Falling Down

Falling Down — Scarlett Johansson

Go on and take a swig
Of that poison and like it

So much kool aid… So many properties… When will it all end? I have speculated it will end near rental parity. Based on the inputs for this property, rental parity is around $2,250 a month depending on financing and tax considerations. It is even lower for someone in the highest tax bracket, but the owner-occupant of this property probably would not be. Could this property rent for that? I think that is a bit high, but it might.

38 Fallbrook Kitchen

Asking Price: $315,000IrvineRenter

Income Requirement: $78,750

Downpayment Needed: $63,000

Monthly Equity Burn: $2,625

Purchase Price: $442,500

Purchase Date: 7/8/2004

Address: 38 Fallbrook, Irvine, CA 92604

Beds: 3
Baths: 2
Sq. Ft.: 1,150
$/Sq. Ft.: $274
Lot Size:
Property Type: Condominium
Style: Other
Year Built: 1979
Stories: 1 Level
Floor: 1
Area: Woodbridge
County: Orange
MLS#: S549956
Source: SoCalMLS
Status: Active
On Redfin: 1 day

New Listing (24 hours)

End Unit, downstairs with extra large patio. Bank Owned Property. No
one behind the unit so very private area. Living, Dining and Kitchen
have laminate flooring. Needs paint and carpeting so bring your handy
buyers or investors.

You have to put more money into a property you will lose money on. Great deal… Not.

This property is another in our endless series of speculators who milked the mortgage teat and are leaving the lender dry. This property was purchased on 7/8/2004 with a $376,125 first mortgage, a $66,375 second mortgage and a $0 downpayment. The property was refinanced on 8/16/2006 with a $397,500 Option ARM with a 1.75% teaser rate and a $79,000 stand-alone second. Total mortgage equity withdrawal is $34,000. Total debt (peak appraised value) of $476,500. If this property sells for its asking price, the mortgage holders stand to lose $180,400 after a 6% commission.

BTW, this is the kind of thing that really makes my blood boil: McCain calls for federal bailout of homeowners

“In a bold effort to reverse his sagging fortunes after a month of dire economic news, Republican Sen.
John McCain
said Tuesday night that if he is elected president, he will order the
Treasury to buy up Americans’ bad mortgages and renegotiate new loans
that reflect their homes’ diminished value. The economic
crisis has “become so severe that we’re going to have to do something
about home values,” McCain said at the second presidential debate at
Belmont University at Nashville, Tenn. “Is it expensive? Yes,” he said.”

I don’t particularly want to see my tax dollars going to bail out the fools who overpaid for houses while simultaneously crowding me out of the market.


I have come 500 miles
Just to see a halo
Come from St. Petersburg
Scarlett and me
Well I open my eyes
I was blind as can be
When you give a man luck
He must fall in the sea
And she wants you
To steal and get caught
For she loves you
For all that you are not
When you’re
Falling down, falling down
When you’re falling down
Falling down, falling down

You forget all the roses
Don’t come around on Sunday
She’s not gonna choose you
For standing so tall
Go on and take a swig
Of that poison and like it

Falling Down — Scarlett Johansson

102 thoughts on “Falling Down

  1. Agent#777

    I have a friend who kept his house as a rental house when he moved to Texas. A recent foreclosure sold for 60K less than his mortgage+HELOC amount. Does he not qualify for a bailout? I mean, he isn’t really a speculator, just someone who had to move (new job in the mix) who felt he was not able to “get (his) equity out”.

    1. Larrygg

      Why should he be bailed out? I bought a new car in 2007 and now it’s worth $4K than I owe on it. Shouldn’t I get the same consideration. Same goes for my big screen tv I bought two years ago. When does this crap end?

      1. AZDavidPhx

        Larrygg –

        That is just plain crazy talk. You are acting as though your car and TV are entitled to appreciate in value. Only houses are entitled to do that. You can’t live in a car DUH Er wait a minute.. uh yea…

    2. Walter

      “I don’t particularly want to see my tax dollars going to bail out the fools who overpaid for houses while simultaneously crowding me out of the market.”

      I agree 100%. I have been waiting and saving for 8 years now. When I heard McCain say bailout all the homeowners, the rest of the debate did not matter to me. I don’t want that fool in office. Also, think of the endless amount of abuse a plan like that will be subject too.

      1. garbler

        Sadly, Biden said the same thing last week. When McCain said it last night, I was appalled. There’s no one for me to vote for now.

        Guess I’ll just write in Ron Paul.

        1. Agent#777

          I have never voted Democrat in my life, but honestly, the GOP ticket is so worthless I would vote Dem for the first time ever if it mattered. However, where I am the R ticket is a lock, so I am voting for either Barr (on the ballot here as Ind.) or writing in Ron Paul. THAT is how I am making my vote count – to let them know that I do not like either of the main two.
          I will be voting for my GOP Rep, as he voted against the bailout!

        2. Dave

          Here is my ticket:

          Prez: Ron Paul
          Vice: Paris Hilton

          Compared to the current slate, this constitutes a veritable dream team. Ron Paul, obvious. Since Paris is being cut out of the Hilton legacy, she knows all about bustin’ a** and saving money. Being a celeb is expensive business after all.

          Everyone else, if they voted for bailout, out with ’em. If they voted against, they stay in.

        3. Headless Unicorn Guy

          Guess I’ll just write in Ron Paul.

          Or join the growing troupe of John Galt Celebrity Impersonators.

      2. Major Schadenfreude

        McCain lost my vote, again, when he said that. He lost it the first time when I heard that his campaign manager has ties to a lobbyist for Fanny/Freddie.

        How disgusting!

        1. It All Happens on the Margin

          uhhhh Franklin Raines !?

          Hello ?

          Both these parties and candidates have blood on their hands.

  2. Agent#777

    On this house in particular…anyone else amused that all the pictures are from 09/04, except for the last one? It is like they took all the pictures (only 2 inside, 4 outside?), and then thought “oh, we just HAVE to show them the street too”. 🙂

  3. Kelja

    With the stock market meltdown and coming recession or depression, rents will have to come down. This will have an impact on values.

    Pisses me off how both parties are pandering to the public on this problem. The continuing deterioration of the economy will sweep Obama into office, unfortunately. I say that only because I thought McCain was more fiscally conservative.

    Now, it doesn’t look like he is.

    We’re in deep doo-doo. (Technical term)

    1. AZDavidPhx

      What do you think the rent on this crap-shack is going to drop to?

      In the nicest area of Scottsdale, this 30 year old condo might fetch 800.00 a month. Let’s assume that California gets their bailout from my federal income tax so it can continue to prop up its phoney artificially inflated economy.

      The rent on this place falls to 1500.00 a month easily during the recession.

      If the state goes bankrupt and can no longer loan money and the majority of the businesses go bust then this place drops down below 1000.00 a month.

      Will be interesting to see what happens.

      1. Agent#777

        You are saying that this rents for MORE than $1500/month now? =0

        I pay 1600/month for a 2300+ SF, 4/2.5 “pergraniteel” house on a cul-de-sac lot in Knoxville…oh yeah…flyover country to ya’ll, right? And really, this is at or below rental parity, because the owner paid around 275k for it.

        1. Dave

          That’s probably too pricey for K-nox, unless it’s way the hell out Kingston Pike.

          Rents are going to come down in the OC.

          Bottom: $140/sf

      2. alan

        Rents in So Cal are bubbly compared to the rest of the country. That’s why eventually peole move out of So Cal, the cost of doing business and living is high. In the last downturn we saw an exodus from Cal to surrounding states. Get ready for another as the job market is better and the cost of living lower in other regions.

        1. Kelja

          Yep – and those moving out of the great state of california (past tense) will be the productive ones and those with money.

          I’m contemplating a move out – I live in Carlsbad. Fortunately, I rent.

          1. r€nato

            I look forward to yet another wave of California refugees moving to Arizona to help prop up our sagging RE values.

      3. Dejnov

        The great state of California in fiscal trouble!!! Say it isn’t so… I mean we have so much sun and surf out here in the land of milk and honey, how could that possibly happen? At the very least we can all live in our cars and surf every morning… look at all those 9 to 5ers in the other states… chumps I tell ya, chumps…


        1. AZDavidPhx

          Shouldn’t all the other states be asking CA for the handout? With all that raw talent and wealth you’d think that everyone else would be coming to them with the tin cup. No No Pay no attention to the man behind the curtain.

        2. Larrygg

          Just goes to show you how F’d up this state is especially the people running it. Here we’ve seen a run-up of house prices, increased tax revenue accross the board (Income Tax, Sales Tax and Property Tax) and then after very short downturn they are crying wolf because they are broke. What have these fools been doing with all of the extra money they’ve been getting over these past ten years?

          1. Forbear

            Sacramento was broke during the run-up also, didn’t Arnold borrow/bond 15 big for his smoke and mirrors balanced budget a few years back. They weren’t able to control the budget with those windfalls let alone what’s coming down the pipe.

            I’d suggest the state put California on Ebay while it still has some value.

          2. Major Schadenfreude

            “I’d suggest the state put California on Ebay while it still has some value.”

            Which? California or eBay?

      4. brea

        My mother owns one of these and she rents it out for $900. Tenent has been in for a while. What surprises me is that the tenent will pay late sometimes. At $900 for Irvine rent, I would not want to rock the boat.

  4. AZDavidPhx

    I don’t know why you are so offended by McCain’s call to bail out the home owners. He is losing in the polls so he is just going to up the ante and promise some more free stuff to the masses. That’s all it’s about isn’t it? Who gives away the most free crap?

    It does not matter which of the two media-selected candidates take the white house this November. If there is one thing that should be obvious to everyone at this point it is that nobody is in control. The inmates are running the asylum. The leaders are just there to sign the paperwork and make things look official and make the people feel like daddy is in the house watching over them.

    We do not vote for people who “tell it like it is”. We do not vote for people with honest leadership qualities that are going to tell the people that the country is in trouble and that citizens need to stop buying Cheese Doodles at the Qwiki Mart with their Visa cards.

    No, we vote for recreation. We all get together every 4 years, put on our Cheese-Head hats for a day of political Super Bowl and go out to root for our team. Some years the other team gets the bigger herd, other times not. We count which team had the biggest herd and declare a winner. This is our great democracy – a majority of stupid ignorant citizens running around believing that they are participating in the “choice” of president. Of course the vast majority of these fine citizens never research candidates in other local elections and have no idea who anyone else on the ballot is, but by-gollie they are informed when it comes to their presidential Super Bowl (they’ll just use the party affiliation to vote for the other “whatever” candidates)

    Both of the media-chosen candidates are worthless. They bring absolutely nothing new to the table. It is the same old song and dance, battling the same battles for the last 40 years.

    Enjoy your Pepsi Taste Test Challenge this November when you put on party’s ballcap and head down to the polls to root for your team.

    Look forward to arguing about abortion, guns, religion, etc, in another 4-8 years while Rome continues to burn.

    Do the patriotic thing – DONT VOTE. Tell the government that you are not going to participate until the playing field is leveled and independents have a fighting chance.

    1. MalibuRenter

      Just vote against whoever is pitching the most looney bailout package, and make sure you send a note to the campaign saying that’s why.

    2. Kelja

      As a thoughtful voter, I’ve always known I’m massively outnumbered by the numskulls.

      As a longtime voter, I’m ready to throw in the towel.

    3. r€nato

      I am so very weary of this ‘they’re-two-sides-of-the-same-coin’ crap.

      We heard that endlessly in 2000 and it turned out to be crap.

      We heard it again in 2004 and it turned out to be crap.

      And here we go again. Obama and McCain are no different from one another? Jesus. It’s almost as retarded as an undecided voter is at this point.

      If you can’t tell the difference between the two then you either are not paying attention or you’re adopting a cynical-chic pose because it’s cool to pretend like you’re above it all.

      1. Schadendude

        Man I’m really on your case today Renato. I think we’re having severe virtual mood clash… haha

        It’s not that their the same, but they’re both playing the same game. “Who can run America into the ground the fastest.” Doesn’t the pandering piss you off ? Why do you think they do it ? Cause they’re courageous ? It’s all about obtaining power. Why the hell did Bush sign Medicare-D ? Poll numbers were in the shitter… Throw a bone to the silver-tsunami to cheer them up.

        Why did Ross Perot (prior to his implosion) gather so much momentum so fast ? Cause people are sick and fucking tired of heads I win tails you lose politics. Had that guy not lost his marbles and had a decent campaign manager, I’ll be you dollars to donuts that he’d have had a shot at actually winning the whole thing.

        When he flubbed, he reinforced the tired notion that we can only be a two-party system. Change has to start at the bottom and it doesn’t happen overnight. The longer we continue to vote in the establishment, the further down the rathole this country will go.

        We need leadership, not pandering.

        1. jhill

          I’m certainly going to vote for the Democrats, for a wide range of reasons. But not because I think they care about me, about to retire on a grossly diminished set of investments in my modest, paid-for home with our family’s two 8-year-old cars. The situation on the economy was summed up for me in a blog post I read a couple of days ago: Your choice is between two former chairmen of Goldman Sachs: Robert Rubin or Hank Paulson.

        2. r€nato

          Schadendude, you’re being civil (probably more so than I) so I have no problem with differing opinions so long as they are expressed intelligently and civilly; in fact I enjoy the opportunity to debate ideas and defend/explain my views.

          I understand the desire to have something better than a two-party system. I also agree that the system is rigged to make it extraordinarily difficult to have more than two viable parties. In fact, I would like it very much if the US had a parliamentary system, but that’s not going to happen without a wholesale revision of the Constitution. It’s also a fact that third parties generally fail to move beyond minor party status because third parties are usually motivated by a single idea which, when it gathers enough momentum, is co-opted by one of the major parties thus robbing the third party of its momentum.

          It seems very much to me these days that the Republican party has become so rotted from within, so intellectually bankrupt, so adrift from its original guiding principles, so interested in power for power’s sake rather than for the sake of doing right by the American people, that it absolutely must be forced out of power and given about 20 years or so to work things out so that it can once again become a responsible opposition party.

          (I guarantee you that on Inauguration Day, GOP partisans will start hooting for the impeachment of President Obama. If that indeed becomes the case, it will prove my point: they haven’t learned a goddamned thing about how to be a responsible opposition party and put America first)

          On the other hand, I look at the Democrats and I see a lot of smart, intelligent politicians who have learned a lot from their years in the wilderness and who have real answers for America. For every William Jefferson (cash in the freezer guy), there are at least a dozen Republicans who have been doing things as bad or worse.

          I see a GOP which is anti-science, anti-Enlightenment, anti-intellectual, and stuck in the 20th century. I see a Democratic party which is pro-science, pro-Enlightenment, and determined to move forward FINALLY into the 21st century.

          I’m convinced that the Democratic party represents the best hope we have for putting the nation back on the right track and repairing the damage done in the Bush/Cheney years, as well as removing from the system the poison the Republicans have been injecting into our political discourse since 10 years ago when they pursued the constitutional coup d’etat/witchhunt against Clinton.

          I’m supporting Obama and all Democrats this year not because they are not Republicans, but because I truly believe they represent the best hope for America in these difficult times. I wish more people could see past their cynicism; it truly is not the case that ‘both parties are at fault.’ That’s intellectual laziness of the worst kind.

          1. shiny

            I don’t care if he is inaugurated wearing a turban and holding an AK-47, I am voting for Obama. I am beyond disgusted with the last 8 years: absolutely, positively, the worst, most vile, despicable, asshat administration ever. Bush should have stuck to coke snorting and executions.

          2. Schadendude


            I agree whole heartedly with your view of the Republican leadership. Absolute trainwreck.

            As far as what is best for America, since you’re supporting the Democrats, I’m tempted to say we could debate about it all day. But it occured to me that I can’t possibly understand the depths of your political positions based on what I’ve read here even though my kneejerk reaction was to assume I could do just that.
            I guess that’s what I mean about the system we’re locked into, and what AZDavidPHX was saying earlier. Democrat and Republican is an amalgamation of such a complex set of ideologies. When I think of the democrat platform, I tend to think leftist because that’s the label that’s been consistently slapped on them by conservative pundits as an easy way to garner support. I imagine that most democrats believe that ‘we’re all in this together’ from an economic standpoint, and that government can solve most problems. I’ve been speaking to more and more of them lately that are sounding more like Libertarians. You know, those crazy Libertarians !!! Ahhh branding…
            Your correct about intellectual laziness. It’s everywhere. I think sometimes though it is less about intellectuals being lazy, and more about non-intellectuals trying to sound intellectual. I’ve been guilty of that kind of generalizing from time to time.
            What I mean when I evoke the broad brush, is that if you pick and chose individual episodes and events, there were decisions coming from representatives of both parties that conflict with Schadendude’s grand vision of what is needed for our country.

            Take the mortgage mess. Speaking typically (there I go again) it’s believed that Republicans oppose regulation; regulation that was badly needed (or enforcement thereof) to keep capitalism from annihilaing itself. Democrats of course, championed the cause of ‘affordable’ loans for all, which of course in a market represents additional demand, which raises prices, which makes the asset unaffordable yada yada…
            And so it goes. Lazy, accessable logic for the masses, but true nevertheless to a certain point.

            I have a dream that my unborn childred will grow up in a world where politicians will not be judged by the color of their propoganda, but on the content of their positions…

            I’m afraid of Obama to be honest. Ditto McCain. They both believe government holds the solution to most of our problems. I believe (generally selfish) people participating in a free market of ideas and commerce inside a framework of government that restrains its ambitions to providing protection from force, fraud and deciet is the best way to provide for what our founding documents promise, which has always been ‘pursuit of happiness.’ Happiness itself is not assured, or even realistic for all of society.

            Ok I need to quit before I begin to decend deeper into philosophy.

            Good debate Renato. Thx.

          3. Schadendude

            Bush isn’t running again. I’m not telling you who to vote for, but please exercise more consideration before casting it.

        3. LC

          I don’t see how a conservative will advocate for the change that this economy needs. Conservatives sit on their hands mostly, by definition. The pedulum swings both ways, and right now we need massive change in our economy. We need a lot of other things too — but really the only ones who are willing to try new things are liberals. We need proactive investment in many sectors that the government can make and encourage. To imagine that it is not useful is to ignore the millions spent on the pitched battle to win public office. The leadership that we have had for the last eight years has been a disaster when it comes to the economy. The chickens are coming home to roost, and we have not even seen the worst of it yet. When people speak of lack of confidence, they are ultimately talking about the criminal Buah Gang.

          1. r€nato

            one of the many, many things I just cannot stand about the modern GOP is how frequently they insult our intelligence.

            And one of those ways is how McCain talks about regulating and reforming Wall Street. He spent 26 years championing deregulation, he has publically admitted his ignorance of economic matters and now he’s promising to do something about the greed and corruption on Wall Street which he looked away from – if not aided and abetted – for a generation?

            I’d sooner expect a Catholic priest to denounce John Paul II as a pedophile coddler. I highly doubt even the base believes McCain’s blather about regulating Wall Street. Besides, if you’re paying attention, you know that when a Republican talks about ‘reforming’ something, what they really mean is throwing out the rules and letting corporate America do whatever the fuck it wants to.

    4. Matt

      One small problem with your argument, David, is that the behavior of the smartest, most upright public servant ends up running the same campaign as the craven office-seeker looking to bang interns. Elections force them to do the same thing.

      I’m unclear on how not voting tells anyone anything. From one perspective, you might think that non-voters are actually the MOST satisfied with the system: after all, nobody is taking to the streets, heck, people aren’t even voting…if people are unhappy with the way things are, then wouldn’t you expect them to take a small modicum of action to change things?

      And, if you’re waiting “independents to have a fighting chance,” I wouldn’t hold my breath. The United States is a two-party system…and that is essentially impossible to change. How impossible? Well, you’d need to get rid of the presidency, get rid of single-member districts for Congress, and somehow erase the cultural and political history of the country. All of those factors stack the deck in favor of two parties. Sure, the two parties we get then stack some of the laws in their favor…what else would you expect them to do? But, the root and main cause of us having two parties is us voting for individuals instead of parties (unless you want to consider other, more complex forms of voting, like instant run-off). And that’s just to make it so more PARTIES can contest elections. If you actually want candidates to have a chance of winning who aren’t affiliated with any parties, good luck with that. E.E. Schattschneider wrote that “democracy is unthinkable save in terms of parties.” No modern democracy (ie, since 1000 AD) has existed without having parties. The only question is how many there will be: 2 or more. 2 is what single-member district countries have; more (but most often with 2 big ones and a bunch of smaller ones) is what proportional represetnation has.

      1. Kirk

        I think it is high time all us conservatives teach the liberals a lesson they’ll never forget by not voting. This will break the spirit of inclusiveness that these anti-American scum feed on.

        1. r€nato

          I agree Kirk, conservatives should teach us lie-bruhls a lesson by not voting this year.

          You could really teach us a lesson we’d never forget by not voting in 2010, and in 2012 for that matter.

          And you would just devastate us if, after Obama’s crushing defeat of McCain next month, the GOP would fall into in-fighting and split into two parties, the few remaining moderates staying in the GOP and the christianist Qaeda forming a new, far-right party.

      2. AZDavidPhx

        I agree with you, Matt.

        You are right, “not voting” in and of itself means nothing to the government unless you back it up with public protest. I think that people should be taking to the street with pitchforks in hand to demand reform instead of going to a ballot box to participate in a sham election.

        Unfortunately, the realist in me knows that it is not going to happen. At least not right now while the coffee is still brewing at the local Starbucks.

      3. darms

        Matt (2008-10-08 08:53 AM ),
        There’s actually a pretty simple thing that will instantly drive a stake through the heart of our corrupt two-party system especially at the state & local levels. That simple thing is called Instant Runoff voting.

        It’s pretty simple, really. On my ballot (TX), I will have a choice of Cornyn, Noriega, a libertarian, and somebody else for our senatorial election. Currently I have but one vote. Under Instant Runoff voting, instead of voting for a particular candidate, I would rank the candidates in my preferred order: Noriega-1, a libertarian-2, somebody else-3. If neither my preferred candidate, Noriega, or my least-favourite, Cornyn, were to end up w/sufficient 1st choice votes to win then my 2nd choice candidate, a libertarian, might themself have enough 2nd choice votes to win instead. This way a vote for a third-party candidate is neither a wasted vote nor as occurred in 2000, in effect a vote (Nader) that helps the wrong candidate (GW) by denying a vote to the right candidate (Gore).

        1. AZDavidPhx

          Ding Ding Ding.

          This is exactly what I have spoken about in previous posts.

          It’s way more Democratic. The one vote “use it or lose it” is crap. It’s an incredibly stupid system.

          Of course the people in charge right now don’t want that because it will disrupt the status quo.

          1. darms

            Thank you so much for the ‘Ding Ding Ding’ even here in extreme EPUville. Little wonder both r’s & d’s will fight this tooth and nail as, like the IRA & the militias during the ‘troubles’ of the 70s-90s, solving this problem affects their revenue streams. SFW. Got any ideas how to spread the word? If you think my description above is accurate, I will do my best to spread the word on the many blogs I read & comment on. I am really tired of having to choose between a conservative Republican and a Democrat wannabe and not voting is not an answer, either.

    5. Schadendude


      Well put brother, but I think you’re preaching to the choir @ the IHB. It’s not often I hear partisan cheerleading here. I think most of us are totally disenchanted with the political process in this country. As IR pointed out last week, Plato was right about democracy. Powerhungry demogagues rule the day.

      Those close to retirement age, despite the terror of the present circumstance, at least aren’t likely to outlive our republic (actually much more like a democracy now). I hope.

      The rest of us should be getting comfortable with our 2nd amendment rights while we still have it.

    6. Jeff

      Hear hear David. A vote for either McCain or Obama is a vote to use government force against your neighbors. One way or another, we are all going to be forced to pay for this. Those who refuse, either by not paying taxes, leaving the country, or getting out of dollar denominated assets are all going to meet with government force in the form of jail, exit taxes, etc. There will be no choice in the matter. So stop giving DC the false veneer of legitimacy by voting for the same crap election after election…

      1. AZDavidPhx

        I have NEWS for those of you who are going to vote for Obama just because you are mad at Republicans –

        Mr. Obama knows about people like you. He knows that he “has you”. He knows that you will vote him because your emotions make you feel that he is the lesser of two evils.

        He is counting on using your emotional state to motivate you to vote for him by default. If you want to be a cow in that herd, have at it. MOO!

    7. oc bear

      I have been wondering why the politicians keep pandering to the 1 out of 6 who are underwater on their mortgage. They have to know that contacts with congress ran 9 to 1 against the bailout. I just don’t get it. They should keep their money available for the time when jobs of even the responsible are lost.

    8. TurtleRidgeRenter

      You are spot-on correct, Arizona David. All the young people I work with are so excited to be voting in their first presidential election. They were dumbfounded when I said it doesn’t matter who is president.

      I asked them, “Do you think there would have been no economic mess if Al Gore had been prez? Like the markets were all going crazy, lending money to anyone with a pulse, but the mortgage companies would have paused and reflected: ‘Oh wait. We can’t do this. Because Al Gore is president.'”

  5. idrnkurmlkshk

    The only way to stop the foreclosures with intervention will have to come with bailing out the homeowners. Don’t get me wrong. I’d prefer the market crash and work it’s self out naturally. But the with this country full of; denial, ignorance, irresponsible, and very low tolerance for pain, I think our gov’t will throw every last dollar at this problem, until our dollar is worthless.

    1. IrvineRenter

      “I think our gov’t will throw every last dollar at this problem, until our dollar is worthless.”

      Quote of the day.

  6. alan

    I wouldn’t get so riled up over McCain’s idiotic offer to buy up bad mortgages. Current estimates of mortgage losses are $1.4 trillion which means he would need between $2 to $3 trillion to fund such a program and I don’t see that happening.

    McCain could have said something intelligent, like we do have adequate regulations on the books, Cox at the SEC didn’t enforce them. Why would you think that Wall Street would voluntarily regulate itself has he did in 2004. Or that if the government had classifed CDS (credit default swaps) as insurance policies (credit default insurance) instead of a security swap then they would have been regulated and AIG would not have needed to have been bailed out.

    1. LC

      McCain thinks the falling prices are the problem, not the solution. I imagine that decent wages might help people to qualify for loans to buy houses.

      And what is the deal with blaming Fannie & Freddie? Did they only deal with “conforming loans?” The idea that they were involved in sub-prime is crazy. They were the voice of reason in a world gone mad. McCain continues his guilt by association, this time the crime is to be a black-run company. Plus it is the fault of the welfare queens who were getting houses. It is never the fault of rich and powerful decision makers, just powerless poeple who have no voice.

  7. Nate Jastrow

    I love a candidate who is mavericky enough to buy my bad mortgage. But that’s not enough. I’ve got a drawer full of eToys stock I need taken off my hands. Ease my pain, JMac.

    1. AZDavidPhx

      Anyone remember Mr. Maverick a few months ago when he was completely against the bailout of Wallstreet and people who borrowed too much and bought houses they could not afford?

      Then overnight, his attitude completely changed and now he is all for it.

      I’ve heard the media refer to this type of hypocrisy as “flip flop”.

      Keep fighting the good fight, Maverick. Your base is rooting for you and loyally excusing all of your misteps along the way.

      1. r€nato

        If you don’t like McMaverick’s position on a given issue, just wait 4 or 5 hours, he’ll change his position to something with which you are more likely to agree.

    2. r€nato

      I was gobsmacked when he said that. I literally could not believe what I was hearing.

      This is what happens with these so-called ‘free market conservative’ politicians. They are all for laissez-faire when times are good, but when laissez-faire fails they cannot resist the pressure to have the government bail out the capitalists who created the situation. They may WANT to resist the pressure but their desire to be (re) elected is an even stronger pressure.

      We’re much better off electing politicians who believe in responsible regulation of markets, which may curb the highs but also dampen the lows and in the long run we are much better off without the government bailouts every 10 to 20 years.

    1. AZDavidPhx

      Their apologists are claiming that the event was scheduled a long time ago (before their financial problems) so it was just unfortunately “too late” and the show had to go on.

      Cancelling the event would be terrible; to let a golf game and a nice massage go to waste.

      1. r€nato

        David, it is very likely that this event was planned at least 6 months in advance. That’s how these things work.

        And, as I pointed out below, canceling the event would have been a real slap in the face to the people who are helping keep AIG afloat.

        The insurance agents did not tell AIG to sell tons of risky CDS and then pocket the money without setting any of it aside in reserve, like a responsible insurer should have done.

        Punish the people responsible, not the guys down the corporate ladder who did nothing wrong.

        1. AZDavidPhx

          They can do whatever they want. They should just pay for it with their own money.

          I don’t care if they paid everything in full 6 months ago.

          It is extremely offensive to see how these companies pissed away huge sums of money on such stupid things like golf/massages and then went crying poor to the government when the bar tab showed up.

          It makes no sense at all.

          Your company goes bankrupt, you cancel all the festivities and batten down the hatch. That’s the normal response. These guys go bankrupt and they take my tax money and are off to throw a party.


        2. Schadendude

          Shit rolls downhill Renato. It’s everyone’s responsibility to look uphill once and awhile.

          Otherwise, they may live through a horrible trajedy like having their 5-star, world class luxury boondoggle cancelled.

          OMFG that makes me so sad to even think about it.

          My company just cancelled presidents club, and I was on track to go. BTW, we’re totally unrelated to finance.

          There’s lots of collateral damage going on right now. Get used to it.

          1. r€nato

            This event occurred six days after AIG was bailed out.

            If they had cancelled the event it is very likely that AIG would have gotten very little money refunded.

            When you cancel an event like this one so close to the event date, the resort is not going to refund you even a single dime on those rooms; they already turned away people who would have booked them. The airlines are not going to refund your airfare. Etcetera, etc. The only money they might have saved would have been for the open bar, the golf, and other services ‘consumed’ during the event.

            So, AIG had a choice of canceling the event, which would have looked good outside the company but likely would have saved not very much money and also would have demoralized the rainmakers.

            Or, go with the event which was pretty much already a sunk cost, take the PR hit and scale back or cancel future events of this type.

            Again, I never imagined I’d be the defender of corporate America but I can understand AIG’s reasoning to go through with this.

            I guess we’ll just have to agree to disagree.

          2. LC

            The event is symbolic of the culture that led to them to going broke. That is the real story. It doesn’t bode well for the luxury resorts all over South OC, though.

          3. Dave

            The symbolism was magnificently contemptuous.

            They should have canceled it and gone to work instead.

            I canceled a $1000 event myself this year.
            Took the hit personally because other, more
            important things came up. Like economic

            As it turns out, a good friend purchased
            my ticket, but I had not anticipated
            that outcome. AIG may well have recouped
            some of that money.

        3. No_Such_Reality

          Having a fit on this is like me loaning a friend $8000 and then having a fit because he spent 5 cents on a tootsie pop for his son.

          1. AZDavidPhx

            No_Such_Reality –

            You are looking at this from 5 feet away.

            The problem is not with this one sole event. This one event is just one example of the pissing away huge sums of money on gambled money.

            What is a lot more telling is that it gives you a glimpse into the mindset of the people running the company.

            They have no problem going on with and throwing parties while in the middle of a meltdown and begging the tax payer for financial help.

            Think about it from a higher perspective.

          2. No_Such_Reality

            The successful business unit continues operation in a normal pattern that continues the successful business line.

            This wasn’t the business unit that imploded, this is one of the business units that is profitable and sound.

            AIG had $110,000,000,000 in revenues last year. They had $19,900,000,000 last quarter. The business unit that continues to generate profits and revenues spent $500,000.

            $500,000/$19,900,000,000. Newsflash. That isn’t a CEO level expenditure. It isn’t a corporate officer expenditure. It’s a middle manager expenditure and likely a incredible minor budget line item for an marketing events director about ten or more levels down from the CEO.

          3. AZDavidPhx

            This is great NEWS, No_Such_Reality. I guess they can give back that 80 billion dollars now. The whole insolvency thing was a big misunderstanding.

          4. No_Such_Reality

            Micromanaging and attempting to control every expenditure will destroy the company and what little value we may garner from the equity we took for giving the loan.

    2. r€nato

      Count me out of the demagoguing on this story, though I’m sure it’s difficult to resist the temptation to do so.

      This event was scheduled far in advance, it was a junket for successful independent agents who sell insurance for one of AIG’s profit-making subsidiaries. In other words, the very people who should NOT be made scapegoats for the shitty decisions made by AIG’s senior executives and should NOT have been punished by having their junket canceled.

      I’ve been to corporate events like this one, though the resorts were not quite as swanky as this one seemed to be. You get to go if you are doing well for the company. Some of the senior brass show up, and if this AIG shindig was like the ones I have attended, I assume there were meetings regarding the direction of the business in addition to the open bars and massages and such.

      Were the optics bad? Sure. Should AIG have done anything differently? No. It would have been next-to-impossible to scale back the event at such a late date by moving it to a more modest resort, and probably would not have saved any money.

      Punish the senior brass of AIG and hold them up for national contempt and ridicule… not the guys who are rainmakers.

      1. AZDavidPhx

        You don’t think this event was attended by any of the rainmakers involved in the credit default swaps? Come on now……

        1. r€nato

          David, it may well have been attended by some of them.

          I have no first-hand knowledge of this event, but in general it is typical for at least some of the brass to show up to talk to the ‘grunts’ and take part in breakout sessions. And you know what? The ‘grunts’ appreciate the chance to talk to the brass up-close-and-personal. It’s good for morale and it’s good for the business to have the senior execs spend some time talking to the people who are out there making money for the business day-to-day.

          Again, I do not know if this was all play and no work, but if it was a typical corporate event then there surely was some work involved.

          From the reports of the event I have read, these were not the agents we were looking for… er, these were not the agents who sold credit default swaps. AIG has many lines of business, CDS was just one of them.

          If, however, these were the people responsible for selling CDS, then yes they should have canceled the fucking event. But that would be entirely contrary to everything I have read so far about the event.

      2. Schadendude

        Sorry man, not buying it. I don’t care how hard these guys worked. The money they just spent didn’t belong to their employers, it belonged to us. There are millions of Americans out there making it happen every day. Their party is what ? A multi-trillion dollar future tax burden so a bunch of overpaid brokers of toxic garbage can smoke cigars and drink expesive port. Bullshit.

        Did the people on the titanic deserve to die ?
        Of course not, but shit happens.

        I don’t care that the amount is trivial compared to the sums being squandered right now. Same thing as pork. It’s not that pork is bankrupting us, because it’s not. It’s the principle of it.

        Are there such things as principles anymore, or have I been sleeping under a tree for 100 years ?

        1. r€nato

          geez, I never thought I’d end up as the defender of corporate America.

          AIG has many lines of business. Selling credit default swaps was only one of them. From everything I have read about this event, the attendees – that is, the independent insurance agents who sold insurance for AIG General – had absolutely nothing, zero, zip, nada to do with selling credit default swaps.

          I understand the desire to lash out, but really, if “we” own AIG now then it makes no sense whatsoever to scapegoat the people who are actually making money for “our” insurance company.

          1. Schadendude

            Man I have to admire your deft, because you joust very well, but you’re on the losing side of an argument. I agree that it sucks that the (actual) top performers working for their company should have their little trip cancelled, but look around.

            Sure, we own AIG right now. Wanna take a poll on how many Americans think this thing should have been cancelled in light of what happened ?

            It didn’t end up on the front page of every major newspaper because it was good form.

            Sorry for mad-dogging you this morning. I think I’m moody.

          2. r€nato

            Sure, we own AIG right now. Wanna take a poll on how many Americans think this thing should have been cancelled in light of what happened ?

            *shrug* that goes back to my point about demagoguing. I love Henry Waxman but I think in this case he’s using AIG to score some political points.

            If people knew the facts, they might realize things are a little more complicated than they seem at first glance.

            Again, the optics are bad, no doubt. But I try to put myself in other people’s shoes before I condemn them, and in this case I can understand why AIG acted as they did.

            If they continue to hold events like this, then yes by all means they are douchebags and should be dragged before Congress and held up for public contempt and ridicule.

            This one time, I’m giving them a pass because I can understand what really went on here.

          3. AZDavidPhx

            It’s not complicated at all.

            The people running the company are bums who have been raping the country with their “shadow banking” for years.

            Sometimes the most obvious answer is the answer.

          4. Matt

            Companies don’t spontaneously get bailed out.

            You tighten your belt once you realize things aren’t going well. I don’t know who approved this at AIG or if they were aware that their company was fucked when they did it.

            If they were aware, I’m not sure whether the analogy is the lookout on the Titanic stealing the silverware or whether its that lookout not notifying anyone as he got into a lifeboat.

            If they were not aware, though, this is like the deck hands rearranging the chairs 2 minutes before hitting the iceberg….it’s not their fault if the lookout hasn’t told them; it’s the lookouts.

            Either way, though: the lookout doesn’t come out smelling like roses. Unless, of course, the captain heard the lookout’s report and then had him gagged, bound, and tossed overboard because he didn’t want to interrupt the tea service with an “evacuation”. WHICH IS LIKELY WHAT HAPPENED!

  8. Beinformed

    I would like to share. After reading about the Great D, and also hearing some stories from my folks, I came across an interesting article about penny auctions. It seems that during the D farmers back then were in the same boat as homeowners are today. Well of course the bankers being the bloodsuckers that they are, foreclosed on the farmers and then proceeded to auction off the farm. Well a coalition of farmers got together and put a stop to it, they did not wait for the gov’t. They would all get together and go to the auction, their presence with shovels, axes, pitch forks, in hand dominated the auction, then they proceeded to bid, 1 cent for this, 5 cents for that. A whole farm would sell for only $5.00 Wouldn’t it be great if people today would unite like that and take back what they worked for. Who needs government? Oh I forgot Bush took our rights away with his patriot act bill. We can’t even assemble without getting arrested now.

      1. nefron

        Beinformed, you are singing my song. We are not powerless. Politicians are followers, not leaders. They sniff around to see which way the political wind is blowing and go that way to save their jobs. WE need to lead THEM.

        I’ve said it before on this blog….we need to email our representatives. And we need to invest in our own economy by buying American made goods whenever possible. Small businessmen employ the majority of people in this country. We can influence our economy by our every day buying decisions instead of waiting around for our “leaders” to figure out what to do….which would only benefit their cronies anyway.

        Congrats on the publicity, IR.

  9. Jim Jones

    I don’t understand why everyone keep talking about a foreclosure problem. We do not have a foreclosure problem what we have is a “took out a loan who’s payments where not affordable” problem. And frankly I don’t consider the fact that someone took out a loan that they couldn’t afford to be my problem.

    No one forced these people too take on a financial obligation that they could not handle. As has been stated over and over the fact that they did so has kept me from being able to afford a house. Thus we don’t have a foreclosure problem what we have is an affordability problem. If anyone deserves a bailout it is those folks like me who got priced out of the market.

    Where is my bailout?

    1. AZDavidPhx

      During the bubble my rent payments skyrocketed as nearby apartment complexes went condo.

      At the same time, a portion of my income tax was being sent back to mortgage debtors to help pay for the interest on their mortgages?

      Where is my bailout?

      1. occasional reader

        There is no case being made , anywhere, for the typical renter who couldn’t/wouldn’t buy an overpriced home. We need our own coalition: NARR , National Association of Responsible Renters.
        I had to add an extra R to keep the other lobby off our backs ;-P

    2. Chris

      Your bailout, my friend, is your 401k/IRA in stocks and stock mutual funds.

      As any analyst would tell you, stocks and stock mutual funds perform better than real estate over the long run so you should be in excellent shape by now if you use the money to buy stocks and stock MFs instead of a home. Adjusted for inflation and taxation, stocks/stock MFs should outperform almost all investments you can ever make in your lifetime.

      Call Fidelity or Vanguard for more information on how you can achieve financial freedom.

      (damn, that tag above wouldn’t compile…why?)

  10. garbler

    I am a member of Generation Y. I graduated college in 2004, at the height of the RE bubble. I was too young to buy a home before that.

    My only chance of being a homeowner is if prices deflate to an affordable level. Politicians couldn’t care less that they are dooming ALL of Gen Y. It’s as if we don’t have a voice, or nobody hear it.

    1. Jim Jones (aka: Angry Renter)

      It makes my blood boil when I hear politicians talk about the need to prop up home prices with my tax dollars.

      It seems as though none of our elected officials are speaking to the interests of those of us who chose to be responsible and continue renting when we could just as easily thrown caution to the wind and taken out a loan that we knew we could not afford beyond the teaser\reset period.

    2. Dave


      You’re turn is coming.

      This event will likely be THE defining economic event of your lifetime. You will be that generation that keeps 10-15% in cash, always, maybe some of that in coin or metal. Likely, you will *never* trust banks or the markets to look after your best interest. That any of the rest of did was foolishness. Your frugality and common sense will remove a VAST amount of capital from the economy permanently. Greenbacks sitting in a safety deposit box during a deflating economy increase in value, allowing no leverage. Wall Street is petrified of this. But I think it’s too late. Too much outright gambling with other people’s money. Party’s over.

    3. Chris

      Garbler, you’re luckier than most Gen Xers such as myself. I do believe most Gen Xers have fallen into this bubble trap by being a 1st time homebuyers and they’re falling behind payments. The baby boomers, OTOH, are the HELOC abusers who are totally screwed because their houses are now worth less than what they owe on and their retirement savings are being exterminated at this point. The only thing they look forward to at this point is the Social Security paychecks and that probably couldn’t cover all of their future expenses (including Medicare).

      Of course, I’m generalizing at this point 🙂 Some Gen Xers and boomers are probably better off at this point than most….but I fail to see a show of hands :-O

  11. Gary in Cupertino

    When I saw the movement of money begin to happen so quickly and without proper qualification in a number of sectors across the economic landscape, I began to think to myself that this just can’t last. Very much the same thing as when the masses of speculators were causing fly-by-night Internet based startups to skyrocket in valuation with little basis during the “dotcom” boom years. What are these people thinking?

    Ah, how could I be so stupid, thinking about it in retrospect. They knew exactly what they were doing. It was a gambling casino, and the window shades were beginning to be pulled up (meaning, people were starting to notice that there just might be “a bubble”). The smart, quick, and clever ones cashed out in time. Most people lost out. The SAME THING happened this time around with the “real estate bubble”, only the trouble was that financial instruments like mortgage loans couldn’t be tossed out so quickly. This time a lot more people (companies) got caught with their pants down.

    Who made out? Well, the buy-and-sell “flip it” individuals who sold off early. The real estate brokers that rode the wave and made huge commissions. And the executives of financial institutions behind the engine of this mess who voted themselves golden parachutes. FAR more people lost this time around.

    If ever there was a wake-up call, this is it. FOR THE SECOND TIME. Greed is NOT good. It seems tasty and nutritious enough in the short run. Why, it’s just a few $$ I’m making–what could it possibly hurt? But no… it’s a little by little erosion that takes place in society. Making money from nothing is not productive (i.e. speculation). It’s gambling. There is no mutual benefit–it’s totally selfish. Our entire financial system is now centered on this speculative behavior. Even McCain called Wall Street a “giant casino” (funny thing for him to say, given his strong and overt fondness for gambling).

    The individual by themself is virtually powerless against the leaders and engineers of big business (who really control the government, by the way). But we can vote in a couple of ways. 1) At an election, 2) how we spend our money, 3) how we invest our money, and 4) what causes/people we contribute to. The public money, enmass, can become a powerful thing. Just look at what it has done in electronic trading (a good example, just misdirected).

    This is the big wake-up call folks. “We the people” have to change the way we are living. “Informed patriots” is what we should be. What our founding fathers expected we’d be, to help keep watch against the legions of corruption. But we fell asleep and let the political drivers take us wherever they wanted us to go, because we trusted them. That failed.

    We can’t fail again. Time is running out. The power of the global economy is upon us. This is our last chance to turn this once fine nation around. If we don’t do it, we’ll be no better than a 3rd world nation. And this is a race that is unforgiving. There’s no 3rd chance.

    Wake up. Wake up and spread the word.

  12. Chris

    For crying out loud, you can enter your own candidate’s name in the ballot as the person you’re voting for to be the next President (i.e. enter Ron Paul if you want him to be the next President).

    This is way better than not voting.

    The problem is…the MEDIA doesn’t want YOU to know this.

    1. Matt

      No, the problem is that it’s pointless.

      By October 21st, you have to have a slate of electors for them to allocate the votes you get to. Without that, your vote actually cannot count. Unless Ron Paul has 55 people sign up to be his electors, a vote for Ron Paul simply will not count.

      Beyond the technicalities, all you can really hope for is that enough votes get cast for the same person (which requires a massive amount of coordination…hence why parties exist in the first place) that people take notice. Write-in candidates HAVE won congressional and legislative elections, but they’re usually very odd circumstances where they got tons of media coverage (like a death too close to the election to allow for a formal replacement).

      Why, exactly, would “the MEDIA” not want people to know this? Doesn’t it seem a HECK of a lot more likely that, in catering to a large audience, journalists focus on candidates and voting procedures that will matter to the greatest number of people? I mean, the only reason I could see the media not wanting me to know it is because I could then figure out that the mob faked the moon landing on a grassy knoll.

      1. Chris

        Ron Paul was successful using the internet. I don’t see why we can’t use that tool again for coordination.

        Regarding **MEDIA**, I meant **MAINSTREAM** media. How are they making their moola? You guessed it: advertisement. No company will pay for any media that would go all out to disparage mainstream phenomenon or to offer something that would go against a large audience (i.e. irvinehousingblog when it was saying housing price was on a bubble….my God, that was so damn wrong and so against mainstream kool-aid drinking snobs who were buying properties as if there were no tomorrow).

        Coordination to put more than 50 million voters to put the 2 words, “Ron Paul”, on the voting ballet, I agree, is difficult.

  13. Chris

    “BTW, this is the kind of thing that really makes my blood boil: McCain calls for federal bailout of homeowners”

    Why doesn’t he just up the damn ante and say “I for one will pay every single Americans $50k out of Treasury for voting me.”?

    No mas Obama…case closed…everyone happy (except for Obama voters).

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