Saturday, October 16, 2010

An eyeopener..............

Faithful readers might figure that my musical tastes run toward
"classic rock" and "oldies".   Well, that is partially true.  But......
sometime in the early 1980's, friend Ferds turned me on to the
1978 Pat Metheny Group album.  Yes, it was vinyl.  Love the
(now) CD and love this song.  Jazz/fusion.   Who knew? 

The Pride of Philadelphia.....

William Penn was born this day in 1644.  Perhaps the original
Philadelphian, he is definitely one of history's more interesting

Expelled from Oxford and caned by his father, Penn's teenage
years marked him as a bit of a rebel.  At age 18, Penn's family
(they had some wealth and were favored by the Crown) sent
him to Paris, France to to "get him out of view, improve his
manners, and expose him to another culture."

Penn was a free thinker about religion.  This in an era of
strict laws and persecution of any faith other than the official
Anglican one.  In time he became a Quaker.  Not passive
by nature, "Penn became the first theologian, theorist, and
legal defender of Quakerism, providing its written doctrine
and helping to establish its public standing."

He was jailed, threatened with life imprisonment, yet refused
to recant and continued his aggressive attacks on the Anglican

His father's favor with Charles II saved him in the end.  An
elegant solution was found- the mass emigration of the Quakers. 
Penn was granted a charter from the Crown to establish a colony
in the Americas,  the "extraordinarily generous charter which
made Penn the world’s largest private (non-royal) landowner,
with over 45,000 square miles."  The year was 1681.

"Having proved himself an influential scholar and theoretician,
Penn now had to demonstrate the practical skills of a real
estate promoter, city planner, and governor for his 'Holy
Experiment', the province of Pennsylvania."

While nothing is simple, and Penn would probably have
chosen a different end to his story, the City of Philadelphia,
at the center of his "Holy Experiment", thrived.  It grew and
prospered as a center of culture, commerce, and free
thinking in the Colonies.

The Statue of Billy Penn atop City Hall in downtown
Philadelphia.  It was not until the 1980's that any real
estate developer was brave enough to erect a
building in the downtown "higher than Billy Penn's hat."
But, that is a story for another day.

I'm with Mathew on this one...................

Our friends at Keeping Current Matters are looking for the silver
lining in Foreclosuregate.  Following the lead of a recent Wharton
Business School release and a Fox News story,  KCM is
wondering if it is not a good thing to let all those houses in the
foreclosure pipeline just stay in the pipeline for an extended time
period, thus reducing the available supply of houses for sale. 
Less supply may mean that any demand will  keep prices from
falling farther.  It is a working theory  anyway.  Full post here.

If I have been reading Keeping Current Matters correctly over
the past few months, they seem to see the real estate world
through the eyes of  Sellers.  Nothing wrong with that.  In fact,
for most Realtors that viewpoint is probably dominant.  For
as long as I've been in business, it has been true that the Realtor
with the listings (representing the Seller) is the Realtor that will be

Ace blogger Mathew Ferarra added a comment after the post.
Mathew looks at the issue through the eyes of the Buyers and
wonders why "higher prices and less choice is a 'good thing'."

It strikes us that, as Mathew points out, it is a Buyer's market.
Buyers can pick and choose.  My first broker defined a true
buyer as "someone who has their furniture in a moving van and
who needs to find a place to live today".  Very few buyers fit that
description, which is maybe why my first broker never sold many

There is enough uncertainty in the market place that there is no
apparent reason for a normal buyer to hurry to make a buying
decision.   Buyers, in a buyer's market, tend to be a pretty clever
breed.  The Buyers are the ones establishing values now, not the
Sellers. They know there is this huge backlog of available homes
coming.  Don't you think, that absent finding a reasonably priced
property (by 2010 standards), they will just wait it out, knowing
that housing prices will have to fall over the next 12-18 months?

Hope I am wrong, but  the only silver-lining in Foreclosuregate
is for those folks in default.  They will get to stay in default a
while longer.

To get healthy, the market first has to hit bottom.  It is not there
yet.   Delaying that by slowing the foreclosure process does
not help the economy, our industry, the lenders, or owners of
residential real estate.  The sooner all the excess inventory is
actually for sale, the sooner the inflated values from the bubble
 years can be scrubbed from the market, the sooner our
economy will begin to heal.


Hide not your talents.  They for use were made.  What's a
sundial in the shade?
- Benjamin Franklin

Courage is not the lack of fear, it is acting in spite of it.
-Mark Twain

On matters of style, swim with the current.  On matters of
principle, stand like a rock.
-Thomas Jefferson

Every time I see an adult on a bicycle, I no longer
despair for the future of the human race.
-H. G. Wells

Choose your corner, pick away at it carefully, intensely,
and to the best of your ability, and that way you might
change the world.
-Charles Eames

Be careful what you set your heart upon, for it will
surely be yours.
-James A. Baldwin

Don't fight forces, use them.
-Buckminster Fuller

It is no use saying, "We are doing our best."  You
have got to succeed in doing what is necessary.
-Winston Churchill

Be true to your school.
-Brian Wilson

The above quotes were borrowed from Walker
Lamond's fun book, Rules for My Unborn Son.

On offending "intellectuals"..........

"Nobody planned the global capitalistic system, nobody runs
it, and nobody really comprehends it.  This particularly
offends intellectuals, for capitalism renders them redundant.
It gets on perfectly well without them."

-Peter Saunders, as quoted in The Rational Optimist

Friday, October 15, 2010

It is just different.................

Faithful readers will know that this blogger believes that investing
in real estate is a specialty business and that much of the current
economic pain was caused by really smart people viewing real
estate, and investing in it, as if it was just another security

Recent quote:

"The ultimate, bottom-line cause of the 2008 crash as Urban
Land Institute chairman Jeremy Newsum sees it: making
money was too easy. The industry was a playground for
financial engineers, and when it was over, a lot of people
paid the price."

Full article from whence the quote was lifted: here

A short collection of unconventional ideas.....

from Chris Guillebeau's The Art of Non-Conformity blog,  here.

A few samples here:

A year after you leave college, no one will care what your
GPA was.

Once you fully understand what you want, it’s not usually
that difficult to get it.

You don’t have to live your life the way other people expect
you to.

Potential is good when you’re 15 years old. After that, you
need to start doing something.

Simplifying your life is like running – not that complicated.
You don’t need gadgets or monthly magazines to do either
of these activities.

If you save $2 a day for three years, you can go anywhere
in the world. Most places will take much less than three


The list of really big mistakes that you can’t recover from is
very short.

Despite appearances to the contrary, it’s OK for artists to
make money.

Sometimes things that seem “too good to be true” actually
turn out to be true. If you’re skeptical by nature, you might
miss out on some of them.

You don’t have to feel guilty for having more than other
people do. The goal is to help them get more by creating
wealth, not by taking it away from you.

Almost anyone can learn to do 100 push-ups in six weeks.

There is almost always more than one way to accomplish

In many organizations, it’s not hard to stand out by being

Heaven forbid..................................

"Investors may actually have to work at investing now, and
look at what they are buying, instead of just buying on the
basis of a few alphanumeric indicators issued by a group of
analysts nobody ever met, running models most people have
no assessment of, and which have proven inaccurate by
large margins."

Fun quote from Joel Ross, talking about the potential demise of
those rating agencies who labeled semi-worthless CMBS
products as AAA.  Full story here.

Can't go too long.............

.......without checking in with Hugh.

visiting gapingvoid has become a habit.

1000watt blog suggests...............

......the future is now, here

"....Bilton constructs a theory of 'Me Economics' in which
he submits that it’s individuals that will be the center of every
interaction in the future – individuals who will increasingly
expect the products and services they use to provide them
with highly engaging personal experiences."

"Science fiction writer William Gibson said, 'the future is
already here… just not very evenly distributed.'"

Does this mean I have to learn how to Twitter?

Thursday, October 14, 2010

Location, location, location..................

Thanks Jessica

Work, work,, work, work......

Well............sort of.  Spent part of Tuesday afternoon
learning how to Segway.  Interesting process.  Your own
personal, all electric, self-balancing transportation system.
No accelerator, no brakes, no steering wheel.  Lean forward
and go, lean backward to slow and stop.  Going is an
easier skill to attain than stopping.  Thank goodnesss for
wide open spaces.

This particular machine had a governor- top speed limit
of 11 miles per hour.  Probably fast enough for the novice. time.......

Details on Segways here and here.

As a bonus, here is another personal two-wheeled, self-balancing,
transportation system.  Reportedly, more fun than a barrel of

Post # 1,000..................

According to the counting thing Blogger provides, this is my
1,000th post.  Rob and Kurt suggested I celebrate the milestone.

Let the Celebration begin!

"You're in for it.................."

"Mom............. Brian won't let me play with his stuff."

Clark and Dawes explain our economy.

"Stuff"," blips", "I hope", and "doing the right thing... for the country"................

Not exactly confidence inspiring, but it would be nice if this was
the beginning of the end of foreclosure-gate.

From the JPM conference call this morning (ht Brian)

JPM: We've identified issues relating to the mortgage fore-
closure affidavits and those include signers not having
personally reviewed the underlying loan files but instead
having relied upon the work of others. Those others, Chase
employees, did conduct reviews of the underlying loan files.
And there are circumstances where affidavits have not been
properly notarized. So I want to just step back and have you
understand what the nature of some of the information in this
affidavit relates to. They obviously differ by jurisdiction but in
general the types of content that we're attesting to includes
the name of the borrower, property address, the date, whether
or not the borrower was actually defaulted and if they've
cured the default and the total amount of indebtedness. As a
result of these actions, we're reviewing 115,000, plus or minus,
loan files that are currently in the foreclosure process. And
we'll do the following based on that review, either refile the
affidavits where appropriate. As you know, we delayed our
foreclosure sales and so to the extent we can, we'll reinitiate
those when appropriate. And we're also in the process of
putting additional processes in place to make sure on a go-
forward basis we fulfill all the procedural requirements....
And just to remind everyone, this is a very lengthy process and
so from the initial default to the actual foreclosure sale, for our
serviced mortgages, that's on average 14 months. Mortgages
in the state of Florida for us, that process is 678 days, in New
York it is 792 days, more than two years. And in most, if not
all instances, over that period of time no principal or interest
payments have been made on the mortgage. So I think we
would like to conclude by saying is that we really believe the
proper approach and response here is to go loan by loan, file
by file, customer by customer, and if mistakes have been made
then we need to address them individually which we absolutely
will do.

Analyst: I was wondering if you could give us any sense for
timing of resolution in terms of reopening these 115,000 cases?

JPM: It's going to take several weeks to go through the files
and make sure and correct any errors that are in there. The
underlying stuff is all accurate. So that's the key substance.
Obviously we know there's a lot of state AGs and we have
conversations with them. We're hoping [to get back to] the
normal process -- for us, the sooner the better for everybody
involved. We don't think there are cases with people have
been evicted out of homes where they shouldn't have been.
These foreclosures go through multiple process, so we're
hoping it will be sooner rather than later and those
conversations are starting to take place.

Analyst: And is it fair to assume that at least a fair portion of
that litigation reserve that you added to is specifically for this
topic within mortgage?

JPM: No, nothing in it for this topic. I think the way you
should look at this topic is that we're bearing today $7 billion
of charge-offs, foreclosure, repurchase costs, this is ex-
reserves. That $7 billion will go up or down based upon the
economy and stuff like this. I'm not sure stuff like this is going
to dramatically change that number. It may extend it a little
bit longer and stuff like that but -- and remember, we have in
total, between the repurchased reserves and $11 billion, we
have $14 billion of reserves for repurchases or loan losses.
Look, the mortgage thing is -- we're halfway through all this.
We think we should continue and get done and make sure we
do the right thing for the consumers, the investors and the

Analyst: And the foreclosure stuff, outside of how it directly
may impact you or somebody else, how do you look at the drag
it may have on the housing market, kind of the macro impact,
what do you think about that?

JPM: Again, I hope -- this is a hope. This is not a knowledge.
Is that when people take a deep, sigh breath, go back to the
right, look to the substance underlying the files and go back
to modifying, foreclosing and doing the right thing, all told,
it could be a blip. Talking about three or four weeks it will
be a blip in the housing market. If it went on for a long period
of time it will have a lot of consequences, most of which would
be adverse on everybody.

Analyst: The foreclosure suspension, it's a matter of weeks
instead of months, did I hear you say that?

JPM: No. I didn't say weeks to clean up the files. We actually
have to have little in depth conversations with regulators
and AGs and stuff like that. So I don't know exactly when.
I'm hopeful that it all starts to move at one point. I don't
know if it's going to be three weeks or five. But I think it will
be a real shame if we don't get this resolved and moving again.

Analyst: In all likelihood you should be allowed to foreclose
as we go into next year.

JPM: I hope so. It's not up to me.

As always, thanks to Calculated Risk

Wednesday, October 13, 2010

The Pride of Philadelphia............

Ernest Evans, aka Chubby Checker, creates a craze in 1960


I have just three things to teach: simplicity, patience,
compassion.  These three are your greatest treasures.
- Lao Tzu


Someday there will be a political movement that is willing to
make choices, that is willing to say “this but not that.”

David Brooks, commenting on Chris Christie's unwillingness to
fund the new NY/NJ tunnel, laments on the current inability of
governments to be able to invest in projects that might bring
tremendous future benefits.

His essay sets out the notion that pension liabilities for public
workers are starting to eat up many governmental budgets, and he
points to the "excessive demands" of the public service unions. 
Maybe, but its my guess that the decision to defer the funding of
those liabilities was not made by the unions.   Cold hard reality
has caught up with us all.  One of its names is "unfunded
pension liability".

Still, Brooks writes well.  Full essay here.  Another excerpt here:

Many of us would be happy to live with a bigger version of
1950s government: one that ran surpluses and was dexterous
enough to tackle long-term problems as they arose. But we
don’t have that government. We have an immobile
government that is desperately over committed in all the
wrong ways.

All in all, governments can’t promote future prosperity
because they are strangling on their own self-indulgence.

Here is a scary headline from a related story:

US cities face half a trillion dollars of pension deficits.

That is a lot of zeroes.  Full article from The Housing Wire

The headline reads................

".....Number of Licensed Real Estate Agents declines Sharply."

Story (which is actually only about California)  here.  Fun chart

I suspect that the amazing increase in the number of licensed
agents between 2004 and 2007 should have been more of
a story than the current decline.  Look for the number of
licensees to continue to fall as the next round of the
required continuing education hours comes due.

Just for grins:  the chart below, using data from the National
Association of Realtors, shows the number of Realtors
between 1980 and 2007.  Sort of a "shadow" bubble perhaps.

A few chuckles for a Wednesday..........

Tuesday, October 12, 2010

How does he do it?................

The consistent excellence of Cultural Offering is a joy to behold.

Kurt was at the top of his game last evening (10/11/10).  Here

Never, never, never, never give up..........

The 14th Amendment...............

"............nor shall any State deprive any person of life, liberty,
or property, without due process of law; nor deny to any
person within its jurisdiction the equal protection of the laws.”

Pressure for speed + pressure for cheapness = Cutting of corners
at the expense of "due process".

Paul Jackson elucidates the problems in the foreclosure mills-
I mean, the mortgage servicing industry.  While the outcome is
uncertain, the faulty processes matter.  Full opinion here

Happy Columbus Day................

Other thoughtful celebratory cards here

Construction humor............

Thanks  What Would Dad Say

Out with the carrot and the stick................

Dan Pink talks motivation.....................

Monday, October 11, 2010

The Pride of Philadelphia...........

Solomon Burke, one of the great singer/songwriters, died on
Sunday.  A member of the Rock and Roll Hall of Fame, Burke,
whose roots were in gospel/blues/soul, became known as "The
King of Rock and Soul".  More here

A day without E.................... like a day without sunshine.  Here


Am I afraid of high notes?  Of course I am afraid.  What sane
man is not?
-Luciano Pavarotti

I will not reason and compare:  my business is to create.
-William Blake

Entrepreneurship is the last refuge of the trouble making
-Natalie Cliffor Barney

Chaotic action is preferable to orderly inaction.
-Will Rogers

The country needs and, unless I mistake its temper, the
country demands bold, persistent experimentation. It is
common sense to take a method and try it: If it fails,
admit it frankly and try another. But above all, try
-Frankin D. Roosevelt

When I’m painting, I’m not aware of what I’m doing.
It’s only after a get acquainted period that I see what I’ve
been about. I’ve no fears about making changes for the
painting has a life of its own.
-Paul Jackson Pollock

Be daring, be different, be impractical, be anything
that will assert integrity of purpose and imaginative
vision against the play-it-safers, the creatures of the
commonplace, the slaves of the ordinary.
-Cecil Beaton

You have to stop in order to change direction.
-Erich Fromm

All of the above quotes were lifted, out of context, from Tom
Asaker's very excellent blog- here.

Monday's poem..........

               The Investment

Over back where they speak of life as staying
("You couldn't call it living, for it ain't),
There was an old, old house renewed with paint,
And in it a piano loudly playing.

Out in the plowed ground in the cold a digger,
Among unearthed potatoes standing still,
Was counting winter dinners, one to a hill,
With half an ear to the piano's vigor.

All that piano and new paint back there,
Was it some money suddenly come into?
Or some extravagance young love had been to?
Or old love on an impulse not to care -

Not to sink under being husband and wife,
But to get some color and music out of life?

-Robert Frost

Pacman and Hartley.............?

Official description here

Disincentives matter................

Greg Mankiw's latest column in the New York Times suggests
his leisure time will be increasing.  Here.

Sunday, October 10, 2010

One of my father's favorites..................

Thelonious Monk, jazz pianist and composer extraordinare, was
born this day in 1917. 

Ecclesiastes 3:1-8...........sort of...............

A few verses for Sunday..........

For the mind set on the flesh is death, but the mind set on the
Spirit is life and peace.
-Romans 8:6

Set your mind on the things above, not on the things that are
on earth.
-Colossians 3:2

See that no one repays another with evil for evil, but
always seek after that which is good for one another
and for all men.
1 Thessalonians 5:15

     For the love of money is a root of all sorts of evil, and
some by longing for it have wandered away from the
faith, and pierced themselves with many a pang.
     But flee from these things, you man of God; and
pursue righteousness, godliness, faith, love, perseverance,
and gentleness.
-1 Timothy 6:10-11

     For where jealousy and selfish ambition exist, there is
disorder and every evil thing.
     But the wisdom from above is first pure, then peaceable,
gentle, reasonable, full of mercy and good fruits,
unwavering, without hypocrisy.
-James 3:16-17

The Open Bible

I'll sign the..................

petition supporting this

Taking a buble bath..................

with Calculated