Sunday, July 19, 2009

Bankrupt in Deschutes County? Impossible!

I'm going to do a short one this week....

But I'll preserve for the ages a fairly good piece by the Bully on going BK... in Sisters, no less.

The human side of bankruptcy
Financial disruption is personal for the millions who file for it

By Lily Raff / The Bulletin
Published: July 19. 2009 4:00AM PST

At 64, Jack Gulick is starting over.

He buys groceries with cash instead of credit. He no longer buys lattes from Starbucks. He and his wife, Laura, share one car instead of two. He is grateful for things he once took for granted, like having health insurance. He follows the financial news more closely.

For the Sisters resident, this is life, post-bankruptcy.

When a bankruptcy makes the news, it usually involves a large corporation — think General Motors or Lehman Brothers. But the vast majority of bankruptcies are not filed by companies at all. Of the 1.17 million bankruptcy cases filed in federal court last year, 1.07 million, or 92 percent, were filed by families or individuals.

Bankruptcy is a legal process that helps people and businesses eliminate debts or repay portions of their debts under protection of the court.

Non-corporate bankruptcies are usually mentioned as statistics or trends. But for the individuals who file, bankruptcy is personal. Really personal.

The Gulicks had been living near San Francisco when they bought a half-acre lot in Sisters in 1997.

“I was born and raised in Portland and my wife in California, so this was kind of a compromise, I guess,” Jack Gulick said. “We both loved it. We’d been coming here for years.”

In 2001, they sold their house in California and hired a Central Oregon builder to construct a 2,100-square-foot custom home on their lot. In June 2002, they moved in.

“It was our dream home … and our plan was to retire in it,” Gulick said.

The couple saw no reason not to. Gulick had a steady job as regional sales manager for a large electronics company, with 30 years of industry experience under his belt. He traveled, two or three weeks a month, throughout the 13 Western states. He earned a six-figure annual income including commissions.

Then a lingering health problem flared up. For about 10 years, one of the discs in Gulick’s neck had been slowly deteriorating. In late 2003, doctors recommended a disc fusion.

“They told me I had about a 50-50 chance that it might work (to stop the pain),” he said. “So I got the wrong side of the coin, so to speak.”

By 2007, Gulick was unable to lift more than 10 pounds. He couldn’t comfortably walk more than 100 yards at a time. He could no longer handle the grueling travel schedule his job required.

In December 2007, Gulick was laid off. His long-term disability insurance now provides him with 60 percent of his base salary. But Gulick’s base pay rate does not include sales commissions, which made up half of Gulick’s income.

“I’m actually getting 30 percent of my ordinary pay,” he said. “So … all of a sudden my income gets cut by 70 percent and it’s like, ‘Wow, there’s no way we can pay for this. We can’t pay for the house.’”

Unable to pay their mortgage, the couple moved out of their dream home and into a nearby rental. The home was foreclosed and will be sold at auction next month.

Even with their housing costs cut by more than half, the Gulicks’ finances buckled under growing debt. They sold one of their two cars at a loss, just to get rid of one monthly bill. Meanwhile their credit card balances, which included many of Gulick’s medical costs, ballooned.

“We took all the cost-cutting measures we could, but we still had a lot of credit card debt,” he said. “That’s really what sunk us. You miss one payment and your low-interest credit card goes from 6 or 7 percent up to 19 or even 24 percent.”

Gulick called a counseling service and was told that even with more drastic cuts in spending, he would need to earn about $900 more per month to qualify for any sort of debt consolidation program.

“Their advice,” Gulick said, “was to get a hold of a bankruptcy attorney.”

Credit fever

Last month, 94,085 Americans called a consumer credit counseling service. That’s a 36 percent increase over June 2008, when 69,431 Americans phoned for help.

Kate Williams is vice president of financial literacy for Money Management International, a private nonprofit that oversees 24 nonprofit consumer credit counseling agencies. Before a person may file for bankruptcy, he or she is legally required to seek a one-hour credit counseling session and receive a certificate of completion. These sessions make up about 45 percent of consumer credit counseling calls, according to Williams.

She went on to estimate that about 90 percent of callers’ most troublesome debts are carried on credit cards.

“Credit cards become, in some cases, a third source of income. Mom works, dad works and then we’ve got Mr. Visa at our house,” she said.

Psychological studies have shown that consumers don’t feel as responsible buying an item with a credit card as they do buying an item with cash, Williams said.

She offered two pieces of advice to people who want to avoid bankruptcy: Save for retirement and save for unforeseen expenses.

“Every worker today should be (saving for retirement) because we know we want to retire. Even though the market is just brutal to everyone right now, make it a habit,” she advised. “And … even if you can only set aside $25 a paycheck right now (into a savings account), it’s not going to grow fast, but the $600 or $700 that you save in 2009 may be the set of tires that you don’t have to put on a credit card in 2010.”

Try to cut expenses in little ways, she urged, by packing a lunch instead of going out, for example.

“Most families can cut out $85 to $100 a month. It’s not going to be easy, and it’s not going to be one particular thing, but it’s a lot of $2 and $3 and $5 and $8 things that add up,” she said.

Williams recommends that consumers keep track of their income and expenses on one sheet of paper. Most people, when asked how much debt they think they owe, underestimate it by 20 to 33 percent.

Gulick said it was shocking to see a comprehensive list of his debts.

“My wife had been admonishing me for years about going on a cash basis and getting rid of credit cards,” he said. “I just, I didn’t listen to the advice that I got.”

Deciding to file

Brian Hemphill is a lawyer in Bend who did not work for the Gulicks but who specializes in bankruptcy cases. He keeps a box of tissues on his desk because clients are often in tears. Many clients, he said, feel overwhelmed and ashamed.

“I tell them, it’s not a magic wand and it can’t cure everything,” he said. “It does have a lot of negatives to it, and people have to decide, do the positives of bankruptcy outweigh the negatives? But fundamentally, bankruptcy is there to help.”

Hemphill said the social stigma attached to bankruptcy has faded in recent years as it has become more common.

Donald Trump told the New York Daily News in 2004 — during his casino company’s second voyage through bankruptcy — that there’s no shame in it.

“It doesn’t matter,” he was quoted as saying. “It’s a modern day thing, a legal mechanism.”

Many others disagree. Dozens of Central Oregonians who filed bankruptcy in the last year declined to speak about their experiences for this article.

When Hemphill’s clients decide to file, he helps them determine which avenues of bankruptcy they qualify for. Most individuals consider Chapter 7 or Chapter 13 bankruptcy, both named for the section of federal code in which they are described. In Chapter 7, some of the debtor’s belongings may be sold. Debts are then forgiven or discharged.

In Chapter 13, a debtor works out a payment plan and agrees to dedicate future earnings toward paying off some or all of the debts.

Not everyone qualifies for both types of bankruptcy, but some people get to choose. In both types of bankruptcy, the person files in federal court and is assigned a trustee, who acts as a referee between the debtor and the creditors.

In Chapter 7 cases, the trustee helps decide which assets to sell. In Chapter 13 cases, the trustee helps create a fair, feasible repayment plan. In both, the trustee helps determine how much money each creditor gets.

In all cases, a bankruptcy judge has final say. Filers must appear in bankruptcy court at least once, but few Central Oregonians must trek to federal court in Portland. Instead, bankruptcy judges or trustees come to Bend several times a month, to hold hearings in classrooms at the National Guard Armory.

Just before Gulick filed for Chapter 7 bankruptcy, he paid for an appraisal of his furniture and belongings to see what they could fetch at an auction. If certain pieces had been particularly valuable, Gulick may have been required to sell them. But there are legal exemptions to protect people from having to sell basic necessities.

“They can’t sell off every single thing you own,” Hemphill said, “otherwise you’d be naked, living under a bridge.”

Chapter 13 cases usually go on for three to five years as the consumer pays back his or her debts. The trustee oversees the case throughout that time, collecting money from the consumer and adjusting the agreement if he or she loses a job.

When people emerge from bankruptcy, they often feel relieved that the debt is behind them. A discharge from bankruptcy court is a document confirming that the debts are closed.

Life after bankruptcy

Bankruptcy is not just for low-income consumers.

“Most people who file for bankruptcy never, ever could have imagined that they’d be in this situation,” said Paul Stednitz, a senior vice president and regional manager for Central Oregon at Liberty Bank.

Williams, of the credit counseling group, said the process is, in some ways, more difficult for consumers with high incomes.

“Some of them are paying for private schools, for example, so their kids end up having to change schools,” she said. “It just upends their lives.”

Many people who go bankrupt lose their homes, although foreclosures — when banks reclaim homes whose owners fail to pay their mortgages — are often separate legal processes.

A bankruptcy remains on a credit report for seven to 10 years. But that doesn’t mean that a consumer is unable to obtain new loans.

“We have, at times, lent to people that have had bankruptcies,” said Stednitz of Liberty Bank.

Banks are usually notified when an account holder files for bankruptcy.

“People could have overdraft lines (of credit), for example. Almost everybody has some sort of line of credit attached to their bank account,” he explained. “And any sort of lending mechanism like that would trigger a bankruptcy filing to come to our bank.”

When a person with a past bankruptcy applies for credit, the loan officer looks closely at the details of the bankruptcy before making a decision, Stednitz said.

“In that person’s credit report, we can see all of the credit that was included in the bankruptcy,” he said. “And if we can’t see that, then we ask for a copy of the bankruptcy documents so that we can see it. Because some people will exclude items from a bankruptcy, so they might file for bankruptcy but stay (current) on some of their loans.”

Generally speaking, he said, a Chapter 13 bankruptcy looks more favorable than a Chapter 7 bankruptcy because it shows that the person or couple took some responsibility in repaying parts of loans.

“But there are times when people don’t have a choice. They have to file a Chapter 7,” Stednitz added. “They may have had a medical situation or an illness.”

Post-bankruptcy consumers can rebuild their credit with a secured credit card.

“It’s essentially a Visa card that’s issued with a savings account that is collateralizing the card,” Stednitz explained. “So if you have a $1,000 limit (on your card), you would have to have $1,200 in the savings account. It appears on the credit report as a regular credit card, so it’s a great way to rebuild credit. In fact, it’s hard to rebuild credit any other way.”

Experts agree that it is critical for a person who goes through bankruptcy to learn a lesson in the process.

Gulick said that for him, lessons were unavoidable.

“It’s really tough to go on a cash (only) basis; it takes more discipline than I ever thought,” he said. “But going through bankruptcy, you lose all your credit cards, and I’m not going to take any new ones out. So we live on cash only, and it’s a whole different experience. If you don’t have the money in the bank to do it with, you don’t do it. That goes from grocery shopping to taking a weekend away or anything that you want to do.”

Gulick has shared these lessons with his grown children to help them avoid his same fate.

“It’s been an education, and it’s been … very traumatic,” he said. “I wouldn’t say that I feel lucky in having gone through the experience but I will say this … it has been a great teacher. Unfortunately, I got taught pretty late in life.”

I linked to the print-version, since there's some good info there, including a graph for NW states of BK's per quarter since 2006.

The Bully also gets another notch to The Good for printing this. A nice reprieve from their candy-apple bullshit.

A warning though: The douche-lawyer they quote in there is a big asshole. And a total dumbfuck. Believe me, I know.

OK, I'll print the other piece in the Bully, since it's pretty rare for them to have ANY decent pieces:

Few loans to rely on
Scarcity of money making it especially tough for startups, so many turn to private financing

By Andrew Moore / The Bulletin

Before Terri Cumbie opened Dudley’s Bookshop Cafe in downtown Bend in December, she applied for business loans, only to be turned down. She self-financed her store instead.

Terry Rhode is a Madras farmer who has started marketing safflower oil, a cooking oil derived from crushed safflower seeds he’s begun harvesting. He also recently applied for loans to build a pressing plant, but said he was turned down. He’s financing it himself, but the meager amount he can invest is making it harder to launch the business.

Sky Pinnick, owner of the new downtown Bend bar Velvet that opened last month, said he and two business partners put up all the funds to open the business, not once considering a bank loan.

“Why go through all the hassle if they are just going to turn it down?” he said.

The credit crunch that ushered in the recession still seems to have a stranglehold on people who want to start new businesses.

While banks are making small-business loans, they’re fewer than in the past. Throw in the lack of capital once available from credit cards or home equity, and many would-be entrepreneurs are left with either dashed dreams or a scramble to secure capital from family, friends or their own savings accounts.

Under more scrutiny

Dennis Lloyd, director of lender relations for the federal Small Business Administration in the Portland district, said the number of loans guaranteed by the SBA this year in the district — which includes Deschutes County — is down “considerably.”

The value of the loans, however, is roughly the same.

From Jan. 1 through July 15, the SBA had guaranteed 21 loans in Deschutes County for $6.8 million, according to the SBA. For the same period last year, it guaranteed 34 loans for $6.7 million, and in the same period in 2007, it guaranteed 56 loans for $10.2 million.

Asked whether the decline in loans was due to fewer applications or more denials, SBA spokeswoman Sylvia Gercke said it was the latter.

“Because of the economic situation, making loans to small businesses is risky, so (banks) are preferring to monitor their existing portfolios rather than add new loans,” Gercke said. “I guess they are just being cautious.”

Paul Stednitz, a senior vice president for LibertyBank and the regional manager for Central Oregon, said banks are lending, but it has always been difficult for new businesses to secure startup financing — in the current recession, even more so.

Stednitz said there are some industries, such as restaurants, that banks rarely give new-business loans to because of high failure rates. But for other startups, the decision about whether to extend a business loan depends on the experience of the entrepreneur, the business plan and the viability of the idea.

“The economy hasn’t changed how we look at startups,” Stednitz said. “I think now we have to scrutinize collateral closer, cash flow, projected cash flow, what you’re selling — is it going to be able to sustain in this economy, because people aren’t buying things. You could have the greatest idea, but if no one’s buying … here we are as bankers trying to make these determinations and it’s not easy.”

A waiting game?

Money is tight, and that’s affecting the way new businesses are being launched, said Bill Saling, a volunteer with the Central Oregon chapter of SCORE, formerly known as the Service Corps of Retired Executives. Saling and local SCORE staff offer free advice to small-business owners.

“We’re already telling people early in the conversation that if they are saying they have to get lending from banks, not right now, I don’t care how good you are,” Saling said.

Saling said he is advising people interested in launching a new business to wait for the credit crunch to subside. He said prospective small-business owners should instead tie up all their loose ends and ensure they have a solid business plan so they can move quickly once credit normalizes.

Saling said it can be tempting to self-finance a business, but many would-be business owners miscalculate how much more money they will need.

“Not everybody is going to pay their bills on time, some people will stiff them, contractors change their terms, so all of those things without a cash reserve make it very difficult to survive,” Saling said.

Falling back on private funding

Stednitz said the loss of jobs is compounding the problem, as more people are forced to come up with creative business ideas to generate income. But with home equity no longer an option for most and retirement accounts battered by the stock market’s decline, those wanting to launch a business could find themselves in a pinch.

“The next fallback, unfortunately, it’s the credit card — and we would not recommend using a credit card to start a business,” Stednitz said.

What’s left is private money, he said.

Cumbie, at Dudley’s, tapped family, credit cards and a home equity line to open her store, she said. She also was frugal about the endeavor, furnishing her store with secondhand items and stocking inventory she collected for four years prior.

While initially disappointed she didn’t get a small-business loan, Cumbie wasn’t surprised, given the economy. In the end, she’s glad she didn’t get the loan.

“I think if I got a really big loan from a bank, the economy got worse after I opened, and it would have been really, really hard to make those loan payments,” Cumbie said. “I would have had to borrow more just to make the payments in addition to what I needed.”

These two pieces basically illustrate 2 sides of the same coin: Save Your Money.

People who are liquid in the future will run the show. Being "INVESTED" (as I have been admonished for not doing so in this forum... often) is NOT what you want to be doing now.

Putting your money "At Risk" has worked just peachy for 3 decades, it's all many people have ever known in their adult life. Buy a house, buy stocks... if you did these 2 things to the fullest extent of your ability, you've done as well as could be expected.

This formula needs to be turned on it's head for the next 10-20 years. This is not going to be a short-term phenom.

In the first piece you read the guy had to sell his STUFF at a LOSS. The second woman could not get a nickel, and went to CC's & HELOC... and family, who almost certainly did the same. So basically she doesn't "own" the place, others do.

Folks, Cash Is King. True today, true in 2019. This will not be over soon.

It's especially true here. We are STILL 24% overvalued! STILL! The pain is not remotely over here, in some ways it hasn't even gotten going.

We won't fall 24%, and that'll be it. We'll cut RIGHT THROUGH THAT, and keep going down. Then we'll just sit there, at dead-ass bottom.

THAT is when you break the piggy bank, and begin a slow, methodical process of accumulating stuff CHEAP.

What'd you pay for Pegasus, Dunc? $5K? That there is what I'm talkin' 'bout.

Things won't just be cheap, they will be ridiculous. All the current-day knife-catchers will have bloody, perforated hands, and will just want out. Soooooooo many people think they are catching the bottom now. Folks, that shit will not happen until the first digit in your age advance 1 or 2 digits... the second digit will stay the same.

This blog will be LONG GONE when it's time to buy in Bend. There ain't a chance in hell I can write this fucking thing for 2 decades. Neither will you have The Bully available to Ring The Bell... it'll be long gone.

Folks, they'll be GIVING shit away. I know this seems impossible, because things NOW are STILL so fucking (relatively) expensive. That's because we are still in the BEGINNING STAGES of working off a speculative bubble the like of which will nevere be seen again... EVER.

So assets are still ridiculously expensive. Compared to what they will be. At the end, cars, homes and small businesses will be given away practically. Big Assets, previously the domain of credit providers, will have to go for Cash Prices. And cash will be Damn Scarce. Scarcer than it is now. Lots.

OK, I'll end with some Great News!!! We are finally Number One!

Oregon homeless figure tops nation
Jobless rate still high; shelter worries about coming winter
By Amy Easley, KTVZ.COM

Oregon has the highest proportion of homeless people in the nation, according to a new report issued by the U.S. Department of Housing and Urban Development.

The study reveals more than one-half of 1 percent of Oregonians were homeless last year.

Chris Clouart, executive director at Bend's Bethlehem Inn, blames the troubled economy for high numbers.
"We've seen a definite increase in need for beds," Clouart said Monday.

"We've seen a need in single individuals and families, and it all has to do with the fact that the economy is in such bad shape."

While all of Central Oregon's roughly 2,200 homeless may not be living on the streets due to financial hardships, the recession certainly hasn't helped.

Oregon's unemployment rate hovered at 12.2 percent in June - essentially unchanged from the previous month but more than double the jobless rate at this time a year ago, the state reported Monday.

The seasonally adjusted unemployment rate remained well above the U.S. rate of 9.5 percent, as Oregon's recession-bound economy shed another 7,200 jobs last month.

In all, there were 241,000 Oregonians on the unemployment rolls in June, compared with 114,000 jobless a year ago.
Bill Seidel, says with all the competition, begging is the only job he can get.

"I wish something would happen with this economy so I could get into a place and wouldn't have to do this," he told me.

Others, like 17-year-old Haze O'Riley, chose to live on the streets, saying it's the only life they know, but admit it has its hardships.

"What I've seen in Portland, I saw about 400 or 500 kids my age and younger living on the streets," the teen said. " It's not a pretty sight, with drugs, fighting and hunger."
Homeless shelters say during the summer months, the number of homeless is manageable, as more people opt to camp outside.

Staff at the Bethlehem Inn say the trouble will come this fall.
"What we're hoping doesn't happen, but what will probably happen, is that when the weather starts turning cold this fall, we're going to see ourselves inundated,"

Clouart said.
It's a problem with no easy solution. Because in this recession, no area is out of the woods yet.

Jam yesterday, and jam tomorrow, BUT NEVER jam today. ie, Don't worry about the homeless today, cuz their frozen corpses don't line China Hat Rd.

The homeless kid in Portland had what I thought was the most unsettling quote:

"What I've seen in Portland, I saw about 400 or 500 kids my age and younger living on the streets," the teen said. " It's not a pretty sight, with drugs, fighting and hunger."

WTF is going to come of this? 'Course the Bully won't print that essentially Bend has this same problem, because to do so would admit that we're facing some sort of Lord of the Flies-Escape From New York scenario.

Finally, I was walking downtown yesterday and I guess it was the first time I've seen that Tetherow's Sales Office in Franklin Crossing is closed. When did this happen? I tried searching the Bully, but didn't find it.

Life on the 'Berg: 90% of what happens is never seen.
hbm, will you ever let me grab your huge stick shift?Dunc, please tell me about Pegasus backorders... it makes me so HOT!Woof. This chick is HOT.


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IHateToBurstYourBubble said...

Notice this quote from the first piece:

Psychological studies have shown that consumers don’t feel as responsible buying an item with a credit card as they do buying an item with cash, Williams said.

And note the gal from the second piece financed her biz from CC's.

Lot of CC-financed biz's will go down or be sold for next to nothing in the coming years....

IHateToBurstYourBubble said...

This 'unknown' big bank could now go bust - making the US recession worse

Until very recently – perhaps just this week – you probably hadn't heard of CIT.

The company is one of the biggest lenders to American businesses. But despite all the flak that's been flying around financial firms over the last two years, it's hardly a name that trips off the tongue.

In fact, it's only making the news pages now because it's on the verge of going bust. If it does, it could be the fourth-biggest bust in US history. Yet many experts aren't too worried.

They should be. Small businesses are just as important to the economy as Wall Street's favoured investment banks. CIT's woes mean that America's recession could be about to get a lot more painful...
It's time to get to know this 'unknown' big bank

"If you've not heard of CIT, this is probably a good time to get acquainted with the company", says Izabella Kaminska on FT Alphaville. "CIT is the third-largest US railcar-leasing firm and the world's third-biggest aircraft financier. It also funds about one million businesses, including 300,000 retailers. Barclays Capital estimates that if the company was to fail it would be the fourth-largest bankruptcy by assets in US history, in between General Motors and Enron".

CIT has almost run out of money. It's already had some bailout help from the US government, and from Goldman Sachs. But so far, it's not been enough. CIT might have been around for more than 100 years, but its time is fast running out.

It has to 'roll over' about $1bn of floating rate notes maturing in August, which is another way of saying it needs to find a lot more cash very quickly.

It's tried to raise money by issuing its own debt. But to have any credibility (given that it's being issued by a company in such dire straits), this needs to be guaranteed by a serious backer such as the Federal Deposit Insurance Corporation (FDIC), one of America's banking regulators. But even six months after being asked, the FDIC hasn't given CIT the go-ahead.

Why not? Because no one's quite convinced that CIT is "too big to fail." It might well be "too small to save". Last night, US government-led rescue talks blew out. That's pushed CIT even closer to the edge.
Would it matter if CIT fails?

So would it matter if CIT goes to the wall? After all, a steady stream of American banks has gone under during the last few months, but you'd only know if you studied the small print on the financial pages. When the Bank of Wyoming was shut down by regulators last week, it caused scarcely a ripple.

Many reckon that CIT's demise wouldn't make much difference either. "A CIT failure would be unlikely to drag down other financial institutions", says Robert Cryan at "Sorry CIT, you're not too big to fail. It's hardly fair, but it should be clear by now that only the biggest reckless lenders get a helping hand".

But here's the key point. CIT might not be Goldman Sachs. It might not be seen as "systemically important." But as Sandra Jones points out in the Los Angeles Times, CIT is a "major cog in making sure orders get paid for and delivered to stores. Without CIT, retail shipments for the crucial holiday shopping season could be in jeopardy, and could in turn set off a new wave of bankruptcies among retailers and vendors."

IHateToBurstYourBubble said...

A great graph of Cali RE losses...

IHateToBurstYourBubble said...

Good stuff @ Seeking Alpha:

Washington's Dilemma: This Isn't a Recession, It's a Collapse

Washington is bluffing that it will not bail out California, and every other state suffering from collapsed revenues and massive job losses. If cuts in police and schools don’t force DC off from its current position, then the math will. Because in many states the aggregate revenue losses and looming cuts to state payrolls will largely render the intended effects of federal stimulus as moot. Frankly, unless Washington prints money and bails out every state that needs capital, including California, federal power will decline amidst this severe economic recession, and the process of a soft American devolution will begin. If you think this idea is outrageous, then you’ve still not come to terms with a core reality of our current situation: the structure of this financial crisis is wholly different than any in our post-war era. This isn’t a recession. This is collapse.

In Recession vs. Collapse published in March, this blog explained that in a normal recession existing savings are used to support government debt issuance and that those who remain employed increase their savings to also support government debt issuance. Neither phenomenon is at work today. Yes, the savings rate has soared in the US. But this has not resulted in any actual accrued savings. Because private sector debt came to define the internal structure of the US system, savings currently is little more than debt service. Also, bank purchases of US Treasuries are really just a result of the circularity of monetization. It’s just money from the FED being recycled into Treasuries. There is no privately driven growth of bank deposits, in the aggregate. Americans as a class are broke. What the savings rate more accurately measures is a collapse of consumer spending.

The internal composition of the US economic and financial system when it hit 2007/8 was very different than in previous recessions, even the severe recession of 1980/82. It’s this internal composition that’s now determinative, to the outcome. The sawdust of debt, and the monetization of assets rather than the production of goods, continually came to define the internal composition of the system. The economy cannot, therefore, express the same kind of resilience it has done so often, since WW2.

This is the core problem of this collapse and why the prospect for recovery is dim. Americans can’t actually rebuild the savings that the banking system needs to escape from the current mess. Individually, Americans are trapped by debt and cannot spend. In The Seigniorage Curse, I explain that one of the primary mechanisms for the hollowing out of the American economy over many years was the dollar advantage, which at first was earned. And then, came to be un-earned. By the time the US reached the 21st century, our primary manufactured product was debt, and dollars. Is it any wonder that once that system collapsed, that we quickly gave up 100% of the phantom job growth that had been sitting on top of the debt bubble? The current level of employment in the United States has now returned to the levels of June 2000. Enough said.

Washington apparently has a fresh dilemma on its hands, just inside of 6 months after the new administration came to power. Clearly the economic team, even though they were given almost 18 months to study the nature of the current crisis (starting in the Summer of 2007), incorrectly judged this recession to be of the post-war variety. Is that any surprise?

IHateToBurstYourBubble said...

Seeking Alpha cont...

Nothing in the public record since the year 2000 indicates that Larry Summers, Ben Bernanke, or Tim Geithner understood that we had been building a skyscraper of private sector debt in textbook blow-off style, since the deflation scare of 2001. Now, two years after FED repair operations began on the broken credit system, and over 3 years since US real estate topped in price, major portions of the country are staring at further home price declines in most major markets. Indeed, it appears that the same macro cycle of the last two Autumns is about to repeat, with more waves of foreclosure, more withdrawals from savings and investment to pay for living expenses, and the attendant bailouts of financial institutions that comes around each time.

Washington can’t really take a pass on this situation. If the federal government decides it can wait while “the states rebuild their balance sheets and clean up their payrolls” (as in past recessions) they’ll be waiting forever. None of that is underway.

IHateToBurstYourBubble said...

Don't believe in RIOTS?

Why we're (still) screwed
Political science warned of coming violence, unrest and other trouble. Political science was right.

BOSTON — I wrote a rather nerdy column in February about the Davies J-Curve, the political science theory put forth by James C. Davies in the 1950s.

Davies' idea was simple but powerful: Political unrest occurs when a people's rising expectations — about how much money they can make, what they can buy, whether they have enough food or medicine — are suddenly dashed by, let's say, a global economic crisis that follows the longest expansion in decades.

Here's how professor Davies put it, in that special language of academia:

"Revolutions are most likely to occur when a prolonged period of objective economic and social development is followed by a short period of sharp reversal. People then subjectively fear that ground gained with great effort will be quite lost; their mood becomes revolutionary."

Since those dark days of winter, the global meltdown — while moving out of the panic stages — has shown very few signs of recovery. Meanwhile political violence and turmoil has blossomed in nearly every corner of the world. In many places, the mood has become quite revolutionary.

First, the economics:

The U.S. unemployment rate — the key figure underlying confidence in the world's largest economy — is at a 26-year high of 9.5 percent, and President Barack Obama this week warned it's still rising. Larry Summers, the director of the president's National Economic Council, was even gloomier, telling the Financial Times: “I don’t think the worst is over. It would not be surprising if GDP has not yet reached its low."

As for the global economy, World Bank President Robert Zoellick has warned 2009 remains a "dangerous year." Recent gains could be reversed easily, Zoellick said, and the pace of recovery in 2010 is "far from certain."

So much for economic cheer. As for the unrest part, it's been even worse. Here's a quick rundown of some of the trouble we've been following at GlobalPost the past few days, weeks and months. And this list of woes is by no means complete:

* China this month suffered its worst political violence since the Tiananmen Square crackdown, as tensions between Muslim Uighurs and ethnic Han Chinese exploded in the northwestern province of Xinjiang, killing nearly 200 people. A reported 1,400 people have been arrested in China, and Al Qaeda is now threatening to target Chinese working in North Africa and the Middle East in retaliation for the deaths of 46 Uighurs. At the heart of these escalating ethnic and religious tensions? A battle over money and resources.

IHateToBurstYourBubble said...


* The bloody uprising in Iran has been about a lot of things -- the limits of political expression, underlying tension between conservative and more liberal values, the role of Shia Islam in Iran's political process, charges of official corruption, the legitimacy of a ruling political elite in the face of changing demographics, and plenty more. But economic insecurity has played perhaps the biggest role. A faltering economy was the key issue in the June 12 election, with Iran's unemployment rate estimated to be above 20 percent and inflation hovering near 25 percent. Declining oil prices, too, are hurting the government's budget. The International Monetary Fund says Tehran needs oil prices of $90 to stay in the black; light sweet crude this week fell below $60 a barrel. This economic unease became clear during the uprising when street protesters openly mocked President Mahmoud Amadinejad's (mis)handling of Iran's economy.

* On June 28, Honduran soldiers stormed the bedroom of President Manuel Zelaya and -- at gunpoint, with Zalaya still in his pajamas -- forced him to flee to Costa Rica. While the coup was largely a power play over constitutional reform, Honduras is one of the poorest countries in Latin America. Many of its 8 million citizens, particularly the Zelaya supporters who subsist on shrinking banana, coffee, apparel and other low-value exports, are growing increasingly restless.

* On June 4, in the remote Amazon region of Peru, violence erupted in the worst civil unrest the country has witnessed since the days of the Shining Path guerilla movement in the early 1990s. The source of the trouble, in which 23 people were killed? The development of oil and gas resources where the indigenous population claims an ancestral right to land, and to the riches buried beneath it.

* On March 4 the president of Guinea-Bissau was assassinated, the culmination of four months of political violence and upheaval in the tiny west African nation. According to the CIA Factbook, Guinea-Bissau is one of the five poorest countries in the world, an economic plight that has helped fuel almost constant unrest since the nation won independence from Portugal in 1974.

* No discussion of recent unrest would be complete without noting the ongoing piracy debacle in the Gulf of Aden, a stretch of troubled waters hemmed in by the two failed states of Somalia and Yemen.

But political and economic turmoil is also seeping into the world's most developed, and presumably more stable, economies.

IHateToBurstYourBubble said...

Foreclosures keep soaring as unemployment becomes main cause of housing woes

WASHINGTON (AP) — The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.

The mushrooming foreclosure crisis affected more than 1.5 million homes in the first six months of the year, according to a report released Thursday by foreclosure listing service RealtyTrac Inc.

The data show that, despite the Obama administration's plan to encourage the lending industry to prevent foreclosures by handing out $50 billion in subsidies, the nation's housing woes continue to spread. Experts don't expect foreclosures to peak until the middle of next year.

Foreclosure filings rose more than 33 percent in June compared with the same month last year and were up nearly 5 percent from May, RealtyTrac said.

"Despite all the efforts to date, we clearly haven't got a handle on how to address the situation," said Rick Sharga, RealtyTrac's senior vice president for marketing.

More than 336,000 households received at least one foreclosure-related notice in June, according to the foreclosure listing firm's report. That works out to one in every 380 U.S. homes.

It was the fourth-straight month in which more than 300,000 households receiving a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes. Banks repossessed more than 79,000 homes in June, up from about 65,000 a month earlier.

On a state-by-state basis, Nevada had the nation's highest foreclosure rate in the first half of the year, with more than 6 percent of all households receiving a filing. Arizona was No. 2, followed by Florida, California and Utah. Rounding out the top 10 were Georgia, Michigan, Illinois, Idaho and Colorado.

The Obama administration in March launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments, but it's off to a slow start.

As of early July, about 130,000 borrowers were enrolled in three-month trial modifications under the plan, and 25 mortgage companies have signed up to receive potential payments of up to $18.6 billion, according to the Treasury Department. But analysts and housing counselors say it isn't having much of an impact.

"The plan isn't going well, at least not yet," said Mark Zandi, chief economist at Moody's "It's a creative plan with lots of incentives, but it's very complex."

In testimony prepared for delivery at a Senate hearing on Thursday, Bank of America executive Allen Jones said the company has about 80,000 loan modifications in the works under the new government guidelines, including some that aren't in the three-month trial phase yet.

IHateToBurstYourBubble said...


"We have achieved this level of success by devoting substantial resources to this effort," Jones said, noting that the company has more than 7,000 employees handling calls and working on modifications. Industry experts, however, say the response from most mortgage companies has been lackluster.

"They've been slow to make sure they understand it and put all the processes and people in place," said Joel Lewis, vice president of financial services at Convergys Corp., which runs call centers for the financial industry and other companies.

A week ago, Treasury Secretary Timothy Geithner and Housing Secretary Shaun Donovan sought to ramp up pressure on the industry, saying in a letter to participating mortgage companies that the industry needs to "devote substantially more resources to this program for it to fully succeed." They also summoned mortgage executives to a July 28 meeting with top government officials.

Though the program was launched months ago, few companies are upgrading their computer systems to process loans rapidly, said Bill Kelvie, chairman of Overture Technologies in Bethesda, Md.

"They need to automate the process, and they need better technology, and they need to do this quickly," he said.

IHateToBurstYourBubble said...

The Seigniorage Curse
March 24, 2009

Much has been said the last few decades about the Oil Curse. The idea that countries with a large petroleum inheritance actually devolve over time, failing to diversify their economies. The result is often a stagnant culture and a dysfunctional political structure. Amidst the arrested development, these countries are of course deeply vulnerable to swings in the price of oil. Writers who have looked at the Oil Curse will often compare Indonesia (discovered oil) to South Korea (no oil) from the time after the Korean War ended. Indonesia of course remained a mess for decades, while South Korea became an economic supergiant, based on its promotion of education, innovation, and engineering.

Another country that now looks quite arrested in its development is the United States. But not because of an Oil Curse. Rather, the United States appears to have finally succumbed to its multi-decade “advantage” via dollarization. In dollarization, the US Dollar has been the world’s reserve currency, and the United States economy has “enjoyed” the freedom to borrow and print ad infinitum without the usual penalties. In this regard, the United States has functioned as the King, who issues coinage with your bullion, but takes a small shaving in the process. In return, US citizens and those holding dollars enjoyed the purchasing power premium of a currency backed by the King. That’s the power of Kings. The power of Seigniorage.

A problem develops internally, however, when the King or the King’s economy no longer offers as much value for the premium charged. And that’s exactly what’s been happening to the US economy over the past 30 years. Oh, not all parts of the US economy. Innovaters have rolled onward as the dysfunctional and shoddy parts of the economy took greater hold. But what happened eventually is that the shoddy parts–especially the financial sector–ran out of things to monetize. In fact, the US economy stopped making things to monetize.

The Seigniorage Curse appears to hollow out the economy by the following manner: First, the premium charged to holders of dollars becomes a new source of accrued, aggregate revenue. This extra capital flowing into the economy is initially seen as a global honoring of our economy’s strength, and innovation. But when innovation falters and less value is created, seigniorage is maintained–and thus the unhealthy dynamic begins. From this point forward, whether the US economy either leads in innovation, or lags in innovation, the Dollar advantage grows regardless. It then becomes clear that manufacturing Dollars, rather than manufacturing goods, is a better value proposition. Once that dynamic is in place, then a long cycle of financialization ensues, in which innovation and talent moves from design and manufacturing to the financial sector. The financial sector then becomes rapacious, as it scours what’s left of the economy to monetize. Whereas manufacturing and innovation were once monetized, the financial sector begins to monetize itself.

The final hurrah was seen this decade, when the financial sector, unable to monetize other US based streams of income, decided to monetize housing. That was all that remained. Seigniorage had allowed us to stop earning our living, and eventually we “bundled up and packaged” our real estate. Interestingly, it’s only in the aftermath of the burst housing bubble that we observe how many Americans are being ‘forced to sell” their homes. In fact, Americans had already sold them.

Every inheritance starts out as a gift. Just as oil-cursed nations remain ever vulnerable to swings in the price of oil, the United States is now vulnerable to its own number one export–the value of the US Dollar and by extension the value of US Treasury Bonds.

IHateToBurstYourBubble said...

Gee, I wonder where this will hurt?

Upscale home sales lag as jumbo loans are hard to get

More than four months after the Obama administration launched its housing rescue plan, scores of lenders are focused on rewriting mortgage loans to make them more affordable.

But one demographic is being largely ignored: homeowners with higher-price loans.

They don't qualify for mortgage modifications under the Obama plan. They can't get today's low interest rates if they try to refinance. And with newly cautious lenders warier about who they lend to, just try to sell a home that costs $730,000 or more these days. In many cases, finding a buyer who can get financing takes far longer than for lower-price homes, because banks want as much as 30% down and six months of mortgage payments in reserve.

The result is a housing market in which sales and purchases of higher-price homes have come almost to a standstill, and it's a predicament that could undermine the housing recovery. Move-up buyers (homeowners who want to buy larger, pricier homes) are getting locked out by lack of financing. Too many unsold homes in the top tier of the market also can push down prices for homes in the midprice range.

"We need to have a market recovery in all segments," says Lawrence Yun, chief economist with the National Association of Realtors (NAR). "If the high-end market weakens, those in the middle have to reduce prices."

While the number of homeowners with higher loans is small relative to the entire market, Yun says, "All of Middle America is undoubtedly impacted."

Jumbos and super-jumbos

Bigger loans, known as jumbo loans, come in three types.

Loans up to $417,000 are considered "conforming," and can be sold to mortgage-finance giants Fannie Mae and Freddie Mac, which also guarantee them when they resell those mortgages to investors. But after that, the situation is more complex.

Loans between $417,000 and $729,750 are "conforming jumbo," and loans above $729,750 are "super-jumbo." Fannie and Freddie back only conforming jumbos, and what qualifies as conforming can vary depending on location. In San Francisco, Fannie and Freddie will back loans up to $729,750. In Atlantic City, the maximum is $453,750.

Lenders are leery of making loans above the amount that Freddie and Fannie will guarantee, because if a jumbo loan borrower defaults, it's harder for a bank to quickly sell a higher-end foreclosed property. And because Freddie and Fannie don't buy non-conforming jumbo loans, there's less of a secondary market for super-size loans.

States with the highest percentages of jumbo mortgages include Hawaii, California and New York, as well as the District of Columbia. In New Jersey, Maryland, Massachusetts, Virginia, Connecticut, Washington, Nevada and Florida, jumbos account for 10% or more of all loans.

Jumbo loans aren't just for the very rich: In some pricey areas, $500,000 may buy only a modest single-family house or condo.

IHateToBurstYourBubble said...


Sales of higher-price homes have slowed to a glacial pace, driving the supply of homes for sale above $750,000 from 18.7 months in 2007 to 41.1 months in 2009, according to NAR.

With home values still falling in many areas, borrowers who took out jumbos a few years ago are finding they can't refinance, and their mortgages are sliding into default. The number of jumbos 90 or more days delinquent reached 4.83% in March 2009, up from 1.68% in March 2008, says First American CoreLogic.

That trend is helping spread the foreclosure crisis from real-estate-bubble markets, such as California and Florida, where the housing crisis started, to other areas. Data from First American CoreLogic show that delinquency rates on jumbo mortgages under $1 million have more than doubled in areas such as Atlanta, St. Louis and Portland, Ore.

Some cities with high percentages of jumbo loans that are 90 or more days delinquent include Merced, Calif., Muncie, Ind., and Las Vegas-Paradise, Nev.

It's been a costly situation for Victor Montalvo-Lugo, a clinical program manager at MedImmune in Gaithersburg, Md. He and his wife, Janette, bought a $1.6 million home in Thousand Oaks, Calif., in late 2005. He moved to Maryland for the MedImmune post in December, contracting for an $800,000 home to be built by late August. But with the California house on the market for weeks, he's had no luck selling, even asking $1.05 million.

If he can't sell that home before a company buy-out option expires, Montalvo-Lugo worries about the financing on the new one. A similar but smaller home down the block from his in California is listed in the $900,000s, forcing him to lower his initial asking price. "I'm very concerned. We are already listing for less than what we owe," Montalvo-Lugo says. "We lost all of the initial equity, and we owe the bank more than we will get."

Pressure on prices

Those with jumbo loans who lose a job or have an adjustable-rate mortgage that resets to a higher amount are struggling. But help is scarce: Under the Obama housing rescue plan, homeowners with loans above $729,750 aren't eligible for mortgage modifications. Lenders may make such modifications on an individual basis, however.

Many homeowners in higher-end markets are finding they must drastically lower prices to try to get buyers. From July 1, 2008, to July 1, 2009, nearly 26% of homes on the market for more than $1 million have seen price reductions, and the average reduction is 13% off the asking price, according to real estate information provider Trulia. Homes on the market for less than $1 million have seen an average reduction of 9% off the asking price.

"What you're seeing are those properties sitting on the market for a lot longer because people can't get loans," says David Kerr, a ZipRealty agent in the San Francisco area. "I got a call about a property in Berkeley for more than $1 million and almost fell out of my chair. All of what we're showing is in the $200,000 to $300,000 price range."

Jumbos are still being offered at Investors Savings Bank in Short Hills, N.J. But demand has slacked off because those taking out or refinancing jumbo loans must pay higher interest rates than other borrowers, says Richard Spengler, chief lending officer. Rates on jumbos are hovering around 6%, vs. 5.20% on a 30-year, fixed conventional loan.

The bank requires down payments of 20% to 30%, depending on the size of the jumbo. Spengler says many banks have gotten out of jumbo lending because of the lack of a secondary market. Investor Savings Bank keeps jumbos it issues in its own portfolio.

The overall stagnation in the market has a spillover effect on the economy. NAR estimates the slump in the jumbo home loan market has led to a $42 billion decline in economic activity.

IHateToBurstYourBubble said...


That's because borrowers who take out jumbos have much higher incomes than a typical borrower (an average $207,600 in 2007, says NAR's most recent data) and when they buy a home, they spend a lot to furnish it. When sales of costly homes slow, sellers of furniture, carpeting, flooring and appliances get hurt.

Z Gallerie, a home merchandise retailer, is the latest in a string of higher-end stores to feel pinched. The store filed for bankruptcy-court protection from creditors in April, citing a severe sales drop. January sales were down 19% from a year earlier.

"The high-end retailers are being impacted," says Gary Drenik at BIGresearch, a consumer intelligence firm. "When people buy a home, home-improvement and related sales go up."

Those who can buy higher-end homes are seeing their discretionary income further whacked by strict lending conditions. Lenders are requiring some borrowers seeking to finance 80% of their home purchase keep 40% of the total loan value in a reserve account, says Michael Tooker, a mortgage planning specialist for Valley Private Mortgage Group in Scottsdale, Ariz. On a $1 million loan, "that's $400,000 in reserve," he says. "Some want six months total debt service in reserve. It's so arbitrary."

Camille Swanson, a Realtor at Realty Executives in Phoenix, can relate to the struggle. After selling her home, she fell in love with a foreclosed stacked-stone home in the desert that had been abandoned. But she discovered that no lender wanted to give her a jumbo loan on a property that needed so much renovation.

Swanson is almost finished obtaining a loan for the new place with an approval up to $640,000, but details are still being negotiated. With her 20% down payment, the total investment will be $800,000. She approached five lenders as far as Washington before finding one in her area to give her a loan. She didn't need money in reserve because of her retirement assets. "For them, it's an issue of risk," Swanson says.

Raising the roof

Real estate groups such as the NAR are pressuring Congress and the Obama administration to increase the jumbo loan limits that Fannie and Freddie will guarantee and make them permanent. Current amounts were raised in 2008 and are set to expire Dec. 31. They also want the Federal Reserve to buy jumbo-backed securities because Freddie and Fannie can't. The hope is that Fed purchases would create enough of a secondary market for these loans so banks would be more open to lending higher amounts.

Meanwhile, in jumbo-heavy markets, homeowners are increasingly frustrated by their inability to sell. They can't relocate for jobs or retirement. They can't unload vacation homes that they may now struggle to afford.

One such homeowner is Robert Westover, who works for the federal government in Washington, D.C. He's been trying for months to sell a home in Hawaii with an ocean view. He bought it for $585,000 six years ago; it was valued at $1.1 million during the real estate peak in 2006. But there are no offers. He planned to list it for $940,000, but his Realtor suggested $890,000. Then he lowered it to $850,000. At one point, a potential buyer came forward but had no financing.

"It's just been tough. It was getting crazy," says Westover, 45, who now is taking the home off the market and renting it instead. "I hope I've learned a lesson, which is don't put anything on the market in this economy. Most people who have homes in the jumbo (price range) are reliable, pay bills. Why are we suffering while the government gives help to everyone else?"

IHateToBurstYourBubble said...

1,252 Bend SFR's on COAR today.

How do sales look Young Margie?

Anonymous said...

From last week's thread...

HBM: "I should have sued the idiot endodontist but I just wanted to put the whole fucking horror story behind me, so I contented myself with calling him up one afternoon and reaming his ass for about half an hour and hinting that I was thinking about suing him. Gave him at least one sleepless night, I hope."

BP: "I should have sued the idiot City Council but I just wanted to put the whole fucking horror story behind me, so I contented myself with calling up one council member one afternoon and reaming his ass for about half an hour and hinting that I was thinking about filing a complaint to the Ethics Commission. Gave him at least one sleepless night, I hope."

Did BP really leave?

Or just change his initials to HBM?

Anonymous said...

Credit cards are a plauge on the average American.
Think for one minute:
If you have to use a credit card to buy something, what that really means is that you can NOT afford it.
The single biggest step toward getting out of debt is
1.Put your credit cards away
2. Pay cash for everything you buy.
If you say "but I can't pay cash", that is the biggest red flag of all.

IHateToBurstYourBubble said...

504 Bend SFR's listed at $800K+.

Get used to owning those...

IHateToBurstYourBubble said...

Over 40% of Bend SFR's are listed at over $800,000....

Yeah, we're fucked.

Anonymous said...

I saw about 470 Central Oregon (all Deschutes Co) properties with asking between $750K and $1.5M.

This year (Jan thru July) there was one sale. One $1.3M sold for $900K.

Another 120 listing of properties over $1.5M. With one sale so far this year, a $4.5M property sold for $2.2M.

One sale out of 120 in 2009 so far. That is 60 years inventory for properties over $1.5M.

Anonymous said...

63 SFR's sold to date at $246,500 median price. Average PPF is $133.00
I hope that median doesn't stand, Crips, someone will call "bottom".
By winter it will be back down under $200k. Just like the new owners of the Shire, the koolaide is still being consumed.

Anonymous said...

Haircut anyone?

75 NW Yosemite listed in 8/06 for $1,750,000 just sold for $620,000.

Anonymous said...

Who on earth in Bend can afford
$800K for a house??
Working at the local quickie mart?

Bend can be a depressing place in the winter. This winter is going to a record one for bum feelings.

Go out and ride your bike, hike, and if you can, get OUT of Bend before the snow flies.

Anonymous said...

Buying a Bend house for $800k was brilliant when the market was going up. The bigger the house you bought, the more money you made.

Buying a $800k house in Bend now is the dumbest thing in the world. You are a dolt, an absolutely kneebiter, if you buy an $800k house now.

First of all, it's only worth $500k now--it's priced at $800k simply out of momentum--and you'll be able to sell it for only $375 in three years.

hbm said...

"If you have to use a credit card to buy something, what that really means is that you can NOT afford it."

No, it means I'm buying something on the Internet and I need to do it by card. When the credit card bill comes due I pay it off.

Using credit cards for convenience is fine. Using credit cards for credit is dumb.

hbm said...

BTW nice titty collection this week, Homeboy. The girl in the jeans IS unbelievably hot!

hbm said...

"75 NW Yosemite listed in 8/06 for $1,750,000 just sold for $620,000."

Where is NW Yosemite?

Actually I'm kinda surprised that anything at all sold for over $600K.

hbm said...

"That is 60 years inventory for properties over $1.5M."

Anybody who can afford more than $1.5M for a house can afford to live virtually anywhere. So why the fuck would they want to live in Bend, Ory-gun?

Answer: They didn't. Those insane home prices were the product of speculation, pure and simple. The Greater Fool Theory in operation.

Of course all along the real estate / builder / developer axis and its cheerleaders kept insisting it was because "people really, really, REALLY want to live here because we are just SOOOOooooo gosh-darn special because of our super-duper amazing LIFESTYLE that is just TOTALLY UNIQUE in the whole wide world!"

People often ask, "HBM, why do you hate Bend?" I don't hate BEND. I hate the dumbass PEOPLE in Bend (including virtually all of our so-called "community leaders") who kept pumping out this BULLSHIT and -- worse yet -- came to believe it themselves.

Anonymous said...

Real houses for real people with real children cost $200k-$300k. It's delusional to think there will be a market for the $500k+ market. That's just a dribble of people retiring who don't realize what the winter is like.

IHateToBurstYourBubble said...

I just heard on KTVZ that the COBA Tour of Homes has been a resounding "SUCCESS"!

Actually I had a bet with a friend of mine that white-hot, spring-loaded swords would be launched into my eye sockets & scrote if the words "failure", "slowdown", or "disappointment" were used in the piece.

I was never really in any danger whatsoever.

PopGoesBend said...

I toured five of the homes. None of them were great, but I do need to point out what a friggen nightmare of a floor plan the LEED certified one on Dorian in NWX has. It's a rats nest of a home with so much traffic needing to go through the "living room" - to get into the house, to get from the kitchen to the deck and to get up the stairs - that there is almost no place for furniture that you wouldn't trip on a daily basis. Good luck furnishing that. I would love to see the blueprints and see if they actually drew furniture in.

I went to the developer's website and it looks like this is their first project. It shows with "rookie" written all over it. If you stop by, check out the "ADU" with no kitchen that would be considered small by Manhattan standards.

Anonymous said...

"Credit cards are a plauge [sic] on the average American."

Dude, use your card and pay it off each month. I have a card that pays me back a percentage of whatever I spend.

Also: it's not wise to leave lots of money in your checking account and then use a Check Card. That money is much easier to steal electronically than credit cards are.

At least, that's what a friend who writes the security software tells me.

Anonymous said...

I will buy everyone in Bend a free beer, if the unemployment rate drops this year, like so many talking heads are predicting.

Anonymous said...

Did anybody else do a double take when the ads for the new "Underground" bar on 97 came out? Huh? NOW is the time to open "the biggest bar in Oregon"? I remember hanging out at Club97 back in the day, but that was before there was anywhere decent to hang out downtown.

IHateToBurstYourBubble said...

Forget the 1930s; We're Reliving 1975

If there is a term that is to compete with “green shoots” for the most misused phrase in the financial media this year, it must be “… worst since the Great Depression.”

The problem with the Great Depression reference is that, while it might make for sensational journalism, it is really not helpful to us as investors. Economic philosophy and government institutions were substantially different back in 1932.

Yet the implication from that reference is that you should look past all postwar recessions and must go back more than three quarters of a century to find a parallel to today. By almost any measure the Great Depression starting in 1929 was twice as bad as any subsequent economic collapse, including today.

So if the Great Depression is not the best reference point, it has been puzzling me as to which previous recession was the most similar to the downturn that started in December 2007 in the United States.

The National Bureau of Economic Research (NBER) lists 13 official recessions since the 1932. I pulled together data from the Federal Reserve and other U.S. government sources to assess the severity of each recession, focusing mostly on peak to trough declines of various indicators.

The recession of today is nothing like the Great Depression. The first thing to notice is the duration of the 1929-32 depression was more than three and a half years versus a maximum of 16 months since. It is unclear what the NBER will mark as the ending point of this recession. We may very well be past that point or it may be later in the year. The NBER, which tries to identify the top and bottom of economic cycles, does not exclusively look at negative growth in GDP. It also looks for the peak and trough in things like industrial production, initial jobless claims, and other such real time indicators to determine a specific month.

Today’s recession is on par with two other post war recessions. Before 2007 there were only two recessions that had double digit peak-to-trough declines in the economic growth (GDP), the stock market, industrial production and corporate profits. These were the recessions of 1957-58 and 1973-75. I have ignored the year 1945. There was technically a recession in that year as factories retooled back to commercial products and as war time price controls were removed. The latter caused a one time spike in inflation, reducing “real GDP” (economic growth after accounting for inflation).

The decline in real GDP, industrial production, and corporate profits was higher in the 1957-58 recession than 1973-75. However, the duration was significantly shorter and this was mostly a business cycle recession. Consumer spending was only a contributing factor to the economic decline until the recession was almost over. The present recession was a combination of consumer and business investment factors.

Compare this to recessions in 2001, 1981-82, 1960-61, and 1957-58 where the consumer sector was a relative small portion of the decline in GDP growth during the recession period. Thus, the best comparison between previous recessions and today is the 1973-75 recession.

IHateToBurstYourBubble said...

Whoops... title link:
Forget the 1930s; We're Reliving 1975

Beyond the numbers, the 1970s were more similar to today than most think. Coming into the recession, the U.S. was dealing with

1. a run up in energy prices,
2. a housing market correction, and
3. the wrath of ‘financial innovation’ gone badly.

This led to a) widespread bank failure, b) aggressive Fed intervention as a lender of last resort, c) a precipitous decline in automobile sales, and d) serious concern for the stability of the financial system and the integrity of the U.S. dollar.

The annual Economic Report of the President, although a bit political at times, provides a nice snapshot of the mood of the day. The 1975 ERP report (written at the close of 1974) leads off,

The economy is in a severe recession. Unemployment is too high and will rise higher.

Here is an excerpt from later in the report:

After having weathered the energy crisis late 1973 and early 1974, auto demand in the fourth quarter of 1974 was in a state of collapse.

The financial innovation of the day back then were ‘Real Estate Investment Trusts’ (REITs). Hyman Minsky in his 1986 book Stabilizing an Unstable Economy writes,

A boom in housing and commercial investment was facilitated by the emergence of REITs, which depended on refinancing their positions, were placed in great difficulties. In particular, virtually all the REITs became walking bankruptcies in 1974. These years saw an epidemic of bank failures.

It has a familiar rhyme, doesn’t it?

A few word changes and this passage is as fresh today as it was 23 years ago when written:

A boom in housing and commercial investment was facilitated by the emergence of mortgage-backed securities, which depended on refinancing their positions, were placed in great difficulties. In particular, virtually all the Wall Street investment banks became Zombie banks in 2008. These years saw an epidemic of bank failures.

Again, it is not a perfect analogy. It was mortgage originators like Countrywide Financial and investment banks like Lehman Brothers, Merrill Lynch, and Bear Sterns that were dependent on short term refinancing, not the securities themselves but with Citigroup (C) labeled as a “walking bankruptcy” or “zombie bank” the analogy is not far off. The point is we have been here before but not eighty years ago merely thirty-five.

1975 wasn’t such a bad year. The Standard & Poors 500 Index opened trading at the beginning of 1975 at 68.65, down 44% from the high in January 1973. Corporate profits had just peaked in Q4 of 1972 and then started a steady decline before bottoming out two years later. Industrial production, which peaked a year after profits did not correct substantially until the end of 1974 based, in part, on the steep decline in demand for autos referenced above. The S&P500 ended the year at 90.19, an increase of more than 31% for the year.

The U.S. economy started 1975 in terrible shape but ended the year with unemployment down almost percentage point from its peak. The Economic Report of the President a year later (from 1976) wrote:

IHateToBurstYourBubble said...

Cont 2:

A year ago the economy was in the midst of a severe recession with no immediate end in sight… It is now clear that we have made notable progress. The sharpest recession in the post-World War II hit bottom last spring, and a substantial recovery is underway… While unemployment remains far too high, it is moving in the right direction.

The years that followed 1975 weren’t so great, through.

A look back at the thirteen recessions since 1932 provides a context for today’s recession. Even if the numbers for the 2007-09 recession signal a more severe downturn than the other twelve that preceded it, we are still far from the Great Depression and comparisons to it are misleading. Of all of them, the recession of 1973-75 has many of the same characteristics of today’s economic malaise. Stay tuned for next week’s article where we will look at the question, “If the economy recovers like it did in 1975, what does it mean for 2009 and 2010?”

IHateToBurstYourBubble said...

There are good historical tables/graphs in this piece... have a look

Forget the 1930s; We're Reliving 1975

IHateToBurstYourBubble said...

Wow, you look at that table of historical recessions, and you see that this one is a Whopper.

11.9% peak-to-trough GDP contraction... hasn't happened since 1958, and we're still not through.

54.9% stock mkt fall off... worst since Great Depression...

15.1% contraction in industrial production, worst since WWII. Same with fall off in corporate profits.

Dickey45 said...

A couple news postings:

tim said...

A bar on 97 is a great idea for funding the police via DUIs.

Anonymous said...

Another thing that will make this recession the worst since the 30's-
the duration. This recession is likely to last a full 24 months, and maybe longer.

Green shoots- yeah, right!

Susie said...

"I just heard on KTVZ that the COBA Tour of Homes has been a resounding "success".

Of course! It may be termed a "success" by the number of lookers, but the REAL success is how many of the homes actually sell.

There are 40 homes listed in the Bulletin supplement. Three have already sold (#20 by Ridgeline Homes on NW Yosemite, #22 by SunTerra Homes on NW Fairway Heights, and #24 by Solaire Homes on Underhill Place).

There are still a bunch of homes that haven't sold from the 2008 Tour of Homes last year.

Long way to go, before "success"...

PopGoesBend said...

The three homes on Sacagawea have supposedly all sold. I think two were before the tour, and one on Friday.

Bewert said...

New UE numbers for June 2009:

Unadjusted June 09 May 09 June 08
Bend MSA (Deschutes County) 14.8% 14.9% 6.8%
Corvallis MSA (Benton County) 8.3% 8.2% 4.0%
Eugene-Springfield MSA (Lane County) 12.8% 12.7% 5.7%
Medford MSA (Jackson County) 13.6% 13.5% 7.2%
Portland-Vancouver-Beaverton MSA 11.7% 11.4% 5.4%
Salem MSA 11.5% 11.3% 5.8%
Crook County 20.6% 18.1% 8.0%
Harney County 15.9% 17.0% 7.3%

Adjusted June 09 May 09 June 08
Bend MSA (Deschutes County) 15.8% 16.4% 7.3%
Corvallis MSA (Benton County) 8.4% 8.8% 4.1%
Eugene-Springfield MSA (Lane County) 13.2% 14.0% 5.8%
Medford MSA (Jackson County) 13.7% 14.0% 7.3%
Portland-Vancouver-Beaverton MSA 11.6% 12.1% 5.3%
Salem MSA 11.7% 12.1% 5.9%
Crook County 22.6% 20.5% 8.8%
Harney County 18.9% 19.0% 8.7%


Things are looking up--you could be living in Prineville!

Anonymous said...

There are still a bunch of homes that haven't sold from the 2008 Tour of Homes last year.

Yes indeedy. There about a $3.5-4 million dollar little Pacwest nugget sitting out in Tumalo that won the whole T.O.H. enchilada last year, or maybe even two years ago.

Anonymous said...

Dick's Sporting Goods moving into the old Joes location

Anonymous said...

Dicks? Are you sure it's not a porn shop?

Susie said...

"The three homes on Sacagawea have supposedly all sold. I think two before the tour and one on Friday".

What's the address on the one on Friday?

Susie said...

And from the 2007 Tour of Homes: a few examples:
1. 21266 Bellflower - (Palmer) '07 TOH List Price: $374,900. Sold: 4/08 for $299K.
2. 855 NW Haleakala - (Plush Homes)'07 TOH List Price:$1.5 M. Sold early in 4/07 for $1.475 M. Zillow estimate last month: $670K
3.Out in Caldera Springs (Sunriver)- (Schumacher) TOH List Price: $1.650 M. Sold in 9/08 for $1.2 M.

Um, what are these houses worth now?

And look at Woods Valley Place over in River Rim. There are 15 homes on that block. Did Tamarack offer at least one in the 2006 TOH? Public records show they still own 11 of them and owe over $32K in late property taxes. One is presently listed at $375K.

Another home on that street is now a short sale in the $360K range. The owner bought in mid-2006 and added $40K in so-called upgrades. Another owner bought a home from Tamarack for $619,900 in mid-2006. Last month, that same owner "transferred the property to avoid lien" to BoA in the amount of $280K.
Two owners on that street bought within 9 months of each other at ridiculously different prices. Records show they are both up-to-date on their property taxes.

It's all there in black and white. A snapshot of the Bend bubble and its aftermath on just one street. Yep, public records are a beautiful thing...

Anonymous said...

Comments on the AP article about Bend:

J Lee July 20, 2009 9:31AM
The sky is not falling...the sun is still shining and the million dollar homes were never worth a million...even in the best of times...try getting through Bend this summer....sure, a few businesses have closed but not a hotel room to be found on the weekends...the real estate speculators made a ton of money, now they are losing a ton of all comes out in the wash and folks...would you rather be in Bend or Oakridge, Gilchrist, Drain, Mill City, Mehama or Lyons where things are even worse economically?

Beavers 205 July 20, 2009 9:36AM
Bend messed up a long time ago when it decided not to say no.You would have two Albertson stores within two miles of each other.Only one would make it.It grew to fast. Bad planning.Something Albany is aiming for.

Onyx July 20, 2009 11:00AM
Urban sprawl and ugly urban planning is what comes to mind when I think of Bend. Hopefully they will learn from this and future 'developers' will keep a leash on things and a bigger finger on the economic pulse of the country. Bend is tied into the rest of the country as much as any of us are. With all that sunshine they get over there, when is someone going to develop an industry that sells energy to the rest of the state? Solar farms would be hot hot hot and could employ a lot of people. So could solar industries.

wilvus July 20, 2009 1:45PM
Solar farms would employ a few people but not a lot after start up and commissioning. Energy production is a capital not labor intensive industry. Besides the fact that the valley people do not generally let the eastern two thirds of the state live and let live. The valley folks would find some obscure rare plant to put on the endangered species list preventing a solar farm from even beig built in eastern oregon.

Anonymous said...

Um, that's bullshit that you can't find a hotel room on the weekend.

IHateToBurstYourBubble said...

Surprise, surprise! Tomorrow in the Bully:

Find out why some appraisers oppose a new law aimed at eliminating appraisal fraud.

IHateToBurstYourBubble said...

Unadjusted June 09 May 09 June 08
Bend MSA (Deschutes County) 14.8% 14.9% 6.8%


IHateToBurstYourBubble said...

At the risk of repeating....

Oregon's recession is 'poverty with a view'
by The Associated Press
Monday July 20, 2009, 5:56 AM

BEND, Ore. -- This city in Oregon's scenic high desert once had one of the nation's hottest economies. Resort developers, bankers, construction workers and luxury car dealers rushed for a piece of the action.

Now some locals call Bend "poverty with a view."

The county it anchors, Deschutes, shows some of the most serious recession pain in the land, as measured by The Associated Press Economic Stress Index.

The county ranked fourth this spring among American counties of more than 25,000 people in a measurement of the yearly rise in the AP index. The index measures unemployment, foreclosures and bankruptcies at the county level across the nation -- the higher the index's number for a county, the worse the recession's impact.

Other Oregon counties were not far behind Deschutes. Some of the state's most stressed counties have been hit by a double whammy: The general real estate boom was as lusty here as elsewhere, and its bust dragged down a particular Oregon sector, the factories that have long supplied the construction industry with 2X4s, plywood and windows and sashes.

In Bend, where the boom was spectacular, former waitress, bartender and clerical worker Angela Saldivar measures the recession's impact by a personal statistic.

Sitting at a computer in the state employment office recently, she punched in 116 skills she thought would fit the needs of potential employers. The computer spat back exactly one job possibility.

"You don't know how bad it is until you see something like that," she said.

In Deschutes, many high-end homes were built on speculation during better times but not sold. As of May, Deschutes led the state in bankruptcies and foreclosures, according to the AP index figures. Joblessness, not seasonally adjusted, was at 15.2 percent -- up almost 9 percentage points in little more than a year.

Overall, Deschutes had a stress index score of 19.35 -- not even the worst among nearby counties but well above the national average of 10.

To the northeast, Crook County, with unemployment at 18.4 percent, had a stress index score of 20.03 in May, the state's worst. The index score was 18.09 in Harney County to the east and 18.69 in lumber-producing Douglas County to the southwest.

Some of the regional problem boils down to wood: Who buys it? Who produces it? These days, hardly anyone.

Bend's head-spinning growth spurt over the past several years echoes that of larger markets throughout the Southwest and in metropolitan Portland.

As builders and workers flourished because of housing demand, things picked up in rural Oregon counties with a long reliance on logging. Many made good wages in factories that turned out wood products for the boom.

So when people stopped buying and building homes, it not only threw local construction workers out of work, but also squeezed wood products industries.

In Douglas County, local officials estimate that one in four jobs is directly tied to wood: cutting it, transporting it, making it into building material. State statistics show that the county lost a quarter of its wood products jobs since the start of 2008, most of them in the last six months.

Timber country is used to booms and busts tied to interest rates and construction booms. It's used to feeling picked on, as when federal restrictions crimped timber harvests on federal land during the recession of the early 1990s. This time around, the economic pain feels more general, if harsher, says one Douglas County leader.

"It's different in that we're all in it together, " says Norm Gershon, president of the local work force development agency. "There's no big bogeyman."

IHateToBurstYourBubble said...


Across the state, Oregon has lost jobs in a variety of sectors, heavily in manufacturing: from chip-making and printers to heavy trucks and recreational vehicles. State Employment Department analysts echo Gershon: The recession is broad and deep. The state's jobless rate climbed steeply, now tops 12 percent and is second only to Michigan's 13.9 percent.

In Bend, local officials are dealing with what the bust left: once-pricey lots left vacant, overbuilt and unsold subdivisions, jobless construction workers.

"That isn't where we wanted to be," said Roger Lee, director of the nonprofit Economic Development for Central Oregon.

He said 43 percent of area job losses in the past year came from the construction and manufacturing sectors. Land values have fallen by more than half, housing prices and office rents by maybe 30 percent.

But, bad as things seem, people are not fleeing Bend. The golf courses, forest hiking trails, trout streams, skiing, sunshine still are attractive.

Oregon's population grew by about 1.2 percent in the past year. The Bend area grew three times faster.

In Bend, many people have come on a shoestring, chasing the lifestyle and hoping for work, said Carolyn Eagan, the regional economist for the Oregon Employment Department.

"We think this is still happening," she said. "The region is importing unemployed labor. It's still a desirable place to live."

She said many younger couples planning early retirement now need to work as their retirement funds wither. Families who prospered with one wage-earner during the boom now find both adults have to work.

These people weren't fired. They're just new on the market. As a result, Oregon's
labor force has grown 3 percent in the last year.

Eagan said more people are working in Deschutes County now than were two years ago but that there are not enough new jobs to absorb the influx.

The area is called "poverty with a view" because living costs have traditionally been high and wages low, said construction worker Aaron Schlachter, 31, who has found steady jobs, often out of town, working on bridges, power plants and wind farms. He says such jobs are there for skilled workers willing to chase them.

Bend is generally free of boarded-up buildings and other outward signs of stress. If a business closes, another moves in, and the brickish downtown is clean, trendy and busy-looking.

But on some residential streets where buyers once rushed to submit bids above the asking price for new homes, nearly as many are for sale as not. Some are foreclosures.

Dream homes shattered by an auctioneer's hammer? Maybe, maybe not. Many are held by investors.

Michael Hollern, chairman of Brooks Resources Corp., the region's largest
developer, said the Bend boom coincided with the one in the Sun Belt. Brooks once owned the massive Brooks Scanlon Lumber Company, which was founded in 1915 and basically built Bend.

The building boom began gradually in the 1960s and took off seriously a few years ago.

"We thought we were different, special, with real jobs and real people. It turns out we weren't that different. And we realized prices were out of touch with reality. Now we need to work off our excesses."

Much of the work force is still around, he said. The quality of life is off the charts, and few people want to leave.

"Where are they going to go? Hollern said. "Conditions are the same everywhere. There seems to be a sense that it is better to be unemployed in Bend than in other places."

rotorman said...

Why is there such a huge disconnect between all the news hype about how bad the economy is and what I see when I go shopping. As an example, yesterday (Monday) I was in the Seattle CostCo and had trouble finding a parking slot in a 30 acre parking lot. The place was jammed with people hauling out stuff by the cartload. The previous day, the Pike Place market was jammed. You could hardly move because of the crowds that were digorged from 3 cruise ships in port. I keep hearing how bad things are and I do see some business shutting down, but not anywhere in the correct proportion to the hype. According to the hype there should be empty stores, deserted roads, soup lines in the streets and beggars on every corner. Look at the pictures from the depression. Are we anywhere near that? This does not pass the smell test. Someone is trying to overplay this problem for some kind of gain. Call me cynical. But as someone once said, paranoia is just a hightened state of awarness.

PopGoesBend said...

>What's the address on the one on Friday?

I suppose I should have said "have had offers accepted" instead of actually sold.

2460 and 2488 both had their sold signs out before the tour started.

2440 is the one that had the offer accepted over the weekend. I liked the cabinets in the kitchen and the tile work in the master bath. The dining room was fairly cramped and wouldn't fit a table with extra leaves in it when guests came over. The living room was smaller than the master bedroom. I think it would have been nicer if they took a few feet off the master, and gave it to the living space.

hbm said...

rotorman: I'm half-inclined to agree. Aside from the real pockets of poverty (the Rust Belt of the Midwest and the Bubble Belt of the West Coast and Florida) things just don't seem that desperate.

"A recession is when the money goes back to its rightful owners," says the old proverb. Playing up the severity of a recession is a good way to exploit people's fears and pick up stuff dirt cheap. There's a whole shadow market out there of people and corporations with serious money who are buying up bank-owned and foreclosure properties for next to nothing and are going to make a killing somewhere down the road. This happened in the 1930s and it will happen again. "Those that's got shall get, those that's not shall lose." -- Billie Holiday

Anonymous said...

20 years until it's time to buy in Bend? Sounds like 2030 will be a good time to retire. See you then.

Anonymous said...

Photos you're talking about from the Depression weren't all taken the first year.

Give it time.

Bewert said...

Re: Much of the work force is still around, he said. The quality of life is off the charts, and few people want to leave.

"Where are they going to go? Hollern said. "Conditions are the same everywhere. There seems to be a sense that it is better to be unemployed in Bend than in other places."


Ah, yeah. Try anyplace that sounds nice in the top 60 or so here:

BTW, you're on the verge of surpassing last years record of 1948 NODs--1922 and counting...

Lots of road cyclists coming to town the next few weeks, which should bring in some dollars.

Duncan McGeary said...


Rotorman. HBM.

Stand behind the counter for a couple of hours. Watch what happens.

As I've said, I'm seeing plenty of foot traffic. Dare I say, more than ever before?

Translates into tiny sales per customer.

Meanwhile, my regulars who live in town have cut WAY back. And the tourists are showing all kinds of price resistance. They are putting stuff back that they would've bought in years past.

Lots of action on my liquidation table, but it's hard to make much money at .50 or 1.00 a book.

I have a theory that tourists came to the following conclusion: We will go on vacation, but we'll not buy anything ON vacation.

As far as Costgo being busy, so is Walmart, so for that matter, is my wife's used bookstore (as well as the used book section in my store.)

Common denominator: big discounts on price, assuaging the guilt of the consumer.

So in my opinion, it's actually worse than they are letting on, and it will get much worse in the off season.

You can't let the appearances or even the number of stores fool you.

Like I said, dig a little deeper. Take two hours, park yourself outside a store (NOT mine, if you please...) and count how many people go in, and how many come out with shopping bags.

And if they come out with shopping bags, was there a sale going on? Doe's the bag look full, or is it a token purchase?

And so on.

Duncan McGeary said...

Also, do I need point out that it's the middle of Frakken Summer?

It's like going to the Antartic on it's warmest day of the year and saying, "Gee, I wonder why they say it's so cold here? I could live with this!"

Even if it's 20% colder than the previous high, it still is going to mislead you.

Bend is a tourist town -- every store should be doing 20, 30, 40, 50% better than the rest of the year. Every store has probably budgeted based on that conclusion.

So a 10% better than normal result isn't too good.

Bewert said...

Think you had a bad day?


Realtor finds body before showing empty LA house

Sunday, July 19, 2009

(07-19) 19:18 PDT Los Angeles, CA (AP) --Police say a Los Angeles real estate agent about to show a foreclosed home found a man's body inside on the living room floor.

Officer Karen Rayner said Sunday that the agent could not find the key to the three-bedroom house near Los Angeles International Airport in its lockbox and an employee was sent over to open the door late Saturday.

The employee and agent found the man inside. Rayner says it is unclear how long he had been dead.

Police say an autopsy will be conducted to determine the cause of death. The man's name has not been released.

Read more:


Wonder how the place smelled...

Anonymous said...

(07-19) 19:18 PDT Los Angeles, CA (AP) --Police say a Los Angeles real estate agent about to show a foreclosed home found a man's body inside on the living room floor.

Good! One less Cali fuck to come up here and ruin things.

hbm said...

"Bend is a tourist town -- every store should be doing 20, 30, 40, 50% better than the rest of the year."

Is that what the historical record shows? 20% sounds reasonable; 50% sounds rather unrealistic.

BTW I went down to the OMD yesterday and the place was, like, DESERTED. And the size of the stores and the wide sidewalks make it seem even emptier.

Dropped in at the new Strictly Organic coffee shop in the OMD to check it out. Very few customers. I hope they didn't make a big mistake -- they're decent people.

Jelement said...

The whole CC mess is only going to get worse on the consumer side as well, card companies are trying to make changes before the CARD act hits in February.

Chase has canceled cards of longtime customers who pay their cards off every month simply because they consider those customers to be leeches. They make no money on them in finance charges, and pay out rewards so what is the incentive to them?

Unfortunately I also know small business owners who use this tactic when they purchase supplies. This will end up hurting some of them as well even if they aren't in actual CC debt.

The CARD act isn't going to help much since it only motivated banks to change terms to their liking on an accelerated schedule. The biggest problem I have with it is the impact on consumer credit scores when banks close cards, you can get hit several different ways for doing nothing wrong.

hbm said...

Dunc, you are like the paramecium who thinks the Petri dish in which he lives is the whole world.

Nothing personal, of course.

hbm said...

"There seems to be a sense that it is better to be unemployed in Bend than in other places."

If I had my druthers I would be unemployed in Hawaii. At least I'd be warm while I starved.

Anonymous said...

All the bicycle nerds in their yellow jerseys and black leotards will be prancing all over Bend in the next few weeks. Also running stoplight, stop signs, going the wrong way on the street.
Watch out for these bozos. They are worse than the DWO's
(Driving while Oriental)

Duncan McGeary said...

Nothing personal?

Yes, but I have found over the years that is what is happening in my store is happening elsewhere as well.

I don't live in a vacuum.

Plus, I've talked to enough business owners to know whereof I speak.

Where exactly do you get your opinion, HBM? From walking around the streets?

Duncan McGeary said...

I usually see about a 25% increase in summer from the slower spring and fall.

I've seen as much as 50% in the past.

I suppose it depends how dependent on tourism you are, which is why I provided a range from 20% to 50%.

Meanwhile, since I've been compared to a parmeciam, I've always wanted to do this.

How about we mark this day, HBM, and you tell me in a year who was right or wrong about this?

You saying it's all been exaggerated, or me saying it hasn't been emphasized enough?

I think I keep a pretty close pulse on the retail rhythms, but I suppose you know better.

hbm said...

"How about we mark this day, HBM, and you tell me in a year who was right or wrong about this?"

Sure, but with one big qualification: How do we determine "right" and "wrong"? What are the criteria? What are the hard data by which we make the determination?

Actually, before we even do that we have to agree on what we're disagreeing about, and to what extent. I'm not saying that the Bend economy is gonna be back to 2005 levels by mid-July 2010. I'm saying I have a gut feeling that things are not gonna be as catastrophic as you say they are -- but then I don't know exactly HOW catastrophic you're saying you think they'll be. Every store boarded up? Former merchants selling apples on the street corners? 100% unemployment? People eating cats and dogs? In other words, how bad is bad gonna be?

Unless we can answer these questions clearly and agree on a set of verifiable empirical data, it's pointless to even discuss whose prediction is right and whose is wrong. Hell, we don't even know what the predictions actually are.

Duncan McGeary said...

I'll let you decide, HBM.

Don't worry, it will be obvious.

hbm said...

Dunc, I might add that I have been following this blog for years and have heard PLENTY of predictions that by this time a third of the downtown stores would be boarded up, everybody would have left and this would virtually be a ghost town.

You know very well I am no Kool-Aid-addicted optimist, and I'm not saying that can't or won't happen; I'm just saying that it's easy to make end-of-the-world predictions, especially when you do so anonymously and can't be held to account. At least you and I put our names on our stuff.

hbm said...

"I'll let you decide, HBM."

Oh well, in that case I'm officially declaring now that I was right. (According to my own criteria, which of course are secret.)

Gosh, that was easy.

Susie said...

> Yes indeedy. There about a $3.5-$4 million dollar little Pacwest out in Tumalo that won the whole T.O.H. enchilada last year, or maybe even two years ago.<

Yep, it was last year. I think you're referring to this: On the Pacwest site:

"This 5764 sq ft Collins Road custom home designed by Steven Van Sant was voted Best of Show in the over $4,000,000 class of the 2007 COBA Tour of Homes...Steve Van Sant was quoted on the design of this home: 'It looks like it grew there and we carved it out of the ground. It is truly meant to blend into the landscape, to be part of the environment'."

I'm looking at the picture, and it looks like a freakin' hotel! As for the Best of Garage award, it's good for a chuckle:

"The Carriage House/Garage has a feature car display area. It also has 4 maintenance bays and an RV maintenance area. There is an area for lawnmower or a tractor storage area. It also has its own washer and dryer, shower and kitchen area. Out the back door are two horse stalls."

Duncan McGeary said...


A year before the bubble popped, we could've argued what perimeters would be a collapse.

In the event, it didn't matter. We all knew.

I'm saying the same thing about retail in Bend.

It will be obvious.

If it's not as obvious as I think it will be, you win the bet.

Susie said...

PGB, thanks for the info on houses on Sacagawea. We'll see if those three homes actually close. Lots of contingents are falling through.

As for your thoughts on 2440 Sacagawea, I'm with you. I'd much rather have a smaller master and more REAL living space.

Anonymous said...

"This 5764 sq ft Collins Road custom home designed by Steven Van Sant was voted Best of Show in the over $4,000,000 class of the 2007 COBA Tour of Homes...Steve Van Sant was quoted on the design of this home: 'It looks like it grew there and we carved it out of the ground. It is truly meant to blend into the landscape, to be part of the environment'."

It can be had for under $3 million now.

Susie said...

"This 5764 sq ft Collins Road custom home designed by Steven Van Sant was voted Best of Show in the over $4,000,000 class of the 2007 COBA Tour of Homes"

>It can be had for under $3 million now.<

And another one from the 2007 COBA TOH: It was #68 (Schumacher), a 5,353 sf home at 606695 Waterfront Court in River Rim. Original list: $2.796 million. List price dropped to $1.999 million and now has dropped again to $1.7 million. That's a 39% drop.

As of today, the property taxes from 2007 and 2008 haven't been paid and total $9,003.11 --including interest.

Anonymous said...

I believe there wasn't any unemployment benefits or other social safeguards during the Great Depression and they came about because of the GD.

How would things look now if we didn't have that. The people that were first affected are starting to run out of benefits, and more will every month. Things might get even more grim. I'm with Dunc.

hbm said...

"The people that were first affected are starting to run out of benefits, and more will every month. Things might get even more grim. I'm with Dunc."

The money that might have been spent on real human needs and creating real jobs was pissed away on bailouts for fucking multibillionaires. But should we really be surprised in America circa 2009? How long do you think a REAL progressive president like FDR would survive in today's America?

Anonymous said...

The money that might have been spent on real human needs and creating real jobs was pissed away on bailouts for fucking multibillionaires. But should we really be surprised in America circa 2009? How long do you think a REAL progressive president like FDR would survive in today's America?

Never in my life have I read the musings of someone with the ability to over-simplify things the way you can.

Anonymous said...

All the bicycle nerds in their yellow jerseys and black leotards will be prancing all over Bend in the next few weeks. Also running stoplight, stop signs, going the wrong way on the street.
Watch out for these bozos. They are worse than the DWO's
(Driving while Oriental)


Wow...I happen to resemble both those remarks. Maybe you should get your fat ass out of the car sometime and you'll see there's both crappy bicyclists and crappy drivers

IHateToBurstYourBubble said...

The semi-annual BRAGFEST about people moving here... not so braggy. In fact the article has 2 paragraphs, before it degenerates into [AHHHHH!] MOVING TIPS.

Make it a smooth move

At the beginning of this month, Bryan Murphy moved 28 Central Oregonians out of the state, one of the biggest weeks for out-of-state moves Prestige Allied Moving & Storage has seen in years.

“We’ll be moving 63 families out of Bend this month,” Murphy said, echoing what other local moving companies agree is a trend throughout the region: Displaced workers and their families are moving elsewhere for work.

IHateToBurstYourBubble said...

Here are "Moving" pieces previous titles:

More people moving in, but at a slower pace

Moving statistics point to growth

Central Oregon still a magnet for Californians

These used to be about NOTHING BUT the massive influx of Arizonians, Cali-bangers, and Washitonians to Central OR, the LIFESTYLE CAPITAL OF THE UNIVERSE.


IHateToBurstYourBubble said...


First, you have to decide if you are going to drive a moving truck yourself or have a professional moving company do it for you.

Certified movers must register annually with ODOT, showing proof of general liability and property damage insurance.

* Is the company certified through ODOT? Have any violations been reported?

• Do they have a record with the Better Business Bureau?

• Do they offer a free estimate?

• If moving a great distance, will they ever move your belongings onto a different truck?

• Are they a full-service moving company, loading and unloading your belongings? Some will also pack up your whole house for an additional cost.

• Will the belongings arrive in a reasonable amount of time? Some may only be able to give you a six-day window of when your items might arrive.

• Are customer references available?


Funny how that works. Good work Costa, you fucking Gas Giant Piece of Shit.

IHateToBurstYourBubble said...

This is one of the biggest stories in the region this year, MASSIVE OUTFLUX, but the Bully has converted this annual, trusty and reliable piece about moving stats and area "growth", into MOVING TIPS.

Now that it's about CONTRACTION... we get MOVING TIPS.

IHateToBurstYourBubble said...

First, you have to decide if you are going to drive a moving truck yourself or have a professional moving company do it for you

Yes, just drink that cool, refreshing Kool-Aid... we'll stand in the background asking perfectly MINDLESS QUESTIONS that sound like news....

Anonymous said...

>>This is one of the biggest stories in the region this year, MASSIVE OUTFLUX

wow 63 families are moving out. that's like 200 people out of 170,000 in the county. Assuming zero people are moving in, we'll be a ghost town in only 70 years.

IHateToBurstYourBubble said...

wow 63 families are moving out.

One moving company, dipshit. And it's a moving company.

Everyone KNOWS you arrive in Bend by MOVING COMPANY, you leave via U-HAUL.

If they alone are moving OUT 63 families, they are probably damn near booked solid, which means every motherfucker in town with outbound trucks available is BOOKED SOLID.

IHateToBurstYourBubble said...

We’ll be moving 63 families out of Bend this month...

And it's BEND... so it's 80,000, not 170,000....

IHateToBurstYourBubble said...

Assuming zero people are moving in, we'll be a ghost town in only 70 years.

Dude, there is cool, refreshing Kool-Aid being served at the Bully HQ today... Go enjoy.

hbm said...

"Assuming zero people are moving in, we'll be a ghost town in only 70 years."

Yes, Bend will look just like Shaniko in 2080.

hbm said...

"“We’ll be moving 63 families out of Bend this month,” Murphy said, echoing what other local moving companies agree is a trend throughout the region: Displaced workers and their families are moving elsewhere for work."

And these are only the ones who can afford to hire a moving company -- a minority.

hbm said...

"Maybe you should get your fat ass out of the car sometime"

But ... but ... but that would be UN-AMERICAN!

hbm said...

"If they alone are moving OUT 63 families, they are probably damn near booked solid, which means every motherfucker in town with outbound trucks available is BOOKED SOLID."

Highway 97 South looks just like Route 66 in "The Grapes of Wrath" -- an endless stream of Beemers, Audis, Hummers and Escalades loaded up with pitiful belongings, with Granny strapped to the top in her rocker.

hbm said...

Well, at least The Bull has actually acknowledged that people are moving out of our glorious "paradise." First we were fed the line that "people will keep moving here because it's such a desirable area." Then we had: "People will stay here because although times are tough, it's still an incredibly desirable area." Finally we have: "Whaddaya know -- people have figured out they can't eat the scenery."

This is progress, of a sort.

IHateToBurstYourBubble said...

Granny strapped to the top in her rocker.

I believe that's National Lampoons Vacation...

IHateToBurstYourBubble said...

[Delivering the eulogy for Aunt Edna, flatly]
Clark: O God, ease our suffering in this, our moment of great dispair. Yea, admit this kind and decent woman into thy arms of thine heavenly area, up there. And Moab, he lay us upon the band of the Canaanites, and yea, though the Hindus speak of karma, I implore you: give her a break.
Ellen Griswold: Clark...
Clark: Honey, I'm not an ordained minister; I'm doing my best.

Quimby said...

Butter, I love it when the local realtor/industry crowd comes on here and pitifully attempts to poke you in the eye....and you give it back doubly with the asswhoopin' they deserve.

Half the reason I read this hilarious blog man!

Anonymous said...

You can always go to and price what it costs to move to and from Bend and other places. Prices rise when/where there's a scarcity of trucks.

Anonymous said...

I love it when the biatches crying about their 300 days of sunshine decide to move to Fargo to pursue the real Good Life.

Anonymous said...

"Here are "Moving" pieces previous titles:

More people moving in, but at a slower pace

Moving statistics point to growth

Central Oregon still a magnet for Californians

These used to be about NOTHING BUT the massive influx of Arizonians, Cali-bangers, and Washitonians to Central OR, the LIFESTYLE CAPITAL OF THE UNIVERSE."

Actually, the mainstream media OUTSIDE of Bend get it: People moved to Oregon (and Bend) last year, with NO jobs, expecting to get one. Thus our labor pool INCREASED while our available jobs DECREASED.

I think they're starting to understand how that works out. Not that you could go to Vegas or anything - the Vegas unemployment rate is 12.2% also - but at least a hotel maid there is UNIONIZED and makes $14.25 an hour, with health care.

Anonymous said...

Hey! Does "Life is Good" still live in Bend?

Anonymous said...

Two words- San Antonio.
Unemployment under 7%.
Nice house for $150,000.
Low crime rate.
Great recreation.
Inexpensive higher education.
NO state income tax.
Very little business regualation/harrassment.

Anonymous said...

Oh God, another week with the street overrun with geeks who think that if they dress like Lance Armstrong, they will BE like Lance Armstrong.
Strutting around showing your butt in leotards is not macho-
more like GAY!

Anonymous said...

Yeah, Most of these bicycle nerds are closet gays.
Where else can you show off your "package", wearing no underwear, with a group of people that are ALL GUYS!
Organized guy biking is the biggest gay activity for men.

Anonymous said...

Me thinks thou dost protest too much ...

Are you fishing to see if we really are gay so you can finally be accepted? Sorry, we aren't gay in any higher percentage than the non biking population - but we are accepting.

Or are you just mouthing off because your wife happens to find buff, in-shape men hotter than you? And the fact that she can check out our asses is just a bonus for her.

When you think you are insulting someone by calling them gay it does not insult, it just shows that you are a bigot and a moron.

Anonymous said...

Yeah, Most of these bicycle nerds are closet gays.
Where else can you show off your "package", wearing no underwear, with a group of people that are ALL GUYS!
Organized guy biking is the biggest gay activity for men.

ya, you're not an idiot...

after over a decade of racing bicycles at a very high level, I have yet to meet a gay bike racer.

Some of the hottest pussy on earth can be found in the wives and girlfriends of bike racers....fact.

hbm said...

Story in the NY Times today says Apple is doing very well retail-wise, in both the computer and the iPhone ends of its business. This despite the relative expensiveness of Apple products and the fact that all other computer manufacturers are tanking.

What this says, I think, is that there ARE people with money out there and they're willing to spend it if you have a product they want and consider a good value.

(Bend homes, needless to say, do not meet either of those criteria.)

hbm said...

"Yeah, Most of these bicycle nerds are closet gays."

Reminds me of an old friend of mine (now deceased) who used to insist that all tennis players were gay because Bill Tilden had been gay. (Yes, this dude was old enough to remember Bill Tilden.)

All it takes is one prominent gay athlete in a sport and people will start generalizing that they're ALL gay.

Can you name ONE openly gay pro cyclist? Just ONE?

Quimby said...

Maybe they aren't gay but they LOOK gay!

If you ever have a dude lean out the window and yell "Road FAAAGGGG!", you'll have met Quimby.

We should road tax those fuckers.

It's sad, I have to pick their carcasss out of my Hummer grill from time to time.

hbm said...

"I believe that's National Lampoons Vacation..."

Or it mighta been The Beverly Hillbillies.

The Bend Hillbillies ... now there's a setup for a sitcom. Family of rich Californians moves to Bend for the "outdoor lifestyle," goes broke in real estate and ends up having to live the REAL Bend "outdoor lifestyle" -- shooting deer and elk for meat, cutting, splitting and stacking their own firewood, etc.

hbm said...

"If you ever have a dude lean out the window and yell "Road FAAAGGGG!", you'll have met Quimby."

You're probably one of the inbred shitheads who ran me off the road back in the days when I was into cycling for exercise. Retards like you were one factor in making me give it up.

Maybe you're not an asshole but you SOUND like an asshole.

Anonymous said...

Billie Jean King. Martina Navratilova.

Quimby said...

Lemme tell you little story bout a man named Dan, rich Californian always kept is family tan....

Then one day he shot at by some crips, and up from the south came that bubblin' oooooze.....

Fuckin Calis, Golden State trash....

Quimby said...

Don't worry HBM, we're all assholes :)

hbm said...

"Hey! Does "Life is Good" still live in Bend?"

Haven't seen that one in a while.

I want a bumper sticker that says: "Anyone Who Makes Sweeping Statements About Whether Life Is Good or Bad Is an Idiot."

But I guess that would be kinda long.

Quimby said...

Hmmmmm, this doesn't quite work:

Then one day he shot at by some crips, and up from the south came that bubblin' oooooze.....

But this is a little better:

Then one day he shot at by some fools, and up from the south came that money grubbin' oooooze.....

Bewert said...

Re: The money that might have been spent on real human needs and creating real jobs was pissed away on bailouts for fucking multibillionaires.


Goldman has set aside $11.36 Billion in compensation this half year...

Almost $400K per employee.

What do they manufacture again?

hbm said...

"Lemme tell you little story bout a man named Dan, rich Californian always kept is family tan...."

Sounds promising. Keep working on it.

Maybe I should work up a two-page pitch and show it to my agent.

Quimby said...

>> I want a bumper sticker that says: "Anyone Who Makes Sweeping Statements About Whether Life Is Good or Bad Is an Idiot."

I would totally buy that. If you could come up with something referencing my distaste for road bicyclists, I might buy that one too.

hbm said...

"What do they manufacture again?"

They manufacture "wealth," Bruce.

In much the same way that the Somali pirates manufacture wealth, but on a much larger scale and with less personal risk.

Quimby said...

>> They manufacture "wealth," Bruce.

Very true. They play with numbers in a computer. This has got to have an end at some point.

hbm said...

"Billie Jean King. Martina Navratilova."

That's two Lesbians, out of how many woman tennis players?

It was pretty obvious all along that Martina was Lesbian, but Billie Jean surprised me a little.

Anyway, I thought I asked for names of openly gay male pro cyclists.

hbm said...

"Very true. They play with numbers in a computer."

What they really do, of course, is use the computers to transfer wealth from some people to other people. They don't "manufacture" anything. Essentially they are a parasitic organism, and they have just about killed their host.

Bewert said...

Quim, now that's an idea Dunc could run with. The killing off developer theme story was a little iffy, but Orange County Barbie carefully cutting around the penis and then removing the bladder of a buck would be pretty funny.

Anonymous said...

NFL... now that's a sport full of homos. Esera Tualolo, David Kopay, Roy Simmons... Must be something about the locker room

Anonymous said...

Can't forget the NBA.... John Amaechi, Dennis Rodman...

Still can't come up with any gay male cyclists. There are however plenty (10 or so) lesbian cyclists I can think of.

Quimby said...

On the subject of parasites:

A long but interesting read

The Tapework Economy

Quimby said...

Damn, link should read The Tapeworm Economy.

Anonymous said...

Our Irish future.

hbm said...

"Quim, now that's an idea Dunc could run with."

Now, damn it, the concept for "The Bend Hillbillies" is MINE!

Anonymous said...

Can you name ONE openly gay pro cyclist? Just ONE?

Yes I can...Ol Lance, one ball in his pants, Armstrong.


When you think you are insulting someone by calling them gay it does not insult, it just shows that you are a bigot and a moron.

Fuck you, you nigger fag boy.

Anonymous said...

Lance gets way hotter pussy than you do.

Anonymous said...

"Lance gets way hotter pussy than you do."

Yeah, and Michael Jackson got Elvis' daughter.

LavaBear said...

>>>Can you name ONE openly gay pro cyclist? Just ONE?

Richard Virenque! No wait he's just French. I get those confused. Turns out he has a wife and a couple kids....

Anonymous said...

The french are gay? I thought it was brits who are gay.

Anonymous said...

You have never met even ONE gay cyclist? Sweeetie, don't get your panties in an uproar, but you are in such denial.
10% of the population is gay.
If you say you have never met gay cyclists, YOU need to come out of the closet.

Bewert said...

You dumb fucks are funny arguing over gay cyclists.

Fact: Chicks like nice asses as much as we do.

Fact 2: Bike racers have really nice asses.

Head to head, elbow to elbow racing at serious speeds or climbing, wearing virtually nothing, is intense. Pussies get dropped fast. Testosterone rules.

Simple stuff.

Watch those sprints. I was a sprinter, almost won the Boise Twilight Crit but crashed coming out of the last corner, and rubbing cars ain't shit compared to rubbing elbows.

You man up or get dropped. By like a 100 people. It's humbling.

Anonymous said...

Is your life so pathetic that you have to research Lance Armstrongs dates? What are you, a 15 year old girl?? Do you read Tiger Beat magazine,too.
Get a life, man, and grow some balls.

PopGoesBend said...

AP video: Oregon's Recession Is 'poverty With a View'

On another note, today we passed last year's NOD count. 1965 at the end of the day. If we keep it up at this rate we will be over 3500 for the year.

I've noticed a number of the properties I have been watching go pending or contingent within the last week. The last Newport modern house is now contingent. The three wood sided houses at 7th and Roanoke are either pending or contingent as of this week, and a couple of foreclosures in the West Hills as well. All of these are either bank owned or short.

Three of the five tour homes in NWX are "sold". It will be interesting to see if they actually all close. If so we may see some actual volume moving this summer.

Anonymous said...

The uniforms look like clown costumes. That's the problem. Like Mighty Morphin' Power Rangers. They just look like...clowns.

Anonymous said...

Yeah, just paint their faces white, and they could be mimes in a French circus.

IHateToBurstYourBubble said...

Fuck you, you nigger fag boy.

Can I use that? Cuz that shit is FUNNNN-NEE!

IHateToBurstYourBubble said...

Lance Armstrong dated Ashley Olsen? WTF? Isn't she like 12?

OK, he ain't gay but that grampa is a borderline pedal-phile!!


IHateToBurstYourBubble said...

Although I'd fuck that Kate Hudson till Eyes Dead.

Anonymous said...

Bewert said:
"Watch those spurts. I was a spurter, almost won the Boise Homo Lick but crashed cuming out of the last anus, and rubbing dicks full of shit is nothing compared to rubbing elbows."

We miss you, Bruce Pussy!

Bewert said...

Feeling the love ;)

Quim, that Tapeworm article is a good catch. Goldman is the king, as Krugman notes here:

Bewert said...

"Over the past generation — ever since the banking deregulation of the Reagan years — the U.S. economy has been “financialized.” The business of moving money around, of slicing, dicing and repackaging financial claims, has soared in importance compared with the actual production of useful stuff."

hbm said...

BTW if this is your idea of a "short post," a long one must the the size of A la recherche du temps perdu.

Anonymous said...

I don't think bicyclists (in general) have the good bodies of a general athlete. What they have are strangely proportioned bodies. They have large butt cheeks, similar to trumpet players and hamsters having large mouth cheeks.

Now, it's certainly possible that the odd person here or there might be attracted to this enlarged feature. Humans can make anything into a fetish. Some people are attracted to large feet or ears.

Anonymous said...

Mortgage securitzation began in the 70s, I believe. Milken was dealing junk in the 70s. I certainly wouldn't peg that stuff to 1981. It's been growing all along under both parties. The zealotry is really attractive though! Keep that crazy look, Bruce. We love it!

Anonymous said...

Well, prices at The Parks have finally dropped. Realtor-owned 2-bedroom at $299. Remember what they used to try to get for those?

Anonymous said...

Not at all unlike Bewert. He's got tremendously developed mouth cheeks and esophageal muscles. He's smoked so much cock in his lifetime, things look strangely proportioned, indeed.

Anonymous said...

"Milken was dealing junk in the 70s. I certainly wouldn't peg that stuff to 1981."

Securitization and other tricks extend all the way back to the 1970s, but right about 1981 is when finance really took off and became crazy. It just got worse and worse and worse -- and we still haven't learned our lesson.

People have a short memory and there's no regulation coming back in. We're set to repeat history over and over and over . . .

Anonymous said...

what happened to weatherman Christian Boris? He's not listed under "News Team" for Z21.

Duncan McGeary said...

Funny, I had Ron Pederson in the store the other day (Bendites know of whom I speak.) He's doing weather for one of the Portland channels we don't get (and...umm... selling real estate...)

He said he was watching the local news and the weatherman was saying it was his last night....

Anonymous said...

>>I had Ron Pederson in the store the other day (Bendites know of whom I speak.)

Ron's been on TV in Portland for almost 20 years. KATU then KOIN and now KGW.

Anonymous said...

Obama's losing popularity faster than I expected. What the hell?

Duncan McGeary said...

"Ron's been on TV in Portland for almost 20 years. KATU then KOIN and now KGW."

But he was in Bend for at least 20 years before that...

Like I said, true Bendites now of what I speak.

20 years.....grumble, grumble, new comers.....

Anonymous said...

Whatever Obama wants to do, he getter get his ass in gear and do it quick. He needs to spend his remaining political capital before it dissipates into nothingness like Clinton's. After it's gone, Obama will hire someone like Dick Morris to help him triangulate so he can win a second term. We'll have six years of Obama as defacto moderate-conservative, just as we did with Clinton.

Anonymous said...

Dunc, true Bendites mountain bike, they don't watch the fucking TV.

Duncan McGeary said...

Actually, true Bendites ride three wheelers and snowmobiles, and run over bikers and cross country skiers.

Duncan McGeary said...

And have a big screen T.V. in every room...

Duncan McGeary said...

Which are switched on all day.

Duncan McGeary said...

The T.V.'s keep the kids and dogs busy while the Bendites sleep off the hangover from the Underground.

And in case Nancy Pelosi shows up on screen, and they have to shoot it out with their guns.

Which are also in every room

Mountain bikes, sheeesh. Not from around here, are you?

Anonymous said...

Flashback from Glenda...

Search Parameters: 3 bedroom, 2 bath in zip codes 97701 and 97702.
Statistics from Central Oregon MLS ~
Total 308 Homes in Active or Contingent Status ~ a decrease of 24 homes since October 5th, 2007.
Price Range $159,900 - $1,050,000
Average List Price $342,595

Average Square Feet 1625

Average days on market 211

The selection remains broad although homes meeting the criteria has fallen by another 32 which equates to a drop of 77 since the August update, average list price has dropped and square feet is remaining within a small range. Sellers continue offering concessions to prompt a purchase, ranging from selling incentives to buying incentives. Some of the recent options we are seeing are renting, lease optioning, holding the property for future use or sale

Recent media is dominated by subprime mortgage write downs. The impact astronomical and being felt at a worldwide level. The economic outlook remains uncertain. Interestingly our economy is not falling apart in the wake of massive losses. There are bargains available on the market and inventory is plentiful.

If you need a home ~ buy a home! There are deals out there and there is no time like the present.

Anonymous said...

God, I love the Internet! Here- calculate the damage you avoided by NOT following advice :)

Wednesday, August 1, 2007
Update ~ Time to Buy in Bend Oregon!

This is the August update using same search parameters as July 16th.

Search Parameters: 3 bedroom, 2 bath in zip codes 97701 and 97702.
Statistics from Central Oregon MLS ~
Total 379 Homes in Active or Contingent Status ~ an increase of 8 homes since July 16th.
Price Range $219,000 - $1,050,000
Average List Price $357,954
Average Square Feet 1622
The selection remains broad and several sellers are motivated to sell. Buyers are still hesitating and currently sellers are trending towards other options. Some of the recent options we are seeing are renting, lease optioning, holding the property for future use or sale.

On July 27th Barbara Corcoran appeared on a Today Show Interview with Matt Lauer. Barbara sees the current market as the optimal buying market ~ there is no time like the present ~ expressly if you love the home or need to buy!

Finding a motivated seller and closing a deal now may be in the buyers best interest. Mortgage rates are becoming more favorable according to Cindy Goodman @ Cascade Mortgage Company in Bend. Email questions to Cindy Goodman. Given the current market and mortgage rates now is the time to get off the fence and make a decision.

Glenda Crowell
Principal Broker
Bend River Realty
230 SE 3rd St
Bend OR 97702

tim said...

Thanks for selflessly looking out for my best interests, Glenda. :-)

Anonymous said...

Bad timing for Obama to put his foot in police poop. Where are his handlers?

Susie said...

Here's one portrait of the Bend Bubble popping: A home in Oak Tree subdivision on Yellow Leaf Street. Its history:
5/09/2006: 9,148sf Lot: $31K
Home built in 1997 - 2,228 sf
7/10/2002: $222,000 (Sold)
9/15/2006: $389,900 (Resell)
Two price changes with the last one from $250K to $175K. Contingent at $175K @ $79/square foot A 55% drop in 34 months.
What will it close at? Records show it's not a REO yet, but could very well be a SS (although property taxes are current). On the hook? Countrywide, now owned by BoA.

Susie said...

Ooops! Previous example is NOT Yellow Leaf Street (Over in SW Poplar Park) but Yellow Ribbon in Oak Tree in the NE section...

Anonymous said...

It's been three long years, do you still want me?

Bewert said...

Option ARMs: The Most Misleading Mortgage Product Ever Devised. Worst Than Subprime? You Bet. Looking at Wells Fargo, JP Morgan, and Bank of America.

If you had to create a mortgage that was more toxic and more destructive than a subprime loan, you would have a very hard time creating that product. Yet leave it to creative finance to spawn a devilish product with the unique name of option ARMs. The option ARM is a 30-year adjustable rate mortgage which offers borrowers four different monthly payments. You have the 30-year fully amortizing payment, a 15-year fully amortizing payment, the interest-only payment, and the most popular last option of “negative amortization.” The illusion and Orwellian language of this loan gave the impression that borrowers would have tremendous options in paying off their mortgage.

The facts are disturbingly different for this Jekyll and Hyde mortgage. Over 80 percent of option ARM holders elected to go with the smallest payment. The option ARM is a subset of the Alt-A toxic mortgage universe. In the midst of the major bank failure circus Washington Mutual, Wachovia, and Countrywide Financial all were swallowed up with their option ARMs into the belly of JP Morgan, Wells Fargo, and Bank of America. The three firms are now gone but their option ARMs linger creating banking indigestion...


More at the link. Good article. Scary shit.


As it turns out, option ARMs are even more toxic than subprime loans. Here are some facts to chew on:

Option ARMs

36.9% of loans are 60 days past due

19% in foreclosure


33.9% of subprime loans 60 days past due

14.5% in foreclosure...

Many of the option ARMs will recast in 2010 with the peak being reached in 2011...

tim said...

Foreclosures have just begun, Bruce. It's going to be even uglier than it is.

Anonymous said...

Unemployment last month dropped in Bend and the entire county.

Anybody have any idea WHY?

Anonymous said...

Exodus of people w/o jobs

Bewert said...

World Prepares to Dump the Dollar

What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.

One rock-solid, foundational belief underpins almost all economic theory in America: faith in the dollar’s unassailable status as the world’s reserve currency. Foreigners hold so many dollars that they can’t afford to stop buying them, the theory goes. Therefore the dollar’s status as the world’s reserve currency is sound. But the dollar is now coming under a concentrated attack. Are American economists about to get schooled?...Now that the initial panic has subsided, the dollar’s international purchasing power has resumed its former downward trajectory. Since the post-crisis high in March, the dollar has fallen by a portfolio-shredding 10 percent.

America’s foreign creditors are again questioning the wisdom of holding so many U.S. dollars. And they’re looking for a way out...At the G-8 summit, French President Nicolas Sarkozy called for a complete revamp of the global currency system, saying that the dollar’s supremacy is outdated. “[W]e’ve still got the Bretton Woods system of 1945,” Sarkozy stated on July 9. “Frankly, 60 years afterwards, we’ve got to ask: Shouldn’t a politically multipolar world correspond to an economically multi-currency world?”... Masaharu Nakagawa, the chief finance spokesman for the opposition, told the BBC that he was worried about the future value of the dollar. He said that if his party were elected in the upcoming national elections, Japan would refuse to purchase any more U.S. treasuries unless they were denominated in Japanese yen instead of dollars.

Such a decision could break the U.S. dollar bond market.

Japan is America’s second-most important creditor nation—lending the U.S. billions of dollars each year. If Japan won’t lend unless America pays it back in yen, then China and other major lenders may quickly follow suit. This would eliminate America’s ability to use inflation to cheat on its debt payments. America’s debt burden would soar, interest rates would jump, and national default—Argentina-style—could be staring America in the face within months instead of years...


The nightmare scenario. Very possible, especially if Goldman, et al quietly move from dollars to euros or other investments not denominated in dollars.

Interesting listening to Buffett now talking about the safety of US banks on CNBC right now, as I post this.

Anonymous said...

Don't look at month to month employment numbers. You'll go insane. Just watch the YOY numbers.

Anonymous said...

Since the unemployment numbers went up when all the retirees in trouble tried desperately to find jobs, maybe the numbers have gone as they have given up looking for jobs that simply aren't there.

Anonymous said...

The health plan will save us $2 billion over the next 10 years! Call your Congressman and demand he vote for the plan!!

Anonymous said...

Tammy Sawyer...slumlord

hbm said...

"Tammy Sawyer ... slumlord"

Interesting and entertaining story.

Also reminds me of a point I wanted to make a few days back when someone made the claim that small-town folks are "the salt of the earth." Many of them are, but you'll find crooks and liars and chiselers in small towns who are as bad as any you'll find on Wall Street -- they just operate on a smaller scale. Not to mention people who are just plain nasty, petty, vindictive, spiteful, selfish and vicious. People are people in big towns or small.

Anonymous said...

Also reminds me of a point I wanted to make a few days back when someone made the claim that small-town folks are "the salt of the earth." Many of them are, but you'll find crooks and liars and chiselers in small towns who are as bad as any you'll find on Wall Street -- they just operate on a smaller scale. Not to mention people who are just plain nasty, petty, vindictive, spiteful, selfish and vicious. People are people in big towns or small.

Anymore great words of wisdom, oh mighty pompous one?

Anonymous said...

Give his wife time to get the old fireplace bellows out and pump him full of hot air again.

Anonymous said...

Dead brown lawns. Tons of them. Obviously bank-owned.

It's really something.

There were not this many of them last year.

Anonymous said...

That place on the south side of Greenwood where brotek used to be is starting to look pretty rough. Weeds are waist high and dead. Part of the issue there is that commercial agents are horrible at their job. Not all but 3/4 of the agents I have dealt with in the last 6 months could hardly get themselves out of bed in the morning. Then they call you 3 weeks later and wonder why you moved on...

Duncan McGeary said...

Before I re-signed my lease downtown, I looked into Franklin and Greenwood and 3rd. (Not the brotek place, however...)

I thought the landlords wanted WAY too much.

If I'm going to pay 3/4th of downtown rent, I'm better off paying downtown rent.

Don't know if they've come down, yet, but they need to be half or less of downtown. A 1.00 a foot, maybe.

Anonymous said...

Commercial landlords are still living on fantasy island.
Do not sign a long term lease.
Bargain hard, as many of these spaces will be vacant by this winter/spring.

Anonymous said...

There's a lot of empties on Greenwood. When will something go into that Boomtown space?

Anonymous said...


there are good deals out there but the commercial RE fucktards are still trying to bend people over rather than fill empty space.

Don't get hooked up with one agent, just do your homework and make the calls yourself. Otherwise, you'll just get the run around.

Duncan McGeary said...

I'm set for the next four years.

I was surprised by the prices, though...

IHateToBurstYourBubble said...

I see Epic Air is announcing layoffs...

Lemme guess, THESE are the LAST ROUND OF LAYOFFS.

They cut 20 people in Jan.

Before that, in Nov 2008, they announced they were going to HIRE 100 people.

IHateToBurstYourBubble said...

re: slumlord... Wow!!

"Sawyer was more concerned about putting carpet in than actually doing maintenance," Androes said adding she had a faulty circuit in her unit that had the potential to catch fire and burn the whole park down. "She was a slumlord, pure and simple."

Jennifer Moore told a similar story. Her unit is one of the older ones and is having serious issues, which she said she reported to Sawyer almost weekly for about a year.

"Because of Tammy Sawyer, I've been forced to live with a ceiling caving in," Moore, a nearly two-year resident, said.

Anonymous said...

If the landlord does not fix things, why don't you MOVE??

IHateToBurstYourBubble said...

Holy Shit!


Now, they PRETEND it's a margarita, but that my friends, IS THE PREGGER DUDES MEGA COCK.

Note the scratch marks where the fetus tried to claw it's way BACK IN when it realized MOMMY HAD UNDERARM HAIR.

IHateToBurstYourBubble said...

Costa photoshopped that mother fucker so men and women the World over would CUM TO BEND, and suck down a cool refreshing MEGA COCK.

My God, look at that rubbery motherfucker... them kids stretched that dudes cock out so bad I bet he just dribbles out a stream of piss day & night...

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