Now I do agree that the compensation of the CEO at Countrywide was
totally out of line and had no relation to his actual performance.
However, here's the problem with populist notions about things like
this. How, exactly would you propose to fix it?
I wouldn't propose to fix it. It is not a problem. It is, if anything at
all, a matter between the board of directors and the stockholders, nothing
else. And if the stockholders don't like it, they know how to fix it.
Apparently, they must like it. So why should anyone else be concerned,
except out of pure jealousy?
Agh, I hate you so much right now. Not that you've been offensive in
any way, but we're trying to refi about $400K... I just can't
understand how people are buying all the McMansions around here when
an old, modest three (tiny) bedroom house is going for almost half a
on the cost of gasoline, we cant produce our way out of this.
alterntives must be found. because we are shipping billions weekly to
oil rich mid east terrorist breeding grounds. they love our money but
hate us as a people
Another populist misconception. Oil is a worldwide commodity. If
the US reduced it's dependence on oil from mideast countries, that oil
would just be sold elsewhere to places like China and India. How
much money do you think it takes to finance terrorism? It's not
billions and doesn't require vast oil revenues. Iran is on the short
list of the top terrorist financiers. How much oil does the US buy
from them? Zilch!
And the notion that you could then just ignore what goes on anywhere
and they won't bother you because you don't need their oil ignores the
lessons of history. How much oil did Germany have?
I guess my house dropped 50K or more, but it doesn't matter because
it's not for sale. In many locations it is a very bad time to
sell--if you can put off moving for a couple years you'll likely be in
a better position as a seller.
Location is one key factor in home valuation. If you have a small no frills
house in a desirable neighborhood it is worth way more than an overbuilt
luxury home in a slum.
Location and square footage being equal, a house in good shape and built to
last will always bring more money than one with sagging roof timbers and
On a general note, the folks taking it in the shorts are the folks that
bought to speculate, and those that bought that had no business buying a
house they could not afford. If a buyer purchased a home at the top of the
market and has a fixed mortgage that they could afford the payments, then
even though the present value of the home may be less than they paid, time
cures all wounds.
As an example When I moved to this area in 1995 I was talking to a guy that
was grousing that he had paid $75k for his home and he could not get that
back at present so he was thinking about walking away from the home.
At the recent top of the market, the same home was going for over $300k.
Assuming a 15% drop from the top, the $300k home would be worth $255k,
giving the $75k buyer a nice chunk of change anyway.
The places that really take big hits is when the reason for living in a
place goes away. There the markets do not rebound for a long time because
there is a big lack of demand. Think about the rust belt as an example.
While $300k would not buy much of a house here, you could buy an older 2
bedroom home in some places in Indiana for less than $20k.
About the time I had mastered getting the toothpaste back in the tube, then
On Sat, 23 Feb 2008 15:58:30 -0800, Roger Shoaf wrote:
That's about what I was thinking when I wrote my original post. I live
in a suburb of Detroit, and while there is a drop in home value across
the board here, it seems that the homes Way, WAY, out in the ex-brubs
with 50 minute drive time (one way) to work are dropping in value more
than the small lot, 1950's, 60's and 70's single family homes in the
close in suburbs of Detroit.
But it could also be the homes in many of this suburb are better built
that some of the housing building tacks further out from the jobs.
I take a tank of gas about once every 7 or 8 days. Some others I know, do
3 tanks of gas per week; they are noticing neighbors leaving their
homes. My neighborhood has not a single vacant house; homes from the
I was just asking because the Cable TV news story was talking about some
California communities being hit very, very hard by drop in value of
homes, homeless (from other communities) taking up residence in abandoned
houses, and so forth. These development tract communities are way out in
Fancy McMansion /= 'better built'. Even in the cookie-cutter layer of
the housing food chain, a lot of the 1955-1975 era houses have better
interior finish since anything built since then, short of a high-end
custom house. Hardwood floors, clear-grain casings and trim with tight
corners, even the occasional built in cabinet was not unknown in that era.
But having said that- I think the McMansions and more recent
cookie-cutter 'house of many gables' subdivisions are taking the biggest
hits, especially the ones with the long commutes and huge lots. The most
recent half-dozen or so subdivisions around here are hurting big-time,
with deep, deep discounts on the new spec houses fighting the fire-sale
prices some of the upside-down first wave buyers are offering. Many of
the later phases in these subs are years behind schedule- the banks
won't write the paper when half the lots in the first phase aren't even
sold, much less built on. With the number of jobs around here going
down, some of these subdivisions never WILL get built out all the way.
But this is NOT a new phenomena. I see traces of the same thing in some
older subdivisions around here (and in other cities I have spent time
in), from 20, 40, even 60 years ago. Little stub streets ending in
dirtbanks, obvious infill houses with styles 20 years newer than their
neighbors, the legal plat name not matching the sign out by the road,
etc. It all goes in cycles. The trick is to make the high and low points
in the cycle match the points in your life when you need to buy and
sell. And if you live in a balloon area, never try to ride the bubble
all the way to the top.
Saw a real nice 40s era house in NC at the height of the housing
market. . But five blocks away was the low rent type. It looks like
creeping ghetto-ization. That house remained listed for a long time.
when the feds in pure greed removed the credit card interest deduction
it pushed many into rolling debt into their home.
know people who have done that over and over.
that explains how people can live in a home for 10 to 20 years and
still owe more than its worth.
greedy credit card companies, greedy mortage companies, often the same
companies looking only to boost the short term bottom line can sink
i am mnone of these, our mnortage is paid off, very little overall
not everyone is overspending, but all pay the price when things go bad
I see a proliferation of "pay day check services" in my town. Las Vegas. I
even see them in very conservative Southern Utah. These people are the
kings of legal loansharking, and they get away with it, and are condoned by
government because they pay a fee or % to the state. Anyone who walks into
those places are surely brain dead, yet they go in there and sign up for
loans at high rates.
It's just the new morality. Get it now, pay for it later. No waiting. No
delayed gratification. You "need" that new car NOW, and you need to be
paying $500 a month for it plus insurance, even though you'll still be
upside down in it in two years.
But you look good.
You need new socks, haven't had your teeth cleaned in three years, and don't
have a penny in any form of savings/investment. But you need to look good
and feel good about yourself.
well since companies like citibank lost billions they are upping
credit card rates, late fees, penalties and interest without warning.
this will only make the economy worse.
gasoline is costing me a fortune, $3.20 a gallon and rising. i have no
choice i drive all day repairing office machines
Boy, your cup sure is always half empty, ain't it? Credit card
companies have been charging high rates for ever. I guess you don't
think anyone ever defaults on those credit cards and they never get
paid. If you think you can earn a profit and do it for less, go
start one. The fact that there are plenty of smart people with a lot
of money that aren't running up to do so suggests that the rates are
probably about right.
And if this economy is so damn bad, what did you think about the late
You think any of that gas price might be due to the fact that the
politicians won't allow drilling off the coast in most areas of the
US? Or allow drilling in ANWR? Or that no new refineries have been
built in the last 25 years?
There's an ad for one of those "cash now" services on TV, and in microscopic
print it says 99.5% APR. No, that's not a typo. I did the math on that for
the "average" loan amount they listed of $2,500.00 for their "average" loan
length of 42 months. There's a $75 loan origination fee (an origination fee
for $2,500!), $9,025 in total payments ($215 per month), so you end up
paying $9,100 on a $2,500 loan. Who on earth could be that stupid?
They can charge whatever they want. People agree to pay when they
sign the credit-card agreement. People also have the choice to pay
off the credit card balance in full at the end of the month. Greedy
comes to mind when I think about oil companies, insurance companies
and pharmaceuticals. It's about time people (and the US government)
took financial responsibility and buy only when you have the cash to
cover your purchase. I think my home dropped 50K, but I don't care
since I'm not selling in the near future. Truly, it's a bad time to
sell a house. I wish the government would stop trying to control the
economy (rah rah for Ron Paul!).
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