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Open Thread: The Real State Of The Economy
Over the past two years, one of the most salient topics of discussion has been America's collapse into a Chinese state of economic disclosure - limited, opaque, and, at worst, fraudulent. Due to Zero Hedge's extremely "eclectic" selection of readers who are professionals in a variety of industries, we would like to take the opportunity to hear from all of you on what the true state of the US economy is where you are - be it (un)employment, inventories, overall business conditions, moods, general supply and demand, etc. Consider it an objective, crowd-sourced, non-manipulated business perspective.
This will likely be the last open thread for a while.
The soapbox is yours.
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I'd be worried about all of those retirees who rely on their social security checks to make ends meet, or who may burn through their retirement savings a lot sooner courtesy of the 2008 equity markets. At some point, the level of benefits will have to take a cut in real terms (versus nominal $), and the fallout won't be pretty.
Also, now that the state is a lead underwriter for insurance on property on or near the water (or so I understand), the next major hurricane to strike FL could sink the budget.
A friend of mine bought a home in cape coral for 245k in 06. Its now going for 85k.If I thought for a moment that we were going into recovery, I would purchase 10 of these homes and just sit and wait. But that would just be financial suicide at this point in time....
Wait another year Robo. Things will get cheaper still.
Wait a couple of years. Not yet. RE in miami is stabilizing a bit but will go down more. Commercial RE shoe about to drop. Lots of waterfront property will be available for pennies on the dollar. patience pays.
I own a small ecommerce business (15 years) and lived through the dotcom burst in SF. There was a downturn there of course, but it was far less dire. For the ecommerce business, it has really mirrored the S&P more or less in terms of a chart for revenue. Sales flattened in Q3 2008, went down in Q4 2008-Q1-2009 and then rose to better (but lower) levels in Q2 2009. It flatlined from there (as the S&P went up and all of the green shoots talk continued)...it remained relatively flat at that level till the end of the year and has gone back down in Q1 2010. I see these retail #s posted by the government and I am scratching my head. We work with 80+ vendors and all are telling me sales across the board are down...and some are letting go after trying to hang on. Wish I had better for you, but the reality is quite different than what is being hyped in the news and by the government.
Outskirts of Northern Virginia, otherwise known as one of the the lips of the burst bubble...
The Semiconductor industry is doing very good right now because we had a world wide industry supply glut that lasted from about 2002 to 2008 which is just now turning into tight supply. Luckly for me we turned around at just the right time. Unfortunately, we still have salary and promotion freezes in place. I'm not sure how long it will last but things are looking up for us. Hopefully the shortages last long enough for me to survive through this depression.
Not everything is roses...
I followed my job here 5 years ago and had to buy into this overheated RE market to take advantage of a corporate move package worth around 20k. I moved from the inland west where RE prices were somewhat realistic and affordable only to confront the exagerated flipper prices over here. Needless to say I was stunned at the utter stupidity of the prices. Were people really willing to strap themselves to 250k dollars in debt when they only have a 35k a year job?? I searched long and hard for a decent affordable house but in the end I gave up and bought a cheap 3 bedroom townhouse without a garage.
Anyway, even with the move package my mortage at that point was 70k more than my previous house WITH a two car garage which was also an easier commute. Thank god I received a promotion in the move.
I just found out Monday that the bank now values my house at 10k BELOW what I owe...
I can't describe my frustration and anger. I've owned and payed OVER my minimum monthly mortgage payment for 8+ years. I have excellent credit and always pay on time and this is what our corporate capitalism has brought me. I have been taken advantage of by Wall Street and mark my words when I am out of debt I will never send money that way again. Maybe this isn't the right forum to express it but I will take all my money out of Wall Street at the earliest possible time and never return.
Burn me once, shame on you. Burn me twice, shame on me... I don't intend to get burned again.
You couldn't find a better forum to express that on. Good for you.
I am familiar with this area. The housing market in NoVa is/was totally insane (in the brain), especially at its peak a couple of years ago. The area also has the highest number of graduate degree per capita of any area in the country--so, how can this many smart people have run up the housing market to such unreasonably high (see: silly) prices. DCTBH, there's nothing you could have done except to have bought-in. In real estate, you you can't always wait for the market to come back to reality before you must make a home purchase (because the stupidity of the market generally lasts a lot longer than one would think possible.) It is really unfortunate that the 'sheeple' can make the market so damn unreasonable for sensible, sober-minded buyers. Having that said, NoVa hopefully will rebound over the next 5 years. It's not like the areas of Detroit, Pittsburg, Cleveland, etc., where old economic engines (like autos, steel, manufacturing) are dead and not coming back--Washington will be around forever.
Amen!
I live in the UK hence a little off topic, The UK/US business models are similar, Hence worth the imput.
Petrol is shooting up here, It has risen by 15% in 2010 alone, In US$ terms its about $8.00 a gallon and its pledged to raise another 3p a litre in tax plus VAT about 25 cents a gallon on April 01 These prices are all time highs.
The Government over here is stoking price inflation via stealth taxes, Even a telephone landline tax is being introduced,
Regarding houseprices they are shooting up here in Manchester, New builds have mostly if not all been mothballed, The lack of supply/Demand is very houseprice inflationary, Yesterday I looked at the prices of a unit in a block I sold, The asking prices are MORE than the pre bubble highs, The Rent to yield ratio is about 20 Totally bubble prices.
Rents have been stable and still are.
The official CPI in Feburary is 3.5% Pa, I estimate its about 10% pa real rate here in the UK stoked by a 25% devaluation of sterling being passed on and taxprice inflation,
The Employment figures are 29m in work and over 30m not working, The official working age rate is 72% employment, The Industrial base of the UK is all but gutted, The general state of the region I am in is fine, I estimate about 10% of shops have gone bust in local towns,
The mood of the people is still denial around here, Business as normal, My doomsday forecasts are not laughed at now but they are still ignored today.
Regarding the UK labour government the amout of reported sleaze and corruption is very high in the MSM, Its banana republic levels coulpled with apathy of an electorate, The general election is due on May 06, Its a near cert for me this morally corrupt government has many iffy things hidden like Greece, Which may come out if a new party is elected, Sterling is at risk for me.
The powers in the UK are stoking inflation big time, This area and the manner it is being done is of great concern.
The damage to this countrys fiscal position as yet is not being reflected on the ground, This is both good and bad news, For me the real on the ground damage has only begun.
a friend and i were thinking about going in on a foreclosure in the newark nj area to renovate and rent out. she told me tho that she has friends who've done that but they can't find renters. in the hudson valley, there are an awful lot of for sale signs, and a friend who owns his own RE brokerage has made only a few sales in the past year. a house that was on the mkt a few years ago for 300k in a village not too far from the cutesy antique town of hudson ny is now on the mkt for 200k. meanwhile, in nyc, the colleges are full of people whose unemployment is being extended and extended. i've seen people on this board complain these students are being "warehoused," but if they learn a little something it can't be bad for society in general. friends of my daughter's are being forced to leave the private colleges around the country because the scholarships are being cut and these kids don't want to go into debt. everything i posted here is anecdotal. of course i read the same articles as everyone else, so this is just from my personal experience.
ventura, california. Where did all the day workers in the home depot parking lot go? need a corner to beg? good luck finding one that isn't being worked already. city is broke. everybody is pissed. but the surf has been good, so who's bitch'in.
My anecdotal evidence in the Southeast:
-45 to 60 minute wait for most sit-down restaurants (Olive Garden, TGI Fridays, etc.) on a weekend night. Tough to find parking when going out for lunch.
-IT Jobs are still plentiful. A software developer could easily make $70-$100k.
-Housing prices are stabilizing. However houses that were on the market 6 months ago are still on the market now.
-Banking/Financial jobs are available, but at the lowest prices. CPA accountants can probably get no more than $30k
-Service Contractors (A/C repair guys, roofers for example) are begging for work and discounting appropriately. I got a call from a guy who is 2 hours away willing to drive to fix my a/c for $400.
-Hyundai Dealerships are mad busy. We actually had to "compete" to get the attention of a sales person. Meanwhile Toyota dealerships are empty.
-Apt Complexes are giving retention discounts instead of annual increases. New renters don't need security deposits or credit checks. Best friend is an apt manager for a publicly-owned REIT. Says they just need warm bodies in the units to pad their occupancy stats for the month/quarter. Rents are also negotiable for the first time in my lifetime.
-Morning Traffic on the roads are starting to pick back up.
-Nintendo Wii is constantly sold out.
-No "infrastructure" (read: stimulus) projects in sight. Guess that money went to political favors instead.
-I have only a 680 credit score and am starting to get the flood of credit card offers in the mail again, but no 0%-balance transfer offers or free mug/shirt/swag offers like 3 years ago.
-Lots of "For Lease" signs on offices and industrial buildings. No new CRE construction in the last year.
-Unemployed spouses are resorting to extra-income activities, like babysitting or tutoring and finding some success doing that.
-Being frugal is now chic. 5 years ago, everybody would come into the office with the obligatory Starbucks cup. Now everybody is drinking the free company-provided coffee. We also share a big pot of coupons around the office.
-Everybody (including the unemployed) has an iPhone or some sort of smartphone and a data plan. Landlines are a rarity now.
-My company gave a maximum of a 2.5% raise for the best performers.
-Everybody I know with available equity in their houses are getting a HELOC "while they can".
-Lots of front-counter staff (at hotels, big-box electronic stores) are former corporate-types that are obviously over-qualified but can't find anything else. Waittress at italian restaurant was a recent MBA grad.
-Two co-workers have attempted strategic defaults. One is 6 months behind in mortgage payments and haven't gotten any threat of foreclosure or anything. Bank is willing to extend-and-pretend. The other makes a payment every three months to keep the collection calls to a minimum but not even the slightest hint at any credit report damage.
Personally, it's a mixed bag of things that are getting better and some things not getting better. But overall, things don't seem to be getting "worse". Most of the unemployed/laid-off professionals that I know of say they are getting interviews and very low-ball offers (i.e., CPA accountants for $30k) and some are taking these offers just to have some sort of cash flow and expect to leave for a better position when things get better.
Other young folks (22 - 28yrs old) who normally would be buying houses/getting married at this stage in their lives are still living with their parents rent free and are saving money while working at a position below their college degree (e.g., instead of being an entry level sales rep for a pharmaceutical, they are an admin assistant). I especially see alot of folks who have their kids living with them along with taking care of their mom/dad. 3 generations of folks under one roof (albeit severly underwater).
Interesting about Olive Garden. I stopped at one in NJ -- my first time ever, and it was as awful as I expected -- and was amazed to see it filled and with a 45 min wait, just like what you saw in another part of the country. Mind you, OG is low end, and this may be the one night out for the crowd that just got the unemployment check. It would be nice to know how whether OG is taking mkt share from other restaurants that have gone under, or whether people have downsized from $40-60 meals, or if this really means some kind of business is picking up, or if it is representative of some other trend.
I think its just snap-back from frugality and savings over the past 2 years. Going out to eat at OG is quite easy to do, much more than buying an SUV or buying a house.
Interesting to see how things are shaking out across the country. I work for a large, global manufacturer with $20B in annual sales. Our business fell off a cliff a year ago and hasn't rebounded at all. The only way we've stayed profitable is by cutting hours with plant shutdowns, mandatory unpaid leaves of abscence for saleried workings, and every other cost cutting measure under the sun short of firing people. One of the things we did last year was form an entire team dedicated to nothing but sucking at the government teat. We were able to gobble up a huge amount of government stimulus/pokulus and that's frankly frightening to me since that money isn't going to last forever. In the meantime there is very little new business coming in so a double dip for us definately looks to be in the cards when the government well starts to run dry at the end of this year.
Here in Arkansas it is completely quiet. People are starting to accumulate at gas stations and other places where people must go like grocery stores.
Some houses have not sold for more than a year now from just looking up and down the roads in our area. Nature is rotting a few properties left open to wind and rain. Abandonments appear common.
Cars are running with increasing amounts of damage. People are not buying new cars. Or used ones for that matter. I can take either one of our paid for vehicles to a major dealer and have three mechanics ready to do whatever as long parts are availible at any time. Before you needed a appointment.
It is easy to make appointment and see any kind of Medical Doctor now. ER is full most of the time for those who cannot pay to see a doctor.
The railroad is quiet. They run at night mostly slow freight that has no priority. The China Trade Shipping containers (Pacer Stack Train) roars by with ever increasing empty flats. But it seems they added a new pusher loco to get the train to St Louis faster as it appears to be getting longer with more containers. Go figure. The coal still moves.
I attempted to sell about 30 trees due to various reasons and most of my local wood people told me that the trees are not worth anything to them. Even if they could use it all right away, they would lose money on everything. I was told to save the trees for firewood should we need it later.
Gas Pricing jumped. But more people are buying more gas. They dont care anymore. They just go fill up and walk in to pay. Then side step over to the 10.00 lottery tickets with a better chance of break even/small win.
We have deleveraged (Paid debts) until it is possible to become totally debt free this year pending some issues to be resolved. Even then, we are ready to drop our health insurance to accumulate more cash. The current government Health Care debate/vote is irrevelant to us because we see ever increasing costs and are getting out of it. If something happens that requires ER, we will deal with the billing office afterwards or the funeral home.. (Both burials paid for with cremations also paid for and arranged)
We might spend 5 dollars buying a pizza from walmart once a week rather than paying 15-20 dollars for Pizza Hut. We have noticed packaging on food items getting MUCH plainer, portions getting smaller while pricing has increased. We buy meats now such as a roast, cut it up and have several meals out of it.
Essentially going back to the slow way of living prior to the 80's
We have noticed people in walmart check out using massive amounts of change. They appear to be buying smokes and just enough food to get to next pay day or unemployment check day.
We buy once a month now making sure to buy two extra weeks of food products. That way if the weather was bad or something else happens we will have food for a while.
Contractors for any number of house problems are availible 24/7 All we have to do is call. However, we are carefully making sure we dont call any and doing what we can ourselves.
The roads are in very bad condition. Bad enough to take the truck at 10 miles to gallon and it's sturdy suspension and tires to save the family car from destruction. (30 miles to gallon/vs repairs... not cost effective.)
It will take approx 14 dollar gallon gasoline to make us stop driving all together. Even then we might make it about a year on current expenses such as utilities. We are constantly adding to that cushion before anything else.
Spouse says that her Workplace is collapsing in the name of cost control. They have already cut staff to the bone and overworking the survivors. The weaker ones are quitting and Supervisors are not replacing them. Every department appears to be fiscally flush, but are afraid to spend anything until after this fiscal year.
Spouse is already calculating chances of getting out to work part time to reduce the stress that is taking toll physically. I am doing what I can, but my field has essentially died off. Only the ones who are not starving survive until times improve. And they will, someday.
Things are not all bad, the Churches still have a big rush twice a week and some serve big dinners to worshippers on wedensday nights to get them in the doors.
Our town has spent a great deal of money and we are getting ready to see increases in our utilities to pay for this spending. We are seriously considering moving out away from towns, cities or any place that has a local government that spends money and taxes for schools. Even if we stayed, we are free and clear for now. So it really matters not now if we stay or move.
One major bank in our town is leasing out the second floor of thier branch to anyone. It used to be thier upstairs office but it appears that even the rats are getting out of it. The credit unions are busy, even more busy than ever.
The only work that is not affected are those in State, Federal Governement, Military and Contracted work related to same. All others are essentially have no work to do. Gas Drilling and pipeline laying is the only thing keeping us afloat at the moment. When that stops, we are really gonna find out what it takes to live in this area.
Lala Land (S . Cal)
I am a bit underemployed so lately I ve been doing plenty of retirement planning. Well,
"to say that the majority of the 50+ population is not prepared or capable of retirement is understatement." I am dealing with people who are visibly well off - nice salaries, income generating businesses, fabulous homes and cars, however once you go over their financial assets available for retirement, often those won't last for more than ten years. And let me tell you, facing the prospect of drastically changing your life style or going back to work at 75 is a very scary prospect. The reason is very simple, a pressure to live up a notch higher than one is capable off and the short term thinking. Most of us have leveraged up our life styles due to social pressure and are ignoring the fact that high leverage will cost us our financial independence and financial freedom down the road.
Among our clients those with backgrounds in IT are on the move, everyone else is ether stagnating or doing worse.
As of employment in S Cali especially in finance, the picture looks BAD. Just the last week a former classmate promised to be my bff forever, implicating anything (a trip to Vegas & sexual favors - sounded rather ridiculous despite her being cute) for a job lead, anything finance - part time, data entry, making coffee , 40% of her former salary, you name it. My reply was, if you have any leads for me, I promise the same x 2.
After that convo, I went over a RE loan for a customer - delayed principle payments for 10 years + variable interest rate (currently under 5%), my calculations showed her payments in 5 years would go up at least thee times assuming her variable rate will not climb above 7% & it might. I ve seen somewhere that 25% of loans in CA were of similar nature. Next time, I'll promise x 10 for a job lead, got to safe some $ for the next bubble bust or ELSE I'll live in a car.
Comrade, You are a retirement planner? I have a question for you (or anyone else in this business):
I have a sneaking suspicion that the majority of upper-middle class McMansion dwellers (and SUV/german car drivers) who are between 45-60 do not have anywhere near enough assets to maintain their lifestyle in retirement. I believe this because it takes a lot of time, energy and brain power to comprehend the REALITY of how to manage your money for retirement. [It is common knowledge that people spend more time planning their vacation every year than they do reviewing their retirement/financial plan.] Unless you have a 75%-100% defined benefit pension-plan (from an entity that won't go bankrupt any time soon), you won't be able to retire and keep up appearances. Of course you could build and manage a $5,000,000 portfolio and withdraw enough from principal and interest (and gains). But a $5M portfolio is damn near impossible to build for most people. In the end, I agree with you: NO ONE is thinking deeply about retirement, even seniors, and EVERYONE is spending money acquiring assets out of social pressure.
So, 1.) what in your opion is the % of soon-to-be retirees (to retire within 15 years) in America who are prepared and will get at least 80% of their pre-retirement salary covered in retirement income and 2.) What will be the 'big picture' affect on the entire US economy when all of our Baby Boomers finally realize they are not prepared financially for retirement??
That is one of my biggest unanswered questions these days: what is the unprepared boomer affect going to be on the economy (especially as healthcare costs skyrocket)?
Unfortunately, unless markets turn back into reality based markets, I don't see how any of us can depend on an IRA, 401K or anything else. I'm 44 and between the wife and I we probably won't have enough to retire on. I'm going to collect as soon as I can and do under the table side work.(electrician) It's funny as slow as it is I have people asking me to do small jobs for them all the time. I take some of them usually on a barter basis. I'm hoping I'll be able to sell my house and buy something smaller in a climate that doesn't require much fossil fuel based heat. A nice little cape with southern exposure and a wood stove. I won't have to worry about my health care costs anymore, Chairman Obama took care of that for us all.
All hail Chairman Obama!!!
100% agree. If only the American people could understand that these retirement instruments are just 'hopefull' storehouses of values--but with zero guarantees!
I also think a less-expensive house with southern exposure and a wood stove is a good idea. You can also get solar panels and be close to 90% off-grid. I've seen people do it, even with nicer homes.
Lastly, I have talked with several people about the best 'plan' for retirement, and the most common plan that is discussed is to conitinue working after age 60-65; work until 75. Unless the job is super-heavy manual labor it is possible to keep working. And in the same sense, I know people wanting to start businesses after retirement.
So the point is: It is not cash that is king, but CASHFLOW. So finding a way to stay employed or to stay in business after 65 is the key. Of course, you should design a way to not work full time and try to have younger employees do the heavy lifting while you do more managing.
In any event good luck to you, AM. I think the lower consumption living idea is a great one.
I live amongst the sub 20K/yr set. Nary a day goes by where I don't see signs of the bizarroland econ landscape being sported by our nation. An increasing number of able bodied guys are saying "fuck it" and going idle. No jobs, no interest in jobs, for whatever reason deciding it is more attractive to appease a service-sector employed female and play "kept male" than it is to join a broken dick, low paying, and entirely propagandaized labor force, only to make not enough money to keep up with expenses. Others play out the "I'm crazy" portion of the Social Security seweepstakes But there's a twisted kind of payback in that....oftentimes, they end up crazy from playing the game. I know a man who swore he lost feeling in his arm. Ran through all sorts of med tests that showed his arm was fine. So the sick bastard sits around with his arm bent up like a gimp for a few years. His arm atrophied up pretty good and the docs grudgingly said that he was a bit crazy. Crazy's covered! Cha ching!
Children have been largely thrown out of the snow shoveling/lawn mowing racket. It's middle aged adults looking for cash who run that show now.
Liquidity in the hood is for shit. Marijuana salesmen have gone from peddaling $20 units to smaller sized $15 dollar units.
After a healthy jag for the Earned Income Credit laden tax season, restaraunt customer headcounts are back in the shitter.
Lots of residential rental properties available. Not much rollover on the ads (same ads week after week after week). It took us 3 months to move a furnished 1 bedroom, breaking our 11 year run of 100% occupancy for our 3 unit building. Rental prices are staying firm, though. At least thus far.
The postman told me that the volume of mail fell off a cliff for the "crisis kabuke" phase, but has rebounded some since.
There are fewer people in jail. (my city has their jail roster available online...a virtual who's who of fucktardery). I think the county has seen the econ writing on the wall and are less inclined to break out the cuffs, if only on an economic basis, lest they go broke imprisoning dead beat dads and misdemeanor posessions.
+1
I split my time between Northern Chumbawambia and Central Va. The house in Northern Chumbawambia is down around 40 percent, house in CVA is flat. Also have a 100 acre farm in CVA ,purchased circa 06 or 07, which we got a great deal on and paid in cash.Undeveloped CRE lots in CVA not selling and not being price reduced.Farms and woodland only selling when prices are greatly reduced, otherwise no movement.
Getting ready to cash out 750k in retirement accounts and convert the leftovers to PM's before the accounts are locked out or confiscated
Also getting ready to move to the farm full time.Taxes will soon get to the point where it will make no cents\sense to continue working.(healthcare will add 3.8% on unearned income, for 1 example of tax increases to come) I will just hang out on the Farm in the lowest tax bracket.I refuse to allow myself to be financially raped by our wasteful gov't
Moving to Europe is an option, as the wife unit is a citizen of one of the PIIGS, if that option ever makes sense, but I do not think it ever will.
But due to lack of leadership, good management ,manufacturing base and massive levels of corruption/collusion, I see our situation continually eroding. Remove the consumptive stimulus and welfare payments of all types, and we would be in big time depression. Its just a matter of time before we run out of stimulus and welfare payments and thereby collapase. Financial perpetual motion cannot be maintained.Fiat always fail.
Penalties on cashing your 401K might be huge. Just saying..
Also, you could always roll over those into main brokerage like E-Trade, TD-Am and administer those at your liking ... gold, polonium, whatever.
Yes, that is why i used the term "leftovers"
If they are locked or confiscated Argentina style
though, they are gone forever
Polonium has a half life of 140 days, so a very bad investment, almost as bad as housing in 07!
I'll stick with Au and Ag
I don't think they "have to"confiscate. There are are plenty of people right now who are in fear of free markets & economy and who will gladly volunteer to sign up for MEDIOCRE but stable long term results.
And when people are in fear, it's way too easy to push forward any "Party" agenda, just look at the health bill - a black swan written behind the doors.
I appreciate the advice CdC
In normal times, it would be sage.
But this time, it truly is different...
I will consider carefully before pulling the trigger,
but my gut tells me to liquidate, take the taxes and penalties
before its too late.
Good post. I figured that's what you meant when you wrote "leftovers". I have tried to persuade a couple of people to cash out as the leftovers are more than zero, or dribbles in a hyperinflated environment, and I urged these folks to invest in physical gold when it was 311 to 500. Nope, now they're stuck and cannot withdraw because of newer controls on retirement accounts and because they can't liquidate real estate and equity has nearly vanished. So good to read about people like you who are actually doing it right.
Sure wish I knew you when Au was at 311!
I started piling in at 700...
Margret Thatcher said " The problem with Socialism , is that you eventually run out of other peoples money"
I think this 'back-up' (or primary) farm thing may really start to take off soon. Although John Grisham and Dave Matthews beat you to the CVA farm idea! (although, they did it not out of scarcity, but out of abundance.)
That is probably the simplest, most accurate way to describe the current financial crisis.
Dallas, Texas says:
Residential Real Estate: Below $250,000 is very active. $250 to $350,000 Busy. $350 to $500,000 is slow. $500 to $1,000,000.00 Very Slow. Over $1,000,000.00 stinks.
Commercial Real Estate: Don't see a lot of activity, but am not directly involved.
All in all, Dallas doesn't appear to have been hit as severely as other parts of the Nation. Our Real Estate values never reached the nose bleed levels that were seen in other areas. The Texas economy is also very diverse.
Don't get me wrong, some parts of the economy have been killed but the bleeding seems to have stopped. Mainly in Residential home building sector. The high end re-sale and new construction are still flat to depressed.
Construction subcontractors are still hanging on with a needle and thread. Many of my subcontractors have had their businesses fall as much as 75% over the last 3 years. These are businesses I have know of for over 20 years, who had stellar business reputations. They have seen a bounce in the first time buyer market. Everyone is anxiously awaiting the tax credit to end to see if the market can at least stay steady. There does not seem to be any enthusiasm.
Personally, my fear is that we will remain in a stagnated economy for a long time. My fear is that this debacle has been an insolvency event and will remain an insolvency event until the level of debt in this Nation is lowered.
I could go on and on. In summary, I don't see any enthusiasm and I do see a lot of doubt that our economy will ever resemble what it did just 4 years ago. I also see a lot of doubt concerning the Obama regime.
I run a businesses with an international product. Sales globally are steady, but we are starting to see some push back from US customers.
For me personally, things are pretty good - if only the government didn't seem so determined to tax me to death.
South suburban Detroit:
Light Industrial RE at 10 cents on the dollar.
Visibly more homeless on the streets of Detroit.
The federal government employees 14.6 million people.
There are 14.2 million combined military personal in the top 25 armies around the world.
we are doomed
I'm with the largest design firm in the world. I work in one of the 400 ofices world wide. At the location I'm in we are architects and engineers. We get involved in US 10M and gerater projects ( the big stuff). For the past 2 years, our active US contracts have been declining, terminated, put on hold or completed. Currentky, we are "dead in the water" when it comes to US work. We have work coming in from overseas sister companies and that has kep us going. We do not expect things to get better domestically anytime soon. We have had to let go 1/2 of our staff. The point is that as designers, we provide work for the construction of large projects in the future, which means that if we get contracted today, the construction trades get started with their work 2 years down the road. We have been in a steady decline now for 2 years.
That is "the" indicator of the economy "coming back", the engineers and architects. Even in our area about 75% of the architects are out of work. And that translates inot a 3-5 year delay in growth if they "picked u tomorrow", which they are not.
That is the worst indicator for construction and regional growth in the large constructin projects. So much for Green Shoots, and all the effect of the ARRA.
Santa Barbara: No recovery
South Fla: Res RE def stabilizing esp in coastal areas w massive foreign buying
Friend w sign business in Miami Beach. Business level went from par to 50% down, now only 40% down. Big whoop
Zero interest rates murder for retiree spending
Smells like the Japanese disease tho w higher birthrates and more immigration and nukes
Nevada near Reno. Our state is a disaster. Unemployment is 13%+. We have the higest foreclosure rate in the nation for 5 months in a row. A casino reopened and needed 50+ employees. 600 showed up for minimum paying jobs.
Las Vegas in a depression. Home sales on the low end have picked up due to banks letting more homes go as short sales or foreclosures. Few real sales.
Our budget is about 6 billion with almost a 1 billion dollar deficit. Next year defecit projected at 30%.
Gibbons, our governer, is a moron who knows how to text his mistress.
John Ensign can't keep his pants zipped up then purjures himself trying to hide it and Reid is senile.
HD still a bowling alley and most small stores have a much reduced business model.
We have gambling, housing and construction in Nevada. Man, did we plan well.
Am retired and am ok for now. Keep buying more physical gold. My daughter graduates college in May and am afraid of what she faces.
And the medicare bill looks like it will pass. That will really help employment going forward. Not.
Beyond words all, just beyond words.
Dude you forgot mining.
Las Vegas NV here.
Employment: Worst in US after Michigan. State: 12.9%. Clark County (Las Vegas):13.1%.
Clark County Unified School District planning massive teacher layoffs (upwards of 2,000+), Clark County government planning both layoffs and reductions in both wages and hours. Mayor Oscar Goodman's plans to fire the city's entire workforce and hire them back at reduced wages/hours shot down by unions/courts, so there will be substantial layoffs.
Private Sector: NO JOBS WHATSOEVER, even at unskilled/minimum wage levels. Professional/Administrative/Technical employment decimated. And Construction? Official estimates of Union Skilled construction worker unemployment is at 30% and rising. Only good news there is that many of these folks have packed up and left, otherwise the rate would be over 50%.
RE: According to the local propaganda fishwrap Las Vegas Review-Journal, prices have stabilized. Don't count on it. Shadow REO inventory being held off the market has doubled in the last year. On our block alone, out of 14 housses seven are now vacant, and only ONE "For Sale" sign. The house next door to ours has been vacant for nine months, no for sale sign, and gradually crumbling to neglect. About a month ago, a rep for the management company offered to hire me for cash to mow the lawn, pick up the trash in the yard (high winds keep blowing things in).
Couldn't find any reliable Mexicans to do it, I guess. But, as they only offered me $25 per month, I turned them down. Did take the person's card, though so I have someone to complain to when it gets too bad. Previous tenants left a back yard full of wet garbage and trash which was breeding rats.
Commercial RE: Empty strip malls and half-built smaller commercial buildings all over town. Two Giant resorts and some condo complexes half-built on the strip, the abandoned construction cranes twisting slowly in the wind.
On the "KrvtKpt" : Things OK. The Missus still has her retail mgmt job, but it's in Primm, 50 miles away at the stateline. Have my Navy pension, my side business remarketing repossessed Class 8 trucks and trailers, and my trading sideline, which is still positive.
No debts, only the house payment ($740/Mo), food and utilities, two older paidfor cars, etc.etc. Even though we don't have to, we've cut back like no one's business and don't spend unless it's a dire necessity.
Oh, and we made the last payment on "U-96" last month. Docking fees in Long Beach are still a pain in the butt, though. Will probably sell it when the slip lease expires.
KrvtKpt. laughing swordfish
Now Landbound
Southwest Michigan:
1. There aren't many more manufacturing jobs to lose, and many here with high school degrees and former blue collar jobs are on some form of public assistance.
2. White collar types seem to be doing okay.
3. We never had much of a boom but housing prices have sunk since I bought my last home in 2005. I just received my Tax Assessment and the township, on their own, dropped the value of my home another 10%. Seems to be worth about 20% less than I paid for it. However, houses are moving and there isn't much inventory on the market. In fact, where I live in the township, my subdivision continues to slowly add new homes.
4. Commercial real estate is not an issue in this area, very few actual store closings and business looks pretty normal at the stores and malls.
5. My family lives in the NW suburbs of Chicago and they seem to be doing about the same as always. My older sister lost her job a couple years ago due to a bank merger but she found a good job closer to home anyway.
6. The State of Michigan continues to face relatively huge budget shortfalls and it seems every six months the Governor and the Legislature have to get out the budget axe and cut some more spending.
7. My tax burden in includes Federal Income Tax, State Income Tax (4%), Social Security Tax, Medicare Tax, Property Taxes, State Sales Tax (6%), Taxes and fees tacked onto my wireless and land line telephone bills, mandatory car insurance, etc.
8. After keeping less than 50% of what I earn, I try to spend as little as possible, to build up non-retirement (after tax) savings, and have converted some of that into physical precious metals.
I live in southeast Minnesota in a small town dedicated to 1 medium sized food producer. We have not had any layoffs yet but wages have been stagnant for 2 years. We seem to still be moving product but only with 10-25% off at the wholesale level. Commodity prices are still murder. Luckily the town is pretty dependant on the one company and all the support positions at grocery stores, restaurants, etc were already pretty range bound on wages. The bars seem to be full most of the time even though you can't smoke.
I guess my only bright spot is that after moving out of the Twin Cities two years ago my salary goes a lot further. I am stasing away cash in the credit union in town and doing my best to use the rest at the local community college on skills like first response, electrician, diesel engine maintenance, etc. I figure at some point they are going to dump all the paper pushers in our office and that would be me. Time to get back to something more basic.
I would be interested in buying some land I could grow food on or maybe just some trees and a water supply. I just have no idea how to go about finding where that sort of property is listed.
http://msp.themlsonline.com/search/details,6a58088789bce0786f47cffb535e3472,1,results,3687146.html
You have lots in MN. Build yourself a cabin and don't tell anyone. Build it on your own. Its very easy. Lots of books and web sites to help.
Thank you.
http://www.landandfarm.com/
Thank you.
here's another 2 cents: start growing food on a small scale now.
if you got even a tiny bit of land, make a raised bed (don't need to till) and do a square foot garden out of 2x4s. if not, goto instructables.com and build yourself a DIY earthbox. and start making your own compost with whatever organic material that comes through your residence.
the more you learn now, the easier it will be when you start really putting that land you're going to buy to good use.
spring is here baby, time to plant some seeds.
Here's my view from Toronto:
Real estate is booming - prices are at/above all time highs and there's lots of movement - there was a softening in Fall 2008 (which I took advantage of to buy) but since then it's been more-or-less strong demand. Toronto is doing just fine at the moment - restaurants are full, malls are busy and sales seem typical of the last few years. Small businesses seem to struggle, but as storefronts disappear, another pops up a month or two later. CRE seems slightly less bullish - but there has been a lot of new commercial space come online in the last year - my firm just moved into a shiny new building, but the move was planned well in advance of the economy having spasms.
I think things will get soft in real estate, but not fall off a cliff.
Toronto has been spared almost any trouble witnessed south of the border - amazing to think that less than an hour's drive away is a totally different world. The city is (among other things) a banking center and the Canadian banks are all doing fine - which has fed most of the positive energy the city has. My particular industry isn't great, but we're still profitable and have retained most staff.
The manufacturing sector in Ontario is in dire shape - a result of a high dollar and low demand from the US.
The energy patch is doing very well - if we hadn't had oil go to $145, everyone would think these are boom times - production demand is strong and the price reflects it. Mining is busy as well - and M&A in that sector is feeding the Investment Banks lots of cash.
Austin, TX
To some extent agree with EconomicMorphine - real estate seems to be doing ok. Not great, but not crummy. However, on the commercial side, have seen a growing number of vacancies in smaller strip mall type settings, and a number of spec commercial buildings, both large and small are still either vacant or far from fully rented over a year after completion. On the residential side, foreclosures are creeping up, even in some of the nicer neighborhoods. Then these things go on the market priced $40k to $80k less than prior comps. Job market is struggling. Not in a tail spin, but not as dynamic as some MSM make it out to be, particularly if you are in the upper 5 digits or $100k+ salary category.
Consider myself a cynical optimist, but agree with the earlier "eye of the hurricane" assessment at the national level. As Edward Harrison and others have reported, foreclosure data is understating the true depth of the housing problem seen when looking at delinquencies, and mortgage resets that will occur this year and next will add fuel to the fire. See http://www.creditwritedowns.com/2010/03/strategic-default-in-come-the-waves-again.html.
A good friend who worked on planes in the Air Force once said "If you put enough thrust on a brick, it will fly." The US economy is a brick, and the Congress and Fed have certainly put a lot of thrust on it. But from my perspective, their efforts to move the economic and perceptual needles have come at tremendous cost, including squandering opportunities to focus attention on and start a real dialogue on addressing root causes. The US can't afford - literally and figuratively - to keep applying thrust to a brick.
Wanted to share a few interesting quotes from a book I'm currently reading. Care to guess which country is the subject of the book? The similarities to the US are eerie.
"In the past the central bank had proved unable to resist pressures for increases in the money supply that had contributed to the nation's inflationary tendencies. Only by credibly tying its hands would the government eradicate inflation and foster the stability necesary for businesses, investors, and savers to start behaving in ways that would make the economy healthy and productive."
"The pervasive state control erected by [political "leader"] hobbled the economy for years thereafter. For many businesses, success depended less on their productivity than on their skill at extracting start-up permits, import licenses, special bank loans, and other government favors - all of which created a fertile climate for corruption. In the hope of easing social tensions, governments frequently spent well more than they taxed, and the central bank created [fiat currency] to cover the difference, with inflation the predictable result."
"...they passed up opportunities to confront [country's] fundamental problems - in particular, the size of its debt - earlier and more proactively. And they ignored warnings that the longer they postponed the day of reckoning, the more catastrophic the result would be. Might [country's] crisis have ended less disastrously, and might the suffering of the [country's] people been substantially mitigated, had those warnings been heeded? It is impossible to know for certain. But the most plausible answer is surely yes, considering the depth and pain of the collapse that materialized."
Quotes from the first two chapters of "And the Money Kept Rolling In (and Out): Wall Street, the IMF, and the Bankrupting of Argentina" by Paul Blustein.
I'm In Reno Nevada
Real Estate here sucks, my house recently went underwater counting the HELOC that got frozen right after I made a big payment to it. Two houses on my small culdisac where repo sales and one other house is still vacant after a repo/walk away. I work in the gaming industry for one of the major slot machine manufactures(Not IGT) and we are doing ok so far. GS, those bastards, recently downgraded our industry so our stock took a hit. We had some layoffs in 2009, mostly just deadwood but no raises since then. We recently had to bring programmers over from India to help re-program our games to take advantage of Illinois opening up for gameing. After that who knows. I'm hoping I keep my job for at least another year, I should have most of my debt taken care of by then except for the underwater mortgage so if TSHF we should be in good shape with my retreat cabin getting finished up by September.
The Suburbs of Atlanta, GA
Residential real estate is still in the dumps.
- A good friend of mine was one of the most successful developers in Atlanta over the past 30 years - she has since closed up shop and moved to the Florida Gulf Coast to sell distressed properties.
- I'm looking out my back window at a development that was just starting the construction phase inn 2006, and can see a new home that has been finished and on the market since 2007 - no takers. Too bad the construction company didn't wait another year...I might've still had woods and deer behind my place instead of 100+ empty lots and a few finished homes.
As for the economy in general....lots of empty stores in strip-malls and shopping malls, and a plethora of car lots closed for good. 2 or 3 years ago, I would see huge lines outside all of the chain restaurants almost every night of the week....now you can walk up into most of these places at any time on Friday evening and be seated within 5 minutes. Add to that - I now get emails with coupons and special offers from high end places like Ruth's Chris, The Capital Grill, M&S, and Flemmings Wine Bar....never saw that at any time during the past decade, and I've been on their email lists for years.
My personal situation has continued to improve each year since 2000 as I work in an industry that has proved to be recession-resistant, but I think I am one of the lucky few, at least in Atlanta. The economy here is far from recovery, but there sure are a lot of Obama fans here....makes me shake my head in wonder at times...
I work in an industry that has proved to be recession-resistant
Care to share?
I'm thinking it's gotta be either hookers or cocaine . . .
West Coast, north of California...
Day-to-day life much slower than 3 years ago. Grocery and fuel prices have been rising slowly but surely.
Roads here were usually full of RVs and trailers. Don't see much of that stuff on the road anymore... but you see do it parked in driveways w/ 'For Sale' signs.
Stores and malls here have been really slow for over a year now. Plenty of empty, cheap CRE everywhere.
Res. RE prices still have a ways to fall here, imo. The reasonable-priced homes are starting to sell a little bit, while delusion-priced homes are sitting on the market year-after-year (literally).
Job market is a disaster. Local & regional businesses continue to announce lay-offs by the thousands. Smaller businesses here are slowly being wiped-out. Lots of empty warehouses. Rail yards are stagnant (milled lumber and timber piling up). Lots of idle equipment getting dusty and rusty.
I think folks up here can handle all of this well - relatively speaking - except for the unemployment problem. There is no catalyst for jobs here, only more contraction. If this continues (and I think it will) then life here will change significantly and permanently. This is the only thing I am sure of.
Pittsburgh, PA commercial electrical specialty contractor. Participate in the largest projects, for (45) years. Always busy in our niche until 3rd quarter 09. Actually 2008 was our best year and back log was large enough not to worry. Then basically ate the back log wrote very little new business. Adopted ultra agressive stance 1st quarter 2010, wrote good business albiet at much lower margins. Many employees still on layoff. End of March again fell off hard.
The work we are now getting is non sustaining. FBI 700' long parking garage, prison expansions, VA hospital, other health care. The VA system is re-modeling/ adding large buildings/ care centers, etc. Schools cut back but still some are building even with declining census. West Virginia definitely is strong. Probably 30% of my new work is in WV.
Casinos are "praying" for table games, slot revenues not what was hoped for. Local unions trades 300-400 journeymen and apprentices on the books.
My CTA who was the second largest option writer on the CME, has virtually shut down. Floor guys sit around, many are laying off. Seats are going down in price dramatically from a few years ago.
All this said, car traffic is busy. Restaurants busy.
residential real estate low end is firming. high end dead
Our office up in Arlington has lots of work. Look up AECOM. There is another legacy office in the DC area. They are also busy. You are lucky to be so near the government. It's about the only game in town.
I know what you mean. I worked for the same contractor for 14 years in MA. I left in '96 for better insurance, my daughter was on the way, tough choice getting into maintenance when all you've done is projects. In the long run though the contractor is now out of business and the mfgr. I went to work for went from a $15M a year company to $50M. I'm not getting rich by any means but I'm comfortable. Kudos to you for staying alive, "the strong shall survive, the weak will fall by the wayside."
Oh I forgot to mention Nevada will be in big trouble next year. We only have an 8 billion budget but next year, without any changes, we would be short 3 billion. We have a democratic dominated legislature that is reluctant to cut spending and of course loves to raise taxes so next year should be real interesting. As for this year we just got done with a special sesion and we were able to plug a 900 million shortfall with mostly one shots so they will not be there next year. Teacher and other gov workers are getting pink slips now.
Im in res RE - manage a portfolio of, relatively small, res investments in Romania
Everything is frozen. Assets' values have deflated cosniderably over the past year or so
Banks are still hesitant, clients too - the state has tried to re-ignate the market by introducing a, small, array of measures etc
Secondary house market has reached a lower bound resistance point
imho, the sense of most people worlwide, using iceland and greece as examples, is we the people by and large are not free-loaders, we took the employment available for whatever myrriad of reasons and paid our taxes as per the rule of law, and along the way, the ones who purported to be working in our best interest thru or for whatever number of reasons just made stupider and stupider decisions that went un-accounted for, and thus social mood is not good
i understand the sentiment of the small business man, i also have no desire to start another one, when i was young and saw all kinds of stupidity u tell yourself, well, it must be greener on the other side, after 15 years u learn it is not, yet, at that point a die is cast, it does come to a point where the effort is not worth the reward, i've gotten as small as possible and am totally debt free as almost always
i employ one, a former 70k a year, 20+ year executive assitant who after being layed off 1.5 years and could not find a job, i offered her 500 a week cash for 20 hours, without tolls, day-care costs, clothes and drycleaning, plus gas, she does okay, loves her job and the flexibility of hours
i'm a keep it simple simple person, the numbers just do not add up, when avg govt worker is 60k, and private is 40k it is clear to me, one side of the ledger is lopsided
what i find interesting in this thread is taxes are not rising, fee's everywhere have tripled, i received a ticket cause my insurance card was not updated, now it got waived cause i showed up with a current one, the ticket cost $379, i think there was another 150 that they would have tacked on to it if it wasn't paid on time, just a decade ago a ticket cost me 79........
it use to be government provided a service, now the departments are set up they must generate income just to sustain the bloat
i will say, i do find the dmv the most efficient and cost effective, if u go the wrong time u have to wait awhile, other than that they have it down pretty good and prices have remained steady all these years, at least here in the lonestar state
Taxes will increase starting 2011
Estate tax will be back next year at year 2002 levels
Healthcare, if passed, will tax unearned income @ 3.8%
Other taxes to be introduced,impossible to avoid at current debt levels and unemployment rate
Phoenix/Scottsdale:
Commercial real estate is a mess - whole blocks empty and not much movement yet. Residential real estate probably overshot on the downside and is now stabilizing. Small business seems pretty demoralized with the talk of more government, more mandates, more taxes and more bailouts for the politically favored everywhere. However, a feeling of economic stabilization is here. The next wave down may be a while in coming but there's an eerie sense of concern as to how this is all going to play out. A sense that Government is now going to just keep taking things over in the name of "stability and order" and the "public good" - where have we heard that before?
Near Houston, TX.
The economy here seems to be about 18 months behind the rest of the U.S., so those who were paying attention, less than 1% of the population, have had plenty of time to get their shit wired tight.
At the risk of stating the obvious, many of our customers do not have the credit they did 18 months ago, so more and more are paying cash. This has become very apparent in the last 6 months, and is a great thing.
Layoffs seem to have picked up here since the beginning of this year. However, the oil patch is still doing well.
Real estate sales are slow, but probably no more than an average recession, so far. CRE may already be worse than an average recession, as the investors over built so we already have massive vacancies of new space in the suburbs.
I personally know, or have met, between 20-30 people unemployed at some point since the recession began, not counting those seeking employment at my business.
The number of new cars on the road is absolutely astounding, and gas here is still below $3. I do find it odd that ZH is so vociferous about the government's financial market manipulations, yet relatively silent on the central planning that has taken control of the oil market. Traffic and road construction appear recession proof.
There are no shortages of anything, and great deals on most things, especially saltwater boats. I doubt that this will last.
The Port of Houston may be what saves our asses. Thanks to all of you in the flyover states that bought a Volkswagen or a plastic Christmas tree made in China.
As I see it we still have a great number of distressed loans to work our way through. More residential, more commercial, more credit cards and corporate, more municipal, more treasury, unfunded government liabilities.
Since all the banks are insolvent when you value the collateral behind their loans at market, its clear all these liabilities will keep us pinned to the wall for many years. This means credit will be in very short supply for a very long time.
But our economy runs on credit. So we can expect to see a reduction in GDP as a result of a lack of credit to operate or grow businesses. Since a reduction in GDP one year means less investment, which leads to smaller GDP the years following, we might imagine GDP to settle in at, say, $10T of GDP, or a 30% drop from today's $14T.
Our total debt, which is now $40T private and $12T public or $52T, will rise to %520 of GDP. Now lets say our debt is being paid off at 4% per year plus another 2% interest. That's 6% of $52T or $3.1T per year. Now, lets compare that debt service ($3.1T) to GDP of $10T, which is %30! Now just to keep our economy on an even keel, we need 2.5% GDP growth. You can see that the service on the debt we've piled up dwarfs the minimum amount of GDP growth we need. The unavoidable conclusion is that 30% of GDP debt service will slowly crush the life out of our economy.
If we were to default some of the debt away we might get back to a functioning economy: GDP growing at 2.5% while debt being paid down. But I would say that the max debt service can't be too much more than the needed growth, say 5% of GDP max; otherwise a modest increase in interest rates will kill the growth. However, 5% of GDP is $500B, which corresponds to about $10T in total debt. That means we have default on $40T of our debt, which is essentially all of it.
So our 2 outcomes are years of sub-standard GDP while paying down the debt, or a one time debt jubilee: all debt is declared void, and we start over. The economist Steve Keen favors the latter, because it will probably happen anyway. Politicians don't have the stomach for years of deflation and austerity. Besides, we still have the social security and medicare obligations to pay for. Any exogenous shock to the system (like $500/bbl oil) will make the outcome fait acompli, jubilee!
Does anybody really think the world's politicians will just sit there and institute one austerity plan after another, when such an obvious solution as a jubilee is available? No way! The austerity is likely to lead to civil unrest, perhaps a serious overthrow of the government like the Nazis after Weimar. A global "all debts are void" day is coming, because it actually solves the problem quickly and efficiently. And it will include an abandonment of social security and medicare porgrams.
BTW: these are a regular occurrence in history. I only hope we take the opportunity to build a slightly more responsible financial system after that.
the politicians, do not decide, what will be done
Maryland, Saint Mary's County, Steny Hoyer Country, a bedroom community of Washington, D.C:
I don't even know where to begin, because we don't live in the same world as many of you. Virtually everyone in my entire family is on the government payroll in some form or another. This county is completely dominated by the Federal Government. We have the Patuxent River Naval Air Station; an aircraft development and testing base. It employs 70% of the county population and consists of mainly government workers and contractors. There are very few active duty military stationed there. These are high paying jobs and the average household income for the three surrounding counties is between 68k and 85k. Outside of government, Walmart is one of the biggest employers with their one store in the county.
At family get togethers I warn that eventually the Iraq war will end and government will have to make cuts in order to pay back all the debt. Everyone looks at me like I'm crazy and that it will never happen.
http://www.msnbc.msn.com/id/35822116/from/ET/ns/business-forbescom
Housing: There's no rhyme of reason as to what's going on. Many agents are still cooking the books for days on the market. Prices are still falling. There's a healthy amount of foreclosures and short-sales on the market.
http://homedebtors.blogspot.com/2010/03/short-sale-follies.html
Low priced foreclosures are selling. One person will pay $370k one week and the next week some idiot will pay $450k for the same house two doors down. Some new construction is still selling. A lot of people are underwater. Prices are probably back at 2003 levels in a lot of neighborhoods. Some fixer-upper foreclosures in the low-end neighborhoods have sold at mid 1990's prices. Here's what's for sale right outside the base. A price with an "F" on the end of it is a foreclosure. Two "**" are a short-sale.
http://franklymls.com/default.aspx?m=R&h=ALL&l=0&s=20653
http://www.mris.com/reports/stats/
I've been renting since 04, but the housing crisis is rippling through the rest of the family. My aunt let her house go to foreclosure. Her daughter let her house go to foreclosure. My uncle recently quit paying for his house because he can't buy meds and pay the note. The banks have been stringing him along for 18 months with hopes of a mortgage mod. His son let his house go to foreclosure. One of my siblings had two houses with $1.4 million in loans on a 90k salary. BOFA already ate one in foreclosure for a 50% loss. He's still in the other and hasn't paid a payment since March of 08. He gets nasty letters, but BOFA hasn't done anything else yet about taking the second house. His daughter no longer pays her house payment. The bank hasn't done anything and months have gone by. This same sibling's Father in Law has already lost his house to foreclosure. He had a $2200 note on a 3k retirement.
Commercial Real Estate: Huge buildings rented by the big name government contractors seem to be doing fine. Small buildings on the other hand for doctors and the like are in bad shape, and plenty of them are empty. This is the building our insurance agent built for his office and to lease out:
http://www.2hdb.com/SM7203876
Ask him how it's working out?
Questionable land deals are running rampant:
http://www.somdnews.com/stories/03032010/entemor162935_32226.shtml
http://www.stmarystoday.com/News/SewerBluesSoundoffonMetcome.html
http://www.stmarystoday.com/News/DeveloperPullsBackIndustrialZoningBid.html
My dentist: Every time I visit he has less staff. It used to be two dentists, now it's just him.
Restaurants: Ate at the new Olive Garden at 9 PM last night. A 30 minute wait to get seated at that hour. Don't even think about 6 PM - insane lines. On the other hand, lots of other restaurants are failing and have closed.
http://www.somdnews.com/stories/03172010/entebus162259_32220.shtml
Walmart: Have a relative that's been a long-term employee there. They are endlessly cutting costs and whacking people. Profits are stagnant at this Supercenter and the employees haven't been getting the store bonuses that Walmart gives out.
County Government: The chickens are starting to come home to roost for the big spending politicians. There's a lot of infighting now to balance local budget shortfalls.
http://www.stmarystoday.com/News/RaleyDropsHintofTaxHikes.html
In summary: As long as all of you keep paying taxes, everything here will continue to be just fine...
Four places:
Fairfield County/Litchfield County, CT
A) RE: Prices - down 15% from peak. Stable about a year. Sales rate down 80% from peak. The only thing selling is low-end. High end stuff - no sales. Rich folks buying high-end summer houses in Litchfield County (from NYC) - completely dead.
B) Medical Care: Patient visits down. People holding on to their money. Less "maintenance" visits. More "last-minute" visits.
C) Construction/Development: Litchfield County - dead as a hammer. No improvement. Fairfield - slightly better than 2009, but not enough to mention.
D) Jobs: bad. If you have one, you pray a lot. If you don't you have about given up and are ready to move to a homeless shelter.
Naples, FL
A) RE: Lots of sales, at less than 50% of peak prices, mostly foreclosures. High-end stuff - off 50-80% in price. Still very few sales.
B) Construction/Development: Dead, dead, dead. Nothing moving. NOTHING.
C) Jobs: Unbelievably bad.
Panama (Not Florida, PANAMA)
A) RE, Construction/Dev: Prices not dropped yet, but sales fell off a cliff. Condo market - 1 year behind USA, will be fewer foreclosures because less bank financing (development in Panama is rarely bank-financed), but the sellers will hold these things for YEARS without selling them, or will take losses.
Oklahoma
A) RE: sales slow, prices not much change from 2005-6. There was very little "bubble" here.
B) Development: Substantially slowed, but still present. Again, no bubble previously.
C) Jobs: Lots of fear, but not enormous losses. Jobs still to be had, some employers actively looking without being able to fill the slots (Connecticuters don't know enough to know that living in Oklahoma is BETTER than in Connecticut).
Electronics is taking a beating. I work in the industry as an engineer and I'll tell you, no one at work sees any "recovery" Tyler. Sales are getting pounded, layoffs have and are still occurring, pay freezes in place, and no mention of the next project. That's weird. Too weird. I've been through many downturns in my industry, but nothing like this.
North of Detroit. Close enough to ground zero.
Abandoned homes all the way from the inner city to the poshest suburbs. Traffic is light Monday to Friday mornings. Rush hour ended some years ago. My office is full of Christians, arming and buying PM. The ones not arming are taking martial arts. There is an unease in the air.
Recently have heard of people finding jobs or getting interviews.
Inventory build caught semi vendors with no material . Govt motors is building product.
Returned from juarez. They are asking if any new product is coming to the plant.
Returned from Stuttgart. They confess to knowingly extended and pretended last year. They see the wages in Poland and Hungary. they ate concerned but not scared.
Colleagues returned from Suzhou.... Mile after mile of factories. Clean boulevards. Traffic, commerce and an Italian restaurant run by a real Italian.
State employees just got a 3% raise. Repukes couln't get enough demoturds to rescind it. Public sector will collapse. Not enough tax revenue to support the beast.
Detroit, Suzhou.... Your future is the former.
This is a great article from CBNS (I know, oxymoronic), but it highlights what I have been saying for a while - the mortgage origination industry was partially saved by Bernanke's mini-refi boom last year.
Forget about what what is going to happen to house prices, foreclosures, etc., just in terms of jobs, the mortgage industry is going to lose a ton of them this year. The fallout is already beginning.
http://www.cnbc.com/id/35952456
""I still don't think investors and the media at large have grasped the variety of consequences that a [33 percent] year over year drop in mortgage volume in 2010 will bring. Just think about all the lost jobs and income or how many times 'mortgage banking revenue' has driven bank earnings," warns mortgage industry analyst, Mark Hanson.
"A $1 trillion origination year would be down about 66% from the bubble years average and 75% from the peak.""
I have RE in Houston & Dallas. Foreclosures up in Dallas (though BS-peddlers mine for lies amongst the statistics). Suspect Texas does well due to influx of non-Texans (that are interested in working), oil prices remaining up, and intrinsic value of doing business in Texas (no income tax, right-to-work, yada-yada, etc.). I consider oil price to be a measure of declining USD value, not inflation. In other words, if prompt WTI remains @ $80 while deflation pounds everything else it just means the USD got weaker. Hence all else is in deflation except for commodities bound to oil. We see it in salaries, merit increases, and declining quantity and quality of jobs.
Prescriptions: end H1B program. Close the border. Don't raise tariffs, don't (publicly) raise the ire of the Chinese. Don't force IRA/401K holders to buy Treasury-backed annuities. All the "leftist"-like dogmatic anti-capitalist concepts being bounced around in DC will result in unintended consequences such as capital flight, increased corruption, etc.
Write your congressman.
I am on the Board of Directors for a small-to-medium sized human resource service company. We sell our HR services to other companies domestically. Our client base is comprised of over 1,000 customers and no customer holds more than 5% of our total business base. Our company is also well diversified in regards to its industry end users. Our product can go to any company who has a human resources department. Our corporation owns all assets of the company, aside from a small CRE loan for the land and building, and currently has 6-8 months of operating expenses as reserves. No reserves are used in financial arbitrage, as our core business is our only business.
Q2 2008 was the greatest quarter of the country’s twenty-year history, as was the calendar year of 2008 respectively. 2009 showed a 32% drop in overall sales from 2008. In 2009 we cut our staff by 40% and cut costs substantially in a variety of other operational aspects beyond staff. This included elimination of 401(k) matching, 10% pay reduction across the board for all staff and a greater pay drop for top management and directors, anywhere from 40% pay cut to 90%, depending on seniority and their ability to take a higher percentage pay cut. Q1 2009 was the worst quarter our corporation had since Q4 2001.
This quarter looks to put us inline with either Q1 2007 or Q2 2008. I really won’t know if we are hitting 2007 or 2008’s total year sales numbers until middle of Q3 this year, but it feels as if 2008 is back again for us. All pay has been reinstated, 401(k) match reinstituted (against my suggestion), and we have called back half of those we laid-off. We added an additional 10% to our labor force over and above the rehires (all full-time employees, medical, 401K, vacation, sick days, and flexible work schedule).
Residential real estate has dropped 11% in my neck of the woods and our county currently enjoys a recently upwardly revised 10.5% unemployment. Foreclosures in my neighborhood have revealed 4 foreclosures so far, but 1 foreclosure resulted in a principle write-off by the bank, 30% reduction in mortgage payment, and the homeowner kept the home. This is a 10 year old development of around 80 homes
Municipalities in this area are starting to bleed red ink and are announcing department cuts, service cuts, and tax increases have shown up on the last two election cycles and have passed, yet the schools are cutting teachers and showing budget shortfalls along with the city government budgets in the area. County government is cutting their services and the support staff that going along with those services. I don’t have any numbers off the top of my head regarding government nonsense, but they are showing the signs of being insolvent.
Hey Doc, not trying to be a dick, but instead of calling us "Human Resources", which sounds like a capital expense, how about "people"?
I've always hated and despised that change in vernacular. I'm not a human resource. That sounds like I should be traded on the CME.
I'm a human being.
Since you're on a BOD of a company in the industry, how about changing back to "personnel" from "Human Resource"? It's more humanizing, don't you think?
I've always wanted to voice that idea to a high level Personnel director.
You are probably right. In fact, our service is but one mere component of personnel services and I was just giving an over without concern of being PC. Seeing that I am the industry focused on human capital, I, oddly enough, could give two shits about being PC. Human resources does have a dehumanizing tone to it though. In any event, we are back in business and we will see where it goes.
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Been watching the real estate market for past 5 years in a town of about 20 000 in central NJ. Proximity to NYC boosted residential real estate 200% minimum over 7 years according to public records available. Property tax more than doubled same time frame. Little 60-year old houses costing $7000 a year and more in p.t.. How would you like to be a retired homeowner in the house for 40 years, fixed income and facing this kind of recurring expense? Use of eminent domain about 4 years ago to start redevelopment project, townhouses, apartments. Two blgs. out of entire large project completed and sold just in the nick of time 2008-ish before everything came to complete standstill. Great mounds of earth where the redevelopment was supposed to be. Just over past few months, some earth moving activity, some pipes sticking out of ground, some sidewalks. No idea what the plan is or who they will sell it to with hundreds of houses for sale in town, about 20 to 30% lower than peak. Still only back to levels of about 2004, still way overpriced for oldish brick, or slap-em together new. Many foreclosures and shortsales A couple of contractors still building or remodeling old. Twist to their buildings today is interesting: claiming a 20% lower price, the new ones simply are 20% less living space. Who’s kidding who? Many sidestreets in disrepair, pitholes everywhere, even worse after this winter, but new ball parks, city park renewal projects, public buildings being spiffed up and renovated over past couple of years. I shake my head and wonder who is going to pay for it all. But then I am told what if the money is given and this town doesn’t take it, how will people like it? – Been renting for several years now. For the first time I ever heard, the property owner volunteered a 10% rent reduction plus free month for lease renewal. Didn’t even have to ask for it. In spite of the above, r.e. is still way overpriced, property tax is still way out of line. Don’t see this changing as long as we have artificial prop up of r.e. and huge fiscal holes in budgets.
Your comment notes something that is of great importance but has gone otherwise unreported......
Imagine you are retired and living in a paid for home. You would think all is well. Sadly, property taxes are rising at the same time interest on your savings---your primary source of income---is tumbling due to the ZIRP aimed solely at fattening WS bonuses and saving the banks who screwed up.
This is one of the problems facing Japan today. They have an aging population who used to live off interest on savings. More than a decade of ZIRP in Japan has forced them to dip into principle and will result this year in a negative savings rate for Japan.
Anxiety for purchasing firearms seems to have dropped - you can get just about anything you want if you peck around enough - even the more prized "assault rifles" aren't flying off the shelves anymore - plenty of sales to get them out the door now.
Cabelas and other online outlets have plenty of ammo for online purchases.
Try ordering brass, powder or primers WaterWings. powder is 30+ days out, primers are 90+ days out.(Cabellas, currently)
Took me over a month to get 200 158 gr practice rounds for the 308 FAL...(our standard round is 180 gr, but those are way too expensive to shoot in quantity)
You are to be commended for reloading - and you're right, even practice ain't cheap anymore.
http://www.cabelas.com/p-0065838217011a.shtml
http://www.cabelas.com/p-0012679213574a.shtml
http://www.cabelas.com/p-0040370210827a.shtml
Here is an alternative:
http://www.sportsmansguide.com/net/cb/308-146-gr-full-metal-jacket-ammunition-250-rds.aspx?a=545035
And some German stuff:
http://www.sportsmansguide.com/net/cb/1000-rds-308-cal-147-gr-fmj-ammo.aspx?a=604946
www.ammoman.com
FREE SHIPPING!
However, few if any hunting rounds (some .308 and .30-06). Most is surplus NATO, Russian, pistol, and police tactical.
I´m from amsterdam and i work in IT business. Last year we had a bad year and we had to lay off 4 people and cut costs as companies were afraid of investing. This year started amazingly well and sales took off in the first quarter. (Ironically this will mean in the end that more paid jobs will get lost.)
The housing market here has been hit hard. The emergency boost bill that was just passed will only delay the problems in the housing market and only benifit the big construction companies.
Talked to a sales guy in the industry and he is settling for less rent for office spaces more often. Sales of new office spaces has dropped. Prices in the mid segment (2 bedroom appartments) are still stable but fragile. If a second dip will occur the picture won´t be that pretty anymore.
Luckily we have a stable dutch government that makes well thought decisions......NOT!
Silicon Valley - you'd never know that there is any economic problems.
Xmas 2008 just after the crisis, Valley Fair, the biggest mall in the South Bay, was empty. It was almost creepy. Xmas 2009, and these days, you'd never know there were any problems.
Real estate is doing fine from what I can tell. All the condos that were built in the shitty areas, from 2000 to 2006 when the housing prices skyrocketed, are all down 20-50+%. But the regular homes in the good place are all doing fine. They're not at the same level as they were back in 2006, but a normal person still can't afford a place in Palo Alto.
Lots of tech jobs from what I can see. Probably not as good a selection as during the boom days, but still pretty good compared to the bust and also good considering the 11% unemployment here.
No one here really seems to care that CA is in the worst fiscal crisis ever, or that things like the state being billions over budget within a couple of months of approving the budget. I think we're so blase about things that no one cares. Just a few hundred miles away in the Central Valley, unemployment in some counties are 40%, but we don't care here. Everything you hear, like how CA is having trouble pricing bonds, will have to release tens of thousands of prison inmates because we can't afford it, education is amongst the worst in the US, etc, doesn't phase anyone. It's weird, it's really like living in a bubble.
Overall, you'd never know we were in the worst economic crisis since the Great Depression.
Great reading all of the ZH'ers comments. Insightful.
I am here in South Florida where the unemployment rate officially is around 13%, illegals not counted so it is probably alot higher.
RE is dead, so many empty houses and condos we have a supply for the next five years.. I have houses in my neighborhood that have been empty for over three years. I am sure they are not being counted.
My opinion is that you have to get into your own business moving forward, the future taxes coming down the road will be painful.
Everything else going on is the result of "Globalisation", if you have not read "The Future of Capitalism" by Lester Thurow you must.
The U.S. I fear is shooting itself in the foot, I read one post where the contributor mentioned the " protestant work ethic in the US was admired and attracted people to our country" that may have been true 30 years ago but since then we have attracted more welfare recipents than anything else, could be by design of course, "buy the vote scenario".
Moving forward as our wages decrease and opportunities disappear this may not be the best place to live, other parts of the World seem to be doing just fine, if this continues we may end up with an exodus of people. Who will then pay all of our obligations?
Just a thought.
I'm in south florida also. The thing that makes me upset is that with the high unemployment we have and all the other problems you mention above, and trying to sustain Metrodade, you have funds being spent in building a new stadium for the Dolphins. This is City of Miami, of course !. Who is going to pay for all that? We keep getting deeper and deeper in debt!
Software Development in NC and SC: one of my software ventures, related to both residential and commercial real estate, went belly up due to bankruptcy of the primary investors in early 2008. All of my other clients have crawled into a shell except for one, which is in the insurance industry. They have tabled all discussions and production of future feature builds except for some relatively minor ones. I've had some prospects requesting bids on projects recently, but apparently they are looking for real bargains and kept shopping around after receiving my proposals. My work has slowed down but I am using the time to work on some personal projects and haven't yet dropped my pants. 2007 was my peak year. 2008 revenue dropped about 15%. 2009 dropped to about 50% of 2008 revenue. 2010 looks like it will be less than half of 2009. Soon I'll be giving hand jobs in back alleys to make the mortgage payments... but that's OK because I bought a bunch of rubber gloves as part of my dooms day preparations :)
How is MagicHandPuppet hand-job pricing holding up these days?
ha ha ha! nice one, YesWeCan.But..! I'm not sure... but, hopefully I won't have to survey the market anytime soon :)
We've been hiring in the Richmond area (Nat Gas Utility) because delinquency is up and it takes manpower to terminate/restore service. Suspect REO is much higher too as the number of properties that have been 'winterized' , i.e., had all utility service cut to avoid expense yet have to be restored to market is off the charts.
Massive amounts of CRE is vacant too.
House health care debate live right now:
http://www.c-span.org/Watch/C-SPAN.aspx
Healthcare (Financial Analyst) Jackson, MS:
My employer owns and operates four rural hospitals. The hospitals are "Critical Access" which means the Medicare reimbursement rate is cost + 1%. It essentially gaurantees the hospitals some level of solvency though its not really gauranteed. Since my hire date after I finished my MBA in May, the corporate side has hired an additional 4 people. We just moved into a brand new corporate office that was 20% over budget. Combine that with what I see on the balance sheets of the individual hospitals and I cringe at our debt burden. I have no intention of staying long term, so it doesn't really bother me. Just interesting to see how a company so tied to Uncle Sugar can get so leveraged. Any of the cogs the have in place now quit spinning ever so slightly they're done. The best part about it is that the "Corporate Strategic Plan" is six more hospitals in three years. HA!
no comment meant to post this elsewhere.
In my area in Florida all I see is empty commercial real estate and a ton of foreclosures. Construction has almost came to a standstill.
My dear friends,
As you can see from my name I am a Doctor. My practice is sound. I refuse to take (as patients) anyone with any type of Governmental insurance.
I do however have them for dinner at times.
Regards,
Hannibal
P.S. Mr. Durden, thank you for running an excellent page. Information can be found here that cannot be found elsewhere. My hat is off to you Sir. We should get together sometime for lunch. My treat.
H.L.
I'm in North-Central Florida, in a town with a population 12,000. We're 40 miles from Georgia, and 40 miles from civilization (in the other direction). The local economy is very dependent on the presence of a VA hospital, and the District Office for the Florida Department of Transportation. Agriculture and forestry also contribute a good bit to the income of the area, as do the operations of a large transportation construction company that essentially piggybacks off federal and state money disbursed through the District DOT.
I have friends working for the DOT, who inform me that there has been no talk of layoffs yet, in spite of continuing $2 billion plus state deficits, however early on management did decide to change toilet paper brands to one which offers only single-ply protection for the user, as a cost saving measure. The office cleaning service that the District formerly employed has also been released, instead employees do their own cleaning during regular work hours. Recently the District substantially reduced the number of cell phones that it had issued to employees for business use, and mandated that henceforth all the printers in the building were to be unplugged. All printing is to be routed over the network to the main printer instead. Presumably this is to allow somebody to make sure the printers aren't being used to print frivolous or unnecessary material.
One begins to understand that government is not intentionally inefficient. It is just incompetent on a scale that defies belief.
Hiring is essentially frozen at the Department, though I suspect that the VA is still expanding, given it's essentially intravenous connection to the feds.
The housing bubble here lagged the rest of the state's by a couple of years, and the lag persisted for about a year after prices began plunging in South Florida, so we were treated to the spectacle of furious construction about the county while we listened to how the real estate market in the state was collapsing.
Residential real estate really didn't collapse here until about a year or two ago. Anecdotally I hear of a continuing trickle of South Florida escapees still maintaining the residential real estate market on life support, and prices seem to have stabilized, but building is nonexistent.
Commercial real estate development lagged residential by about year too, and there were several strip malls still finishing up the final developement touches as late as last year. I remember driving past them and wondering whether the investors, the banks, or both had completely lost their minds.
They are now about 75% occupied, which I guess is pretty good, considering the devastation a few hundred miles south of here.
As long as the DOT, the VA, and the major contractor here continue to get money from the feds, it looks as if we will not do too badly. Two new restaurants have even opened here recently - though they both did open in buildings formerly occupied by other eateries, and recently vacated, one can only assume, because their business was not quite as robust as it needed to be.
Still, I guess the bank is fronting for these new guys to move in. I can't figure it out.
Unemployment does not appear to be that bad. I stopped to talk to a flagman for a road construction project, and asked him if he worked for the contractor. He informed me that he worked for the local temporary labor pool, so apparently there are still some jobs even for the completely unskilled.
But when the day comes that the great fountain of government money starts to run dry, we will be in deep, deep trouble.
Accounting, Gold Coast, Australia.
Things are still ticking along in Aus ok, so far the steadfast belief in china as our saviour continues unabaited. We've got some of the highest total debt to GDP ratios in the world, only its mostly private debt (housing) so it doesnt show up readily on standard Debt/GDP ratios. The problem is pretty much off the radar and that seems to be the way everybody likes it.
Reading the comments here i dont think you'd believe our housing prices, half a mill AUD (90c US for $1 AUD) is standard and the capital cities prices are far beyond that. All in all things are going swimmingly, we've leveraged our commodities future for more housing equity and the state and local governments along with finance lenders have been more than happy to play the role of enabler.
Ive sold a half share in a house and am looking to sell a unit, leaving one place that my girlfriend and i live in, id sell it too if she'd let me. The dagger over our heads is that a foreign credit crisis/default would push our favourable costs of fundingh through the roof and it'd be game over for our miracle economy as we know it, and from where we're we sit now it'll be a long way down. we've leveraged our future to china and are extremely susceptible to any hiccups in that market.
the only consolation is that there'll still be waves regardless of state of the nation.. am stockpiling surfboards, just in case..
True state of the economy is that the private sector, despite the best efforts of officials, is beginning to recover. Home sales are picking up and the job market is improving.
Except:
Most banks are still insolvent.
CRE market sucks.
Unemployment is still too high.
Consumers need to deleverage more and save more.
The government sector is now in more trouble than the banks were in 2008. Unsustainable spending, sovereign debt crisis, debt service as a percentage of GDP is close to WWII levels and growing.
The government may fail but the private sector may survive. Go figure.
"
Except:
Most banks are still insolvent.
CRE market sucks.
Unemployment is still too high.
Consumers need to deleverage more and save more.
The government sector is now in more trouble than the banks were in 2008. Unsustainable spending, sovereign debt crisis, debt service as a percentage of GDP is close to WWII levels and growing."
Then how in the HELL is the economy getting better?????
sarcasm,, find a foreigner to explain it to you.
^ (that was a joke btw - just another pisstake)
I am a CNC machinist for a decent sized global company. We have divisions in 26 countries including the US, Canada, UK, India, China and a few other places. We machine parts for electrical motors, servos, actuators, slip-rings and other motion control items. We also build high-performance systems that control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, industrial machinery, wind energy, marine applications, and medical equipment. Our customer list includes Lock Head Martin, Boeing, US Government, Respironics, Honey Well, BF Goodrich, and many other top notch companies. Our stuff does anything from treat slep apnea, stop the Dreamliner, deploy the fins on the javelin missle to help produce energy in a wind turbine.
Before Summer 2008 we could never get caught up. We worked a 10 hours a day (sometimes 12) 5 days a week, a lot times 6 days a week. By June 2008 things slowed and we fell back to 40 hours a week. When the crisis hit we didn't really get hit hard until about Feb. 2009. We proceeded to have 5 lay offs over the course of the following 3 months and a good number of the remaining were cut to 32 hours as we continued to slow until around August 2009, the machine shop was basically down to a skeleton crew, some of us running 2 or 3 machines (not all at once, one day you would run one machine, then the next you would run another). After August 2009 Sales stabilized and ticked up a little. Then in late Nov. to early Dec. 2009 we picked up pretty well for just a skeleton crew. So in Jan. 2010 we hired 4 people (the site has over 400 people so this is just a small amount). But sales and machining ticked up till around early to mid Feb. Since things have slowed once again. We're not back to our low in August 2009, but we are slowing and probably will have a lay off in the next few months if things don't pick up again. Unemployment is high here in North GA. Just had two banks in town fail just this past Friday. Rumors swirling around two others. Every one I know that's unemployed have been for over 14 months now and no signs of getting jobs anytime soon. Food banks are out of food and are begging for donations.
I believe the uptick we experienced was just a small inventory restocking. I firmly believe this is a ongoing structural depression since the early 2000s. This small blip we just had was from the massive liquidity put in by the fed and governments. But its over now and the next leg down is upon us. Only this time there will be nothing to stop this one. We only have two choices: a deflationary depression worse than the Great depression of the 1930s, or a hyperinflation great depression that will engulf the western world and destroy it. I believe it will be latter. The Fed and Government have clearly showed they will stop at nothing to prevent deflation. I think the end is much closer than most realize. US government debt has gone into exponential growth. There's only 2-3 years left at the most before the whole thing comes down. The next 10-20 years are going to be hard people.
I am in NW Louisiana which has been doing slightly better than average based on the unemployment numbers. This part of the state is being helped a lot by the Haybesville Shale natural gas play that is pumping millions into the economy. Gm is shutting down a major auto plant (trucks and the Hummer) but there is a possibility that at least part of the plant will remain open via another company. Housing is so-so ...... high end is very slow, mid-range doing fairly well.
South LA is doing well, with Baton Rouge listed as one of the nation's top 25 metro areas.
The state budget is pretty tight and a lot of cutting is ongoing in various "service" areas and education. About 70% or so of the budget is locked in so cuts can come only from the education and services areas. Employment is being cut via attrition. Still, the state is in a lot better shape than most. It helps that LA is (along with TX) a net energy exporter.
So far, revenues have been holding up fairly well for the local governments in this area. They have been beneficiaries of leasing land for the gas play. This will, of course, dwindle over time but it has served to keep municipal budgets for this part of the state in reasonable shape. Sales tax revenues are not up, but are not drastically down, either.
I am "retired" but have a consulting business doing computer repairs, network admin, and computer forensic analysis for attorneys. I have noticed a definite drop in the forensic side due to an increasing number of people deciding to plead or settle rather than spend money to fight. There are definitely a whole lot more people who are existing on a marginal basis than in years past.
I do not see any light at the end of the tunnel as far as this marginal existence is concerned. I see a definite reluctance on the part of most people to just go out and spen money. The bankers I know are doing "OK" but when pressed they admit that loan demand is not real strong.
People, now is the time to be proactive!
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I wish I could counteract that "junk" vote like on Mish.....
Category: Enterprise software.
Sales: Very low. Lots of people looking, talking about upgrades, but not actually executing and buying. Customers not wanting to make commitments to new systems until they see a need for them and so far, no need. Business is very flat.
In the south Texas area, residential real estate is basically flat to a slight bit down. Commercial real estate is in not great shape but getting worse even as they build more strip malls and office space. This is going to end badly here.
The "official" unemployment rate is lower than the rest of the nation but still well above pre-recession numbers (8% vs 4%).
Basically the economy in Texas is poor but not deathbed ill, yet.
Here's the report from WI:
Manufacturing - declines continue. Orders for replacement inventory/spec pieces stable, but no inventory investment or long-term commitments.
Real Estate - aenemic. Commercial VERY slow. Residential -- stable on the low end, spotty on the middle end, dead on the high end. Prices low, and creeping lower. Western edge of the state hit very hard, 2nd homes (vacationproperties) in the northern end very weak - price driving the market and prices are DOWN.
Services - stable to flat. Health care - prices up, profits down. Ag: continued price pressure, fuel continuing to be a factor. Govn't: crunch. Education: flat. Unemployment: raging in Janesville, Racine, Beloit, while stable in metro Milwaukee and calm in Madison. Eau Claire, Rhinelander, Green Bay, Appleton, La Crosse slightly elevated, but not depression-like in levels.
Things are challenging, but not panic-inducing. Small businesses and discretionary firms are seeing the contaction in consumer spending now.
The level of discourse heard in public places points to a VERY DEEP and PROTRACTED RECESSION with NO END in sight. I would say that many Sconnie's are getting used to it now as "the new normal."
I live in Vegas spending a lot of time on the strip. Weekends the strip is busy and weekdays its dead as the convention business is way down. My contacts say the convention business is improving and will be better in 2011.
The high tech industry seems to be floating around. It's slow, but not dead. The high tech bubble still hasn't been purged, so the rebound into the latest bubble went fast and it was expected by everyone.
Banking-wise, a person I met who works at Wells Fargo says consumer credit is terrible. They cold call their "best" customers to try and get them into hock but being the best means not being stupid. They hang up on them. Nobody wants "free money."
Northern California Here,
Bought a house for 55k and it had a loan of 325K on it. The bank took a bath. The problem is that there are 7 million others just like it waiting in the que.
@jedwards
I agree with your observations about the Silicon Valley area. I live about an hour away
near Walnut Creek with similar observations.Restaurants are full, shopping malls are
packed, parking lots are jammed. Real estate prices are ticking up although the
newspaper says volume is down. I feel like I'm living in the Matrix. I want to scream
about the oncoming disaster but no one will listen.
The state of the economy?
We are headed towards unprecedented collapse that exposes the irrationality of stored paper wealth.
http://funy1.blogspot.com/2010/03/finite-irrationality-of-paper-wealth.html
Western Canada, retail entrepreneur.
Was kind of surreal last year as we didnt feel any downdraft until early spring 2009, and thereafter, with odd exceptions ( central BC ), things really just went flat. Started to see pick ups around December09, and while not booming as 2006-08, definitely stable.
Accompanied brother in law on house purchase expedition last month. Market is quite bouyant, and low to mid price ranges moving quite swiftly. Yes, its spring season, but listings are coming and going, and few foreclosure properties around. Contact in Vancouver who stays close to RRE, has noticed about a 10% uptick in the last 3 months on higher end properties ( think the pot business is booming). At the end of the day however, BOL could not get financing as banks documentation requirements are tighter now.
Met with my banking account manager recently and he said most of the fires were under control and he had noticed some liquid clients wanting to get into CRE.
We cater to higher end trades, and those folks have largely kept their jobs....maybe less overtime for sure, but many are glad of it after years of burnout.
Surprisingly little visible impact on business from the Cdn$ being close to parity....a real conundrum how Cdn businesses went from screaming a few years ago they needed a 50cent dollar to compete, to somehow keeping afloat at par !!! ( I suspect there is a fountain of economic insight buried in that fact ! )
Definitely a lot of high end import cars on the roads....never ceases to amaze me.
Going back to RRE, that episode with the brother in law made me realize Cdn avge house prices might now be about double those in the US. What a turn-around.....of course its the Asian economies and the resource boom. I am cautious of the future, both personally and businesswise, and have ratcheted down leverage and maintained high liquidity. With this situation I have been able to be more aggressive with labor and capital.Those who arent prepared, or are in weakened states have their negotiating asses to the wall these days. On banking relationships, my "major" corporate banker found a reason last year why their funding costs had skyrocketed and they need to significantly raise my O/L rates....death if you need the line, but since I was always wary, I just promptly eliminated one of their safer loan credits.
At the start of the bust, I figured it would permanently eliminate about 20% of the service sector fluff in the US. Still retain this viewpoint. Very negative on chances of even a medium term turnaround in the major Western economies.....think social conflict is quite likely and wonder who in their right mind would start a new venture in the US these days with all the insanity going on and the hideous complexity you have to deal with at every turn. Standard of living going down the toilet for the average person.....high end will survive ( and/or leave)
a small ps, very interesting reading all the comments tonight ( wife NOT impressed), and now I understand how some of the regular contributors manage to find time to keep up with ZH.
I work for one of the global leaders in creating retail product and we are definitely way down in sales in N.America, EU, UK, Japan but still pumping in the BRIC's. Also busy refilling the N.American supply chain (we completely got rid of all inventory in '09 to have maximum cash on hand and minimum inventory)...so now we are totally ramming our factory partners to peak amounts of production to refill the pipeline in expectation of sales picking up...although they haven't picked up as of yet. I know at some point the debt bomb will explode but just not sure if it will go off now or in six months or in three years. We have also cut maximum jobs and many have been outsourced overseas and will not be back.
If I could figure out what your selling, I,m not buying.
I own a natural foods grocery store on Maui and our busy season, Nov through April, has been strong. We are way up over last year even with the opening of a new Whole Foods on Maui. Part of this return to normalcy is the Canadian influence in South Maui. Not only are Canadians shopping at my store but they are buying our depressed real estate. I do not think for a moment that we are out of the woods but it was nice to be able to give raises this year and pay bills on time. I have no plans to spend any money except for inventory and supplies. I need things for the store and I have no debt and want to keep it that way until I know that this is not just a temporary phenomenon.
Residential architect, SF bay area. The office I was in closed May '09. A few of us continued work on ongoing projects (renegotiated contracts), which we've been doing since then from our respective homes. A few new projects, but it's very slow. December seemed to be a low point so far.
However, against the odds we are starting up a new office, associating with our previous boss who has great PR and upper eschelon connections in the business world. We have done/are doing houses for Fortune 500 types, all the way down to modest house additions.
We do pre-fab modular houses (hello merehuman). The factory we're currently working with is apparently very low on work.
My wife (also an architect - kids, when choosing a spouse, I recommend against marrying within your profession...diversification helps) does lab planning for pharmaceuticals and biotechs. Their past year (after several really good ones) has been dismal, they've laid off much of their staff and have another one coming up. She's thinking about getting out and going it alone as a consultant. Although with a potential pharma bubble coming up thanks to the health insurance bill, who knows.
We live in an upscale town with good schools, property values have held up generally. But houses stay on the market much longer now, and some offering prices get reduced. The state school budget is a big concern - our town already passed a special bond & parcel tax last year to make up for some shortfall, and it's going to be worse this year. Parents already volunteer and pony up lots of money for the schools, but this year I don't know what's going to happen. Local political issues center around budget overruns, and fingerpointing has started...who mismanaged what, etc.
Oakland is nearby, and I expect it to be one of the places that erupts into rioting when the shit hits the fan. We got a preview of the undercurrent of rage a year or so ago when a BART officer shot and killed a young man on a train platform, caught on video. Never mind that the violent crime in that city is seriously out of control.
Anyway - thanks ZH for this great thread, and for the great people in it.
This is a fantastic thread, great idea ZH.
Now the only question is: is this the bottom and are things rebounding, or is this just midway through the crisis?
Just like when I'm watching a stock I can't tell if this is the turning point or whether its going to keep dropping.
Inland Empire, Ca. Franchisee for a major pizza company. After a disasterous '09, sales have picked up throughout our category. Bad weather has been a boon. I question whether the recent trends are sustainable--have held off from hiring for the most part. As proposed in the reconciliation bill and an employer of more than 50 full-time workers, I will "penalized" roughly $16,000. per month. Much of my competition will not have this burden. I simply cannot make that payment.
The south Texas economy is limping along as usual. In Corpus Christi, fewer people have good jobs, refineries are still laying a few people off, but the weather is good now. Shopping centers have more empty spaces. Sunrise Mall, one of the two enclosed ones, is in receivership. Our local, loco government dreams of issuing more bonds, and increasing taxes, but that isn't working. And they haven't repaired the Harbor Bridge in eight years, and it is getting rusty. Yet the remaining restaurants are still full. House prices are falling slowly; grocery prices are going up.
This seems like an inflationary depression.
The big picture
There is a fork in the road for America and the world. Here is what is going on:
Economy will eventually deflate. Distribution of income is too narrowly concentrated because of the use of information technology in the production process. Today the production process requires much fewer workers to execute due to productivity gains from the use of information technology. And even the income of the information technology workers in the United States is decreasing due to outsourcing.
The number of jobs will continue to decrease (including information technology jobs due to outsourcing) as deflation spreads and companies attempt to maintain their margins. Debt burdens will increase (due to declining incomes) and debt defaults will increase. The Federal Government will have to borrow/print more and more money to help the unemployed and bankrupt states. The U.S. will also most likely embark on massive public works or other projects to increase employment financed by printed money.
Eventually, the Chinese will realize that they are keeping America's malls stocked and America is paying for it with printed money. The only reason America is able to do this is because USD is a globally accepted currency:
a) China will want to become the world leader and will want the world to switch the global currency from USD to Yuan.
b) America will want to remain the world leader and will want the USD to remain as the reserve currency.
The above noted tension is coming in the future and sooner rather than later.
Some ways in which this tension can be resolved:
1) America's economy deflates, markets crash and mass unemployment results. The Chinese buy much of America's private assets because they have the cash. America accepts this outcome and life goes on. The Chinese Yuan eventually becomes the world's reserve currency. This is called smooth transition of power. Of course, the process starts all over again and the world will be at the same crossroads sometime in future again.
2) America's economy deflates, markets crash and mass unemployment results. America responds by raising trade barriers (which increases employment in the United States) but raises tensions worldwide. These raised tensions can get very ugly (leading to wars and conflicts as they did during the great depression). This is called messy transition of power. Again, the process starts all over again and the world will be at the same crossroads sometime in future again.
3) There is another possibility which is less likely but possible. America negotiates with China and the Europeans and essentially creates a new world currency by combining the dollar, the Yuan and the Euro and the Pound. This will be a start of a world government. A single currency makes exchange rate manipulation impossible and the power to print the reserve currency (new currency) is shared. New currency can then be printed to finance massive public works and other projects worldwide to increase employment and combat deflation. This way will require major shift in thinking.
Note 1: Classical economics has a very tough time dealing with unemployment in a technologically complex highly specialized society because acquiring new skills takes much, much time by definition (i.e., given very high level of specialization much, much time is required to get to an acceptable level productivity for a worker switching careers or learning a new trade).
Note 2: Increasing unemployment in the United States and world over has to lead to deflation due to collapsing demand. Unemployed people don't spend much money. Today's production process is very rigid. For example, it will take much time (years) for layed-off software engineers to become nurses. The reason for this was explained in Note 1.
Note 3: One reason America and the U.K. have NOT deflated yet is by selling debt to external creditors. This can go on only so long until some kind of an adjustment in the architecture of global power in the world occurs. The creditor nations are getting economically stronger and it is natural for them to want more say in world affairs.
Community bank credit analyst in Kansas City. The banking system is in an awful lot of trouble, and things aren't really getting better. Everyone who could re-fi already has, and any residential RE sales that are happening are driven by government credits. CRE is crap, there were a lot of deals done in 2005-2007 with levels of debt that turn them upside down collateral wise, especially since appraisals all come back short due to lack of comps in this illiquid market. Nobody in their right mind is paying anything but firesale prices for most RE, if anyone is buying at all (and any buyers must have cash, good luck getting financing that bucket is full for just about every bank even if it were a good risk). Of course those deals don't have any cash flow for the most part, so it is slowly bleeding borrowers dry. The ones that haven't already run out of interest carry or personal cash will soon. The regulators are leaning hard on everyone too, of course driving some salvageable deals bad in the process.
Credit aint coming back in a meaningful way for a few years yet, and that's a fact jack. Banks lag the market by 2-3 years, so even if we are truly out of recession (and I don't buy that) there's issues to get through before banks will be growing assets willingly (unless of course those assets are 0% risk weighted, i.e. treasuries, SBA, and the like). Of course, as someone way earlier mentioned, SBA largely keeps zombie companies alive to murder healthy companies, so that's not any more productive for the overall economy than funding the federal deficit growth with money the feds hand out for free....
Is there any sane way to print these comments that excludes all but content?
San Diego - land of the eternal real estate Polyannas - General Dynamics left town in 1995 and took 15,000 engineering and technician jobs with it - the typical SoCal real estate cycle started an upleg around 1995/96 and masked much of the economic fallout from losing the city's largest employer - here we are 15 years later with several thousand acres of new housing developments, more than 10,000 new condos downtown and essentially no new long-term jobs to support all of this real estate development - when the govt stops supporting the real estate markets, that great sucking sound you hear will be San Diego's economy going down the toilet
Green shoots in some areas of the country, but nowhere near critical mass to get things moving forward.
The correction is inevitable, regardless of what TPTB do or try to do.
I expect a deflationary state for some time to come. Food, clothing, shelter, water, and energy will consume the vast majority of core and discretionary spending.
Sw Missouri, most houses that are not being paid on are sitting quietly while everyone pretends they don't exist. Businesses are closing quietly and suddenly including Quizno's, Fuddruckers and Hallmark. Nothing is replacing them. Our businesses was forced to rollback our prices to a major customer by 8% or risk losing them. Our wages are already under $10/hr for most positions and people want more but we can't raise prices without losing customers which would then force job cuts.
Utility costs continue to rise, even though we are doing everything we can to conserve and have purchased HE equipment to further conserve. But we are reaching a point where the equipment is wearing out and being a non-profit, we don't have the funds to replace them.
Prices are going up, but it's sporadic, not widespread. Items that last year were $8 are now $10. Items that still sell for the same price are now reduced in volume, not in contaier size. Perfect example, Folgers coffee used to be in 39 oz containers, now the container is 33.9 oz. Draw you own conclusions as to why they would suddenly need to measure the volume to the tenth of an ounce except to confuse consumers (hint: there is still a 3 and 9 in the volume!)
People are eating out less, restaurants that were full are now 3/4 to half full at 6pm. Buffets are still doing a booming business, especially the AYCE affairs. Most jobs being advertised at $8-10/hour but a lot of companies have laid off people and more are doing so. Wife is one of the recently laid off and although she is looking nothing is opening up.
People only buying what they need or what is seriously on sale. Still a lot of SUV's being driven by people with carphones stuck on the side of their face, but they don't seem to be headed anywhere.
IMO: Too much shadow inventory, too much lying from the government and too much "money" going to too few people. There is no green shoots but can Soylent Green be far away?
My small business is located just outside of the Dallas/Fort Worth
metroplex in TX. My Feb and March sales were exactly 1/2 of
what they were in 2009. I personally don't think this is over
by any stretch of the imagination.
As a principal in a private placement firm that works on an international basis i speak with capital markets and banking contacts everyday (including Goldman, Deutsche Bank, Morgan Stanley, etc.)
From speaking with these contacts and from seeing first hand how much harder it has gotten to close proposals for clients in a short amount of time, i will say that the lending market (at least for mid/large size companies) is, despite contrary reports still in the proverbial pits.
In terms of real estate, it is almost non-existent when compared to activity from years prior to 2009.
Regional as well as large banks are keeping reserves on hand to re-finance and or write-off CRE loans coming due within the next two,three and four years.
The private lending market is still there, although needless to say it has gotten a lot smaller and the firms that did survive are now charging very high premiums typically for making loans.
The overseas markets (mainly Canada, Russia, Germany) are much more active in terms of looking for potential clients to lend to.
This is of course a quick snapshot of the overall picture as time does not permit me to write more.
All in all, whether it be for investment or business purposes; the time has come to turn your attention away from the US to international markets as they will unquestionably be the revenue and growth drivers for most firms moving forward.
There are of course exceptions to this rule, as investing in a solid business with good fundamentals that derives most of its revenue from the US can still make you a hefty profit, but these companies are few indeed.
Cincinnati, OH--- Things are not good.
I'm a private equity investor involved in distressed businesses.
The shared office space complex I'm in has lost 27% of its tenants in the past 2 years.
One of our businesses is down 65% in the past two years. Last year we laid off 60% of our workforce, and implemented pay cuts of 10% to 30%, with no plans of reinstating salaries.
An outsourced IT services business we own was down 14% in 2009 from 2008. Ironically we lost a large school district customer, which chose a competitor at a 40% increase in our cost because they are woman-owned. This year we lost a bid for another school district, which chose a solution that was 35% higher than ours because 'their techs like bells and whistles'.
I guess there is no such thing as a recession when you are spending other people's money.
Real estate is not much better. An appraisal on a building we own in Atlanta came in at a 45% discount to where it was appraised in 2008.
An appraisal on a building we own in the next county came in at 35% lower than what we paid for it in 2005.
An appraisal on a building we own in Hamilton County came in at 7% lower than what we paid for it in 2001.
Downtown Cincinnati is a ghost town. The number of people on the streets at the rush and lunch hours is down dramatically. The vacancy rate is north of 20%. The number of empty store fronts on my daily walk has tripled in the past 3 years.
Yet the City is in the midst of building a ginormous retail/office/residential complex on the waterfront. And an insurance company here is building a 50 story 'monument' to its CEO, and has apparently leased out 20 or more floors to a downtown neighbor.
Nearly all of the 110 corporate suites at Paul Brown Stadium are up for renewal, and despite a decent season last year for the Bengals none of the companies I know who had those suites will be renewing their leases.
I'm a pilot in the US Navy currently working in Manhattan as an Officer Recruiter. In regards to unemployment the amount of people coming into my office looking for a position is terribly high, most people have graduate degrees with many being in the engineering and math fields. Combine that with the amount of people leaving the military (almost zero) and it is nearly impossible to find a position for someone off the street. It is a strange position for me to be in as someone who took this job as a way of transitioning into the civilian world. Many of my fellow Officers who were dead set on getting out (including myself) are reevaluating our plans. As hard as it may be for people to believe in a world which we are engaged in war on two fronts the military is downsizing and while not necessarily firing people, they are certainly cutting back. With my area being Manhattan many applicants are those from the financial field and what has been the biggest surprise is how poorly they do on the standardized Navy entrance exam. I guess that was the problem with the industry to begin with if they cannot pass a simple mathematical and verbal exam similar to the SAT. Nonetheless, a ton of people are trying to get in only to be shown that they are not qualified. At this current time if you don't have a graduate degree or a GPA higher than the 3.5 area you can forget about joining the military as an Officer. Everything is closed out until 2011.
Good thread. Thanks ZH and glad for the t-shirts in the store shop.
Here in Arizona, we're beyond broke. The state announced that it was cutting the S-Chip program (medicaid program for children). There's just no money. What happens? A suit is now before the court to restore funding to the S-Chip program. Let's say a judge orders it back. Where does the judge think the money is coming from?
As a small business owner I hear that if I have less than 25 employees and nobody makes over $50k, I will get a tax credit under the new healthplan to be signed into law tomorrow, of 35% for my cost of healthcare of the employees. I have 10 employees with 4 pushing very close to the hard limit of $50k. Obviously, nobody is getting a raise.
Fresno, CA – I sell produce for large farming entity, central California. We furrowed hundreds of acres last year, facing same situation this year. Water allotments very low, and being gamed by scaly pols on both sides of the aisle. See significant decline in business from retail grocery accounts, moving toward more basic commodities, moving away from specialty produce. Our last bastion of independence as a nation is domestic food production. Imports from Mexico are degrading domestic production significantly. Cost vs. is simply not equitable. Our labor costs and regulations are extensive. Same growing situation in Mexico…80% lower labor. And as for hygiene rules in the import states…LOL. I have walked the fields in the Mexican growing regions. Won’t eat the produce…even after two rinses with produce wash. COOL (Country of origin labeling) had no effect; consumers buy the lowest price, period. The model works for Wal-O-China-Mart…so the big retailer mimic for food consumption.
Wife works as DE Underwriter for BOA in central California. Situation is declining rapidly. Some spike previous quarter due to Fed/State home buyer tax credit, but those deals that can’t close by 4/30 are drying up fast. Mostly refinances under HAMP program, but the modifications are few and far between.
We are debt free except for mortgage, and battening down the hatches tighter, as we predict the Mortgage industry is going to go ka-boom out here during the RE downturn that will hit by summer.
Daughter works for biggest title insurance company as Escrow Officer. She is rocking, was chosen to handle the DRE division. That is all they are doing now. The “blip” of home sales, is transfers of foreclosed, forbearance or default property titles from mortgage holder to investors. Anything less than 200K is all investor purchased for cash. No 1st time buyers can compete against the cash buyer. Most banks are dragging their feet on short sales, preferring to play out the hand as the property holder.
Finally, best friend is Sales Manager of local Chrysler dealership. He said they have NO new car sales. But are smoking on used car sales. Financing, forget it. Cash and carry deals only. People come in, null and void trying to flip out of 2-3 year old cars…leave literally crying to find that they will NOT be getting anything new for a long time. Those that MUST have a different car are flipping into 2-3 year old used iron.
My friend had a VP from WFB in last week. The VP said that WFB is in deep trouble. Over 30% of all mortgage loans in Fresno considered in default (90 days late on payment or more) and that their entire HELOC portfolio is like toxic waste. He said they read it like tea leaves. Homeowner figures out what is going on. They stop making the HELOC payment. After 90 days of no calls or correspondence from the bank..they figure, what the heck. Stop making the first. Many many homes on the books, no payment for 12-15 months. WFB is state of paralysis he said. Guy normally would come in every 2 years, buy a new fully loaded Jeep Grand Cherokee. My friend said the guy bought a 4 year old Jeep, no options and paid 14K cash…left like he had just bought a Rolls…WFB executive said paid off assets are worth more than people realize. He said, if it is paid for..and runs…or doesn’t leak…do not sell. Guy said he is totally afraid for the republic.
That is the latest from central California…FresnoDA
"And as for hygiene rules in the import states…LOL. I have walked the fields in the Mexican growing regions. Won’t eat the produce…even after two rinses with produce wash. "
thanks for sharing this. all the more reason to grow your own.
Thanks for the news about Wells ( I assume WFB is WFC). I can't wait for them to expire; they can't even do simple arithmetic and deserve what they get, the morons.
Spent hours reading through this thread. By far the best in the year+ I've been lurking here.
Personal anecdote: Had to relocate recently forcing short-sale "attempt". Got a 700k bid on house with 875k note - and BofA told me to fuck off. Can't wait to see them get 350k in foreclosure in a couple years. Nothing bad enough could happen to those rapists. Bank of America, like its namesake, is in all likelyhood DONE.
Thank you all for your comments. Now time to go and start that farm.
Yeah, I despise BofA as well, bunch of lying cheating asshats. I moved my accounts out of there more than a year ago.
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