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July 30th, 2008

http://calculatedrisk.blogspot.com/2008/07/fraud-in-2008-mortgage-vintage.html

Short form: dude, not _my_ problem. Uh, actually _it is_.

Words fail me; fortunately, they don't fail Tanta.

ETA: I'm think the wholesale mortgage business -- which most banks have gotten out of -- needs to be shut down entirely.

ETA: From the comments thread, as further evidence that Wells Fargo is Not the Lending Paragon some might have you believe:

http://www.mygarrisonhomes.com/

Buy a house; they'll throw in a car for free.

Oh no! We _like_ Lull Farm!

http://www.cabinet.com/apps/pbcs.dll/article?AID=/20080730/BREAKING/103977593

Hopefully this will not have negative effects on the business. One can imagine
all kinds of dire zero tolerance scenarios.

Obamanomics, according to Boskin

http://online.wsj.com/article/SB121728762442091427.html

A number of questions spring to mind here, like, um, _what_ state has an income tax of 10.3%? And has Obama _really_ suggested that that would no longer be deductible against income? And even so, isn't that just the highest _marginal_ rate? That's never going to be 60-some-odd percent from go. That's going to be 50 some odd percent from, like, every dollar over, oh, I don't know, but probably well into the 100Ks, maybe not until 200 something.

Can I just _cry_ for you?

So the table is annoying. The commentary is worse. Whatever. I just want to go on record here. I'm not one of those idiots out there who is opposed to raising taxes because I'm afraid I might some day win the lottery (figuratively or metaphorically) and I Don't Want the Guvmint To Take All My Money From Me.

Nope.

I'm one of those smart people who thinks that an equitable society is a stable society and we need to reverse this destabilizing trend away from equitability, and I'm more than happy to pay my fair share, seeing as how I got to hoover up some spare change lying around on the carpets of the tech boom some years ago. And while I'm not old enough to remember top marginal rates aboove 70%, I've read about 'em. And I wish we could bring 'em back. That's one way to ensure that top executives don't get paid ridiculous amounts.

Go Obama! Soak the rich. I'm good with that. About time, in fact. Desperately needs to be done.

And while you're at it, let's seriously get some socialized medicine and regulate the hell out of medical care in this country.

I swear, I am _NOT_ being sarcastic. I'm pregnant, or I'd be breaking out the whisky right about now and proposing toasts to R. about who should be first up against the wall when the revolution comes.

lead? in AstroTurf?

Are you _serious_? It's there for "color stabilization". _That's_ a worthy cause. Supposedly, newer fields have less lead in them. Do _you_ feel encouraged?

The CPSC has decided that this is A-OK and poses no risk to children, which as far as I'm concerned, is just further evidence that CPSC has sold itself so many times it long ago lost track.

It gets better: "cadmium, zinc and benzene" in the tire crumbs used to cushion the field.

Further investigations from other agencies to follow later in the year. Sensibly, at least some of these will look at a wide range of possibly dangerous chemicals, and look into the possibility that someone might not only inhale stuff out-gassing in the sun, but also face plant and therefore ingest, or fall and abrade and get some in through a cut in the skin. There are also water runoff concerns.

Very NY-centric coverage here:

http://www.newsday.com/sports/ny-liturf0731,0,4643528.story
That housing bill changed the rule from the old 2 of the last 5 years to something that I do not yet understand. Presumably, more later. Rule effective end of the year. I care.

ETA: looks like number of days "unqualified use" divided by number of days you owned it times the gain equals the taxable amount. Unqualified use is a really interesting thing, especially if you live half the year in one residence and half in another. Snowbirds will presumably await interpretation.

I think I'm a little bummed about this, primarily because if we rent this house for some period of time before selling it, we'll have to go back and figure out the basis, something we could otherwise have avoided doing entirely. *sigh*

And all the fun of figuring out what can be added back in: the garage, the driveway, the shed, the playset (if we leave it), landscaping, AC, generator, whole house humidifier (assuming we ever get that done). . .

Long ago, Back in May

http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/WhatIfGasCost10DollarsAGallon.aspx

This is a _perfect_ example of what is wrong with the punditry. The article is a What If, published May 16 of this year: What if gas cost $10?

Highlight predictions:

"Thousands of truckers would go bankrupt. Airplanes would sit idle in hangars. Restaurants and stores would shut down. Car-pooling, hybrid vehicles, scooters and inline skates would swing into vogue. And telecommuting, rooftop vegetable gardens, home cooking and recycling would proliferate."

Every Single One of these things has already happened (with the possible exception of the inline skates). Most had already happened back in May. Other brilliant predictions:

"Consumer spending on eating out, clothing, electronics, vacations and other little luxuries would fall sharply...discount retailers, particularly those selling food and gas, could do relatively well. Think Costco, Wal-Mart and McDonald's...Food prices could jump by a third or more...pinched consumers would give up pricey fresh meat and vegetables for cheap pastas and oils...cities might sprout to life as people planted vegetable gardens on their roofs and balconies and in vacant lots."

Every Single One, oh, never mind.

"We could even see civil unrest as the poor scrambled to survive. Suburbanites would crowd into urban town houses to avoid costly commutes, and working from home would become common."

There had already _been_ food riots overseas by the time this article was published.

Towards the end of the article:

"Will gas cost $10 a gallon anytime soon? It's unlikely, though short-term expectations of $4 or even $5 gas this year are increasingly common."

There are some simple things in life that Do Not Change. Real estate in Seattle lags the national market. Condos lag single family homes. Expensive housing lags starter homes. And in a rising market, no one really wants to believe prices are going to do anything other than drop back down to where they were. Some people are better at doing what they want to do than others.

Is gasoline $10/gallon (in the US)? No.

Did the things described in this article happen? Yes (I left out some things that have not yet happened, but a lot fewer than you might imagine). There are some interesting data points in the article:

"According to Todd Hale, a senior vice president for consumer researcher Nielsen, at $10 a gallon, the average family's gas bill would leap from 16% of its retail spending to about 40%." (This is followed by a risible assertion that I will not reproduce here. Go look it up yourself.)

Now, that's a helluva statistic. What could we predict knowing that?

People would take their kids out of private schools, for one. And probably a lot of people struggling to pay for college for themselves or their children would have to give up, unable to make any headway on the problem at all. If it was summer, you'd hear about people dying from the heat because they couldn't afford to run the A/C. If winter, you'd read about people burning their houses down because they were trying to heat the place with wood. Or a space heater in one room while letting the rest of the place drop.

Oh, wait. Those are already happening, too.

Exurbs and outlying towns would be making deals with salvage companies to dismantle empty houses that were foreclosed on by the town to collect on tax liens (possibly against banks who had foreclosed on builders or owners). The salvage company gets to dismantle the building as long as a proportion of extracted value goes towards the lien. The land is then sold to someone for the rest of the back taxes; that person then grows potatoes on it. (There's reason to suspect this is already happening.)

Having stopped police officers from driving around (gas too costly -- already happening), towns would next lay off police officers. At some point, emergency services would be cut back or off-loaded onto the state, whose budgets would already be stretched. Possibly to the point of default or bankruptcy (remember NYC? Gerald Ford's little Fuck You that cost him the election? Did you _see_ the coverage of Paterson and Bloomberg's comments on NY state and NYC and the state of the economy?).

After laying off teachers and accepting a substantially larger number of students/classroom, schools would reach agreements with higher authorities to have kids in school fewer days a week/month/year because they cannot afford to run the buses. (Already happening.) More children would have to walk to school. (Already happening.)

Massive layoffs from all the businesses that went out of business because no one has any money to spend on anything except gas. Massive consolidation/increase in household size as people get roommates, move in with family, etc. in an effort to make ends meet. (This is just barely starting.)

Arson (to collect on insurance on a house that can't be sold -- or just as revenge.)

Tire theft (because they've become _that valuable_ with oil that expensive; I'm actually a little surprised I haven't seen this one happen yet.).

Gas theft (already happening, both from individual cars and from gas stations).

Manhole covers stolen (already happening) for salvage value. Metal barriers alongside roadways (ditto). Copper everywhere (like I said). Never mind the plastic water bottles going away. No more aluminum (because there isn't enough input to run the power plants for the electricity) for drink cans. Bridge closures (no money to repair). Road closures (ditto). Curtailment of postal service (already happening in some rural areas).

Carpooling to the grocery store.

Boats repossessed and sold to overseas buyers. (That was some amusing news coverage.)

Need I go on.