Bubble Burster, The reason your blog is successful is that it's prescient in an intelligent, yet endearingly crassy way.
The intelligence and crassiness won't ever diminish. The prescientiousness may.
I'd just keep doing what your doing but pull back a bit on frequency or content if the 'material' is not there. What will likely happen is that the Bend Story will likely morph into something bigger and change shape as time goes on. I don't mind optimism and opportunity. It's meaningful to hear a MNC-type observation now and then from one who calls it like is (when it's dire) so often. Of course, seeking opportunity or trying to see the bright side when things become so bad will make you a paria - but that's what you're good at and is your destiny anyway!
I enjoy your blog.
AZ
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