Home Refinance Calculator: August 2010

Tuesday, August 31, 2010

Mish's Global Economic Trend Analysis

Oregon Tax Revenue from Measure 66 is 50% Short of Predictions; Oregon Grants Unions 4.75% Pay Hike
26 of Last 88 Trading Days have been 90% Days (Either Up or Down); 7 More Lean Years in Stock Market?
Movie Attendance Drops to 1997 Level; Case-Shiller Home Prices Rise; Last Hurrah for Housing
How Many New Home Sales Was That?

Oregon Tax Revenue from Measure 66 is 50% Short of Predictions; Oregon Grants Unions 4.75% Pay Hike

Posted: 31 Aug 2010 09:15 PM PDT

From the dysfunctional state of Oregon comes news that Measure 66 fell about 50% short of its revenue predictions. Balance that with 4.75% pay hikes and it adds up with a continuing refusal by Oregon to address its problems.

Oregon Grants Unions 4.75% Pay Hike

5 percent pay increase for Oregon state union employees begins Wednesday

A step pay increase of nearly 5 percent for Oregon state workers represented by unions goes into effect Wednesday. The 4.75 percent increase will cost the state as much as $16 million through the end of the two-year budget period.

Measure 66 Falls Short

Oregon tax revenues from Measure 66 coming up short of predictions

Early indicators suggest the state won't receive nearly as much as officials expected from a tax increase on wealthy Oregonians -- raising questions of whether January's bitterly fought election was worth it.

The latest numbers show Measure 66, which set higher tax rates on households making more than $250,000 a year, and on individual filers making half that, has brought in about $70 million in additional collections to date.

"We're thinking we're right around half of what we expected about this time," said Paul Warner, head of the Legislative Revenue Office.

Here's the deal. Oregon raised taxes for the benefit of unions and now they have to raise taxes again because the state only got half as much revenue from the tax hike as expected. When does the madness stop?

I have written about Oregon a lot recently.

Dysfunctional Oregon

August 22, 2010: Dysfunctional Oregon

Sight unseen, I am willing to state that Oregon should get rid of all 64 state boards, no matter what they are supposed to do. Sight seen, it's time Oregonian voters relegate Gov. Ted Kulongoski to the ash heap of history.

Overoptimism Oregon Style

August 18, 2010: Oregon Wins Blue Ribbon for Unfounded Optimism; Everything "Weaker than Expected"

In July of 2009 state revenue projections were $222.8 million to the plus side. Now just one year later, smack in the midst of a "recovery", a $577.2 million June 2010 deficit is too optimistic by as much as another $500 million.

Congratulations of sorts go to Oregon for winning the blue ribbon for unfounded optimism.

Oregon has already cut state spending by 9%. Another 9% may be on the way.

We can now add Measure 66 to the list of overoptimistic misses in Oregon.

Edge of the Financial Chasm

July 25, 2010: Edge of Financial Chasm

Four Problems Oregon Faces.

Problem 1: Our income is shrinking
Problem 2: We have more people in need
Problem 3: We've locked up a lot of money
Problem 4: We can't grow our way out

End of the Line for Meaningful Can-Kicking Delays

When it comes to state budgets, the low lying fruit has been picked. Indeed all the fruit has been picked and next year's harvest has been spoken for as well. Thus it's the end of the line for state's ability to kick the can down the road in a meaningful way, if employment does not dramatically pick up soon.

Here's a hint: it won't.

Oregon Taxpayers at Huge Risk over PERS

July 24, 2010: Oregon's Public Employee Retirement System (PERS) in Deep Trouble, Taxpayers on the Hook

If we finish the year here the system will only be 70% funded. Pray tell what happens if the stock market finished the year down a modest 15% and is flat next year?

Notice the article says "Actual pension rates vary by individual employer". Although the rates will vary, it is not "employers" who pick up the tab. Rather it is taxpayers who have to pay taxes to pick up the tab.

If articles like the one quoted explained things properly, there would be much more needed outrage.

The system is broke and the only way to fix it is to get rid of it. Defined benefit plans at taxpayer expense have to go.

Oregon Faces Decade of Budget Deficits

May 23, 2010: Governor's Study Shows Oregon Faces Decade of Budget Deficits; Support for Unions Wanes in Illinois

A study conducted by Oregon Governor Ted Kulongoski shows that Oregon will not be bailed out by a rebounding economy, assuming of course the economy rebounds at all.

Oregon Overestimates the Recovery, Underestimates What Needs to be Done

My sense is that states are all overestimating what the recovery will do. That aside, Oregon is a step ahead of others in realizing the recovery alone will not fix the problem.

The report made no recommendations even though it is crystal clear what needs to happen. For starters, the state needs to kill defined benefit plans for new hires. Next, the state needs to outsource everything possible with the goal of getting rid of all public unions.

Anything else is just pecking at the fringes of the problem.

Business Owners Move Out

January 27, 2010: Oregon's Death Spiral; Business Owners Say "I'm moving out"

On Tuesday, unions in Oregon won a charred earth victory that will drive already troubled Oregon, straight off the cliff.

Oregon voters passed Measure 66 which raises tax rates on individuals who earn more than $125,000 and couples with incomes greater than $250,000. Voters also passed Measure 67 which increases business taxes.

Complete fools in Oregon just voted to save bloated union salaries and pensions, while driving away the real source of tax revenue, private business.

Unions that take hold of states inevitably wreck them. Oregon should take a good hard look in the mirror. It will see a reflection of Michigan. Good luck with that.

Look's like that was a decent call on Measure 66.

Increased taxes will drive away business. For whose benefit are these tax hikes? Unions that need to be eliminated. Oregon's problems cannot and will not go away as long as political pandering to unions continues.

Public union salaries and benefits are Oregon's biggest problem.

A tip of the hat to Oregon Live for excellent articles on the economic plight of Oregon.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

26 of Last 88 Trading Days have been 90% Days (Either Up or Down); 7 More Lean Years in Stock Market?

Posted: 31 Aug 2010 12:20 PM PDT

Here is an interesting snip from August 31 Market Commentary by Art Cashin for UBS. Sorry, no link.

Monday's market evaporated nearly all the gains from Friday's rally. Despite lighter volume, it was a 90% down day. That means the bears got a lopsided advantage in negative breadth and negative volume. In Friday's rally, the bulls had had a similar 90% advantage. Robert McHugh of Main Line Investors says 26 of the last 88 trading days have been 90% days – one way or another. Any wonder the public is wary.

Are these 90% Days a Good Thing?

While the big boys push the market around, small investors have thrown in the towel and are not coming back.

Market volume now consists of black boxes pushing all stocks one way or the other on 30% of the days. Is this a good thing? For who? Investors or Goldman Sachs?

Holding the Line

Today, the 1040 level on the S&P held for about the 8th time on "fabulous" news consumer confidence rose to 53. Bear in mind number in the 70's are typical of recession lows.

How long the 1040 level can hold is a mystery, but each bounce seems to be weaker and weaker.

Last Friday, I noted Market Cheers 1.6% Growth; Treasuries Hammered; while asking "what's next?"

We have a partial answer already. Treasuries have regained the entire selloff that started (and ended) on the "great news" that 2nd quarter GDP was +1.6% instead of the expected +1.4%. Nevermind that growth was revised down twice from above +2.5% to +1.6%.

Looking ahead, I expect GDP to be negative in the 3rd quarter.

Art Cashin's 17.6 Year Cycles

A little over a year ago Art Cashin commented Dow Trapped in 17-Year Cycle

Art Cashin, director of floor operations at UBS Financial Services, offered CNBC his stock-market insights. Cashin decried the idea of a second stimulus, in light of the "infamous" first attempt.

"There was no 'stimulus' in the stimulus package. It was mostly social engineering," Cashin said. Thus, talk of a new plan is shaking markets with fears of even more debt — with "nothing to show for it."

Cashin revisited his theory of "the 17.6-year cycle."

"It's like the Biblical story of the fat and lean years. During the fat, you can throw a dart at the wall, and anything you buy goes up."

He believes one such cycle spanned 1982 to 2000. And he notes that from "1966 to 1982, the Dow went to 1,000 — then went back down."

Barry Ritholtz described the 17.6 year cycle in Art Cashin on Secular Cycles

"Back On The Cycle – David Rosenberg, formerly chief economist at Merrill Lynch and now at Gluskin Sheff was a guest host on CNBC's Squawkbox this morning. During the discussion he alluded to an 18 year cycle in the market. Not to quibble but many traders have thought of it as the 17.6 year cycle. Here's how I outlined it back in May 2002: Yesterday, as the elders were being asked about the hiding place of the great Bull Market one of the fogeys mentioned the "near 18 year cycle." Like the fat and lean years, it refers to so-called "easy" times to make money in the market versus times requiring much harder work. The fogeys suggested it was near 18 years because it was approximately 17 years, 7 months. For ease of explanation to the juniors, one of the fogeys decimalized the number as 17.6 years so they could use their calculators. He then postulated this example – Let's say the markets topped out in about February 2000. Let's call that 2000.2. Subtract 17.6 and your back in about July 1982 (1982.60). The Dow was around 900. So you could see why those were a fat (easy) 17 years. Take away 17.6 again and you are back around January of 1965 and the Dow is around 900. (Yup – just like 1982.) Many twists and turns in those 17 years. Lots of chances to make money. But you had to work for every penny. Take away 17.6 again and you are back around May of 1947. The war is over. The Dow is around 170. Lots of prosperity ahead. Take away 17.6 and you are back around Sept of 1929 and the Dow is around 350. He began to go on. The juniors had had enough. Folks don't like to hear that you can do well only if you do your homework everyday. Having lived through two of those cycles, we can attest to the work cycle."

From where the market is today, Cashin is essentially describing the Japanese scenario of two lost decades. That has been my preferred scenario for quite a long time.

Japan's Lost Decades Rallies

If Cashin is correct, and I believe he is, it's another 7 years of nowhere at best for the stock market. Nonetheless, there will be trading opportunities in both directions as the above chart from Business Insider shows.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Movie Attendance Drops to 1997 Level; Case-Shiller Home Prices Rise; Last Hurrah for Housing

Posted: 31 Aug 2010 09:42 AM PDT

Movie attendance is down but increased prices made up the difference for now. Bloomberg reports Summer Movie Box-Office Attendance Falls to Lowest Since 1997

Summer movie attendance fell to the lowest level since 1997, while soaring ticket prices produced record revenue for Hollywood studios and theater owners.

The number of tickets sold from the first weekend of May through the U.S. Labor Day holiday is expected to drop 2.6 percent to 552 million, Hollywood.com Box-Office said yesterday in an e-mailed statement. That would be the lowest attendance since summer moviegoers bought 540.3 million tickets in 1997.

"The movies just didn't excite people the way they needed to," Paul Dergarabedian, president of Hollywood.com Box-Office, said in an interview. "When you raise prices and perceive that quality goes down, you have a major problem."

Summer box-office revenue will rise 2.4 percent to a record $4.35 billion in the U.S. and Canada as higher prices more than make up for the lower attendance, Hollywood.com estimates. The average ticket price will increase 5.1 percent to $7.88 from last year's $7.50, the biggest gain since a 6.3 percent jump in 2000, Hollywood.com said.

The price-conscious majority appears to be overwhelmed by the price-insensitive wealthy, at least for the time being. How much longer this lasts with cheap movie rentals and another downturn in the economy remains to be seen.

Regardless, the results portray an increasing dichotomy between the "haves" and the "have-nots".

As long as Hollywood can get away with inceasing prices, they will do just that, even if it means an increasing percentage of customers are "priced out".

Last Hurrah for Housing

Case-Shiller Home Prices in 20 U.S. Cities Rise More Than Forecast

Home prices in 20 U.S. cities rose more than forecast in June from a year earlier, reflecting the influence of a government tax incentive and a sign the market was stabilizing before sales plunged in July.

The S&P/Case-Shiller index of property values increased 4.2 percent from June 2009, the group said today in New York. The median estimate of economists surveyed by Bloomberg News called for a 3.5 percent advance.

The Case-Shiller index is a moving three-month average, which means the June data are still being influenced by transactions in April and May that benefitted from the government incentive. A pullback in demand since the credit ended, mounting foreclosures and an unemployment rate near a 26- year high may weigh on prices in coming months.

Nationally, prices increased 3.6 percent in the second quarter from the same time last year and were up 2.3 percent from the previous three months.

San Francisco, San Diego

Fifteen of the 20 cities in the S&P/Case-Shiller index showed a year-over-year increase, led by a 14 percent gain in San Francisco and an 11 percent increase in San Diego.

Compared with the prior month, 17 of the 20 areas covered showed an increase on an unadjusted basis, led by 2.5 percent gains in Chicago, Detroit and Minneapolis. Two cities were little changed and Las Vegas fell 0.6 percent.

Builders such as KB Home and Lennar Corp. reported falling sales after April 30, the deadline for homebuyers to sign contracts to purchase a home to qualify for the extended tax credit. The deadline to close transactions by June 30 was later extended to Sept. 30.

Donald Tomnitz, chief executive officer of D.R. Horton Inc., the second-largest U.S. homebuilder by revenue, said he welcomes the end of federal homebuyer tax credits that boosted sales earlier in the year.

Back to Normal

"I don't want the tax credit to be re-enacted or be recreated or extended," Tomnitz said on an Aug. 3 conference call with investors. "We want to get back to a normalized market."

Foreclosures may be an obstacle for the market for much of the year. A record 269,962 U.S. homes were seized from delinquent owners in the second quarter as lenders set a pace to claim more than 1 million properties by the end of 2010, according to RealtyTrac Inc., an Irvine, California-based data company.

Last Hurrah for Housing

Case-Shiller is a backward looking index. The increasing number of foreclosures, the complete collapse in new home sales, a massive increase in inventory, and the end of tax credits all suggest we are near the end of the line for this bounce in home prices.

Interestingly, even the home builders are against another home tax credit. Is that reflective of the massive distortions caused by the credit, the realization the tax credit was useless, or the fact that homebuilders recognize there is little chance Congress will back another tax credit?

Regardless, here's the deal: New Home Sales Consensus 330K, Actual 276K, a Record Low. As a followup please see How Many New Home Sales Was That?

Expect to see new all time low prices in some cities later this year or next year as pent-up demand dries up along with incentives that merely brought that demand forward.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

How Many New Home Sales Was That?

Posted: 31 Aug 2010 12:08 AM PDT

People are still emailing me, making a mountain out of a molehill of a Rosenberg statement I quoted in Burning Down the House; New Home Sales Consensus 330K, Actual 276K, a Record Low; Nationwide, Zero New Homes Sold Above 750K

I failed to comment yesterday on the huge miss by economists on consensus new home sales, but Rosenberg has some nice comments today in Breakfast with Dave.
The high-end market, in particular, is under tremendous pressure. In fact, it is becoming non-existent. Guess how many homes prices above $750k managed to sell in July. Answer — zero, nada, rien; and for the second month in a row. Only 1,000 units priced above 500,000 moved last month. That's it! Over 80% of the homes that the builders managed to sell were priced for under $300,000. Just another sign of how this remains a full-fledged buyers' market — at least for the ones that can either afford to put down a downpayment or are creditworthy enough to secure a mortgage loan (keeping in mind that 25% of the household sector does have a sub-600 FICO score).

How Many is Zero?

There are a couple of issues here.

1. New home sales are recorded at contract signing. So recent closings at a higher rate do not count. Nor do existing home sales. Many of those complaining were looking at closing data or existing home sales.

2. The other factor is rounding error. Rosenberg should not have been so emphatic.

From the Census Bureau New Home Sales Spreadsheet

Table 2 - $750K home sold
"(Z) Less than 500 units or less than 0.5 percent."

Anyone targeting Rosenberg's statement is making a mountain out of a molehill.

Let me put it this way "There was a statistically irrelevant number of new home sales above $750K, somewhere between zero and 500".

This is not worth the amount of attention it has received.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mortgage and Loans - Mortgage Refinance, Home Loans

Weiner Clarifies His Calling The GOP An Insurance Subsidiary
Getting the Best Refinance Mortgage Rates
investing – How Apartment Buildings Can Make You Financially Free – And That Fast!
Applying for a Maine Mortgage: The brand new Process
What is the best health insurance company for the self employed?
Bank Mortgage Fraud pt 2 of 5 ASSIGNMENT TRANSFER FRAUD…ANY CONFLICTS??
Holiday getaway Plans – Ideas To Acquire A Holiday vacation Property

Weiner Clarifies His Calling The GOP An Insurance Subsidiary

Posted: 31 Aug 2010 07:12 AM PDT

Weiner Clarifies His Calling The GOP An Insurance Subsidiary

Getting the Best Refinance Mortgage Rates

Posted: 31 Aug 2010 07:09 AM PDT

For real information click HERE: best-refinance-home-mortgage-loan-rates.com Getting the best refinance home mortgage loan rate, then, can be important to almost any homeowner. READ here to Save your money: best-refinance-home-mortgage-loan-rates.com

investing – How Apartment Buildings Can Make You Financially Free – And That Fast!

Posted: 31 Aug 2010 06:21 AM PDT

mortgage refinance Is Indian Real Estate in Boom or Decline? This is the primary concern confronting everyone related with the real estate market right from the common laborer to the policymakers at the helm of the Government machinery – be it property dealers, property consultants, infrastructure development companies, construction companies, materials manufactures and dealers, property buyers and sellers, and you name who not. There is a background for this apprehension.

juegos The property scenario has been vibrant in India for several decennia now, barring a recent interregnum. But during the recent global economic meltdown there was slump in the Indian real estate scene. Reportedly, the industry is back in the saddle again and the market is gaining momentum.

real estate This is mainly due to the decline in property prices following the recent global economic downturn. Another reason for the new demand is the falling interest rates. Banks and financial institution are vying with each other offering property loans at competitive interest rates. Increase in the income level of the prospective segment has also had its sway in the growing demand. The Central Government’s revised pay structure, a better paying public sector, NRI investment are some of the other contributory factors of his new trend.

As already observed, there is a new fillip in the real estate market in India now. This is mainly because middle income segment evinces more interest in buying residential units now than before. It all began with developers realizing that affordability is the sine qua non for a ready market. As middle income population forms the chunk of the prospective buyer segment, construction companies experimented with “no frills” apartment units of smaller units.

But rather than taking the easy way, asking real estate agents for deals with seller financing, you will be more successful if you try to find motivated sellers on your own. It requires more effort but the payoff can be very handsome. In commercial real estate deals, you generally get a positive cash flow from day one. And we are talking about thousands of dollars, per month, in most cases You can be published without charge. You can to republish this article in your website or blog. Please provide links Active.

Applying for a Maine Mortgage: The brand new Process

Posted: 31 Aug 2010 03:31 AM PDT

In today’s market, it is more important than ever before to have a professional assist you in your quest for a Maine Mortgage. The days of “Everyone is Approved” are over, and these are the times of “Even if you qualify, may very well not”! I had an underwriter let me know just the other day that even though you qualify for a home loan, meeting all of the guidelines, you might still not qualify. What?!? What am i saying?

I thought it was as elementary as Applying, Qualifying and Closing?

Not anymore! Welcome to the new Maine Mortgage Industry, where we’re bailing out the mistakes of Wall Street, as well as major mortgage companies for the ridiculous mortgages they provided. The best one was 100% NINA with a 660 Overall credit score. NINA stood for (it obviously no longer exists) No Income, No Assets! Really, they really gave someone a Maine Mortgage without income, and no assets and with nothing down? Yes, and because of it, you and i are paying for it now. I’ll explain what the underwriter I pointed out above meant. In past times, the procedure went something like this:

Qualify the borrower, take application, submit it to an automated decision engine, and close the loan.

There are actually automated decision engines that evaluate if the loan quality meets the loan programs standards. These are called DU and LP. In the past, when you had a DU Approve/Eligible or an LP Accept, you had been approved for a Maine Mortgage. All the underwriter did was assess the documents to find out if they matched up to what was listed in the engine. Now, it’s different. We still have DU and LP, therefore we still must submit the loans to them to get an Approve/Eligible or an Accept ”but now there is more to it than just the approval. Due to the Mortgage crisis, the lenders have become a good deal stricter. Not only must you have an approval, but, the credit score, and also credit profile will have to be good. Let’s say you have a 645 fico score, and your loan received an Approve/Eligible. The underwriter will now review your credit profile, and if there are several late payments, or simply a habit of shoddy credit, they might still decline your loan. Ah, that’s what she meant. That’s a change from 3-4 years ago.

For this reason you’ll need a professional Maine Mortgage Broker to help you!

You need one who knows the ins and outs of the approval process. You expect someone who can help you make the correct decision for you and you future. You may think you’re ready for a Maine mortgage now, but you may not be. Buying a home is almost certainly the biggest and most important decision you might ever make. Why get a house now, and foreclose in two years, as it was a bad situation for you? Good Mortgage decisions are more important now than any other time.

What is the best health insurance company for the self employed?

Posted: 31 Aug 2010 02:36 AM PDT

Searching this topic in Google only gives tons of applications but no info. I just want to know roughly how much it would cost a year for me to get my own health insurance. Are there big names to look for? I do not want a small insurance company.

Bank Mortgage Fraud pt 2 of 5 ASSIGNMENT TRANSFER FRAUD…ANY CONFLICTS??

Posted: 30 Aug 2010 11:58 AM PDT

stopforeclosurefraud.com lawyerthatgetsit.com Uncover Violations Get an Audit fmi-audit.com Here I will show you how MY personal Mortgage Foreclosure FRAUD happened. Pay close attention and learn before it is too late. Here are the subjects and principles. Hi Erica Johnson-SECK (SICK) I read in your Deposition how you google your name …Just add this one for reference. Law Offices Of David J. Stern PA in Plantation Florida Roger Stotts Dennis Kirkpatrick These people are ALL over the US pulling this crap Do searches on them and all and see what you can find out to save your home. Judge Dale Ross in broward gave my home to IndyMac Bank (Property Managers) and when I tried to speak he rolled his eyes and said “What Difference Does it make”?????? He pre-judged me and this is not his job… The difference is the courts are aiding & abetting FRAUD. Yes Google his name and we will see how his peers enjoy him. I did NOT have a fair trial. I was raped from my RIGHTS as a citizen. Learn from this study it and maybe WE ON OUR OWN without the GOVERNMENT can make a difference. Thank you for allowing us to loose our wealth, rights, and justice for all. Here are some excellent resources. YOU ARE NOT ALONE. IT IS NOT YOUR FAULT OUR GOVERNMENT FAILED US. We have just scratched the surface. Wait to see what is at the CORE.

Holiday getaway Plans – Ideas To Acquire A Holiday vacation Property

Posted: 30 Aug 2010 09:56 AM PDT

Are you currently stressed out? Thinking about about a trip? If so, wherever are you currently planning to holiday? Have you been considering vacation houses for lease?

If that you are, then it’s almost certainly time to get just one! You can find some lucky folks available who already possess a holiday getaway dwelling. A best area for the get away throughout the weekends or to love individuals lengthy summer days. A site to escape from the hectic city life and to quietly relax wherever you might come across all your tension melting away. You should also desire to get a holiday getaway residence to produce individuals holidays even a lot more memorable.

Now, we might have those who have their holiday getaway houses within driving distance only to ensure they could stop by it way more typically. But we also have those who invest in houses down inside the south to ensure that it really is good and sunny. If this sort of property is just not applied extremely normally but maybe just as soon as or twice inside a twelve months, an individual might possibly wish to go for an method known as ‘timeshare’. This would mean that an individual would have the accommodation through their holiday vacation at that certain time. The holiday vacation household could be shared by one more individual or family members too when they need it. This would prevent you the price of maintenance throughout the calendar year and you’ll only have to pay throughout the time that you’re there. This alternative is being rapidly adopted by folks that are searching to purchase trip properties now.

The winter time, and not just the sun, is also enjoyed and preferred by quite a few. These persons typically like to ski, snowboard or get engaged in a variety of kinds of winter sports. The timeshare can be a viable method for them as well. Ordering a holiday getaway residence at these locations, which would only be visited for several months for the duration of winter, is just not really feasible. So instead of leaving the property empty for any larger portion from the 12 months, a person prefer go for timeshare.

You’ll chose your Florida holiday home orlando rental vacation villas depending on the sort of individual that you are and what you usually take pleasure in performing. If you’re a man or women who enjoys h2o sports like swimming, fishing or boating, you’ll uncover your self somewhere near the drinking water front in which you’d have prepared access to drinking water. The time which you commit here would ascertain the type of trip property you’ll invest in Florida vacation rental apartments.

To get a good holiday getaway household is seriously not that tough but it is dependent upon you and your family’s requirements and to comprehend what ideal fits you. The options offered by the genuine estate marketplace would contain cottages, condos and time shares. You need to assess how a lot time you can essentially commit inside a holiday vacation household just before you venture out to invest in an individual. There could be no point in choosing a gorgeous house that you simply would only stop by when in the twelve months. So it could well be wiser to opt for any timeshare in this scenario. If you’re capable to family vacation for only two weeks or so inside a yr, a timeshare can be the most effective bet and a greater selection. Also in the event you obtain oneself working for the duration of weekends, then a getaway residence could well be a smart idea as you’d probably use this incredibly typically.

Whatever kind of investment you would like to make, you might uncover many authentic estate agents for those who just care to flip by means of the yellow pages or browse the web. They will be way more than prepared to support you get the great area for your self or your household

Monday, August 30, 2010

Mish's Global Economic Trend Analysis

Bankrupt Miami in Fiscal Emergency, Breaks Employee Contracts, Hikes Property Taxes; What You Can Do.

Posted: 30 Aug 2010 07:16 PM PDT

Miami is bankrupt. Unfortunately the city refuses to admit it.

In an enormously foolhardy attempt to make ends meet, in spite of the fact that Miami home prices have been hammered and 1-in-8 are unemployed, the County keeps pouring on the painful tax and fee increases.

As you recoil from your tax warning notice today, ponder this: those multiple tax hikes aren't the only charges set to rise. Besides Miami-Dade County's plan to raise every taxpayer's rates 12.2% for operations and an incredible 56% for capital spending on undisclosed projects, it also plans to raise retail water and wastewater rates 5%.

And though County Manager George Burgess proposed the 5% water and wastewater hikes, that's not because water and sewer are running in the red. They're already quite profitable. But by raising rates, the county can dip into water and sewer cash and add $25 million to its operating spending cache while claiming it's keeping our cost down. And for that $25 million slice the county would be right — unless you happen to drink water or flush a toilet.

"If you keep taking money it just goes to reason you're going to be charging more so all the residents are paying more," Commissioner Carlos Gimenez told us. "It's actually a hidden tax. You're just hiding it in water and sewer."

One Miami-Dade worker in eight can't get a job and commissioners don't seem to notice. Instead, as the economy strangles the public and values of homes fall, the county plans double-digit tax hikes on every dollar of remaining value. Before the commission finally clamps the screws on taxpayers or, as it should, relieves pressure by backing off its massive increases, it will hold budget hearings at 5 p.m. Sept. 13 and 23.

What can we do?

One suggestion: Let your commissioner know you'll be taking names of those who vote to raise tax rates even a penny in today's economy. Remind them that the purpose of government is not to remain bloated. Another suggestion: Wear a red "Cut Tax Rate" T-shirt to the hearings. Have your friends do the same. Remember, commissioners only count the hundreds of votes in the room, not the hundreds of thousands of suffering taxpayers back home fighting foreclosure.

Miami Breaks Employee Contracts

Inquiring minds are reading Broke City Breaking Employee Contracts

The city of Miami is so broke it's forcing employees to take pay cuts, even though they're under contract. Mayor Tomas Regalado said he's never seen a financial mess like this before, and his options are grim.

"It's either that or we layoff 1,000 employees or we raise taxes to the max, and we're not raising taxes to the max," the mayor said.

Mish Comment: If you are looking for one of the most disingenuous comments in history there you have it. The only reason it is not a blatant lie is the ending phrase "to the max". Regalado is clearly incompetent and needs to be removed.

The city is operating under a state of "fiscal urgency," declared earlier this summer. The budget deficit for next fiscal year is about $110 million. The proposed cuts in salary, pension contributions and health insurance costs amounts to about $86 million in savings for the city.

That fiscal urgency declaration allows city commissioners to impose salary cuts on employees, despite their contracts.

Charlie Cox, who represents about 1,100 general service workers, said employees with valuable knowledge will retire or find work elsewhere. "We're going to have a ton of people leave the city and the institutional knowledge will be gone," he said.

Mish Comment: Hello Charlie. Good luck in finding jobs with excessive benefits in this market. Hell, you don't need luck you need a miracle.

Good riddance, the sooner you leave the better Miami will be. Every position vacated will be a gain to the city.

Miami's police officers, firefighters and other union workers are all expected to choke down cuts. One police union official said the Fraternal Order of Police will sue the city if the cuts are imposed

Mish Comment: It is the right of the FOP to file a lawsuit. I hope they do. The correct response for the city would be to immediately declare bankruptcy so the overpaid union clowns can see just what benefits they get in bankruptcy court, ideally nothing.

Hell, the correct response is for Miami to declare bankruptcy now, whether the FOP is stupid and arrogant enough to sue or not. Miami is bankrupt, and the sooner the mayor and city council admit it the better.

Budget Hearing 5 p.m. September 13 and 23

If you live in Miami and you do not show up at the hearing you are part of the problem. You better show up because union will, en masse, and they will pack the halls demanding still more tax increases so they can go on receiving huge wages and even bigger pension benefits.

In the meantime, please flood the mayor's office and all of the commissioners with phone calls, emails, and faxes.

Mayor Tomas P. Regalado
E-mail: tregalado@miamigov.com
Email Mayor Tomas P. Regalado
305-250-5300 VOICE
305-854-4001 FAX

Commissioner Wifredo (Willy) Gort
District 1
Email: wgort@miamigov.com
Email Commissioner Wifredo (Willy) Gort
305-250-5430 VOICE
305-250-5456 FAX

Commissioner Marc Sarnoff (Chairman)
District 2
E-mail: msarnoff@miamigov.com
Email Commissioner Marc Sarnoff
305-250-5333 VOICE
305-579-3334 FAX

Commissioner Frank Carollo (Vice Chairman)
District 3
E-mail: fcarollo@miamigov.com
Email Commissioner Frank Carollo
305-250-5380 VOICE
305-250-5386 FAX

Commissioner Francis Suarez
District 4
E-mail: fsuarez@miamigov.com
Email Commissioner Francis Suarez
305-250-5420 VOICE
305-856-5230 FAX

Commissioner Richard P. Dunn
District 5
E-mail: rpdunn@miamigov.com
Email Commissioner Richard P. Dunn
305-250-5390 VOICE
305-250-5399 FAX

Please flood the Mayor and all the commissioners with emails. Have your friends do the same (unless of course you want your taxes to rise for the sole benefit of unions and city employees).

If you are not in a public union or a city employee, please say so. Include your name and address and let them know you will not vote for anyone who raises taxes.

Those email links above contain a sample heading line. Please modify it so they do not all look alike.

In the body, let the mayor and commissioners know that Miami is bankrupt and politicians giving into union extortion is the reason. As I said, union thugs will show up en masse demanding more taxes, more benefits, and higher wages. Let the mayor and commissioners know that you support bankruptcy to avoid union ripoffs.

Finally, if you live in Miami, please have your friends do the same.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Banks Recruit Investors to Oppose Honest Valuation of Assets; Just how Unprepared are Banks for Major Losses?

Posted: 30 Aug 2010 09:46 AM PDT

Reader "Henry" has a question on the loan loss provision chart I posted in Former Fed Vice Chairman vs. Mish: Is the Fed Out of Ammo?

Henry writes ...

Hello Mish,

Thanks for writing and sharing your wonderful column. It has been very informative and educational.

Could you please help us mere mortals decipher the ALLL/LLRNPT chart in a follow up post?

I have difficulty reconciling the units, and I suspect I'm not the only one. Exactly what does that chart depict?

Thanks.

Henry

From my previous post ...

Assets at Banks whose ALLL Exceeds their Nonperforming Loans

The ALLL is a bank's best estimate of the amount it will not be able to collect on its loans and leases based on current information and events. To fund the ALLL, the bank takes a periodic charge against earnings. Such a charge is called a provision for loan and lease losses.

One look at the above chart in light of an economy headed back into recession and a housing market already back in the toilet should be enough to convince anyone that banks already have insufficient loan loss provisions.

That is one of the reasons banks are reluctant to lend. Lack of creditworthy customers is a second. Quite frankly would be idiotic to force more lending in such an environment.

To further clarify, the chart depicts the ratio of loan loss provisions to nonperforming loans across the entire banking system (all banks). There are 33 ALLL charts by bank size and region for inquiring minds to consider. The above chart is the aggregate.

The implication what the chart suggests is that banks believe nonperforming loans are NOT a problem (or alternatively they are simply ignoring expected losses to goose earnings).

The implication what I suggest is banks earnings have been overstated. Why? Because provisions for loan losses are a hit to earnings. I believe losses are coming for which there are no provisions.

The chart depicts a form of "extend and pretend" and overvaluation of assets on bank balance sheets. The Fed and the accounting board ignore this happening (encourage is probably a better word), hoping the problem will get better. With more foreclosures and bankruptcies on the horizon, I suggest it won't.

Magnitude of the Problem

The above analysis is only in percentage terms. Let's see if we can figure out in dollar terms how big the problem is. A few more charts that will help do just that.

Nonperforming Total Loan Percentage

The above chart shows that 5.5% of loans are non-performing.

Total Loans and Leases

The above chart shows there are $7 trillion in total loans and leases. Of that 5.5% is nonperforming. Thus there are $385 billion of "admitted" nonperforming loans.

At the start of the recession, the first chart shows that banks had made a loan loss allowance for about 90% of non-performing loans. Now the figure is under 20%.

We are still not there yet, and this is where it gets fuzzy. Not all losses will be 100%, Some might be 10% others 80%. I cannot quantify the losses, I can just state there is a huge problem with insufficient loan loss provisions.

Charts Understate the Problem

The above charts understate the problem because there are hundreds of billions of dollars in nonperforming bank assets held off bank balance sheets.

We can add still more to the problem because of absurd mark-to-market valuations and the Fed and FDIC playing games with what constitutes a "nonperforming loan".

Banks Oppose Rule Changes

Inquiring minds note Wells Fargo "Strongly" Opposes FASB's Rules on Loan Values

Wells Fargo & Co., the largest home lender in the U.S., said it disagrees with an accounting board's plan that would require banks to report the fair value of loans on their books.

"We strongly oppose the expansion of fair value as the primary balance-sheet measurement attribute for virtually all financial instruments," Wells Fargo Controller Richard Levy wrote in the Aug. 19 letter. "It will only serve to cement a short-term focus on fair-value measures."

Wells Fargo, based in San Francisco, said the proposal would lead investors to put more emphasis on short-term results, eroding support for the banking system. The lender also said the new rule would mean deriving values for illiquid instruments like loans from subjective "Level 3" valuations such as models.

All Major Banks Oppose Honest Reporting

Virtually all the banks are against honest reporting. Wells Fargo is leading the pack because of all the nonperforming Pay Option ARM and problem housing assets on its books.

The louder a bank screams, the more unprepared it is to deal with nonperforming loans and mark-to-market valuations of garbage held on its balance sheet.

Banks Recruit Investors To Kill Fair Value Proposals

Banks are so opposed to common sense rules that they have even recruited investors in a Campaign to Kill FASB Fair-Value Proposal

Banking lobbyists have launched an e- mail and Web campaign to mobilize investors against a proposed expansion of fair-value accounting rules that may force banks such as Citigroup Inc. and Wells Fargo & Co. to write down billions of dollars of assets.

The American Bankers Association opposes the Financial Accounting Standards Board's plan to apply fair-value rules to all financial instruments, including loans, rather than just to securities. The group says the rule could make strong banks appear undercapitalized.

Fair-value, also known as mark-to-market accounting, forces companies to adjust the value of most securities they hold to market prices each quarter. It became one of the biggest flash points of the financial crisis when banks barraged lawmakers and the Securities and Exchange Commission with complaints that the rule exacerbated their problems because they had to record losses on mortgage bonds they had no intention of selling.

FASB in April 2009 relaxed that requirement after being pressured by lawmakers on a House Financial Services subcommittee. At the time, FASB Chairman Robert Herz said Congress stepped in because of complaints from banks and their trade groups.

The change raises the stakes for the 26 biggest U.S. banks, which currently value loans at $94.8 billion more than market prices, Barclays Capital analyst Jason Goldberg said.

San Francisco-based Wells Fargo said the fair value of its loans was $721.1 billion, or 3 percent less than the carrying value. Regions Financial Corp., based in Birmingham, Alabama, estimated loans were worth $70.2 billion, 15 percent less than the value reported on its balance sheet.

Thus, the above charts and discussion only forms a framework of discussion for what losses banks are hiding on their balance sheets and off their balance sheets.

The starting point for discussion is not pretty, and beneath the surface the actual magnitude of the problem is worse than it looks.

Undercapitalized Banks

Banks are undercapitalized across the board because of these issues. Unfortunately, as noted above, it is purposely hard to accurately untangle this mess because of the lobbying effort by banks and the Fed's willingness to encourage extend-and-pretend games.

Those of you who keep asking "Why are banks reluctant to lend?" now have another solid reason.

Moreover, Obama administration policy errors compound the above problems. The result turns up in small business hiring trends.

Small Business Trends

Small Business Trends - Yet Another Disaster

Wells Fargo/Gallup Small Business Index Hits Record Low, Future Expectations Dip Below Zero First Time Ever

Another Atlas Shrugs - Small Business Owners Chime In

Small Businesses are Not Hiring - Why Should They?

Structurally High Unemployment For A Decade

The icing on the cake is that because of massive overcapacity and tapped out, deleveraging consumers, and misguided policies by the Obama administration, businesses do not want to borrow, expand, or hire.

The combined result is an amazingly toxic brew that will keep unemployment elevated for as long time.

Flashback August 18, 2009: Structurally High Unemployment For A Decade

Consumer demand is dead. That demand is not coming back anytime soon, and there is no driver for jobs if it doesn't.

Harsh Reality From Bernanke

In the Incredible Shrinking Boomer Economy I noted a harsh reality quote of Bernanke:

"It takes GDP growth of about 2.5 percent to keep the jobless rate constant. But the Fed expects growth of only about 1 percent in the last six months of the year. So that's not enough to bring down the unemployment rate."

Pray tell what happens if GDP can't exceed 2.5% for a couple of years? What about a decade (or on and off for a decade)?

If you have come to the conclusion that we are going to have structurally high unemployment for a decade, you have come to the right conclusion. Ask yourself: Is that what the stock market is priced for?

People manage to get hyperinflation out of this. The idea is laughable.

Addendum

Off Balance Sheet Accounting at Citigroup and Wells Fargo

Inquiring minds may be interested in Wells Fargo's Balance Sheet: Scaring the Horses regarding off balance sheet exposure at Wells Fargo and Citigroup. The article is from February 2009, but the off balance sheet problem still exists.

Here is another Flashback, this one from April 16, 2009: Wells Fargo's Profit Looks Too Good to Be True: Jonathan Weil

FDIC Allows Banks To Hide Insufficient Capital

Dateline December 15, 2009: FDIC Approves Giving Banks Reprieve From Capital Requirements

The Federal Deposit Insurance Corp. gave banks including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. a reprieve of at least six months from raising capital to support billions of dollars of securities the firms will be adding to their balance sheets.

Bank regulators including the FDIC and Federal Reserve want to permit a phase-in of capital requirements that rise starting next month under a change approved by the Financial Accounting Standards Board. The rule, passed in May, eliminates some off- balance-sheet trusts, forcing banks to put billions of dollars of assets and liabilities on their books.

Executives from Citigroup, JPMorgan, Bank of America, Wells Fargo & Co., Capital One Financial Corp. and the American Securitization Forum met FDIC officials Dec. 2 to discuss capital requirements related to the FASB measure.

The executives proposed that "the transition period should extend beyond 2010 to a point in the economy where unemployment is lower and issuers are less capital-restrained from growing their balance sheet and providing credit," according to a paper the ASF presented the FDIC.

Citigroup suggested three years to offset assets and liabilities brought onto balance sheets, Chief Financial Officer John Gerspach said in an Oct. 15 letter to regulators. Requiring banks to "assume the risk-based capital effects immediately, or even over one year, is an undeniably severe penalty," he wrote.

Banks in general are sitting on assets, not marked-to-market, both on and off their balance sheets, for which they have made no loan loss provisions, while credit risk for new loans is exceptionally high.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mortgage and Loans - Mortgage Refinance, Home Loans

The Dogs of Puerto Rico-PART TWO
Knowing The Various Kinds Of Mortgages
Exactly What Do Mortgage Lenders Want When Considering Your Application For A Loan?
If someone has two health insurance coverage, how does coordination of benefits work?
Plane Struck By Lightning

The Dogs of Puerto Rico-PART TWO

Posted: 30 Aug 2010 07:17 AM PDT

Knowing The Various Kinds Of Mortgages

Posted: 30 Aug 2010 05:24 AM PDT

It’s a rare and fortunate person who have enough money to get a house outright. For some of us, this pursuit of this American Dream calls for getting a home loan. A mortgage is actually a loan that helps individuals have the ability to purchase homes that they otherwise could never afford. By doing monthly payments over a specified period of time, individuals at some point have their homes. Mortgage payments don’t merely deal with payments on the loan, either. They consist of money to pay out the loan interest, the mortgage insurance, as well as property taxes. So what would you like to know when you decide to go out to apply for a home loan?

First of all, it is good to understand the terminology that the lending officials will probably be using once they talk to you. In order to turn into a responsible borrower, you need to sound like you understand what you are discussing. When you apply for a mortgage it is along with the understanding that the particular loan will apply to the house as well as the area it is sitting on. To get your loan, you’re putting up your house per se as the collateral. Collateral is exactly what you provide to the particular lender as an assurance that it will not be kept holding the bag. If you do not come up with your loan payments, the particular lender will have all the right to take the property away from you.

You also need to fully grasp the different types of mortgages that exist. A fixed rate mortgage means that the interest rate would be the same through the entire mortgage repayment span. That way you will always know what your payment per month will be, and you are not experiencing any surprises. Many other choices consist of a variable rate mortgage which will always be refigured periodically throughout the period of the mortgage and may always be adjusted either up or perhaps down. The percentage you will gonna pay will be different marginally from place to place, so a madison wi mortgage rates might be slightly less than a comparable one in New York City.

If you are looking to refinance in a mid-size city like Madison, Wisconsin, you’ll still have lots of Wisconsin mortgage lenders to choose from who can introduce you to a more recent option, a Two-Step loan, brings together the best areas of both fixed as well as variable rates. This will allow you to hold the stability of a fixed rate mortgage although providing the particular borrower a 7-year window by which rates may be adjusted. Towards the end of the seven years, interest rates get the final adjustment depending on the interest rates at that point. One other new kind of home loan to think about is known as Lender Buydown. This was designed to help fresh home customers get started with their particular fresh payments with a lower-interest loan. Next, right after 3 years, the rate is changed into a fixed rate at a percent that was agreed upon when the loan has been initially activated.

Getting a mortgage could be a little scary, because you’re taking on the biggest responsibility you will assume during your life. However, as long as you are sensible regarding the quantity you are able to pay, and you know what your obligation will be, you will survive the particular adventure perfectly.

Exactly What Do Mortgage Lenders Want When Considering Your Application For A Loan?

Posted: 30 Aug 2010 02:46 AM PDT

There are a lot of points in life that may be frightening, especially when you’re doing new things for the very first time. It might be signing a loan to buy an auto or interviewing for any new job, and also it could be getting a mortgage loan to purchase your very first home. You’ll find out, however, that all homebuyers, even though to those who have tried it repeatedly, can get nervous about whether or not they’ve got the appropriate qualifications that the lenders are searching for when considering giving them a home loan. Knowing precisely what the mortgage lenders in Wisconsin and also in other places are going to be looking at can make the process much less stressful which is good for those currently looking at mortgage lenders in Wisconsin.

You will find four principal points that lenders will look at: property, income, assets, as well as credit. These are the four pillars that all home loans are built on. While lenders are going to expect you to have excellent scores to all these four areas, they are not gonna expect superior standing. You will be asked to supply written documents that give proof of your standing in these areas. You’ll need to give them paycheck slips, 2 yrs worth of W-2s, and also three months of statements to your bank accounts. Other documents they’ll require, if it applies to you, which includes the divorce documents, bankruptcy info, and also self employment proof.

The following pieces of info could also guide you to avoid some of the reasons why loan applications are turned down:

1.Never protest when the lender requests that you give more proof. Politely give him everything he asks for.

2.Do not apply for any more credit cards, although it is just for a balance transfer.

3.Do not go out while the loan is still being considered as well as charge a lot of things to your new home or for any additional reason. Running up more debt might cause the particular loan to be denied.

4.It’s not the time to shift jobs while the mortgage request is in process. Just before the lender will close on your own loan, he will make sure you’re still holding the similar job you had when you applied.

5.Make sure you don’t ask to lend more cash than you can pay for to make the payments on. If your current rent is $800 a month, and you’re simply applying for a mortgage with a payment of $2,000 monthly, you need to be in a position to prove you have the cash to manage to make these elevated payments.

As you have seen, when you get down through all the documents as well as questions, you will find that applying for a mortgage isn’t really as hard as you thought that it was. You need to be honest and offer all the info the lender demands, and you’ll be living in your new home in no time.

If someone has two health insurance coverage, how does coordination of benefits work?

Posted: 30 Aug 2010 12:14 AM PDT

My friend was in an auto accident, and the health insurance from the auto insurer is her primary health insurance for the accident. She also has regular health insurance from another company. If the auto insurer pays 80% of her auto accident medical costs, and her secondary insurance normally pays 70% of her medical costs, then how would the secondary insurance treat a 00 bill, for example? The auto insurer pays 0 of the 00 bill (80%), but how much would the secondary health insurer pay?
SRC50
Auto insurance covers medical costs from an accident when auto insurance is selected as the primary health insurance for an accident. She therefore has two health insurance coverages in terms of her auto injuries only.

Plane Struck By Lightning

Posted: 29 Aug 2010 09:40 AM PDT

Watch how a plane gets struck by lightning.